If this is Uncle Sam's broadband strategy, give me a break

The government's laying out a big loan to a private company charged with hooking up millions of people still too far from an Internet connection. But WTF -why has it taken forever?

Earlier this week, the U.S. Department of Agriculture approved a $267 million loan to a Denver, Colo.-based company called Open Range. The idea: build out broadband service for 518 rural communities in 17 states

The loan represents one of the federal government's biggest ever public-private investments in broadband service. Considering Uncle Sam's miserly approach, to date, that's not saying much. But here's what caught my eye: Those without service will have access to broadband and other technologies for the first time in their lives.

Give me a break!

They must be kidding, right? Over the years, the agency has invested billions of dollars on all sorts of infrastructure projects deemed vital to the public, such as water and waste pipes or electrification. That it's taken so long for broadband to win similar consideration is stunning.

When I called the agency find out whether this was a one-off, agency spokesman Joe Fletcher told me there was "no guarantee it will happen in the future."

Let's hope he's playing cute. In the meantime, the hired help in Washington do read their mail, so here's a great opportunity to e-mail and Twitter them to death until they get the message. For once, government bureaucrats have come up with a good idea--one which is long overdue--and here's to hoping they don't live down to expectations and screw it up.

Unfortunately, there's still no consensus about the impact of public capital investment to expand broadband's reach. What it will take is a champion, someone to bulldoze the idea through the government. Something like the mid-1950s push by President Eisenhower and Congress to create the National System of Interstate and Defense Highways.

Andrew F. Haughwoutof the Brookings Institution has a interesting piece analyzing the track record of public investments over the years. What you'll find is that the estimates are all over the map so people will pick the expert closest to their political persuasion.

".. research on the effects of infrastructure investment on firms' and households' location decisions tends to find that the benefits of new investments are localized. They are highest near where the investments are placed. This finding makes sense, particularly for public works like playgrounds, parks, or public buildings: the farther someone has to travel to use the facility, the less its net value."

Makes sense to me. You lay a foundation in the right way and the government ultimately reaps benefits in the coin of increasing annual GDP. I'm open to being convinced otherwise, but we've passed the point where the Internet has attained quasi-utility status. Think how different your own lives would be without it. Or how governments and private companies near you would function if they were shut off from the grid.

Something more. The Gordon Gekko types may demur but the fine print in the social contract I subscribe to says society ought to intervene when fate throws folks a curve ball. We can save the philosophical shouting match for another day. In the end, there's no convincing rationale for leaving folks stranded as second-class digizens.

 

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