Regulatory roadblocks holding up broadband access in U.S.A.

Those Americans who want to facilitate the rapid spread of new technologies are pleading for passage of the Tauzin-Dingell telecommunications bill. Supporters promise that passage has the potential over the next decade to bring high-speed broadband service to nearly every home and business in America. They say it will do for telecommunications what the cable box and satellite technologies have done for television.

Economist Robert Crandall of the Brookings Institution estimates that a speedy rollout of broadband could generate $500 billion a year in economic benefits – a hefty shot in the arm for the ailing U.S. economy.

But regulatory bureaucrats are placing roadblocks in the way of the nascent broadband industry's development – just as they did in deploying other technologies in the past.

  • Today, only about one in 12 American homes is wired for broadband access – and only about 6 percent of small and medium-sized businesses have access.

  • In the past, the U.S. Federal Communications Commission kept cellular telephones out of the hands of middle-income Americans – and it took 14 years for this technology to reach 50 percent of homes.

  • In less than a decade and a half, inventions like cable TV, microwave ovens, VCRs, cell phones, CD players, personal computers and the Internet were available and affordable to more than half the U.S. population.

  • The same will soon be true of DVD players, flat-panel TVs, and palm pilots.

    Under current law, telecom companies would be required to invest billions of their own money on the infrastructure – but then subject themselves to government-set rates and competitors that don't put a penny at risk.

    Broadband supporters say it is no wonder that investment in U.S. telecommunications is in a drought condition today.

    Source: Stephen Moore (Club for Growth), Freeing the Digital Economy, Washington Times, December 12, 2001.

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    RSA Note:
    South Africa endures even worse delays in the development of its telecommunications. In addition to having the same regulatory hold-ups, South Africa unfortunately inherited a nationalised telecommunications industry, which continues to enjoy regulatory protection from competition. Wherever government gets involved in business it slows down development and deprives consumers of the benefits they would have under a truly competitive environment. Governments that act in this manner misunderstand their proper function, often interfering with the growth of competition by preventing entry or disallowing the development of the most economically efficient organisations.

    Eustace Davie, director, FMF.

    FMF Policy Bulletin\19 December 2001
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