Create Broadband Enterprise Zones ?

June 9, 2009

The Institute for Policy Innovation has urged the Federal Communications Commission to create broadband enterprise zones for unserved areas as part of a national broadband plan to ensure as many Americans as possible gain broadband access in the future.

In IPI’s comments filed with the FCC, authors Bartlett Cleland, Tom Giovanetti and Richard Bennett recommended the federal government leverage the private sector’s wildly successful rollout of broadband technology by adopting a means of further incentivizing broadband deployment to currently unserved areas through the use of these designated zones.

“Broadband enterprise zones are an economically efficient means of incentivizing broadband rollout to areas where market forces have proven to be insufficient up to this time,” the authors of the comments stated.

Within these zones, service providers would receive federal tax credits, and in an effort to encourage adoption, vouchers could be issued to households within the zone that could be used to pay for one-time installation charges.

This program would pave the way for the federal government to harness the strength of previously existing infrastructure and incentivize broadband rollout in areas where service has not yet arrived, stated the authors.

To date, the rollout of broadband has been a tremendous achievement—not a failure.

However, the authors noted, even if government did nothing, and if existing trends continued, major competitive network providers will continue to invest in rolling out new services to new areas on a demand-driven approach.

“There will be a virtual race between cable, traditional telecom and wireless providers to unserved areas, and underserved areas will see additional new competitors,” stated the authors. “This is the current and near-term reality, and it’s a good reality.”

Government actions related to broadband policy should enhance, rather than supplant, the existing, largely private nature of the network infrastructure and avoid returning to failed policies. Unbundling—a step backwards for the U.S. broadband network—is a certain way to devalue the existing private infrastructure. Furthermore, communications convergence continues to bring extensive competition between new and old companies and different technologies, and therefore public policy must be technologically neutral in effort to provide maximum consumer choice and foster future innovation.