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Government-Owned Broadband, Not Just An American Issue

June 20, 2014

Proponents of government-owned broadband systems, like Federal Communications Commission Chairman Tom Wheeler, are fond of saying taxpayer networks are necessary to boost broadband competition and, therefore, reduce prices and improve service for customers. iStock_000006799258Small

But as the Coalition for the New Economy has pointed out in Tennessee, it was GON supporters who wanted to raise fees on private providers in order to make it harder for them to compete against the taxpayer-financed system.

It looks like a similar thing happened in Australia when that country set up its national, government-owned system a few years ago.

There, the government-owned network, National Broadband Network (NBC), recently asked the government to rule on whether a private company can “provide fiber-to-the-basement services to high-rise apartment buildings in the inner-city Melbourne suburb of Docklands.” That’s because when NBN was created a rule was put in place that said private providers had offer the same service, under the same terms, as the government network. Or, as TechPolicyDaily’s Browyn Howell explains: “Competition for the NBN is problematic because, in a throwback to the good/bad old days of government-funded networks, services are to be provided at a universal price across the country, regardless of the different costs of providing them in different areas.”

Howell says this rule is clearly meant to keep NBN from facing too much competition in the hopes that it will help the government system reach its revenue targets.

NBN doesn’t currently serve the Melbourne neighborhood in question, but the rule still applies, which means in this case it could keep residents in an inner-city neighborhood tied to slower service.

How’s that for competition?