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Scholar: Go Private To Reduce Digital Divide

September 29, 2017

Brent Skorup, a research fellow at the Mercatus Center at George Mason University, has released a new paper outlining recommendations for broadband deployment in the United States. Coalition for the New Economy readers will recall that Skorup’s colleagues at the Mercatus Center issued a study in 2014 that found municipal broadband networks generate “underwhelming economic effects.” 

Skorup begins new his paper by noting that the United States is a “global leader in technology, innovation, and broadband use” because of its “light-touch internet regulation.” He acknowledges that a digital divide remains, but concludes that the same regime—few regulatory interventions—is still the model most suited for advancing broadband.

Specifically, Skorup recommends:

  • Incentivizing Adoption By Rural And Elderly Residents. Based on his previous columns, we know that Skorup believes municipal networks hold little economic value for rural communities. That does not mean, however, that government should not consider direct investment in solving this problem. Skorup simply thinks those investments should be made on the demand side. He argues, “Rather than building public networks, state legislatures should consider offering a direct consumer subsidy—a voucher that rural residents and older Americans can use to purchase discounted broadband or devices.”
  • Making Broadband Deployment Cheaper And Faster. Skorup argues that the most logical way to reduce barriers to private investment is for state and local officials to “streamline and expedite permitting of broadband infrastructure on public property and public rights-of-way.”
  • Staying Away From Municipal Networks. In his paper, Skorup reiterates his belief that “public networks are financially risky and often only benefit a small number of residents.” He says taxpayer networks “depress private investment” and argues that concentrating on private investment is a bipartisan cause. Skorup notes that Larry Summers, who served as President Bill Clinton’s Treasury Secretary and as the top economic adviser to President Barack Obama, said broadband investment is “clearly the responsibility of the private sector.”