Corruption

-By Scott Cleland

As the FCC lays the groundwork for its submission of a National Broadband Strategy to Congress next February, some suggest the U.S. follow the lead of Australia’s new broadband policy model. While it may have superficial and nostalgic appeal to some, upon close scrutiny and analysis it is not an applicable, practical nor sound broadband policy option for the United States for a variety of reasons. The Australian “Fiber Mae” broadband policy model is:

• Not applicable to the U.S. because the ownership and competitive baselines in Australia and the U.S. are not analogous;
• Not practical for the U.S. because it is a hugely expensive proposal in an exceedingly tight budget/financial environment that would generate very little incremental additional benefit over the current competitive trajectory; and
• Not sound policy for the U.S. because it pursues the wrong policy emphasis and structure, which could have the perverse result of the U.S. falling behind in broadband leadership — the exact opposite of the intended result.

By way of background, the Australian government announced last month that it would establish “a new company to build and operate a new super-fast National Broadband Network.” The proposal would deploy fiber to the home to 90% of users with 100 Mbs, and deploy 12 Mbs wireless technology to the remaining 10% of the country, at an estimated total cost of ~$31b or ~$4,100 per home passed. This government-sponsored enterprise would be majority-owned by the Australian government. It would create “Australia’s first national wholesale only, open access broadband network.”
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Why the Australian “Fiber Mae” Broadband Model Doesn’t Work for the U.S.”