Uncommon Wisdom

Nov 9 2009   2:03PM GMT

New broadband stimulus proposal emerges from FCC inquiry

Tom Nolle Tom Nolle Profile: Tom Nolle

A proposal to pay ISPs to connect broadband customers is one of those that’s emerging out of the FCC broadband policy debate, and the concept has some merit. A direct payment for a connected subscriber might address the fact that there is a very large base of consumers who can get broadband but don’t, and not being willing/able to pay for it appears to be the largest reason.

A subsidy would be a strong incentive to boost broadband usage, but there are major risks. The incentive might spawn another overlay CLEC model that doesn’t really address cost management and thus doesn’t create a viable market. Users might be pirated to gain their subsidies and given substandard services. Some significant tuning on the idea is essential if it’s to form an element of a future broadband policy. We think, for example, that the funds should go only to ISPs who provide facility-based services.

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