Who Will Buy ... a National Broadband Plan?
Last updated: October 7, 2009 - 8:41am
For the national broadband rollout, the big question is who will pay for it? Phil Bronner of Novak Biddle Venture Partners challenged investors to make national broadband happen at an October 1 Federal Communications Commission workshop. Other panelists echoed calls for investment in the national broadband plan. FCC Chairman Julius Genachowski said that every dollar invested in broadband leads to tenfold returns in the economy. Anna-Maria Kovacs, president of Regulatory Source Associates LLC, called broadband a high-risk investment. Investors would want to know if they can make money out of investing in broadband. The problem of investing in broadband is mainly in the rural areas - which is where most capital would be needed.
Links to Sources
Comments
If the investment really would lead to a tenfold return, why aren't people rushing madly to invest in it? What's the risk?! & what's the problem in rural areas?
The likely answer to all these questions is that in some areas investment is occurring, but in others it is not. In the other areas, this is likely because investments will not lead to tenfold returns, and hence consumers will not be willing to pay for the money sunk by investors. That is, the market is signaling that such investments are not economically efficient.
A far less likely answer is that investment is not occurring because, despite the tenfold value consumers will obtain from the investment, they are unwilling to pay 1/10th of that to cover the costs necessary to generate an economic return. That is an implausible claim that should be demonstrated rather than accepted.
Related Events
The Challenges of Capital Formation in the Broadband Sector (w/agenda)
(Thu, 10/01/2009)
Related Legislation
Related Sections
Related Topics
Special Topics
Similar links
- Elected Officials Say Broadband Plan Must Give Role to States and Localities
- FCC's Memphis Broadband Hearing Rescheduled
- Promoting Broadband Diversity Within the Law
- Broadband and Energy Hearing at MIT
- Report from Nov. 12 Georgetown Field Hearing on Broadband and Public Safety
- Research Recommendations for the Broadband Task Force
- Future Fiber Architectures and Local Deployment Choices
- DHS Keeping Close Eye On FCC Broadband Plan
- McDowell Opens FCC Talk on Access to Capital and the National Broadband Plan
- Diversity, Civil Rights and the National Broadband Plan
- Clear Correlation Between Education and Adoption
- Low Country Broadband
- National Broadband Plan: Serving the Last, the Least and the Lost
- FCC Will Provide More Notice Of Future Broadband Hearings
- Panelists: Information-Sharing to Solve Cyber-Security Woes Still Lacking
You may be making an apples and oranges argument: Chairman Genachowski is quoted saying that every dollar invested in broadband leads to tenfold returns *in the economy* -- not necessarily to the infrastructure investor. The investment in broadband can bring payoffs in education, health care, public safety, etc and the network operator may or may not enjoy those benefits. This may be why so many communities want to make their own public investments in infrastructure.