Don't Import Bad Broadband Policies

DON'T IMPORT BAD BROADBAND POLICIES
[SOURCE: Harold Furchtgott-Roth]
[Commentary] Proponents of a new federal broadband policy have hailed the results of a United Nations study that finds America is ranked 15th or lower in the world for broadband services. Washington activists make three arguments in support of a new policy: 1) America is behind the rest of the world in broadband. 2) Other countries are ahead because their broadband policies favor competition. 3) More broadband leads to greater economic activity. Each of these arguments is wrong. The rationale for any broadband policy should not be that it causes economic growth, contrary to populist claims. Broadband penetration does not predict economic growth. Although America ranks only 12th in broadband penetration, we have a higher rate of economic growth than the vast majority of countries ranked ahead of us. This result is not surprising because broadband services still account for only a small share of economic activity in every country. Economic growth depends on many factors, and broadband deployment is not one of them. Paradoxically, although lower taxes cause economic growth, many of those calling for a broadband policy advocate higher taxes. Moreover, most other countries, with higher taxes and a greater inclination to intervene in markets, grow more slowly. Little would frighten investors, slow investment, and harm consumers more than adoption of a new federal broadband policy. Our broadband policy should be the same whether we are ranked 1st, 15th, or 115th: Willing investors should be able to offer services to willing customers all under full protection of predictable laws with prices set by supply and demand. That, in a nutshell, is current American broadband policy, and it does not need to be changed.
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