Shocker: Free Market Making Obama’s Stimulus Broadband Investments Unnecessary
The federal government has invested hundreds of billions of dollars into expanding broadband infrastructure into rural areas. The idea is that because of the prohibitive cost of building communication infrastructure into low-population areas those areas go unserved or under-served. The government stepping in to subsidize that infrastructure supposedly fixes that problem.
Not surprisingly, all this “investment” has resulted in a whole lot of wasted money. And now the free market is proving that all this investment was probably unnecessary.
Verizon Wireless is unveiling a new home internet product, based on their 4G cell phone data service, that will allow rural citizens to access DSL-quality internet speeds without the need for burying cable out to their communities:
NEW YORK — Verizon Wireless on Tuesday announced a version of its wireless broadband service that’s designed for use in rural and remote homes that can’t get DSL or cable.
The service, called HomeFusion, could also appeal to some households where DSL is the only fixed-line option, since it’s faster than most DSL services.
HomeFusion could provide potent competition for satellite broadband providers, which are often “providers of last resort” for rural homes.
The service isn’t optimal. It’s a bit pricey – $60/month for 10gb of data. According to AT&T, the average household uses about 18gb of data, though I’m not sure how accurate that number is given the rapid proliferation of video streaming services like Netflix, Amazon and Hulu. As a frame of reference, my household uses about 250gb of bandwidth per month, though I work from home, use VOIP regularly and we’ve gotten rid of our cable television and rely entirely on the aforementioned streaming services for our entertainment.
So 10gb per month is quite a bottleneck on usage. Still, though, the point is that the free market is making this sort of service available in rural areas. As time goes on, assuming sufficient demand, this service will improve both in terms of price and availability. Of course, that growth is going to be sandbagged by government “investments” that will distort the market.
People often assume that if the government doesn’t do something, it won’t be done at all. This is a false assumption. If the government has to do something, it’s usually because there’s very little actual demand for it.
Tags: rural broadband, Stimulus, verizon wireless
