If you’re a parent, you likely experienced the “There’s no instruction manual!” moment of panic soon after leaving the hospital with your first child. Who in their right mind would let you take a newborn home without a detailed plan of action compiled by experts?
In the world of politics, many candidates experience similar feelings before they make the final decision to run for office. There are so many issues to take positions on and most candidates have strong feelings one a few issues, but how are they going to respond to every question about every issue?
Luckily, there are a multitude of “experts” who are more than willing to furnish them with a campaign plan (for a price, of course). As varied as these plans may be, for the last 10 years or so every one includes this piece of advice: Make “better broadband” one of your key policy proposals. It doesn’t matter if you understand anything about broadband or the companies that provide it. As long as you’re “for” broadband, you’re on track to be the next president, governor, legislator, school board member, drain commissioner, etc.
As we mercifully head into the final week of campaign 2016, the calls for better broadband abound. But what, exactly, do those entreaties really mean?
Before answering that question, it will be helpful to answer a few baseline questions about the status of broadband in Michigan.
Do Michigan residents have access to broadband services? According to the latest Connect Michigan report, 98.38% of residents have access to broadband. Since that report was published in 2014, the percentage has certainly increased given the amount of investments made by broadband providers.
Are there areas of the state that lack broadband access? Yes, some rural areas served by large, nationwide broadband providers have yet to see the investments residents there deserve. Fortunately, customers living in rural areas served by Michigan’s rural broadband providers have had access to some of the highest speeds available in the state for years.
Why haven’t the nationwide providers invested in rural Michigan? Generally, those providers can get a much higher return on investments in densely populated areas like urban and suburban communities. Building and maintaining broadband networks in rural areas is expensive. Given the relatively sparse populations in rural communities, nationwide providers target urban and suburban markets first.
Will those providers ever bring higher broadband speeds to rural Michigan? Yes. Two of Michigan’s largest wireline broadband companies (AT&T and Frontier) announced investments totaling more than $50 million over the next three years to deploy broadband in their rural markets. Those investments are expected to reach 155,147 households, which is more than double the number identified as “unserved” in the Connect Michigan report.
To recap, there are pockets of Michigan that deserve more broadband investments and those areas are being targeted with aggressive investments over the next three years. So what is a candidate who supports “better broadband” to do?
The sound economic answer is to support local, state and federal policies that reduce government fees, taxes and regulations. Broadband providers face so many government-imposed obstacles to maximizing their investments that each dollar they do spend on “better broadband” has been shrunk considerably. Local permit fees, state property taxes and federal regulations combine to make it much more expensive for broadband providers to put a business plan together for “better broadband” investments.
Unfortunately, some candidates believe the government is the answer, not the problem. They call for using taxpayer resources to support broadband investments or for elaborate government programs to determine where dollars get spent. In one example of “better broadband” run amuck, Northern Michigan University is likely using taxpayer and tuition dollars to operate a wireless broadband network that covers areas of the state that already have excellent broadband availability from private sector providers. These sorts of projects, and the politicians who support them, actually reduce private sector investments because those companies can’t compete against the built-in tax and tuition advantages that public universities possess.
Given that more than 98% of Michigan residents already have access to broadband provided by the private sector, politicians should focus on getting out of the way…not in the market. The next time a candidate promotes “better broadband” as a policy plank, ask whether that means freeing private sector providers to invest more or authorizing governments to spend more taxpayer resources on competitive ventures.