FED UP?

Despite its usual inclination toward competition over oligopoly, the Consumers Union has issued a report essentially declaring deregulation a failure. Local phone charges have gone up more than 17% since the Telecom Act passed. Cable rates have increased more than 36%, and broadband prices jumped even more egregiously in the last year alone.

Competitors are slowly gaining access lines, but their overall financial health is precarious and the cost of infrastructure is high, factors that call into question whether facilities-based competition was ever a realistic expectation. “The federal government needs to go back to the drawing board,” the Consumers Union wrote back in February.

The nation's leaders recognize the importance of broadband as an economic engine. (State governments do also — California is currently spending $2 million to study the feasibility of delivering 1 Gb/s broadband connections to all its residents by 2010.) But they all seem fresh out of ideas on how to get it running. There's a vacuum of vision and a humbling, desperate mood that seems to ask, “Buddy, can you spare a paradigm?”

If infrastructure costs are the most prohibitive barrier to competition, what if the government owned the infrastructure? After all, the nation's highway system, begun by private companies, was taken over by the federal government and became one of the most significant economic drivers of the 20th century.

If the communications network worked like the transportation network, its pipes essentially would belong to the public, but private firms could offer services over those pipes just as private shipping firms drive their trucks over the nation's highways. Local infrastructure could be owned by local governments, just as local roads are. It would remedy some of the chronic access conflicts inherent in the current network, in which a single entity provides both the services and the means of delivering them. (Imagine if trucking companies owned the interstates.) And wholesale prices could be set to allow healthy margins for service providers.

Of course, any analogy can be dangerous if one doesn't respect the differences between the things being compared. And it's true, the relevant differences between the information superhighway and the concrete kind are too numerous to list here. But the failure of the current telecom system makes the idea of government-owned networks harder to dismiss than it was, say, five years ago. It's at least worth sketching out on the drawing board.

Naysayers might point to Amtrak and the U.S. Postal Service as government-funded operations with poor reputations for customer service and financial success. But compare them to WorldCom, Global Crossing and most of the remaining CLECs, and suddenly they're not so easy to deride.