Broadband connectivity is the infrastructure of the modern economy. Its uneven distribution is not a market failure — it is the market working as designed, in the absence of the public investment that the market will not make.
The Access Architecture
The broadband access architecture in the United States — the combination of private investment by telecommunications companies, federal subsidy programmes, and state and local policy frameworks that determines who has access to high-speed internet at what price — has produced the most uneven broadband landscape among peer countries. Dense urban areas have competitive broadband markets with multiple providers, reasonably priced services, and high adoption rates. Rural and low-income urban areas have limited competitive broadband options, higher prices for lower quality services, and adoption rates that reflect both the price barriers and the digital literacy gaps that the access infrastructure has not addressed.
The broadband access gap is primarily a market structure problem. Private broadband investment follows the profit motive, which directs investment to the dense, high-income markets where return on investment is highest and away from the sparse, low-income markets where it is lowest. The result is the access distribution that the market produces: excellent broadband where the market is most profitable, inadequate broadband where it is least profitable. Closing this distribution requires public investment that addresses the gap between the market-provided access architecture and the universal access architecture that equity and economic development require — which is the public investment logic that the Broadband Equity, Access, and Deployment programme is attempting to apply.
Broadband is infrastructure in the same sense that roads and electricity are infrastructure — the prerequisite for economic participation that the market will not provide universally without public investment. The policy debate that treats broadband access as a market outcome to be nudged rather than an infrastructure commitment to be made is a debate that will produce the market outcome rather than the infrastructure commitment.
Discussion