Build Broadband Better: Focus on Competition, Not Competitors
Background…
Claims that the U.S. broadband market is insufficiently competitive have prompted public policy proposals to stimulate market entry, including through subsidies to government-run broadband service. The White House has incorporated similar proposals into its American Jobs Plan, while Congress also is considering increased subsidies for broadband as part of its infrastructure package.
But…
Competition in the broadband market is stronger than critics claim. Economists have long recognized that a market’s level of competition is not solely determined by the number of competitors. Seeking to increase the number of firms beyond what that market can profitably bear will lower societal welfare. A better way to encourage broadband buildout would be to remove regulatory barriers to entry.