That argument cuts both ways, asserts Christopher Mitchell of the Minnesota-based Institute for Local Self Reliance (ILSR), one of my favorite incumbent spin busters. Incumbents have benefitted from favorable governmental policies that have been in place for decades including the availability of high cost subsidies and public policy that permitted them to maintain a monopoly. Not allowing government subsidization of FTTP infrastructure built by non-incumbents in the footprints of the incumbents, Mitchell suggests, is a double standard.
Given that telecommunications infrastructure must be broadly dispersed in order to be economically viable and adhere to Metcalfe’s Law, Mitchell accurately notes FTTP infrastructure builders must be able overbuild outmoded incumbent infrastructure when they opt not to upgrade to FTTP -- and receive government subsidies for doing so if available. That’s eminently fair and good old American progress – the same progress that brought electricity to large swaths of the nation in the 1930s when market forces alone could not do so.
As for the incumbent argument they will come out losers, Mitchell observes incumbents have made losers out of nearly 20 million Americans who according to a 2012 Federal Communications Commission estimate live in neighborhoods incumbents redlined and declined to offer any wireline premises Internet connectivity, leaving them to dialup and satellite.
Click here to hear Mitchell and ILSR colleague Lisa Gonzalez elaborate in a 13-minute podcast.