The American Cable Association thinks that areas where cable companies have made the investment to provide internet service should not be labeled unserved and eligible for government investment in telco entry into the local broadband market.
The Connect America Fund has $1.8B to spend in the effort to bring broadband to underserved rural areas. ACA simply does not want a competitor riding into town on CAF’s dime and turning a local cable company’s investment into a loss.
“The FCC should protect the public by ensuring that broadband deployment subsidies do not result in significant government-supported overbuilding, which would cause real harm to cable operators that have invested only private capital,” ACA President and CEO Matthew M. Polka said. “It would also mean that locations across the country that need support will not receive broadband because the program would not have additional funding.”
ACA says that any cable operator offering an internet connection at an appropriately defined level should have its investment protected; meanwhile, the CAF development money should head for regions where there really is no access to broadband.
RBR-TVBR observation: ACA does have a point. It’s like going to the trouble to build a pet store in an area that doesn’t have one, only to have the government decide the area is still underserved and then paying a second pet store to move into the market.
If the second pet store wants to go in there of its own volition – fine! That’s what capitalism is all about.
The government has a role in preventing an incumbent in a case like this from erecting barriers to prevent the entry into the market of a competitor. And a single cable company in a small market in most cases will have a local franchising authority to deal with as a hedge against monopolistic abuses of local consumers.
But having the government not only pave the way for a competitor but help finance it at the expense of a risk-taking incumbent is just plain wrong.