Cyberspace and U.S. Competitiveness

October 17, 2011 |
We need telecom and tech-savvy leadership--we've entered an era where lawyers are making decisions about technologies they clearly do not understand. Without bold leadership, the U.S. is consigning itself to a telecommunications backwater.
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For millennia, trade routes defined the very foundations of civilization and empire. Today, the Internet backbone and the spread of broadband connectivity are as fundamentally important to the future of civil society and the twenty-first century economy.

Access to online resources and the efficiencies, lowered transaction costs, increased collaboration, and information and media sharing that this access facilitates are driving increased productivity and financial activity. But while civilization is entering the information age renaissance, a diverse array of constituencies and communities have been denied the benefits.

Today, powerful interests are working to curtail user-driven innovation and lock down the Internet in ways guaranteed to undercut our long-term global competitiveness. The ignorance of politicians and regulators is acting as a "digital divide force multiplier"-- causing irreparable harm to local economies in underserved communities.

Whereas the evidence of how to improve our lot is overwhelming, key decision-makers have actively resisted implementing necessary consumer protections. The history of communications is rife with cautionary tales of what happens when leaders fail to act--worse service, higher prices, less buildout, and the stagnation of innovation. The key difference today is that the detriments to those on the wrong side of the digital divide will be doubly difficult to overcome--not only placing entire countries in the slow lane, but--because of the opportunity costs, externalities, and network effects--driving inequalities throughout almost every aspect of society.

Our estimates are that a $430 billion investment in broadband infrastructure is needed to return the United States to a leadership position in the world--if we forego this expenditure, it will cost the U.S. economy trillions. Voluntary "asks" have failed. Regulators need to mandate the systematic, longitudinal collection of key data--broadband speeds, deployment areas and geographical availability, andpeering and network management--to prevent harm to consumers, anticompetitive business practices, and a cascading Internet failure like the 2003 electrical blackout that swept the Northeast. We need to stop pretending that we have a competitive market for wireline and wireless broadband services, and institute solutions that work: structural separation, common carriage, and open access.

But most importantly, we need telecom and tech-savvy leadership--we've entered an era where lawyers are making decisions about technologies they clearly do not understand. Without bold leadership, the U.S. is consigning itself to a telecommunications backwater. In a single decade, the United States has gone from a global leader to an international ranking between fourteenth and thirty-first place on a wide swath of broadband metricsand last place in its rate of innovation. Other countries have already acted while U.S. policymakers dither--the time to act has long since been upon us.