Ask Senator Markey: How to fix the infrastructure spending

Ed Markey is a champion for consumers and Internet users. He’s one of only three candidates I’ve endorsed in the last few years. He’s doing a live session with The Verge Wednesday May 12 I hope to attend.

The fog of misinformation in DC is overwhelming and likely to bring enormous waste in infrastructure spending. Those who understand broadband in DC see the logic of not spending more than$10-20 billion in the next four years or so. Biden and most of Markey’s allies haven’t realized that yet. Asking the right questions is a good way to get people – even Senators – to look more closely. My questions, below, in italics.

$10-20 billion could be spent in a way that brings fast connections to those who don’t have them available. Bringing down the prices for the poor is obviously necessary. Comcast has connected over a million with low prices.

But the evidence is that overbuilding cable with fiber does not lower prices; that 100+ Mbps cable upstream will reach 85% of the US quickly because the upgrade is ~$200; and that the US is building just about all the fiber the industry can already in the next 2-3 years and will need at least that long to mobilize for a large increase in funding. The broadband experts are putting this together but the politicians need education

Most of the money proposed would go to building a fiber network where cable shortly will have 100 Mbps upstream, which is now reaching the field. Scott Wallsten, the Chief Economist of the Broadband Plan and very respected, has just done an econometric study of 1 provider vs 2 providers. It was very dramatic but not surprising: the prices and adoption rate were pretty much the same.

We watch the telcos & cablecos raise prices in lockstep every year. It usually takes 4-7 companies for competition to do its magic. 2 companies have an overwhelming incentive to signal each other to keep prices high.

If the prices are little improved, why subsidize a second network?

Upstream cable at 100+ Mbps is reaching the field. Is cable at 100/100 or 900/100 good broadband? Scott Wallsten, who was chief economist of the broadband plan, just analyzed the data on cost and adoption. He found that going from 1 to 2 providers added little or nothing.

So why do some people in DC still insist subsidizing fiber in cable-only areas is not a waste of money?

Prices are going up because the carriers want to build more fiber than the industry is ready for. I’m being told that construction companies are withdrawing bids and resubmitting higher ones. AT&T is doing 4 million FTTH lines. Lumen and Frontier are promising millions more. RDOF is kicking in for two million more.

Of course new companies, managers, and crew could be developed. A large ramp would take 2-4 years. Verizon and British Telecom, both strong technically, took 3 years to ramp their FTTH.

How do we limit infrastructure spending to an additional $2-4 billion per year for 2022-2024?

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