A Dynamic Perspective On Government Broadband Initiatives

Debate over government provision of broadband has generated many of the usual arguments over the pros and cons of government service provision. On the one hand, such initiatives might make broadband more affordable and hasten its adoption. On the other hand, they could also generate significant costs for taxpayers and stunt incentives for cost containment. Such arguments commonly occur when governments consider direct provision of electricity, gas, water, roads, and many other services that tend to be provided by monopolies that invest in long-lived assets. Less extensively discussed, however, are some unique challenges that arise because broadband is anew, fast-changing technology available from competing suppliers. Policymakers need to consider some unique problems when a government enterprise enters a dynamic market such as the provision of Internet services. 

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