Argument: State intervention would crowd out private firms

The imposition of a powerful state firm dominating the broadband market would serve to reduce the ability of private providers to compete. The greater resources of the state would be able to give it the power to dictate the market, making it less attractive to private investment. Creating a monopolistic provider would be very dangerous considering that this is a sector upon which much of future national development relies. [1] Crowding out private firms will make them less inclined to invest in new technologies, while the state provider is unlikely to fill the gap, as traditionally state utilities rely upon their power of incumbency and size rather than seeking novel services. An example of this is Eircom which, when it was the state utility, provided broadband of a lower quality and at higher price than most private providers. The end result of state dominance and reduction of private competitors is a loss of innovation, a loss of price competition, and an erosion of customer service.

[1] Atkinson, R. “The Role of Competition in a National Broadband Policy”. Journal on Telecommunications and High Technology Law 7. 2009, http://heinonline.org/HOL/Page?handle=hein.journals/jtelhtel7&amp;div=4&amp;g_sent=1&amp;collection=journals

Candidate 1: "The private sector will never be able to meet the demands governments would make in order to build a working broadband network and the subsequent smart grid because their profit motives cannot internalize the social benefits of the new grids and technology. Unfortunately the private sector will only build the infrastructure in profitable densely populated areas neglecting rural areas. The state must therefore fill the gap, either by subsidizing private firms to provide service to unprofitable areas, or to service them itself. Furthermore, it can provide the service more freely and more fairly in order to guarantee that citizens get the services they deserve and need to succeed in the 21st century."
Candidate 2: "Universal broadband is a necessary prerequisite to developing more efficient and effective power-grids

Advanced infrastructure technology often relies on the existence of broadband technology universally installed across the grid. Countries like South Korea and Japan have succeeded in expanding their power grids by means of “smart grids”, power-grids that are far more efficient than existing structures in previously leading states like the United States, that make use of the broadband network in the provision of power. The US government has since committed to creating its own new grid, one that would increase efficiency, supply and management, and lower costs of energy provision to its citizens. [1] Such grids depend on the reliable and advanced broadband networks. The incentive for states to employ broadband across their territory is tremendous, beyond mere access to fast internet. This is why private firms will never be sufficient in efficient provision of broadband, because they do not reap all the benefits directly of the smart grid that can arise from its development. The state providing broadband is an essential part of upgrading energy provision for advanced countries in the 21st century.

[1] Kass, D. “FCC Chairman Wants Ultra High Speed Broadband in 100 Million US Households by 2020”. IT Channel Planet. 18 February 2010. http://www.itchannelplanet.com/technology_news/article.php/3865856/FCC-Chairman-Wants-Ultra-High-Speed-Broadband-In-100-Million-US-Households-by-2020.htm"
Candidate 3: "Broad-based access to broadband is essential for countries to be competitive and to excel

Information technology is critical to the success of contemporary economies, with even the simplest business ventures. Uneven or non-existent penetration of broadband is a major drag on economic progress. [1] The private sector has been unable to effectively adapt with a holistic approach to the provision of data space and internet speed. The state providing these services would guarantee a high quality of service, and penetration across the country, linking all citizens to the network. For a country to compete internationally it needs broadband, and the surest way to provide it, since the private sector has resolutely failed to do so, and where it does provide services, it tends to overcharge. [2] As the Western world is left behind by the internet speeds of erstwhile developing states like Singapore, which has almost total penetration of high quality, state-sponsored broadband, it needs to refocus on what can reverse the trend. [3] Broadband is one of the steps toward the solution.

[1] Elgan, M. “Should Wireless Carriers be Nationalized?”. Huffington Post. 10 October 2012, http://www.huffingtonpost.com/mike-elgan/wireless-carriers-nationalized_b_1955633.html

[2] ibid

[3] Kass, D. “FCC Chairman Wants Ultra High Speed Broadband in 100 Million US Households by 2020”. IT Channel Planet. 18 February 2010. http://www.itchannelplanet.com/technology_news/article.php/3865856/FCC-Chairman-Wants-Ultra-High-Speed-Broadband-In-100-Million-US-Households-by-2020.htm"
Candidate 4: "State firms do not necessarily crowd out private firms. Rather, they can furnish services in areas that private firms consider unprofitable, and can coordinate infrastructural process on a wider area, allowing for gains in economies of scale. Eircom provides an example of this too as its reduction in investment in broadband post privatisation meant that the government had to begin reinvesting in broadband itself. [1] Private firms will still have incentives to develop new technologies because there will still be profits to be made. But absent private firms, innovation will still exist. State investment in innovation and new technology can be very effective, as was the case with the Space Race.

[1] Palcic, D., and Reeves, E., “Privatisation and productivity performance in Ireland”, http://www.forfas.ie/media/productivity_chapter11.pdf P.200"
Candidate 5: "It would provide an efficient service for everyone

A single, universal provider of broadband would allow the government to rationalize the management and development of the service. Multiple private service-providers ultimately end up causing three serious problems. The first two are straightforward, that private firms competing in the same area waste money creating multiple distribution channels that are unnecessary for the number of consumers, and that when they opt not to compete they end up dividing up territory into effective utility monopolies. The third problem is especially salient to the state when it is attempting to provide for everyone: many areas are too sparsely populated or economically underdeveloped that private firms are unwilling to invest in them; these areas are entirely dependent on state intervention to allow them to get broadband access. Thus for example, in the United States 19 million people in the United States still have no broadband access. [1] Much like electrical and water utilities, a single provider can create the most efficient outcome for consumers, and when that provider is the state it can guarantee affordable prices and commit to not price-gouging as private firms are wont to do. [2] Broadband should be treated as a utility, and the state has always proven to be the best purveyor of public utilities.

[1] Elgan, M. “Should Wireless Carriers be Nationalized?”. Huffington Post. 10 October 2012, http://www.huffingtonpost.com/mike-elgan/wireless-carriers-nationalized_b_1955633.html

[2] Encyclopaedia Britannica. "Public Utility." Encyclopædia Britannica Online Academic Edition. Encyclopædia Britannica Inc. 2013 http://www.britannica.com/EBchecked/topic/482523/public-utility"
Candidate 6: "The information age demands a right to broadband access

As information technology has come more and more to pervade people’s lives, it has become abundantly clear that a new set of positive rights must be considered. In the forefront of this consideration stands broadband. Broadband allows for far more rapid access to the internet, and thus access to the world of information the internet represents. Today, a citizen of a free society must be able to access the internet if he or she is to be able to fully realise their potential. This is because the ability to access the fundamental rights to freedom of expression and civic and social participation are now contingent upon ready access to the internet. Thus access to the internet has itself become a right of citizens, and their access should be guaranteed by the state. This right has been enshrined by several countries, such as France, Finland, Greece, and Spain, thus leading the way toward a more general recognition of this service as a right in the same way other public services are guaranteed. [1] It is a right derived from the evolution of society in the same fashion that the right to healthcare has grown out of countries’ social and economic development.

[1] Lucchi, N. “Access to Network Services and Protection of Constitutional Rights: Recognizing the Essential Role of Internet Access for the Freedom of Expression”. Cardozo J. of Int’L &amp; Comp. Law, Vol.19, 2011, http://www.cjicl.com/uploads/2/9/5/9/2959791/cjicl_19.3_lucchi_article.pdf"
Candidate 7: "If the state overstepped in its regulation, no doubt private competitors would be able to fill the void. But such an eventuality is rather unlikely given the robustness of civil institutions in free societies and the willingness of people to come out in arms against attacks on their freedoms. The state is not a bogey-man. Rather, it is the best outlet by which to deliver inexpensive, efficient broadband service."

State firms do not necessarily crowd out private firms. Rather, they can furnish services in areas that private firms consider unprofitable, and can coordinate infrastructural process on a wider area, allowing for gains in economies of scale. Eircom provides an example of this too as its reduction in investment in broadband post privatisation meant that the government had to begin reinvesting in broadband itself. [1] Private firms will still have incentives to develop new technologies because there will still be profits to be made. But absent private firms, innovation will still exist. State investment in innovation and new technology can be very effective, as was the case with the Space Race.

[1] Palcic, D., and Reeves, E., “Privatisation and productivity performance in Ireland”, http://www.forfas.ie/media/productivity_chapter11.pdf P.200
