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Building the digital superhighway - April 3, 2008

Verizon chairman/CEO Ivan Seidenberg is a smart man, working his way up from splicing line to running one of the world's biggest telecommunications companies. But he needs to brush up on his American history.

Accepting the Digital Patriot Award from the Consumer Electronics Assn. last night, Seidenberg lauded the "unprecedented" progress being made in the U.S. in building out broadband networks, nearly all of it accomplished with private capital investment. The only projects of comparable scope and speed, he maintained, were construction of the Interstate Highway system and the Apollo space program, "both of which required billions of dollars of taxpayer money."

Um, right, they did. And it's hard to imagine another investment in American history--public or private--that has produced the sort of broad public pay-off, over as long a period of time, as the Interstate system. It's hard to imagine much of the post-war economic expansion in the U.S., in fact, without that public investment in an efficient, coast-to-coast, high-speed network for transporting goods and people--an investment that did not seek to privatize or monopolize the profits or the added value it created.

Verizon deserves credit for rolling out its high-speed FiOS network. But so far, all that wondrous private capital investment lauded by Seidenberg has mostly brought Americans higher prices and lower broadband speeds than consumers face in other industrialized economies.

Does that mean what the U.S. needs in massive public investment in broadband networks? Not necessarily. But the public has a clear strategic stake in a modern, affordable communication infrastructure, and the goal of public policy ought to be to promote the public interest, not simply to make the world safe for private investment and private profit.

A final note: Anyone seriously interested in the role of public investment and public policy in shaping the development of communications networks in the U.S. should read Paul Starr's The Creation of the Media. From the Colonial era newspapers, to the U.S. Postal Service, to the origins of modern broadcasting, it provides a very useful historical perspective.
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