I believe that the U.S. decline still needs to hit absolute bottom, where it will be ranked 20th in the world, based upon broadband penetration (currently it’s ranked 12-16th depending on which study you believe). This should happen within the next couple of years.

Perhaps the next President of the U.S. will come back from a visit to a foreign country, upon discovering how a more advanced nation is prospering via superior broadband access, and then they will then champion a national telecom investment program.

It’s similar to the momentum that led to President Eisenhower signing the Federal-Aid Highway Act of 1956, and the creation of the Interstate Highway System. His enlightenment was apparently influenced by discovering the advanced highway systems in Europe (during World War II), and then returning to the U.S. with its inferior roadways.

Most American policymakers don’t comprehend just how far behind the U.S. is currently, relative to the leading broadband-enabled nations in the world. Also, national pride can fuel denial, so this is another reason for the public policy inaction that sustains the current U.S. duopoly status-quo.

When the Telecom Act of 1996 opened up ILEC facilities, the ILECs fought tooth and nail against any other entities that wanted to use those facilities to deploy advanced services. They had to keep the entire pie to themselves, and the recent gutting of TA96 was the nail in the coffin for competitive ISP service on telecom infrastructure. What a waste.

The one place where headway is being made to increase broadband penetration is the use of wireless by cities and entrepeneurs in areas unserved by the telcos and cable companies. Contrary to what the telcos want you to believe, wireless is a very effective and reliable way to deliver broadband service to the masses. It doesn’t fit into their plans, so they are trying to figure out how to kill it or at least smother it with their own systems of deploying it.

The best way to get our country out of the broadband doldrums would be to pull out all ILEC favoring federal subsidies and gut the Universal Service Fund program (Unnecessary Slush Fund?). Fast failure of the telcos. The sooner that their assets can be redistributed to dynamic, competitive companies, the sooner we will have a higher standard of broadband accessibility in our country.

However, on the other hand, LLU in Europe has greatly lowered prices of and increased the speed of broadband connections. A key aim of regulators and governments.

Therefore, a combination of the two situations is surely the best policy. Following UK’s example of a separation of wholesale and retail access. It can be argued that the regulator can give the wholesaler a certain ROI in return for new network build out and univeral service provisions.

That way you get the new network build out, as low as prices can economically go to recompensate the wholesaler for the new build and not give any market player any unfair advantage that would have impaired market forces in the future.

If there were 10,000 customers in an area and it cost $1,000,000 to create the infrastructure to provide the services the customers want, then it would cost the telecom company $100/per person. But assume there were two competing companies that built their infrastructure to cover all 10,000 customers and it still cost $1,000,000 per network, and assume that each company had an equal number of customers, 5,000 each. Then that would mean it would cost $200 per person instead of $100 per person.

Yes this is an over simplified example, and yes you could use the argument that the lower cost for the telecom company would mean they would just charge the same amount and make more profit. But, it still sets the foundation that one company can provide the same services cheaper than two companies, and if that one company could be properly regulated, consumers would save money and more services such as fiber to the premise would already exist.

The telecom act of 1996 made it law for the incumbent local exchange carriers to share their facilities to anyone that wanted to use their last mile (the line that runs from the central office to the home). You can thank the FCC for creating the telecom act of 1996 for delaying the deployment broadband solutions like fiber to the premise.

The ILECs delayed deploying solutions like fiber to the premise that because they wouldn’t be able to get a ROI necessary to justify the cost of deployment. Once the industry has righted itself and there is only one telecom provider per area, we will start to see more and more services being rolled out. The industry is already well underway in consolidating itself with mergers like SBC and ATT, MCI and Verizon, ATT and Bell South, etc. It is inevitable that the industry will return to ma bell days, simple economics dictates that it will, and I welcome its return!