Heavy government involvement spurs off-shore broadband buildouts

Broadband build outs have happened faster and more completely in countries like South Korea, Japan and Sweden than the United States due to increased government involvement, according to The New York Times. The article cites intense government involvement, government subsidies and lower expected profit margins as the cause for much of those countries' lead over the U.S. in broadband deployment.

Sweden, for instance, sparked their universal broadband initiative with subsidies for rural development, tax incentives for broadband infrastructure capex, and mandated local backbone build outs by government owned utilities. Japan let businesses write off a larger percentage of their broadband investments than is usually allowed, prompting private spending on broadband infrastructure.

"The return to fiber takes time," said Dave Burstein, the editor of the DSL Prime newsletter, in an e-mail message to the NYT. "Governments can invest thinking 10 and 20 years, but few companies can. So putting the expensive part (ditch-digging) under the government in some form has good logic. Then you have the companies compete at an upper layer where the investment required is not so intimidating."

The $7 billion portion of the stimulus package designated for broadband should help increase the number of rural U.S. residents that have broadband access, but more government subsidy would likely be needed to achieve anything close to total coverage. The broadband success stories from other nations all involve a level of government involvement in the private sector that the U.S. may not tolerate. 

For more:
New York Times has a great blog series on broadband policy 

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