One of the themes in the Berkman Report is that of the role of government investment in broadband. This post, from Ars Technica, shows how public money can be used as a threat or as an investment floor. In this case, a municipality chose to start building fiber to the home. The local telecom wasn’t too happy about this, dragged their feet, took it to court, but ultimately got some trucks and trenchers together and got to work. Now the consumers have a choice of 2 distinct fibers. That is probably too much cost, and its likely that an open-access policy would have helped… open-access on the municipal fiber.

Now, why might a municipality be able to invest, and a telecom company cannot? The municipality might have a different weighting on factors such as return on investment. Faced with the prospect of 0.01% interest, the local government might feel infrastructure has a better payback. The telecoms company might instead be looking for a 24 month return on capital. The municipality may also be able to weight intangible factors like increase in property tax due to higher income people settling there.