Hundt is the former chairman of the FCC. He asks what we’re doing to stimulate demand for technology.He says we need a new universal service policy for broadband: 100% of households with real broadband. It would throw money at the problem and increase the scale of the solution, and it would create a new platform for new services. And, it would require an upgrade in the ability of technology to do this effi iently. But, he says, we should be careful not to destroy cable and telephony. He would have the government give everyone in the US $20/month until the “sunk costs” are paid off. Then the company can charge maintenance costs. It’d cost $50B over 3 years. It’d all be done through fiber [What about open spectrum?] And he’d remove the subsidies for voice transmission.

He says that we have a policy that charges a surtax on TV’s in order to pay for something no one wants: tuners capable of receiving digital over-the-air broadcasts. It’ll raise $40B, or about what it’d cost to provide broadband fiber to every household.

Other countries will provide broadband nationally. This will in fact be the smallest of the steps they take. We don’t want to fall behind.

Wouldn’t it be nice, he asks, to throw money at problems that can be solved, e.g., $50B to research cars that won’t contribute to global warming, $50B to end cancer, etc.

Q (Adina Levin): You say we should speak up about these policies, but that seemed to make no difference to the latest FCC ruling on media consolidation.

A: It may look like it may not have done anything, but when those emails poured in it became that there was an issue here. There is a strong sense in Congress that the FCC as an unelected group went too far.

Q (Arnold Kling): Why cable? Why does the government think it knows best about how to deliver connectivity?

A: It would stimulate demand even if the infrastructure it built isn’t the right one in the long term. A pure physical link (fiber) would be a good bet for providing a good-enough infrastructure. Likewise, when the highway system was built, there was a dispute over whether asphalt or concrete would be best. Hundt would be happy to open it up for competitive bidding, let municipalities aggregate, etc.

Q (me): Is there a hope in hell that this will happen?

A: Yes, but not necessarily in a timely fashion. If Voice over IP were to strip revenues from the telephone industry, you’d see government step in to put a safety net under the industry. It depends on what crisis you imagine.

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