Letting the Market Function

A  very  thoughtprovoking paper on Broadband in USA highlights the power of innovation, genuine competition and  allowing markets to grow and cater to demand sans unnecessary regulation. Its conclusions are reproduced below. They suggest avoidance of overenthusiastic tinkering in markets through market distorting regulation and subsidies. Most of these would be equally important in any context whether we talk about the developed or developing world except perhaps that in many developing countries supply side problems are far more prevalent America’s broadband networks have allowed the United States to become a leading digital econ­omy. Building on a sound broadband foundation and leveraging the advantages of America’s inno­vation ecosystem have allowed American firms to export their digital goods and services to other countries, making the digital sector America’s third-largest category of exports after industrial supplies and capital goods. Policymakers should take the following steps to ensure that the United States continues to be the leader in global competitiveness: In order to maximize investment, avoid utility-style regulation. Instead, focus on market-based, technology-neutral approaches that encourage dynamic competition with different networks and technologies. Avoid subsidies for any particular technology: a variety of broadband technologies keep the market competitive. Government involvement in the broadband market may cause private firms to exit, stifling growth in the industry. Permit competition-enhancing consolidation of broadband companies because mergers lower overhead costs and make operations more efficient. Remove barriers to mobile infrastructure at the local level. Municipalities often hinder the deployment of infrastructure, which limits broadband competitors, particularly in rural areas. Focus on increasing Internet adoption rather than the deployment of network. More than 80 percent of Americans use the Internet, and those who do not cite lack of usability and relevance as their primary reasons rather than cost or lack of access.