Wheeler: Government Needs To Lean On Broadband Demand Side

Says broadband deployment influences venture capital investment
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The government needs to focus on making demand for broadband part of its social policy DNA, not simply focus on the network connections that will meet that demand.

That was the bottom line from venture capitalist and former NCTA President Tom Wheeler to an FCC broadband workshop on the economic impact of broadband. Wheeler helped write the tech policy platform for then-presidential candidate Barack Obama. The other takeaway from Wheeler was that broadband deployment definitely influences venture capital investment.

In fact, Wheeler, currently vetting such investments for Core Capital Partners, said his company only invests in IP-based businesses because they are the ones that will be the growth engine of the tech economy.

Nothing that IP has ever touched avoided being transformed by it, he said, and in the case of the broadband network, that transformation will be no less than the world's economy and lifestyle.

Connections have consequences, he said. "Throughout history,[of which Wheeler is a keen student] network links have defined economics, and because they do, they define the way people live."

But while he said broadband networks will transform the country as surely as railroad networks, he also argued that the "build it and they will come" model exists only in the Iowa corn fields of the silver screen (a reference to film Field of Dreams).

"There needs to be demand for the network," he said.

Wheeler said the FCC has historically been a referee of competing economic interest, but has the opportunity through the broadband initiative to become an economic growth agency and stimulate innovation and investment.

But he also said it needs to have partners throughout government.

He suggested creating demand with a "bucks for broadband" approach similar to the "Cars for Clunkers" program. But he also said it was more than simply appropriating funds.

Wheeler argued that public policy needs to create demand by explicitly stipulating mandatory tie-ins with policies on everything from medical records to education to energy policy.

"We can create, through public policy and additional funding mechanisms, demand [that produces] greater returns than simply subsidizing the building out of that new capacity."

Another panelist, Ryan McDevitt of Northwestern University, said he wasn't sure a "broadband for boondocks" program equivalent would work. He was talking specifically about rural-targeted programs, saying that it could be expensive relative to the benefits since cable and telcos would have already met the demand there if it were "cost-viable.

Wheeler, who has written books combining history's lessons with business strategies, said that the reason that Chicago overtook St. Louis as the "Second City" was because it chose to build a bridge over the Mississippi river to connect the railroad while St. Louis took too much time deciding whether to fight watermen who wanted to protect their ferry businesses. Not much has changed, he suggested.

The workshop is one of a series of such panels to help the FCC come up with a national plan for broadband deployment and adoption, due to Congress by Feb. 17.

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