Benefits of competition between local governments

I've just had an email discussion about part of an article I wrote last spring for the July issue of Internet Telephony magazine.  My topic was broadband Internet access policy.  Among other things, I questioned the legal and regulatory policy approach taken by nearly every country in the world.  At least one reader appreciated my point so let me excerpt it here.

... it would be a terrible idea to impose any particular solution, however good it seems, on a national basis.  <This> point ... was best expressed by U.S. Supreme Court Justice Louis Brandeis more than 70 years ago in New State Ice Co. v. Liebmann, 285 U.S. 262 (1932): "It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."

The United States has 50 states and more than 22,000 local municipalities. The richest laboratory for broadband policy would be to give 22,000 municipalities permission to do whatever they want, and then see what emerges. Federal policy might be required to give them permission; (i.e., to undo decades of communications regulation and restrain local lobbying by existing national monopolies), but competitive public policy choices would be preferable to risking all on a single national policy, especially in an area that's evolving as rapidly as broadband connectivity.

Of course, we do have one fallback.  Because there are several hundred national governments on the planet we can argue to our national governments, "We're falling behind.  Look at broadband in country X."  But it's hardly as compelling as the local-to-local argument "City X is booming while our population is migrating away and our tax base is shrinking."  Now that's something a politician can understand.

In 2005, I referred to this approach as edge-based policy.  I have yet to hear a counter argument...  Any takers?

Comments

[Craig Plunkett]

This is a terrific idea, but can the levers of government be pried out of the hands of our representatives whose votes have been purchased by millions of telco lobbying dollars? It sounds like a great idea for the region I live in, Long Island, NY, where the county governments have gotten together to try to do something about broadband competition, but the result may prove to be weak. They also complain about a brain and youth drain here. It would be possible then to build a network along the Frankston model described here:
http://www.frankston.com/public/?name=FSM

[Benoit FELTEN]

It's a great idea, but there's another thing that needs to be done for the emulation to work, and that's serious economic studies on the impact of broadband on the economy. There are papers out there, but none are serious enough to make a compelling argument...

[brough]

Yes! There is a little bit of such literature appearing, for example:
http://www.freepress.net/docs/broadband_and_economic_development_aes.pdf
but it's only a beginning.