The Australian government is moving ahead with a $31 billion national broadband network that will operate on a structurally separated, wholesale-only basis, with all licensed retail providers able to buy and use the network. The network aims to connect 90 percent of Australian homes with service at speeds up to 100 Mbps.

 

Separately, as part of the recently passed American Recovery and Reinvestment Act of 2009 (the "stimulus plan") the Federal Communications Commission was asked to create a national broadband plan, and submit that plan to Congress in February 2010.

 

The two events - Australian fiber to home network and U.S. broadband plan - likely are related, and the reason is the template Australia's plan, plus other developments in Singapore, New Zealand and Europe likely will play in shaping U.S. broadband policy.

 

Though immediate and serious attention will have to be paid to the concept of "network neutrality," particularly forms of net neutrality that ban any forms of packet prioritization, even if a customer wants to buy that sort of service, or traffic shaping that enhances network performance for most customers, serious discussion of structural separation is coming.

 

The FCC (News - Alert) has been asked to provide a plan that suggests "the most effective and efficient ways to ensure broadband access for all Americans." The plan also must address "strategies for achieving affordability and maximum utilization of broadband infrastructure and services."

 

It is going to be hard for the FCC to avoid hearing from some proponents that the best way to proceed is create separated wholesale access companies that sell service to any and all retail providers, at the same time hearing from proponents of strong forms of net neutrality. If either concept should emerge as national policy, against the huge objections of nearly all facilities-based providers, a virtual capital strike is likely to follow, forcing the government to become involved at a huge level in building such facilities.

 

In many other markets where wholesale access is the norm, investment has been flowing out of the home nation and into investments in other countries that offer investors a higher return. If the point of a national broadband plan is to increase investment, that would be a perverse outcome.