Until very recently, it’s been a commonplace to suggest that America’s big incumbent cable companies will never build high-speed Internet for the masses without government intervention. Widely respected scholars have argued that we need an “industrial policy” for high-speed Internet access, lest we fall behind other countries. When critics have replied that what we really need are innovative firms to compete with the broadband incumbents, not regulation or industrial policy, they’ve been dismissed as naïve, or as shills for industry. But as Michael Hendrix reported in NRO in December, the advent of Google Fiber has lit a fire under the cable giants. When Google decided to offer its own high-speed Internet service, and when it managed to get municipalities to relax some of their rigid regulations in the process, companies like Comcast and TimeWarner immediately moved to upgrade their service. Tim Lee of Vox has more on how Comcast, TimeWarner, and AT&T are adapting to the Google Fiber threat, and how Google Fiber is prodding the cable incumbents to upgrade their service even in markets that Google Fiber has yet to enter. (And Klint Finley of Wired has more on Comcast’s plans in particular.)
Can we expect the partisans of regulation and taxpayer-financed broadband to say that they were wrong, and that what we really needed was for a disruptive new entrant to raise expectations and persuade local governments to allow them to do crazy things like build fiber in neighborhoods with a high enough level of demand to support new service? Or can we expect them to ignore these new developments and keep pushing the same policies?