I took a look at testimony provided by Assistant Secretary of Commerce Larry Strickland to the House Committee on Energy and Commerce as part of its hearing on broadband stimulus. Mr. Strickland made strong arguments for why broadband adoption is necessary, citing the National Telecommunications and Information Administration’s success in meeting deadlines set by Congress for disbursing funds to broadband programs as authorized in the American Recovery and Reinvestment Act.

According to Mr. Strickland, 12,000 community anchor institutions (schools, libraries) have been wired for access to the Internet. Approximately 86,000 miles of broadband network has been deployed or upgraded, and stimulus funding has generated approximately 520,000 new Internet subscribers.

I expected the feel good stuff from NTIA, but, as the committee’s background report implies, does $ 7 billion spent intervening in the broadband access market trump a decade worth of investment by private sector players in the broadband space?

The committee determined that between 2002 and 2011 private broadband providers invested on average $65 billion a year in network facilities. By 2010, 95% of Americans had access to broadband services while two-thirds of households had broadband in the home. Pew Research put out a study confirming the House committee’s determination as to broadband in the home. Sure an additional 520,000 broadband consumers accessing service sounds good, but that number is marginal when 200 million households already have broadband in the home.

The committee is correct when it says that private sector players have incentive to be efficient and minimize waste; it’s their capital, specifically the investors’ capital, that they are playing with and maximizing shareholder wealth requires controlling costs while trying to provide a superior quality of service.

There is nothing that can be done now about stimulus finds that have already been disbursed other than continuing oversight on projects that are not yet complete. What this hearing should do is send a signal to municipalities that wish to proceed with deploying their own networks seeded with funds directly from tax receipts or via bonds guaranteed by future tax receipts. The general intent of this market intervention was to ensure that the unserved and underserved got access to broadband services; access that is priced competitively.

If municipalities want to ensure against waste, they should build only backbone networks where services are not being provided and allow private broadband access providers to deploy last mile facilities; government builds the road while private providers build the driveway.

Otherwise, to avoid the waste identified by the committee, government should stay out of the market making business.

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An article last week in The New York Post questioning whether there would be any job cuts resulting from AT&T’s purchase of T-Mobile USA and if so, how many.

I would expect some cuts to the workforce due to overlap. Keeping people doing duplicative work would create costs that would erode any efficiencies the transaction is supposed to bring about.

Politically, AT&T would not look good to the Communications Workers of America who appear to be going out on a limb with this transaction.

In the longer run, given the speed with which people are subscribing to fast phone services, some of the people who are let go may be able to transition to another area of the industry.

Either way, it’s difficult to put a smiley face on the possibility of lay offs.

The Heritage Foundation has hit this issue right on the nail head. The unjustified notion that big is bad introduces unnecessary regulatory review, which amounts to unnecessary delay in getting innovative products to market. As a former regulator, I saw the unnecessary and time consuming hoops that telecommunications firms were forced to jump through in the name of “consumer protection.”

It’s time that the FCC abandon the “regulate the behavior” school of thought and look at resource allocation from an optimizing view point. In other words, if the transaction gets spectrum into the hands of the party that makes the best and efficient use of it, then allow the transfer at the fastest speed.

Government, as manager of the economy, is supposed to look for optimal use of resources. It’s not supposed to use regulation as an optimal noose around the neck of innovation.

Just read in Politic365.com that former FCC chairman Michael F. Powell will be taking the reins of the National Cable and Telecommunications Association. I believe Mr. Powell has the energy, intelligence, and presence to do a great job. Not only will he advocate well for NCTA, but will be able to educate and inform policymakers and consumers in a clear voice about the needs of the cable and telecommunications industries.