When public infrastructure goes private

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There's nothing new about this, Jackson observed. "People on the east side are left out of a lot of things," she told me. "They don't have automobiles, they're not private homeowners. They haven't been part of the discussion since the turn of the 20th century."

There's no point in blaming Google for this result. "Digital inclusion is really important to us," says Jenna Wandres, a spokeswoman for Google Fiber, adding that the company "believes communities are stronger when they're connected to the Internet." That's probably true, as a philosophical matter. But Google is an economic actor, not an agent of social policy.

Although the company says it's trying to narrow the digital divide, its pricing may not meet the needs of inner-city residents even in neighborhoods that qualified, says Michael Liimatta, a community activist focused on improving Internet connectivity for the disadvantaged. Many people in those parts of town will be unable to sign up even for a lower-speed service Google is offering for free for at least seven years, after payment of a one-time $300 fee that can be spread over a year. That's because the fee structure still oriented toward homeowners, and most of the housing stock on the east side is owned by absentee landlords.

"This hasn't worsened the digital divide and hasn't narrowed it," Liimatta says. "The unconnected stay unconnected."

What this experience shows is the impotence of public leadership. Utility companies have always groused about requirements that they provide universal service. They always say it's too expensive to build and there's too little consumer interest. Left to their unregulated druthers, they'll just harvest the low-hanging fruit — and they'll block any alternatives.

In the 1920s and 1930s, for example, Southern utilities resisted the creation of the Tennessee Valley Authority, arguing that they were serving the region just fine by themselves. But the valley was the poorest part of the poorest region in the country, where 99 out of every hundred farms had no electricity. The TVA fixed that, and soon the valley was among the most profitable electric markets in the U.S.

The argument today is that competition among Google-like fiber, phone companies, and cable operators will work to get broadband connections to everyone.

But the opposite may happen. Time Warner Cable told Kansas City it would compete more vigorously with Google, but it wanted (and received) the same deal Google got, including the right to draw its own service boundaries. (AT&T has also proposed to wire Austin for fiber — assuming it gets Google's terms). If cable companies had been allowed to wire Kansas City on Google's terms from the start, then broadband connections would be about as common on the low-income east side as Neiman-Marcus stores.

Some policy experts say the old mandate of universal service may be obsolete in the new world of rapidly changing technology — that requiring that the best technologies go to everyone will stifle innovation. "If you require gigabit service everywhere, you will have gigabit service nowhere," says Blair Levin, a former official at the Federal Communications Commission who is now a communications and society fellow at the Aspen Institute. The goal, he says, is to have "a new social contract that protects universal service and also allows innovation," adding that allowing municipalities like the two Kansas Cities to experiment with public-private partnerships may eventually yield the best answer.

Yet that still leaves open the question of who benefits from the partnership, and on what terms. It's hard today to find anyone in Kansas City to speak ill of Google, and that's not necessarily because of the contractual restriction. For customers whose neighborhoods qualified, the fiber service will surely be spectacular. But who's looking out for those left on the far side of the divide?


Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.

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