Derek Slater and Tim Wu think that customers could build their own fibre connections to the net. Here is their paper. I haven’t read it yet but as I mentioned some months ago it sounds like an excellent idea. I have had a related idea here.
[Update: OK, I have now read the paper. It is excellent. Of course, I would think that as it seems to follow the line of thinking in my 2006 CEDA report. Customer-owned fibre is just one option in a raft of suggestions as to how to get local provision of broadband in place. The authors note that the chief barrier is likely to be the availability of what they call an Open Point of Presence connection to the Internet. That is the barrier we face in Australia. But they also argue that a tax credit for broadband investments by customers may be a good funding model. I agree.]
Here is a paper on the idea http://www.newamerica.net/files/HomesWithTails_wu_slater.pdf
To start the process any householder should be able to purchase their existing connection from their house to the Internet. As Telstra currently owns most (but in most cases we paid for them through the cost of our land) we should be able to purchase from Telstra for the depreciated value. If we want to upgrade our connection then we get a zero interest loan for 100 years from the Reserve Bank up to some maximum to help pay for the upgrade. The Reserve Bank prints the money for the loan. As the money will be spent on creating a new asset then it will not be inflationary. It will not appear in the “government books”.
The Reserve Bank ups the fractional reserve amount that banks have to hold and so reduces the amount of new money the banks create through loans – which they seem to be reluctant to do anyway. So fund broadband, create a true market for the last mile all at no cost to the government. Seems like a winner for everyone including Telstra as they will get most of the new business of supplying new and upgraded infrastructure – and we can also get rid of many telecommunications regulations.