Felten said that the industry “has to accept that existing players are no longer fit to invest in infrastructure. They are too focused on the short term. These are broadband infrastructure projects we’re talking about, it’s a platform that will last 40 years. It may be bleak for the first five, so of course it will look weak if you analyze a 40-year plan with short-term thinking.”
That’s why policymakers are wrong to assume that the incumbent should be the one to take the lead in building broadband infrastructure, he added. “That’s not the way to go - we need independent pure infrastructure players who are happy with a 15-year plan, whether it happens with public funding or not.”
Felten cited Hong Kong Broadband Network (HKBN) as an example of a successful long-term play.
“They lost money for the first seven years. After they broke even, the financial market looked at them and said what a great business model. But if investors hadn’t had that kind of patience, HKBN would have folded,” he said. “Everyone talked about how [HKBN] was sitting on a goldmine, but they had to build that goldmine. If you don’t want to put that amount of time and money into it, fine, but don’t block the people that do.”