Is municipal broadband more important than net neutrality?

I had high hopes for this article because the author successfully saw the link between the two concepts.  Maybe he read my tweets.  There is a definite correlation between municipal broadband and net neutrality, but I have only read one or two articles that actually get it right.  

Municipal broadband evolved from the concept that the cost of building these networks is prohibitive so it is a function that the government could provide.  That concept is fine when no service provider is serving an area but most of the municipal broadband deployments have one or two franchised providers.  This situation results in the government competing with private enterprise.  Granted that a duopoly does not create a competitive market, but the government has several advantages over private enterprise that makes it an unfair competitor.  Also, any subsidization of broadband networks by taxpayers creates an unfair advantage.

The reason that there are not more competitors for broadband network is that they are extremely expensive to build.  Investors do not like waiting almost 10 years to see if their investment is going to yield a profit which is what would happen with 3 or more competitors.  People seem to overlook that fact when accusing the incumbents of snuffing out the competition.  Economics have snuffed out the competition.

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FCC Chairman Wheeler pledges support for municipal broadband network efforts

Commissioner Wheeler once again showed his support for competition despite the accusations that he is in the pocket of the industry.  Much like his proposed net neutrality rules, allowing municipalities to enter the broadband market creates competition against the incumbents, albeit from a governmental entity.  This pro-consumer stance that is more than just speeches is refreshing in an industry that is just lumbering along.

Although I do not personally agree with any governmental entity entering the private sector, laws that have been passed also prevent governments from forming public/private partnerships with companies to build broadband infrastructure and networks.  The laws as written typically prevent a government from building their own fiber infrastructure and leasing that infrastructure to communications service providers unless they were grandfathered.  I believe that this model of “open access” is not only economical and taxpayer neutral, but extremely pro-competition since many different service providers can offer their services without a huge capital expenditure in a last-mile network.

Open access broadband infrastructure is the smarter way for municipalities to go because it reduces the financial risk of running a business in competition with the incumbent providers.  The financial results of municipalities running their own communications business are mixed at best.  There are several examples in the country (e.g. Vermont, Minnesota, and UTOPIA) where companies have gone bankrupt and left bond holders and taxpayers to clean up the mess.  If a municipality only leases the infrastructure then they have potentially several carriers paying for the fiber, and those companies combined will have a larger potential market share than if it was just them selling the services.  Also, their expenses are greatly reduced because they don’t have to purchase the content, buy the equipment, and maintain a much larger staff to sell, market, and service customers. 

I applaud Commissioner Wheeler’s move because it demonstrates that he is pro-business and not just another political lackey with a social or specific industry agenda.

 
Editorial Director and Associate Publisher

Character for children of FCC

Character for children of FCC”Broadband” (Photo credit: Wikipedia)

In an address to attendees at the National Cable and Telecommunications Association’s (NCTA) The Cable Show in Los Angeles yesterday, Federal Communications Commission (FCC) Chairman Tom Wheeler expressed strong support for the right of municipalities to supply broadband services using their own networks. Wheeler pledged to “preempt” state laws that restrict the construction and operation of such networks.

As high-speed broadband becomes a more important aspect of residential and business life, several communities, particularly in rural areas, have become frustrated while waiting for incumbent service providers to upgrade their services. Some have decided to build their own networks, often using fiber to the home (FTTH) technology, withLafayette, LADalton, GA, and Chattanooga, TN, among the most high-profile examples.

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Wyoming Town Creates Broadband Bonanza

How does a town of 5000 people in a sparsely populated region get its own fiber-to-household broadband system — WITHOUT relying on federal funding? Powell, Wyoming, is one of the great broadband success stories of the decade.

By Craig Settles

Powell, Wyoming, at first glance may appear to be the typical rural community that large and even some small broadband service providers avoid. The town has just over 5,000 residents in a county with a population density of four people per square mile. The last place for a fiber network, right? Wrong! Powell’s community-owned network, Powellink, is one of the great success stories in broadband.

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AT&T, cable lobbying drive Chattanooga’s EPB to shelve network expansion bill

Market Square in Chattanooga, Tennessee, USA, ...

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By Sean Buckley

EPB, the Chattanooga, Tenn.-based service provider known for its 1 Gbps service, and its supporters have decided to put on mothballs a new bill that would enable municipal broadband operators to expand outside of their service areas.

If the “Broadband Infrastructure for Regional Economic Development Act of 2011″ bill had gone through, municipal-run broadband providers like EPB would have been able to extend service up to 30 miles outside their service areas. One of EPB’s motivating factors to have the bill was to bring service to Bradley County, where Amazon.com is building a second distribution center.

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Controversial Broadband Bill Moving Forward in North Carolina

April 1, 2011 By Brian Heaton

Downtown Raleigh, North Carolina as seen from ...

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A bill that would place restrictions on the establishment of municipal broadband networks is gaining traction in North Carolina. The proposed legislation, House Bill 129, was passed by the state’s House of Representatives in an 81 to 37 vote on Monday, March 28, and is making its way through the state Senate.

The bill, which has sparked controversy across the state, is called the “Level Playing Field/Local Gov’t Competition” act. The legislation would require communities to alter the way networks are financed and deployed. One section of the bill mandates that a municipal network not price services below their actual costs. The intent of the language appears to be an attempt to protect companies from unfair competition, even though private companies regularly offer incentive deals to attract customers.

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Google fiber: Palo Alto loses out to Kansas City

Midwest community to get ultra high-speed Internet project instead of Silicon Valley

by Sue Dremann
Palo Alto Weekly Staff

The Official Seal of Palo Alto, CA

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A Midwest city has beaten out all Silicon Valley contenders, including Palo Alto, to become Google’s first fiber-optics-wired city, executives announced Wednesday (March 30).

Kansas City, with a population of 145,786, was chosen out of 1,100 cities that applied in 2010 for the “Google Fiber for Communities” project, sponsored by the Mountain View tech giant.

The ultra high-speed fiber-to-the-home connections will provide Internet access at 100 times faster than typical broadband services, the company said. Fiber transmits light over fiber-optic cable — a strand of glass as thin as a hair — to send and receive data. It is far faster than electric signals sent over metal wires.

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Ultra high-speed broadband is coming to Kansas City, Kansas

 

Google Fiber Logo As part of our overall goal to make the web better for users, last year we announced a new project: to provide a community with Internet access more than 100 times faster than what most Americans have today. The response was overwhelming—nearly 1,100 cities felt the need for speed—and we were thrilled by the enthusiasm we saw across the country for better and faster web connections. Thank you to every community and individual that submitted a response, joined a rally, starred in a YouTube video or otherwise participated.

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