This article takes a stance that government can do things better than private industry although history has consistently proven different. Few will question the fact that incumbents will do what is necessary to continue the business model in which they are comfortable. Also, several states have felt the need to “protect” taxpayers from getting stuck with the bill from a failed investment in municipal broadband. Despite the un-based assertion that most municipal broadband projects are financially successful, more than half of the projects have left bondholders and taxpayers with the debt from a poorly executed strategy.
The article fails to address that the FCC has no legal authority to override state law nor that it is not the government’s role in a capitalist society to enter the communications business. The article implies that municipalities have rights and freedoms to enter certain businesses. I do not recall anything in the Constitution granting municipalities any rights.
Editor’s Note: Why don’t publications capitalize titles any more?
I really do not see Google Fiber as being disruptive other than offering a lower price to consumers. They offer the lower price because they can afford to offer the service and just break even on costs. Their “real experiment” is to determine if the higher speeds equate to greater ad revenue. Google’s goal is to increase access to Google properties where they will deliver more advertising to consumers as well as collect more data on their living habits. Their business model is perfectly valid.
Having another competitor in the market is always beneficial and Google has shaken up the market in a few areas, but they still offer the same types of services in the same bundled paradigm. It is not Google’s fault. They are forced to offer the video packages from the content providers. Maybe someday they will have enough market clout to break the forced video bundles or at least change the way that they are offered.
The mayor realizes how important broadband is to the city’s future, but her approach to enter into becoming a service provider is off mark. The government should enter into a business enterprise ONLY when it is not feasible for a private company. Syracuse already has two retail communications provider and others that serve businesses. It is correct that communications companies are challenged to build last-mile infrastructure so maybe they should consider constructing infrastructure and lease access to different communications providers.
Syracuse (WSYR-TV) – Mayor Stephanie Miner is in the early stages of researching installing broadband internet fiber in the City of Syracuse.
The mayor says high speed internet should be a public service, almost as important as trash pick-up and water.
Miner said high-speed internet is “the modern day equivalent of infrastructure.”
She adds, “It’s clear that broadband is going to be a foundation of our new economy.”
English: A fiber optic splice lab being used to access underground fiber optic cables for splicing. (Photo credit: Wikipedia)
By Tony Kindelspire
Englewood-based TCS Communications will begin construction on phase one of building out the city’s fiber optic loop on Monday.
“Postcards were mailed out yesterday” to homeowners that will be part of the initial phase of construction, Jennifer Wherry, TCS’s director of risk management, told the Longmont City Council at its Tuesday study session.
The initial round of postcards was mailed out to 720 homes, Wherry said. Her company will also be using door flyers in both English and Spanish to let people know there will be work done in their area.
I like the spirit behind Chairman Wheeler’s move to allow municipalities to determine their own broadband future, but unfortunately he does not have the legal standing to take in the matter. The constitution is pretty clear on states’ rights, and the FCC’s regulatory authority is not sufficient to override the Constitution. Wheeler will lose this battle should he chose to fight it. I wish the 25 or so state legislatures would review these laws that they have passed and either repeal them or change the wording to allow communities to develop business relationships that promote open access broadband in a taxpayer neutral fashion.
By: John Eggerton
National Conference of State Legislatures (Photo credit: Wikipedia)
The National Conference of State Legislatures wrote FCC Chairman Tom Wheeler this week to say they would challenge the constitutionality of any attempt to preempt state laws restricting municipal broadband networks.
Wheeler has said those laws are attempts by ISP incumbents, including cable operators, to prevent competition and that he wants to use the FCC’s authority to loosen “legal restrictions on the ability of cities and towns to offer broadband services to consumers in their communities.”
Although I agree with Rep. Blackburn that government involvement in communications is a states’ rights issue, I find it rather ironic that she is going about it with a federal law. I have applauded Chairman Wheeler’s support of allowing municipalities to take control of their broadband destiny even though I do not believe that they should be in the communications services business. I do not believe that the FCC has the authority to trump state law in saying that states cannot pass laws prohibiting cities from building and operating broadband networks. This fact is why I am deeply suspicious of Rep. Blackburn’s bill.
The LightReading article below is a good synopsis of the situation without the typical editorializing I have seen in many other publications. I agree that there should be no state laws prohibiting local governments from determining their broadband destiny, but I do not believe that they should become a service provider like so many of them attempt. The communications’ industry moves much quicker than electric or water utilities, and the market works better when there are more competitors not one that can operate with an unfair advantage. I do support local governments building and selling the infrastructure though.
My favorite recent headline about the ongoing legislative brouhaha over municipal networks is this one, from a publication called The Escapist: “Tenn. Congresswoman Valiantly Protects ISPs from Evil Municipal Broadband.”
That sarcasm is a reference to an amendment attached by US House of Representatives Rep. Marsha Blackburn (R-Tenn.) to the fiscal 2015 Financial Services appropriations bill that would keep regulators from modifying state laws prohibiting municipalities from building and operating broadband networks. The amendment was approved 223-200 in the House last week, but a final version of the bill must still be passed by the House and Senate and signed by President Obama to become law.
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.