Tag: Public utility

Surge of Broadband Investment Threatened by Utility Regulation

  By
Patrick Brogan

U.S. broadband providers invested $78 billion in network infrastructure in 2014, according to a new analysis of capital expenditures data for wireline, wireless and cable broadband providers. The 2014 investment expenditure was $3 billion, or 4 percent, greater than the $75 billion invested in 2013 and $14 billion, or 22 percent, greater than the $64 billion invested just five years ago in 2009 amidst the financial crisis.Of the 2014 total, the wireline industry invested $28 billion, or 36 percent of the industry aggregate, compared to 43 percent for wireless and 21 percent for cable.

From 1996 through 2014, broadband providers have made $1.4 trillion in capital investments with wireline providers investing more than $720 billion, or 52 percent of this total, compared to 32 percent for wireless and 16 percent for cable. These surging investment levels have taken place during a period of light regulation, which has come to an abrupt end with the Federal Communications Commission’s (FCC) decision(link is external) to impose public utility rules on broadband providers. It is difficult to predict the near-term impact of this decision on investment, but numerous economic analyses(link is external) forecast negative long-term consequences on investment, innovation and other long-term economic benefits that come with broadband investment. Continue reading

Need for speed: city utilities fight to offer internet

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Picture of Alcatel-Lucent OLT with fiber connected.

Cities frustrated with high prices and slow internet speed fight to build their own blazing fast fiber-optic networks.

This very detailed article is one of many examples that demonstrates competition benefits the consumers in price, choice, and customer service. No one argues that broadband services improve the lives and vitalities of those that it touches or that the incumbents are slow to improve and expand their services without competition. What is at question is whether a government owned service provider has any unfair advantages over private service providers? Does FiberNET benefit from their utility parent owning poles and right-of-ways? Do these advantages prevent other players from possibly competing against FiberNET? Should FiberNET’s facilities be open to all potential carriers?

There is no doubt that Morristown FiberNET is well run and delivering a quality product. They have over a 100 year history to build providing other utilities. I believe that the MUS should open up their fiber network to other potential service providers including the incumbents to spur even more competition that will benefit the city and its residents. Continue reading

Tom Wheeler’s Other Web Takeover

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Optic fiber

Optic fiber (Photo credit: Wikipedia)

This week Federal Communications Commission chairman Tom Wheeler plans to seize regulatory control over the Internet by declaring private broadband carriers to be public utilities. Less well known is that he also wants to usurp state authority to regulate municipal broadband networks.

Local governments are forever seeking opportunities to diversify their, er, investments in sports stadiums, convention centers and such. Many lately have been getting into broadband. Municipalities have built some 180 fiber-optic networks in addition to about 75 cable services. Most operate as de facto public utilities with an implicit, if not explicit, taxpayer backstop. Continue reading

After Wheeler unveils proposal, what’s next for net neutrality?

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Seal of the United States Federal Communicatio...

Seal of the United States Federal Communications Commission. (Photo credit: Wikipedia)

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A flurry of activity will follow the plan from U.S. Federal Communications Commission Chairman Tom Wheeler to reclassify broadband as a regulated public utility as the foundation for new net neutrality rules.

Wheeler’s plan would reclassify broadband from a lightly regulated information service to a more regulated telecommunications service under Title II of the Telecommunications Act, reversing the FCC’s broadband policy for the past decade. Still, Wheeler’s plan has the agency forbearing from most traditional telecom regulations under Title II, including rate regulations, contributions to the FCC’s Universal Service Fund, and requirements to share their networks with competitors. Continue reading