Municipal Broadband: A Different Perspective

Suppose we’ve been framing the questions associated with municipal--or municipally sponsored--broadband in the wrong way?  Suppose the question isn’t whether or not this is a good idea (and there are volumes that have already been written on this topic), but, in fact, who will serve rural and remote areas when the private firms, for any number of good reasons (and some not-so-good reasons) won’t?

When the shouting’s done and opposing parties have each had time to take deep breaths, most intellectual combatants are motivated by self-preservation. This is a harsh generalization, but I suspect it applies regardless of the contested issue.  In this light, debates about sports refereeing, as an example, are really no different than the current clamor over the viability of municipal broadband. At the end of the day, it’s all about perspective.

Perhaps the most commonly heard argument when issues of municipal broadband is raised is that it’s unfair to force for-profit companies like Time Warner and Verizon, among many others—to compete with the government which is not only responsible to taxpayers but to constituents as well. Are those individuals and communities who need broadband access--not only to compete, but to participate--and can’t get it because it’s not financially feasible, entitled to broadband? And if so, who pays for the infrastructure?

Currently, federal agencies and programs, including the Rural Utilities Service (RUS), which operates under the umbrella of the U.S. Department of Agriculture, and the NTIA Broadband Technology Opportunities Program (BTOP), which exists under the U.S. Department of Commerce have made significant investments to support rural and hard-to-serve areas.  Since 2009, RUS has invested $382 million in building North Dakota’s broadband infrastructure. Significantly, within the past month, the RUS has extended $13 million in loans to expand and improve broadband service in rural parts of North Dakota.  These loans have been earmarked for exchange upgrades and fiber-to-the-home in two communities along.  This particular project will provide expanded voice, video and data services to 682 subscribers.  In another ND community, $8.5 million has been loaned to support the construction of buried fiber in locations in both North Dakota and Minnesota.  While North Dakota is only one location within the country that was underserved, these efforts reflect a larger federal push to deliver services to communities that have been long ignored.

Much of the current kerfuffle involves a challenge to Section 706 of the Telecommunications Act of 1996 (Pub. L. No. 104-104, § 706(a), 110 Stat. 56, 153)  These challenges, more often than not, have been mounted by localities that seek to implement their own municipal broadband networks, but have been thwarted because of the existence of state laws (and heavy lobbying, both pre- and post-legislation) that precludes such action. The passage in question reads:

The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.

Buoyed by comments made by FCC Chair Tom Wheeler suggesting that the organization that he leads will work to declaw such state rules in the name of, among other things, net neutrality, some municipalities have begun to take significant steps to create their own networks.  In July, the Electric Power Board of Chattanooga, Tennessee and the City of Wilson, North Carolina petitioned the FCC to preempt existing state laws that each community sees as restricting its abilities to use state and/or municipal funds to build out broadband. Once filed, to continue the metaphor, the fur began to fly.

Given the nature of municipal broadband, the issue, of course, has become highly partisan. As is often the case, consumer groups are pitted against Conservatives and states-rights activists who don’t want to see federal intervention preempt existing state and/or municipal law.  On the side of the states-rights advocates are the current ISPs and cable providers who’d prefer to avoid competition with local governmental or quasi-governmental units.   Joining the pro-municipal broadband advocates are utilities and consumer advocates who seek ensure that broadband really is available to everyone (Currently there are fewer than 20 states that have existing rules that prevent or discourage (read: virtually prevent) local governments from deploying broadband networks ).   As a sign of what a contentious issue this is, when comments on the FCC’s proposed Net Neutrality plan closed at the end of August, more than 3,000,000 comments had been received.  Municipal broadband is only a part of this issue, but clearly the issue has the attention of a great number of interested parties…

In addition to political issues, there remain a number of logistical issues to be weighed legally and practically as well. Rules and regulations regarding pole attachments, road construction (related to the laying of new cabling), as well as different regulatory schemes for wireless and wireline services all must be added into the mix before a physical network can function, let alone be sold to customers.

One of the primary goals of the Telecommunications Act of 1996 and follow-on rulemakings has been to provide “advanced telecommunications service” to every American. As technology has evolved away from a strictly voice-based environment, the needs of those who live in rural or other sparsely populated areas have evolved too, and the need for high speed broadband has become increasingly acute.  Federal agencies and some states and municipalities have supported such efforts.  But if true universal service and access is the goal, then competing public and private interests must figure out a way to work together to bring service to those who need it—regardless of who the provider is.  When the cost to deliver access and content becomes reasonable, perhaps government intervention and active participation will be unnecessary.  Until that time, it is. Just ask people who don’t have it.