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Summary:

A handful of telco and cable companies and their allies are advancing what some consider the sugarcoated destruction of free-market dynamics and the democratic process by attacking North Carolina’s community broadband networks. This runs counter to the National Broadband Plan and democracy.

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A handful of telco and cable companies and their allies are advancing what some consider the sugarcoated destruction of free-market dynamics and the democratic process by attacking North Carolina’s community broadband networks. The State Assembly passed a bill (H-129) that severely restricts communities’ ability to choose their own best broadband solutions, even if those solutions include public private partnerships.

The battle continues as the State Senate now reviews the bill. Pro-community network forces have stepped up their opposition, driven by new data showing North Carolina is dead last at meeting the FCC’s broadband standard of 4 Mbps. Another survey reveals that seven of the 10 worst cities for low broadband speed relative to price are in North Carolina.

A national trend is brewing as similar battles pitting consumers and local businesses against incumbents have started in other states that have poor broadband coverage, threatening the national broadband strategy’s success. The threat is considered so real that FCC Commissioner Mignon Clyburn took the unusual step of publicly speaking out against H-129 last week.

Municipal broadband advocates have shaped their attacks on H-129 around a five-point free market approach for getting better broadband:

  1. Our community is a market.
  2. As a market, our businesses and individuals collectively spend significant dollars on communication services.
  3. Despite our spending as a market, we have un-met broadband needs and unfulfilled dreams.
  4. Subsequently, we will use our purchasing power and political clout to get the broadband we need and want.
  5. Key to the success of our free market strategy is our ability to encourage, facilitate or create competitors in our market, which we will do.

Dissatisfied with broadband options offered by Time Warner, Centurylink and other incumbents, or their refusal to serve some rural communities, four municipalities in the state built, and own, fiber networks. Additionally, several communities in western North Carolina created cooperatives and nonprofits to build and operate those additional fiber networks. All of these network infrastructures are capable of gigabit speeds. Speeds incumbents can’t match.

These community actions harken to solutions created by the early pioneers or Silicon Valley entrepreneurs. If early Americans didn’t have or didn’t like their options for water offered by the private sector, communities built, owned and still own their water facilities. If teachers or doctors in the 80’s didn’t have or didn’t like their options for computer technology to meet their needs, they built, owned and sold better options.

In towns, cities and counties, the entity that acts collectively for businesses, schools, hospitals, nonprofits and individuals is local government. Therefore, local government as well as co-ops and nonprofits are the entities these constituent groups are increasingly asking to be their buyer/builder of broadband services for the good of all constituents when private industry fails them.

Advocates accuse incumbents of sugar-coating a bitter pill for community networks. “The level playing field bill” imposes disclosure, pricing and other requirements onto municipally owned networks that incumbents do not have to follow. Incumbents say they’re “looking out for taxpayers” while in reality, they are trying to prevent communities from building communication infrastructure to attract companies that bring jobs and tax revenue.

Time Warner’s legislative allies say “The cities can enter into it [broadband service]. It is not going to be easy, though.” In truth, the bill makes it so difficult as to effectively abort networks before they have a chance at life. H-129 strips away communities’ right to do business where they choose, micromanages with whom communities can enter into contractual agreements and dictates how a community endeavor can advertise, market and promote itself.

What really incenses broadband advocates is the trampling of the democratic process. Large incumbents don’t live in the communities they serve poorly or refuse to serve, yet H-129 imposes upon the will of the people and their elected officials decisions that are best made locally. It dictates financing options, which typically, local governments decide, and imposes a nice-sounding requirement for a local referendum. In reality, these referenda become telco spending binges funded through front groups that bury local voices with untruths, distortions and baseless fear tactics, as was done recently in Longmont, Colo. Not every community should build their own network. But every community deserves the right to make that choice.

In 2005 and 2006, we went through a similar war by incumbents on local free markets and constituents’ rights. The only way telcos were made to heel was widespread and vocal public pushback, particularly from those who understand technology and loathe any attempts to impede its progress. We have to do it again.

Implementing our national broadband strategy is as much a political process as it is an exercise in technology deployment, maybe more so at the state and local level. It’s time to get behind North Carolina and other communities that are building better, faster broadband so they can join those communities that are getting broadband done.

Craig Settles is a broadband industry analyst and co-director of Communities United for Broadband and can be found at @cjsettles on Twitter.

Image courtesy of Flickr user Drama Queen.

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  1. Rob Welbourn Monday, April 11, 2011

    Please Brett, do tell us how you would ensure communities get adequate competition in broadband deployments?

    And, by the way, your constant snide comments about Google and GigaOm are doing you no favors.

  2. Robert Welbourn Monday, April 11, 2011

    Brett, rather than your usual snide comments, I’d like to hear how you would assure broadband competition, particularly in under-served markets.

  3. Frederick Pilot Monday, April 11, 2011

    This begs the question: If these communities are so unprofitable to serve with fiber to the premise, why would the telcos and cablecos care whether locals operate their own networks?

  4. This article should be labeled as an editorial.

    1. It’s more like an ad for Settles’ Music Man service.

      Settles can’t even get through one sentence without descending into hilarity: “A handful of telco and cable companies and their allies are advancing what some consider the sugarcoated destruction of free-market dynamics and the democratic process by attacking North Carolina’s community broadband networks.”

      Free market dynamics are preserved by government competition with private companies? The democratic process is destroyed by mandating *voter approval* of massive expenditures of public funds for duplicate infrastructure?

      This post doesn’t pass the laugh test.

      1. Doesn’t pass the laugh test? What free market would there be for cars if GM owned the roads and made the rules — prohibiting other makes from using them?

        Access to the Internet is a platform and the private sector business model does not work for most communities.

        By Richard’s logic, it was crazy to build interstates in any state that already had dirt roads.

      2. By my logic it would be crazy to build dirt roads alongside dirt roads, actually.

        In any event, the cities and towns of NC will be free to build any kind of broadband they can sell to the public in a democratic vote. Democracy may not be the ideal system of government, but it’s better than all the others.

  5. Frederick Pilot Saturday, April 16, 2011

    Government can and does intervene in markets to increase access to and affordability of essential services. Consider health insurance. One of the provisions of the Patient Protection and Affordable Care Act appropriates several billion dollars in technical assistance funding for state health insurance cooperatives. It would be good public policy to provide similar technical assistance funding for local telecom cooperatives since adequate telecommunications infrastructure is vital to our economy.

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