The essence of the objection to municipal involved in communications is that public intervention will undermine the private sector due to the cost advantages uniquely available to governmental entities, thus creating a barrier to public entry. As we have shown, however, this objection fails in two ways: First, municipalities tend not to become involved in communications in markets characterized by effective competition; and second, where municipalities do become communications providers, private entry into the market tends to be stimulated rather than suppressed.
Mediacom Continues Obstructing Rural Broadband Rollout in Lake County Minnesota
Mediacom has pulled out all the stops, including filing complaints with the Inspector General that included dubious allegations at best and then complaining after the Inspector General investigated and found nothing worth following up on.
What we have here is a company that wants to block a project that will deliver essential infrastructure to thousands of people who are presently lacking access. Why? Because part of that project will overlap with an outdated and overpriced Mediacom cable network that prefers its subscribers to have no choice in providers.
Recall that this is a part of the nation where a single fiber cut previously cut off all communications for 12 hours. Police could not run plates, no business could call outside the North Shore or run credit cards, ATMs were useless, 9-11 ceased functioning, and US Customs and Border Protection needed to use Canadian communications.
Minnesota Public Radio ran a solid article that explained the need for real broadband up there. It starts by talking about a local business, Granite Gear, that has suffered from the lack of proper access. (The rest of the quotes in this article come from that article.)
To help businesses like Granite Gear and solve the internet woes of northeast Minnesota residents, Lake County began stringing fiber Tuesday in Two Harbors, which is on Lake Superior's North Shore.
It is worth remembering that the FCC and others consider companies like Granite Gear to be served. Local and federal policymakers have largely failed to recognize the importance of fast, affordable, and reliable access to the Internet. Instead, they pretend that DSL or a cable network is sufficient.
But Mediacom is claiming that the presence of a modern network will kill its business (which I doubt).
Larson said the project can't succeed without taking the majority of Mediacom's customers.
Larson said Mediacom has invested a lot of money in its network in Lake County, but didn't cite a specific figure. He also said the company is planning to launch a newer, much faster cable Internet service.
But Lake County Commissioner Paul Bergman said Mediacom has not improved or expanded its service, and could have itself applied for stimulus funds.
Sure, Mediacom has invested a lot of money to build its network. And it has taken far more money out of the community by taking advantage of its monopoly (because so few companies want to overbuild in rural areas, not because of any government grant of authority).
The important policy question is how society should balance the interests of Mediacom on one side, and the interests an entire county of residents and businesses (plus part of a neighboring county) on the other side. Not only is this a matter of essential infrastructure, Mediacom had plenty of opportunities to apply for funds itself or to work with the local government.
It didn't. Mediacom has neither the interest nor the capacity to build a next-generation network for the community. And in reading the article, the only voice of opposition to this rural investment is from Mediacom. Everything we have seen suggests overwhelming support from local businesses and residents.
"One of the things that I hear at class reunions is 'I'd love to move back home if I had a job,' " Bergman said. "Well here we bring in a whole new avenue where people, their headquarters might be in Minneapolis or Hong Kong, they could still work out of their house on a shore of a lake here in Lake County."
Even without Mediacom fighting it every step of the way, Lake County would have a tough road. It is frustrating to watch Mediacom use its significant power to make it even harder to build essential infrastructure in rural America.