In hindsight, KPN [a Dutch telephone company] made a mistake back in 1996. We were not too enthusiastic to be forced to allow competitors on our old wireline network. That turned out not to be very wise. If you allow all your competitors on your network, all services will run on your network, and that results in the lowest cost possible per service. Which in turn attracts more customers for those services, so your network grows much faster. An open network is not charity from us, in the long run it simply works best for everybody.
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Source: Ad Scheepbouwer, KPN CEO
Comments
Additional Utah Restrictions
Utah has some additional restrictions that cause significant headaches. Per Utah Code 10-18-302, "not more than 50% of the average annual debt service of all revenue bonds described in this section to provide service throughout the municipality or municipal entity may be paid from the revenues described in Subsection (3)(a)(ii)." Not being able to bond for more than 50% of the total cost of the network is crippling at best. One of the reasons UTOPIA has struggled so much is that the shared portions of the network ate up a significant chunk of the first round of money, yet that scale of project is required to effectively attract service providers. That UTOPIA manages to get anything done with this restriction is a small miracle.
Additional Louisiana Restrictions
The Louisiana law (at RS 45:844.47) additionally forbids _any_ public-private partnership. This was decisive in shutting down New Orleans public WiFi network and forcing them to give what the community had built and supported over to a private owner who subsequently got out of the business, abandoning the network. This provision strips the patina of ideology off such laws--it is intended to preserve the status quo ante and to protect the incumbents from _any_ competition whatsoever. There is no "free enterprise" involved.
For those readers who might be interested: the entirety of the (un)fair competition act, with additional restrictions passed in the year following its enactment runs from RS 45:844.41 to RS 45:844.56
Check out, just for fun, RS 45:844.56 which tries to allow offended incumbents to abrogate contracts (contra explicit clauses in the state constitution forbidding such) in a naked attempt to scare localities into thinking that raw retribution by the current providers is legalized.
Or right before that, in the complicated enforcement clause (RS 45:844.56) the most egregious silliness is concealed from those who are not familiar with the Louisiana Constitution. That clause is complicated because the constitution specifically forbids the state public service commission to regulate local community utilities. So a convoluted route to getting the regulations from the PSC is capped by the fiction that the legislative auditor (YES! the legislative auditor) is actually making the decision. That contortion too is of doubtful constitutionality...but...
Sidelight: the legislative auditor, an employee of the legislature, gets to devise a "list" of private corporate auditors that the local community has to pick from to help enforce said rules. That could be a list of one. Can we say corruption? Opportunity for self-dealing? The sudden influx of AT&T and Cableco "business" to said private entity?
There's more, of course, including a bit of craziness that requires the municipality to charge its customers for rental fees on poles it owns, but that should be enough to give the general flavor of the law.
Open access is a way around this problem
In Virginia, two open access networks have been in operation for years despite the fact that the state was an early leader in making it difficult for local governments to get involved in telecommunications. nDanville (www.ndanville.net) is starting its third year of operation and has been very popular with businesses in the city of Danville, and The Wired Road (www.thewiredroad.net) has been in operation for eighteen months. Neither network has been challenged by incumbents because all services are provided by private sector companies, and the incumbents were all invited to use the networks. nDanville is owned and operated by the City, and The Wired Road is a regional authority with two counties and a small city (Galax) as the primary partners.
There are lots of governance and ownership options available that can avoid legal restrictions. It is just a matter of being aware of how to structure governance in a way that avoids fights with incumbents. It is easy to do, and restrictive laws need not be a barrier to community-owned telecom infrastructure.
Open Access one of the incumbents' tools...
Andrew,
While I understand the ideological attractions of open networks, in point of fact the requirement that public networks be open is one of the tools that the incumbents have successfully used to insure that public networks fail.
Most open networks in the US are the result of such forced openness, not the free choice of the communities who were forced to play by those rules. Open networks are reasonably implicated in the failures or struggles of a number of public networks by those on the scene.
The idea that Virginia which absolutely forbids public participation in the lucrative cable business (so none of your examples can support their network with that tool) and which has a clause which forbids any non-cable "telecom" business from charging less than an incumbent [§ 56-484.7:1 Para C] is a VERY poor example to hold up as giving "lots of governance and ownership options." Those two restrictions alone cut out ANY competition for cable services and ANY competition for any other 'telecom' service if the incumbents choose to offer an equivalent service.
I cannot imagine that it is "easy" to avoid such restrictions...all the solutions are left in the meager spaces where the private sector has not (yet) decided it wants to invest. Competition is forbidden. If there was no incumbent objection to the public involvement in the projects you mention it can only be because no one in the private sector was offering any competition or wanted to...Projects which amount to using public resources to provide an infrastructure for private gain are dubious and no responsible community would offer such subsidies if they had the honest choice to build and own their own project.
The people of Viginia are very poorly served by such "solutions." And by such rationalizations.
The real solution is to repeal such laws; it is no solution to make light of law enacted specifically to forbid the alternatives that made BVU such a success.
The Florida law is more like
The Florida law is more like a "de facto" ban than just a "barrier." In addition, to the requirement to turn a profit within 4 years, the law also prohibits below-cost pricing by municipal providers (meaning that municipalities cannot respond to predatory pricing by incumbents in competitive markets). It also limits revenue bond maturities to 15 years (meaning that the longer bond term typically required for municipal broadband systems would require a referendum). Finally, the law requires municipalities to first provide private providers with the opportunity to provide the system that the municipality intends to provide. Collectively, these requirements make it close to impossible for a municipality to secure financing to build a municipal broadband system in Florida (unless the municipality's right to operate a broadband system was grandfathered by Florida law).
All monopolies should be seized and converted to co-ops.
Monopolies are the bane of a free market and the US is full of them.
Most utilities are monopolies, etc.
Missouri ban?
I know this article is a little old, but it appears that the statute mentioned in the Missouri ban specifically exempts internet-type services. I think that as long as the municipally owned network provides only computer-type service it's exempt.
Missouri Ban
In combination with the other restrictions, the Missouri law effectively bans communities from building community fiber networks. Though it seems increasingly feasible to make a network succeed without offering voice services, nearly all community fiber networks require triple-play revenues to succeed. So yes, we believe the Missouri statutes constitute a ban. We may revisit this in time as the technology and economics change.
This is bullcrap!
Texas has banned municipalities from deploying their own fiber networks??
What kind of crap is this?
Now I want to move out of Texas.
Send a Thank you note to AT&T
AT&T has long had a very powerful lobby in Texas. I hope you will let your elected officials know how displeased you are that the state has revoked this local decision-making power from communities.