Cox Looks to Head Off Municipal Network Competition in Rhode Island

Cox Communications recently grabbed headlines for an announcement that the company would be investing more than $120 million in Rhode Island to expand and upgrade its Internet infrastructure. But officials in the state say much of the planned deployments may not actually even be new. The announcement appears timed to ensure that public funds from the American Rescue Plan are shifted away from potential competitors (including local governments), and toward a regional monopoly long criticized for underinvestment in the state. 

“Historic Investment”

On March 15, the region’s dominant cable broadband provider announced a $120 million plan to provide 10 gigabit per second (Gbps) service to an unspecified number of  Rhode Island residents over the next three years. The coordinated press event and announcement took place at the Old Colony House in Newport mansion of Governor Dan McKee, who heralded the “historic investment.” 

According to Cox, $20 million of the announced total would fund fiber new deployments to roughly 35,000 homes in the Aquidneck Island communities of Newport, Portsmouth, Middletown, and Jamestown. The rest will focus on providing less-robust hybrid coaxial/fiber service to the rest of the state’s residents. 

“We’re preparing for the next generation of Internet use in home and in business,” Ross Nelson, Senior Vice President and Regional Manager for Cox Communications said. “We are committed to being the Internet provider customers can count on to have the speed they need now and in the future.”

But several state leaders, well familiar with cable and phone monopolies' long history of under-investment in the state, say the announcement was largely decorative, and doesn’t come close to actually meeting the needs of long-underserved local Rhode Island communities. 

“When you break down the $20 million among just those four communities over three years, it is $1.6 million,” Rhode Island Representative Deborah Ruggiero said in a press release of her own, calling the Cox announcement a “PR stunt.”

“How is that not routine maintenance that should have been happening over the past eight to 10 years?” she asked. “If they are really deploying last-mile fiber to 35,000 households as they mentioned, the cost would be close to $50 million. The numbers don’t work, and where exactly are those households?”

Entrenched monopolies have a long history of not only hedging on deployment promises, but announcing “new” investments that aren’t particularly new. For example, the cable industry’s push toward 10 Gbps downstream speeds is part of an existing cable sector “10G” DOCSIS upgrade branding strategy for routine coaxial upgrades originally announced in 2019. 

Elected Officials Would Rather Steer State Funds to Municipal Networks

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As Rhode Island receives millions in Covid-19 relief and infrastructure broadband aid, Ruggiero, a major backer of community broadband alternatives, is pushing for the creation of a new Broadband Advisory Council. It’s much-needed, since the state is among just a handful that has neither a state office, infrastructure fund, or task force for broadband.

“Now more than ever, the Rhode Island Broadband Advisory Council is needed for the state to coalesce around technology trends and create roadmaps for municipalities to access federal dollars and for how a private cable company can partner with a public entity for innovative fiber broadband over the next four to five years,” she said. “The public demands transparency as the state receives hundreds of millions of federal dollars to deploy fiber broadband.”

Hoping to counter a surge of interest in community-driven alternatives, Cox has taken to regional news outlets to insist that regional monopolization isn’t actually a problem, and that community broadband networks (born organically from very clear market failure evident to most state residents) are somehow “redundant” in nature. 

“We are encouraged to see so many members of the General Assembly committed to adoption and solving the problem of digital equity, and not the construction of redundant infrastructure that cannot possibly be maintained by municipalities once the federal dollars are exhausted,” a Cox representative told the Providence Business News.

As ILSR research has repeatedly made clear, functional competition and shoring up access to U.S. broadband gaps is far from “duplicative” in a country where 83 million Americans reside under a broadband monopoly, usually a cable company.

Other cable industry executives, like Timothy O. Wilkerson, president of the New England Cable & Telecommunications Association, also made some misleading statements to outlets like the Boston Globe, suggesting that community broadband network operators were incapable of performing basic customer service.  

“Do Jamestown residents want to be calling Town Hall when their Internet goes out?” Wilkerson proclaimed. “Who will restore these municipal systems after a hurricane? How many employees will be required to pay for these duplicative systems?”

In reality, data indicates that as actual community residents, local community broadband networks tend to be more responsive to local community needs, and such offerings routinely provide faster service, lower prices, and more personal customer service than regional monopolies. 

Cox’s press event at the Old Colony House in Newport mansion was a clear effort to ensure the company receives the lion’s share of the $100 million in broadband grants Rhode Island is set to receive courtesy of the Infrastructure & Jobs Act. The state is expected to set aside millions more in American Rescue Plan Act funding for broadband.

Ruggiero stated that the company was misrepresenting how community broadband networks worked, and was primarily interested in ensuring that federal relief funding goes toward regional monopolies, and not popular regional alternatives or would-be competitors. 

“Municipalities, unlike private companies, answer to the taxpayers,” she said. “Municipalities can also bond over 20 to 30 years to pay for infrastructure so you build an entire community instead of waiting years for the cable company to show up.”

Need Is There

A January study by Connect Greater Newport found that 42 percent of populated Rhode Island remains unserved or underserved. According to the report, 134,000 homes and small businesses are not accessing reliable broadband at speeds of 100 Megabits per second (Mbps) down, 10 Mbps up—either due to availability, interest, or cost. 

Rhode Island has tinkered with several flavors of community broadband networks, but not at the same degree as other underserved states. Providence does provide a citywide free Wi-Fi network, and Block Island recently unveiled plans to provide the state’s first and only city-owned fiber network.

In her Master’s thesis for Clark University, Ruggerio focused on the lack of affordable broadband in the state, arguing that Rhode Island do more to open up the Ocean State Higher Education Economic Development and Administrative Network (OSHEAN) - a major fiber network tethering numerous state anchor institutions - to spur more last-mile investment. In the thesis she laments that the state handcuffed itself by tethering it exclusively to Cox Communications until 2040 by way of an Indefeasible Right of Usage leasing arrangement.

The state, if it wants, has a compelling community-driven model close by that it could follow to close the infrastructure gap for rural households. Vermont has put the city-led Communications Union Districts model at the forefront of its 10-year broadband plan, and committed more than $100 million to the nine that have launched. For more on Vermont CUDs, listen to Episode 494 of the Community Broadband Bits podcast.

Like many advocates for community broadband, Ruggerio argues that the longstanding status quo of pandering to monopolies hasn’t worked for more than a generation, and highly-localized, flexible community-based solutions are what’s needed to finally bridge the stubborn digital divide.

Watch the video below to hear more about the state of broadband in Rhode Island.