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New Report: Competition is Just a Click Away
A new report out from the Copia Institute highlights the failures of the current national broadband marketplace and the value of locally-driven connectivity solutions, while underscoring once again the potential for open access models to break entrenched monopoly power. Along the way, the report offers some useful ways of reframing our understanding of how we got to a place where Internet access is dominated by just a handful of companies across the United States.
Cities as Laboratories, and the Possibilities of Open Access
“Competition is Just a Click Away” covers a lot of ground. Its author - Karl Bode - is a veteran of the broadband policy space (including writing for ILSR recently), and has long helped shed light on the consequences in increasing monopoly power in the technology landscape.
In the report, he begins by laying out the problems borne from a lack of competition, including: the consequences of regulatory capture of the FCC by huge, for-profit companies, past and continued problems with mapping, and the resulting slower speeds, lack of investment, astonishing extraction of wealth, and worrying lobbying power enjoyed by monopoly providers, all fueled by increasingly high prices and the efficient extraction of wealth from communities to further concentrate market reach and lobbying power.
An important early point made in the report is that, in the face of these realities, over the last fifteen years local cities have become “telecom laboratories where financial and technical innovation flourish, providing blueprints federal policy makers struggling to boost affordable broadband availability would be foolish to ignore.” Chattanooga and a handful of other city-owned and operated networks illustrate the power of communities to retake control of essential infrastructure.
The community broadband movement is an organic market response to market failure and the extractive power of unchecked monopolization.
Among the many results, the report points out, is that subscribers in the United States pay higher prices for slower service than many other places. But it doesn’t have to be that way, Bode reminds us.
Open access networks offer a concrete path to separating Internet infrastructure from service provisioning, and allow even conservatively minded cities to use the inherent advantages of local government authority and expertise to dramatically re-shape the cost and speed of connectivity. There’s increasing appetite for open access networks popping up at ever-larger scales across the country, as communities and their leaders increasingly tire of the high prices and slower speeds being served up by national cable monopolies.
Bode points to Ammon, Idaho as a prime example; it’s a community we’re well-familiar with and one which offers a host of learning opportunities for cities big and small. Colorado Springs, Colorado, Springfield, Missouri, and Fort Pierce, Florida also show, Bode says, the possibilities offered by embracing an open access approach to improving local connectivity:
Open access wholesale fiber networks, and the variety of experiential models being adopted in communities across the country, should be viewed less as an existential threat to the telecom sector, and more as an overdue, highly-customizable evolution.
In addition, the report points to a useful framing of the problem of broadband competition in the United States. Bode reminds us of the trend over the last decade that rather than take subscriber fees and invest in new areas or upgrade existing infrastructure, corporate leadership at the monopoly providers has led companies like Verizon and ATT to alternatively spend money instead on other ventures - most notably, a host of very expensive media acquisitions (like Verizon on its ill-fated Yahoo/Oath play, and AT&T on WarnerMedia).
Given the demand for better service (oftentimes in neighborhoods just across the street from existing infrastructure) and the completely different personnel and skill sets needed to run a media company as opposed to an ISP, moves like this don’t make immediate sense. That is, unless we think of the monopoly ISPs not as broadband providers, but corporate behemoths for which broadband is just another part of the machine they’ve built to extract wealth from communities.
Sure, they want to deliver services on the network so they can charge subscribers. But they also want to own the network infrastructure from top to bottom, so they can squeeze content producers and aggregators (i.e. Netflix) from the delivery side. But they want to create that media too, so they can control those profits and continue to increase margins while squeezing competitors and privileging their own brands and products.
Framed this way, thinking of (and therefore regulating, as well as giving public dollars for deployment subsidies to) Charter and Comcast and Verizon and AT&T just as broadband providers does more harm than good. They want to do it all, and maximize returns for shareholders at every step of the way. Once they have no competitors, innovation in services and upgrades to infrastructure become even more of a moot point. It’s a good lesson to remember, especially when cities are talking about the models they want to incent with Rescue Plan, BEAD dollars, and any local dollars.
Broadband Competition in the United States
In aggregate, “Competition is Just a Click Away” shows that yes, as it’s often written about, some of the problem of broadband competition in the U.S. is one of provision. Building infrastructure at scale in sparsely populated rural areas and densely settled urban ones certainly provides its fair share of challenges. So does operating and maintaining that network across tens or hundreds of thousands of households. But it’s certainly not rocket science, and yet the national monopolies have done a good job of artificially magnifying those obstacles when it suits them, claiming only they have the size and resources to get the job done in order to gobble up hundreds of millions in federal subsidies. This is in spite of the reality that cities and electric cooperatives have time and again shed light on the variety of practical deployment models that are sustainable into the future.
[Community networks] enable more competition, rather than consolidation; more user empowerment, rather than leaving it to the whims of a few corporate giants; and more innovation, rather than allowing long dominant players to rest on their laurels.
The report also pulls out a host of reminders as states and cities begin decide how and where to direct historical federal broadband investments, including that community-driven models lead to better return on investment, bring with them a wealth of indirect benefits, and remain more accountable to the populations they serve. Bode emphasizes that “financing, geography, and the reform-resistant political power of entrenched monopolies can all easily derail the best of intentions.”
Listen to Karl talk more about the report, competition, and broadband access in the latest episode of the Techdirt podcast. Read a new Electronic Frontier Foundation report on the market possibilities offered by a national broadband strategy with open access at its center here (also referenced in Bode’s report).
Check out our Open Access page to learn more, and listen to Christopher talk with Jeff Christensen about the future of open access networks on Episode 424 of the Community Broadband Bits podcast below.
Read “Competition is Just a Click Away” here, or attached below.