Ownership is a key question when a community is exploring how it can improve Internet connectivity. Network owners make the decisions – now and in the future. What is the #1 priority? Is it to make a profit or to benefit the community? With some exceptions, they do both. But which comes first?
Owners define the rules. Will the network be open to multiple competitors at a non-discriminatory rate or will it be a monopoly? Will all traffic on the network be treated the same or will some traffic be disrupted to benefit the owner's business plan? Will the network be affordable to everyone and offer sufficiently fast speeds to attract and retain businesses? Will Internet access come with monthly data caps or share browsing preferences with advertisers and others?
Communities are limited in what they can compel a private network operator, such as Comcast, AT&T, or CenturyLink to do. They cannot require a network owner to upgrade its network to offer the faster speeds available in other communities. They are powerless to stop the provider from charging outrageous fees to local businesses.
Privately owned networks are only responsible to their shareholders. They are legally required to maximize profits for their shareholders. This means they are actually required, by law, to put their private interest ahead of what is best for each community. They leave small, rural towns and low-income communities in cities without affordable, reliable Internet service. If an area is not lucrative, there is less incentive to provide service there.
Although everyone wants more choices, the high cost of building networks prevents true competition or a functioning market; communities generally find themselves at the mercy of monopolistic providers who are unaccountable to the community.
By contrast, locally owned networks are accountable to the community. Citizens can shape their destiny via the democratic process. Rather than waiting on hold with a distant call center, they can call the mayor or harass the city council member at the grocery store. If the network is underperforming or prices are too high for local businesses, City Hall is almost always more responsive than a call center in India or some middle manager reporting to bosses that are beholden to Wall Street.
A community fiber network can be open to all competitors on equal terms, bringing choices to all citizens. This may not generate the most revenue, but it can maximize the social benefits by encouraging innovation and spurring local jobs.
Community networks have proven to offer great services at competitive prices, advancing communities and keeping money circulating locally rather than heading across the country in the form of corporate profits.
LUS Fiber on Public Accountability
Lafayette, Louisiana's LUS Fiber started providing Internet service in 2009 to the city of 130,000 people.
In this Community Connections video, LUS Fiber Director Terry Huval explains why cities should own fiber assets.
Local publicly-owned networks can develop long-term plans for providing Internet infrastructure to maximize benefits to local businesses and residents. Whether partnering with a local service provider, working with a countywide initiative, or creating a municipal network, communities need to keep their options open and not be stuck with the status quo of large incumbent providers.
What works for one community may not be right for another community. When thinking about increasing Internet access, communities must be able to consider all possibilities. That may be investing in passive assets like conduit and dark fiber or it might mean taking on greater risk and directly competing with existing providers like Chattanooga, Sandy, and Spanish Fork.
Some have denigrated public ownership, asking why government should get involved in this area. They have compared it to government-run supermarkets. But if a community has no supermarkets, or if the existing supermarkets have decided to charge prohibitive prices for basic staples merely to extract monopoly profits, then government absolutely needs to get involved.
Governments are directly accountable to the public; behemoths like AT&T and Comcast are not.
The success in and around Cleveland demonstrates not only the benefits of Smart Infrastructure, but also the reality that local communities are best equipped to implement today's fundamental need for infrastructure that empowers innovation.