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.
Community Broadband Quotes
Consider the rapid response of a locally-owned and operated network when the local Amateur Radio Emergency Service (ARES) in rural Mitchell County, N.C. recently needed an Internet link on a mountaintop tower to test and operate its emergency service. Utilizing the local Mountain Area Information Network (MAIN), the ARES volunteers had a secure network connection the same day of their request. “We would still be waiting for an answer” from the non-local phone company, said ARES volunteer Bob Rodgers.
In Iowa, we know the municipal model works because we have 20 municipalities providing services at rates far below the incumbents'.
This is where the profit motive fails society -- there's no real financial incentive to provide coverage for someplace like Gilboa, New York, so therefore it isn't covered. But there is an incentive to prevent anyone else -- including the small town itself or, heaven forbid, the entire county -- from providing services to Gilboa because a David may grow up with the potential of killing Goliath.
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.
The US's broadband infrastructure would make a former Soviet bloc country blush. Rural areas are often stuck with slow dial-up or expensive satellite Internet service. Even urban centers lack better high-speed service options, as the increasing deregulation of the telecommunications industry has helped prop up monopolies - which then have no incentive to improve broadband speed or lower costs.
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.
This same development is occurring today in the area of advanced communications services just as it did in electricity over 100 years ago. Public power systems in some areas are meeting the new demands of their communities by providing broadband services where such services are unavailable, inadequate, or too expensive. These services, provided with high quality and at affordable prices, are crucial to the economic success of communities across the nation.
While exchanging emails with John down at Lafayette Pro Fiber, I was reminded of one my favorite quotes that relates to community broadband - from Lafayette's Mayor, Joey Durel, on the subject of states that preempt their communities from building broadband networks:
Our customers, when communicating with each other will get not 1 or 2mbs, but we will open up the pipe to them and they will have 100mbs at their disposal. Actually, I often say with tongue firmly planted in cheek that I hope that the other 49 states do outlaw what we are doing. Then I will ask them to send their technology companies to Lafayette where we will welcome them with open arms and a big pot of gumbo.
In Burlington we were very clear about what we wanted to build. We wanted to build a road system -- an electronic public road system. Cities build public roads to be available to everybody on a non-discriminatory basis.
Cities are perfectly comfortable offering a public bus service as well, or a garbage service, not to mention fire and police services. There is no problem when these services use the public roads they build, and in some cases like garbage disposal and bus service, cities actually charge a fee.