Tag: "ownership"

Posted January 27, 2011 by christopher

For years, I have heard Graham Richards, former mayor of Fort Wayne Indiana, brag about this "beg, borrow, buy, build" [pdf] philosophy as Mayor.  I am not insulting him -- his brash style is quite likable, but it is bragging.  He was somewhat of a celebrity among the broadband folks because he both understood the importance of broadband and had convinced Verizon to roll out FiOS in Fort Wayne when they had no plans to.  His philosophy is to first beg, then borrow, then buy, and finally build the network if necessary -- a similar approach of many local governments.  This is also often the path of least resistance (which, Utah Phillips reminds us, is what makes the river crooked).  

Graham is a terrific guy and a great evangelist for broadband (though he never jumped into a frozen Lake Superior) -- but we have long argued that his priorities were wrong in the long term.  Not owning the network means the network is unlikely to care about what the community needs.  Unfortunately, our philosophy has proven prescient.

When we last discussed Frontier's radical price increases for the FiOS subscribers they bought from Verizon, we failed to note that Fort Wayne was one of the transferred communities.  They begged for the network and they have no voice in how it is run.  So when Frontier jacks up its FiOS prices and glibly encourages people to drop their high quality FiOS cable for lesser quality DirectTV (with a long contract), the folks in Fort Wayne have little choice but to shrug their shoulders.

Serfs may occasion upon a good Lord of the Manor, but mostly they didn't.  Ownership of essential infrastructure offers long term benefits.

Photo used under Creative Commons, courtesy of Jenn Raynes

Posted November 10, 2009 by christopher

One the goals of this site is to catalog reports, articles, and all things related to publicly owned broadband. A number of older articles about muni broadband still resonate today -- As part of its May 2005 issue, Broadband Properties offered a pro and con view of municipal networks. Carl Kandutsch, a former FCC attorney, wrote "The Case for Municipal Broadband." Other articles from that issues are also available here.

The piece generally focuses on matters of economics and law, but in an accessible manner. The threat of private, monopolistic service providers -- particularly in rural areas -- is indeed a significant motivation and reason to embrace public ownership.

He also delves into debunking specific arguments against municipal ownership and argues that publicly owned networks are at a disadvantage relative private companies:

The municipal balance sheet must then be compared with that of private firms existing actually or potentially in the relevant market, taking into account the often huge tax breaks granted to private sector communication firms, the economies of scale conferred on incumbents from ownership of pre-existing infrastructure and nationwide or international service areas, the freedom to contract with any other entity on any terms within the limits of the law and so on.

And

Moreover, whereas private firms are permitted to operate behind closed doors, municipal utilities must comply with numerous open-records requirements, and must secure public approval for all significant decisions. The level of public scrutiny under which a municipal utility operates ensures that significant operational inefficiencies will be short-lived, and that utility officials are politically accountable for their decisions.

Posted November 9, 2009 by christopher

The Media and Democracy Coalition put together an impressive report examining a number of policy options to put communities first in telecommunications infrastructure. The report discusses the fundamental importance of broadband - noting that it enables the right to communicate. Having establishing its importance, the report notes that good policy must be well informed and goes on to make multiple recommendations.

Policy should promote competition, innovation, localism, and opportunity. Locally-owned and -operated networks support these core goals of Federal broadband policy, and therefore should receive priority in terms of Federal support. Structural separation of ownership of broadband infrastructure from the delivery of service over that infrastructure will further promote these goals.

The report also touches on other key issues - including Universal Access, a non-discriminatory Internet (network neutrality), symmetrical connections, and privacy. But the most important focus from our perspective is that of localism:

For decades, American communities — both rural and urban — have been neglected and underserved by absentee-owned networks, whose business models clearly do not work in smaller or economically challenged communities. By contrast, in the communities in which they are based, locally-owned networks are more likely than absentee-owned networks to provide rapid response to emergencies, enhanced services, and value-added, social capital benefits such as job-training, youth-mentoring, and small business incubation. In addition, local networks are less likely to outsource jobs, thereby strengthening local and regional economies, while creating more opportunities for community-based innovation and problem-solving. Federal broadband policy that prioritizes support for local networks will produce more competitive markets, consumer choice, and opportunities for innovation.

The first two recommendations in this section calls for federal policy that discourages absentee ownership:

  1. To fulfill the goal of extending broadband service to un- and underserved areas, federal broadband policy should prioritize support for locally-owned and -operated networks, including those owned by local governments, nonprofits and cooperatives, and public-private partnerships. Local, for-profit networks receiving federal broadband subsidies should certify that any...
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Posted April 30, 2009 by christopher

Competitive broadband service and pricing is within reach of most Minnesotans if anti-competitive polices and practices are removed and municipal governments build broadband infrastructure, according to a new report released today by the Institute for Local Self-Reliance (ILSR). The findings are contained in "Who Will Own Minnesota's Information Highways?", a report issued by the New Rules Project of the Institute for Local Self-Reliance.

"Minneapolis and Saint Paul have a once-in-a-lifetime opportunity to develop an affordable, high quality broadband infrastructure that would benefit city offices, consumers and businesses," said co-author Becca Vargo Daggett, a former information systems administrator for a private company.

"But to make that a reality, Minneapolis city leaders must revisit their decision to depend on a private company for future information needs," Daggett warned. "Given that Minneapolis has spent the last 10 years trying to get its cable company to live up to the provisions of its original franchise contract, it is remarkable that it wants to travel that same privately owned information highway in the future."

When cities offer broadband services, the competition with private companies drives prices down and improves service. The experiences with community-owned systems in Buffalo, Chaska, and Windom, Minnesota support that conclusion. The city need not act as a service provider, however. Publicly owned networks in Philadelphia and Western Utah will sell network access to private service providers, who will in turn sell services to consumers.

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