In studying the role of municipalities in broadband infrastructure deployment, it is important to remember that municipalities act with a public motive and not a profit motive. Municipalities invest in schools, roads, hospitals, senior centers, marinas, airports, and convention centers, all assets that positively differentiate one community from another. In those areas, direct investment by municipalities is accepted and indeed often encouraged, even though private firms can (and do) build private schools, hospitals, health clubs, marinas, and conference centers that coexist with municipal infrastructure.
Critics also charge that municipalities only succeed due to tax exemptions and subsidies -- but Florida municipalities return as much, if not more, funds to public treasuries that private telecom firms. And as for subsidies -- well, incumbents themselves have received direct subsidies of nearly $390 million in the last five years to provide service in Florida.
A new report by the Institute for Local Self-Reliance argues that a publicly owned information infrastructure is the key to healthy competition, universal access, and non-discriminatory networks.
“Localizing the Internet: Five Ways Public Ownership Solves the U.S. Broadband Problem” notes that high speed broadband is becoming ever more widespread. But, it argues, the way in which that broadband is introduced may be as important as whether it is introduced.
Many telecommunications companies are offering to build a citywide wireless or even wired network at little or no upfront cost to the city. That arrangement is especially attractive to local elected officials who fear that government lacks the expertise to manage a high tech network and who worry about the possible impact on their budget. “This is an excellent time to remember to look that gift horse in the mouth,” maintains Becca Vargo Daggett, the report’s author and the director of the Institute’s Telecommunication as Commons Project.
“Even deals framed as coming at no cost to the city require the public sector to enter into extended contracts to pay millions for their own services over the new privately owned network. Cities owe it to themselves and their citizens to carefully evaluate the costs and benefits of public ownership.”
Ms. Vargo Daggett also notes that cities that own infrastructure like roads and water pipelines should not fear owning the physical information network. “Concerns about obsolescence are overstated. Fiber optics is the gold standard, with essentially unlimited capacity and a lifespan measured in decades. Wireless technology is rapidly evolving, but its price is low and the payback period is short.”
Moreover, unlike investments in traditional infrastructure, an investment in information networks can generate a significant return. “The investment will not only pay for itself, but can generate revenue that can pay for other important municipal services.”
Municipal systems do not “crowd out” private providers any more than the New York City Subway “crowds out” private taxi cabs and car services. To the contrary, studies and anecdotal evidence repeatedly show that where municipal systems take on the expensive task of building network infrastructure, the number of private providers increases.
Media Access Project, Consumer Federation of America, and Free Press co-authored a white paper entitled “Connecting the Public: The Truth About Municipal Broadband.” The paper argues in favor of supporting the right of municipalities (local governments) to deploy broadband networks.
From the Executive Summary:
From fiber optic communications between medical offices and hospitals in and around Leesburg, to advanced services for schools, students and a business park in Quincy, to a wireless “Downtown Canopy” in Tallahassee, cities and towns throughout the State of Florida are taking charge of their futures by investing in new, exciting and innovative broadband technologies that attract businesses, educate the young, and improve the quality of life. For many communities, the availability and affordability of broadband services is just as important to their future as roads, schools, water systems, airports and convention centers have been in the past. Unfortunately, legislation has been designed to restrict or inhibit the ability of Florida’s municipalities to provide these vital public services to their communities which puts millions of Floridians at risk of being left behind in the digital revolution.
The Florida Municipal Electric Association does not have this paper on its site anymore.
The Municipal & Utility Guidebook to Bringing Broadband Fiber Optics to Your Community is a free, comprehensive guide to the economic and quality-of-life benefits of robust fiber infrastructure. It examines in detail four communities that have successfully deployed fiber-to-the-home (FTTH) services to their citizens and businesses. “This guidebook helps government leaders build a strong case for investing in FTTH infrastructure,“ said Alan Shark, Executive Director of PTI. “With thorough analysis, interviews and painstaking research, it sets forth strategies that, if followed, will help American communities whose broadband needs are not being met by current market dynamics to prosper in the information age.“
The United States, creator of the Internet, increasingly lags in access to it. In the absence of a national broadband strategy, many communities have invested in broadband infrastructure, especially wireless broadband, to offer broadband choices to their residents.
Newspaper headlines trumpeting the death of municipal wireless networks ignore the increasing investments by cities in Wi-Fi systems. At the same time, the wireless focus by others diverts resources and action away from building the necessary long term foundation for high speed information: fiber optic networks.
DSL and cable networks cannot offer the speeds required by a city wishing to compete in the digital economy. Business, government, and citizens all need affordable and fast access to information networks.
Today's decisions will lay the foundation of telecommunications infrastructure for decades. Fortunately, we already know the solution: wireless solves the mobility problem; fiber solves the speed and capacity problems; and public ownership offers a network built to benefit the community.
Burlington Telecom, a city department in the largest city of Vermont, offers a world class fiber-to-the-home network offering cable television, fast broadband, and telephone services. This case study explains how they did it.
ILSR issued a report in 2011 that updates this case study: Learning from Burlington Telecom: Some Lessons for Community Networks