Better Communities Through Better Broadband

Better Communities through Better Broadband
A Coalition of Public and Private Interests Affirms the Need for Local Internet Choice

This post originally appeared on the Benton Foundation’s Digital Beat Blog.

For true believers in the power of broadband, it has been quite a week in Washington. Consider that the President came out in favor of local decision-making on broadband. Or that Sen. Cory Booker and some of his Senate colleagues have just introduced a strong bill (the Community Broadband Act) affirming the right of local governments to undertake broadband projects. Or that the FCC has the issue of local Internet choice on its agenda—and is poised to take a significant stand in February.

In ways that we have not seen in the past, policy makers in Washington now seem to understand that we live in the age of the gigabit. And it increasingly appears that those policy makers understand that the engagement of local communities in our collective broadband future is essential in this gigabit era.

Applications in just about every field that communities consider critically important—including economic development, education, public safety, healthcare, energy, environmental protection, transportation, and many others—require at least gigabit network capacity to achieve their full potential. In short, gigabit connections have become the electricity of the 21st century.

Unfortunately, as was true a century ago when America was electrifying itself, the private sector alone cannot meet burgeoning demand everywhere at the same time. Back then, more than 3,000 communities across America formed their own electric utilities to fill gaps left by the private sector. Now, hundreds of communities from coast to coast—in states where they are not hampered by incumbent-promoted legal barriers—are developing innovative approaches to ensuring that they and their businesses, institutions, and residents will not be left behind in acquiring affordable access to this age’s critical infrastructure.

Local leaders and national policy makers alike are recognizing legitimate concerns exist about American communities’ ability to compete in the national and global economic spheres without this infrastructure. Indeed, there is more recognition than ever in the U.S. about how essential fiber is for our local, regional, and national economic competitiveness, healthcare delivery, and educational system.

Local leaders recognize, too, that there are no simple off-the-shelf solutions that will work everywhere—that every community has its own particular resources, needs, and priorities, and that aggressive, proactive leadership is essential to getting the best solution for their constituents.

In some communities, collaborating with willing incumbents may work well. In other communities, a public-private partnership with a new entrant may be preferable. In still others, the community may find that it has to develop a network of its own.

Buoyed by the efforts of Google and approximately 100 rural towns and cities that have deployed gigabit networks, local governments—particularly in rural areas—are concluding that they must take charge of their own futures, and that with so much at stake, they can no longer wait for unwilling or incapable incumbents to get around to them.

What are the options? Business cases today are frequently pointing toward different models than the one supporting the municipal- or utility-operated fiber networks that emerged over the past 10 years in rural areas and small towns. A new generation of public–private partnerships is now emerging along with innovative new public options.

Indeed, at every level of project planning—from communities just beginning to explore the possibilities, to those actively designing infrastructure—many of the new state-of-the-art networks represent collaboration between the public and private sectors.

Localities seek private partners to invest in the infrastructure of the future; private companies seek the support and facilitation of local governments to tilt the balance on their risk/reward calculations. In these partnerships, both sides share the risk and both share the reward.

The reward for the private investors is primarily financial and is relatively easy to measure. The reward for local communities has both direct and indirect financial components, as well as many other kinds of benefits. For example, a gigabit network that helps a community attract and retain employers, improve health care, enhance public safety, and make transportation more intelligent is valuable to the community in multiple ways that are difficult to quantify but are very tangible in their overall economic impact.

Not surprisingly, incumbent service providers are not sitting quietly by. But rather than expanding their infrastructures—rather than competingsome incumbents are taking anti-competitive steps to stop these challenges to their businesses. Distressingly, these monopolists and duopolists have seen some success convincing well-intentioned state legislatures that more broadband is not for the best.

What a sad outcome for the national interest and the local interest—particularly because these incumbent-promoted laws, which purport to be about stopping wasteful public expenditures, have the actual effect of precluding local innovation and preventing not just responsible public investment, but (in the case of public-private partnerships) private investment as well.

We see the effects of such laws in states like Tennessee and North Carolina, which precluded successful local broadband initiatives from expanding into unserved rural areas. And we see the effects in states such as Colorado, where impediments have been put in the way of public–private initiatives that would have brought private investment in next-generation broadband to local communities.

We saw similar but unsuccessful initiatives in other states’ 2014 legislative sessions. In Indiana, a measure would have precluded localities from using traditional economic development incentives to attract private broadband providers to their communities. In Kansas, a cable industry-drafted bill would have made illegal future public–private partnerships modeled on the one between Google and Kansas City.

While pro-competition coalitions in both states were successful at turning back these destructive bills, we have reason to believe that bills to restrict local efforts may be introduced in the legislative sessions that have just begun in both states—and potentially in others. Indeed, in early January, a significant barrier to entry was proposed in the Missouri legislature—a barrier that would put Missouri communities at a disadvantage relative to their peers in states that do not tie the hands of their own localities.

As local interest in gigabit networks has grown—and as incumbent efforts to stop the emergence of new gigabit networks has also grown—it became clear to us that the battle for so-called municipal broadband has been both misnamed and misunderstood. This battle is not for municipal broadband—it is for better communities through better broadband, in whatever way works best for communities.

By extension, the battle is for the right and authority of any local community to develop this important infrastructure in whatever way it sees fit. This includes all the ways we noted earlier and any other approach that may work for the community.

To be clear, the battle over local choice in Internet is not a battle between public and private interests. To the contrary, a broad and diverse coalition of public and private interests stands united behind the principle that local communities should be free to contribute, innovate, and invest as necessary to secure their broadband futures.

To give voice to that broad public–private coalition, we co-founded the Coalition for Local Internet Choice (CLIC) in 2014. Our membership of more than 200 entities includes communities throughout America; competitive Internet service providers such as Ting Internet, iTV-3, and Metronet; public and private utilities (represented by the Utilities Telecom Council and the American Public Power Association); associations representing private companies (such as Engine and the Telecommunications Information Association); and a broad array of Silicon Valley companies, including Google and Netflix.

CLIC works at the federal level—and supports similar efforts at the local, regional, and state levels—to demonstrate the importance of local authority for the expansion of broadband in America.

The positive results of local Internet choice and local authority are abundantly clear. Where localities are unrestrained by anti-competition state laws, we have seen tremendous innovation and creativity as local communities seek to attract private broadband investment.

  • In Illinois, for example, the cities of Urbana and Champaign, in partnership with the University of Illinois, attracted a private Illinois company—iTV-3—to commit to building gigabit fiber-to-the-home. The consortium attracted this private partner by making available extensive Urbana-Champaign Big Broadband (UC2B) backbone fiber optics that were built through a series of innovative partnerships between local companies, the cities, the university, the State of Illinois, and federal grant funds. Multiple commercial providers already use city dark fiber to reach anchor institutions and business customers—and the cities believe they could see more than $50 million in direct fiber construction investment in the next few years as a result of this initiative.
  • In New Mexico, the city of Albuquerque is seeking a private partner for co-investment opportunities as the city plans open access fiber in key economic development zones and low-income neighborhoods. The city’s goal is to enable private provision of services in these areas to both businesses and homes, and to create new incentives for private fiber investment.
  • In Maryland, the city of Westminster last week announced a partnership with Ting Internet under which the city will build fiber to pass all homes and businesses and Ting will lease the fiber, provide equipment, offer services, and manage all customer service and related functions. The city will achieve its gigabit goals with relatively low risk, while Ting will be able to compete for customers in the Westminster market with modest upfront investment.
  • Also in Maryland, rural Garrett County is actively seeking a private partner to share the risk and the potential reward of implementing an innovative TV White Spaces (TVWS) wireless network to serve nearly 1,500 isolated residents and small businesses where constructing fiber optics would be prohibitively expensive. The network that Garrett County envisions—which would be owned by the County and operated by the private partner—would extend from the open access middle-mile fiber constructed across Maryland over the past few years.

For more examples, we invite you to read our recent paper, “Economic Development: The Killer App for Local Fiber Networks.

In states that restrict or preclude local Internet initiatives, partnerships such as these might not be possible and local communities would be left with few or no tools to work toward the next generation of communications networks.

And for that reason—because the promise of gigabit networks is so great—issues of local Internet choice in broadband have prominence in Washington and the state capitals at a level we have never before seen.

As we look toward the states’ legislative sessions, we are hopeful that our elected officials will recognize the value of enabling, rather than impairing, their localities—and that local Internet choice can serve as the key to innovation and next-generation networking.

– Joanne Hovis and Jim Baller

Published: Friday, January 23, 2015 by CTC Technology & Energy