Lawmakers ramp up attacks on muni broadband
In the US, depending on your data source, it's estimated that anywhere from 14.5 million to 42 million people don't have access to high-speed Internet.
With that owing in part to national ISPs that won't build out to unprofitable areas of the country, on top of affordability issues, municipalities sometimes address this problem by building networks themselves – one of the most famous and successful examples being Chattanooga, Tennessee.
Seen as a key tool to closing the digital divide in the US, the Biden administration has called for prioritizing and supporting these networks in an eventual infrastructure bill.
That call has resulted in a concerted effort by some lawmakers and industry stakeholders to paint municipal broadband networks as an all-out failure and a waste of taxpayer money.
In a recent op-ed, Rep. John Curtis (R-UT), and the former mayor of Provo, Utah, from 2010 to 2017, made this argument, calling Biden's plan "misguided."
"When I served as mayor, no challenge loomed larger than Provo's government-owned broadband network, which I inherited upon taking office," writes Curtis. "The iProvo network was established with the promise of delivering affordable high-speed internet connections to all the city’s residents. But the network failed to effectively reach residents across the city and created massive costs that were ultimately paid for by residents."
He goes on to say Provo City sold iProvo to Google Fiber for $1 "because that's how little the government-owned network was worth. Its technology was out of date and its infrastructure was unworkable."
Indeed, Rep. Curtis made a similar argument at a House Congressional hearing on broadband equity in early May, testifying that the city's network failed because of "our inability to deal with the fast changing nature of broadband and the large capital needs that happen on a recurring basis."
"I saw firsthand the inherent problem with local governments stepping out of their core competency," said Curtis.
But according to Roger Timmerman, one of the engineers who built the Provo network, and the current CEO of UTOPIA Fiber, an open access, municipal fiber network of 16 cities in Utah, Curtis is leaving out a chunk of the story.
"Provo was an example of a successful municipal fiber network until it was privatized. So this story of how Provo is an example and a basis for criticizing municipal fiber? It's just not based on any truth," said Timmerman in conversation with Broadband World News for an upcoming episode of The Divide podcast.
According to Timmerman, Rep. Curtis' take on what happened in Provo is an "oversimplification" and glosses over the fact that the city privatized the network before Curtis as mayor sold it to Google Fiber for $1 in 2013.
"When Provo City built a fiber network ... they had over 10,000 customers and they were hitting the benchmarks for take rates and subscriber counts. Everything looked great," said Timmerman. But the city ran into some financial shortfalls and political pressure to ditch the network ramped up.
"They probably should have just done another incremental bond to fund new customers. I mean, any business would have said, 'hey this is a good problem to have, more customer installations need to be funded, right?' But there was a lot of politics going on in the city and the mayor panicked," said Timmerman, referring to Provo's mayor at the time, Lewis Billings.
As a result, Provo's fiber network was handed to Broadweave Networks in 2008, only to be returned to the city a few years later due to Veracity Networks (which merged with Broadweave) defaulting on its contract.
According to a 2012 article from the Salt Lake Tribune: "The city deemed Veracity in default on its contract to buy the network after its security deposit fell below $1.6 million. Veracity had been using the deposit to cover its $278,000 monthly payment to the city to improve its cash flow.
"Under the terms of the original sales agreement, the city would take possession of the network in a default and continue to be responsible for paying off its $37 million debt."
With that history in mind, Timmerman argues that iProvo isn't an example of a failed municipal network, but a failed effort at privatization.
"It was this whole politically motivated privatization of the network that failed. The municipally owned and managed network before that was fantastic. So they screwed it up when they tried to make it a private network," he said.
Timmerman, the CEO of a successful municipal network, argues that while big telcos and cable companies don't like "anything happening from a public sector perspective," UTOPIA's open access fiber model promotes competition with local providers.
"This is pro-private sector and pro-competition. The only thing that it's anti is anti-monopoly ... if you're a monopoly, you don't like this."
One such monopoly speaking out against municipal broadband is AT&T. In a recent interview with The Economic Club of Washington, DC, AT&T CEO John Stankey called Biden's plan for publicly owned broadband "misguided" when asked if he supported it.
"It would be a shame that we take taxpayer money or ask local governments to go into a business that they don't run today," Stankey said. "You know, their job is to deliver water, patch streets, things like that, not be in a capital-intensive technology business that requires constant refresh and constant management."
According to FEC filings, since the start of 2021, Utah's Rep. Curtis had so far received $2,000 and $5,000 from AT&T and Comcast Political Action Committees (PACs), respectively, for his 2022 congressional primary fund.
State bans: 17 and counting?
If the Biden administration succeeds in providing support for municipal networks in whatever broadband bill eventually makes its way out of Congress, it will have to contend with existing bans of municipal networks in at least 17 states.
While states like Washington have overturned such restrictions, Ohio's Republican-controlled legislature is seeking to ban most municipal broadband in its upcoming budget bill for 2022. As Ars Technica reports, "If passed, the proposed law could kill existing broadband services and prevent new ones from being deployed. There are reportedly 30 or more municipal broadband providers in Ohio that 'would not be allowed to operate so long as there is a private-sector company operating in the area, as there are in most, if not all of the cities.' "
The effort to kill municipal broadband has drawn criticism from Ohio residents who use the networks.
In a letter to the editor in the Akron Beacon Journal, a subscriber of FairlawnGig, Chris Walker writes of the legislature's effort:
"I cannot believe this was done without hearings or public input. This was a last-minute amendment to the Ohio Senate's budget proposal. There are only two conclusions I can draw. First, whoever did this knows it is wrong and hopes no one notices, and second that it is a result of lobbying by providers like AT&T and Spectrum… I am a happy customer of the FairlawnGig broadband system. When I was an AT&T internet customer, I paid $30 per month for 8 Mbps... I now get 35 Mbps from FairlawnGig for that same $30 per month."
Another Ohio resident, Ralph Moody, writes to Cleveland.com: "I find it astounding that the Ohio legislature wants to effectively ban municipal broadband internet programs and remove $190 million in proposed grants to expand broadband infrastructure... Next thing you know, the legislature will want to ban electric light bulbs."
With the budget bill still to be finalized over the next couple of weeks, advocates are trying to get the legislature to strip the anti-public networks amendment. In a letter to Ohio's Governor Mike DeWine, signed by 12 Ohio communities and organizations, the non-partisan, broadband advocacy group Next Century Cities argues that "the current proposal promises to hinder long-term broadband development plans."
Next Century Cities recently released a report examining contradictions in broadband mapping at the state and federal level. Speaking to their findings, Corian Zacher, Next Century Cities' policy counsel for state and local initiatives, tells Broadband World News that community-based networks are "critical" to solving the digital divide.
"Each community has its own unique needs and must develop its own broadband solutions. Many local governments across the country have had to turn to municipal broadband solutions to fill incessant connectivity gaps," says Zacher.
"Supporting communities by reducing municipal broadband restrictions and including public organizations in broadband funding programs opens the door for innovative solutions that connect every resident with the high-quality, affordable Internet access that they need for meaningful participation in a digital society."
— Nicole Ferraro, contributing editor and host of "The Divide" and "What's the Story?" Light Reading
Here's where you can find episode links for 'The Divide,' Light Reading's podcast series featuring conversations with broadband providers and policymakers working to close the digital divide.
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