June 30, 2014
State Legislatures Consider Bans on Municipal Broadband Initiatives
The current broadband Internet marketplace is, unfortunately, limited to a few competitors. Typically, the average household has access to options for high speed Internet from their cable company, telephone service provider, and possibly a fiber optic high-speed Internet provider (depending on their location). Many areas, especially rural areas, do not have access to these high-speed Internet options. In order to bridge the gap and provide Internet service to these underserved areas, many municipalities have begun experimenting with providing Internet service themselves.
In order to bridge the gap and provide internet service to these underserved areas, many municipalities have begun experimenting with providing internet service themselves. However, the established Internet Service Providers have begun to push back, claiming that these initiatives are unfairly competing with private industry.
However, the established Internet Service Providers have begun to push back, claiming that these initiatives are unfairly competing with private industry. At the same time, these municipal projects are seeking to serve those that market forces have deemed to costly to serve. Many have pointed out how uncompetitive the current marketplace is, and that the incumbent Internet Service Providers are only seeking to secure their market power.
Traditional ISPs have been lobbying state legislatures over the past few years to curb local government’s power to enter into these municipal broadband arrangements. In states such as Kansas and Utah, state legislatures are beginning to introduce legislation that would do just that. For instance in Utah, the Utah Telecommunication Open Infrastructure Agency (UTOPIA), which is “a consortium of 16 cities that operates a fiber-to-the-premises broadband network,” would be banned from expanded beyond the city’s boundaries. UTOPIA has sought to build the fiber optic infrastructure that would allow for numerous companies to offer competing Internet packages. While it would be grandfathered in if the bill passes, it would not be able to expand any further.
Additionally, in Kansas the state legislature is considering a measure that would ban cities from providing broadband access as well as public private partnerships between local government and private companies. Kansas is also home to Google Fiber’s first project in Kansas City. Google Fiber, through a public-private partnership with the city has sought to provide affordable gigabit (more 75 times as fast as tradition high speed internet service) Internet to the surrounding area. The bill introduced (written by an association that represents the cable companies in Kansas) in January of this year would have banned projects including the Google Fiber initiative. There has been significant pushback since its introduction and currently the bill in on indefinite hold.
High speed Internet is becoming a necessary utility for nearly everyone. As more and more of our lives intersect with the Internet, those without access will be left behind. While the marketplace can reach many people, it has its limits. These municipal projects can represent just another way of reaching those underserved populations.