While arguments over network neutrality have steadily misdirected attention toward Washington, phone and cable companies have quietly lobbied one state after another to throttle back or forbid cities, towns and small commercial and non-commercial entities from building out broadband facilities. This Community Broadband Preemption Map, from Community Broadband Networks, tells you how successful they’ve been so far: Now they’re the verge of succeeding in North Carolina too.
This issue isn’t just close to home for me. I lived in North Carolina for nearly two decades, and I have more blood relatives there than in any other state. (Not to mention countless friends.) Not one of them tells me how great their broadband is. More than a few complain about it. And I can guarantee that the complaints won’t stop once the Governor signs the misleadingly-named “Level Playing Field/Local Gov’t Competition act” (H129), which the cable industry has already been lobbied through the assembly.
The “free market” the phone and cable companies claim to operate in, and which they mostly occupy as a duopoly, is in fact a regulatory zoo where the biggest animals run the place. Neither half of the phone/cable duopoly has ever experienced anything close to a truly free market; but they sure know how to thrive in the highly regulated one they have — at the federal, state and local levels. Here’s Ars on the matter:
Let’s be even clearer about what is at stake in this fight. Muni networks are providing locally based broadband infrastructures that leave cable and telco ISPs in the dust. Nearby Chattanooga, Tennessee’scity owned EPB Fiber Optics service now advertises 1,000Mbps. Wilson, North Carolina is home to the Greenlight Community Network, which offers pay TV, phone service, and as much as 100Mbps Internet to subscribers (the more typical package goes at 20Mbps). Several other North Carolina cities have followed suit, launching their own networks. In comparison, Time Warner’s Road Runner plan advertises “blazing speeds” of 15Mbps max to Wilson area consumers. When asked why the cable company didn’t offer more competitive throughput rates, its spokesperson told a technology newsletter back in 2009 that TWC didn’t think anyone around there wanted faster service. When it comes to price per megabyte, GigaOm recently crunched some numbers and found out that North Carolina cities hold an amazing 7 of 10 spots on the “most expensive broadband in the US” list.
North Carolina has a long tradition of self-help and self-reliance, from founding the nation’s first public university to building Research Triangle Park. Befitting the state’s rural heritage, North Carolinians routinely take self-help measures to foster economic growth and provide essential local services such as drinking water and electric power. Statesville built the state’s first municipal power system in 1889, and over the years 50 North Carolina cities and towns followed suit. In 1936, the state’s first rural electric cooperative was launched in Tarboro to serve Edgecombe and Martin counties. Today, 26 nonprofit electric networks serve more than 2.5 million North Carolinians in 93 counties. Strangely, this self-help tradition is under attack. The General Assembly just passed a bill to restrict municipalities from building and operating broadband Internet systems to attract industry and create local jobs. Although pushed by the cable and telephone lobby, similar bills were defeated in previous legislative sessions. But the influx of freshmen legislators and new leadership in both houses created an opening for the dubiously titled “Level Playing Field” bill (HB 129).
No one disputes the importance of broadband access for economic growth and job creation. That’s why five cities – Wilson, Salisbury, Morganton, Davidson and Mooresville – invoked their self-help traditions to build and operate broadband systems after years of neglect from for-profit providers, which focus their investments in more affluent and densely populated areas. Not coincidentally, all five cities own and operate their own power systems or have ties to nonprofit electric cooperatives. (While the bill does not outlaw these five municipal networks, it restricts their expansion and requires them to make annual tax payments to the state as if they were for-profit companies.) How does a state that values independence, self-reliance and economic prosperity allow absentee-owned corporations to pass a law essentially granting two industries – cable and telephone – the power to dictate North Carolina’s broadband future? This question will be moot if Gov. Beverly Perdue exercises her veto power and sends this bill where it belongs: to the dustbin of history.
We don’t need more laws restricting anything around Internet infrastructure build-outs in the U.S. That’s the simple argument here.
We need the phone and cable companies to improve what they can, and we need to encourage and thank them for their good work. (As I sometimes do with Verizon FiOS, over which I am connected here in Massachusetts.)
We also need to recognize that the Internet is a utility and not just the third act (after phone and TV) in the “triple play” that phone and cable companies sell. The Net is more like roads, water, electricity and gas than like TV or telephony (both of which it subsumes). It’s not just about “content” delivered from Hollywood to “consumers,” or about a better way to do metered calls on the old Ma Bell model. It’s about everything you can possibly do with a connection to the rest of the world. The fatter that connection, the more you can do, and the more business can do.
Cities and regions blessed with fat pipes to the Internet are ports on the ocean of bits that now comprise the networked world. If citizens can’t get phone and cable companies to build out those ports, it’s perfectly legitimate for those citizens to do it themselves. That’s what municipal broadband build out is about, pure and simple. Would it be better to privatize those utilities eventually? Maybe. But in the meantime let’s not hamstring the only outlet for enterprise these citizens have found.
Here’s a simple fact for Governor Perdue to ponder: In the U.S. today, the leading innovators in Internet build-out are cities, not phone and cable companies. Look at Chatanooga and Lafayette — two red state cities that are doing an outstanding job of building infrastructure that attracts and supports new businesses of all kinds. Both are doing what no phone or cable companies seems able or willing to do. And both are succeeding in spite of massive opposition by those same incumbent duopolists.
The Internet is a rising tide that lifts all economic boats. At this stage in U.S. history, this fact seems to be fully motivating to enterprises mostly at the local level, and mostly in small cities. (Hi, Brett.) Their customers here are citizens who have direct and personal relationships with their cities and with actual or potential providers there, including the cities themselves. They want and need a level of Internet capacity that phone and cable companies (for whatever reason) are not yet giving them. These small cities provide good examples of The Market at work.
It isn’t government that’s competing with cable and phone companies here. Its people. Citizens.
No, these new build-outs are not perfect. None are, or can be. Often they’re messy. But nothing about them requires intervention by the state. Especially so early in whatever game this will end up being.
I urge friends, relatives and readers in North Carolina to Call Governor Perdue at (800) 662-7952, and to send her emails at governor.office at nc.gov. Tell her to veto this bill, and to keep North Carolina from turning pink or red on the map above. Tell her to keep the market for broadband as free as it’s been from the beginning.
[Later, as the last hour approaches…]
Larry Lesig has published an open letter to Governor Perdue, Here is most of it:
Dear Governor Perdue:
On your desk is a bill passed by the overwhelmingly Republican North Carolina legislature to ban local communities from building or supporting community broadband networks. (H.129). By midnight tonight, you must decide whether to veto that bill, and force the legislature to take a second look.
North Carolina is an overwhelmingly rural state. Relative to the communities it competes with around the globe, it has among the slowest and most expensive Internet service. No economy will thrive in the 21st century without fast, cheap broadband, linking citizens, and enabling businesses to compete. And thus many communities throughout your state have contracted with private businesses to build their own community broadband networks.
These networks have been extraordinarily effective. The prices they offer North Carolinians is a fraction of the comparable cost of commercial network providers. The speed they offer is also much much faster.
This single picture, prepared by the Institute for Local Self Reliance, says it all: The yellow and green dots represent the download (x-axis) and upload (y-axis) speeds provided by two community networks in North Carolina. Their size represents their price. As you can see, community networks provide faster, cheaper service than their commercial competitors. And they provide much faster service overall.
Local competition in broadband service benefits the citizens who have demanded it. For that reason, community after community in North Carolina have passed resolutions asking you to give them the chance to provide the Internet service that the national quasi-monopolies have not. It is why businesses from across the nation have opposed the bill, and business leaders from your state, including Red Hat VP Michael Tiemann, have called upon you to veto the bill.
Commercial broadband providers are not happy with this new competition, however. After spending millions in lobbying and campaign contributions in North Carolina, they convinced your legislature to override the will of local North Carolina communities, and ban these faster, cheaper broadband networks. Rather than compete with better service, and better prices, they secured a government-granted protection against competition. And now, unless you veto H. 129, that protection against competition will become law.
Opponents of community broadband argue that it is “unfair” for broadband companies to have to compete against community-supported networks. But the same might be said of companies that would like to provide private roads. Or private fire protection. Or private police protection. Or private street lights. These companies too would face real competition from communities that choose to provide these services themselves. But no one would say that we should close down public fire departments just to be “fair” to potential private first-responders.
The reason is obvious to economists and scholars of telecommunications policy. As, for example, Professor Brett Frischmann argues, the Internet is essential infrastructure for the 21st century. And communities that rely solely upon private companies to provide public infrastructure will always have second-rate, or inferior, service.
In other nations around the world, strong rules forcing networks to compete guarantee faster, cheaper Internet than the private market alone would. Yet our FCC has abdicated its responsibility to create the conditions under which true private broadband competition might flourish in the United States. Instead, the United States has become a broadband backwater, out-competed not only by nations such as Japan and Korea, but also Britain, Germany and even France. According to a study by the Harvard Berkman Center completed last year, we rank 19th among OECD countries in combined prices for next generation Internet, and 19th for average advertised speeds. Overall, we rank below every major democratic competitor — including Spain — and just above Italy.
In a world in which FCC commissioners retire from the commission and take jobs with the companies they regulate (as Commissioner Baker has announced that she will do, by joining Comcast as a lobbyist, and as former FCC Chairman Powell has done, becoming a cable industry lobbyist), it is perhaps not surprising that these networks are protected from real competition.
But whether surprising or not, the real heroes in this story are the local communities that have chosen not to wait for federal regulators to wake up, and who have decided to create competition of their own. No community bans private networks. No community is unfairly subsidizing public service. Instead, local North Carolina communities are simply contracting to build 21st-century technology, so that citizens throughout the state can have 21st-century broadband at a price they can afford.
As an academic who has studied this question for more than a decade, I join many in believing that H.129 is terrible public policy…
Be a different kind of Democrat, Governor Perdue. I know you’ve received thousands of comments from citizens of North Carolina asking you to veto H.129. I know that given the size of the Republican majority in the legislature, it would be hard for your veto to be sustained.
But if you took this position of principle, regardless of whether or not you will ultimately prevail, you would inspire hundreds of thousands to join with you in a fight that is critical to the economic future of not just North Carolina, but the nation. And you would have shown Republicans and Democrats alike that it is possible for a leader to stand up against endless corporate campaign cash.
There is no defeat in standing for what you believe in. So stand with the majority of North Carolina’s citizens, and affirm the right of communities to provide not just the infrastructure of yesterday — schools, roads, public lighting, public police forces, and fire departments — but also the infrastructure of tomorrow — by driving competition to provide the 21st century’s information superhighway.
To contact the governor, you can email her. If you’re from North Carolina, this link will take you to a tool to call the governor’s office. You can follow this fight on Twitter at @communitynets
You can follow similar fights on Twitter by searching #rootstrikers.
Well put, as usual. Hope it works.