In wake of net neutrality decision, should cities build internet networks?

The fallout from the FCC’s decision to repeal net neutrality—the principle that all internet traffic and data must be treated the same without favoritism—is still taking shape. But some see the policy shift as a potential boost to the movement for more municipal broadband networks.

In an era where broadband connection and competition comes from just a handful of large companies, it’s tempting for many to envision high-speed internet access as a true public utility, controlled by local government and managed in a way that provides maximum access. More than 185 communities nationwide offer some form of publicly controlled broadband service, including many that have laid their own fiber networks.

If the worst fears of consumer advocates come true, that repealing net neutrality rules leads to big telecom companies such as Comcast favoring content, charging access fees to new startups, and placing barriers to competitors, it may hasten the rise of publicly owned networks (Comcast’s NBCUniversal unit is an investor in Vox Media, which owns this site). A more public internet would certainly offer some much-needed competition. According to a 2015 White House study, three out of every four Americans have access to just a single provider offering high-speed service (then considered 25 Mbps).

Karen Culp

Even more promising for advocates is data showing the public would like to see these networks created as a check on telecoms providing poor service. According to a Pew Research Center poll, 70 percent of more than 4,000 Americans surveyed, local governments should have the right to create high-speed networks if current offerings are “too expensive or not good enough.”

Those arguing for and against municipal broadband often clash on cost. Proponents point out that a public system that isn’t beholden to shareholders can offer cheaper service and provide high-speed offering to remote and rural areas overlooked by big companies. Opponents, especially the telecom companies themselves, argue that long-term maintenance costs, and the need for future upgrades, places an unsustainable financial burden of local governments, who know nothing about maintaining a broadband network.

The pro-public case study most cited is Chattanooga, Tennessee, where a citywide service has been credited as a catalyst for the city’s tech scene. The municipality’s Electric Power Board set up a fiber-optic network in 2010, and now offers the service, which gets excellent ratings from Consumer Reports, for $70 a month. The city’s former mayor, Ron Littlefield, told Vice Motherboard that the service acted as an incentive and subsidy for small businesses and startups. Before the city built its own system, it had to accept whatever was offered.

“We didn’t rate with Comcast because we were a small market,” says Littlefield. “By virtue of that, we had little say over what service we were receiving.”

Municipal networks can also offer huge boosts to underserved communities. CityNet, a public network in Santa Monica, California, prioritized connecting affordable housing sites, and offers students at a handful of buildings desktops and free broadband to help them do homework.

Opponents point to expensive boondoggles where city efforts to startup systems failed and cost taxpayers millions. The iProvo network in Utah, a $39 million investment, ended up being sold to Google for $1 after failing to catch hold. And a recent analysis by the University of Pennsylvania found that, of the 20 public services that provided financial records between 2010 and 2014, 11 had negative cash flow, suggesting the economics, and long-term viability, aren’t nearly as easy many may imagine.

In much of the country, the playing field for cities trying to create their own broadband network is far from level. More than 20 states have passed laws that restrict the formation of municipal broadband networks. And as the debate plays out in municipalities across the country, cities and small towns often run up against well-funded political campaigns by telecom giants.

This past fall, Fort Collins, Colorado, passed a resolution to authorize the creation of a city-wide broadband network, battling an industry campaign that outspent advocates roughly $900,000 to $15,000 (Mayor Wade Troxell was encouraged by the results, especially considering the “headwinds of incumbents trying to misinform the electorate).

In the recent Seattle mayoral race, Comcast and CenturyLink, two broadband providers, donated $25,000 each to a political group that explicitly fought against the formation of a publically owned municipal broadband network, a policy plank of the losing candidate. Even the Koch brothers, the deep pocketed conservative donors, are involved, helping to bankroll the Taxpayer’s Protection Alliance, which tried to defeat a municipal network proposal in Louisville, Kentucky.

The industry pushback against these efforts seems particularly anti-competitive and anti-consumer at a time when access to fast and affordable internet service is considered necessary to compete in today’s economy. Despite sometimes uphill battles, there are many other plans in the works—even New York City is considering the idea. Local governments should have the freedom to provide their residents with alternatives that hopefully spur additional competition, according to groups such as Consumers Union, the policy and mobilization arm of Consumer Reports.

"At this point, who would go to a city that doesn't have electric utilities?” Louisville chief of civic innovation Grace Simrall told Wired. “Who would go to a city that doesn't have water, or access to highways? Fiber is that type of infrastructure plan."