Municipality merits

The telecom world is finally taking note of a trend that has actually had its humble beginnings in the mid-1990s--municipally owned broadband networks.

Cities, towns and their publicly owned utility companies have been building broadband networks for almost the last decade, dating back almost to the very beginning of cable modems and DSL networks. Towns such as Glasgow, Ky., were early to realize that by building their own broadband network, they could retain businesses, improve their schools and medical care, and offer entertainment services.

Now that a growing number of cities are building fiber optic networks and Wi-Fi nets, however, service providers are growing concerned about the lost business this represents. The result has been a sudden burst in state laws to prohibit or limit what municipalities can do to fund and build a broadband network.

Not all of these efforts succeed--a proposed law in Indiana just died in committee. But as attorney Jim Baller of Baller & Herbst, who has been involved in helping municipalities in this area, notes, the newer laws are getting more and more onerous.

It's no secret that large incumbent service providers on both the telco and cable side, are lobbying heavily for these laws. Their viewpoint is understandable--a tax-supported government or electric utility has an advantage when it comes to building a network.

But it is impossible to dismiss the concerns of cities and towns, which are seeing their livelihood threatened and view broadband as a means to improve economic development.

Rather than seeking government intervention in the form of greater regulation--something both cable and telephone companies claim to hate--incumbents should be aggressively seeking means of working with municipal leaders to guarantee greater access to broadband resources for a wider swath of the U.S.

Email me at cwilson3@primediabusiness.com.