Municipal broadband advocates fight back

A coalition of consumer groups, media organizations and municipal broadband advocates is firing back at the well-funded lobbying efforts of incumbent service providers aimed at preventing municipalities and their publicly funded utility companies from offering local broadband services.

At a Washington press conference, the group issued three separate reports which seek to validate the economic and policy underpinnings of the effort by cities and towns to build their own broadband networks. Those efforts have come under fire in many states, as incumbents have backed legislative initiatives prohibiting municipal ownership of broadband telecom networks in states including Florida, Indiana, Illinois, Ohio, Nebraska and Texas.

The overarching theme of the group's presentation is that, for areas neglected by incumbent carriers or limited to a single source of broadband access, municipal broadband networks are not only financially feasible but provide a true means of economic development and stimulate local economies without wiping out telecom competition.

Secondarily, however, the group intends to fight what it considers a campaign of misinformation being conducted by incumbents, who have fought municipal networks on the grounds they represent publicly funded competition of a private sector.

"The private sector is good at deploying new technologies where it is profitable," said Harold Feld, senior vice president of the Media Access Project, a public interest telecom law firm. "We are concerned with making it available to everyone."

Feld, Media Access Project colleague Gregory Rose joined with Consumer Federation of America President Mark Cooper and Ben Scott of the Free Press, jointly wrote one of the three reports, "Connecting the Public: The Truth About Municipal Broadband," in which they accuse the telephone companies of using outdated and inaccurate information to disparage municipal networks.

One the common misconceptions is that municipal networks crowd out competition, said Rose, but the opposite is often the case.

"There have been a couple of empirical studies, which show that, in fact, the existence of a municipal broadband system creates opportunities for other CLECs to enter into the marketplace and provides alternatives in terms of access and in terms of content," he said.

Incumbent carriers have also claimed that municipal networks represent a taxpayer boondoggle and don't have a track record of success.

There is very little data available, said George Ford, an economist who is president of Applied Economic Studies. He joined with telecom attorney Thomas Koutsky to author a case which examined how a municipal broadband network affected the economy of Lake County, Fla., which began offering municipal broadband service in 2001.

Comparing data on countywide sales between Lake County and similar counties that didn't get broadband networks, Ford and Koutsky concluded that "Lake County's economic growth was twice that of counties that didn't have broadband networks," said Ford. "The results were statistically quite strong."

Economic development is the primary goal of most cities and towns when they consider building a broadband network, said Barry Moline, executive director of the Florida Municipal Electric Association.

"This is a debate of philosophy versus facts," he said. "We think we have the facts on our side. Private sector says government should not compete with the private sector, but they are skipping over our communities. We are being left behind."

Incumbents argue that municipal networks are subsidizing telecom networks with taxpayer dollars to the detriment of the private sector but are taking home sizeable subsidies of their own, said Cooper. He pointed to Universal Service funds which directly subsidize some networks and the city of Philadelphia's $600 million incentive for Comcast to move its headquarters there as examples of direct subsidies, but added that there are a number of indirect subsidies as well.

The fact that a number of bills against broadband are failing is a point of encouragement to the group, said Ben Scott of Free Press.

"A broad coalition of citizens and private sector companies and mayors have come out in force and demanded that this anti-public legislation be stripped out," he said.