ITIF municipal broadband debate reveals strong passions on both sides

Of all the policy topics in telecom, few are debated with as much passion as municipal broadband networks—and an event sponsored by the Information Technology & Innovation Foundation today was a prime example of that dynamic in play.

Using the sort of formal debate process that many of us learned in high school, advocates and opponents discussed the thesis that “Governments should neither subsidize nor operate broadband networks to compete with commercial ones.”

Jeffrey Eisenach, managing director and principal of Navigent Economics, supported that view. When a municipality passes legislation to fund a broadband project, it is essentially “coercing people to give up money, many of whom don’t want to do it,” Eisenach said.

Christopher Mitchell, director of telecommunications for the Institute for Self Reliance, countered that argument, noting that municipalities typically obtain funding through bonds. If local officials raise taxes to fund a broadband network without sufficient support, he said, they will lose their jobs when the next election comes around.

No other choices?
Municipal broadband networks typically come about when local community leaders have exhausted other options, including trying to persuade the incumbent local carrier to offer broadband or upgrade its broadband service, argued James Baller, president of Baller Herbst Law Group.

But ITIF President Robert Atkinson argued against municipalities overbuilding existing communications networks. Noting that municipal networks often are built in areas already served by both a telco and a cable operator, Atkinson said, “In a high fixed-cost industry, three is not better than two.”

Overbuilding, he said, “takes money out of the broadband ecosystem” by forcing incumbents to lower prices, thereby reducing the funds they have available for future network expansion."

Michell, however, challenged the idea that municipal broadband networks duplicate networks that incumbents already have built, arguing that municipal networks are only built when existing networks are deficient. “Is an interstate a duplication of a dirt road?” he asked.

Anti-municipal network legislation on the rise
The ITIF debate took place at a time when more and more states are introducing legislation to prohibit or restrict broadband networks. North Carolina, for example, recently passed such a bill.

Atkinson argued that legislation often may be necessary to ensure the proverbial level playing field. He argued, for example, that municipalities should not be allowed to use rights of way under more favorable terms than what are available to commercial network operators.