By Jeff Milchen, February 10, 2015
A large and growing portion of small businesses rely on a high-quality Internet connection for essential operations, but lack of competition and choice among broadband providers has forced many businesses — and most Americans — to choose between inferior service or exorbitant prices.
Federal Communications Chair Tom Wheeler says the vast majority of the country has only a company providing Internet access above 25 Mbps, what he called “table stakes” for today’s economy.
Often responding to local business concerns, many local governments have been investing in fiber optic networks or partnering with independent firms to create real choice among Internet providers. Chattanooga, Tennessee built its own fiber network and became the first U.S. city to bring the entire community gigabit service — fast enough to download a high-definition movie in less than two minutes. Chattanooga’s success in creating service 50 times faster than the national average received better media coverage in England than most of the U.S.
More important than sheer speed, such networks help customers to enjoy consistent and fast service with multiple users and devices simultaneously.
Kansas City received attention for contracting with Google for its broadband, but other communities have done even better partnering with local firms whose profits recirculate locally, plugging what is typically a huge leak from local economies. In Iowa, the City of Indianola is building a fiber network and leasing it to a local company, which then provides affordable gigabit service to locals.
The Institute for Local Self-Reliance tracks more than 400 communities where local governments offer or partner with independent ISPs to provide telecommunications access to businesses and/or residents. Often, the network starts by serving businesses in certain areas of town and may be expanded over time.
But telecommunications corporations are erecting obstacles to success elsewhere. Some 20 states have removed or restricted the ability of communities to build or partner in these networks at the urging of telecom giants. Not surprisingly, these corporations gladly will invest in electing politicians willing to protect lucrative profits from real competition.
In Wilson, North Carolina, the municipal fiber network Greenlight has helped small businesses thrive for several years and attracted many businesses to the city. But a state law passed in 2011 at the urging of Time Warner Cable now prevents Wilson from offering service to neighboring towns with poor Internet access. Perhaps the telecom giants are especially threatened by the precedent of real customer service. Greenlight promises technical support at any time from local staff.
The Federal Communications Commission (FCC) currently is considering petitions from Wilson and Chattanooga to bar such state laws limiting competition. In effect, the FCC will decide whether to preempt the states’ preemption and restore local authority.
However, states should take initiative without waiting for the FCC. Our local governments need the freedom to ensure all businesses and residents are well served. In particular, no state should erect barriers to open-access approaches where local governments build infrastructure that may be used by multiple private-sector competitors. These are public-private partnerships that truly have potential to capture the advantages of both private enterprise and community investment.
The American Independent Business Alliance, which I co-direct, urges the FCC to restore this local authority and has joined the national Coalition for Local Internet Choice (CLIC) to advance community rights. We believe local governments should make these decisions because they best understand local needs and circumstances. And we stand firmly in the majority with citizens across the political spectrum.
Fast, affordable, and reliable Internet access is essential for many independent businesses to thrive. For their sake and our overall economic health, we should ensure telecom oligopolies cannot prevent us from taking local action to meet those needs.
Jeff Milchen is a co-director of the American Independent Business Alliance (AMIBA), which supports independent community-based business and pro-local business coalitions in more than 85 communities. A Montana-focused version of this commentary was published in the Billings Gazette.
Community Broadband Networks, a project of the Institute for Local Self Reliance.
Map of community networks in the U.S. and the states that impede or bar them.
In addition to the arguments above, municipal broadband will be a huge economic boon to many communities because it plugs one of the largest direct leaks to their local economy. Large telecom firms provide few local jobs relative to the money they export from communities. Conversely, sourcing internet, TV and cable service locally creates a large local mutiplier effect.