Thursday, December 29, 2005

Verizon Story Explains Why Muni-Broadband Bans Need to Go

The New York Times ran a story in Wednesday's paper that explains why communities must be allowed to provide their own telecommunications infrastructure and deliver their own services.

The story focuses on the performance of Verizon's stock but, in so doing, looks at the hard financial choices Verizon is going to have to make in coming months. It's all about resource allocation. In this particular case, Verizon may have to curtail their fiber optic network build out in order to afford buying out their partner in Verizon Wireless.

While the focus is on the choices the company faces, the fact is that viewing the choices solely from the corporate perspective hides the true economic implications of those choices, particularly in communities where Verizon operates.

If Verizon does have to scale back its fiber rollout, that will have direct economic impact on the communities that will suddenly find themselves off the fiber path. But, nowhere in the article (and, probably, nowhere in Verizon's own discussions of the company's options) is the impact of these decisions on communities mentioned.

The facts are that no company or combination of companies has the financial resources to deploy fiber to every home and business in every community. Verizon can't do it in its own service area. Neither can AT&T (formerly SBC), nor can BellSouth, Qwest or any of the cable companies.

It is in light of these facts that restrictions on the ability of communities (cities, parishes/counties) to provide their own infrastructure and even deliver services to their own citizens must be viewed.

The clear impact of these municipal bans (or, in the case of Louisiana, sizeable hurdles masquerading as protections for 'free enterprise') is to relegate communities to the far side of the digital divide until further notice.

Think about it.

BellSouth is deploying fiber in the New Orleans area now only because flood waters from Katrina destroyed their copper wire infrastructure there. Lafayette has moved to deploy its own fiber optics network. But, what about Baton Rouge? What about Lake Charles? What about Alexandria? Shreveport? Monroe? Houma?

They are supposed to wait how long? Until some catastrophe hits there? Or, until a certain very warm place freezes over?

The odds are that AT&T will buy BellSouth within the next two years. While that will make it a much bigger company, it will also saddle it with a lot more debt which will, in turn, further restrict the company's ability to upgrade its infrastructure. The proof of this? Look no further than Verizon and the choices it faces now.

Meanwhile, the rest of the world is getting fibered up. What will that do to the economic prospects the aforementioned Louisiana cities and with them our state?

The economic fate of communities is too important to be determined by the narrow financial judgments of corporations whose focus on shareholder value leave no room for the interests of communities into the essential economic infrastructure deployment decision making process. Yet, this is precisely what is happening in those states where municipalities have been prohibited or restricted from entering the telecommunications infrastructure and services business.

These muni-broadband bans transfer sovereignty out of the community and into corporate board rooms where make communities are valued solely as revenue streams.

That the interests of the community don't make it into the corporate equation is bad enough; add to that the fact that the telephone and cable companies couldn't afford to deploy the fiber even if they genuinely cared about the communities only compounds the injury of these prohibitions on communities.

Be it resolved that in 2006 that we should all work to remove these municipal prohibitions from the books where ever we live. We're going to work to do that in Louisiana by working to repeal the so-called Municipal Fair Competition Act of 2004. This bad law works against the economic interests of our communities and our state.

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