Thursday, January 07, 2010

"Municipal fiber needs more FDR localism, fewer state bans"

Christopher Mitchell, the best researcher/commentator on municipal fiber in this country bar none (IMHO) has an outstanding essay up on Ars Technica today that you ought to read.

http://arstechnica.com/tech-policy/news/2010/01/municipal-fiber-needs-more-fdr-localism-fewer-state-bans.ars

It holds Lafayette up as the premier example of a city that has done the right thing by its citizens. I have to say that I agree. But more than that: this essay lays out as coldly and directly as I have seen it done the rock-solid case for municipal broadband. It doesn't pull punches, and it doesn't bother to engage in histrionics.

I cand do no better than to excerpt the case he lays out and emphasize the parts that delight a Lafayette partisan but really, you'd be better served to read it yourself and not bother with my abridgement...it's not long and it's well-crafted.
The “broadband market” in much of the US happily provides snail-speed connections at inflated prices when compared to many of our peer nations....Recognizing the disconnect between the best interests of distant shareholders and the best interest of their community, cities across the US have built their own networks, taking a page from the thousands of small cities that built their own electricity networks a century ago when private utilities ignored them...

Lafayette, Louisiana is a good example. The city begged its incumbents to beef up local broadband networks and was rebuffed. This Cajun country community decided to build its own next-generation network. The incumbents argued that the households and businesses of Lafayette had all the broadband they needed and sued to stop the city. This year, after years of litigation, the victorious city began connecting customers to LUS Fiber.

LUS Fiber may offer the best broadband value in the country, offering a true 10Mbps symmetrical connection for $29/month. Those wanting the 50Mbps symmetrical connection have to pony up just $58/month—about what I pay to my cable provider in Saint Paul for "up to" 16/2 speeds.

Lafayette and Monticello were lucky because they had the power to build a digital network. Many communities do not.... Eighteen states impose some barriers to community broadband....Though Monticello and Lafayette have succeeded in spite of barriers, many other communities are unable to persevere, and watch their younger generation leave for modern opportunities elsewhere...

...communities have fought this fight before—when electricity was only available to the urban and affluent. Profit-maximizing companies not only refused to build the grid to low-profit areas but argued those areas should not be permitted to wire themselves. Fortunately, FDR saw things differently:

I therefore lay down the following principle: That where a community—a city or county or a district—is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up, after a fair referendum to its voters has been had, its own governmentally owned and operated service.

We need FDR to remind us that we are discussing the basic right of a community to invest in its future. Communities must not be held hostage by an absentee company that knows it can overcharge and under-invest without consequence.

Wireless is nice for mobility, but does not threaten the wired monopoly or duopoly. These networks—particularly full fiber-optic networks—are natural monopolies. There is no natural “market” any more than one could imagine a competitive market in streets or metro airports. This is infrastructure—the foundation for many other markets...

Industry-funded think tanks have produced many reports claiming publicly owned networks are failures. Their methodology is suspect—equating long-term investments in next-generation networks with lost money....The truth is that publicly owned networks do quite well. Communities typically borrow from outside investors to build the network and pay off the loans over a 15-20 year period with revenues from phone, television, and broadband services...

State barriers to publicly owned broadband networks may benefit monopolistic cable and telephone companies but can cripple communities within those states. Of course, such policies also give a competitive edge to cities in other states who have moved ahead.

Actually,” says Lafayette’s Republican Mayor, Joey Durel, “I often say with tongue firmly planted in cheek that I hope that the other 49 states do outlaw what we are doing. Then I will ask them to send their technology companies to Lafayette where we will welcome them with open arms and a big pot of gumbo.

Cold weather is gumbo weather and we can sit down over a bowl and watch TV with our grandchildren, and later help with their homework over a medium that we own. It's been a good week for self-reliance in Lafayette regardless of the icy weather and Mitchell's essay is nice reminder of how good we have it.

PS: Check out Christopher's blog: muninetworks.org, and for some background on the topic of municipal restrictions his recent post.

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