Midtown Blogger/Manhattan Valley Follies: Extreme Tech- FCC and Municipal Broadband

Monday, February 2, 2015

Extreme Tech- FCC and Municipal Broadband

FCC may kill state restrictions on municipal broadband, force ISP competition

By Joel Hruska on February 2, 2015 at 1:44 pm
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For years, various ISPs have sponsored state-level restrictions on municipal broadband networks that prevent public-private partnerships, block any attempt to fund such networks, and require expensive multi-year impact studies as a precondition of proposing them. For months, it’s been rumored that the FCC might act to curtail such actions, having identified them as a major reason why Americans continue to pay more for less service, and now those rumors have been born out. Wheeler is rumored to be circulating a draft decision to his fellow commissioners, with a decision expected as soon as February 26.

If the draft decision is adopted, it would preempt the restrictions that have blocked “timely and reasonable” deployment of high-speed internet in Chattanooga, TN and Wilson, NC. Both Chattanooga and Wilson have previously requested the FCC intervene on their behalf. In Wilson’s case, the city created the Greenlight network and provides symmetrical 40Mbps fiber optic service to its customers along with home calling and cable TV for packages that start at $102.95 and run to $161 (the internet service is identical in each tier). It’s been blocked from expanding the service, however, by new state regulations that forbid the company from doing so.

Image by The Daily Dot.

Evidence from both cities has again indicated that municipal broadband networks benefitcustomers by leading to sharp drops in rates from competing networks, but that hasn’t stopped the cable and telco companies from bleating about how such competition is actually government-sponsored communism in disguise. The broadband-banning laws typically contain clauses that do not allow a city to borrow from any other fund to pay for expansion, while simultaneously requiring public hearings, referendums, and votes for any expansion of a network, thereby guaranteeing that funding will be nearly impossible to obtain. Cities are also required to charge above “cost” for a service, but that cost is calculated at rates and tax levels that would only apply to private providers. Geographic areas are also sharply restricted in the current North Carolina law, ensuring that Wilson’s network cannot take advantage of any economy of scale to provide more efficient service. ISPs will undoubtedly push back hard against any such ruling, Verizon has all-but promised to sue if the FCC takes significant action to rein in its practices.

If Wheeler’s draft resolution goes forward, the FCC will use its mandated requirement to ensure Internet service is provided in a timely and reasonable fashion to attack the laws that states have enacted to prevent it. No court has yet ruled on whether or not the FCC’s petition can apply in such scenarios, but the fact that multiple cities have asked the FCC to intervene may weigh favorably upon the court. The GOP commissioners sitting on the FCC have already voiced total opposition to such plans, believing that private regulation of the sort we already enjoy is the most effective way to guarantee competition and have argued that if the FCC is allowed to expand its authority under Section 706 more broadly, it could extend into extensive regulation of services. Google and Netflix themselves are unconcerned about such outcomes; the former has called on the FCC to force line sharingand regulate ISPs under Title II. President Obama has also called on the FCC to take action to improve US ISP competitiveness.

Now read: FCC raises broadband definition to 25Mbps, mocks ISPs