DPI Webinar: Cautions Against Risks of Government-Owned Networks

DPI Webinar Cautions Against Risks of Government-Owned Networks

Sept 30th, 2014

The Ball State Digital Policy Institute offered a webinar on the topic of Municipal-Run Broadband on Wednesday Sept 24th. The webinar provided the insights of three panelists addressing the risks and perceived benefits of municipal broadband.   The panelists were: Michael Santorelli, director of the Advanced Communications Law and Policy Institute at New York Law School; Randolph May, president of the Free State Foundation; and David Merritt, former city council member of his municipality of Glenwood Springs, Colorado. The panelists were asked to comment on key issues concerning this area of communications policy by moderator Barry Umansky, Senior Fellow and Senior Policy Counsel at the Digital Policy Institute and Professor of Telecommunications at Ball State University. The full archive of the webinar is available at: http://dvisweb1.bsu.edu/media/BSU/DPI/2014/Sept_24th/.

Michael Santorelli began the discussion by highlighting the key finding of ACLP’s June 2014 Report: Understanding the Debate Over Government-Owned Broadband Networks. Santorelli highlighted the basic conclusions derived from the report’s data driven objective analysis. First, the report provided the context and historical perspective regarding the troubled history of municipal networks in the United States. Second, it examined ten case studies of existing or pre-existing municipal broadband instances, which spotlighted faltering, failed and perceived successful municipal broadband efforts. Third, Santorelli called attention to ten findings in the report. These findings show that, in large part, successful municipal broadband initiatives were hard or impossible to replicate, and were in fact the result of a unique set of external factors including financial aid or stimulus.

On the subject of competition, Randy May expanded on the view that competition under certain circumstances is not always fair competition.  Mr. May emphasized how, in many instances, there is not an even playing field for different types of broadband providers. Often, private or external broadband initiatives do not have the same advantages and preferential treatment afforded to municipal or local efforts. These benefits for municipal efforts often include receiving cost incentives, tax subsidies, and greater access to permits and rights of way.  Mr. May also commented on municipal broadband providers who understate costs and overstate demand, with the end result often being financial instability.

David Merritt provided valuable insights about his personal experience with municipal broadband deployment in Glenwood Spring, Colorado. When the Glenwood Springs city council decided to invest in extending fiber optic network within their locality, the community did not yet have embedded carriers that could lead broadband deployment in the area. Glenwood Springs’ system is still running, but fell ten percent short on their operations budget. Mr. Merritt went on to offer other perspectives on the potential considerations municipal broadband proponents should have in mind.

Moderator Barry Umansky prompted Michael Santorelli and Randy May to comment on the overall policy implications of municipal broadband efforts. Santorelli offered the step-by step checklist in the ACLP Municipal Broadband Report, which walks policy makers through a list of considerations regarding broadband policy choices. Additionally, Santorelli touted New York as model for successful broadband deployment. Randy May explained why the federal preemption of municipal broadband bans would be unwise.   He favored a discretionary approach where state municipalities themselves are able to make the choice that best suits them. In examining the FCC’s jurisdiction to preempt state bans on municipal broadband, Michael Santorelli and Randy May concluded that the FCC’s authority on the issue is vague at best. When asked to comment on the potential effects of a Supreme Court ruling that might reject the FCC’s authority to ban municipal broadband, Michael Santorelli alluded many possible outcomes which included a new clarification of the role of state entities in communications policy matters.  David Merritt encouraged the involvement of local state legislators in making informed decisions regarding the implementation of broadband initiatives by either municipal authorities or the private sector.

In concluding remarks, Randy May advocated for an increased understanding and appreciation for the reasons behind the use of bans as a means to increase competition.   He said it should be up to each individual state to approve or not approve municipal broadband networks, and that any action taken by the FCC to preempt such state laws would certainly lose in the Supreme Court. Michael Santorelli suggested that to create competition and more users, the FCC should focus on increasing the demand for broadband rather than increasing broadband access choices.