Revenge of the broadband bullies

Pushback against municipal broadband and stalling tactics in granting access to utility poles keep incumbent ISPs safely entrenched

The prospects for a more competitive broadband market have grown grimmer of late, if it's even possible.

Americans already have little, if any, choice when it comes to broadband providers. The latest statistics from the FCC show that in areas where broadband internet access -- defined as at least 25Mbps -- is available, 78 percent have only one broadband provider to "choose" from. Meanwhile, 30 percent of the country have no providers offering broadband access.

Local solutions

Some communities have begun taking matters into their own hands, setting up municipal networks to directly provide better broadband access for businesses and schools. But many are thwarted by state legislatures working on behalf of telecom lobbies to pass laws that ban municipalities from competing against private ISPs.

As far back as 2014, the FCC indicated a willingness to intervene and preempt these kinds of ISP-driven protectionist state laws. Last year, it began its campaign to open up the broadband landscape, voting to block laws in North Carolina and Tennessee that prevented municipal broadband providers from expanding outside their territories.

After the FCC struck down North Carolina's protectionist law (one of 20 states with such statutes), the community-owned Greenlight ISP in Wilson, N.C., expanded its network to nearby homes that had previously only had access to the internet via sluggish DSL service. Greenlight's fiber network provided speeds of 40Mbps to 1Gbps at prices ranging from $40 to $100 a month -- better than service from incumbent providers that had lobbied for the protectionist law.

Good while it lasted

Unfortunately for municipal broadband, an appeals court last month struck down the FCC's actions, saying the agency had overstepped its authority. The FCC has indicated it does not have the resources to pursue the fight further. According to its statement, "municipalities that want to keep expanding their municipal broadband networks will have to fight to overturn state laws on their own."

Good luck with that -- telecom giants have a choke hold on legislatures in those states.

The appeals court decision means Greenlight will be shutting off its new fiber-to-the-home internet on Oct. 28, to comply with state law.

Competitive advantages

Municipal broadband is not a red or blue issue. In fact, most municipal broadband networks have been built in conservative areas and have broad, bipartisan support. This is an issue of jobs and education, not ideology.

Chattanooga, Tenn., has been a pioneer in municipal broadband. The city's mayor points to the city's fiber network as a significant factor in an economic renewal that's seen Chattanooga reap roughly $1 billion in the form of new jobs and other benefits. "We know that the wage rise is linked to internet jobs and particularly the technology sector," Andy Berke said.

But with telecom giants shoveling piles of cash to lawmakers, new protectionist laws are being passed each year. Tennessee state lawmakers in the spring voted down a proposal to expand municipal broadband. One state representative accused his fellow lawmakers of caving to pressure from lobbyists rather than listening to the electorate. Another blamed AT&T for leading efforts to kill the bill. 

For its part, AT&T argued that "taxpayer money should not be used to overbuild or compete with the private sector." Never mind that municipal networks like those in Wilson and Chattanooga are being paid for with bonds, not taxpayer money.

Pole dance

AT&T is also front in center in another fight aimed at forestalling competition: denying would-be competitors access to utility poles. Many cities do not have authority over their own poles, which are often controlled by utilities or the telecom companies.

If a new service provider wants to move into an area and string fiber, it faces two bureaucratic nightmares: getting an agreement in place with the pole owners, and then getting the physical access to the poles to string a new wire. Susan Crawford calls these two sources of delays and spiraling costs Swamp One and Swamp Two.

"A handful of companies  --  the usual villains in the internet access story  --  is very interested in keeping the status quo in place by quietly making sure that access to these vertical conflict zones is fraught with difficulties," Crawford says.

Chattanooga was lucky: A city-owned electric utility controls its poles, enabling the city to carry out its fiber plans.

Cities like Louisville, Ky., and Nashville are not so lucky. When Google Fiber came to town, hoping to set up a Gigabit fiber network, it was met with stalling tactics -- as long as nine months waiting for incumbent ISPs to prepare the poles for attachment of new wires. To cut down on these lengthy delays, the city councils passed reform laws.

AT&T sued both cities, disputing their authority to regulate utility poles; claiming infringement of its constitutional rights; arguing the laws violated its pole access contracts and its union agreements with workers; complaining that the ordinances were unworkable and that Google Fiber crews didn't always follow safety codes -- in other words, trotting out its greatest hits of obfuscating arguments.

"This is not really about poles at all," says Crawford. "Pole shenanigans represent an exercise of raw, entrenched power. The incumbents ... would rather keep things as they are. Tennessee, for example, remains a state in which more than three-quarters of households (and two-thirds of businesses) get download speeds that don't meet the FCC's requirement of 25 megabits per second."

So Google Fiber remains bogged down by delays -- and many of us are stuck as well. We're stuck with too little choice and expensive, sluggish broadband.

Copyright © 2016 IDG Communications, Inc.

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