- The Information Technology and Innovation Foundation published a paper that argued public broadband networks have an unfair advantage over private ISPs and that they aren’t as efficient in their deployments
- Gigi Sohn, an advocate for public broadband, said communities don’t build broadband networks unless the private providers are giving them ‘subpar service’
- Municipal broadband continues to grow in the U.S., despite facing various opposition
Municipal broadband is accustomed to its fair share of scrutiny from lobbyists and incumbent ISPs. Nonprofit ITIF claims public broadband providers get advantages that private players don’t and that they aren’t as efficient in building networks.
A new study from ITIF analyzed 20 randomly selected government-owned networks, looking at their financial resources, their profitability and the regulations of the states in which they operate.
“The playing field for broadband service and deployment is often unlevel and skewed in favor of government-owned networks, whether it’s finances unavailable to private ISPs or various regulations that advantage government-owned networks,” said Ellis Scherer, ITIF’s research assistant for broadband policy and author of the study.
For example, the report refers to a Maine law that supports funding for municipal broadband projects. A municipal broadband network can also fall “under the same umbrella” as another utility, say an electric service, Scherer told Fierce. The electricity provider’s revenue “would basically be shared between the electric utility and the government-owned network.”
Private ISPs, though they have various funding opportunities via state and federal programs, don’t have access to that kind of system, he said. And municipalities often receive capital grants to cover some of their deployment costs. He also pointed out the regulatory hurdles private ISPs face when deploying their networks. Indeed, operators like Altafiber, Brightspeed and Ziply have expressed frustrations with how long the permitting process takes.
Access to poles is another issue for private ISPs. According to ITIF, the Tennessee Valley Authority indirectly owns poles through the local power companies that purchase electricity. The utility can set rates for third-party access “well above Federal Communications Commission rates.”
Based on data from the FCC broadband map and BroadbandNow, ITIF found 18 of the 20 municipal networks were built where the local broadband market had “comparable private options in speed and price.” Further, Scherer argued because of the “poor financing models” public networks often have, they’re “not equipped to move at the pace and update as quickly as private providers.”
ITIF has a public list of donors who contributed more than $10,000 in the past fiscal year, which include a few of the big telco names: AT&T, Charter, Comcast, T-Mobile and Verizon.
Public broadband advocate strikes back
Gigi Sohn, executive director of the American Association for Public Broadband (AAPB), said ITIF’s paper wipes under the rug that private ISPs have received billions from federal and state sources, including the Universal Service Fund, the Affordable Connectivity Program and soon from BEAD.
Meanwhile, the advantages public networks get are “limited to a handful of state grant programs and the fact that some localities own utility poles,” she said in a LinkedIn post.
In Sohn’s opinion, the most “laughable” part about ITIF’s report is that it states “there is no gaping market failure in need of repair by [public broadband networks].”
“You’ve got tens of millions of U.S. households that either can’t afford broadband or don’t have access to it at all,” she told Fierce. “Communities don’t build broadband networks unless the private ISPs are giving them subpar service.”
ITIF’s report highlights most of the municipal networks it analyzed earned less than their operating costs. Of the 17 municipal networks that had their financial information available, Minnesota’s Barnesville Municipal Utilities was “one of the best-performing” because it was “profitable without receiving alternative funds and has deployed across the entire city.”
But broadband is a utility just like water, electricity and roads, Sohn said. “These are entities that are filling a need for a necessary service” and were not created to turn a profit. The figures in the report also “don’t reflect savings in other places” like in the electrical grid and water systems.
“The numbers, in my opinion, are completely meaningless unless you look at the entirety of what this system is doing and the cost savings in other places that come from it,” she said.
Muni broadband continues to grow
Public broadband providers are a rapidly growing cohort, with the U.S. having just under 500 municipal networks online. And it’s hardly the first time they’ve run into opposition.
The city of Vineland, New Jersey faced pushback this year when it began the process of constructing a municipal fiber network. A lobbying group claimed the city is not being transparent about its process. Bountiful, Utah is another city where an organization tried to halt public broadband construction. An article from Ars Technica in May reported private ISPs like Comcast and Charter often use dark money groups to attack municipal broadband.
Niel Ritchie, executive director of the League of Rural Voters, told Fierce it doesn’t matter if a provider is public or private, as long as they have the experience and resources to build and operate a broadband network.
“Even after networks are built, there are still too many Americans that have barriers to using the internet,” he said. So, it’s also important ISPs partner with communities to provide low-cost internet options for households and ways to improve digital literacy.
“If [municipal systems] can compete with incumbent private network providers to do this, then they should be given some opportunity to compete,” said Ritchie.
Interestingly, some private providers are working with local entities to deploy broadband. ALLO Fiber is partnering with the City of Joplin, Missouri to a build a fiber network in the city. However, this isn’t by definition a municipal network, as ALLO is entirely responsible for building and operating it.
Lumen meanwhile is an anchor tenant for Springfield, Missouri’s utility, which means it uses the utility’s fiber network to deliver high-speed internet.
