Recently an amendment was attached by US House of Representatives Rep. Marsha Blackburn (R-Tenn.) to the fiscal 2015 Financial Services appropriations bill that would keep regulators from modifying state laws prohibiting municipalities from building and operating broadband networks. The amendment was approved 223-200 in the House last week, but a final version of the bill must still be passed by the House and Senate and signed by President Obama to become law.
Municipal networks are an old concept as many of the smaller Independent Operating Companies are actually owned by their local communities. Today’s municipal broadband networks are being built for what is perceived as the same reason. Those older networks were built because the old AT&T did not bring telephone service out to those small towns. The newer networks are being built because they feel that the incumbent providers are not building out higher speed networks.
Needless to say, service providers are unhappy with cities building their own networks with taxpayer dollars. This represents a way of raising capital at a very low cost. From a service provider standpoint, all that is happening a new competitor is being created. This has led the service providers to go to the state governments to restrict the building of municipal networks. They are letting their lobbying dollars work for them.
I don’t like that idea at all. I think if anyone wants to build infrastructure they should be allowed to do so. If service providers don’t want cities in the game, then all they have to do is build Fiber Optic Access Networks. Where Verizon FiOS exists, these debates don’t happen.
My only caution to the cities is that these networks are not in a stable technology place. Unlike Roads or Sewers, broadband infrastructure has evolved dramatically in the last 15 years. It will probably be unstable for another 10 years. This means that a network built now probably requires a rebuild in another 10 years. Cities generally work on longer timelines than that. They can get locked into poor technology if they don’t plan better.
So build them with caution.
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