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Incumbents don't want cities and towns to build their own gigabit networks, but what's their alternative plan?

If Not Muni Networks, Then What?

Carol Wilson
7/28/2014
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The latest round of municipal network battles has quickly escalated to the federal level, with FCC Chairman Tom Wheeler promising to challenge state laws prohibiting muni networks and Republicans in Congress trying to prevent his agency from interfering with state laws. (See Muni Utilities Take Gigabit Fight to FCC.)

This looks for the world like the latest chapter in what has been a decade-long battle between incumbent carriers and the cities, towns and rural areas they serve. But it's not.

A few things have changed since the first few rounds of the muni network wars.

First, many of these areas have seen what gigabit broadband services can do, courtesy of the broadband stimulus-funded buildouts, state projects, the Federal Communications Commission (FCC) 's own gigabit challenge, Google Fiber Inc. and more. They've seen what EPB Fiber Optics of Chattanooga, Tenn., accomplished and they've also seen commercial service providers, led by AT&T Inc. (NYSE: T), make gigabit promises as well. (See Chattanooga Rocks 1-Gig FTTH Service, Power Companies Promise Gigabit Broadband, Google Fiber Shifts Into High Gear).


For ongoing updates on Gigabit Cities and the municipal network debate, visit Light Reading's Broadband/FTTx content channel.


But for under-served communities, watching gigabit speeds reach places such as Austin, Tex. -- an area already flowing over with tech business -- is a little like watching the circus train pass through town but never stop.

The second significant change has been in the US economy, which continues to flounder somewhat, due largely to major long-term job trends that haven't yet been addressed. Communities that once counted on manufacturing, for instance, are still seeking similar well-paying jobs for those who aren't college educated. The pervasive availability of goods and services online, layered on top of the rise of massive chain stores, has made it hard to impossible for local retail to survive. Other industries - publishing/printing, for example - have been dramatically impacted by the rise of the Internet as well.

At the same time, the rise of cloud computing and data storage/analytics has prompted competition for data centers and other similar facilities. Financial services, healthcare, education, retail, and many more industries are dependent on the availability not just of high-speed data, but of gigabit speeds.

And finally, the technology itself and some of the painful experiences of the past have led to a smarter approach to building fiber-optic networks to support these gigabit speeds. The common argument a decade ago was that cities didn't know how to run networks, but the experiences in Chattanooga and Bristol, Va., among others, has laid that thinking to rest.

When Rep. Martha Blackburn (R-Tenn.) launched the amendment to a House bill to keep the FCC from challenging state laws against muni networks, she waged the expected argument that states' rights shouldn't be violated, but she also mentioned the "vibrant communications marketplace" that didn't need interference from the feds. (See The Municipal Menace?.)

I'm wondering if the communities seeking help from EPB or Wilson Energy's Greenlight in North Carolina consider themselves to be part of a "vibrant communications marketplace." If incumbents are going to continue working to handicap those that would build gigabit networks where they don't yet exist, they need to think about what their answers to those under-served communities will be.

The need for gigabit networks is only going to increase. Simply trying to stalemate municipal efforts isn't going to change that. I personally think that's why Wheeler sees the need to engage the FCC in this process. Whether that's the right approach - or even if the Commission has that authority - I don't know.

But waiting for incumbents to get around to upgrading ageing copper networks in many areas seems a strategy already doomed to failure. These companies exist to make money, and if they could have done that building gigabit networks in smaller cities and towns, it would have happened by now. So if not a muni-backed network, then what?

— Carol Wilson, Editor-at-Large, Light Reading

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mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
8/6/2014 | 6:53:37 PM
Wireless balloons will save us...
Muni builds haven't had a great track record so far, but that's not a prediction of how they might perform in the future. Still, it may be up to Google and Facebook to try to disrupt the telcom monopolies. Perhaps wireless broadband delivered by drones will actually become practical (if the FAA allows commercial use of drones..).
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
7/31/2014 | 3:31:50 PM
Blackburn
Great blog post, Carol. 

Marsha Blackburn has done the voters of her state a favor by announcing that she's a conservative in name only, and in fact she's bought and paid for by lobbyists. 
briandnewby
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briandnewby,
User Rank: Light Sabre
7/30/2014 | 3:01:56 PM
Re: The Muni Trap
It's complicated, further, but the fact that pure wireless spectrum is an FCC thing.  I was on a city council 10 years ago looking at muni wi-fi, and cellular data service is much more affordable and common now.  Cutting the cord was a bit of a pipe dream then and now, from a phone perspective, it's very common.

There are taxation issues and city revenue impacts related to these changes as well.  Plus, on the cable side, constant disruption to citizens with road construction (even if paid by the vendor) takes an initial toll on citizen satisfaction and, quite likely, another toll on needed road repairs down the road.

All told, as nutty as it sounds, it's almost an area, really, municipal governments should exit.
kq4ym
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kq4ym,
User Rank: Light Sabre
7/29/2014 | 1:26:56 PM
Re: The Muni Trap
Yep, it's going to be hard going to get both sides of the issue pulling for the best of both world's. State's right advocates don't want Federal involvement, but there's going to have to be some compromise made to get the ball rolling smoother than it has in past years. It's not going to be easy to do battle with the companies with well paid lobbyists on their sides.
mendyk
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mendyk,
User Rank: Light Sabre
7/29/2014 | 9:36:23 AM
Re: Digital divide revisited
That's only because we focus on the really important issues, like telling people whom they can marry and how they manage their reproductive systems. Snide comment aside, it is hard to imagine telecom or broadband regulations being a deciding factor in any election. Still, when rules and regs are decrepit and corrupt, it usually doesn't take much collective effort to get them changed. But it does take effort.
brookseven
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brookseven,
User Rank: Light Sabre
7/28/2014 | 8:06:03 PM
Re: Digital divide revisited
I wonder if the cities that it got into a mulit-city, multi-state JV that it would trigger the FCC.

seven

PS - Kbode...I think what we have seen so far is the first to fiber wins.  And you are right, once the fiber is in it is software to upgrade a lot of bandwidth.
fgoldstein
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fgoldstein,
User Rank: Light Sabre
7/28/2014 | 6:49:45 PM
Re: The Muni Trap
Amen to Karl on multiple points.  The "gigabit" part is sizzle, not steak.  But if you have FTTH, the higher burst speed costs next to nothing.  On cable, DOCSIS 3.1 might give more downstream speed, but you can't get more than bupkis upstream (same as today) unless US sysems move to a higher split frequency.  This will never happen; the MSOs will move to fiber first (and they're in no hurry).

The muni question is tricky.  Some systems work; a well-planned and well-managed system can do okay if the incumbent competition isn't strong.  And that's where munis do best.  Overbuilds are hard to make work whether muni or not.  State laws to ban muni networks are utterly corrupt and terrible policy.  On the other hand I am not sure if the FCC or the feds in general have the authority to change it; wasn't there a previous case noting that a municipality is a creation of the state and thus its powers are only what the state gives it?

The real trouble with Tom's proposal is that it perpetates the fallacy that overbuiders are a substittue for common carriage at the physical layer.  The wire on the poles was pulled as a utility and should stay that way, available to any information service provider, not vertically integrated.  Powell's excuse was that "facilities-based competition" would do the job.  Except for a handful of munis and Google, that didn't happen, nor did the new technology he pretended would help (BPL, the equally plausible Roddenberry subspace communications, etc.) do the job. So rather than do his job, Tom's offering the false hope of muni overbuilds as the competitor to keep the incumbents in check. And he knows it won't.  I call his bluff.
KBode
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KBode,
User Rank: Light Sabre
7/28/2014 | 6:18:03 PM
Re: The Muni Trap
I agree that the obsession over 1 Gbps is a little silly, but it's more an ideal -- and the discussion isn't really whether YOU (or anybody else) thinks city builds are a good idea, and it's more about letting states decide that for themselves. The other issue at play is the problem with letting entrenched duopolies write the nation's telecom laws. That can't just be run over and past while telling towns and cities what they should or shouldn't do.

Also keep in mind, when citing how many failures there are, that most of these efforts face lawsuits and endless public relations assaults immediately out of the gate by deep-pocketed companies. Not exactly the best way to launch oneself into a new initiative...
KC-Kiwi
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KC-Kiwi,
User Rank: Light Beer
7/28/2014 | 6:16:47 PM
Re: The Muni Trap
Your statement regarding Google Fiber availability, "where "1Gig" systems are available (in a few select areas of Kansas City...", implies that there is tokenism or cherry picking in Google's offering. If you consult the information at fiber.google.com you will see that there are significant areas of Kansas City, MO (pop 464,310) and Kansas City KS (pop 147,268) that can get Google Fiber now. Deployment is ongoing in many other Kansas City metro areas, as detailed by the interactive map at the previously mentioned Google Fiber site.

 

I find that facts are compelling when presented in a.... well, factual way. Wouldn't you agree?
Carol Wilson
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Carol Wilson,
User Rank: Blogger
7/28/2014 | 6:08:06 PM
Re: Digital divide revisited
Dennis,

Unfortunately, most of the state laws were passed with little fanfare and little voter awareness. 
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