To put it mildly, the US broadband industry is not very happy with President Obama right now.
Complaints and criticisms poured in from major cable and telco interests late Tuesday after Obama called for the feds to override state laws blocking municipalities from developing their own broadband networks. The two biggest cable and telco trade associations and the incumbent cable operator in the community where Obama spoke all issued blistering statements attacking the president's position.
Taking on the industry once again, Obama is urging the Federal Communications Commission (FCC) to preempt state laws that keep local communities from building high-speed data networks and promising greater financial and technical aid for smaller communities seeking to build those networks. Speaking Tuesday afternoon in Cedar Falls, Iowa, where a municipally owned utility built a broadband network that turned the community into the state's first Gigabit City in 2013, the president forcefully made the case for cities and counties seeking to create their own broadband networks. Framing it as a pro-consumer, pro-competition cause that crosses political lines, he called on the FCC to "push back on those old laws" in the 19 states that prevent or restrict municipally owned networks and spelled out other federal moves to foster the development of those networks.
"In some states, it's virtually impossible to create a community network like the one that you've got here in Cedar Falls," the president said. "So today, I'm saying we're going to change that. Enough is enough. We're going to change that so every community can do the smart things you guys are doing."
Without naming any companies, Obama lambasted the large broadband providers that have lobbied the states for the bans on public networks. "In too many places across America, some big companies are doing everything they can to keep out competitors," he said. As a result, he said, in 19 states "we've got laws on the books that stamp out competition and make it really difficult for communities to provide their own broadband the way you guys are."
Not surprisingly, many leading broadband providers reacted quite coolly to Obama's proposal. Speaking for the cable industry, National Cable & Telecommunications Association (NCTA) President & CEO Michael Powell contended that many municipal networks "have ended up in failure, saddling taxpayers with significant long-term financial liabilities and diverting scarce resources from other pressing local needs." Rather than "chase false solutions," Powell said, "government policies should be directed at overcoming barriers to [broadband] adoption and extending the reach of broadband to places yet unserved."
Using stronger language, the United States Telecom Association (USTelecom) said Obama's state preemption proposal and proposed Title II reclassification of ISPs, if enacted by the FCC, "would be sweeping exercises of authority, raising Constitutional concerns related to separation-of-powers, the scope of an independent agency's Congressionally delegated authority and the role of states in our federal system." The group charged that "these expanded government roles" would be financed by "higher costs to consumers and new taxes and fees on local citizens."
Mediacom Communications Corp. , the incumbent cable operator in Cedar Falls and many other Iowan communities, had no love to share with Obama either. Saying it was "deeply concerned" with Obama's comments, the MSO argued that Cedar Falls Utilities (CFU) "is a municipal utility that leverages its government-conferred monopoly over electric, water and gas service to unfairly compete with private enterprises" for cable and broadband customer. "The president's remarks, combined with the selection of CFU as the venue for his speech, clearly show that the White House wants to waste taxpayer dollars to supplant our nation's private sector broadband providers with government-owned utility companies."
Yet an undaunted Obama, who plans to make universal broadband access a key component of his State of the Union address to the nation next Tuesday night, argued that community broadband networks are "not a partisan issue." He noted that the people of Yuma County, Colo. voted overwhelmingly in favor of a community broadband network two months ago in the same election where they overwhelmingly supported a Republican candidate for the US Senate.
"It's not a red [state] issue or a blue [state] issue," he said. "Folks around the nation want these broadband networks. They're good for business. They're good for communities. They're good for schools. And they're good for the marketplace because they promote efficiency and competition."
Obama's call for federal preemption of the state bans on municipal networks comes as the FCC is weighing a proposal to do just that. In response to petitions from two other small and midsized cities -- Chattanooga, Tenn. and Wilson, NC -- to preempt their state broadband laws, the Commission is expected to approve that idea at its meeting late next month.
The president's latest broadband initiative also comes as the FCC prepares to upgrade the definition of broadband service dramatically. In another proposal that's expected to be approved shortly, the Commission is weighing whether to raise the broadband bar from the current 4 Mbit/s downstream standard to 25 Mbit/s, with a corresponding increase in the upstream rate as well.
Finally, Obama's support for community broadband networks comes as Republicans and Democrats gear up for another huge battle over net neutrality rules in Washington. The president added fuel to that fire two months ago when he came out strongly for utility-style Title II regulatory treatment of ISPs. At least partly in response, the FCC is expected to take up that issue at its meeting next month as well. (See Obama Backs Net Neutrality, Stuns Industry.)
— Alan Breznick, Cable/Video Practice Leader, Light Reading