Five years before Google Fiber came to Kansas City, the residents of Chattanooga, Tennessee were already enjoying the ultra-fast speeds of gigabit internet speeds. But those connections didn’t come from a private company like Google. They came from the municipally owned utility.
Chattanooga isn’t alone. Cities like Wilson, North Carolina and Lafayette, Louisiana have likewise given up on waiting for private companies and started their own ultra-highspeed internet services. But some community efforts have been stymied by state laws prohibiting governments from competing with private internet providers.
Critics of these laws have long argued that they protect entrenched telecommunications companies at the expense of customers who need and want faster, cheaper service, while defenders of the laws say it’s unfair to make private companies compete with tax funded government agencies that don’t need to turn a profit to survive. On Tuesday, President Obama sided with the critics.
“The Obama Administration believes that consumers should have the option to provide themselves broadband services through local government and locally-owned utilities and that state and local policy should support a level playing field for these community-based solutions,” reads a White House report on community broadband initiatives.
The debate over the future of municipal broadband is central to both the economic development of communities across the US—and to the future of investment in broadband infrastructure. Improvements to the state of broadband can’t come soon enough. The US lags behind countries like South Korea and the Czech Republic in both speed and cost of internet access.
Sure, the rise of Google Fiber has spurred competition both in cities lke Austin, where Google has only recently begun rolling out service, and areas that some providers think could be next on Google’s list. But there’s no guarantee that Google Fiber will spread beyond a very limited number of cities, and some communities are being left further behind in the broadband revolution than others. While 94 percent of Americans living in urban areas can purchase broadband faster than 25mbps, only 51 percent of rural Americans can purchase access at those speeds, according to the report.
The report also says that 30 percent of homes have no broadband connection, and high prices for access is a big part of that. Plus, there’s not much competition in most cities: 40 percent of US citizens have only one company in their area that can provide fixed line connections faster than 10mbps—if they have any option at that speed at all. “Without strong competition, providers can (and do) raise prices, delay investments, and provide sub-par quality of service,” the report says.
Projects such as those in Chattanooga bring much needed competition to their communities, but these projects don’t always work out well. Provo, Utah financed a municipal network that struggled for years before it was eventually acquired by Google Fiber.
But the report argues that the mere possibility of having to compete with municipal projects can improve service from private companies, citing a study that found that cable television providers were more likely to upgrade their infrastructure if they faced the threat that municipal utilities would enter their markets. And if there’s one thing that just about everyone in the debate agrees on, it’s that we need more competition in the broadband sector.