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High-Speed Broadband: The Public-Private Debate


Tuesday, June 24, 2014   

ROCHESTER, N.Y. - High-speed Internet networks operated by municipalities and nonprofits are fighting a pitched battle against the Comcasts and Verizons of the world, and the political and financial hurdles which small-scale Internet providers face are significant.

Nearly 400 communities nationwide have some form of publicly-owned Internet service. In New York, residents of Ontario County in the Finger Lakes region benefit from local high-speed Internet. Christopher Mitchell, director of the Community Broadband Networks Initiative with the Institute for Local Self-Reliance, says choice is at the heart of this Internet alternative - or more accurately, the lack of choice.

"Fundamentally, there's a lack of competition," says Mitchell. "The reason that cities step into this space is often because we don't believe the private sector is capable of resolving that lack of competition on its own."

Some cities and local governments have had difficulty keeping the community Internet provider model afloat. Libertarians and conservatives tend to oppose it as something government shouldn't be involved in, but there are success stories like Chattanooga, Tennessee, where citizens access a city-owned fiber optic network for less than $70 a month.

Ryan Radia, associate director of technology studies with the Competitive Enterprise Institute in Washington, D.C., cites Pew Research statistics which claim one in four Americans don't have broadband at home - because they don't want it.

"A non-trivial portion of Americans, especially in some of the cities where we see these networks, don't value broadband," says Radia. "I am troubled by the idea of the government providing it."

Mitchell, on the other hand, says community broadband networks are important because they go up against a handful of companies with a stranglehold on the business. He says in his hometown of St. Paul, Minnesota, he - or anyone else - would have a difficult time competing with Comcast to provide Internet access.

"I'd probably need to raise about $200 million to build a network that would compete with them," says Mitchell. "But as soon as I did that, Comcast would cut its rates significantly, and people - being very price-sensitive - would decide not to go with my new, faster, better service."

Mitchell says community networks are often demonized by big cable and telephone companies for "failing" when they don't create profits in the first three years - a nearly impossible standard. But he notes the point of community-based Internet is to provide a service first, not make a profit. Mitchell adds few would demand local governments turn a "profit" on roads they manage within three years of building them.

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