Preemption, Local Authority, & Municipal Broadband (Episode 10)

This is better than it was five years ago when it would take more than an hour. Comcast has modestly increased my speed, but it’s pretty significant, frankly. I find it a little bit frustrating, especially because I’m actually paying more for my crap connection than people are paying in Chattanooga for a much better connection.

One of the things that the mayor there, who I’ve gotten to know quite well, Joey Durel, had said was they were very frustrated that their kids would grow up in Lafayette, in the heart of Cajun country, and they’d have to move to Dallas or Houston to get high-paying jobs, to get good jobs. He wanted to fix that. I think, Lisa, you’ve been tracking this closer than I have.

That is not good enough if you’re a major tech company. You need very high-quality access. In particular, you need high-quality upload speeds. A lot of us at home, we have higher download speeds than upload speeds. It might be okay because we’re not going to upload as much, although that’s really been changing in recent years. If you’re a business, you need to make sure you can get files out to clients. You need to make sure you can do offsite data backup immediately. You don’t want to be waiting all night to make sure that something is backed up offsite to be secured. There’s all kinds of reasons in which you need a high-quality connectivity, which actually even goes – and we’re not going to get very technical – but you get into all sort of issues with latency and other kinds of technical measures of quality for an internet connection that you do not get on DSL and cable.

Now, here’s a couple of other things, too. They don’t raise their prices every year. They don’t engage in this misleading promotional pricing, where you pay one price for a little while and sometimes the cable company won’t even tell you what you’ll be paying in six months. They have transparent pricing that stays pretty stable over time. They don’t try to rip you off. They have good customer service when you have a problem, if you do have a problem.

There’s all kinds of other differences, too, that we tend to gloss over. They’ve done an incredible job, but there are places that didn’t have as good of internet access and really decided that they had to do more. I think maybe it would be just helpful if, Lisa – you’ve been running the website for a long time now – what are some of the big savings that we’ve seen from communities building these networks?

The goal is is that the cable company gets what it wants, but it has to pay for that. One of the ways it paid for that was to give franchise fees to pay the city some percentage of the cable proceeds of their revenues, but also to do some other things including wiring broadband to key anchor institutions like schools and libraries, police stations, and that sort of thing. This all changed in the ’90’s is what Lisa’s saying.

Martin County, when they ran the numbers, they realized it was just more cost-effective for them to deploy their own network and run it themselves. The county and the school district partnered together to pay for this and they did use E-Rate, also, to help pay for some of the infrastructure costs.

Now, there’s some communities that would say, “We would never put taxpayer dollars into this.” There’s already been several – some of them are very conservative, some of them are very liberal – that have said, “This is a basic infrastructure, so we’re going to use our taxpayer dollars.” When Lisa and I are advising a community, we would never come in and just say, “This is the way you should do it.”

You work in energy, John, where there tends to be more local groups. Not a lot, but there are some local groups that have some expertise and might be trying to lobby one way or another. Certainly now, there’s actually groups that are favoring renewable energy that are actually pretty good at lobbying.

The point was was that when you and I, John, when we were in high school, we were getting on the internet, we could go to any company in town. Right? We’re using dial-up modems and we would go to these companies. Those were all these companies that came about from a result of Congress changing policy and allowing them to enter that market. They almost all got crushed and destroyed because of changes in federal policy, because the incumbents were so good at lobbying in the late ’90’s and early 2000’s. Over time, they really learned a lesson.

You come back to now. There’s not a vibrant movement of independent service providers that are lobbying against anti-competitive bills in the statehouse. Which is to say that when a cable company goes to the statehouse and says, “We need to outlaw this competition,” a legislator might turn around and say, “Well, who can I talk to to get the opposite opinion?” There’s no one. Right? There might be a municipal league of cities, which is then consulting with someone like us to try and figure out what they can say, but that’s only one of many issues for them. There is almost nobody in every state whose primary issue is to look after the telecommunications interests of small businesses and residents. There’s just a vacuum.

Honestly, our number one defense when Virginia or Missouri, which are two states which are right now considering these bills to really restrict local authority, our number one goal is to make sure the press is reporting about it. Because when the press reports about these bills, people write in. They get very frustrated. They call. They overload the switchboards in some cases. Then the bill disappears.

I think it’s important to note that if you look at the result of that breakup now, I think it’s been good in the sense that I don’t think the internet would have developed if AT&T continued to have a monopoly. We also went from an era in which Americans all had good access to telecommunications of the day, telephones that worked at reasonable prices. We have moved into an era in which telephones do not work very well and we pay an incredible amount for our telecommunications bills. I am a very big fan of competition, but I think it’s also important to recognize that there are trade-offs and it is not by any means a clear win to have competition.

Some people cite religious reasons, but it’s really about preserving small businesses because it’s harder for them to be open seven days a week. That is a policy that a lot of people look at and say, “Government shouldn’t be regulating that,” but it’s also a pro-competition policy. Pro-competition policies are hard and they may look like the government’s putting its thumb on the scales more than people are naturally used to, but that might be what it takes to truly establish a competitive market in a lot of areas.

It just follows him and his family and his life and, at the same time, what was going on with the AT&T breakup and all of the stuff that was going on with them. It’s just a really interesting story because it talks about anti-competitive implications and monopolies, but at the same time it brings it to a real-world perspective. It’s called, Genius on Hold.

We have a number of other resources on preemption and local authority at our website dedicated to community broadband, muninetworks.org. At that site, you can also find the interactive Community Networks Map we discussed during the interview. Take a few moments to check it out.

This was Episode #10 of the Building Local Power podcast. We encourage you to subscribe to Building Local Power and all of our other podcasts on iTunes, Stitcher, or wherever else you get your podcasts. Never miss out on our original research by also subscribing to our monthly newsletter at ILSR.org.

Thanks to Dysfunction_AL for the music, license through Creative Commons. The song is, “Funk Interlude.” I’m Lisa Gonzalez from the Institute for Local Self-Reliance. Thanks again for listening to the Building Local Power podcast. Catch you next time.