Op-ed: Spanish Fork’s success shows municipal Internet networks work
By Christopher Mitchell
For nearly 10 years, large telephone and cable companies have claimed municipal Internet networks are so risky that local government authority should be restricted. But after 15 years of experience, we can only conclude that the cure is worse than the disease.
Utah has three municipal networks, where local governments invested in Internet infrastructure to provide choices in a monopolistic environment. But only two of those networks are regularly discussed and used as examples of why local governments shouldn’t be in this business: iProvo and UTOPIA, which were not able to meet their financial targets.
The network missing from the conversation is Spanish Fork Community Network, which has just finished paying off its debt and has generated millions of dollars in surplus revenue for the community. The network is now upgrading from community cable to community gigabit fiber optics.
Of the over 450 municipal networks tracked by the Institute for Local Self-Reliance, Spanish Fork’s experience is above average. The vast majority of municipal networks deliver benefits well in excess of costs and do not require subsidies to operate.
It may come as a surprise, but iProvo and Spanish Fork are nearly twins, separated at birth and raised in dramatically different environments. Both were conceived at the same time — the same consultant did the feasibility study for each. But Spanish Fork, being smaller and more nimble, was able to move forward before Utah’s Legislature weighed in to restrict local decision-making.
Comcast and the predecessor to CenturyLink crafted the legislation, which was revealed in a brilliant 2011 BusinessWeek article aptly entitled “Pssst … Wanna Buy a Law?” by Brendan Greeley and Alison Fitzgerald.
Since then, any new Utah municipal network has been subject to numerous requirements unlike anything private providers face, including a de facto requirement to use a wholesale-only arrangement.
Provo wanted to use the same business model as Spanish Fork, which we now know was tremendously successful. Whereas Spanish Fork could directly offer services to local businesses and residents, Provo was required to wholesale to other companies that delivered services.
Google has since taken over Provo’s network and may soon be building in Salt Lake City, ensuring some competition for Comcast and CenturyLink in the short term at least. Whether they remain for the long term or not is their decision to make, independent of what is best for the community. Where the network is available, the services and prices will be determined from California, not Utah.
This powerlessness to ensure universal high quality access to the most important utility of the 21st century is a legacy of Utah law, which discourages locally-rooted networks. Utah should embrace the leadership from FCC Chairman Tom Wheeler, who has pushed a pro-competition agenda to bring a real choice in high speed Internet access to local businesses and residents.
Ensuring universal high-speed Internet access requires all hands on deck, not only the private companies. We are seeing new local approaches out of smart communities like Ammon, Idaho, where an incremental approach to the wholesale-only model is very promising.
But that model shouldn’t be imposed on communities by the state. Especially when those state laws are written by the very industry voices that seek to limit competition. The record is clear — laws revoking local authority to create Internet choice have increased the risk to taxpayers, limited investment in better networks and have only benefited cable and telephone companies monopolies headquartered outside the state.
Christopher Mitchell is the director of Community Broadband Networks at the Institute for Local Self-Reliance in Minneapolis (MuniNetworks.org).
This article is a part of MuniNetworks. The original piece can be found here