In a typical knee-jerk reaction, USTelecom released an Issues Brief that claims that government-owned broadband networks aren’t built for the long haul. This was clearly prompted by federal grants that are giving money directly to towns, cities, counties, and states that can be used to build infrastructure, including broadband.
The Issues Brief trots out the same old lame arguments that the big ISPs have made for years against municipal broadband – that there have been some municipal broadband efforts that have failed. This is a true, but my math shows that the municipal failures are something less than 5% of municipal ventures. We never hear the comparative figures about how many new commercial ISP startups fail. That’s because there are no newspaper headlines when a small fiber overbuilder over-borrows and quietly folds shop. And somehow the big ISP industry totally overlooks their own big dramatic failures. Frontier just went through bankruptcy and walked away from $10 billion in debt – any industry expert can tell you that Frontier’s problems were all self-made and not due to unforeseeable market forces. AT&T recently walked away from a disastrous foray into cable TV and content and lost over $50 billion in just five years. This is not an industry that should talk too loudly about failures.
The real truth behind this Issues Brief is that the big companies don’t want any competition. The Issues Brief trots out the ridiculous FCC statistic that says that there is “fierce competition among providers—over 92% of American homes have at least two fixed broadband providers competing for their business”. That statistic is due to an FCC that hasn’t wanted to admit that urban areas are largely a monopoly for cable companies. Urban homes can either buy decent broadband from a cable company or slow broadband from ancient and out-of-date DSL from a telco. And that’s where you can still buy DSL – because that FCC statistic hasn’t been updated to reflect that AT&T completely walked away from selling new DSL. There is no fierce broadband competition in most markets. My consulting firms conducts surveys, and we generally see over half the public everywhere claiming they don’t have any choice of broadband providers.
Another great quote from the Issues Brief is that “The private sector has the best track-record of success for broadband deployment”. Really? I work with dozens of communities every year that are only looking for a better broadband solution because the big incumbent ISPs have not invested in their communities. The big telcos walked away from maintaining or upgrading copper networks several decades ago. When cable companies decided to upgrade to DOCSIS 3.1 a few years ago, most of them decided to leave the upload bandwidth at the older DOCSIS 3.0 technology – which hurt millions of homes that struggled with working and schooling at home during the pandemic. The big companies only spend capital when they feel like they don’t have an alternative. This is another topic the big ISPs ought not to be touting too loudly because it’s demonstrably not true.
The Issues Brief finishes by touting public/private partnerships as the answer – the big ISPs want cities to hand them all of the current grant funding to get them to invest in the networks they should have been investing in all along. The truth here is that the vast majority of communities do not want to be an ISP and are looking for partnerships. But in most cases, communities first look for smaller ISP partners that have a track record of providing good customer service before considering the incumbents. There is a clear reason why the big ISPs are always at the bottom of every measure of customer satisfaction – they treat customers like dirt.
I can summarize this Issues Brief a lot more succinctly than did USTelecom: “We know cities are getting a lot of grant money right now. Don’t try to use this money to become a municipal ISP because cities are too stupid to make it work. Give the grant money to us instead and we’ll take care of your future broadband needs, just like we have over the last twenty years. Wink wink.”