I see such restrictions all of the time where broadband infrastructure that is built with public dollars cannot be used for commercial purposes, or in the case of school bandwidth, can’t even be used to distribute broadband to the public for free.
The first time I ran across this was over twenty years ago when I was working with a city in Virginia that wanted to build a backbone fiber to connect city buildings, but also to connect to a few business districts that had lousy broadband. The city had a fairly robust fiber network that was used to control streetlights and there was enough spare fiber in this network to provide a significant portion of the needed solution. Upon investigation, it turns out that about one-fourth of that fiber had been funding through a grant from the state highway department that came with a clear prohibition from using the fiber for any other purpose other than traffic control. The city attorney read that grant prohibition to even mean the city couldn’t use the fiber to connect city buildings, let alone run the fiber to a business district. And this was after the city had paid for most of the fiber out of local tax dollars. The city would have been far better off financially had it never taken the highway grant.
This happens all of the time. I’ve seen similar restrictions on fiber networks built to reach schools. There are often similar restrictions on fiber built to connect public buildings. Some states have laws that prohibit fiber built by a municipal electric or water utility to be used for any other purposes.
There are other fibers funded 100% by taxpayer dollars that are also off-limits for other purposes. For example, there was a lot of middle-mile fiber built as part of the $11 billion CAF II program that was given to the large telcos. The fiber was built as middle-mile fiber to reach DSL huts and cellular towers. None of that fiber was made available to anybody else, although the fiber was funded by federal money and most of the fiber sits unused today.
There are a few reasons such restrictions exist. In the case of the Virginia city, after a lot of investigation, we figured out that Comcast and Verizon had lobbied to restrict the use of state-funded fiber. The restriction wasn’t from a specific law in this case but had been written into state grant awards. In some cases such restrictions are written in state law, which likely is also due to lobbying by the big telcos and cable companies. We’ve found a few restrictions against using government-funded fiber that seem to come from bureaucrats who simply invented the rules without understanding the long-term ramifications.
The COVID-19 pandemic has shown us that all of these restrictions must go. Government-funded fiber ought to be made available to ISPs, cities or others that want to use it to solve the digital divide. It’s ridiculous for the country to be sitting on huge amounts of empty fiber due to stupid political restrictions or boneheaded bureaucratic decisions at a time when people don’t have broadband in their homes.
The only way to fix this is in Congress. They could write and a pass a short simple bill that would remove all restrictions against using fiber funding by the government. The federal law should override contracts, state laws, and any restrictions created by state or federal agencies. The FCC sadly can’t consider this kind of ruling since they have written themselves almost completely out of the broadband regulation business. Since the FCC killed its own regulatory powers, a federal law should give the power to state regulatory commissions to work out any details.
I run into people all of the time who are upset because they live close to fiber but have no broadband. They get doubly mad when they find out that the fiber was funded by their tax dollars to provide broadband to highway signs or to serve a nearby school. A new law won’t automatically bring relief to everybody who lives near fiber because you shouldn’t cut into a long-haul fiber anywhere except existing access points. However, there is a huge amount of government-funded fiber in the world and this one simple change would unleash ISPs to find many more last-mile solutions.