Continued Bans Against Municipal Competition

There are still states around that don’t let municipalities participate in finding broadband solutions. In a world where it’s now clear that broadband is vital to homes, it’s hard to understand how such bans make any sense. I’m going to write today about my state of North Carolina as an example of how continued bans are harming the citizens of the state.

This is a state where the telecom lobby has been historically generous with state lawmakers and has been able to pass desired legislation for decades. The municipal ban in North Carolina was passed a decade ago when lawmakers reacted to a citywide fiber network constructed by the City of Wilson. The big ISPs at the time – Time Warner Cable (now part of Charter), AT&T, and CenturyLink argued that municipal competition was unfair and that the private sector should be allowed to take care of the broadband needs of communities.

The pandemic has highlighted the fallacy of the big ISP argument. In the ten years since the law passed, the state has seen some improvements in broadband. When Google Fiber popped up in the Research Triangle, both AT&T and Time Warner reacted quickly and a few lucky households can buy gigabit broadband today from three providers. There are a few telephone cooperatives in the state that have built fiber in rural areas, including one that is extending into some neighboring counties. A few WISPs have built wireless broadband to pockets of rural customers. Charter upgraded a few years ago to DOCSIS 3.1 and cable broadband in the cities is decent – although upload speeds now look to be inadequate to handle the pandemic.

But the households that had no broadband, or poor broadband a decade ago when the municipal ban was passed still had no broadband when the pandemic sent students and adults home to work. AT&T has gone so far as to announce on October 1 that it will no longer install new DSL customers – so it’s ceding the towns and cities in the states to become monopoly markets controlled by cable companies. CenturyLink got billions of federal dollars to improve rural broadband to at least 10/1 Mbps, but nobody in North Carolina can find where these upgrades have been made.

The big ISPs are lobbying against a bogeyman that doesn’t exist. Municipal competition has been allowed in a lot of the country for twenty years and there are still only around 200 communities that have built fiber – most of them small and most of them already having a municipal electric utility.

Communities only look for broadband solutions when prompted to do so by their citizens. A big percentage of rural communities are now exploring better broadband because their citizens are screaming loudly about the inability to participate in normal daily life without good broadband. At the local level, broadband is a non-partisan issue and you won’t find many local politicians in rural areas who are not strong proponents of solving the broadband gaps.

But unfortunately, at the state level, politics as usual still controls the municipal ban on broadband. Almost annually in North Carolina, proponents for better broadband take a shot at overturning the municipal broadband ban. But year after year the lobbyists kill such efforts. In the last legislative session the story I heard is that AT&T lobbyists were able to change the wording of the proposed new law to the point of neutering it. This is the same AT&T that publicly announced a year ago that it was finished building residential fiber and that this year decided to bow out of the business of providing broadband using DSL on copper wires. This is a big ISP that is not spending any money to help North Carolina households but that still is still spending on lobbyists to kill any law that even hints at broadband competition.

The AT&T tactic used to kill a pro-broadband law earlier this year demonstrates the newest big ISP tactic. Lobbyists get language inserted into proposed bills that kills them – but the language is always subtle, and to a layperson never sounds bad. This gives cover to state politicians that can tell their rural constituents that they are pro-broadband while still voting against pro-broadband laws.

What’s ironic about the municipal broadband ban is that there are only a few communities that are willing to become an ISP. The vast majority of communities that spend money looking for a broadband solution are trying to lure a new ISP to serve their community. But of course, the big ISPs don’t want that any more than they want municipal competition.

The pandemic may have changed the calculus of the legislative process enough to overturn the bans against municipal broadband. Rural residents are now up-in-arms about lack of broadband and are letting politicians know their unhappiness. But since the legislative process is done behind closed doors, it’s sadly likely that the lobbyists of the big ISPs will continue to hold enough sway to keep killing competition.


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