North Carolina Broadband Bill Could Stifle Fast, Cheap Municipal Networks

The North Carolina legislature is considering House Bill 129, or “Level Playing Field/Local Gov’t Competition” to its friends, which would prevent the creation of municipal broadband networks. The law’s proponents say it is designed to prevent unfair competition between state-owned internet services and private ones. The argument is that state-run services would be able to take subsidies, giving them an unfair advantage.

Though the spectre of a monolithic state-run internet service provider lording over the welfare of whole communities is unsettling, the current situation is not much better. As it stands, the privately-operated ISPs are not even comparable to the speeds provided by nearby municipal networks. Ars Techica crunches the numbers and reports:

Nearby Chattanooga, Tennessee’s city owned EPB Fiber Optics service now advertises 1,000Mbps. Wilson, North Carolina is home to the Greenlight Community Network, which offers pay TV, phone service, and as much as 100Mbps Internet to subscribers (the more typical package goes at 20Mbps). […] In comparison, Time Warner’s Road Runner plan advertises “blazing speeds” of 15Mbps max to Wilson area consumers.

Additionally, GigaOm recently reported that 7 of the 10 most expensive places to buy broadband are located in North Carolina. In a nutshell, the current state of Internet access in North Carolina is dog-slow, expensive, and apparently lacking any real competition to drive innovation.

The bill is, of course, multifaceted and provides a framework for discussion when creating municipal networks, which would be useful to a community seeking to create one. However, it also includes convoluted requirements about how municipal ISPs would calculate their cost, designed to force municipal ISPs to not undercut private operators. This is the “level playing field” of the bill’s title. But, as Ars Technica points out:

the rule would actually put public networks at a disadvantage; private networks have long been able to offer “loss leader” offers and intro pricing to get people to sign up, and the large ISPs can all use profits from one area to subsidize below-cost prices in another.

The law would also prevent the expansion of existing networks into rural communities. Ironic, since increasing Internet access in underserved rural communities was a cornerstone of the Obama administration’s wireless plan. Though the bill provides exceptions for bringing the Internet to areas without existing access, networks would not be allowed to expand outside the municipal limits of the city which created it. Poor, rural communities for whom building their own network would be impossible could be left out in the cold.

I am not an economic or legal expert; I work for a blog. But the logic of arguing against a faster, cheaper alternative in an area where competition is apparently stagnant fails me. The U.S. Postal System is an example of one government run service that has not prevented excellent companies like UPS and FedEX from thriving. And in an age where digital communication has, arguably, surpassed physical correspondence, it is perhaps even more imperative that municipalities provide what is now a basic necessity.

Though news of ISP shenanigans has mostly been limited to Canada as of late, it’s not surprising to see such activities in the Land of the Free. Too often it seems that ISPs are quicker to clamp down on their users activities and push for protectionist policies than actually engage in a free market — which would require investment, competition, and technological development. It seems to me that governments should perhaps be taking action against the existing problems, then planning for some kind of horrible Orwelian future.

Our problems are here and now, and they need solutions.

(via Ars Technica, image via Wikimedia)