Tuesday, Jul 8, 2008
The most promising alternative to the cable-DSL duopoly is Community Internet -- universal, affordable high-speed broadband service provided by cities and towns or community groups. Hundreds of places -- from Philadelphia and San Francisco to Chaska, Minn., and Granbury, Texas -- are now viewing broadband as a public service, no different from water, gas or electricity. They are building Community Internet and municipal broadband projects to bring high-speed Internet to areas overcharged or underserved by the cable and DSL companies.
Community Internet projects come in many different forms, utilizing different technologies and various business models. Some projects are built and operated exclusively by a municipality, while many others operate under public-private partnership agreements. Although a few places receive broadband over power lines, or fiber laid directly to homes, the majority of Community Internet projects utilize "Wi-Fi" technology to create "hot-spot" zones of broadband coverage or, in many cases, build a "mesh network" to blanket an entire city. San Francisco Mayor Gavin Newsom is currently taking bids to build just such a network in his city, with Google offering to provide the service for free.
The story of tiny Scottsburg, Ind., illustrates how Community Internet can provide needed services that keep jobs and resources in the local economy. In 2002, Scottsburg Mayor Bill Graham was confronted with the possibility of two local businesses leaving town because his city had no broadband service. One of the companies nearly lost a key defense contract because its dial-up Internet connection repeatedly failed as it was trying to send in a bid.
The mayor contacted cable and DSL providers, who told him outright that providing broadband in his town just didn't make business sense. As Graham told the PBS program "Now": "We were in a crisis mode. We were gonna lose companies, gonna lose jobs. We just had to do something, you know. How many jobs can a small community lose? None."
A committee formed by the city to find a viable solution to this problem quickly concluded that the answer was to construct a municipal wireless network. The city created the Citizens Communication Corporation, and within four months installed wireless transmitters on water and electric towers, producing a network that reaches over 90 percent of the county's residents.
After the Scottsburg network was up and running, several DSL companies (the very same ones that had refused to service Scottsburg) went to the Indiana statehouse to lobby in support of a bill that would have prevented any other towns in the state from creating their own Community Internet systems. Fortunately, the powerful testimony of Mayor Graham convinced legislators to kill the SBC-backed bill.
However, across the nation, the cable and telecom companies, armed with powerful lobbyists and coin-operated "experts" are quietly working the halls of state legislatures and Congress in a concerted effort to kill off Community Internet. Over the past several years, 14 states enacted laws that ban or place limits on municipalities from building Community Internet projects.
Over the summer, Rep. Pete Sessions (R-Texas) -- a former SBC executive -- introduced an anti-Community Internet bill with the Orwellian title "Preserving Innovation in Telecom Act of 2005." The legislation would prevent any city in the country from providing Internet access if a private entity offers service nearby -- even if the private company serves as little as 10 percent of the residents.
Community Internet opponents routinely accuse municipal broadband providers of being an unfairly advantaged competitor and offering an inferior service doomed to fail and bankrupt taxpayers. But the allegation that municipal broadband providers hold an unfair advantage because they are the beneficiaries of special tax and legal treatments doesn't hold water.
For decades, the incumbent cable and Bell companies have enjoyed all the benefits of a protected monopoly status, granted to them by the FCC and by local municipalities. And over the past several years, these companies have received hundreds of millions of taxpayer dollars to subsidize their broadband deployment efforts. The truth is that Community Internet projects pay taxes just like any other competitor. In fact, a study by the Florida Municipal Energy Association showed that private incumbent providers pay fewer taxes than municipal systems and receive more state and federal subsidies.
In addition to providing broadband to underserved areas, Community Internet projects often entice other competitors into the market. The same Florida study found that municipal construction of communication networks expanded "the number of private firms serving the same market by more than 60 percent."
Yet the big cable and telecom companies continue to spread misinformation. A "fact sheet" distributed to journalists earlier this year by Verizon, detailing supposed failures of Community Internet projects, was found to be full of errors and mistakes, relying primarily on a 7-year-old discredited study of municipal cable TV networks.
Notably, municipal networks are arising because of the failures of the incumbent providers. Without them, the U.S. will continue to fall behind the rest of the world in broadband technology. Nations such as Canada and South Korea long ago realized the importance of public broadband, and incorporated municipal systems into their overall broadband strategies.
There are signs, though, that the tide may be turning in the U.S. against the cable and Bell companies. This year, spurred in part by success stories in places like Scottsburg, anti-municipal broadband bills were defeated in seven states and delayed in two others. Sens. John McCain, R-Ariz., and Frank Lautenberg, D-N.J., have introduced a bill that would allow municipalities to provide Internet service and overturn existing state anti-municipal broadband laws. The bills are expected to receive further attention this fall.
But Congress needs to do more than just allow Community Internet projects. It needs to free up valuable "spectrum" for these wireless networks to operate on. Currently, most Wi-Fi devices operate on an unlicensed basis in the "2.4 GHz" region of the spectrum -- a crowded area occupied by hundreds of different types of consumer devices such as microwave ovens and cordless phones. The physical properties of this end of the spectrum prevent wireless signals from penetrating obstacles and terrain. This means citywide networks using the 2.4 GHz band will require large amounts of antennae, raising the overall price of deployment.
If wireless networks were able to operate on lower-frequency spectrum -- such as the region used by over-the-air television stations -- the infrastructure costs would be much lower, potentially allowing Community Internet networks to offer extremely fast connections for as little as $10 per month.
In most areas, even in large markets like Los Angeles, large portions of the television spectrum go unused. (Just attach an antenna to your TV to see how many channels it picks up -- odds are it will be less than a dozen, and most of those will barely be visible.) Congress should allow low-power wireless devices to operate on these valuable but unused channels.
Similarly, Congress could set aside a portion of the spectrum coming back to the government from the broadcasters, as part of the digital television transition. The current plan is to auction off this valuable resource to the cellphone companies to cover the cost of the war and tax cuts. But it's hard to imagine a better use of the public airwaves than opening up the spectrum for everyone to use.
But the answer doesn't lie solely in government either. What is needed is a truly competitive market, with many providers engaging in innovation that ultimately benefits all consumers. Government can play a role in making the market more competitive -- both by deploying Community Internet projects and by requiring the cable and telephone companies to provide open access to their networks.
American innovation offers a solution to our broadband problem. It's time for Congress, the FCC and the White House to stop protecting the corporate dinosaurs and start exploring alternatives that will foster a genuine free market in high-speed Internet services.
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