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FCC’s Tom Wheeler Discusses Municipal Broadband

May 28, 2014

cne stock 2A couple of weeks ago on this blog, the Coalition for the New Economy discussed the roadmap Google and AT&T have given cities interested in partnering with the two companies to bring gigabit broadband service to town.

TheVerge.Com reports Federal Communications Commission Chair Tom Wheeler discussed Google’s checklist at a congressional hearing in Washington, DC last week. According to TheVerge, Wheeler pointed “to Google’s strategic approach to building out its ambitious broadband service as something the commission should take inspiration from.” Specifically, Wheeler said, “The FCC should be asking similar questions about our own rules, cutting red tape wherever possible.”

Wheeler stressed in his remarks the importance of ensuring a competitive environment and argued “that makes it all the more important that we knock down existing barriers to competition and avoid erecting new ones.”

Unfortunately, then Wheeler said he plans to institute a policy that CNE has argued will stifle competition and build up barriers to private investment in broadband. He announced, “One place where it may be possible to encourage competition is municipally-owned broadband systems. … [I]f municipal governments want to pursue it, they shouldn’t be inhibited by state laws … I believe the FCC has the power – and I intend to ask the Commission to exercise that power – to preempt state laws that ban competition from community broadband.”

To illustrate how little regard municipal networks have for “competition,” CNE would like to remind Wheeler of what happened in Tennessee last summer. Last year, municipal broadband companies in that state fought to increase the pole attachment fees that private broadband providers pay. After several watchdog groups argued the tax increase would harm private investment in the state, the effort was defeated.

While that outcome was positive, the point is this: municipal broadband networks will obviously do what they can to keep competition out by erecting the same barriers that Wheeler says he wants to break down.

CNE also continues to be worried about the taxpayer implications of Wheeler’s policy. Wheeler even acknowledged, “[T]he experience with community broadband is mixed … there have been both successes and failures.”

The record, however, is not all that mixed. Taxpayers from Connecticut to Vermont to Georgia to Minnesota to Utah have lost millions of dollars on failed municipal broadband networks that don’t bring better service or access to improved consumers and also don’t reduce their costs.

Which is why we hope Wheeler and the FCC will reconsider.