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Guest Post–Community Broadband: America’s Broadband Hope

August 14th, 2012

Guest Column: Christopher Mitchell  

The broadband gap in America is slowly morphing into a broadband chasm. Millions of Americans have no broadband access to the Internet. Tens of millions are stuck with only slow and unreliable DSL. The vast majority of America has a single cable option as its fastest connection to the Internet.

But a few communities are doing far better. UTOPIA’s service providers have long offered some of the fastest connections at the most affordable rates in the country and are now offering a gigabit. While Kansas City recently gained fame for its Google gigabit, several other cities have long had those high capacity connections available throughout the entire community. The first city in the country with universal access to a gig was Chattanooga, via a municipal network owned and operated by the City’s electric utility, EPB.

Community fiber networks in Lafayette, Louisiana, and Bristol, Virginia, followed shortly thereafter. The Institute for Local Self-Reliance explained how each of these communities built their own networks and the tremendous benefits they have seen in a report called Broadband at the Speed of Light.

But most community networks have focused on meeting local needs rather than chasing the elusive gig. They have focused on serving local businesses. Danville, Virginia, was once the unemployment capital of Virginia, but its open access network has helped local businesses thrive and attracted new companies into the area. The network, nDanville, generates more revenues than expenses, contributing to the City’s general fund.

The city of Wilson, North Carolina, decided to build its own fiber optic network after Time Warner Cable refused to upgrade its cable network, which became unreliable during downpours. Critics attacked the City’s decision and Time Warner Cable attempted to shut it down via the state legislature but Wilson persevered and is now running in the black. Unfortunately, the state did eventually enact Time Warner Cable’s legislation to constrain Wilson’s ability to expand and to prevent other communities from duplicating it.

The vast majority of public investments in broadband have generated benefits far in excess of costs. But UTOPIA has been labeled a failure because of its tremendous financial difficulties. Though the financial situation is regrettable, essential infrastructure cannot be evaluated solely on its balance sheet. UTOPIA was (and remains) a response to overwhelming market failure.

Consider why Wall Street loves the massive Comcast Corporation: “We’re big fans of the firm’s Video and High-Speed Internet businesses because both are either monopolies or duopolies in their respective markets. Further, we believe that both services have become so sticky and important to consumers that Comcast will be able to effectively raise prices year after year without seeing too much volume-related weakness.”

Utah’s UTOPIA communities have a real choice, providing some rare discipline for Comcast as it considers rate hikes. That choice has come with a cost, but broadband will be essential infrastructure for decades. And given federal policy, Comcast is likely to maintain its monopoly in much of its national service territory. Keep an eye out to see who pays more over the next 10 years-UTOPIA subscribers or those stuck with a Comcast monopoly.

People living within the UTOPIA footprint have a more vibrant market for broadband than any other Americans. Local businesses have a competitive advantage in telecommunications over all of Utah and much of America. As UTOPIA continues to recover from past mistakes, it deserves some recognition for its successes.

As more communities consider and commit to their own locally owned networks , the lessons from UTOPIA will help to ensure they are successful.

Christopher Mitchell is the Director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance. He is the editor of MuniNetworks.org