"Cities are [taking advantage of broadband technology.] Spokane, Washington, yesterday established a wi-fi hot zone that allows users within a hundred block area of the city to obtain wireless broadband access. Imagine if you’re the head of a chamber of commerce of a city, and you say, ‘Gosh, our city is a great place to do business or to find work. We’re setting up a wi-fi hot zone, which means our citizens are more likely to be more productive than the citizens from a neighboring community.’ It’s a great opportunity . . . [T]his is a very exciting opportunity for the country. - The White House, President Bush: High Tech Improving Economy, Health Care, Education (June 24, 2004).
“I think we do a grave injustice in trying to hobble municipalities. Why don’t we encourage [municipal broadband] instead of having bills introduced [saying] – ‘Oh, you can’t do this because it’s interfering with somebody’s idea of the functioning marketplace’ – but the marketplace is not functioning in those places. - Michael Copps, Commissioner, Federal Communications Commission
To put this in context, imagine if Borders and Barnes & Noble, claiming it was killing their book sales, asked lawmakers to ban cities from building libraries. The legislators would laugh them out of the State House. Yet the same thing is happening right now with respect to Wi-Fi and other municipal broadband plans, and it is being taken all too seriously. - Municipal Broadband: Should Cities Have a Voice, Jon Leibowitz, FTC Commissioner Sept. 2005
History: Municipality involvement in communications has a long history.
The USG funded part construction of the early telegraph network, funded its coast to coast expansion, and gave 1500 miles of telegraph line to Western Union after the civil war.
Before the turn of the century, when Alexander Graham Bell's telephone patent expired, there was an onslaught of new independent telephone companies. Municipalities were involved in franchising the new local telephone services, finding them to be common carriers, granting them authority to operate, and setting fair rates.
During World War I, AT&T was nationalized, and competition was illegal.
Municipalities are under the authority of state governments. Therefore state governments can say whether or not it is permissible for a municipality to offer broadband services. This is true even though the Telecommunications Act of 1996, 47 USC 253(a), stated that no state could prohibit "any entity" from offering telecommunications service. The Supreme Court in Missouri Municipal League v. Nixon (SCt 2003) upheld that a municipality is not an "any entity" and that a state could limit the municipalities authority.
A plethora of states have passed laws restricting, conditioning, or prohibiting municipalies from offering broadband services. Some of these laws constitute nothing more than "don't stick your finger in your eye." These are requirements that states do due diligence, find out what the demand for broadband is and find out what service providers currently offer service in their market. Other states out right ban municipal action. And then there is the truly wierd Pennsylvania law which gives Verizon the right to veto any municipality, except Philadelphia, from offering broadband. Jim Baller points out that in the year 2005, there was a backlash against these laws; of the 14 legislative proposals introduced in 2005 to place barriers in the way of municipal broadband, 13 failed.
As this is a state issue, the Federal Communications Commission would appear to lacks jurisdiction over municipal broadband. The FCC has taken two important actions relevant to municipal broadband. First, the FCC created the Unlicenced Licensed Information Infrastructure, aka WiFi, for the purpose of creating broadband networks in cities. Second, the FCC has spoke on municipal broadband only once, listing it as a "Best Practice" and describing it as "the kinds of efforts that can successfully bring advanced services to a diverse range of communities."
Deployment of Advanced Telecommunications Capability: Second Report, ¶ 181 Best Practices (FCC August 2000) PDF (See Section 706)
171. In addition to the geographic area case studies, we have also conducted, in conjunction with the Federal-State Joint Conference on Advanced Services, a review of community-based deployment efforts to identify best practices which have led to increased access to advanced telecommunications capability. This information has been developed through the series of hearings and site visits sponsored by the Joint Conference, the development of the database on project characteristics and literature review. The field hearings, site visits, and the Joint Conference’s growing database of community deployment efforts,220 have provided important insights into the kinds of efforts that can successfully bring advanced services to a diverse range of communities. This section outlines some of these successful strategies.....
Public Investment
181. Direct public investment in desired infrastructure has also been used. There are many instances where a municipality, usually one that already provides another utility service like cable or electricity, builds its own high-speed telecommunications facilities and directly serves customers. In other instances, states have invested in substantial fiber networks to schools or other customers.
182. Hawarden, Iowa took this approach. The City of Hawarden operated a successful electric and cable utility. Unhappy with the telecommunications service options available to them, the City decided to build its own advanced telecommunications facilities. They have now built a hybrid fiber coaxial cable network throughout the town. Businesses in the community that previously feared being left behind in a digital age, no longer fear being forced to relocate to have access to the modern communications they need. 229 In Orange City, Iowa the town government formed a partnership with its local telephone companies and is building a wireless system that is bringing high-speed Internet to its citizens. The case studies of both Waltham, Massachusetts and the Muscatine, Iowa illustrate the strong role public investment has played in those communities.230
See also FCC,
CONNECTED & ON THE GO, BROADBAND GOES WIRELESS, REPORT BY THE WIRELESS
BROADBAND ACCESS TASK FORCE p 32 (2005) (“FCC Report”) PDF (“community networks can act
as a low-cost alternative where access to cable modem or DSL service is either unavailable or too
expensive.”) & p 33 ("“Ensuring that all citizens have access to broadband
services is of increasing importance to local governments.”")
Debating Municipal Broadband with Christopher Mitchell June 19, 2008
Community Fiber Networks Are Faster, Cheaper Than Incumbents
There are multiple federal legislative proposals addressing municipal broadband, likewise running the gamut of ensuring that they are permitted to declaring that they are prohibited. The Telecommunications reform proposal that was passed out of the Senate Commerce Committee in June of 2006 would prevent states from prohibiting their own municipalities from offering broadband services; municipalities who do plan to offer broadband must solicit bids for service, although they would not be obligated to accept any of these bids. [Senate Moves to Ease Muni Wifi, ZDNet June 29, 2006]
S 2686 Communications, Consumer's Choice, and Broadband Deployment Act of 2006 (Introduced in Senate)[S.2686.IS]
Community Broadband Act - Amends the Telecommunications Act of 1996 to prohibit any state or local government statute, regulation, or other legal requirement from prohibiting any public provider from providing, to any person or any public or private entity, advanced communications capability or any service that utilizes the advanced communications capability provided by such provider. Provides safeguards, including that a public provider may not provide advanced communications capability to the public unless the provision of such capability by that public provider is subject to the same laws and regulations that would apply if the advanced communications capability were being provided by a nongovernmental entity.
HR 2726 Preserving Innovation in Telecom Act of 2005 Title: To prohibit municipal governments from offering telecommunications, information, or cable services except to remedy market failures by private enterprise to provide such services. Sponsor: Rep Sessions, Pete [TX-32] (introduced 5/26/2005)
See Topic Muni Broadband
S.1504 Broadband Investment and Consumer Choice Act
Title: A bill to establish a market driven telecommunications marketplace, to eliminate government managed competition of existing communication service, and to provide parity between functionally equivalent services. Sponsor: Sen Ensign, John [NV], Thomas 8/5/2005
See Topic Muni Broadband Jim Baller’s response to Senator Ensign’s municipal networks provision
Killer Applications: The use of VoIP has been described as a killer application for Muni Wifi. [Aaron Kaplan, Funkfeuer Network presented at NAF (Feb. 6 2008)] It could present a compelling alternative to over priced mobile telephone service with the use of such things as Skype Wifi phones.
Alameda(f)
Anaheim (w)
Cerritos
Cupertino (w)
Fullerton (w)
Galt
Hermosa Beach (w)
Loma Linda (f)
Lompoc (w)
Long Beach (w)
Palo Alto (f)
Sacramento
San Francisco (w)
San Manteo (w)
Santa Clara (w)
Sunnyvale (w)
Retail offering prohibited. May do it wholesale. Hold hearing, conduct feasibility study, have legislative body adopt the feasibility study before entry
Hold a hearing with a financial report, or referendum, or survey finds no service providers, or offers only facilities - and uses revenue to replay cost
Jackson (w)
Madison
Milwaukee
Reedsburg (f)
Waupaca (w)
Some Municipality RFPs have explicitly stated Network Neutrality as a condition. See SF RFP Sec. 2.1 PDF
The Network Operator shall promote the open and interconnected nature of the public Internet by operating the Network in a neutral manner that ensures consumers are entitled to:
• Run applications and use services of their choice, subject to the needs of law
enforcement
• Access the lawful Internet content of their choice
• Connect their choice of legal devices that do not harm the network
• Competition among network providers, application and service providers, and content providers.
Anti Government Sentiment
See History of the Internet and Timeline. An argument lodged against Municipal Networks is that governments can not be trusted to run a network - they will botch things up and they will not innovate. Contrast this argument with the reality that the Internet (aka the ARPANet) was funded and operated at some level for the first 30 years of its existence. The Innovation, the evolution, the success of the Internet was founded on a partnership between government and academics. - Genny Pershing.
Community Networks
Similar to municipal networks, these are local networks that are organized by the grassroots local communities instead of by the municipalities and local governments. Some of this movement emphasizes on ad hoc mesh networks.
Matthew Dunne, Note, Let My People Go (Online): The Power of the FCC to
Preempt State Laws that Prohibit Municipal Broadband, 107 COLUM. L. REV. 1126 (2007)
Janice A. Hauge, Mark A. Jamison, R. Todd Jewell, Bureaucrats as Entrepreneurs: Do Municipal Telecommunications Providers Hinder Private Entry? TPRC 2006
"Evolving Wireless Access Technologies for Municipal Broadband," with Marvin Sirbu and Sharon Gillett, Government Information Quarterly , 2006. ( PDF )
Carlos Osorio, The Economic Effect of Municipal Broadband: Evidence from Municipal Electric Utilities in the United States TPRC 2006 PDF
William Lehr, Marvin Sirbu and Sharon Gillett, "Municipal Wireless Broadband: Policy and Business Implications of Emerging Access Technologies," Competition in Networking: Wireless and Wireline, London Business School, April 13-14, 2004
Sappington, D., G. Sidak,. Incentives for Anticompetitive Behavior by Public Enterprises. Review
of Industrial Organization, 22, 183-206. (2003)
Ronald J. Rizzuto and Michael O. Wirth, “Costs, Benefits, and Long-Term Sustainability of Municipal Cable Television Overbuilds,” Denver: GSA Press, 1998.
Best Practices
Municipal Wireless: Request for Proposal (RFP) Best Practices, p. 6 Civitium: Demand Assessment (July 2005) PDF
Number of Municipal Electric Utilites doing Communications. Source: APPA - Sharon Gillett, Municipal Trends, Broadband Properties Sept 2004
2000: 300+ - 2001: 450 - 2002: 511 - 2003: 569
FTTH Homes Passed in US - Sharon Gillett, Municipal Trends, Broadband Properties Sept 2004
2002: 27% Muni, 67% CLEC, 5.4% Small ILEC, 0.6% Other (including RBOC)
2003: 32% Muni, 42% CLEC, 6% Small ILEC, 3% Other (including RBOC)
Links
Supporters
AT&T Chicago's main phone company, AT&T, says it similarly would not be opposed to a city-initiated effort. "AT&T always has believed that the best approach is to stimulate investment in broadband," spokesman Rick Fox said. "As long as you're working with the private sector, that's a good thing." Chicago Planning City Wifi CNN March 2006
Nuisance or Competitive Threat, Telephony Online Aug 2004 ( “Many cities that waited for the private sector to serve them became dust,” Jim Baller said.)
, ZDNet June 29, 2006
