It’s a Bad Time to Be in the Municipal Broadband Network Business

It’s been a horrendous 2017 for the municipal broadband sector.

The headline item in the coverage of the naming of Ajit Pai as Chairman of the Federal Communications Commission is the likely demise of net neutrality. Benzinga notes that Pai opposed municipal broadband as well when the issue came up for votes during his service as an FCC commissioner.

Pai is not the only municipal broadband network skeptic who has a new and influential job. Representative Marsha Blackburn (R-TN) has been chosen by leadership to chair the Energy and Commerce’s Subcommittee on Communications and Technology. She is an avowed enemy of municipal broadband or, at least, the way in which Tom Wheeler’s FCC attempted to support it, according to Inside Sources:

Blackburn further opposed a measure passed alongside net neutrality to let two municipalities preempt state laws and expand their broadband networks to compete with incumbent providers. The order was later struck down in federal court.

Municipal broadband is also experiencing rough seas beyond the personnel announcements. Light Reading reports that a municipal project in Salisbury, NC, has hit on hard times. In 2015, the story says, Fibrant began offering speeds as fast as 10 Gigabits per second (Gbps). That’s fast, but not fast enough to keep it from operating at an annual $3 million deficit. The report says that the city council is looking to lease it to an outside entity, hire a firm to manage it or sell it outright.

Still more trouble can be found in Virginia. Ars Technica reports that state legislators are considering the “Virginia Broadband Deployment Act.” The legislation, despite the name, would make it more difficult for municipal broadband deployments. The bill, the story says:

…would prohibit municipal broadband deployments except in very limited circumstances. Among other things, a locality wouldn’t be allowed to offer Internet service if an existing network already provides 10Mbps download and 1Mbps upload speeds to 90 percent of potential customers. That speed threshold is low enough that it can be met by old DSL lines in areas that haven’t received more modern cable and fiber networks.

The commentary in the story makes it clear that the bill would have a significant chilling effect on municipal projects.

The final stop on the bad news tour is Missouri. The Daily Yonder reports that there is already a ban on projects on the books. It is comparatively weak, however. Now, the site says, the legislature is working on SB 186, which would heighten the obstacles to a project by making it illegal for a municipality to work with private companies for such networks.

Municipal broadband is an attractive concept, but the record in the field is mixed. This network structure has always been a big target to big carriers, who prefer no competition – even to areas that are underserved or not served at all. It appears that they are winning the battle.

Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at cweinsch@optonline.net and via twitter at @DailyMusicBrk.