Reports

This report is a brief summary of the Knowledge Exchange, written for participants and to share with the field. It reflects the open and frank discussions that took place during the convening, as well as the ease of communication among the group.

The Institute for Local Self-Reliance is pleased to release the Community Broadband Map and report, Publicly Owned Broadband Networks: Averting the Looming Broadband Monopoly. The map plots the 54 cities, big and small, that own citywide fiber networks and another 79 own citywide cable networks. Over 3 million people have access to telecommunications networks whose objective is to maximize value to the community in which they are located rather than to distant stockholders and corporate executives.

For several years ILSR has been tracking telecommunications developments at the local and state level. We have worked with businesses and communities protecting their right to self-determination via the fundamental infrastructure for the information-based economy. This report offers some of our findings.

Policymakers often tell us that the Internet succeeded because of a lack of government regulation. For instance, FCC Commissioner Robert McDowell recently noted that the “evolution away from government intervention has been the most important ingredient in the Internet’s success.” These views, while widely shared, happen to be inaccurate. In reality, a diverse range of federal regulations, subsidies, and nondiscrimination protections sustained the Internet’s historic growth. But what if, as many inaccurately assume, these regulations had never existed? What would today’s Internet look like in such a world? In this essay, I provide a fictional alternate history - in form of a satirical book review - to illustrate how differently the Internet might have developed in a truly privatized world. Although the essay below (beginning after this abstract) is fictional, it draws heavily upon both the regulatory history of the Internet and the policy arguments at issue in today’s leading regulatory proceedings.

One important way that open policies achieve this goal is by reducing various types of transaction costs. In open networks, new market entrants can completely avoid negotiating with companies who have “gateway control” over the network. The aspiring entrants do not have to pay—nor seek permission from—the network owners for access. Accordingly, these policies encourage vastly more experimentation and amateur “tinkering.” Closed networks, by contrast, produce relatively less innovation because they rely on centralized network owners to introduce—or at least approve—innovation before it becomes available.

[no-glossary]Download[/no-glossary] Breaking the Broadband Monopoly [pdf]

Executive Summary

The Baller Herbst Law Group filed an extensive report with the FCC detailing important information about OneCommunity - a fascinating nonprofit organization connecting many communities with fiber and wireless connectivity in Ohio.

Andrew Cohill of Design Nine has released a report about Open Access networks: "Broadband for America: The Third Way." I wanted to highlight this report because open access is an important idea that should be promoted and discussed. I believe open access is the most promising way to create the world most people want to live in - fast and affordable networks offering many choices in services and service providers to all Americans. However, though I hold Andrew in high regard, I have some disagreements with the paper that are noted below. This paper comes at an important time. For more than a decade, we have ended each year with less broadband competition than we started with. Politicians and regulators have abandoned policies aimed at promoting competition despite their continued lip service in favor of it. Incumbents have more and more power over both subscribers and entire communities. If we want competition in broadband and cable (and I certainly do!), open access is the only feasible approach. The cost of building the networks is fantastically high whereas the cost of offering services to an additional user are tiny. The result is a network with strong natural monopoly characteristics. Without a network that shares infrastructure (wires, poles, CPE, etc.), the market will trend toward monopoly or duopoly. Wireless complements wired broadband but cannot provide the high speeds and reliability of fiber-optic networks. Even if some metro areas can support multiple networks, most rural areas can barely support one network. Without open access, significant parts of the country cannot have a choice in service providers. Read more...

Municipalities that own and control their wireless broadband networks, operate public services more efficiently, prioritize broadband traffic for emergencies, and put unused bandwidth to use to attract new businesses, afford educational opportunities to students and in many cases, provide free broadband access to unserved or underserved residents.

Policy should promote competition, innovation, localism, and opportunity. Locally-owned and -operated networks support these core goals of Federal broadband policy, and therefore should receive priority in terms of Federal support. Structural separation of ownership of broadband infrastructure from the delivery of service over that infrastructure will further promote these goals.

For decades, American communities — both rural and urban — have been neglected and underserved by absentee-owned networks, whose business models clearly do not work in smaller or economically challenged communities. By contrast, in the communities in which they are based, locally-owned networks are more likely than absentee-owned networks to provide rapid response to emergencies, enhanced services, and value-added, social capital benefits such as job-training, youth-mentoring, and small business incubation. In addition, local networks are less likely to outsource jobs, thereby strengthening local and regional economies, while creating more opportunities for community-based innovation and problem-solving. Federal broadband policy that prioritizes support for local networks will produce more competitive markets, consumer choice, and opportunities for innovation.