Community broadband networks offer some the highest capacity connections at the lowest costs. Many of these communities, before building their networks, were dependent on 1.5 Mbps connections that cost hundreds of dollars, or less reliable DSL and cable networks. The community broadband networks below are full FTTH networks, so the advertised speeds are the experienced speeds -- unlike typical cable advertised speeds, which users pay for but rarely experience due to congestion on the shared connection. In comparing some of the fastest publicly owned broadband networks to some of the fastest national private sector networks, we found that the publicly owned networks offer more value per dollar. Update: A few weeks after this was published, Verizon upped its speeds and prices for several of the tiers. 

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  The data we used is below. We thought about comparing also Qwest's "Fiber-Optic Fast" speeds, but their fastest upload speeds are below 1 Mbps, which makes them too pokey for the above networks.  
 

Community Broadband Networks: The Best of the Best

Note: Speeds are expressed as Mbps Down/Up. Each network has distinct offering for each tier.

The table reflects real rates, not short-term introductory rates. Do not be fooled into thinking that community broadband networks are able to offer the best deal because they are use taxpayer dollars. Very few community networks have ever used taxpayer money. Most networks are built using revenue bonds - which means that private investors fund the network, and are typically repaid over a period of twenty years using revenues generated by the services. Some cities choose to "back" the bonds with taxes -- which means that if the network does not generate sufficient revenue, the city will make up the difference with public money. Other cities choose not to back the bonds; this is a choice made by each community and impacts the interest rate on the bonds. In most cases, community networks have been safe investments that have not missed debt payments because the communities had an urgent need for broadband. In many cases, they have so many people wanting to take service, they have long lists for the installers. The idea that these networks frequently fail is an utter myth. However, not all community broadband networks offer the blazing speeds at great prices displayed above -- some were built five years ago, when those speeds were sufficient. Others do not feel the need to push the envelope, the community is content with what they have. However, they are able to meet higher demands if a citizen requires it. So even if a community network advertises its highest tier as being an 8/1, it is likely able to offer an even faster connection to those who need it. This is one of the many benefits of community broadband - the network is accountable to the community. The community broadband networks being built today almost always offer the fastest speeds currently available - as seen above with two ongoing builds, Lafayette and Wilson.

Many private, often incumbent and monopolistic, providers use the term "level playing field" as code for ensuring communities are unable to build their own networks. They do not actually want a "level playing field," they want more advantages for their businesses.

Consider the fight in 2009 over this issue in North Carolina:

HB 1252 would create extraordinary financial accounting and administrative burdens on municipal broadband providers that would render their existence fiscally difficult, if not impossible. The bill also subjects municipalities to the new jurisdiction of the North Carolina Utilities Commission, while not requiring the same of private providers. Also troubling is the injunctive relief provision, which could encourage litigation for purposes of gaining competitive advantage. Furthermore, the legislation appears to prevent municipalities from pursuing alternative funding sources, such as broadband grant programs included in the Federal stimulus bill, the American Recovery and Reinvestment Act of 2009. Source: Save NC Broadband Blog

Additionally, the process in North Carolina reveals the extent to which private providers like Time Warner buy legislation in some states.

Cross-Subsidizing

Cable and telephone companies are able to cross-subsidize their networks - they can charge more in the areas they serve where there are no competitors in order to charge less in a competitive community. Numerous state and federal laws prohibit public entities from cross subsidizing across services. Further, when private companies are forced to have open meetings and disclose their business plans like their public sector counterparts, we will be closer to a "level playing field."

"Private sector companies have completely different goals, driven by shareholders’ and the financial community’s demand for high, near-term profits from user revenues. In the face of this reality, it is completely inappropriate to use of conventional Wall Street metrics to judge whether a municipal project is successful. The metric for success certainly should not be: “If this were a private firm, would Wall Street like it?”
Source: Jim Baller and Casey Lide - "The Case for Public Fiber-to-the-User Systems"

The very idea that one could somehow balance the advantages and disadvantages of different providers is suspect, as explained by the Georgia Public Service Commission (cited by Baller and Stokes):

Preventing anticompetitive practices, unfair competition, and abuse of market position does not mean that the Commission must impose conditions on every applicant which has some advantage not shared by every other applicant. The Commission is required to treat all LEC's [Local Exchange Providers – i.e. phone companies] equally, not make all LEC's equal. BellSouth and the large cable companies certainly enjoy better capital costs than a typical small business owner. Does this put the small company at a competitive disadvantage? Of course. Should the Commission determine which LEC has the highest capital costs and require that all other companies impute that amount into their rates to level the playing field"? Certainly not. If Marietta has to comply with expensive open records requirements or expensive municipal bidding requirements, should those costs be imputed into the rates of all private companies? Again, no. Similarly, if BellSouth has a large tax write-off one year, it would be ridiculous to require that they impute into their tax rates the taxes they did not have to pay merely because some other company may not have had a tax write-off that year.

What is undeniable is that the public sector and the private sector serve different ends. In general, the private sector excels at maximizing returns for investors and focuses on the short term. The public sector primarily invests for the long term and in order to maximize social benefits. Therefore, the public sector and private sector use different balance sheets.

How public balance sheets differ from private

When subscribers make their monthly payments, it shows up once on the private balance sheet (assuming the owner is located outside the community). Some of that money returns to the community in the form of taxes and salaries for technicians. However, on a public balance sheet, the revenue has a larger multiplier effect because that money stays in the community.

Another significant difference between the balance sheets is how much profit is necessary. On a private balance sheet, there is a pressure to profit quickly and increase profits year after year. On the public balance sheet, if it takes ten years to break even, that is acceptable (when was the last time a road "broke even?"). The pressure to profit on the private side results in off-shoring or cutting back on local support that degrades service. On the public side, if a network takes an extra year to generate net income because it has hired another local technician to ensure prompt service, the community benefits.

We are not opposed to profit -- in fact, we work regularly with small businesses to create an environment that encourages them to succeed. In order to succeed, they need access to fast, affordable, and reliable broadband connections. But networks that prioritize profit first tend not to deliver the connections on which all other businesses depend.