Muni broadband virtue should be a choice, not a chastity belt

by Steve Blum • , , ,

Well intentioned or not, assembly bill 1999 could work against efforts to preserve network neutrality, and prevent municipal broadband systems in California from competing against big, monopoly-model Internet service providers.

Authored by assemblyman Ed Chau (D – Monterey Park) , AB 1999 was approved by the California assembly and awaits action in the senate. It would: 1. explicitly allow more types of local agencies – e.g. county service areas, community service districts, enhanced infrastructure financing districts – to get into the broadband business, and 2. require all publicly owned, i.e. muni, broadband systems to abide by net neutrality principles.

Muni broadband is about local choice. Creating more options for local voters to choose from is a big step forward. But locking them into a 2017 business model might prove deadly a few years from now.

It’s a bad idea if net neutrality obligations only fall on muni broadband systems. We don’t know what the economics of the Internet will look like five or ten years from now, and handcuffing munis could prevent them from competing in the marketplace. That would benefit big, monopolistic providers like AT&T, Comcast and Charter Communications, at everyone else’s expense.

Consider this scenario: all limits on big ISP business practices disappear (say, on 11 June 2018), paid prioritisation kicks in, with AT&T, Comcast and Charter blending their subscriptions video packages into their broadband packages. For example, AT&T might offer you all their DirecTv channels for $80 per month – delivered via broadband, as they intend to do – and let you use any spare capacity to check email and browse the web. “Free” Internet access, in other words. You’re still paying for it, but you don’t notice it so much.

Muni broadband systems will struggle to match the level of control that AT&T, Comcast and Charter have over the market for video services. Forcing them to run their business within 2017’s norms might make them completely uncompetitive in 2022. Granted, it would be a bad thing if muni providers back pedalled on net neutrality principles, but it would be an absolute disaster if they went out of business completely.

I don’t know what will eventually happen, but I get nervous whenever business decisions are based on political positions. It’s good business right now for small ISPs – public and private sector – to wholeheartedly embrace net neutrality; it might be different tomorrow. The whole point of muni broadband is to keep the power of choice within local communities.

That’s where it should stay.