State lawmakers should exorcise muni broadband evil, federal advisors say

by Steve Blum • , , ,

Stomp on cities. Boiled down, that’s the conclusion of a group advising the Federal Communications Commission on what states ought to be doing to promote broadband deployment. The FCC formed the Broadband Development Advisory Committee earlier this year, which is top heavy with lobbyists and others from big and mid-sized telecoms companies, very weak on local or state government representation and devoid of any municipal broadband experience. The committee spun off five working groups, including one tasked with writing model laws for states to adopt or, potentially, for the FCC to impose through its assumed preemption powers.

The result is a wish list that might have been – and probably was – written by lobbyists from big cable, telephone and mobile companies, and includes…

  • Statewide cable franchising. California adopted this approach more than ten years ago, when the Digital Infrastructure and Video Competition Act (DIVCA) was passed. Instead of negotiating for franchise rights on a city by city, county by county basis, cable companies get blanket permission to operate from the California Public Utilities Commission, which has virtually no discretion or oversight authority. It simply hands out full or partial statewide franchises and hopes for the best. In some ways DIVCA has reduced barriers to broadband deployment, but it has also given cable companies free rein to cherry pick high revenue service areas, ignore regulatory standards imposed on other telecoms companies and otherwise use its position as the sole provider of advanced service – 25 Mbps down/3 Mbps up – to extract monopoly rents from consumers and businesses alike.
  • Eliminate municipal broadband service. The group’s draft takes a convoluted path, but the destination is clear: keep cities out of the broadband business. The general advice to local governments is to butt out of broadband issues, but if they are determined to do something anyway, they should give money, real estate and other assets to incumbents and trust that all will be right. Owning and operating a broadband system is a city’s last resort, and only allowable if it can be shown that every other possibility has been exhausted – in other words, only if incumbent cable and phone companies meekly concede their turf. Good luck with that. As a kicker, if a city or county owns dark fiber – not uncommon in California – it wouldn’t be able to keep it. At least not for anything beyond its own “reasonably anticipated” needs. Any spare municipal fiber capacity could be claimed, at will, by a private broadband provider for a pitifully low price.
  • Preempt local ownership and oversight of poles and other wireless assets. This one is no surprise to anyone who’s been following the money the wireless policy debate in Sacramento. The group’s draft tracks very closely with California senate bill 649, which was vetoed by governor Brown last month. Discretion regarding installation of most wireless facilities on private property and in the public right of way would be eliminated and, as with dark fiber, telecoms companies could make free use publicly owned property, such as streetlights, at rental rates far below market value.

The FCC’s model state code working group is expected to finalise its recommended policy in January. After that, expect the political money men to pressure the FCC to impose as much of it as it can on a federal preemption basis, and then deploy to state capitols to mop up what’s left.