Chattanooga Saw Billions In Economic Benefits After Building A Community-Owned Fiber Broadband Network
from the radical-socialism dept
Back in 2008, Chattanooga, Tennessee decided to build its own city-owned fiber broadband network on the back of its existing electrical utility, EPB. In the years since, the network has become one of the most popular in the nation, offering affordable, 25 gigabits per second fiber access to local residents.
It almost struggled to be, thanks to the usual bullshit behavior by regional telecom monopolies like Comcast. Comcast tried repeatedly to sue the network out of existence. As we’ve seen elsewhere, they also used co-funded “free market think tanks,” fake consumer groups, and for-hire pundits to seed lies in the local populace about how community broadband was a dangerous, inevitable boondoggle.
Spoiler: it didn’t work.
Years later and Chattanooga isn’t just providing cheap, affordable fiber, it continues to funnel significant financial benefits back into the community. A new study by researchers at the University of Tennessee at Chattanooga has generated $5.3 billion in net community benefits for Hamilton County since 2011.
Benefits range from savings on upgraded smart city meters, local consumer savings on broadband access, free marketing due to the network’s popularity, improved health care outcomes, expanded business and remote work opportunities, improved tourism to revitalized parts of the city, and direct profits from the network itself:
“Since the project was fully completed in 2011, it has returned more than six times the original cost of the investment,” said Bento Lobo, Ph.D., lead author and director of the Department of Finance and Economics at the UTC Rollins College of Business – describing Chattanooga’s fiber network as “one of our community’s most meaningful and impactful investments.”
Telecom monopolies (and the various academics, consultants, lobbyists, and think tankers) spent decades insisting these sorts of networks would be a socialist nightmare and inevitable boondoggle. They did this, because they know that this sort of approach — treating broadband access as a community-owned utility and public good — is extremely effective and extremely popular.
And while telecoms have tried desperately to seed partisan division in the discussions surrounding municipal broadband viability, in reality they see broad, bipartisan support across the electorate. More often than not, they wind up getting built in Conservative cities and counties, thanks in part to frustration with Republican policies on telecom (which almost always involve coddling the regional monopoly).
Republicans and their telecom allies (including fake “taxpayer protection groups”) will breathlessly insist this is all a dangerous waste of taxpayer resources. But if you pay attention, you’ll notice they never have a single bad word to say about the billions taxpayers throw at regional giants like AT&T, Comcast, and Verizon in exchange for broadband networks that are always, curiously, left half-completed.
Open access fiber networks come in a variety of flavors, including directly municipally owned, an extension of the existing city utility, a cooperative, or a public-private partnerships. These creative, locally controlled solutions really do work and are very popular; but routinely get derailed because the U.S., if you hadn’t noticed, is often too corrupt to function in the public interest.
Sixteen states still have laws, ghost written by telecom monopoly lawyers, either banning community owned networks or limiting how they can fund or where they can expand. And at the heat of COVID lockdowns, when these networks were showcasing their significant benefits to local communities, House Republicans responded by trying to ban them country wide.
Filed Under: chattanooga, fiber, gigabit, internet, muni broadband, municipal, telecom, tennessee
Comments on “Chattanooga Saw Billions In Economic Benefits After Building A Community-Owned Fiber Broadband Network”
Always True
Fiber is good for opening things up.
Look, I love the idea of public broadband but this kind of number counting is the same sort of math the RIAA uses to determine damages for piracy. You can’t count dollars people didn’t spend on something as a gain. It implies all of that stuff would have been bought (at full price), but a lot of those benefits probably would have just been forgone if people had to pay AT&T or Verizon prices. Also, “improved tourism to revitalized parts of the city” is doing a lot of heavy lifting here.
Again, the community broadband is great, but I just feel that throwing around the number 5.3 billion is a bit dishonest. The entire GDP of Chattanooga TN is only 42 billion.
Re:
Meanwhile I’m wondering about how broadband results in improved health outcomes. I know Tennessee isn’t exactly the most modern of states, but I don’t think they are ‘massive benefits from telemedicine because they previously didn’t have any doctors’ level of bad.
Re: Re:
If you can’t get past the browser verification, here’s an archived version of the link, and a direct link to the recent study (PDF).
The short answer:
And:
A lot of this seems really dubious. Okay, if people couldn’t afford decent access and now can, they’ve gained access to telemedicine from home. Some will probably see doctors for ailments they might’ve otherwise lived with, unless and until things got really bad.
But “100 megabits in size” is only 12.5 megabytes, and would take about 30 seconds to transfer over a 5 megabit/s connection. And it’s hard to imagine a radiology lab wouldn’t have much better access; or that compared to the office full of machines and employees, that the cost would be prohibitive. According to the Federal Communications Commission, 5 Mbit/s (if reliable and low-latency) is also sufficient for high-quality video conferencing. Cable connections are almost always several times faster, at least.
That’s not to say we should settle for 5 or even 50 Mbit/s. The U.S. didn’t become a global superpower by dreaming small. So, sure, get 25 Gbit/s cheaply for everyone, including businesses, but let’s be realistic about what’s necessary and what’s more of an experiment to see what can happen in a post-bandwidth-scarcity environment. Aftel all, 25 Gbit/s and even 40 Gbit/s hardware is readily available, inexpensively, to network operators. (How to actually deal with customers using 40 Gbit/s across the internet is something else entirely, especially when peering with the traditional monopolist providers. But a Chattanooga radiologist sending to a Chattanooga hospital will saturate their local network with internet bandwidth to spare.)
Re: Re: We already knew it
Doctors have been telling us for years that fiber is good for your health.
I’ll see myself out…
Re: And
What numbers do the Corps throw around when they Charge $100 fir <1gig? They FINALLY got fiber in my Town, and we live next to the freeway, 3 Fiber lines going threw Town, 1 of them Since they Installed Fiber for the NET/Backbone.
Consider that MOST small NON-Corp system Dont pay TOP wages over 1 million per year…THATS A SAVINGS. And there is generally NO Stock shares to DEAL with.
AND with a Solid internet, do remember, That GENERALLY its linked to the Phone and cellphone systems. So while installing the Lines, they can Install Extended Systems, around the area for better reception. AND Charge the corps for Access to the service. Because DOING the work themselves would COST MORE MONEY, then renting access.
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But people did spend money and Chattanooga raked money in, did you miss that or did you just conveniently forget it while sharpening your axe? With your reasoning there has never been any point in investing in infrastructure ever.
Over 15 years, not per year.
Mr. Reading Comprehension, may I present to you Mr. Brain Fart Reasoning.
Re: Re:
Reducing the (potential) cost of living is a good investment, but that’s not a “return” in the normal language of investing; just a reduction in waste.
Like, if anyone could buy “business” gigabit broadband for a thousand dollars a month, and the local monopolist sold a residential version for $300/month, it’d be ridiculous to praise them for saving every resident $700/month.
The actual return here would be the profits of the community-owned provider, plus (arguably) the extra tax revenue from residents and businesses who moved to the community for its broadband.
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Which is exactly the point and there is no hocus-pocus accounting going on, nobody is counting money not spent as a gain because the investment gave tangible benefits.
Re: Re: Re:2
Did you read the linked page, and the study PDF? (Unfortunately, the “communitynets” archive.org link that was working yesterday has stopped working, so I can’t double-check that. The PDF link still works.)
They seem to be including stuff like money saved by not having to physically go to a doctor, the reduction in electricity from having a “smart grid” (which many electricity providers now have, whether or not they sell fiber access to the public)… even “Media coverage of fiber infrastructure” has somehow “contributed” 82 million dollars.
The actual “net fiber profit” (PDF figure 3.3) has gone from about 4 million per year in 2012—only the first year, 2011, was unprofitable—to 30 million per year today. That’s great! It’s a success story that other cities should be eager to copy. By comparison, it’s basically unheard of for a city road department to ever make a profit, and we’re all fine with that. We don’t need to come up with some dubious pretense of “gaining” 5 billion dollars, when the actual profit was around 250 million.
Re: Re: Re:3
Yes. Did you read the whole thing? Seems you just focused on one specific thing while ignoring everything else.
You would know what “Media coverage of fiber infrastructure” covers if you hade bothered to read Chapter 3, paragraph 8.
The net profit metric for infrastructure isn’t particularly important, it’s the secondary effect metrics that matter which is also the prime reason all infrastructure is built in the first place except for a few political vanity projects here and there. A city’s road department will never turn a profit (unless we are talking about toll roads), but the city is still profiting from the roads through secondary effects.
Perhaps you should actually read Chapter 3, pay special attention to what the chapter is called.
So the total economic effect (including increased employment, business opportunities and tax revenue) of the community fiber broadband in Chattanooga is totally irrelevant as an example and incentive for other cities, got it. We should only care about the net profit from the fiber and nothing.
The reasoning presented is just plain stupid and shows a distinct lack of understanding economic calculations behind infrastructure projects and how indirect effects of them are always taken into account.
Re: Re: Re:4
Funny how you read the exact opposite of what was written. It’s fine to care about secondary effects, but we shouldn’t pretend they’re easily quantifiable, or that a reduction in expense is a gain. It’s bad enough when society’s just basing decisions on what is easily quantifiable, such as when “private equity” takes over businesses.
The economic benefit is greater than the direct profit, but some of those numbers get pretty hand-wavy. Maybe it’s one billion; it’s not five.
Heaven forfend that their services be extremely effective and popular, and return six times their investment in 14 years.
The DAY.
We get Corps to tell the truth or SHUT UP. Is the Day God descends and Shacks hands with TRUMP.
Re: Please
We need A Law that If a Corp, Willingly Lies or creates a Falsehood. And its Proven they are Wrong.
They Get to spend time in Jail as WELL as Publish the TRUTH in Every Newspaper and internet news site.
And if we can add this to the Congress and President….DO IT TWICE.
Free association
I wonder if these state laws would survive a constitutional challenge based on the rights of citizens to freely associate and peaceably assemble. The Citizens United decistion and other efforts by Republicans to dismantle campaign finance limitations would seem to serve as some precedent. If the only thing preventing a community from banding together to provide a community service is a law supposedly needed to prevent wasteful spending, but the evidence shows that such services actually turn a profit, then the justification for the restriction on constitutional rights disappears.
Billions the ultra-rich instead wanted for themselves.
'Of course community broadband is terrible, don't you trust the word of AT&T/Verizon/Comcast?'
The biggest tell that community-owned broadband is an improvement over privately owned is how much money and effort the major corporations spend trying to kill it off.
If it was really as bad as they claim it is they wouldn’t have to say a word any time a new community broadband project was announced as everyone would already know and understand that it would just crash and burn like every other time it’s been tried.