Supreme Court Says Bans On Municipal Broadband Is Legal

from the keep-it-all-private dept

Broadband Reports has the scoop on an issue that isn't getting very much press coverage - though, it probably should. It's become popular lately for local municipal governments to start offering their own broadband - especially when they feel that private interests are not doing a very good job bringing broadband to their residents. However, the traditional broadband providers are upset about this competition from the government, and are convincing many places to put up laws banning municipalities from offering services and competing with the private companies. The Supreme Court has now ruled that such bans are perfectly legal. That doesn't mean that no municipalities will offer broadband - just that it's okay for governments to ban such offers. Both sides make compelling arguments for their position. Municipalities feel that they can offer better service and better prices to residents, while private providers claim it's not fair to have to compete against publicly financed broadband. There's an easy response to that, though: if the private providers were providing adequate service, there would be no demand for municipally provided broadband. The reason these muni broadband providers are showing up is because the private companies haven't been able to do their jobs effectively. If anything, having muni competition should spur them to do a better a job. So, while it may now be perfectly legal for state governments to ban muni broadband, it probably doesn't do its citizens very much good. Update: The Associated Press is running a short blurb on the ruling.
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  • identicon
    Karl, 24 Mar 2004 @ 12:40pm

    No Subject Given

    America will snore at this, when this is the EXACT kind of thing people should be paying attention to.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Mar 2004 @ 1:06pm

      It IS unfair competition...

      While I'd be the first in line to subscribe to a local "TinyTown Broadband DSL" service for $19.95/month, I have to say that introducing a government-funded competitor into the marketplace is simply unfair. And Mike, it's a very poor assumption that municipalities would only get into the game because existing providers are doing a lousy job. Heck, if I was a town supervisor and discovered I could legally raise money for my town by undercutting the big evil phone & cable companies, I'd do it in a heartbeat for that reason alone.

      Comcast bought AT&T Broadband and raised my cable broadband bill by $20 A MONTH because I declined a bundle including their crappy and overpriced digital cable service. I switched to the far more reasonable Verizon DSL, and wrote my congressmen about what I believed to be Comcast's price gouging practices. Should there be better processes in place to ensure that customers don't get screwed on price and poor service? Yes--I believe it more than anyone. But government-run ISPs aren't necessarily the answer...the notion runs counter to our open market system and could create as many problems as it solves.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 25 Mar 2004 @ 5:49am

        Re: It IS unfair competition...

        "And Mike, it's a very poor assumption that municipalities would only get into the game because existing providers are doing a lousy job."

        As someone who has been writing on this topic for two years, let me tell you this isn't an assumption at all. By FAR the majority of these systems are in response to either NO service or very poor service.....

        reply to this | link to this | view in chronology ]

        • identicon
          thecaptain, 25 Mar 2004 @ 6:55am

          Re: It IS unfair competition...

          In these cases yes.

          However, I doubt ALL cities would be so unscrupulous if they could make some hard cash out of it.

          reply to this | link to this | view in chronology ]

      • identicon
        The Monster, 26 Mar 2004 @ 8:50am

        Unfair?

        Heck, if I was a town supervisor and discovered I could legally raise money for my town by undercutting the big evil phone & cable companies, I'd do it in a heartbeat for that reason alone.
        Normally, the term 'unfair competition' refers to some kind of subsidized undercutting - say if the municipality ran its service at a loss, with taxpayers footing the bill for part of the cost. But suppose the municipal government offers My Little Town Broadband Bonds, and the monthly fees paid by subscribers retire that debt, with interest, within a few years, pay for enhanced services, and eventually become a net revenue producer for the municipal government...

        What, exactly, is 'unfair' about that?

        reply to this | link to this | view in chronology ]


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