North Carolina's Broadband Policy: Wasting Tax Dollars Pretending To Care About Wasting Tax Dollars

from the dynamic-duopoly-defenders dept

We've long argued that one way to help improve broadband competition is to stop letting incumbent ISPs write protectionist state telecom law. For decades now, these laws have been rushed through campaign-contribution-soaked state legislatures. With ALEC's help, these laws usually encode restrictions that prevent towns and cities from improving their own broadband infrastructure, even if nobody in the private sector wants to (aka market failure). It's the epitome of protectionist drivel; in some cases even preventing towns and cities from striking public/private partnerships to improve telecom and municipal services.

So it was refreshing (and a little bit shocking) when the FCC earlier this year woke up from a fifteen-year slumber on this issue. The agency declared it would be using its authority under Section 706 of the Telecommunications Act to pre-empt the more idiotic portions of these laws. Responding to complaints from municipal broadband operators and utilities trying to get into the broadband business, the FCC initially took aim at just two of the worst states: North Carolina and Tennessee, where companies like AT&T have been literally writing laws ensuring their duopoly power remains unchallenged indefinitely.

It's hoped the success of the FCC's work in these two states will slowly expand to the eighteen other states that have passed similar mega-ISP-friendly laws.

Not too surprisingly, politicians loyal to incumbent ISPs cried foul, and immediately started working on drumming up partisan division. It's not working: most municipal broadband networks see broad, bi-partisan community support -- and most municipal networks have been built with Conservative approval in more Conservative-leaning cities and states (whether that's Lafayette, Louisiana, or Chattanooga, Tennessee). ISP-loyal politicians like Tennessee's Martha Blackburn have expressed outrage that the FCC would dare to trample local rights -- something that is, apparently, the sole responsibility of companies like AT&T, CenturyLink, Time Warner Cable and Comcast.

The pretense behind the opposition to municipal broadband has always been that these laws are necessary to protect taxpayers from themselves, since sometimes (like any business model) municipal broadband doesn't work out. Of course some projects have worked well and others haven't, but the decision to travel this path is something that should be left up to the towns and cities themselves, not AT&T lawyers. However, North Carolina has joined Tennessee in suing the FCC over its latest push, claiming the state has been "aggrieved" by the FCC's attempt to remove state barriers to broadband expansion:
"North Carolina Attorney General Roy Cooper has filed a lawsuit in federal court against the Federal Communications Commission seeking to overturn the FCC's decision to allow the City of Wilson to expand its community broadband network service known as Greenlight. The state has been "aggrieved," according to Cooper. But a broadband group labeled the suit a "waste" of taxpayer money. Cooper stated in the suit that the FCC "unlawfully inserted itself" between the state and "political subdivisions" such as communities."
The problem is the FCC is Congressionally mandated to ensure the "timely and reasonable" deployment of broadband services, and it's pretty hard to argue you're helping that goal by letting AT&T lawyers and lobbyists write state law that does the exact opposite. It's not like this influence resides in shadow, ALEC's draft legislation sits on the outfit's website for anyone to read. The irony of using taxpayer money under the pretense of protecting taxpayer money didn't escape municipal broadband groups commenting on the case:
"Attorney General Cooper must not realize the irony of using state taxpayer dollars to ensure less money is invested in rural broadband, but we certainly do," says Christopher Mitchell with the Institute for Local Self-Reliance. "State leaders should stand up for their citizens' interests and demand good broadband for them, rather than fighting alongside paid lobbyists to take away those opportunities."
It's worth reiterating that these towns and cities wouldn't be getting into the broadband business if they were happy with the service provided by regional monopolies and duopolies. The real absurdity of it is this: municipalities, companies and consumers alike benefit immeasurably from expanded broadband in a state, regardless of how it's provided. That Tennessee and North Carolina are willing to throw all of this potential growth away just to protect the campaign cash contributions of big telecom operators speaks volumes about the quality of Tennessee and North Carolina state legislators, and the stranglehold companies like AT&T, CenturyLink and Comcast have over the state legislative process.

Filed Under: broadband, fcc, municipal broadband, north carolina, state's rights


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  • identicon
    Anonymous Coward, 19 May 2015 @ 8:07pm

    The pretense behind the opposition to municipal broadband has always been that these laws are necessary to protect taxpayers from themselves, since sometimes (like any business model) municipal broadband doesn't work out.


    So we need a federal rule to prevent state laws from prohibiting local laws? Something seems off about that...

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

  • icon
    That One Guy (profile), 19 May 2015 @ 9:07pm

    Sounds about right

    The pretense behind the opposition to municipal broadband has always been that these laws are necessary to protect taxpayers from themselves, since sometimes (like any business model) municipal broadband doesn't work out.

    Makes perfect sense to me, I mean everyone knows that when a private company like Comcast or AT&T accepts a contract and huge pile of cash and/or tax breaks to roll out a broadband or similar network, they always deliver exactly what they promised and on budget, and never under-deliver or over-charge, so with a perfect record like that in the private sector, why would local communities even need to set up their own muni broadband networks?

    Why risk taxpayer dollars on the local, possible-to-fail option, when they can use taxpayer dollars on the proven and reliable private option?

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

  • icon
    scatman (profile), 20 May 2015 @ 7:09am

    gas pipes...data pipes...

    I'm not old enough to know, but when gas stations (owned be different oil companies) started being built throughout the land, I wonder if they divided and conquered like the modern cable/ISP's are doing. Did Exxon say "we're gonna service all of the south eastern states", and did Chevron say "we're gonna take all the western states", etc...? How is it that we can have multiple gas stations owned by different oil companies--and all all kinds of pipes/underground oil lines--in almost every US city, but we can't do the same 'infastructurally' speaking with cable/ISP's? Is it logistically impossible, or just greed blocking the works?
    If governments (fed., state, local) were serious about competition, they'd legislate such that the more competition a monopoly (duopoly, oligopoly, etc.) has--the less that monopoly is taxed. Why not promote competition through lower taxation?

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

  • identicon
    Tony - recent NC transplant, 12 Jul 2016 @ 10:45am

    Is this entire country screwed up

    Once again the politicians and big business are doing what is in their best interest and NOT the consumer. I have tried for 2 years to get a decent option for internet in New Hill to no avail. AT&T has a terrible 584 DSL that I had to fight to get and then cancel because it was useless. Time Warner - No, Century Link - no. My kids can hardly do school assignments and I can't work from home if I wanted to. THIS IS UNACCEPTABLE. Let's vote them all out and allow no corporate funding for political campaigns - or at least let it all go into a pot and be distributed equally.

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


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