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New Study Tries, Fails, To Claim Community Broadband Is An Inevitable Boondoggle

from the sockpuppetry dept

For years a growing number of US towns and cities have been forced into the broadband business thanks to US telecom market failure. Frustrated by high prices, lack of competition, spotty coverage, and terrible customer service, some 750 US towns and cities have explored some kind of community broadband option. And while the telecom industry routinely likes to insist these efforts always end in disaster, that's never actually been true. While there certainly are bad business plans and bad leaders, studies routinely show that such services not only see the kind of customer satisfaction scores that are alien to large private ISPs, they frequently offer better service at lower, more transparent pricing than many private providers.

Undaunted, big ISPs like AT&T and Comcast have waged a multi-pronged, several decade attack on such efforts. One, by passing protectionist laws in roughly 20 cities either hamstringing or banning cities from building their own networks, often in cases where private ISPs refuse to expand service. Two, by funding economists, consultants, and think tankers (usually via proxy organizations) happy to try and claim that community broadband is always a taxpayer boondoggle -- unnecessary because private sector US broadband just that wonderful.

The latest example of the latter comes via the Taxpayer Protection Alliance, a nonprofit that insists its focus is "holding government accountable," but is routinely backed by telecom giants like AT&T, which, for obvious reasons, are eager to paint an inaccurate picture of what's actually happening. The group's latest study, "GON with the Wind: The Failed Promise of Government Owned Networks Across the Country," claims to take a look at 30 examples of community broadband networks, with the heavy implication that the majority of them have failed -- proving that community broadband is always bad and private sector broadband is always good:

"Supporters of taxpayer-funded broadband systems claim that governments (i.e. taxpayers) are needed to build these systems because the private sector simply will not. The truth is that broadband providers have spent more than $1.6 trillion since 1996 to build, upgrade, and maintain networks, resulting in a 71 percent growth in rural broadband. Internet infrastructure is in place to serve 98 percent of the country, primarily built by telecom companies. This inconvenient truth, however, has not deterred attempts to use taxpayer dollars to fund broadband boondoggles."

But the fact that private ISPs have invested a lot of money in US broadband networks isn't in dispute. There's certainly numerous parts of the country where the private sector sees something vaguely resembling healthy competition. But as US telcos give up on upgrading aging DSL lines, there's a massive swath of the country that sees a cable provider (Comcast) as their only option (aka a monopoly). Despite billions in subsidization of private ISPs, there are still 42 million Americans without access to any broadband whatsoever. Millions more can't afford expensive US service thanks to muted competition and regulatory capture, the depth of which is fairly obvious to most (especially rural) Americans.

Community broadband isn't a magical panacea, but it certainly has a role to play in shoring up coverage gaps and motivating an uncompetitive sector suffering from captured regulators. And while the TPA report makes sweeping claims about the inevitable failure of such models, their report doesn't actually prove that in the slightest. In fact, a closer examination by the Institute for Local Self Reliance (ILSR) (pdf) found that just 8 of the networks cited actually had financial issues of note:

"TPA chose 30 municipal networks to make its argument and can only accurately claim 8 out of 30 networks as failures. ILSR has previously dissected TPA’s work and found similar problems. Indeed, the fact that some municipal networks have struggled actually refutes another point frequently made in criticism of municipal networks — that they have unfair advantages. In reality, municipal networks have tended to operate in the most adverse environments, where the private sector saw little reason to invest sufficiently. They have generally succeeded despite multiple disadvantages."

Take a moment to notice that groups like the Taxpayer Protection Alliance routinely pearl clutch over community broadband, but usually have nothing to say about the $42 billion in tax cuts we recently threw at AT&T in exchange for layoffs and investment reductions. Or the countless billions we've thrown at AT&T, CenturyLink, Frontier, and Verizon over the years for fiber networks that (mysteriously!) always wind up half deployed. Somehow, taxpayer waste is only a problem when small towns and cities engage in it. Taxpayer waste on a larger, more industrialized scale is usually ignored. Why, exactly, do you think that is?

Groups like ILSR have long noted that community broadband is not a panacea; it's just another business model. Some are good, some aren't. These towns and cities aren't building these networks because it's fun or because there's nothing else that needs to be fixed locally. It's because giants like AT&T and Comcast enjoy potent monopolies across much of America, with little competitive incentive to expand or improve service in many markets. Fixing the problem is often difficult, expensive, and a political nightmare thanks to AT&T, Comcast, and Verizon legal, PR, and political opposition; that shouldn't be a surprise.

But several times now the TPA has been accused of simply ignoring data that proves the industry's thesis that these networks are inevitable failures. That appears to have happened again here, with the report even trying to insist that Chattanooga's EPB -- rated the best ISP in America by Consumer Reports just a few years back -- was somehow a failure, despite the fact that telecommunications portion of EPB’s debt has been entirely paid off, and the network is one of the most popular in America.

Similarly, while the report tries to frame community broadband as a mindless dash toward heavy taxpayer debt and disaster, it fails to note that towns and cities routinely back away from such options when they're utterly financially untenable, notes ILSR:

"Ironically, while TPA is attempting to discredit municipal networks, its own words consistently affirm that local leaders have made wise decisions with few exceptions. The introduction notes that Seattle commissioned a study in which it found the proposed plan would be too costly and risky. The city did not move forward with that plan. In other cases, TPA explicitly notes that local leaders considered a project only to wait until the feasibility improved over time. This experience is precisely why we trust local decision-makers rather than encouraging state legislatures to interfere with such complicated and intensely local decisions."

Large private ISPs, the beholden FCC, and a chorus of industry experts have long engaged in elaborate calisthenics to try and demonize community broadband networks as an inevitable, wasteful disaster. In reality they're usually not. Even if they were, there's an easy way to put these efforts to bed: start deploying faster, cheaper, better broadband to the countless pissed off communities that have been complaining about substandard private sector broadband for the better part of a generation. Don't want communities getting into the broadband business? Do a better job serving them with cheaper, faster, more widely available service.

Filed Under: broadband, competition, monopoly, municipal broadband


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  • icon
    neost (profile), 22 May 2020 @ 7:04am

    rural broadband access

    I am starting to learn first hand of the plight of rural Americans and internet. I'm closing in on retirement and am looking for a piece of land so i can spread out and have some elbow room. You can't go 10 miles outside of a major built up area in a primarily agricultural state and know you can get reliable, high-speed internet.

    I've been trying to confirm availability of service at multiple locations as I find properties that I think fit the bill. I'm now fending off tons of calls/emails from the providers in those areas about what equipment i want to purchase, what tier of service, etc. when all I am asking is "do you provide service at this address?".

    It's like a broken record. I get a call or an email from a sales person. When I explain i just need to know if service is available because it will weigh on my purchase decisions, the come back to say "oh sorry, we do not service that address, but you can talk to this group to find out how much it would cost to get service at that address".

    Why is there not a simple portal to be able to see if an address has service? It really looks like it is a mounting battle to get any type of internet service in rural areas and everyone wants to push you to fixed wireless with a max speed of 25mbps and 250gb data caps w/$10 per gigabyte block or whatever overage charges.

    I've looked at around 12 locations and have not been able to identify one from any coverage map (if there is even a coverage map) or service portal that has service, so it requires a revolving conversation to find out that it does not, or does, but it's only fixed wireless or 3mbps dsl.

    It's 1920 out beyond the metropolitan limits.

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

    • identicon
      Anonymous Coward, 22 May 2020 @ 7:50am

      Re: rural broadband access

      Starlink may be the future for you and millions of Americans stuck in exactly the same underserved locality. They plan on starting testing later this year and you may be able to purchase a base station in the first half of 2021.

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

      • identicon
        Anonymous Coward, 22 May 2020 @ 9:03am

        Re: Re: rural broadband access

        Personally, I rather doubt Starlink is anything but a boondoggle.

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

      • identicon
        Anonymous Coward, 22 May 2020 @ 10:03am

        Re: Re: rural broadband access

        I have seen this advertisement several times now on TD and am curious whether you know or have a link to the calculations they performed in the determination of satellite quantity required to meet their coverage goals.

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

  • icon
    bhull242 (profile), 22 May 2020 @ 8:21am

    Honestly, if this is the best they have to discredit municipal broadband, then municipal broadband doesn’t sound like a bad idea.

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

  • identicon
    Anonymous Coward, 22 May 2020 @ 9:41am

    Classic projection. Incumbents try to portray the competitors as "an inevitable, wasteful disaster" because that's what they are themselves.

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

  • icon
    imclean42day (profile), 22 May 2020 @ 10:40am

    Community Broadband Success story

    after 3 elections thanks to 'captured' legislators, Longmont rolled out community broadband with 85+% uptake as the fiber rolled through our neighborhood. for $49.95 per month i get symmetric 1 Gbps service, great customer service, no 'unexplained' outages and no hidden fees. ironically after such a successful roll-out, Comcast lowered their 'advertised' price, boosted their default speed to 100 Mbps upstream, CenturyLink started to roll out cable to replace their dated and terrible DSL service. it was a win-win situation as now their is real competition in our broadband marketplace. if this was such a 'boondoggle' why are Comcast and CenturyLink even bothering to compete?

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

  • icon
    That One Guy (profile), 22 May 2020 @ 12:48pm

    When reality itself refutes you, break out the dishonesty

    Strange, if it was really such an obvious problem you'd think that by now they'd have something other than flat out lies and misrepresentations to go with...

    For a group that apparently wants people to think that they just care so very much about potential wasted taxpayer dollars they certainly act a hell of a lot like nothing more than a PR branch of the large telecom companies, companies that are apparently willing to shovel money into attacking potential competition rather than actually competing.

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

  • identicon
    Anonymous Coward, 22 May 2020 @ 1:26pm

    tax subsidies

    " in criticism of municipal networks — that they have unfair advantages. "

    most Community Broadband projects receive substantial taxpayer subsidies, either directly or indirectly.

    That certainly qualifies as an unfair advantage.

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

    • identicon
      Michael, 22 May 2020 @ 2:58pm

      Re: tax subsidies

      100% of broadband projects receive taxpayer subsidies, genius.

      There's no advantage, except to the monopolists who can afford to have laws created that cater to themselves.

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

    • identicon
      Anonymous Coward, 22 May 2020 @ 3:17pm

      Re: tax subsidies

      Am I to believe that the major broadband providers are not recipients of taxpayer subsidies?

      Where is the advantage?

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

      • identicon
        Anonymous Coward, 22 May 2020 @ 5:24pm

        Re: Re: tax subsidies

        ["Where is the advantage"]

        Excellent question

        Why are heavy taxpayer subsidies dumped on both private broadband providers and municipal providers (created to draw consumers away from those private providers) ??

        Makes no sense at all.

        The FCC is supposed to impose logic and economic efficiency on this overall situation, but obviously is clueless.

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

        • icon
          That One Guy (profile), 22 May 2020 @ 6:02pm

          Stupidity could be fixed at least

          The FCC is supposed to impose logic and economic efficiency on this overall situation, but obviously is clueless.

          Oh if only... sometimes it is malice, and that is most certainly one of them.

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

    • icon
      That One Guy (profile), 22 May 2020 @ 3:35pm

      Re: tax subsidies

      It absolutely would... if the other side didn't enjoy similar if not better, but as pointed out in the article the very companies complaining about 'unfair advantages' that municipal broadband enjoy via taxpayer subsidies are really not in a position to throw that particular rock.

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

  • icon
    ECA (profile), 22 May 2020 @ 3:50pm

    Can Anyone?

    "Taxpayer Protection Alliance, a nonprofit that insists its focus is "holding government accountable,"

    I would REALLY, really reallly...
    Love a list of Fake companies..Companies that the names do not match the work they do.. False fronts..

    Would really love to publish these..Like the list of Donations companies that give <50% of the donations to those they are collecting for.,

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

  • icon
    techturf (profile), 23 May 2020 @ 7:33am

    As a free marketeer...

    I do think that private and public ISPs should operate on the same footing. That said, once the very first law is passed in any locality, county, or state, limiting competition or giving any unfair advantage to any ISP, that service should then be regulated as a utility.

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

    • identicon
      Anonymous Coward, 23 May 2020 @ 6:01pm

      Re: As a free marketeer...

      "regulated utilities" can not exist in a free market.

      Those are directly contradictory concepts.
      e
      Better re-check your free-marketeer credentials.

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

      • icon
        nasch (profile), 23 May 2020 @ 7:23pm

        Re: Re: As a free marketeer...

        "regulated utilities" can not exist in a free market.

        There is no such thing as a free market. A market without any regulations devolves into monopolies and oligopolies. The freest possible market is one with antitrust regulations and regulated utilities in areas where competition is not practical.

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

        • identicon
          Anonymous Coward, 24 May 2020 @ 8:56am

          Re: Re: Re: As a free marketeer...

          a free market is a voluntary, peaceful system of economic exchanges among humans for mutual benefit.
          Many rules and complex contractual arrangements develop, but compliance is always voluntary.
          Long term monopolies can not exist in a general free market due to competition.

          "Regulations" commonly refer to forcible, non-voluntary, arbitrary economic interventions by government actors.
          Government regulations always harm the general economy.

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

  • icon
    nasch (profile), 24 May 2020 @ 9:06am

    Long term monopolies can not exist in a general free market due to competition.

    That's something of a tautology. But there are plenty of circumstances that can tend toward monopoly/oligopoly.

    https://opentextbc.ca/principlesofeconomics/chapter/9-1-how-monopolies-form-barr iers-to-entry/

    Government regulations always harm the general economy.

    Citation needed.

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

  • identicon
    Anonymous Coward, 25 May 2020 @ 8:58am

    I don't believe it's actually alien to large ISPs. I believe large ISPs through a fit at the UN, which no one wanted to be involved with to begin with, and large private ISPs became transnational and foreign instead of alien for getting the UN involved from their anti-UN foreign political party from their foreign country.

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


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