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.

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Filed Under: broadband, competition, monopoly, municipal broadband

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  1. 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.

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