Municipal systems do not “crowd out” private providers any more than the New York City Subway “crowds out” private taxi cabs and car services. To the contrary, studies and anecdotal evidence repeatedly show that where municipal systems take on the expensive task of building network infrastructure, the number of private providers increases.
Network Ownership is a key question when considering a network. The owner makes the rules for the network. What is the #1 priority? Is it to make a profit or to benefit the community? With some exceptions, they do both. But what comes first?
Owners make the key decisions. Will the network be open to multiple competitors at a non-discriminatory rate or will it be a monopoly? Will all traffic on the network be treated the same or will some traffic be disrupted to benefit the owner's business plan? Will the network be affordable to everyone and offer sufficiently fast speeds to attract and retain businesses?
Communities are quite limited in what they can compel a private network operator, such as Comcast, AT&T, or Verizon, to do. They cannot require a network operator to upgrade its network to offer the faster speeds available in other communities. They are powerless to stop the provider from charging outrageous fees to local businesses who would pay much less for the same speeds elsewhere.
Though everyone wants more choice when it comes to cable, broadband, and phones, the high cost of building these networks prevents true competition or a functioning market; communities generally find themselves at the mercy of monopolistic providers who are unaccountable to the community.
When the community owns the network, it can shape its digital destiny. Thousands of communities are served by massive companies that are required to maximize profits for their shareholders. This means they are actually required, by law, to put their private interest ahead of what is best for each community.
By contrast, locally owned networks are accountable to the community. Citizens can shape their destiny via the democratic process. Rather than waiting on hold with a distant call center, they can call the mayor or harass the city council member at the grocery store. If the network is underperforming or prices are too high for local businesses, City Hall is almost always more responsive than a call center in India.
A community fiber network can be open to all competitors on equal terms, bringing choices to all citizens. Community networks have proven to offer great services at competitive prices, advancing communities and keeping money circulating locally rather than heading across the country in the form of corporate profits.
Some have denigrated public ownership, asking why government should get involved in this area. They have compared it to government-run supermarkets. The correct response to this analogy is that if a community has no supermarkets, or if the existing supermarkets have decided to charge prohibitive prices for basic staples merely to extract monopoly profits, then government absolutely needs to get involved. Governments are directly accountable to the public, private companies are not.
Christopher Mitchell discussed ownership questions in this 20 minute discussion with Geoff Daily of App-Rising.com.