In the case of muni systems, which are not-for-profit enterprises, one measure of “success” is defined as the level of their “take rate” – that is, the percentage of potential subscribers who are offered the service that actually do subscribe. Nationwide, the take rates for retail municipal systems after one to four years of operation averages 54 percent. This is much higher than larger incumbent service provider take rates, and is also well above the typical FTTH business plan usually requiring a 30-40 percent take rate to “break even” with payback periods.
States Scream at Feds for Preempting, Then Preempt Cities
Here at muninetworks.org, we continually see instances of state government preempting rights of local government to make their own decisions on broadband. It was no surprise to us to read Josh Goodman’s recent Stateline.org article, GOP Legislatures Try to Limit Local Government’s Power.
Goodman takes a look at a disturbing trend in the relationships between local and state authority; a relationship that has local government walking on eggshells. More and more local governments are now contending with their own state legislatures stripping them of specific decision-making authority. Some decisions are better made at the state level, but the concept of a micromanaging, conservative GOP legislature seems contradictory. Any fan of state floor debate, has listened to countless hours of republican legislators berating democrats for trying to overstep into local concerns. Could it be a change of heart or perhaps a very targeted way to ensure local compliance with a party agenda?
Many of these state lawmakers have accused the federal government of adopting an imperious, one-size-fits-all mentality and of subverting the rightful powers of states. At the same time, many high-profile debates in the Tennessee Capitol over the last two years — on topics such as local wage rules and local non-discrimination rules, among others — have centered on the state trying to limit the power of localities to make decisions for themselves.
Rather than take a diplomatic and collaborative approach, these lawmakers prefer to nullify local authority rather than risk a community decision with which they would disagree.
While Goodman’s article discussed a variety of legislative hijackings of local authority - local wage rules, zoning, sprinkler systems, his observations parallel our findings on community owned networks. We have reported on many examples of preemption as it relates to the establishment and development of municipal broadband. Recently we have examined state legislative initiatives in North Carolina, Kentucky, Minnesota, Georgia, and we have mapped where the level of government obstruction varies from non-existent to outright bans.
State preemption on broadband widens the proximity between the decision makers and the people who need access to information infrastructure, much to the advantage of cable and DSL lobbyists. Banning and obstructing establishment of community networks results in unserved and underserved connections in places where corporate providers don’t care to develop. It is estimated that online commerce accounts for 4.7% of our economy, a figure expected to grow exponentially.
A community bypassed by the private sector is at a significant economic disadvantage when their local government has no power to invest in a network.
“What it [legislation] is trying to do,” [State Representative Republican Glen] Casada says, “is make sure that the environment across Tennessee is the same.”
While Casada may not have been discussing municipal broadband, we hear his statement as an accurate description of states’ attempts to homogenize, often to the benefit of larger corporations that seek advantages over main street businesses.
Much like the landscape in Tennessee, each community has unique needs and goals. Taking a one-size-fits-all approach may be a good way to advance the agenda of some special interests, but it will not serve the interests of Tennesseans, whether the issue is local wage rules, zoning, sprinkler systems, or access to broadband.