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.
Tennessee Bill to Encourage Economic Development Killed by Telco Lobbyists
As we continue to report on depressing campaigns to deny people fast, affordable, and reliable access to the Internet (as Time Warner Cable is doing in North Carolina), we are also making an attempt to highlight good legislation (as we recently did in Washington state). In that spirit, we turn to HB 2076 / SB 1847 in Tennessee
From the bill summary:
This bill urges all municipalities to endeavor to utilize advanced broadband systems in their operations and to encourage the construction of advanced broadband systems.
The bill would have let the municipal utilities extend service up to 30 miles outside their service areas.
Unfortunately, the powerful incumbent lobbying machine (including AT&T, Comcast, and others who already hate having to compete with technologically superior networks in several Tennessee communities) killed the bill, a blow to the future of economic development in the state. Neighbors of Chattanooga, including Bradley County, desperately want access to the impressive 1Gbps network Chattanooga built -- the most advanced citywide network in the country.
Harold DePriest recognized the power of AT&T and Comcast in the Legislature, but vowed not to give up.
“Well, we would like to see the bill pass, but I think Gerald was dealing with the reality of the difficulty of moving the bill through the committee at this point in time,” he said Friday. “We will be back. We think it is important.”
The article wisely includes a box detailing contributions to Tennessee candidates from cable and telco interests, totaling almost $200,000 from AT&T and the cable industry alone. Expect that to increase even more whenever they start to push through additional favorable legislation to protect their interests.
Last year, Governor Bredesen (who has since left office due to term limits) encouraged a bill to allow communities to work with public power companies like Chattanooga's EPB to expand next-generation networks through the state. That bill was also defeated then also by AT&T and other interests. We have included video from the deputy governor's presentation below as well as Harold DePriest's testimony.
Stories like this show us that we need to develop a power base to push for laws that will expand local authority to build (or partner to build) networks offering fast, reliable, and affordable broadband to the community, while remaining accountable to it over the long term. Please contact me if you are interested in helping.
Some bullet points from Deputy Governor John Morgan's presentation, which starts a little slow (but gets better):
- Examples of public infrastructure include roads and highways, as well as electricity infrastructure in Tennessee due to its history. Telephone was not publicly owned but regulated to ensure public benefits.
- The next-generation networks necessary to benefit from the digital economy are not being built due to traditional market mechanisms
- Public sector has a broader view of return-on-investment
We highly recommend watching both John Morgan and Harold DePriest's comments, as well as the Q&A that follows. The full hearing with other commenters is available here.