Paradoxically, the incumbents argue that public sector broadband is both an unfair competitor and obviously an inferior service doomed to failure in the market.
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I recently heard that the only place one finds a free lunch is in a mouse trap. As we sift through the lessons from the broadband stimulus programs, we have learned that the federal government preferred funding private projects rather than those that are structurally accountable to the community.
Before the first round of stimulus applications were due, many communities recognized the costs of applying were too high for them. Now, some are recognizing the high costs of complying with the many federal rules that come with accepting federal grants and loans (as detailed by Craig Settles).
And now, North Carolina's city of Wilson has found that applying for the broadband stimulus may have disadvantaged its FTTH network. Though the application was not accepted, the city has had to turn over its full application (chock full with proprietary information) to its competitors.
This is yet another example of ways in which the "playing field" is tilted against the public. The Wilson Times explained the situation and settlement.
The application included a proposed expansion of the network to provide reduced-cost or no-cost broadband lines to homes of Wilson County school children, a health network, increased lines for police and other improvements that would enhance the network in the city, Goings said.
When the North Carolina Telecommunications Association (with prominent member Time Warner Cable - incumbent cable provider competing with Wilson's Greenlight) asked to see the full application, the City refused to turn it over -- even after a court ruled against the City. The City argued the application contained key information regarding the policy and utilities that should not be made public for security reasons. When the Department of Homeland Security ignored the City's requests to intervene, the City was compelled to release the documents.
This is a particularly interesting juxtaposition as privately owned telcos and cablecos regularly argue against having to disclose any information about about their networks as a security concern. In this case, they are on record arguing the same information should be in the public domain.
As reported in the Wilson Times article,
"We have known from the very beginning that, if we built a fiber-optic network, it would basically be a situation where we'll constantly be in court with Time Warner," Goings said. "We're not surprised. I think this won't be the last time we have a court case with Time Warner."
I have been told by many community owned network operators that they have to deal with constant requests for information from the private competitors as a form of harassment and a means to get all kinds of data they would never share themselves. I first became aware of this Wilson lawsuit when reading an editorial in the Salisbury Post regarding transparency and the Fibrant network.
This is one of the big challenges a municipal system faces. It has to play by different rules than private enterprise does. While Time Warner can plan expansions in private, Fibrant and the city have to be open to public scrutiny, and competitors are part of the public.
If Federal programs want to create a "level playing field," they must require all applications are equally available to competitors. In the meantime, this is just another example of the ways in which privately owned massive incumbent providers have most of the advantages in offering broadband services.