Reports Highlighted by MuniNetworks.org

Breaking the Broadband Monopoly

Publication Date: 
May 3, 2010
Author(s): 
Christopher Mitchell - Institute for Local Self-Reliance

The Institute for Local Self-Reliance is pleased to release this comprehensive report on the practices and philosophy of publicly owned networks. Breaking the Broadband Monopoly explains how public ownership of networks differs from private, evaluates existing publicly owned networks, details the obstacles to public ownership, offers lesson learned, and wrestles with the appeal and difficulty of the open access approach.

Download Breaking the Broadband Monopoly [pdf]

Executive Summary

Across the country, hundreds of local governments, public power utilities, non-profits, and cooperatives have built successful and sometimes pioneering telecommunication networks that put community needs first.

These communities are following in the footsteps of the publicly owned power networks put in place a century before. We watch history repeating itself as these new networks are built for the same reasons: Incumbents refusing to provide service or charging high rates for poor service.

Cities like Lafayette, Louisiana, and Monticello, Minnesota, offer the fastest speeds at the lowest rates in the entire country. Kutztown’s network in Pennsylvania has saved the community millions of dollars. Oklahoma City’s massive wireless mesh has helped modernize its municipal agencies. Cities in Utah have created a true broadband market with many independent service providers competing for subscribers. From DC to Santa Monica, communities have connected schools and municipal facilities, radically increasing broadband capacity without increasing telecom budgets.

These pioneering cities have had to struggle against many obstacles, often created by incumbents seeking to prevent the only real threat of competition they face. Eighteen states have passed laws that discourage publicly owned networks. When lawsuits by entrenched incumbents don’t thwart a publicly owned system, they cross-subsidize from non-competitive markets to temporarily reduce rates in an attempt to starve the infant public network of subscribers.

Despite these obstacles, more and more cities are building these networks and learning how to operate in the challenging new era in which all media is online and a high speed tele-communications network is as much a part of the essential infrastructure of a modern economy as electricity was 100 years ago.

Communities that have invested in these networks have seen tremendous benefits. Even small communities have generated millions of dollars in cumulative savings from reduced rates – caused by competition. Major employers have cited broadband networks as a deciding factor in choosing a new site and existing businesses have prospered in a more competitive environment.

Residents who subscribe to the network see the benefits of a network that puts service first; they talk to a neighbor when something goes wrong, not an offshore call center. At the municipal fiber network in Wilson, North Carolina, they talk of the “strangle effect.” If you have problems with their network, you can find someone locally to strangle. Because public entities are directly accountable to citizens, they have a stronger interest in providing good services, upgrading infrastructure, etc., than private companies who are structured to maximize profits, not community benefits. Residents who remain with private providers still get the benefits of competition, including reduced rates and increased incumbent investment.

Some publicly owned networks have decided to greatly increase competition by adopting an “open access” approach where independent service providers can use the network on equal terms. Public ownership and open access give residents and businesses the option of choosing among many providers, forcing providers to compete on the basis of service quality and price rather than simply on a historic monopoly boundary.

Perhaps the greatest benefit communities have gained from owning their telecommunications networks is self-determination. Recent court rulings enable private network owners to set their own rules, including increased charges for accessing some sites – much like a cable bill charges more for some programming. The rules are made far from where the customer resides and the criteria used to design such rules maximizes benefit to the private firm, not the community.

There is no one model for community broadband. Communities vary greatly in their needs, assets, desires, and culture, not to mention a regulatory environment that varies from state to state. This report presents case studies, evaluates existing networks, offers lessons learned, and highlights the most important issues facing both communities and policy makers at all levels. Public ownership offers the best prospect for building the networks we need to succeed in the 21st century.

Open Access: The Third Way

Publication Date: 
February 1, 2010
Author(s): 
Andrew Cohill, Design Nine

Andrew Cohill of Design Nine has released a report about Open Access networks: "Broadband for America: The Third Way." I wanted to highlight this report because open access is an important idea that should be promoted and discussed. I believe open access is the most promising way to create the world most people want to live in - fast and affordable networks offering many choices in services and service providers to all Americans. However, though I hold Andrew in high regard, I have some disagreements with the paper that are noted below.

This paper comes at an important time. For more than a decade, we have ended each year with less broadband competition than we started with. Politicians and regulators have abandoned policies aimed at promoting competition despite their continued lip service in favor of it. Incumbents have more and more power over both subscribers and entire communities.

If we want competition in broadband and cable (and I certainly do!), open access is the only feasible approach. The cost of building the networks is fantastically high whereas the cost of offering services to an additional user are tiny. The result is a network with strong natural monopoly characteristics. Without a network that shares infrastructure (wires, poles, CPE, etc.), the market will trend toward monopoly or duopoly. Wireless complements wired broadband but cannot provide the high speeds and reliability of fiber-optic networks. Even if some metro areas can support multiple networks, most rural areas can barely support one network. Without open access, significant parts of the country cannot have a choice in service providers. Read more...

OneCommunity: An Important Model for America’s Broadband Revival

Publication Date: 
November 11, 2009
Author(s): 
Jim Baller - Baller Herbst Law Group
Author(s): 
Sean Stokes - Baller Herbst Law Group
Author(s): 
Casey Lide - Baller Herbst Law Group

The Baller Herbst Law Group filed an extensive report with the FCC detailing important information about OneCommunity - a fascinating nonprofit organization connecting many communities with fiber and wireless connectivity in Ohio. OneCommunity works with a variety of public and private sector partners to expand access to last mile and middle mile connectivity. Because they fall within our broad definition of putting public needs first, I wanted to highlight this report.

OneCommunity’s roots go back to 2001. At the time, Case Western Reserve University (Case) had a robust fiber-optic communications system and considerable networking expertise, but the rest of Cleveland lacked advanced communications capability. Case’s president, Edward Hundert, and its chief information officer, Lev Gonick, believed that broadband connections to the Internet promised to be a major factor in the local economy’s long-term health; that broadband could transform Northern Ohio from a manufacturing-based to an information-based economy; and that Case could play a profoundly beneficial role in enhancing Cleveland’s broadband future. As a result, Hundert and Gonick reached out to several of Cleveland’s leading government, educational, cultural, philanthropic, and other non-profit organizations and persuaded them to join Case in founding a new entity called “OneCleveland” that would provide gigabit connectivity to participating organizations and pave the way for widespread and free wireless service.

OneCleveland expanded far outside the City and changed its name to OneCommunity. It has already tallied an impressive list of achievements:

In the Northern Ohio region, OneCommunity facilitated public and private arrangements for the deployment of a gigabit-capacity fiber-optic community network, soon spanning 22 counties and now serving over 200 subscriber entities and 1,500 schools, hospitals, clinics, government, and public safety locations. Over one million citizens are affected by the organizations that OneCommunity serves through the network.

The network is open and carrier neutral, but so much more. Read the paper -- and appendixes -- for more information.

PS : I should note that I disagree with the conclusion:

OneCommunity is not attached to any particular ownership model for broadband infrastructure, believing that the more important questions are whether the broadband infrastructure is available and whether it is being used most effectively. As long as broadband infrastructure is available on reasonable terms and conditions, broadband infrastructure is an asset to every community in the region, regardless of who owns it...

I think the hedge words, "as long as," are key here. So long as private companies do not pursue their narrow self-interest, perhaps ownership matters less -- but that is hardly a basis for infrastructure policy. We do not see for-profit companies achieving the same success as OneCommunity because they have little incentive to do so. Being nonprofit is the key to success; it binds together the interests of private and public sector entities. The problem with ignoring ownership is that in the short term, private network owners may make this infrastructure available on reasonable terms and conditions - but they can change their mind at any time. Or they can sell it to another private company with different aims and no history in the community.

In short, ownership matters. With the nonprofit OneCommunity, a variety of ownership models has combined to improve broadband access but the nonprofit is essential to that process.

Tropos Comments on Publicly Owned Wireless Networks

Publication Date: 
November 6, 2009
Author(s): 
Tropos Networks

Tropos is a California-based company that sells wireless networking gear, frequently to municipalities. They filed comments with the FCC regarding the National Broadband Plan in response to the request: "Comment Sought on the Contribution of Federal, State, Tribal, and Local Government to Broadband."

We fully support their framing of the issue:

Municipalities that own and control their wireless broadband networks, operate public services more efficiently, prioritize broadband traffic for emergencies, and put unused bandwidth to use to attract new businesses, afford educational opportunities to students and in many cases, provide free broadband access to unserved or underserved residents.

Read More

A Public Interest Internet Agenda

Publication Date: 
August 3, 2009
Author(s): 
Media and Democracy Coalition

The Media and Democracy Coalition put together an impressive report examining a number of policy options to put communities first in telecommunications infrastructure. The report discusses the fundamental importance of broadband - noting that it enables the right to communicate. Having establishing its importance, the report notes that good policy must be well informed and goes on to make multiple recommendations.

Policy should promote competition, innovation, localism, and opportunity. Locally-owned and -operated networks support these core goals of Federal broadband policy, and therefore should receive priority in terms of Federal support. Structural separation of ownership of broadband infrastructure from the delivery of service over that infrastructure will further promote these goals.

The report also touches on other key issues - including Universal Access, a non-discriminatory Internet (network neutrality), symmetrical connections, and privacy. But the most important focus from our perspective is that of localism:

For decades, American communities — both rural and urban — have been neglected and underserved by absentee-owned networks, whose business models clearly do not work in smaller or economically challenged communities. By contrast, in the communities in which they are based, locally-owned networks are more likely than absentee-owned networks to provide rapid response to emergencies, enhanced services, and value-added, social capital benefits such as job-training, youth-mentoring, and small business incubation. In addition, local networks are less likely to outsource jobs, thereby strengthening local and regional economies, while creating more opportunities for community-based innovation and problem-solving. Federal broadband policy that prioritizes support for local networks will produce more competitive markets, consumer choice, and opportunities for innovation.

Free Press Responds to 'Sloppy' Incumbent Broadband Arguments

Publication Date: 
July 21, 2009
Author(s): 
Ben Scott, Free Press
Author(s): 
Derek Turner, Free Press

The American Recovery and Reinvestment Act of 2009 directed the Federal Communications Commission (FCC) to develop a national broadband strategy. FCC invited comments and then invited replies to those comments in summer 2009.

The Free Press Reply Comments deserve to be singled out for revealing some of the lies of large telecommunications companies like Verizon, AT&T, Comcast, Qwest, and others. It also describes many of the ways that these companies harm the communities that are dependent on them for essential services.

I've highlighted some passages below that show the ways in which these companies put profit above all else.

These companies claim that regulation discourages investment and deregulation (allowing a higher degree of concentration or larger monopolies) encourages increased investment in better networks - an incredibly self-serving claim that Free Press shows to be false on pages 13-29.

Competition -- meaningful and real competition -- and not regulation is the primary driver behind investment decisions. Where meaningful competition exists, incumbents are compelled to innovate and invest in order to maintain marketshare and future growth. Where competition is lacking -- such as it is in our broadband duopoly -- incumbents will delay investment, knowing full well they can pad their profits on the backs of captured customers who have no viable alternatives. (Page 14)

Regulations like open access and non-discrimination encourage competition and should be strengthened. Read more...

Cook Report: Broadband Mapping, Connectivity, the Five Freedoms, and Prosperity

Publication Date: 
July 1, 2009
Author(s): 
Gordon Cook
Author(s): 
Sara Wedeman

This is an interesting interview that explains why mapping is important and how it should be done to ensure the final product is useful for policy. Unfortunately, much of the broadband mapping in the U.S. has been done by a telco-front group called Connected Nation that produces shoddy, unverifiable maps without making any useful data public.

In this report, Gordon Cook interviews Sara Wedeman, a mapping expert who also works in behavioral economics. Cook describes the interview here, on his blog. The discussion ventures beyond mapping, offering keen insights into why universal broadband availability is so important.

Local Network Cookbook

Publication Date: 
June 2, 2009
Author(s): 
Wally Bowen

A Recipe for Starting a Local Broadband Wireless Network via Federal Stimulus Funding

Wally Bowen has created a "cookbook" with step-by-step instructions for creating a community wireless network. This is a solid introduction to wireless networks.

Federal broadband stimulus funding is a once-in-a-lifetime opportunity for local nonprofit organizations -- especially community media centers -- to become Internet service providers (ISP) and begin developing new revenue streams. It's also an historic opportunity for advocates of Internet Freedom. Creating community-based broadband networks would be a huge step toward creating the critical "third pipe" alternative to the cable/telco duopoly. The proliferation of these community-based networks would generate market pressure to force the major carriers to restore “net neutrality” protections for broadband users.

In short, this broadband stimulus opportunity opens the door to the possibility of a new “Jeffersonian Internet” comprised of a “network-of-grassroots-networks” where civil liberties and quality journalism are valued over Wall Street business models.

"Local Network Cookbook: A Recipe for Launching a Local Broadband Wireless Network" is aimed at helping nonprofit organizations -- especially those already using digital technologies -- move quickly to plan and submit a broadband stimulus funding proposal for one of the three application windows.

Broadband Policy: Beyond Privatization, Competition, an Independent Regulation

Publication Date: 
April 6, 2009
Author(s): 
Larry Press, California State University, Dominguez Hills

Larry Press takes a rather quantitative approach to demonstrating that the deregulatory telecommunications policies of the past few decades have failed to produce the desired outcomes. We are currently at a key turning point in history: the policies we enact today will have repercussions throughout the entire decade. Fiber is replacing copper, the question is who will own it because owners make rules.

During the last 25 years, telecommunication has moved away from government–owned or regulated monopolies toward privatization with competition and oversight by independent regulatory agencies — PCR policies. We present data indicating that PCR has had little impact on the Internet during the last ten years in developed or developing nations, and discuss the reasons for this. We then describe several ways government can go beyond PCR, while balancing needs for next generation technology, decentralized infrastructure ownership, and immediate economic stimulus. We conclude that there is a need for alternatives to the expedient action of subsidizing the current Internet service providers with their demonstrated anti–competitive bent. The decisions we make today will shape telecommunication infrastructure and the industry for decades.

Open Access Fiber Networks

Publication Date: 
March 2, 2009
Author(s): 
telecomDE.com

At a high level, everyone understands what it means for a network to be open: (1) whatever else it might do, the network offers a pure “transmission” service, so that users can freely communicate with each other; (2) users can connect any devices they want, as long as they don’t harm the network; (3) the network connects to other networks; and (4) the network doesn’t discriminate among users or among the services, information, and applications users want to provide to each other. None of these points should be controversial. The concept of open networks is at least 40 years old in the US. The FCC’s seminal 1968 Carterphone decision held that a network operator may not forbid the use of devices on the network that benefit the user and do not harm the network itself. A decade later the FCC established its equipment registration program requiring interfaces to the telephone network to be standardized and fully disclosed.