A bill making its way through the Colorado General Assembly is tackling one of the tools that big incumbent ISPs use to secure their positions as monopoly Internet access providers - the right of first refusal. If HB 1099 passes, and other states see the savvy behind this approach, community leaders and advocates for a competitive broadband market will be able to put a chink in the monopoly armor.
A Familiar Story
ISP entrepreneurs, cooperatives that want to offer high-quality Internet access, and entities planning publicly owned projects know the story. Grants are available, usually for an unserved or underserved area that the incumbent DSL provider has ignored. Said entity invests the time and money into developing a plan and applying for the grant, feeling good about the fact that they will likely be able to serve this community that no one else seems to want to serve.
They apply for the grant, may even receive a preliminary approval, BUT then the incumbent ISP exercises its right of first refusal, which throws a very big wrench into the plans of the ISP entrepreneur, cooperative, or entity.
In June 2017, we interviewed Doug Seacat from Clearnetworx and Deeply Digital in Colorado who told us the story of how his company had applied for and won grant funding through the Colorado Broadband Fund to develop fiber Internet network infrastructure near Ridgway. CenturyLink exercised its right of first refusal, which meant that unless Seacat could change the mind of the board that considered the appeal, CenturyLink would get the funding rather than Clearnetworx.
CenturyLink prevailed because it had the attorneys and the experience to wield the right of first refusal as a weapon. When all was said and done, however, the people in the project area did not have access to the fast, affordable, reliable fiber connectivity they would have obtained from Clearnetworx. CenturyLink instead obtained state subsidies to deploy DSL that was better than the services it was already offering, but no where near as useful as the Internet access Seacat’s company had planned to deploy. Community leaders did not quickly forget the fiasco.