Cities Build Their Own, Faster Broadband Networks

May 7, 2012

by Julia Pulidindi

Some of the fastest broadband networks are being built by local governments, according to a recent report titled "Broadband at the Speed of Light" from the Institute for Local Self-Reliance and the Benton Foundation.

Providing service to less populated areas can prove to be unprofitable for the private sector, so a city-built network is really the only way to connect those regions with modern broadband access. "The big carriers have stopped investing in next-generation networks, leaving communities with few options but to consider their own investment," said Christopher Mitchell, director of Telecommunications as Commons Initiative at the Institute for Local Self-Reliance. "Fortunately, we have seen these networks succeed, as demonstrated in our case studies of these globally competitive networks."

A community run network is a useful tool for several reasons. First, it can provide much faster speeds and higher levels of service to customers. In addition, the services tend to be less expensive than what the private sector services would be. There are also incidental factors. Local municipal networks can help with the operation of a variety of city services, including public safety, education, healthcare and transportation. In that way, municipal networks are not just a business opportunity for cities, but they are also a way to impact the way they provide services.

In the report, three cities are highlighted for their successful city-built municipal networks: Chattanooga, Tenn., Bristol, Va. and Lafayette, La. All cities provide a variety of services through these networks and have seen an increased capacity for local economic development as a result.

In Bristol, the city dealt with legal issues in courts and the state legislature to eventually gain the authority to build a citywide Fiber-To-The-Home (FTTH) network. This network offers telephone, cable television and broadband access to users. With an end goal of maintaining reasonable prices for customers, the city has been able to expand service to businesses in nearby counties. Additionally, the creation of this network has encouraged businesses to expand operations in the area, thereby increasing the number of higher-paying jobs.

The creation of a municipal broadband network in Lafayette City-Parish was driven by City-Parish President Joey Durel. Feeling that a locally managed fiber network would be in the best interests of the residents, a Lafayette Utility System Fiber Plan was presented to the community in 2004. Despite opposition from big, private telecommunications service providers, the city is now providing services to customers that outperform the connections in nearly every other community in America at affordable prices.
Chattanooga shares a similar story. With a desire to provide first class service that is competitive with that of private providers, the city has become the first in the country to provide universal access with a "gig," or access to Internet speeds of up to one gigabit per second. However, it wasn't created without opposition from private providers - the state cable association ran television ads (2,600 to be exact) discouraging local citizens from supporting the initiative. However, like the other cities, the network provides a service that not only is superior to cable and DSL but is also drawing businesses into the region, which results in more jobs.

Despite the access municipal networks provide to poorly served communities, there are a variety of barriers and obstacles that can hinder the success of a city-owned network. State barriers and outright preemption is a major one. And even when cities do have the authority to create these networks, they are often met with regulation that isn't required of private providers.

However, dealing with the legal battles, excessive regulations and up-front costs of building a municipal network appear to be worth the effort - in these three cities, at least. With budget shortfalls, decreased revenues from other sources and the overall economic climate, anything that can maintain or improve services, bring jobs to the region and create faith in local government institutions is a worthwhile investment.

Currently, about 19 states have some sort of barrier or preempt local governments from creating municipal networks. This isn't to say that preemption of local authority is the only thing holding cities back from exploring the idea of a community-owned and operated network. The costs alone may not make it a plausible option for them. However, whether a local broadband network is worth the local investment is viewed by many city leaders as a local decision that should not be dependent upon entities which are unable to meet that community's needs.