Municipal broadband

Obama outlines broadband boost via executive action

Visit to Iowa underscores push for FCC to bypass state laws that limit municipal Internet services

Coax cable cord

President Obama said today he will take executive action to boost broadband speeds and connections at lower prices, especially in inner cities and rural areas.

The move is sure to draw fire from Republicans concerned about the president's preference for executive initiatives that he believes are beyond the reach of the GOP-controlled Congress.

Obama appeared in Cedar Falls, Iowa to push his latest broadband proposal and plans to raise the matter in his State of the Union address next Tuesday.

Despite being small in size, Cedar Falls offers fast Internet download speeds at 1Gbps, Obama noted in his brief comments. He covered much of the same ground used in a brief White House preview video.

The Iowa city of 40,000 ranks right along with Hong Kong, Tokyo and Paris for fast broadband, thanks to a city utility-backed fiber optic network. "That's the company you're keeping," Obama said Wednesday. "You're 100 times faster than the national average and you can log on at about the same price as a fully loaded cable bundle."

By comparison, Los Angeles, New York and Washington D.C. offer just 500Mbps download speeds, Obama said in the earlier video. "That may mean money if you are trying to do a business meeting," he added. "You may lose a customer if you're not able to respond quickly.... There are real world consequences to this and it makes us less economically competitive."

Urges FCC toward more regulation

In November, Obama pushed for separate net neutrality measures that would prevent Internet providers from throttling speeds and taking payments to prioritze certain content providers. At the time, he also said the Federal Communications Commission (FCC) should regulate Internet providers under Title II provisions. That approach has unleashed a firestorm of opposition from traditional ISPs who feel it will lead to too much regulation.

obama Yuri Gripas/Reuters

President Obama answers a reporter's question during a Nov. 8 press conference.

Incumbent wireless and wired ISPs are also expected to oppose Obama's latest plans in state legislatures and potentially before Congress. Opponents include the National Cable and Telecommunications Association trade group, which argues its members spent $230 billion over two decades to upgrade networks, with top speeds increasing 3,200% in the past decade. The Information Technology and Innovation Foundation also objected to Obama's plan on Wednesday, calling it "good politics, but bad policy."

Among several measures, the president wants the FCC to allow municipal broadband projects in the 19 states that limit cities from conducting their own rollouts. It isn't clear precisely how he hopes the federal agency will do so, but called it a first step in his program.

"I'm on the side of competition and small business owners," Obama told the Iowa audience. "A community has the right to make its own choice, and nobody is forcing you to. If the state laws restrict or prohibit [municipal broadband], all of us, including the FCC should do everything we can to push back on those old laws. More competition means better products and better prices."

Other Obama measures include grants from the Department of Agriculture to rural carriers in underserved areas and a new Department of Commerce program, BroadbandUSA, to offer online and in-person technical assistance to communities and guides on planning, financing and construction.

ISPs push back

In many states, traditional ISPs have lobbied for the laws that restrict the broadband plans of cities and towns. "Laws in 19 states -- some specifically written by special interests trying to stifle new competitors -- have held back broadband access and, with it, economic opportunity," the White House said in its fact sheet.

While the issue sounds like an involved discussion for technology policy wonks, it could affect almost anybody seeking fast Internet service, either a consumer at home or at a small or medium-sized business. Some experts believe FCC approvals for municipal broadband will allow for more competition that could lower costs and increase speeds. The White House said that three out of four Americans have no competition or no service "at speeds increasingly required for many online services."

A separate new report from the National Economic Council looked at local initatives in Chattanooga, Tenn., Wilson, N.C. and other jurisdictions. Kansas City, Mo., was one of the first cities to win services from 1 Gigabit Google Fiber, which has in turn helped spur new startups and other economic activity there, the White House noted.

The Economic Council said nearly 51 million Americans cannot buy a wired broadband connection with download speeds of at least 25Mbps. The FCC now defines basic broadband speeds as 4Mbps downstream and 1 Mbps upstream, but is considering a revision to define downstream speeds up to 25Mbps and 3Mbps upstream as broadband.

All broadband is local

"You can't survive today without fast Internet," said Deb Socia, executive director of Next Generation Cities, a bipartisan coalition of 55 cities. She praised Obama's proposals in an interview. "I'm pleasantly surprised how aggressive Obama's plan is."

Part of Obama's program calls on localities to make their own decisions about broadband. "That's exciting," she said.

The president seems to be joining forces with many city mayors in his broadband proposal -- thereby skirting large carriers and state legislatures -- in line with the old political adage that "all politics is local."

"Our group talks about broadband as a people issue and not a partisan issue and the local elected officials know they need to be accountable to people on the street," Socia said. "Those grassroots people give you a hard time if you're not meeting their needs. We've got communities that still have dial-up. More and more, folks recognize the value of faster broadband speeds, because they give kids an opportunity to learn, the ability to work at home and not to mention managing finances and joining in participatory democracy."

In his Iowa remarks, Obama argued that municipal broadband is not a partisan issue, noting that Yuma County, Colo., voted in favor of adding a community broadband service in November even while voting 85% in favor of a Republican state senator. "It's not a red or blue issue," he said.

More choice in broadband providers would be good, especially for small and medium-sized businesses that don't have cost-effective options and can't afford Ethernet-based broadband, said Gartner analyst Bill Menezes.

Choice is key

"Average consumers and home-based businesses would rather have a choice of more than one or two broadband providers in their neighborhood in terms of price and performance," Menezes said. Most cities have a history of granting exclusive franchise agreements that keep broadband choice limited to the local cable company and the local telephone provider, which beyond Verizon and AT&T is typically just DSL service.

"The laws the White House wants to address have cemented the cable-telco duopoly by barring municipalities and commercial providers, including Google, from deploying new broadband networks," Menezes noted.

In Colorado, where Menezes works in a home-based office, voters can decide to opt out of the restrictions, but their efforts are fought with well-funded campaigns by the incumbent providers. "Clearly, the average consumer needs someone on their side in this battle," he said.

Jack Gold, an analyst at J. Gold Associates, said political realities, not technology, have shaped the broadband debate. While cities try to implement affordable broadband for underserved constituents, their efforts conflict with the business models of major carriers, he said.

"Cities are saying they want to empower everyone and install technology since commercial companies aren't doing an adequate job, but legislatures often side with business, saying municipal efforts will put unfair competition on businesses that make a profit doing it," Gold said.

"Can Obama force the issue?" Gold asked. "Yes and no. He's trying to get the FCC to adopt rules that bypass the local laws, but it's likely that if they do so, Congress will get involved and negate the rules. There are powerful lobbying forces on both sides and there's no way to tell which camp wins."

Copyright © 2015 IDG Communications, Inc.

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