The Fight for Community Broadband

Save for a few Luddites out there, we all now agree on the imperative of universal, affordable access to broadband. The payoff is real. The potential is enormous. With high-speed Internet, people and communities can improve their lives in innumerable ways. We’ve seen it in health care, education, economic development…you name it. And for small rural communities, with limited access to on-the-ground resources, the stakes are even higher.

Realizing all this, President Bush in 2004 called for universal, affordable broadband access by all Americans by 2007. Unfortunately, that goal is slipping out of reach. According to the Pew Internet and American Life Project, just 54 percent of rural residents have access to broadband. Only 25 percent have broadband at home. In urban areas, 80 percent have access; 45 percent have it at home. As a result, the United States ranks 16th in the world in per capita broadband deployment. We’re also falling behind in access to high-capacity broadband and cost per unit of bandwidth.

And while we’re on the subject of cost, it’s important to note that rural Americans don’t just have less access to broadband; we pay more, too. Fewer providers mean less competition (sometimes no competition), which, in turn, means higher prices. According to the U.S. Small Business Administration, rural customers pay 33 percent more for cable modem service and 11 percent more for DSL than do urban customers.

Why less access and higher costs? Market failure. Private providers—e.g., phone and cable companies—don’t think they make enough money serving rural areas and so they don’t. It’s cheaper and more profitable to serve bigger cities where lots of people live close together, than small towns and rural areas where fewer people live farther apart. In economic speak, rural areas lack the ‘economies of scale’ that urban areas offer.

Fair enough. Why not, then, have government provide this critical public good to rural areas (and poor inner city areas), where the private sector can’t or won’t? After all, that’s one of the really important things we expect government to do: provide services necessary for the common good when the private sector fails to. Which is why, for example, we have municipal utility systems.

Straightforward enough? Apparently not to state legislatures in 13 states where last year they attempted to prohibit or dramatically restrict the ability of municipalities to provide broadband to their citizens. Nor, apparently, is it straightforward to many in the private sector who are goading legislators to block community broadband. It seems they’d like to keep all the customers to themselves—even customers they don’t serve and likely don’t intend to serve, at least not anytime soon.

Fortunately, efforts in 12 of those states failed. In the 13th, Nebraska, a legislature-appointed task force is currently reexamining the issue and may—with clear thinking and perhaps a bit of luck—recommend that the prohibition be repealed.

A paper submitted to the task force by a coalition of groups interested in rural wellbeing (including the Rural Policy Research Institute) and in open access to communication media argues that keeping public providers out of the broadband market hurts Nebraska—particularly rural Nebraska, where 7 percent of towns have no broadband provider and 45 percent have only a monopoly provider. The paper also debunks the fallacious assertions used by opponents of municipal broadband. It’s conclusion: “the responsible policy choice is to allow public entities the ability to provide broadband services where market failures leave vital service needs unmet.” (See brennancenter.org/programs/fepp/broadbandwhitepaper.pdf.)

On the national front, the Community Broadband Act of 2005, introduced by Senators McCain and Lautenberg, would make that responsible policy choice the law of the land--protecting the rights of communities to provide for themselves when the private sector will not and eliminating state battles on what should be a no-brainer.

In a February presentation at the Center for American Progress, community broadband expert Jim Baller summed up the battle precisely, “… as we see what we need, we see across the world the leading nations…getting it and moving forward while we sit here at home in America wasting time quarreling with the private sector about who should be doing what. We don’t have the luxury for that quarrel.”