Internet: The City “Weaves a Web”

Reviewed: May 20, 2015
By FinanceWeb

Given the importance of Internet access, many cities have considered the idea of publicly owned Internet services. Some cities have budget issues and need to find creative ways to raise revenues without increasing taxes. But in most areas of the country there is little or no competition among internet providers. With no competition providers have little incentive to offer high speeds and high levels of service. It is the lack of competition and the corresponding lack of services that have inspired localities to offer Internet services.

Why Weave a Web?

Internet service is part of the local infrastructure that makes an area economically viable and attractive to businesses. It is necessary to improve employment, education, and healthcare. About 90 cities currently offer gigabit transmission speeds. DSL, dial-up, and slower broadband services are common in small towns and rural areas. The quality of Internet service is a factor in economic growth and in local efforts to bring in new sources of employment and to create economic prosperity. Thus, for many Cities, the answer to the lack of responsiveness from the private sector is to build and operate an Internet service.

The Benefits of City-owned Internet Services

The commercial hub of most Cities includes the downtown business and entertainment areas. In many Cities, these areas are entertainment and tourism destinations. Locally focused Internet, and particularly easily accessed Wi-Fi can enhance and invigorate the busy central city zones. Access to Internet is a key to economic expansion. Businesses can locate in areas with good Internet access and do business anywhere in the reach of the World Wide Web. A city benefits from ownership of an Internet service in civil defense. Because it is local, the public owners can build redundancy against electric grid failure, floods and other catastrophic weather events, and unforeseen emergencies. City-owned Internet service can be an extremely valuable tool for providing emergency communications and critical information.

Success Breeds Success

In cities that have created municipal ISPs, they help to commercialize other public assets. For example, it works consistently with advertising that uses public locations, buses, rolling stock, transit terminals. It is a way to use the valuable central City corridors, particularly where there are subway tunnels, as access points for high volume fiber optic networks. About 125 cities currently offer fiber optic or cable Internet services to their immediate communities. These small to medium sized cities have developed internet service systems because large ISPs avoid them. For the Internet giants, there is too little return for the needed investment.

Competition

In many cities, there are poor choices for consumers in terms of price and levels of internet service. Slow speeds, unreliable connections, and overloaded or congested network can interfere with internet usage. The Internet is an important source of commercial growth, innovation, and economic development. In some states, powerful telecommunications companies have managed to get state laws that restrict or prohibit municipal WIFI and other internet services. The issue often comes in the form of expansion, as municipal ISPs seek to expand service areas to surrounding towns or nearby residential areas.

The Federal Communications Commission

On February 26, 2015 the Federal Communications Commission issued some sweeping new policies. They ensured an open and free Internet by enforcing net neutrality, and that reclassified internet services as telecommunication service rather than information service. Using powers granted to it by Section 706 of the Telecommunications Act, the FCC has approved two city petitions to operate internet service. It represents models for cities in the 19 states that have prohibited or restricted municipal internet services. This policy power has opened a path for increased municipal internet services, and even when faced with political and economic opposition from commercial carriers.