After years of consolidation and concentration in the industry, the new battlegrounds for high speed internet providers may be with the cities and local governments. ISPs are often part of large, powerful corporations that can shape public policy on the subject of Internet access and competition. The Federal Communications Commission has made some movement in the direction of empowering local governments to compete for improved speeds, prices, and services.
Across the US, the landscape of high speed internet companies shows that most consumers have few choices. In most areas, for true broadband speeds and services, there are no real competitive options. In response to the lack of competition to drive down prices and boost services features, some cities have entered the ISP business and provided public WIFI and Internet access.
Opening Eyes and Raising Speeds
Google Fiber demonstrated the effects of competition when they entered two markets in 2013. In Kansas City and Austin, Texas, Google Fiber set up local service networks with fiber optic cable and blazing speeds. The result was a sharp increase in transmission speeds by the existing AT&T service provider to match or exceed Google Fiber. Apparently, nothing prevented AT&T from offering superior service before the Google Fiber market entry; competition served as the incentive and the public benefited from the competition.
ISPs have discovered the advantages of their size and economic clout by getting laws passed at state levels to limit, or preempt local government efforts to organize services. In early 2015, as many as 19 states had active or pending laws to restrict public competition. These laws had the effect of taking away local choice on the subject of Internet access. The FCC has stepped into the battle over local authority in two 2015 rulings that established federal preemption over the issues. The FCC reclassified broadband as a telecommunication service and no longer as an information service.
Municipal ISP Helps Consumers
Municipal and local government sponsors can help consumers in two ways. They can spur competition by offering an alternative to a single or dominant source of services. They can also improve local public financing and reduce the needs for new taxes, fees or levies. The construction and development of infrastructure add value to the local government and creates the potential for new beneficial relationships with private actors.
Flexibility for the Public Good
For the same reasons that Municipal ISPs can spread competition as well as compete directly, governments have an obligation to remain open to private cooperation. For example, a city system can permit access to the right of way, poles, and other assets even while operating a system. This sharing of infrastructure is in the best interests of the community if it adds an another broadband competitor with high speeds and low prices.
Infrastructure Is Lasting Value
For many cities, the key is finding a functional role in the service equation. They do not wish to act as a telephone company or utility when the best use of their resources may be the critical elements such as rights-of-way, infrastructure, and ability to operate cable systems in connection with other public assets like subway tunnels and light rail systems. Infrastructure development and sharing creates many public benefits and spurs competition at the local service level.