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Journal Editorial: Leave Protectionist Broadband Bills Alone

A fresh Wall Street Journal editorial criticizes community broadband, and frets over the news that FCC Boss Tom Wheeler has indicated he'd like to do something about ISP-written state laws that ban towns and cities from building their own broadband -- even in cases where nobody else will.

Thomas Schatz of Citizens Against Government Waste and Royce Van Tassell of the Utah Taxpayers Association first take aim against Utah's UTOPIA, correctly pointing out that the network has struggled in the past and now waits for funding from an Australian private investment firm. Utopia is, the two note, a shining example of how things always go wrong when locals try to go it alone into the deep, dark telecom night:

quote:
Its failure to attract the anticipated number of customers has caused a spectacular financial failure. Utopia has lost at least $3 million and as much as $13 million annually. As of July 1, 2013, Utopia had negative net assets of $146 million. And last November voters in Orem, part of the Utopia network, decisively rejected a hike in local property taxes to pay some of the city's costs for participating in the network.
While there's no doubt UTOPIA was plagued with mismanagement at the outset (as any business venture can be), Mr. Van Tassell fails to mention that the "Utah Taxpayer's Association" is tied to CenturyLink. CenturyLink has spent millions trying to scuttle UTOPIA, and when the company was named Qwest -- sued UTOPIA and burdoned the fledgling, then-uniquely-experimental network with mammoth legal costs right at the onset.

That part of the narrative somehow seems to have been omitted, right alongside a mention of the large number of successful community broadband projects that haven't had problems whatsoever. Van Tassell and Shatz proceed to complain that allowing Wheeler to step in and pre-empt these state laws would trample states rights in an "astonishing assertion of federal power":

quote:
Nevertheless, in April, Federal Communications Commission Chairman Tom Wheeler said he believes that the FCC can pre-empt state laws that prevent municipalities from building broadband networks—even if the locality already has them. He gave no statutory basis for this power but claimed that the "competition" municipal broadband could provide is being stymied by the states. This is an astonishing assertion of federal power. States, in Mr. Wheeler's view, cannot prevent their legal subdivisions—including counties, cities and towns—from imposing unnecessary and burdensome costs on taxpayers.
So far Wheeler's words are just words, and he's offered absolutely no tangible path forward toward killing these protectionist bills. This is an FCC that for fifteen years has said all manner of things, but repeatedly, time after time, has failed to get tough on big campaign contributors when it counts. As such, it seems premature for lovers of government protectionism and pampering to become fussy and hysterical just yet.

It's amusing how federal government trying to thwart awful, protectionist state laws is sheer devilry, but a corporation literally writing and buying laws that trample state citizens' and local governments rights is perfectly acceptable. Shouldn't both be contrary to Conservative values?
As is usually the case in this kind of blanket anti-municipal broadband logic, it's amusing how federal government trying to thwart awful, protectionist state laws is sheer devilry, but a corporation literally writing and buying laws that trample state citizens' and local governments rights is perfectly acceptable. Shouldn't the latter be the greater affront to Conservative values?

As often noted, these towns and cities wouldn't be trying to get into the broadband business if there wasn't a failure in the private sector, courtesy of regulatory capture. Focus on corruption, fix those failures, support smart, balanced policy that promotes competition, and there's no need for communities to go it alone.

You can't fight competition at every step, then cry like spoiled school children when towns and cities try to do something about it. You can't abuse, cajole and bribe government to embrace abysmal protectionist policies and awful regulation, then whine incessantly about regulation on the increasingly-rare occasion government actually decides to do something for the consumer. Well ok, you can do both, but others then reserve the right to point at you and laugh.

Sadly Schatz, Van Tassell and those like them are in for another decade of logically-inconsistent grumbling, given that Google Fiber has drawn renewed attention to the obvious failures of the market, and has rekindled interest in community-driven broadband projects. As has been the case for the last decade, the solution to stopping these projects if you're a large, incumbent ISP is simple: take the millions you're putting into lawsuits, astroturf, think tank banter and bad editorials and instead use it to offer better, cheaper product.

Most recommended from 33 comments



karlmarx
join:2006-09-18
Moscow, ID

4 recommendations

karlmarx

Member

Look at the successes

Sure, there have been some failures. BUT, for every failure, there have been MANY successes. Look at it this way, a government investment is NOT supposed to have a good rate of return. For example, the road system was built by the government, it runs at a loss, yet the RETURN on investment is FAR greater than whatever loss it accumulates. The government for the most part is responsible for your electricity, sure, sometimes it a money loser, but again, the RETURN is worth it. High Speed internet is EXACTLY the same as electricity and roads. I don't necessarily want the government to RUN the network, just as they don't run the roads or electricity, but I DO want them to build it EVERYWHERE. The estimated cost to run fiber to EVERY home in america (that includes Alaska and Hawaii) is around 150 billion dollars. That's just trenching, wiring and buildings. It doesn't include the network equipment required to run it, but the layout would be very similar to the telco network (local CO's). Once that is done, ANY company could put in their own equipment in any area they deem profitable, plug into the fiber, and provide services.
In my version of the future, the government has run fiber to EVERY HOME in america. Companies compete to provide services (internet/phone/tv) over those wires. The existing cable/telco cartels are no more. You can buy whatever speed you want, you can order any tv channel you want (a-la-carte), and tv channels can set their own prices. The losers in this scenario are the cable companies, the telco's and the sports franchises. I can pretty much guarantee you that if the NFL wants to charge $40.00 a month to watch a football game, they won't sell many subscriptions. All those shopping channels, will be free or LESS (they pay you). Those religious/music channels, all go away. That's the future I want to see, and that's the future you will get if the government is willing to spend on the american people what they spend on 3 months of a useless war.