Muni Broadband: The Good, the Bad, and the Ugly

By Marlon Schafer

January 04, 2007

While politicians love to throw money at broadband providers, one guy who's built a three county network without asking for a penny has a few suggestions.

Okay, Muni networks (be they wireless, fiber or string and tin can) are all about improving the internet access options in their towns. I think we can all agree that more, better, and cheaper internet is good for the average community. And let's face facts here—sometimes a community won't support a commercial internet provider. Sometimes the only way people will get the services they need is going to be to build it themselves.

But all too often, cities are building public data access networks with public money even though there are already one or even several broadband options in the area. I don't know about you, but the idea of a taxing and regulatory body competing against private industry seems more than a little incestuous. There's just nothing quite like the ability to vote your competition out of business.

Then, worst of all, there are the ones that manage to pour huge sums of money into networks that don't get used or completed. These are money pits (often, literally holes in the ground) that the tax payers are left holding the bag for.

Vital, but not a utility

We all seem to agree that, today, broadband is as important to people's lives as is electricity, roads, automobiles etc. (Please note that I did NOT include food and water here. I think it's important to differentiate between true needs and convenience/lifestyle items.) Even the Federal Trade Commission's report "Municipal Provision of Wireless internet" [.pdf] starts out with:

("FCC") 2005 Wireless Broadband Access Task Force report Connected & On the Go, Broadband Goes Wireless noted that "broadband networks . . . can increase productivity and drive economic growth, improve education, and allow consumers to make more informed purchasing decisions."

And here's where the waters start to get muddy, at least for me they do. First, is broadband a utility? Heck, in this day and age, are any communications systems a utility? Britannica Online defines a public utility as an "Enterprise that provides certain classes of services to the public, including common-carrier transportation (buses, airlines, railroads); telephone and telegraph services; power, heat and light; and community facilities for water and sanitation."

Under that definition, certainly communications systems are a public utility. Then the reason becomes one of why? Britannica has this to say "Given the technology of production and distribution, they are considered natural monopolies, since the capital costs for such enterprises are large and the existence of competing or parallel systems would be inordinately expensive and wasteful."

Okay, that all makes sense. It's completely impractical to build layer upon layer of road, electric lines, water lines, gas lines and such. The spatial and cost requirements of such items (services or utilities if you like) make it impractical, maybe even impossible, to build competing layers.

Then along comes the communications infrastructure. It fits the definition of a public utility in that it is a service offered to the public. And back in the "good ol' days" there was only one choice too. Telegraph signals that ran over telegraph wires. Then around 1900 that all changed. An amazing new device came along. It was able to insert information into an electromagnetic wave! The new electromagnetic device is commonly called a radio. Now we had two utility services able to deliver communications to the same people at the same time but in different ways (yeah, I know they both had their strengths but don't write off this line of thinking just yet).

Fast forward to the 1950s. Along came yet another communications mechanism. Cable TV. According to Britannica, CATV was first used to improve signal in remote or hilly locations. In the 1960s, it was introduced into urban areas as a means to combat poor signals that many large buildings were causing. In the mid 1970s, CATV started to offer programming not available via traditional TV broadcast systems.

A mere 20 years after the advent of Cable TV, we see a mechanism practical for less urban areas come to life. Yes, that's right, earth orbiting systems sitting around 25,000 feet above our heads, more commonly known as Communications Satellites.

According to About.com, Motorola's Dr Martin Cooper made the first cell phone call on a device he created in April of 1973. It took another 10 years to improve the regulatory and technological environment enough to make the cell phone a commercial reality. By 1987, there were over 1,000,000 cell phones in use nation wide.

In the mid 1990s, companies started to build wireless data systems. Products designed to link locations together via common office style network protocols vs. telecom protocols. It was suddenly easy and not too expensive to used one transmit site to link many remote data networks together. ISPs (internet service provider) started to put the technology to use to provide high speed internet access. Early in 2000, the WISP (wireless internet service provider) industry was in full swing.

Whew, that took many more keystrokes than I thought it would. What does it all mean in the municipal data network context? It means that, today, there are 4 (f-o-u-r) different, often overlapping, technologies that are delivering internet services to people.

  • Traditional phone lines (the old telegraph system)
  • Cable (an additional service riding on the CATV coax)
  • Fiber optic (high speed communications cables sometimes run all the way to the end user)
  • Wireless (via cell phone, satellite or dedicated ground based systems)

And there's an also-ran technology: broadband over power lines (BPL).

If we really break things down based on who does what, there are even more.

  • DSL
  • Cable internet
  • Cell phone internet
  • Satellite internet
  • Fiber to the home (FTTH)
  • Broadband over power lines (BPL)
  • Wireless internet (Wi-Fi, Wi-Max and others)

These are all viable technologies, all delivering broadband services to the public, all with their own infrastructure, all working at the same time, often in the same markets.

The real question then becomes, is communications (specifically broadband) really a utility? Certainly it's not a natural monopoly anymore. Because there are so many options to more and more users, broadband can be more closely compared to the local gas station or grocery store than the electrical or water systems.

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