Connections Blog

Tell The Story We Know: Broadband Competition is Too Limited

by Jonathan Sallet, Senior Fellow, Benton Institute for Broadband & Society

I was General Counsel of the Federal Communications Commission when it sought the preemption of state laws in Tennessee and North Carolina that limited the ability of municipalities to promote broadband. We failed in that effort, but the case laid out the key facts.

The FCC found that the provision of municipal broadband in Chattanooga, Tennessee, led to lower rates, increased investment, and improved service from an incumbent broadband provider.

Similarly, in Wilson, North Carolina, when faced with a municipal broadband entrant, an incumbent cable company held rates flat even as it raised rates in nearby geographic areas by up to 40 percent for comparable offerings. By the FCC’s calculation, new competition saved Wilson’s approximately 50,000 residents more than $1 million per year.

This is a familiar story, known to the members of CLIC but not given sufficient attention generally. The Benton Institute’s “Broadband for America’s Future: A Vision for the 2020s” calls for an ambitious goal. That every person in America have the ability to use High-Performance Broadband by the end of this decade. To achieve that goal requires success in each of four building blocks: more deployment, greater competition, emphasis on affordability and adoption, and empowerment of community institutions.

The competition story needs to be told: We can expect people with only one choice to pay monopoly prices, and people with only two choices to pay the higher prices typically charged by duopolies. People with three or more choices typically pay less. Clearly, people who can barely afford to pay a competitive price, say, low-income Americans, are particularly vulnerable to artificially high prices.

In fact, new FCC data (which we all know systematically overstates the presence of fixed broadband competition) shows that, at the typical speed of 100/10 Mbps, 80% of Americans have either no choices in broadband providers (monopoly) or only two choices (duopoly). That’s very little competition.

Local communities should have the freedom to help their people fully participate in a broadband world: learning, getting jobs, obtaining healthcare online. This is not to say that one-size fits all; there are many variations of public-private broadband partnerships. It is to say that empowering local leadership and action is imperative.

Here’s a recent example: Alexandria, Virginia, has only one high-speed, fixed-broadband provider. As Alexandria Mayor Justin Wilson explains, lack of competition leads, he believes, to an inferior product. Moreover, small-business owners say that lack of broadband competition limits investment and makes Alexandria a less attractive location for businesses. One small-business owner, whose business requires the transfer of large data files, told Mayor Wilson that he sends his employees who live in other places home to send and receive files where their broadband is better than it is at work.

After confirming that the local telecommunications company would not be expanding its fiber footprint, this past November, the City of Alexandria issued an invitation to bid for the construction of a municipal fiber network.

The idea is to build a fiber backbone that brings broadband to community anchor institutions – including public safety, schools, and libraries – but that will also lease capacity to private companies wanting to serve residential and small-business customers. That’s an important strategy because the network is, in effect, dual-use: providing immediate value for community institutions and longer-term possibilities for residential service.

As Mayor Wilson explains, just serving the government buildings with municipal fiber makes financial sense; the ability to serve residential and small-business customers is a bonus.

Academic research tells us that more broadband competition matters: pushing rivals to up their game, saving money for consumers, increasing the quality of service.

The actions of so many other CLIC members and communities gives voice to the need to promote competition.

We’ve learned a lot from talking with CLIC and local communities. But we’re eager to gain new insights and I would appreciate hearing from communities (you can reach us at broadband@benton.org) who have learned how to improve the broadband choices of their people. This is a story that must be told and it is rightly told emphatically by community leaders who understand their communities and the importance of broadband to their communities. And the Benton Institute will do our best to help tell that story as well.

This guest blog is co-published with the Benton Institute for Broadband and Society

JOIN CLIC IN HOUSTON FOR THE BROADBAND COMMUNITIES EVENT – April 27 to 30

Come join CLIC on April 30 in Houston, Texas for our Super Session on Broadband Partnerships and Federal and State Incentives: A Force Multiplier which will be held on the last day of Broadband Communities’  2020 Summit: Building a Gigabit World (April 27-30). CLIC Members qualify for a full BBC conference discount, which includes CLIC’s event, by registering here and using the code CLIC410. Or become a CLIC member. It’s free, here.

We will be devoting three hours to a focused discussion on actual partnership solutions between local communities and private partners to solve our local broadband needs. Session 1: Models for Successful Public-Private and Public-Public Partnerships will feature CEOs, business development managers and innovation officers from Point Broadband, FACEBOOK, MetroNet and Lexington, Kentucky. Session 2: Identifying and Selecting your Partner, includes recognized private partners such as TING and Google Fiber. And Session 3: Broadband P3s and Federal and State Incentives: A Force Multiplier draws on federal broadband experts, and state grant experts from Maryland and Virginia.

Our full Super Session agenda can be found here.

Chris Mitchell (ILSR) receives CLIC’s 2019 “Indispensable Contributor” Award

Jim Baller, President of CLIC, honoring Chris Mitchell, Director
of ILSR’s Community Broadband Networks Initiative, with CLIC’s
“Indispensable Contributor” award

A number of years ago, CLIC established its national awards to honor individuals and organizations for extraordinary contributions to the preservation and protection of local decision-making in critical broadband infrastructure matters.  This year, CLIC honored Chris Mitchell of the Institute for Local Self Reliance with its “Indispensable Contributor” award during the Broadband Communities conference in Alexandria, VA in late October.

CLIC conveyed this sentiment in a letter to Chris: “You have been chosen for this singular award in recognition of the indispensable contributions you have made to local internet choice during the last decade, for your tireless opposition to barriers to local decision-making, and for your creation of a huge and immensely valuable body of knowledge about community broadband initiatives.”

Widely known across the country for his passion for local internet choice, Chris’ name is typically one of the first to be recommended to a community seeking information on how to drive the process for improving broadband access to its local businesses and residents.

As Jim Baller, CLIC’s President, recently noted: “If Chris Mitchell and his team at ILSR did no more than tell the evolving story of community broadband in real time, their work would be invaluable. But that is far from all they do. They often write high-quality analyses and reports. They address countless audiences in person and through electronic means. They participate actively in our fights against state barriers to public broadband initiatives. They communicate regularly with the media to debunk industry myths and falsehoods. This list could go on and on. Chris and his colleagues have truly earned CLIC’s recognition for their indispensable work.”

CLIC honors Chris and his team for their hard work and national accomplishments.

Jon Sallet (Benton), Vint Cerf (Google) and Jim Baller (CLIC) address a New Vision for America’s Broadband Future for the 2020s

(L to R) Jon Sallet, Jim Baller and Vint Cerf address a new vision for America’s broadband future

A packed audience in Alexandria, Virginia, listened intently during CLIC’s afternoon event on October 31, as CLIC’s President, Jim Baller, led a fascinating discussion on a new vision for America’s broadband future for the 2020s. This is a moment worth remembering. 

Setting the tone was Gail Roper, Director of National Initiatives for the Knight Foundation, who noted how the Knight Foundation emphasizes the importance of access, and equity as new internet applications unfold. Gail then introduced Jim Baller, who guided Jon Sallet (Senior Fellow at the Benton Institute for Broadband & Society) and Vint Cerf (Vice President and Chief Internet Evangelist at Google) through a spirited discussion of the key components of Jon’s special report for the Benton Institute for Broadband and Society, entitled “Broadband for America’s Future: A Vision for the 2020s.”

As the report notes: “Leaders at all levels of government should ensure that everyone is able to use High-Performance Broadband in the next decade, by embracing the following four building blocks for a National Broadband Agenda: 1) Advancing Broadband Deployment, 2) Promoting Broadband Competition; 3) Ensuring Affordability and Adoption; and 4) Supporting Community Anchor Institutions. The full report can be found here.

CLIC welcomes you to view the full video of this powerful workshop here and provides below a few highlights of this engaging exchange.  (Note: The following are not exact quotations but represent our best recollection of what the speakers said.)

The Goal of the Report:

Jon Sallet: Our report has a very simple goal. By the end of the next decade, everyone in America should be able to have affordable access to high-performance broadband and the ability to use it. Consumers should have robust, competitive choices, over networks that are fit for the future and readily scalable to meet demand that we can’t predict. 

Jon Sallet: If governments are going to spend large sums of money on capital investments in new networks, the best way to ensure that they get the biggest bang for their bucks is to invest in networks that will last—in other words, that are scalable as we look to the future. When we talk to experts, they say that networks capable of providing 100/100 Mbps can typically be upgraded as demand requires. We don’t think it makes sense to make capital expenditures in networks that might become obsolete. For example, in the past, the FCC has put money into networks with lower capacities–say 10/1 Mbps–and then found that such networks cannot meet the FCC’s current minimum definition of broadband—25/3 Mbps.

Vint Cerf: The introduction of high-capacity broadband lifts and enhances everything that you can do with and through the Internet.  In other words, anything you can do to increase broadband capacity and accessibility will increase the capabilities and value of all the applications on the net and will open up new opportunities for new ones. So, I wish you every success. 

Overbuilding:

Jon Sallet: When we say in the Report that overbuilding enhances competition, we are emphasizing that the mode of analysis should be a competition analysis.  We should be focusing on the ultimate benefits to
consumers, including the competitive benefits resulting from pushing  incumbents to provide better services and to charge competitive prices. Absent some anticompetitive conduct, we believe in a system based on the principle that “The More Competitors the Merrier.”

Vint Cerf: Monopolies should only be tolerated if they can’t be avoided, and when monopolies are unavoidable, they should be subject to meaningful regulatory checks and balances. More important, suppose that a community is served inadequately or not at all by a monopoly. Why on earth should the community be prevented from investing in a network that serves its needs?  If someone is complaining that government shouldn’t compete with the private sector, that’s baloney.

Jon Sallet: The current FCC definition of broadband is 25 Mbps down and 3 Mbps up. So, according to the FCC data, there are something like 10 or 11 million Americans who live in this gap between 10/1 and 25/3… Who are we serving if we don’t use funds available to help bring adequate networks to someone who has say 12/2 service? Who are we helping? The question is, How are citizens going to be best off? They are in a situation where they don’t have what the federal government says is broadband.  So, helping them get on a future-proof network seems to be an unalloyed benefit.

Jon Sallet:  The FCC measures presence of broadband providers and systematically overcounts the presence of competitors….Over 70% of Americans either have no choice for fixed broadband or a monopoly or one choice—that is to say—a duopoly. I am a competition policy guy. We don’t believe two is enough to be fully competitive.

5G as an Option:

Vint Cerf: This is a very peculiar beast for those of you who have been trying to figure out what 5G means. You may perhaps be as confused as I am about the different faces of 5G.  But there is one theme that I do worry about. There are two places, as I understand it, that people are looking at in the spectrum—one in the 28 Gigahertz range and one is down below 6 Gigahertz. The Huawei guys are pushing hard on 6 gigahertz and down, and we in the US seem to be pushing hard on 28 Gigahertz and up.  

Now it’s very attractive to grab a big chunk of 28 Gigahertz signal. There’s a lot of bandwidth there. The problem, though, is that the cell towers have to be much closer together in the 28 Gig space, and they still have to be connected to each other, probably by fiber. So, the cost of the 28 Gig solution may turn out to be substantially higher than we would like.  If that is true, then we have two problems. One of them is, if we build all our equipment for 28 Gigs, we may not be able to sell it anywhere else in the world.  Second, the 28 Gig solution, requiring lots more small cells than the technology the Chinese will be using, will pose many more complex deployment issues.  So, I am a little concerned about where we end up from a policy point of view. 

The Report’s Recommendations:

Jon Sallet: The Report has pages and pages of recommendations. Many of them were based on what people around the country were doing, sometimes successfully, sometimes not.  That’s important because municipalities are serving as what Louis Brandeis called laboratories.” They are trying things out. Sometimes open access middle mile, sometimes retail service, sometimes working with rural electric coops, sometimes working with electric systems, sometimes entering into new forms of partnership between private and public entities. What is important about these recommendations is that they were based on what we saw in operation.

Register Now for the Broadband Communities Conference in the Nation’s Capital from October 30-31st

Mark your calendar for October 30-31, 2019,  in our nation’s capital and come join CLIC and  Broadband Communities for two days of intense discussion devoted to broadband policies and practices that are impacting our local economies.

Wednesday morning starts with “The Big Picture: Washington Experts Tackle the Critical Broadband Issues” moderated by Washington, D.C. broadband policy expert Jim Baller, and featuring Joseph Wender, Senior Policy Advisor to Senator Ed Markey, Nicole Turner-Lee, Brookings Institute Fellow at the Center for Technology Innovation, Douglas Kinkoph, Acting Administrator of the National Telecommunications and Information Administration, the U.S. Department of Commerce, and a senior representative of the Federal Communications Commission.

Two days of workshops will then cover broadband and economic development from multiple angles, including, funding, technology, community broadband, public-private partnerships, the future of work, strategies on how to bring modern internet infrastructure to those without access and much more.

Gail Roper, Director, National Initiatives, Knight Foundation
Vint Cerf, VP and Chief Internet Evangelist for Google

Thursday afternoon closes with CLIC’s seminal event: A Conversation about Local Internet Choice in the 2020s, featuring visionaries in the field. After introductory remarks by Gail Roper, Director of National Initiatives for the Knight Foundation, Jim Baller, CLIC’s President, will engage Vint Cerf, an Internet Pioneer and currently VP and Chief Internet Evangelist for Google, and Jon Sallet, former FCC general counsel and author of the Benton Foundation’s publication, A Vision for the 2020s: Access to Broadband in the Next Decadein a penetrating exploration of our broadband future. Through this extensive conversation among Jim, Vint, Jon, and the audience, we will explore the optimal policies and best practices for local broadband decision-making and how these might inform policy making for the coming decade at all levels of government.

Jon Sallet, Senior Fellow,
Benton Institute for Broadband
& Society

CLIC members qualify for the discount rate of $25 off all listed rates, by using the code CLIC-DC19 at the end of the registration form. You can register here. (This rate includes both conference days and meals.)  Or become a CLIC member by signing up here. It’s free.

CLIC Announces Recipients of 2019 Local Internet Choice Awards

WASHINGTON, DC – The Coalition for Local Internet Choice (CLIC) today at 2 P.M. will announce the recipients of CLIC’s 2019 Local Internet Choice Awards. CLIC established its national awards to honor individuals and organizations for their extraordinary contributions to the preservation and protection of local decision-making in critical broadband infrastructure matters. These awardees will be honored during CLIC’s opening ceremony on April 8, 2019 in Austin, Texas to kick off our program, Action Plan for Local Internet Choice for 2019 and Beyond.

The 2019 Local Internet Choice Award recipients are:

Local Internet Choice Federal Policy Champion
Blair Levin, Gig.U – For his timely, thoughtful, persuasive, and amusing speeches and writings in support of federal policies that would preserve, protect, and, where necessary, restore local internet choice.

Local Project of the Year
Roanoke Valley Broadband Authority – For operating a financially sound, fully transparent, and state-of-the-art open-access fiber system that has been a driver and platform for robust economic development; that has caused commercial internet and data transport service prices in the region to drop by as much as 30 percent; that has attracted many new providers serving public, private and residential customers; and that has enabled businesses across all four of its member communities to report more service options than ever, allowing them to grow, thrive and compete locally, nationally and internationally.

Local Internet Choice Local Courage Award
Jeff Wilson, IT Director, Holly Springs – For his visionary and exemplary leadership and courage in guiding his Town on how develop a fiber to the home network after his community was bypassed by fiber movements in the region. Jeff recommended and advocated for the community to build its own fiber backbone to serve their public institutions, and this ultimately led to a private company (TING) utilizing that fiber and bringing Gigabit fast, fiber to home service to Holly Spring residents and businesses, and far earlier than the same services were offered to neighboring Research Triangle communities.

• Public Partner of the Year
Westfield Gas & Electric – For developing a state-of-the-art fiber network in its home town and then putting the knowledge and experience it gained to good use as the public partner in fiber projects in 20 other rural communities in Western Massachusetts. WG&E not only played a leading role in obtaining financial assistance from the state government, but it is also designing, constructing, and operating the systems. In the words of Massachusetts Governor Charlie Baker, “This is big.”

Private Partner of the Year
Ting Internet – For its continuing excellence as the private partner in a growing number of public-private fiber-to-the-premises partnerships in Colorado, Maryland, North Carolina, and Virginia. Ting is proving that all concerned can benefit from a visionary and well-executed business strategies that focus on helping communities meet ambitious goals driven and supported by advanced communications capabilities, that emphasizes excellent customer relations and careful cost management, and that targets reasonable profits and long-term growth.

Local Internet Choice Vanguard Innovator Award
The City of Wilson – For the City’s extraordinary, ongoing leadership in bringing advanced communications services and capabilities to the businesses, institutions, and residents of its community and for being at the vanguard of the development of creative, highly valuable uses of fiber networks. Among many other things, Wilson has spurred its region’s emergence as an innovation economy, featuring advanced skills workforce development and the area’s first Innovation Hub, called the GigEast Exchange.

In a Partisan Era, Local Broadband Transcends Partisanship: Join CLIC in Austin April 8

Join us April 8th in Austin for CLIC’s half day strategy session that includes an in-depth discussion on how partisanship seems to disappear at the local level when building broadband infrastructure.

During our half day focus detailing An Action Plan for Local Internet Choice in 2019 and Beyond, we will first widen the lens to federal and state policy levels, where partisanship seems stark, as we uncover legislation and regulations that could help or hurt local broadband choice. We will hear from Netflix on why local internet choice matters to their disruptive company, and the day then finishes by narrowing the lens to the local level.

From 4:30-5:30 p.m., “In a Partisan Era, Local Broadband Transcends Partisanship” will feature community broadband experts including Will Aycock, General Manager for Wilson Greenlight; Bill Vallee, State Broadband Policy Coordinator for Connecticut; Nathan Watkins, City Manager and Dwight Thomas, Director of IT and Broadband, Mont Belvieu, Texas, who will tell us their stories on what it took to build this critical infrastructure in their communities. Hear the refreshing stories on how local businesses and residents came together with a common cause. Hear the challenges they faced; but how they overcame them.

CLIC members can attend our April 8 event and all three days of the BBC “Putting Your Gigs to Work” conference at a deeply discounted rate, by registering here by March 29 and using the code CLIC410. Or become a CLIC member. It’s free!


Join CLIC in Austin April 8 to Discuss Our Action Plan for Local Internet Choice for 2019 and Beyond

Join us on April 8 in Austin as CLIC hosts a half day session on An Action Plan for Local Internet Choice in 2019 and Beyond. CLIC panel discussions will include strategic policy discussions at the federal and state levels, featuring national experts, Angelina Panettieri, Principal Associate, Technology and Communications, for the National League of Cities; Nancy Werner, General Counsel of the National Association of Telecommunications Officers and Advisors; and Deb Socia, Executive Director, Next Century Cities.

Panettieri, Werner, and Socia will join CLIC officers Jim Baller & Joanne Hovis for a focused discussion on Washington 2019: Challenges & Opportunities for the Local Broadband Future. Recent conversations emerging from Washington reaffirm what the CLIC community has always known: the opportunities and challenges of local broadband exceed geographic boundaries. We’ll review the impact of a new Congress and the Trump administration placing local broadband under the national spotlight, whether new local network options are available as the USDA rolls out its new $600 million in rural broadband funds, and whether the FCC will continue to intrude upon traditional local powers. Our state and local panel speakers can be found here.

CLIC Members can attend our April 8 event and all three days of the BBC “Putting Your Gigs to Work” conference at a deeply discounted rate, by registering here and using the code CLIC410. Or become a CLIC member. It’s free!

Dr. Robert Wack Joins CLIC Board of Advisors

CLIC is delighted to announce that Dr. Robert Wack, a renowned pioneer in community broadband, has joined the CLIC Board of Advisors.

Robert currently directs a regional strategy to leverage technology and broadband in the delivery of health care services. He serves as medical director of the continuum of care at Frederick Memorial Hospital in Maryland and previously served the hospital as director of the pediatric unit.

Robert is president of the Westminster, MD Common Council, where he championed and led development of the renowned Westminster fiber network. He also serves as board chair of MAGIC, the Mid-Atlantic Gigabit Innovation Collaboratory, an economic development non-profit with the mission of realizing the transformative potential of the community-wide gigabit fiber network. 

Robert Wack earned his MD from Georgetown University and completed his pediatric internship and residency at Tripler Army Medical Center as an officer of the United States army.

CLIC welcomes Robert to our board of advisors and thanks him for his many years of effort on behalf of local internet choice and better broadband.

Netflix to be a Featured Speaker at CLIC’s Event in Austin, April 8

Peter Cohen, Netflix Partner Engagement Manager

CLIC is proud to announce that Peter Cohen, Partner Engagement Manager at Netflix, will be a featured speaker during our CLIC half day event on April 8 in Austin. Peter will be speaking on “Why Disruptive and Innovative Companies Support Local Internet Choice” at 4pm, following two sessions which will address the challenges and opportunities for local internet choice presented by a new Congress and varied state legislative dynamics.

Join our strategic discussion on April 8 in Austin as CLIC provides An Action Plan for Local Internet Choice in 2019 and Beyond.  CLIC members can attend our April 8 event and all three days of the BBC “Putting Your Gigs to Work” conference at a deeply discounted rate, by registering here and using the code CLIC410. Or become a CLIC member. It’s free!