It’s Up to Congress & States to Make Private Deployment Easier
Don’t try to preempt state laws regulating deployment of government-owned broadband networks, urged TechFreedom and the International Center for Law and Economics (ICLE) in joint comments filed Friday with the Federal Communications Commission.
“The FCC simply has no legal authority to overturn state laws on muni broadband,” explained Berin Szoka, president of TechFreedom. “Municipalities are creatures of state legislatures, which have full authority over them unless Congress very clearly says otherwise — and Congress hasn’t done so here. But if the FCC did have the broad power it claims, it could ban muni broadband, too — if it decided that economists were right after all, that government getting into the broadband business actually reduced overall investment in broadband.”
In 2010, to justify its net neutrality rules, the FCC reinterpreted Section 706 of the 1996 Telecommunications Act as a power to do anything that promotes broadband deployment or investment that doesn’t violate the Communications Act or the Constitution.
“Section 706 isn’t an independent grant of authority,” warned Geoffrey Manne, Executive Director of ICLE, “but even if it were, it won’t stand up in court as the basis for preemption of state laws. So at best, this proceeding is a waste of time. At worst, it’s a needlessly polarizing distraction from the real issue: removing the barriers that have made it harder for private companies to upgrade existing networks or build new ones.”
”Encouraging municipal broadband sounds great, but it could actually slow broadband deployment overall, hurt the poor, and leave taxpayers on the hook for poorly run networks,” argued Manne. “Government-run businesses tend to crowd out private investment and competition in general. And subsidizing government-run networks in some municipalities could discourage deployment in other areas by denying private broadband providers the scale needed to cover less profitable areas.
“Government just isn’t very good at running high-tech services, given the scale of ongoing investment and technical sophistication required to serve consumers,” added Manne, citing the example of Provo, Utah spending $39.5 million to build a broadband network then selling it to Google Fiber for $1 after running it into the ground. “Taxpayers will be paying off the bonds for years to come.”
“Instead of trying to build and run broadband networks,” continued Szoka, “cities should focus on building smarter infrastructure: ‘Dig Once’ conduits under roads and utility poles capable of carrying fiber. Leasing that infrastructure at reasonable rates could unleash unprecedented competition. But if cities persist in spending more tax dollars to build broadband networks, they should have to lease that capacity to private companies. Imposing such ‘open access’ mandates on private companies is a bad idea because it reduces incentives to invest. But if government’s going to displace private investment anyway, mandatory open access is the only way to prevent government from completely monopolizing the broadband market.”
“Government isn’t just incompetent, it’s dangerous,” said Szoka. “Haven’t we learned anything from Edward Snowden’s revelations? Government-run broadband will only make surveillance and other privacy intrusions easier. The same is true for censorship and the kind of kill-switch control that trigger-happy police have used around the world, even in the U.S., to squelch protests.”
“The fact that Chattanooga and Wilson have cited easier surveillance as one of the benefits of their municipal networks should make everyone think twice about government-run broadband,” concluded Manne.
Manne and Szoka are available for comment at email@example.com.
- Reply Comments of ICLE and TechFreedom, on FCC’s Gigabit Communities Program
- “Don’t Blame Big Cable. It’s Local Governments That Choke Broadband Competition,” Berin Szoka and Jon Henke in Wired.com
- “The Feds Lost on Net Neutrality, But Won Control of the Internet,” Berin Szoka and Geoffrey Manne in Wired.com
TechFreedom is a non-profit, non-partisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.
About The International Center for Law and Economics:
The International Center for Law and Economics is a non-profit, non-partisan research center aimed at fostering rigorous policy analysis and evidence-based regulation.