I had a few emails last week asking me about what it means to define broadband as a utility. So I thought I’d try to tackle the question, which came up after the Minnesota State Bar Association (MSBA) meeting on broadband.
At the meeting, someone compared the drive for border to border broadband to the Rural Electrification Act, which provided federal loans for installation of electricity to rural areas, often through cooperative electric power companies. Someone else asked if that was really what the country needed.
Here’s the catch 22 – metro areas are often angling for competition while rural and remote places are hoping for one, good solution. When visiting Minnesota last year, FCC Chairman Wheeler talked about competition being ingrained in the American psyche.
But in very rural areas, where it’s difficult to make a business case to serve so few homes in such large geographic areas, competition can be detrimental. For example, someone at the conference mentioned FirstNet as way to bring better broadband to anchor institutions in rural areas. On the one hand, it’s a great way to serve those institutions and maybe save money by allowing government entities to share connectivity. On the other hand, you risk taking away a “big” customer from a potential broadband provider who might also serve local homes and businesses. The amount they can charge the big guy offsets the cost they charge home users.
It might be easier in such a case to think of broadband as a utility. Share the connection not only with anchor institutions but local residents and businesses as well. (And there is a growing interest in using a cooperative model to provide services.)
Looking at that conundrum, there aren’t many rules or regulations that lead to an answer. Universal Service Funding (Connect American Fund) strives to fund only one provider in any given area. But recent open internet regulation promotes competition in several ways – for example striving to regulate broadband similarly regardless of platform (wired, wireless). And in practice it certainly seems that while there is often not enough business for one provider to upgrade connectivity, there’s business for two! (One example is Monticello. They have had issues but the local provider was not interested in providing fiber until the local government expressed an interest.)
In February, the FCC declared that broadband is a utility. So how does that fit in with the discussion of rural deployment? It doesn’t much. Weeks before the decision Chairman Wheeler lined out his plan…
“Using this authority, I am submitting to my colleagues the strongest open internet protections ever proposed by the FCC. These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply—for the first time ever—those bright-line rules to mobile broadband. My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission.”
The decision provides protections to customers. It treats wired and wireless similarly to wired broadband. One goal was to promote competition. But it really focuses on making sure that the providers offer and maintain unfettered access through broadband more than to broadband. It ensures that once online, each user shall have equal access to materials, services and each other. BUT it doesn’t as directly address the folks who can’t get online. To build on the analogy of the superhighway, it prohibits providers from creating tolls roads or privileged pay-lanes but it doesn’t push roads everywhere and it expressly does not address price. It does safeguard against the idea of an “Internet Junior” for some areas but it doesn’t promote more infrastructure.
To add more fodder for thought…
Doug Dawson makes the point today that the competition is shrinking. I don’t know if that will help promote better service in markets that are served or better access to unserved areas. I can remember discussions with the original Minnesota Task Force on broadband as a natural monopoly. They refer to one provider more than unfettered access…
Need to think of the future – we’re setting a goal to be reached in the future, not immediately. In you look out 10 years, there’s going to be 1 pipe into houses and that’s going to be fiber. The notion of building 2 mediocre networks for the sake competition is short sighted. The pipe is a natural monopoly. We need to set the goals for the future – not next year. We need to be aggressive – we need to protect consumers. Consumers have been screwed by provides for so long that we need to protect them.
No we don’t have a monopoly; it’s just not true. We have more than one pipe in the house now. There are implications in the statement that will have an impact on policy.
From the rural perspective I think communities and policymakers need to think about who and how promote access. It seems like funding helps – again at the MSBA both providers and policymakers alluded to the collaboration occurring because of the State Broadband Funds maybe a hybrid solution is best – a little bit utility, a little bit free market. BUT these issues are different than the issues addressed by the FCC in their Open Internet policy.