If you’re anything like me, you don’t exactly have an abundance of choice in broadband providers. In virtually every market in America, your options are limited to the local cable monopoly or the local telephone monopoly (and if we’re being realistic on what speeds are sufficiently fast to be considered “broadband,” you’re really stuck with cable). Economically, this dearth of choice comes as no surprise. High upfront investment costs make it incredibly difficult for competitors to unseat the incumbent provider, leaving that provider with the market power to charge high rates for relatively slow speeds.
Broadband markets simply aren’t competitive, and this lack of competition has caused the US to fall behind other industrialized nations in access to ultra-fast technologies like fiber, which provides symmetrical upload and download speeds many times beyond what cable can offer. Because it’s expensive to build fiber networks, and because your local broadband provider is likely the only game in town, ISPs have been reluctant to invest in fiber networks. Fiber options remain distressingly rare in America, accounting for only 8.16% of broadband connections, well behind other industrialized nations with robust tech sectors. Worse, we don’t seem to be in any hurry to catch up, as fiber connections grew only 12% in the US from 2012-2013, again lagging behind other industrialized nations.
Here’s the good news: in the absence of ISP fiber offerings, some municipalities are taking action to bring fiber to their citizens themselves. Today, Rockport, Maine, with the support of Sen. Angus King, a vocal champion of Internet access policies, launched a municipal fiber network with gigabit per second connections. That means Rockport citizens—in a town a of 3,300—can get download speeds almost 35 times faster than what I have access to in San Francisco, the supposed heart of the tech world. In doing so, Rockport joins cities like Chattanooga, Tennessee, which has positioned itself as an emerging tech hub by installing a gigabit fiber network in 2010. Chattanooga’s fiber network has already proven attractive to businesses, with 5,000 business subscribers and an emerging startup community. Companies like Claris Networks are moving operations to Chattanooga to take advantage of the municipal network, which provides equally fast upload speeds crucial to business success.
Municipal broadband networks provide consumers with alternatives in markets desperately in need of competition. Not surprisingly, monopoly incumbent ISPs have fought hard to block municipal broadband networks, helping pass laws in 20 states preventing communities from building their own broadband networks. The telecom lobby has also worked to prevent municipalities from operating or leasing fiber networks that have already been built but lay dormant. These laws have prevented Chattanooga from expanding its fiber network, and the city filed a petition with the FCC, asking the agency to step in and preempt these anti-competitive restrictions.
Access to ultra-high-speed Internet is quickly becoming necessary for business success, and as the US continues to lag behind peer countries in fiber access, startups will soon face significant competitive disadvantages without greater access. Since telecom incumbents have been unable or unwilling to provide fiber access, towns like Rockport have stepped in to create needed competition and provide fiber to its citizens.
If we hope to stay competitive in the world economy, we need to make sure that citizens and businesses have adequate broadband access, whether through private or municipal networks. To achieve that, we need to ensure that Rockport, Chattanooga, and other forward-thinking municipalities investing in connectivity become the trend, not the exceptions, in the marketplace.