How Some States Prevent Cheap Public Broadband

Governments block local ISPs

Key Takeaways

  • Municipal broadband could make internet access less expensive and more widely available, but state laws often block them, experts say. 
  • A new study finds that 18 states have restrictive legislation in place that makes establishing community broadband difficult.
  • The FCC estimates that more than 21 million people in the United States lack a broadband connection.
A concept image with a dynamic fibre optic light trail running through and around buildings in a city.

John Rensten / Getty Images

The digital divide is growing, even as efforts to make broadband more available are being hampered by bureaucracy.

States are blocking efforts to develop local broadband that could help millions of people connect to the internet faster and more cheaply, according to a new report by BroadBandNow, an internet advocacy group. The study finds that 18 states have restrictive legislation in place that makes establishing community broadband difficult.

"Municipal broadband is a crucial bridge that spans the digital divide in some of the most underserved areas in the US," Tyler Cooper, editor-in-chief of BroadbandNow, said in an email interview. "In rural communities, in particular, private competition is sparse, if it exists at all."

Many Living Without Broadband

The need for more widely available internet is great. The FCC estimates that more than 21 million people in the United States lack a broadband connection. That includes nearly three in 10 people (27%) who live in such rural areas and 2% of those living in cities.

"...We simply do not have good information about who is and who isn’t connected, making it difficult to target interventions in areas where the need is the greatest."

Broadband access is critical for our daily lives, Lamell McMorris, a civil rights and business leader, said in an email interview. 

"Broadband allows us to work from home, connect with loved ones, find jobs, educate our children remotely, and get medical attention virtually," he added.

"Too many people across the country live without broadband, either because it's not available, affordable, or accessible, and this needs to change."

Tres Roeder, the vice mayor of Shaker Heights, Ohio, said his city recently looked into installing community-wide internet access. "The cost was prohibitively expensive for a city our size," he said in an email interview. "A regional, state-wide, or even national solution would be better."

Killing Competition

Cooper said one major bottleneck to more and cheaper broadband is state laws that limit competition between ISPs and municipal broadband networks. Some state laws prevent municipalities from offering broadband service to residents if there is one commercial provider already providing service in the jurisdiction. 

"Municipal broadband has long been opposed by both the private sector and state policymakers, whose interests are often aligned," Cooper said.

Another common barrier for municipal broadband is pricing, according to the report by BroadbandNow.

Someone using a laptop while sitting on a motorbike in the middle of a rural field.

Aliyev Alexei Sergeevich / Getty Images

Some state laws mandate that any municipal broadband service must match prices with those of an incumbent ISP. That makes it hard for the municipal broadband network to introduce more competition into the local market.

Providing more comprehensive broadband access is made difficult because government agencies can’t agree on who lacks it in the first place, Mark Buell, a vice president of the Internet Society, a nonprofit focused on Internet policy, said in an email interview.

"The way the FCC maps broadband access is woefully inadequate and inaccurate," he added. "As a result, we simply do not have good information about who is and who isn’t connected, making it difficult to target interventions in areas where the need is the greatest."

Buell said that broadband funding should be open to all kinds of providers, such as community or municipal networks. "Broadband mapping should also include information on affordability. Service should then be routinely evaluated and publicly reported on to ensure they continue to be affordable to communities," he added. 

"Too many people across the country live without broadband, either because it's not available, affordable or accessible, and this needs to change."

McMorris argues that regulations limiting competition need to change. "While it doesn’t make sense for municipalities to overbuild areas where broadband providers are already offering or planning to offer service, there may be unserved areas where a targeted municipal approach is a useful tool," he added.

There’s proof that municipal broadband networks can work better than traditional ISPs, experts say. For example, Colorado passed a law limiting competition for ISPs, then provided an escape clause for local jurisdictions to override the state prohibition, internet communications expert Jim Isaak said in an email interview.   

"Towns like Longmont and Loveland passed the overrides and have started rolling out their own fiber to the residence, including rural and mountainous areas in the Rocky Mountains," he added. "Then, incumbents cut prices to minimize the uptake of the gigabit, full-duplex, $90/month services being provided."

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