Net Neutrality: Is Municipal Broadband the Solution?

Lawrence Liu
J.D. Candidate 2016, UCI Law

Recently, on February 26, 2015, the F.C.C. voted 3-2 across party lines to regulate broadband internet as a public utility under Title II of the Communications Act. Part of the ruling meant that internet service providers are no longer allowed to slow down or speed up access to web services in exchange for payment. In addition however, the FCC ruled that cities were allowed to expand their existing broadband services, preempting state laws in Tennessee and North Carolina that restricted cities to providing municipal broadband services only within certain designated market areas.

The idea of municipal broadband gained traction last year. In April 2014, Harvard Law professor, Susan Crawford proposed in the New York Times solving the net neutrality issue through long-term investment in open municipal fiber networks.[1] By expanding municipal broadband networks, Crawford and other proponents believe that local governments could wrest away control from private cable operators who have long held monopolies over broadband access within designated market areas. Existing service providers have lobbied intensively with state legislatures to restrict local governments from entering this space. However, relaxed restrictions could allow municipalities to invest long-term in fiber infrastructure, increase competition among service providers, reduce costs to consumers, and generate revenue for the cities, while simultaneously maintaining neutrality amongst content providers.

By reclassifying broadband internet service as a public utility, the F.C.C. has staked out broad authority to regulate and remove barriers that it finds limit investment and growth in the area of broadband infrastructure. Cities in many rural parts of American currently lack access to high-speed broadband, and state laws sometimes prohibit these same local governments from investing and developing services in these areas. The recent F.C.C. ruling hopes to resolve this issue. The fight for municipal broadband began when the cities of Chattanooga, Tennessee, and Wilson, North Carolina petitioned the F.C.C. to challenge state laws restricting the cities from providing broadband services. The recent ruling would likely have immediate implications on other cities including Austin, Texas, and Provo, Utah, both of which are building their own fiber networks in partnership with Google.[2] However, some states have banned their cities from entering the broadband market altogether. Vauhini Vara, writing for the New Yorker, suggested that the F.C.C. may have greater difficulty in preempting these states with strict bans on municipal broadband because of state sovereignty principles.[3]

So what does this mean to content providers such as Netflix and their relationships to broadband providers? It is unclear whether or not this will actually promote net neutrality. By increasing the competition among existing internet service providers, the expansion of municipal broadband would give customers greater options in selecting broadband services. However, Google has positioned itself as a provider of both fiber service and web content which could raise the possibility of plans to bundle content with service. Other content providers, such as Netflix, could align themselves more closely to the provider that gives their customers better access or experience. If this is the case, then existing service providers may be incentivized to provide greater access to certain, more popular, web content over others and to build a business model similar to existing cable and satellite television models. This close relationship between service providers and key content providers may in turn contradict the very hallmarks of net neutrality. Whatever the outcome is, the next few months will be an interesting experiment to see how both content providers and internet service providers react to this recent F.C.C. ruling.

 

[1] Susan Crawford, The Wire Next Time, N.Y. Times, Apr. 27, 2014, at A21. (http://www.nytimes.com/2014/04/28/opinion/the-wire-next-time.html)

[2] Vauhini Vara, Why the F.C.C.’s Municipal-Broadband Ruling Matters, Too. The New Yorker, Feb. 28, 2015. (http://www.newyorker.com/business/currency/fcc-municipal-broadband-ruling-matters-net-neutrality)

[3] Id.

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