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Why Is Multi-Billion Dollar Telecom Time Warner Fretting About a Small City in North Carolina?

A story of how the public sector can vastly outperform the private one.
 
 
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Thanks to Christopher Mitchell, Director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance for contributing to this article.  You can, and should follow his reporting on public networks at www.muninetworks.org.

Conservatives would have us believe the public sector can’t compete with the private sector. The private sector itself knows better. Nowhere is this more evident than in the telecommunications sector.

People hate their telecommunications companies. The poster child for poor customer service in the public sector may be the Department of Motor Vehicle Bureau, but its unresponsiveness and arrogance pales into insignificance to those of Time Warner Cable, Comcast, and AT&T. In 2010 Comcast, the largest cable company in America bested 31 other companies from all sectors to win Consumerist.com’s Worst Company in America award.

As if to prove it was worthy of the award, Comcast recently pulled $18,000 in funding for a girl’s summer camp because one of the organizers had disapprovingly tweeted about Commissioner Meredith Baker’s jump from the FCC to Comcast just four months after approving Comcast’s $13.75 billion union with NBC. In an e-mail to the group, Steve Kipp, a vice president of communications for Comcast explained, “Given the fact that Comcast has been a major supporter of Reel Grrls for several years now, I am frankly shocked that your organization is slamming us on Twitter. I cannot in good conscience continue to provide you with funding — especially when there are so many other deserving nonprofits in town.” (The resulting uproar from the mainstream media’s reporting led Comcast to rescind the cutoff.)

The increased importance of high speed broadband in everything from business to education to entertainment coupled with soaring prices, slow speeds and bad service from private providers finally led cities to take matters into their own hands and build their own broadband networks.

Today, over 54 cities own citywide fiber networks. Another 79 own citywide cable networks. Over 3 million people have access to these networks. Hundreds more cities own and/or operate networks connecting only schools and municipal buildings. An interactive map showing these networks can be found at Community Broadband Networks, a project of the Institute for Local Self-Realiance.

Cities now view high speed broadband networks as essential infrastructure like water, sewer, and roads. Says Doug Paris, assistant to the city manager in Salisbury, North Carolina, which launched its Fibrant network in 2010, “It’s really not a luxury anymore. It’s a necessity.”

For Harold DePriest, head of Chattanooga’s state of the art broadband network and its municipally owned electricity company an even more fundamental issue is involved. Who will write the rules for our information future? “(D)oes our community control our own fate, or does someone else control it?,” he asks.

Soaring telecommunication rates are straining already stressed public budgets, leading many cities to build networks for their own use. Montgomery County, Maryland’s network allowed it to stop leasing lines to schools and public buildings, resulting in remarkable savings.


Even the District of Columbia, often trotted out as the epitome of government incompetence, has proven it can outcompete private telecom firms. DC-NET serves over 350 public buildings, including schools, libraries, public hospitals and community centers, saving taxpayers some $5 million per year compared to the costs of leasing circuits. Moreover, with more layers of redundancy than in a typical commercial network, DC-NET has achieved a reliability record far better than the industry standard.

For many cities, publicly owned networks are a key element in an economic development strategy. Jory Wolf, Chief Information Officer of Santa Monica’s publicly owned fiber network explains, “When I talk to prospective post-production and tech businesses seeking to relocate to Santa Monica, they tell me it is no longer the cost of real estate, but the cost of IP [transport] driving the decision.” Fiber has helped Bristol, Virginia hold onto existing businesses as well as attract new ones. Chattanooga’s fiber network, which offers 1Gbps speeds, has led to hundreds of new jobs before it was even completed 15 months after startup.

 
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