Municipal Networks Find Opposition at Chamber Event
Municipalities should leave broadband networks to the private sector when competition is healthy, said financial and regulatory consultant Michael Balhoff in a debate at the Chamber of Commerce Wed. Although the Chamber had speakers on both sides of the issue, many in the business audience clearly seemed to oppose municipal networks. Introducing municipal networks would take significant amounts of business away from ILECs as well as CLECs, slowing or halting competition in the community, Balhoff said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The recent trend of municipalities offering free or low-priced broadband networks has drawn fervent opposition from those who believe them to be anti-competitive. Supporters of the new networks, such as attorney James Baller, say the issue isn’t one of private versus public sector, but rather a way to push lagging regions forward. A ubiquitous broadband network would connect a large percentage of the population unable to afford Internet services.
For example, Philadelphia CIO Dianah Neff said, 90% of high-income households are connected to the Internet, in contrast to 10-20% of low income households. Neff said that segment misses out on an important educational resource that could spur economic development. She said she hopes a Philadelphia-run network would allow for 80% connectivity among the underprivileged. Neff also said she believes there’s enough room in the market for such networks.
Some argued it’s too risky to launch the new networks when the market is so difficult to predict. James Speta, an assoc. prof. at the Northwestern U. School of Law, said he is skeptical that such networks will even accomplish the goal of connecting the underprivileged. Instead, he argued, cities should give out vouchers to help low-income household buy Internet connection from private carriers. According to Speta, municipal networks jeopardize communications markets for a “very lofty” goal.