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State Laws That Stop Cities From Installing Fast Internet (broadbandnow.com)
273 points by nickreese on July 21, 2014 | hide | past | web | favorite | 59 comments

NC's law was practically written by TWC after Wilson, NC got fed up and ran its own fiber. For years Wilson had attempted to get its citizens decent broadband and TWC et al didn't want to invest in the city. So Wilson ran its own fiber. TWC didn't want to see that happen again, and after 4 years of lobbying eventually got a bill passed to ensure it wouldn't.



Keep in mind that these regulations have advantages as well as disadvantages. Municipalities can easily prevent broadband providers from installing networks. So if they compete with broadband providers, they can easily abuse their position.

This can lead to worse internet availability.

E.g. these are municipalities, right, so porn filters and other forms of censorship for example are pretty much guaranteed if you let them install their own networks.

But this has never happened in any municipally provided internet service to date (in fact, even municipally-funded libraries are loathe to install filters). Nor has the government-sponsored Post Office ever refused to carry indecent mails (think adult magazines and videos).

And unlike corporations, government agencies are bound by the Constitution; any attempt by a municipal Internet service to filter based on content would face a First Amendment lawsuit overnight.

> Nor has the government-sponsored Post Office ever refused to carry indecent mails (think adult magazines and videos).

I agree with your overall point -- I am aware of no attempt by municipal broadband providers to censor the internet they provide, and the First Amendment would seriously limit their ability to do so.

This, however, is not right:

>Nor has the government-sponsored Post Office ever refused to carry indecent mails (think adult magazines and videos).

It has done this on very many occasions and, in fact, these efforts are precisely how we got much of the First Amendment obscenity doctrine we have today.

Some examples: http://en.wikipedia.org/wiki/Anthony_Comstock

http://openjurist.org/276/f2d/433/grove-press-inc-v-k-christ... ("'Lady Chatterley's Lover'...has been detained as unmailable by the New York Postmaster and, after a hearing before the Judicial Officer of the Post Office Department and reference to the Postmaster General for final departmental decision, was held by the latter to be 'obscene and non-mailable pursuant to 18 U.S.Code 1461.'")


Another good comparison might be broadcast (and, to a lesser degree, cable) television where, indeed, the government monopoly has generated pervasive content censorship. But this has been made possible by a peculiar First Amendment rule that really only applies to broadcast TV. http://en.wikipedia.org/wiki/Red_Lion_Broadcasting_Co._v._Fe...

I, for one, would rather take my chances with municipal broadband than be stuck with the truly awful TWC service that I am currently stuck with in NC.

I'm also in NC (western part) and Time Warner is one of the two Internet services I have at my house. I have felt no problems with either (possibly because I have two and am ready to drop either if they start to suck). Is there something I should be looking for that I haven't?

Can you get 100mbps service for less than $100/mo?

If not, you're getting fleeced.

these are municipalities, right, so porn filters and other forms of censorship for example are pretty much guaranteed

There are now enough real muni networks that we should have examples of this inevitable censorship by now.

Love this part. Love it.

"While Blackburn is clearly overlooking the success of municipal broadband provider EPB from her own state, what’s left out of the conversation is that largest percentage of funds for Blackburn’s campaign came directly from the telecommunications industry"

I agree. This all seems so shady. I believe a municipality should have a choice, based on what the people vote for. The fact that this lady's funds are coming from telecom is a red herring to me.

I think you meant to say "red flag". A "red herring" is something that initially seems relevant to the issue at hand, but turns out to be unrelated.

A politician's campaign bankroll is very relevant to the issues that person chooses to champion while in office.

Hah, that crossed my mind before I posted but yes I should have said red flag. Thanks for the clarification.

Do the laws prohibit private companies from installing fast internet? I don't necessarily want a city government running my internet. Cities should not be in the telecommunications business. However, there SHOULD be laws promoting competition and thus restricting the de facto monopoly positions of many providers. Where I live in France, I have, in just my small town of Avignon, at least 5 high speed internet providers available -- resulting in my monthly cost for 120mbs + full cable (all the movie channels) cell phone with unlimited data, unlimited calls to over 49 countries in the world AND home phone (which I never use) for about 70 euro per month. The internet portion of that is something like 20 euro per month, the cell portion is about 15 or so (give or take 3 euro.)

Cities don't need to get in the telecoms business -- however governments do have a responsibility to promote competition. Cities getting into the internet business would be about as efficient as the Post Office getting into the letter delivery business -- a ton of public-union-related waste, bureaucratic inefficiencies as well as an inherit incentive to discourage private companies, thus reducing innovation. You also have the issue of city-run networks being subject to political pressures such as "I'll donate money to your reelection if you allow my content to have preference on the network." You also have the city having access to your usage records and they'd be nothing keeping them from using it for law enforcement purposes without a warrant or your consent. After all, you'd be using city-owned property, thus you really wouldn't have much leverage. The police would certainly leverage that. We all know that most internet traffic isn't going to be safe from NSA-types, however, there's a reasonable belief that NSA-level intercepts aren't filtering down to the local cop on the beat. Maybe it's a bit of paranoia, however based on my experiences with city governments in the US, they are some of the most power-hungry, corrupt sufferers of little-man(woman) syndrome I've ever encountered. These are the same twits that want to ban large sodas because they think they're your daddies and mommies. Yeah, count me out. Last thing anyone needs to do is give a city (or any) government more power to do anything.

> Do the laws prohibit private companies from installing fast internet?

Effectively, yes. They can't outright ban competition, but they make it very unattractive using franchise provisions, namely build out requirements. See: http://crosscut.com/2014/03/04/business/118993/google-fiber-...

Unless you have unlimited capital, the most practical way to start a competitor to Comcast, etc, is one neighborhood at a time. Start at the high end, and pick off the local incumbent's high-margin customers. This would have a disproportionate impact on the incumbent's bottom line. However, in most cities, this is simply not allowed. You have to build out everywhere in order to be allowed to build out anywhere. Where I live, in Wilmington DE, more than a quarter of the city lives below the poverty line. Verizon refuses to build FiOS here, in competition with Comcast, because there is no point building $60+ per month fiber service to neighborhoods that can't afford it.

What happens in the US is that municipalities will sign exclusivity agreements with certain companies (Comcast, AT&T, TWC) to encourage them to lay down the infrastructure.

Imagine you are the mayor of Podunk, Arkansas and you want your constituents to have access to high speed internet. AT&T and Comcast won't rush to lay cables to your town because there's simply not enough business for them to compete for. So, as mayor of Podunk give AT&T an exclusivity agreement for 20 years in exchange for them laying down the infrastructure today.

The problem is obvious: now AT&T doesn't have any competition and they can do whatever they want with their prices. Your population is hostage to the exclusivity agreement for the next 20 years.

One possible solution for this problem would be the government to build the infrastructure and then invite companies to compete for it's usage. That's what happens in UK and other countries.

Granting exclusive franchises for cable have been illegal under federal law since 1992.

While true, your statement is completely irrelevant, as is that section of the law to which you refer. Local governments simply switched to leasing right-of-way access; cable companies now simply pay for exclusive access to that, instead of exclusive control of a given franchise area.

I don't know where you're getting that from. That is explicitly prohibited by 47 U.S.C. 253(a): "No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service."

See: https://www.google.com/url?sa=t&source=web&rct=j&ei=KM_NU7Pg.... Section III(A).

The NTIA has a 50-state survey of right of way laws here: https://www.google.com/url?sa=t&source=web&rct=j&ei=KM_NU7Pg...

It is explicitly prohibited and done all the time. Investigate the current situation with Baltimore, Maryland regarding its Comcast franchise as an example of how these things are still a problem, despite Congress' attempts to prevent it.

The executive summary here is that the laws you cite protect some services without protecting other services that may commonly be bundled. In the Baltimore situation I mentioned, only Comcast can provide cable TV. Verizon won't roll FiOS out to most of the city, because they wouldn't be able to sell television services alongside the internet and telephone services. It's rumored this also prevented Google Fiber from considering Baltimore as a target market. So, while the letter of the law agrees with you, that any entity can provide service, the city has signed an agreement with Comcast that makes it financial suicide to attempt it.

It is not enough to parse the laws; you must also understand how they interact with the actual actions taken by real governments.

Its funny you mention Baltimore. I researched the issue extensively because I'm moving there in a month.

Baltimore's agreement with Comcast is non-exclusive for television service: http://articles.baltimoresun.com/2004-09-21/news/0409210094_....

The reason Verizon doesn't offer television service in Baltimore is because it doesn't have a cable TV franchise from the city. The reason it doesn't have one is not because Comcast's contract is exclusive, but because the city won't give Verizon one unless they agree to build out FiOS to the whole city. Verizon won't do that because it makes no financial sense to build fiber everywhere in a city where a quarter of the population is at or below the poverty line. It dramatically increases their cost per actual subscriber, which is already iffy for FiOS to begin with. Verizon hsd built internet service only to a few high end communities, something that doesn't require a city-wide franchise.

Google won't enter Baltimore for the same reason Verizon won't. Google does not agree to build out requirements for Google Fiber. They demand the right to only build fiber in neighborhoods where enough people sign up to justify it: http://www.oregonlive.com/silicon-forest/index.ssf/2014/05/g....

All such agreements are non-exclusive, by law, as you pointed out. It is fairly universal in franchise agreements to require universal buildout and public-access channel service in exchange for certain amenities the local government can provide. In the case of Google Fiber, they chose not to pursue a TV franchise and Baltimore was smart enough to stick to their buildout requirements. It has the same effect: Google can't sell TV service on terms it likes, so Baltimore is not a market. In the case of FiOS, it's far more likely that Verizon would like to have -- and could not get -- a piecemeal franchise in the city, and simply decided that not being able to sell TV meant it was more cost-effective to try selling 4G access as broadband in the city.

In either case, Comcast signed a buildout/franchise agreement, and the economy has shifted since then to render such agreements less profitable. That, combined with Comcast's boilerplate 'most favored nation' clauses it generally gets into their agreements, renders all of your arguments moot, as far as the end result for the populace goes: there is only one game in town. The fact that it technically shouldn't be that way is just academic.

The Sun article you linked regards Baltimore County. Baltimore is not in Baltimore County. I wish you better luck with your future research.

Give me a break, they both signed agreements in 2004 and I posted that at 2am... This page has excerpts from the city's franchise agreement with Comcast. As you can see, it's non-exclusive: http://www.baltimoregrassrootsmedia.org/PublicAccessTV/Franc....

This directly contradicts your assertion claim that Baltimore gave Comcast an exclusive franchise for television.

> It is fairly universal in franchise agreements to require universal buildout and public-access channel service in exchange for certain amenities the local government can provide. In the case of Google Fiber, they chose not to pursue a TV franchise and Baltimore was smart enough to stick to their buildout requirements.

It is fairly universal, but it is also what suppresses competition in the market. Verizon and Google won't touch those terms with a 10-foot pole. Its not smart of Baltimore to stick to those requirements, because it means people in Baltimore won't get fiber.

> That, combined with Comcast's boilerplate 'most favored nation' clauses it generally gets into their agreements, renders all of your arguments moot, as far as the end result for the populace goes: there is only one game in town. The fact that it technically shouldn't be that way is just academic.

Sure, there is one game in town, but my argument isn't about that. Your claim, an oft-repeated bit of misinformation, is that cities get around 253(a) by granting exclusive right of way to certain providers. Or maybe your claim is that cities get around 253(a) by granting exclusive franchises for television to a single provider. The implication is that a competitor is legally precluded from entering the market. However, the reality is that cities don't do those things. What they do instead is succumb to class warfare politics, and make the terms of getting a franchise unattractive for competitors.

The question is: who is to blame. People on HN like to make it seem like cable companies negotiated themselves sweetheart exclusive deals. But the reality is that municipalities are to blame. Between the build out requirements and random cash grabs for public access, cities put up massive roadblocks to potential competition. Only the incumbents are willing to put up with them.

The bottom line is that companies like Verizon and Google are ready and willing to build fiber in places like Baltimore. But the city won't let them unless they agree to ridiculous terms. The fact that even Google refuses to agree to such nonsense in Fiber cities should tell you who is at fault here.

I'm very sorry if you feel I've attempted to mislead you, but the end result is the same: in most US cities, there is only one television provider, and it's always one that has negotiated a favorable contract with the local government. I know you don't think this is possible, that it's been outlawed, and that you're prepared to spend your life asserting that there is no way for a government to cause an exclusive franchise to exist, but there is, and they do. In my city, for example, the government just outright sold land to Time-Warner. Time-Warner doesn't pay for access to the right-of-way because they don't have to any more. In return, my city (and the county it's in) got fiber rolled out city wide.

I'm also unsure why you think that a simple business decision by Google is some sort of Moral Designator. It is the job of a city government to protect the less fortunate. They're not going to achieve that by letting corporations serve rich neighborhoods and ignore poor ones. I'm not sure how a city can "make the terms of getting a franchise unattractive for competitors" by holding them to the same terms as the existing franchisees.

I'm not really interested in having some kind of politically-charged debate with you about it, and now that you're throwing around phrases like 'class warfare,' I've realized you don't have any other actual motivation here. Sorry to have wasted your time on the matter.

Coincidentally, the upside to having the Post Office in the letter-delivery business. They deliver to Podunk, Arkansas where a private company could easily decide it just wasn't worthwhile.

also, when AT&T wires up Podunk, they connect the government and school buildings for free.

Ah, true! Forgot to mention that.

"Cities should not be in the telecommunications business."

You state that as if it is self-evident, and yet cities have run all sorts of utilities for a long time. Internet access is fast turning into a utility.

I have a lot of sympathy for this sort of argument, but I'm starting to think it might be wrong in this case. Like it or not, the project of wiring a city for broadband is going to involve a fuckton of waiting for permission from the city government. There is no "just go do it without government interference" option -- you have to deal with the existing underground architecture, get licenses to dig, get licenses to install hardware, etc. I think at the end of the day it might be simpler to just let the city do the job than to create some huge beaurocratic interface between the city and an ISP.

Cities generally have to be at least partially in the telecom business, or there'd be five independent sets of telephone poles on every street.

In some areas customers can choose among competing providers to have their natural gas delivered through a single set of lines. I've often wondered how feasible it would be to have do something similar with Internet access: The government owns and manages of the physical network infrastructure, but users have a choice of private and/or non-profit ISPs to provide actual Internet service (ie, routing traffic in and out of the municipal network).

Obviously there are a lot of details to be worked out, but are there any significant technical reasons this couldn't be done?

This is the norm in other industrialized nations. It's called local loop unbundling [0], and comes in several different forms. In some countries the local telco monopoly is prohibited from selling to end customers and must lease their last mile cables to other companies at regulated rates. In others they must just provide access to the cables.

There's a lot of evidence that mandatory LLU reduces prices and increases speeds.

[0] http://en.wikipedia.org/wiki/Local_Loop_Unbundling

It's not a dream either. There are still plenty of places in central London you can't get decent broadband, never mind the countryside.

It's also relevant to note the background for LLU: the cables were almost all installed by a government owned telco, so there's a clear argument for the infrastructure being owned by the taxpayer. LLU came into existence as government telcos were privatised in the 90s to avoid creating a private monopoly.

I think this makes a lot more sense in the case of gas/oil, where you actually need something to fill the tubes.

Funny, South Korea has government managed fiber and in fact, they have some of the fastest and most pervasive broadband in the world[1]. Much more-so than the USA.

[1] http://www.akamai.com/stateoftheinternet/ (check out the infographics and note the 24Mbps speeds in South Korea)

South Korea is smaller than my state of Missouri. Now let's see how fast the US can provide broadband speeds if they dumped all their resources into my state alone.

I doubt SK is "dumping" all the resources of the USA into its broadband infrastructure. But that's beside the point. USA telcos/cablecos have had ample opportunity to provide decent service. The whole time, they've been coddled by government regulation. When the regulators screwed up and allowed too much competition (e.g. UNE-P) the telcos squealed and the pain went away. Telcos/cablecos don't like government-run competition, because they don't like competition, full stop.

So then why doesn't New Jersey do this? It is smaller than SK and has comparable population density: 1288 vs 1171 per sq mi. Or how about NYC? Or LA? People keep bringing up USA size or density statistics when talking about government run utilities, but there are plenty of places where they could work given a will to invest in public infrastructure.

Because in the US, planning and zoning falls not under the fed, not under the state, but under the city/county level. In Korea, the fed basically said, nope, we're going to approve this everywhere.

Why do you think google fiber is so selective? Because it is a regulatory nightmare for google to get the unbelievable amount of paperwork done for approval. Even for cities that want to work with google, a lot of them still aren't really able to due to the amount of bureaucracy and red tape required to pass planning/zoning committee muster for each county/city/etc.

The state doesn't do it. Public companies do and most of them don't service just one state or city.

South Korea has about half the per-capita GDP of the US. Why would you think the entire resources of the US would be necessary to give Missouri similar infrastructure?

Forget SK and MO for the moment: how about San Francisco? It's got some of the highest population density in the country (18K people per sq mile), which is 208 times the density of MO. But the city government of SF is more than happy to pass on the buck to ATT, with its shitty "Uverse".

We don't need "innovation", we need a reliable utility.

Here in the US my water and sewer are handled by the city. It's pretty cheap and effective. I don't need more "innovation" in my water delivery.

My electricity is delivered by a regulated monopoly provider that answers to a Public Utility Commission and has a strictly regulated profit margin; it's purchased from one of a hundred retail providers. The supposed benefits of competition haven't materialized - we're paying the same for electricity now as we did when all electricity was a single regulated monopoly on an inflation-adjusted basis, only now no private investor will pony up for capital investment projects so we keep building cheap crappy power plants. Otherwise it's the same as before and it seems to function fairly well.

Either of these would be a huge improvement and exactly what the government is best at - handling public infrastructure that is ill-suited to competition or forms a natural monopoly.

In fact I'm suffering from Verizon's "innovation" right now thanks to their refusal to upgrade peering links. They're "innovating" ways to choke traffic to seek rent/extract money on my private transactions with Netflix, Crunchyroll, and others, despite the fact that I am already paying them for use of their network (and they used my private property to lay lines to the rest of the neighborhood - something for which I am not compensated).

I do not have any choices; my neighborhood has congested capped cable from TW or Verizon's artificially congested FIOS. That's it.

Frankly when Ma Bell/ATT was broken up I firmly believe it was done in a way to serve ATT's long-interests by keeping the retail and lines in the same ILEC box. It let the (D) government appear to be "doing something", right up until the (R)s proceeded to never meet a merger they didn't like.

What we need to to break apart Verizon and ATT and turn the physical plant into a regulated delivery company (DeliveryCo) charged with running fiber to the 90% of reasonably-reachable homes in the USA. That physical infrastructure should serve us for at least 100 years - we know how to send 10Gbps/100Gbps and more down the line and the expensive part is digging up yards/streets; the boxes on either end are a pittance by comparison. I suspect it would actually serve us for 1000 years or more but it's The Future so who knows.

Let anyone who wants to start an ISP do so; DeliveryCo just drops the ISP fiber/ethernet cables at whatever datacenter you like in your city and they're responsible for backhaul/transit, billing, customer service, packages, etc. Let DeliveryCo be effectively transparent with VLANs or IP/IP encapsulation so as far as my router and my ISP's router are concerned DeliveryCo doesn't exist.

People can claim it doesn't work, but the regulators seem perfectly capable of demanding 60hz+/-@120V AC be reliably delivered to every home with guaranteed response/repair times (except in cases of emergencies). When my underground cable gave out and started arcing with the dirt they answered the phone and sent a truck within 2 hours and it was repaired within 5. If DeliveryCo's regulator said they had to deliver 1Gbps links I don't see why it would differ.

> I don't need more "innovation" in my water delivery.

> In fact I'm suffering from Verizon's "innovation" right now thanks to their refusal to upgrade peering links.

Your water utility is using century old infrastructure that in many states is not in compliance with Clean Water Act standards, and in most places dumps untreated sewage into the local river when it rains. Nobody wants to invest the money into fixing things, because investment decisions are highly politicized and effectively made by a rate setting board. We're $300 billion behind in terms of investment for wastewater systems: http://www.infrastructurereportcard.org/wastewater. The ASCE grades almost all of our water infrastructure as a "D." http://www.infrastructurereportcard.org/grades

You're talking about jumping from the frying pan into the fire.

And you're implicitly claiming that corporations will necessarily do a better job, despite the overwhelming number of Clean Air Act violations charged to them every year: https://www.google.com/search?q=clean+water+act+violations+2...

Addendum: the interesting takeaway to me, from the Verizon data, is how over provisioned the rest of the network is. Operating well below capacity. What piece of municipal infrastructure is built with that kind of headroom?

> Cities should not be in the telecommunications business.

Why not? If they can do it cheaper and better, they should.

Any other position is religious idiocy.

The Internet is a public environment, so IMHO you'd be insane to think that 1) someone's not doing exactly what you're talking about already, and 2) that you're somehow safer with AT&T and/or Verizon. The situations you're describing are the exact reasons why people use TLS.

Are these laws any more onerous than the ones the private providers must respect?

I don’t dispute that they are anti-competitive, but I wonder these are laws (or similar) are also the reason there is not private-sector competition. Would like to see original sources, and comparisons.

Remember, most cable and phone systems were designed by municipalities as monopolies, which is what got us here today. They were seen as utilities.

As far as I can tell, cable systems were basically not "designed" -- it was a pretty shady industry in the early 80s, with a bunch of shoddy work, questionable ROW deals, etc. Consolidation happened and a bunch of regional carriers happened and maybe some of the later deployments were "designed", but very little of the early catv was built the way telephony was, which was itself usually different from water/sewer. Electric depended on where, and was either sketchy (in some of the East Coast cities), or some kind of "designed" system, or government (RE).

there's a few more states with restrictions of various sorts.


The fear is that the government will start creating noncompetitive laws once they win the bid. I have no problem with government taking over local ISPs if they can deliver a service that's just as good without caving to gov employees when they fall behind. There must exist some shared infrastructure (or cities must allow for redundant service lines) if true competition is to emerge.

To this European some American laws appear just weird and, I dare say, corrupt.

The telecom - and cable industry in the city of Zurich - yelled "bloody murder!" and foretold all sorts of doom and mayhem if the publicly owned electric utility would build a publicly financed fiber network. This happened about ten years ago.

The same companies argued that fiber is not economically viable and the investment not worthwhile.

They pored massive funds into a NO campaign for the referendum, which was accepted by the public in a landslide, twice!

After construction started the biggest telco, Swisscom, actually jumped onto the train. Now, thanks to the foresight of a public utility and the spending of public money Zurich has one of the densest, most modern, high capacity fiber networks.

Oh, the argument that a public utility smokes out poor private companies? That's not happening and that's very easy to avoid:

EWZ (the utility) does not act as an ISP. They sub lease the network to ISPs under equal and transparent conditions, who in turn sell network capacity to the consumer.

This also avoids the "censorship issue", which, in my opinion, is a spurious argument, at best.

I'm aghast about some of the arguments used in order to keep the public from pursuing its best interest.

I'd wager that a private company, whom's business model is built on force and coercion provides rotten service and will not act in the best interest of its customers.

When you look at where broadband stands in the US, compared to the rest of the world, I think my argument has merit.

Besides, as the UK demonstrates, companies will happily implement "voluntary" filtering as soon as somebody in the government starts spelling "regulation", so it makes little difference either way.

From the first sentence:

> over 39 million Americans have less than 2 wired broadband providers they can get broadband service from.

The logical/programmer side of me reads this as "over 39 million Americans have one wired broadband provider they can get broadband service from"

Zero is also less than two.

Agreed -- if your logical/programmer side interprets <2 as ==1, then be careful with your code refactoring. :-)

Maybe it's a signed int. :^)

Meant unsigned, thanks autocorrect. But anyway, there's still +0 so nevermind.

Zero providers is also fewer than two.

> ...

> Combined these rules force municipalities to compete with for-profit corporations, but with none of the benefits of being a municipality.

> ...

What an incompetent and one-sided summary of the laws! After reading all of these, point-by-point, all I am left with is the impression that these are all good laws, and are good for the fairness of the market. Why the hell should municipalities get kick-ins that are not afforded to the businesses?

Keep in mind, I came in knowing that most of these laws are very one-sided! So, to have such an effect...

Is the author getting funding from the big telco and cableco?

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