Rep. Blackburn is Right: FCC Shouldn’t Force Government Broadband on States

The Federal Communication Commission (FCC) has been very busy over the last few months dealing with spectrum and net neutrality. They have also been busy with another issue, government broadband. In April, FCC Chairman Tom Wheeler made his intentions clear to ensure that government broadband would not only be here to stay, but that under his FCC, would flourish. In his remarks he stated that:

“It is equally important that we encourage competition wherever it is possible. One place where it may be possible is municipally owned or authorized broadband systems. I understand that the experience with community broadband is mixed, that there have been both successes and failures. But if municipal governments—the same ones that granted cable franchises—want to pursue it, they shouldn’t be inhibited by state laws. I have said before, that I believe the FCC has the power – and I intend to exercise that power – to preempt state laws that ban competition from community broadband.“

The latest development that began much of the renewed discussion was an amendment that passed the House last week.  The amendment was introduced by Rep. Marsha Blackburn (R-Tenn.) meant to rein in the FCC’s power in their attempt to force states into government broadband expansion.  According to The Hill:

The House on Wednesday approved a proposal to prohibit funding for the Federal Communications Commission to implement regulations preempting state laws on Internet access.

Rep. Marsha Blackburn (R-Tenn.) offered an amendment to the fiscal 2015 Financial Services appropriations bill that would keep regulators from modifying state laws in an effort to increase local options for Internet access. It was approved 223-200.

Blackburn said her amendment would limit federal overreach.

Reacting to Rep. Blackburn’s amendment, there are some who chimed in on this issue siding with Wheeler saying that expansion is important and that critics are wrong. For example, Brian Fung in the Washington Post wrote last week warned of a possible ban on “public internet.”  That’s nonsense because nobody is trying to ban anything from the public. The real problem here is that government broadband is a lackluster substitute for a private sector product that not only works better, but actually ends up costing less for the consumer (and taxpayer).

TPA disagrees with Wheeler and Fung and supports Rep. Blackburn’s amendment and believes that taxpayers shouldn’t be on the hook when it comes to government broadband. Here are just a few of the examples that make the point:

• Utah’s UTOPIA system, with its goal of providing more access at reasonable costs, has failed to deliver and is in danger of being bought out, yet still will cost taxpayers and even non-subscribers in the long-run.
• In Louisiana, LUS Fiber has shown that many of the concerns regarding government broadband are well founded, including revenue shortage, cost overruns, and competitive prices.
• Lastly, Tennessee’s EPB service, which makes major promises on high-speed Internet service, has failed to live up to the hype.

The list of failures of government broadband is just one of the reasons why TPA thinks that the FCC should back off when it comes to the notion of forcing more taxpayer money to be spent in other states to prop up more of the same.  The private sector is where the broadband successes come from. The Coalition for the New Economy (CNE ) detailed some of these successes:

• Skyriver, which provides Internet services to businesses, announced it will expand its services in southern California.
• AT&T has expanded its 4G LTE service in Louisiana and Verizon has expanded service in Rhode Island.
• Additionally, AT&T has announced it will offer 4G LTE service in Hawaii by the end of 2013.

Some states are already taking matters into their own hands after seeing the  harmful impact to taxpayers as they continue to be fleeced for a public-sector product that doesn’t live up to the most basic standards of quality. In Utah specifically, the state legislature moved to stop any expansion of the previously mentioned UTOPIA program:

After breezing through the Senate, the Use of Bond Proceeds by Political Subdivisions passed the House on a 68-2 vote and is to Gov. Gary Herbert for consideration.

The legislation is intended to make it impossible for the Utah Telecommunication Open Infrastructure Agency (UTOPIA) to issue additional bonds to finance its operations beyond the original $185 million that was used to build its fiber-optic network.

The story on government broadband is the same and no matter how many puff pieces are put out to try and defend the many failed initiatives across the country, there can be no ignoring the real statistics at the end of the day. Rep. Blackburn is correct when it comes to this issue.  We hope that other states will move in the same direction, as some have already, and that the FCC will stop wasting time and taxpayer money on these failed programs.