Tennessee Broadband Report Supports Lifting Muni Restrictions Despite State Suit
A Tennessee report supporting removal of state restrictions on municipal broadband comes during the state’s lawsuit in the 6th U.S. Circuit Court of Appeals challenging federal pre-emption of the state’s restrictions on muni broadband. The FCC order in question pre-empted a state law barring Chattanooga from extending its municipal broadband system to neighboring localities (see 1606210036). But the state broadband study, released Tuesday by the Tennessee Department of Economic and Community Development (see 1607190044), suggested the state create an open regulatory environment to reach the 13 percent of the state that lacks high-speed broadband.
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"One option for increasing access to broadband is to lift regulatory restrictions on who can provide broadband,” said the state-commissioned report, written by Strategic Networks Group and NEO Connect. “An open regulatory environment that allows any entity to build telecommunications infrastructure and any entity to offer broadband services can lead to greater broadband availability.” That approach worked in other states, it said. “In States where there are no restrictions, administrative burdens or regulatory limitations for any entity to build telecommunications infrastructure and offer services, there is more competition and more broadband investment, especially in rural parts of the state.”
The words pleased EPB, the municipality-owned power and fiber company that operates the Chattanooga broadband service at issue in the state lawsuit. “We’re happy to see the study recognizing the importance of high-speed broadband in the 21st century, and we certainly hope that there will soon be a path forward for the thousands of Tennesseans who still do not have access,” an EPB spokeswoman said. EPB frequently receives requests from neighboring communities seeking access to its 1 Gbps broadband network, but the state doesn't allow it, she emailed. “Should the TN state law be changed, we’ll look forward to help our neighbors who have requested service.”
But the Tennessee department behind the study distanced itself from the muni-broadband findings. “The report reflects the views of consultants the department hired to study the state of broadband in Tennessee,” a department spokeswoman emailed. “At present, there is no state plan on these issues. The study is a starting point to begin conversations with stakeholders to develop potential solutions to close the gap on broadband access in Tennessee.”
North Carolina, the other state in the 6th Circuit muni-broadband case, released a broadband plan June 21 describing a major role for local communities. Some of the plan’s nearly 80 recommendations “are already underway and began before the plan was released and others we have started the planning around the best ways to implement,” a spokesman for the Broadband Infrastructure Office in the North Carolina Department of Information Technology emailed Wednesday. “Our office continues to meet with stakeholders, subject-matter experts and local leaders and partners to determine the best ways to successfully implement the recommendations.”
The North Carolina plan recommended local governments form partnerships with private ISPs, prompting the Institute for Self-Reliance to slam the plan as a political document favoring incumbent cable and phone companies (see 1606220032). But the institute’s director of Community Broadband Networks, Christopher Mitchell, supported the Tennessee study’s findings on municipal broadband. “This report calls on Tennessee to remove barriers to community networks and co-ops,” Mitchell emailed Tuesday. “This is a no-brainer.” The Chattanooga fiber network has received some of the highest customer satisfaction ratings in the country, said Mitchell, citing a June 15 paper by Consumer Reports. The Tennessee report cited a 2014 Open Technology Institute report naming Chattanooga as tied for first among cities worldwide for inexpensive and abundant broadband.
The author of a conservative study discouraging muni networks said the Tennessee report fails to list the cons of community broadband. “Nothing in this report addresses the negative economic consequences of allowing or encouraging subsidized and predatory government entry into broadband,” said George Ford, Phoenix Center chief economist. “The limits on government-supplied broadband imposed by Tennessee law are on sound economic footing.” The State Government Leadership Foundation released Ford’s paper on the subject in April (see 1604060042).
The Tennessee study said it may not be enough to rely on the telecom industry to spread broadband across the state. "Incumbent providers in the State of Tennessee have made significant investments in upgrading their infrastructure and continued investment by the existing providers should continue to be encouraged,” it said. “However, in some cities and towns, limited competitive pressures or weak business cases have resulted in access gaps.” The report said areas with more service providers had higher speeds for businesses and residents. For example, businesses in areas with only one provider on average received 22.5 Mbps down, while those in areas with more than three averaged 43.8 Mbps, it said.
Good broadband attracts businesses, the state report said. More than one third of businesses said broadband was essential to selecting their location, and 56 percent said it was essential to remain in their location, the report stated. Sixteen percent of economic development agencies said businesses frequently chose not to locate in an area due to insufficient broadband, it said.