What Does Net Neutrality Mean for Cities That Already Have Community-Owned Broadband?

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Update: Earlier today, the FCC voted to approve new Net neutrality rules designed to make sure Internet service providers treat all legal content equally.

This post first appeared at YES! Magazine and provides some background to how the FCC came around to Net neutrality, and what the new rules mean for local community-owned Internet networks.

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(Press Association/ AP Images)

Just before his State of the Union address last month, President Obama showed up in the small city of Cedar Falls, Iowa, to highlight the work of Cedar Falls Utilities, a publicly owned utility that operates an Internet network in the city. Cedar Falls has one of the oldest community-owned networks in the country and, with recent upgrades, is now one of the fastest. In addition to having higher-speed connections than neighboring communities in Iowa, the publicly owned network’s more than 11,000 subscribers pay around $200 less per year.

While in Cedar Falls the president stated his opposition to the spread of corporate-backed state laws banning local communities from operating their own networks. An accompanying White House report highlighted several community broadband success stories, including efforts in Chattanooga, Tennessee; Wilson, North Carolina; and Lafayette, Louisiana — all of which further document the possibilities of a forward-looking community broadband strategy.

Who will control this critical technology, the nation’s largest corporations or the American people?

Something important is brewing here: In his subsequent State of the Union address, Obama declared that he intends to “protect a free and open Internet, extend its reach to every classroom, and every community and help folks build the fastest networks…” In addition to community broadband, he was talking about opposition to the attempt by corporations to fundamentally change the way the Internet works and his support for Net neutrality — the concept that all legal content or data on the web should be treated equally.

These two issues — local community-owned Internet networks and Net neutrality — are intimately related, and on February 26, the FCC will vote on the future of both.

The struggle over community broadband and Net neutrality has far-reaching implications — not only for the Internet in general, but for the future of a democratic “new economy” built, first and foremost, from the level of local community concerns. The question is: Who will control this critical technology, the nation’s largest corporations or the American people?

How we got to this week’s vote

Ever since its widespread adoption in the 1990s, the Internet has been largely run on principles that benefit the public, widely referred to as Net neutrality. For many years, big corporate Internet service providers (ISPs) like Verizon, Comcast and AT&T — which provide most Americans’ access to the Internet — have been fighting for a different principle sometimes referred to as a “tiered service” model. This is the idea that different users should pay for different content at different rates. In practice, this means corporations will offer fast access to certain content for those who can pay, while everyone else has to settle for restricted access to data and slower speeds.

popular graphic distributed by Net neutrality supporters shows the hypothetical effects of such an approach. A basic Internet plan with 500 MB of data access to certain websites at full speed would be offered for $29.95. After 500 MB of usage, speeds would be slowed down to 128 kbps.

Furthermore, in order to access search websites (such as Google, Yahoo, or Bing), customers would have to pay $5 extra per month; international websites such as the BBC would be another $5 per month; media sites such as Netflix, Youtube and Hulu would be another $10 a month (as an introductory rate, which then goes up to $15 a month); and so on and so forth. Moreover, because in many areas corporate ISPs operate as a monopoly and do not compete with each other, millions of Americans would have no alternative to paying the extra — and rising — costs.

Principles of Net Neutrality

The public impact of such an approach could be severe. Community-supporting institutions — like schools and libraries — and the millions of Americans who rely on them for Internet access would also be placed at a disadvantage — likely forced to pay more for less at the expense of other services.

“Ultimately, ‘pay to play’ only benefits the privileged.”

“School, public, and college libraries rely upon the public availability of open, affordable Internet access for school homework assignments, distance learning classes, e-government services, licensed databases, job-training videos, medical and scientific research and many other essential services,” Barbara Stripling, president of the American Library Association, wrote in Wired. “By allowing ISPs to preferentially charge and premium price access … public libraries — and the communities we serve — will be the ones to lose.”

“Ultimately,” Wired’s Sonal Chokshi reminds us, “‘pay to play’ only benefits the privileged.”

In January the companies got their wish — or at least so it seemed: The US Court of Appeals for the District of Columbia ruled in a case brought by Verizon that the FCC was not authorized to enforce certain Net neutrality principles against ISPs — unless it reclassified Internet service as a “public utility” and regulated ISPs as “common carriers” (similar to telephone companies).

Following the Court’s decision, the FCC decided not to appeal and proposed new rules that would have essentially scrapped some of the core components of Net neutrality by using vague language “banning commercially unreasonable practices” — thus leaving the door open to tiered service.

That, however, was only step one. The proposal quickly drew the fire of consumer groups, activist organizations and millions of citizens. Back in September, the FCC finally closed the public comment window, having received 3.7 million responses — by far the most in the agency’s history. Two-thirds of respondents reportedly supported reclassifying ISPs and preserving Net neutrality.

Also, some major corporations that benefit from Net neutrality — such as those that would have their content restricted or slowed and/or be required to pay (and possibly charge) more under a tiered model — weighed in heavily. Google, Amazon, Facebook, Netflix, Twitter, AOL, Expedia and a host of others, through their trade group (The Internet Association), called on the FCC to “to create strong, enforceable Net neutrality rules and apply them equally to both wireless and wireline providers.” Finally, in late 2014 President Obama signaled his support.

Sometimes when politics works, it really works: On February 4th, Chairman of the FCC Tom Wheeler, a former lobbyist for the cable and wireless industry, reversed field, announcing that instead of abandoning Net neutrality, he would be suggesting “the strongest open Internet protections ever proposed by the FCC.” He would do this by reclassifying Internet service and banning ISPs from blocking content and prioritizing access.

On Thursday, the FCC will vote on these new proposed rules. With Wheeler’s reversal it seems likely the reclassification will happen and Net neutrality will be preserved — at least for a while.

This, however, is probably going to be fight that goes on for many rounds, one that reaches into much deeper issues brewing in American communities — and to what many now are calling the “new economy.”

Confronting Internet apartheid

Inevitably, when giant corporations like Comcast and Verizon own and operate local cable or wireless systems, they control a community’s access to the Internet — including costs, speeds and availability. In the modern information-driven economy, this often means that a town, city, or county’s economic prosperity and future is in the hands of these corporations.

More than 51 million Americans. especially those in rural areas, cannot access high-speed broadband networks and Internet service in the United States is considerably more expensive than in most advanced countries — all of which further contributes to unequal access between richer and poorer communities. Moreover, since large corporations have money, lobbyists and lobbying power they tend to find different ways to influence regulators and public officials at all levels in order to increase profits at the expense of local needs.

The answer, increasing numbers of communities are beginning to recognize, is for Internet systems and infrastructure to be owned and operated locally.

More than 450 communities now have full or partial publicly owned networks — often referred to as municipal or community broadband — including 40 (in 13 states) that offer high-speed, one gigabit services.

In Chattanooga, the city’s publicly owned Electric Power Board, for instance, has been operating a fiber network since 2009, and was the first location in the United States to offer a one gigabit service. The emergence of a community broadband network in the city has also forced the corporate provider, Comcast, to invest in upgrading their service — even as EPB provides faster speeds and lower costs.

It is estimated that the publicly owned network in Lafayette will save consumers and businesses between $90 and $100 million in just its first 10 years of operation.

In Wilson, the community broadband network became profitable nearly a year ahead of schedule, ensuring that Time Warner keeps its prices down in order to compete. Between 2007 and 2009 Time Warner raised its rates in “non-competitive” neighboring jurisdictions (where it exists as a monopoly) as much as 52 percent, but kept prices stable in Wilson.

A similar situation occurred in Lafayette when the city began running its own fiber network in 2009. After raising rates six times in the four years preceding a 2007 vote on a publicly owned network, Cox Communications subsequently kept rates the same for three years (yet was still unable to match the lower cost publicly owned service). It is estimated that the publicly owned network in Lafayette will save consumers and businesses between $90 million and $100 million in just its first 10 years of operation.

Legislative backlash

Recognizing the threat of efficient, lower cost publicly owned competitors, corporations have gone on the offensive. With support from the right-wing American Legislative Exchange Council (ALEC) and Republican lawmakers, 19 states have enacted laws banning or restricting local municipalities from engaging in such wealth- and access-democratizing initiatives. (ALEC’s position, of course, commonly disregards Republican talking points against “big government” and in favor of local control when big money is at stake.)

Community Broadband restrictions map

Communities, however, are challenging these pro-corporate laws. In the recent 2014 midterm election, for instance, citizens in seven Colorado jurisdictions voted to opt out of state law and pursue publicly owned Internet networks.

On the same day it will consider Net neutrality, the FCC will also decide on an important related proposal by Chairman Wheeler (acting on petitions from Chattanooga and Wilson) that would pre-empt the state laws limiting community broadband networks in Tennessee and North Carolina. Should it rule favorably, petitions from localities in other restricted states are likely to follow.

“If the people, acting through their elected local governments, want to pursue competitive community broadband, they shouldn’t be stopped by state laws promoted by cable and telephone companies that don’t want that competition,” Wheeler recently wrote after meeting with Chattanooga’s mayor, Andy Berke.

A turnaround is possible

The Internet is key to the entire information economy and to the future of both the old and new economy.

Even if the FCC votes this Thursday to support community broadband, the story is by no means over. Lawsuits and legislation from Internet service provider corporations and their backers in state and national government are all but certain. Moreover, there are unresolved tensions between Net neutrality and community broadband supporters. For other reasons, certain municipal broadband networks like the one in Cedar Falls oppose being reclassified as “common carriers” and will likely seek an exemption from the FCC for smaller ISPs.

Community broadband and Net neutrality — an abstract term that doesn’t quite get to the political red meat of the issue — are far more important than those not fully engaged in the question understand. More than just how fast or slow our Internet access will be and how much we pay for it in the new technological era, these questions are at the heart of whether the nation’s economic life is held back by the narrow interests of a few corporations seeking higher profits no matter the public cost.

The Internet is key to the entire information economy and to the future of both the old and new economy. In just a few short decades we have seen its enormous power to decentralize production, connect and empower small-scale producers and consumers and facilitate the spread of ideas and innovations. Publicly owned broadband offers the opportunity for local communities to control this vital economic resource rather than leaving their jobs, stability and prosperity at the whim of a few monopolistic private corporations.

What recent developments demonstrate is that with enough energy and political will a turnaround is possible at the national level; that when citizens get really active and involved in an issue of popular concern, something can actually happen.

The struggle to protect an open Internet and community choice is clearly important — and a demonstrably powerful indication of what an expansion, perhaps one day an explosion, of serious organizing around other issues of immense political-economic concern can achieve.

Gar Alperovitz is is the former Lionel R. Bauman Professor of Political Economy at the University of Maryland and co-founder of the Democracy Collaborative.
Gar Alperovitz is the former Lionel R. Bauman professor of Political Economy at the University of Maryland and co-founder of the Democracy Collaborative.
Thomas M. Hanna is Senior Research Associate with The Democracy Collaborative.
Thomas M. Hanna is senior research associate with The Democracy Collaborative.
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