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2004-12-07

Should Local Governments Be Allowed to Provide Broadband Access? A Debate on Community vs. Private Internet Service

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Local municipalities across the country are looking to community-owned broadband wireless access as a cost-effective way to bring affordable broadband into their areas, sparking a battle with cable and telephone providers. We host a debate on community vs. private Internet access. [includes rush transcript]

For millions of people in the United States, high-speed Internet access is an unaffordable luxury. To counter this, local municipalities across the country are looking to community-owned broadband wireless access as a cost-effective way to bring affordable broadband into their areas.

This has sparked a battle with cable and telephone providers over how public or private access to the Internet should be.

At the heart of the issue is a new Pennsylvania law that heavily restricts cities in the state from providing Internet access. The law–which was heavily backed by Verizon and other carriers–bans local governments from creating their own networks without first giving the primary local telecommunications provider the chance to provide service.

The measure is being closely watched around the country, where phone and cable companies are pressuring state legislatures to limit what municipalities can do.

Advocates of community Internet access say broadband is a critical community service which should be provided by local governments while opponents argue it is unfair to local competitors and will not offer the same low-cost services. Today we host a debate on community vs. private Internet service.

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We’re joined by Jeffrey Chester, executive director of the Center for Digital Democracy, and Steven Titch, who is Senior Fellow for Information Technology at the Heartland Institute, a Chicago-based think tank. Let’s begin with Steven Titch. Welcome to Democracy Now!.

STEVEN TITCH: Hello, Amy. Good morning.

AMY GOODMAN: It’s good to have you with us. Let’s talk about this Pennsylvania law. Do you consider it a victory?

STEVEN TITCH: I don’t know if you can put it in terms of victory or defeat. It’s — on one level, I would call it bad law following bad policy. Going into that might take us a little bit off the idea of muni networks. On the basic levels, though, muni networks, especially competitive muni networks, are a bad way to spend city resources which are limited to begin with. Because they duplicate networks. The private sector is meeting the demand effectively and economically. I would argue with the contention that high-speed Internet cost is priced out of many people’s ranges. As you mentioned, it creates the problem where the city competes with the companies it taxes, franchises, licenses, and, in general, regulates. The city in essence becomes a player in a game it regulates. It creates an un-level playing field by that measure, dissuading commercial investment and alternatives. And finally, instead of — instead of expending the money to build an entire municipal broadband network, there are alternative ways of achieving the goal of providing low-cost community Internet access that puts less city money at risk and affords more accountability to the people. You can talk about that, too.

AMY GOODMAN: Jeff Chester, your response.

JEFFREY CHESTER: Well, look, access to the Internet is an essential first amendment freedom for the public. Beyond the competition issues, which I’m happy to talk about, I believe that you really can’t look at the Internet as something akin to television, you know, or broadcasting or cable. It is a special medium. And having access to it — and broadband access will be essential very soon, that will be the standard — having access to it in your home will be the key. Any parent with kids who does homework, knows how important it is to have the Internet in the home. Now the reason — one reason why the U.S. is falling behind the countries, we’re now down to number 13th in terms of broadband access, is because it’s priced too high. The big cable and satellite — big cable and telephone companies — principally the big telephone companies, are going around state by state, as you said, to prevent cities and counties and even the states to provide alternative Internet access. The cable and telephone companies want to have a monopoly. One reason why we have 40% of U.S. households without Internet access, and it stayed at that level — 40% of the country does not have Internet access in their homes — it’s principally because they cannot afford it. So, we have to provide all kinds of means to get broadband and Internet access out to people, make it cheaper. And community access also provides an important first amendment function because then you are not just dependent on the big cable and telephone companies that are controlling the future of the U.S. Internet.

AMY GOODMAN: Jeff Chester, Steve Titch, we’re going to go to break and we’ll be back with you. Jeffrey Chester, Center for Digital Democracy, and Steven Titch with the Heartland Institute. This is Democracy Now! Back in a minute.

AMY GOODMAN: This is Democracy Now! Democracynow.org, the war and peace report. I’m Amy Goodman. As we continue on this issue of fast internet service for people, telecoms fighting plans for public networks, let me guess your response, Steven Titch of the Heartland Institute in Chicago. The issue of the digital divide that Jeff Chester was just raising. In February, a survey conducted by the Pew Internet and American Life Project says a quarter of U.S. adults have high speed Internet access at home, about half of those had incomes of more than $75,000 a year.

STEVEN TITCH: I think there is more to it than purely the affordability issue. There are other aspects that contribute to the decision of high speed Internet. Higher income households place greater value, perhaps, on education. They have access to the computers. They have other means of creating the Internet demand for themselves besides simply just the decision to go Internet access.

AMY GOODMAN: Jeff Chester, you response to that.

JEFFREY CHESTER: Look. The biggest telephone companies and cable companies like Comcast don’t want to see any competition. They’ve already gotten favorable rules from the Bush administration that will give them even greater control over how the Internet serves us all in the United States. It’s now going to be subject of an upcoming Supreme Court decision. It’s called the Brand X Case. Cities can do this. They can do this cheaper. These networks can be run by community organizations, independent organizations. Hundreds of cities across the country want to create their own Internet service. This is an important element if we’re going to have a diverse, you know, media culture in the United States and not just allow one or two companies to determine the fate of the Internet.

STEVEN TITCH: Amy, if you look at many, most of these systems that we’re talking about here, they’re not — they’re Internet second, cable TV systems first. What these cities are trying to get into is to fund universal broadband access by building a cable TV service.

JEFFREY CHESTER: That’s not —

STEVEN TITCH: Yes, it is. Yes, it is. You looked at the Tri-Cities plan, you look at Lafayette, Louisiana, they’re all built around a triple play services where cable is the — just like in the private sector. Cable TV is the revenue driver. They are — their plans are — their goals are universal access, but they’re going to try to fund it through essentially $80 to $100 a month cable services that is the same thing that cable and telecoms do.

JEFFREY CHESTER: These networks can provide the monopoly cable operator with what little competition there is. 99% of the country, there’s no competition to cable. So, if community organizations are building these networks today, you can not just offer the Internet, you can offer telephone, you can offer cable. It’s very important that we have these communities come in and offer these services. Otherwise, with the media concentration problem we have today, we’re turning the fate over of all of our television system and of our Internet, to a handful of corporate giants.

AMY GOODMAN: Speaking of media concentration, I want to interrupt for a second and ask a question about the broadcasters asking for the Supreme Court for an extension. Can you talk about this, Jeff Chester?

JEFFREY CHESTER: Well, the television network — FOX, NBC, and CBS and some of the major newspaper companies — are planning to ask the Supreme Court to overturn the current stay that we won last June in terms of the FCC ownership rules. The biggest TV networks really want to sweep away all of the media ownership rules. They’ve told the Supreme Court they see no reason why they shouldn’t be able to buy as many TV stations or other media properties in towns and across the country. So, we’re going to see, especially with the Republicans fully in charge, a real push on the part of FOX and Viacom and GE-NBC to sweep away the rest of rules going through the Supreme Court and also working Congress.

AMY GOODMAN: Speaking of FOX, the latest news that FOX news will soon become the primary news provider to radio giant Clear Channel. By mid-next year, it’s expected as many as 500 Clear Channel radio stations will be airing hourly five-minute news reports from FOX.

JEFFREY CHESTER: Well, right-wing radio just turned further to the right and now Rupert Murdoch has his grips over the most powerful radio network in the country, and this is a chilling quote from a FOX executive vice president. "We’re looking to bring the flavor and personality of FOX news to radio," said Jim Abernathy. Here you have a merger of two conservative media giants, in essence, FOX and Clear Channel, and it just underscores why we have to fight off further media consolidation and why, in particular, we have to keep the Internet open and provide the public with as much choice and access to what might be the only medium open.

AMY GOODMAN: Steve Titch, your response.

STEVEN TITCH: Yeah. I don’t exactly know where you’re coming from. The FOX-Clear Channel is an agreement where FOX will provide content. It is not a merger. And you were saying that cable has no competition in 99% of the country. That’s — I have to challenge that because, first of all, the phone companies are there.

JEFFREY CHESTER: The phone companies are not — the phone companies have not entered the market yet and the federal study last year showed that the direct broadcast satellite has absolutely no impact in terms of price with cable. Cable is a monopoly in this country today.

STEVEN TITCH: There is DSL service offered in almost — in most cities, most suburbs, most exurbs. There is a wireless — the access issue, which we are talking about here, the city of Chicago — you can get free wireless access at the library system. And it’s not a muni system, it is supplied by the Chicago public library out of its general appropriation budget. You can go down to —- there are several -—

JEFFREY CHESTER: We cannot afford —- we cannot afford to have second or third-class access. I’m -—

STEVEN TITCH: What’s with the third-class access? I’m —

AMY GOODMAN: One at a time. One at a time. Jeff Chester, what’s second or third-class access?

JEFFREY CHESTER: I hope your listeners go to tricitybroadband.com and you can see what Comcast and SBC did to these poor three little cities with the JC’s and the Chamber of Commerce that wanted to have their own broadband network. They engaged with a disinformation campaign, SBC and Comcast, and at tricitybroadband.com, your listeners can see first hand — the ads and the other lobbying materials — that caused this community network to go down in defeat in the election.

AMY GOODMAN: I just want to ask a final question that may seem unrelated. But I was leafing through Advertising Age. And at the end of a piece about Carlos Gutierrez to be named Treasury Secretary, there is a quote from you, Jeff Chester. Why would the — rather the Commerce Secretary — be of interest to you at the Center for Digital Democracy? He is the former head of Kellogg’s.

JEFFREY CHESTER: Well, look, the Commerce Department has responsibility over, in part, administration telecommunications issues and media issues. It depends on the range of influence. But, you know, to those people that are concerned about commercialism in this country — commercial media, particularly its impact on kids — what my point was that now that they have chosen the head of Kellogg’s to be in charge of the commerce department, our hopes about addressing the rampant commercialism, you know, which embroils our media system, is dim for the most part for the next four years.

AMY GOODMAN: Well, I want to thank you both very much for being with us, Steve Titch of the Heartland Institute in Chicago and Jeff Chester of the Center for Digital Democracy. This is Democracy Now!

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