Government broadband debate could affect more than consumers

Telecom carriers are lobbying federal and state lawmakers heavily to prevent government entities from offering telecom services to protect the incumbents’ commercial interests, but the effort ultimately could negatively impact public-safety communications.

At the heart of the carriers’ argument is a time-honored notion of a free-enterprise market — government entities should not compete in the marketplace against commercial businesses. In addition to the philosophical problems, many believe that it is unwise for a government entity to enter a market it knows little about in an effort to undercut the pricing of a private company that pays taxes and fees that support the government.

Proponents of municipal broadband offerings counter that cities should be able to control their own technological destinies, instead of being forced to wait until a telco or cable company decides the population is dense enough that it can offer broadband services profitably.

On the surface, this debate has little or nothing to do with public safety. But several broadband products — including Motorola’s hybrid antenna that supports two 2.4 GHz networks and two 4.9 GHz networks — foreshadow the possibility that a governmental entity might want to sell excess broadband capacity efficiently created by a single network installation.

In some cases, a municipality might want to offer such access to its citizens because none of the commercial providers have stepped to the plate. In other cases, the governmental entity might want to create a revenue stream that helps offset the costs of deploying and maintaining the broadband network.

Regardless of the reason, prohibiting governmental entities from offering broadband services could remove the political and economic justifications for such entities to make a capital investment in a broadband network. Many fire and police departments don’t have the budget to deploy 4.9 GHz networks, but it’s much easier to find that capital if the installation also provides a network other city employees can use and it can generate revenue — not to mention political goodwill from voters — through a commercial offering.

Of course, not all governmental entities looking at offering broadband services are small communities left behind in a dial-up-only world; some regions with cable and DSL alternatives have invested in fiber-to-the-premise networks, which really angers the telecom providers. Being forced to pay taxes and franchise fees to a governmental entity that is competing with you with no obligation to be profitable is hardly a pro-business environment.

For areas that lack broadband alternatives, however, it’s difficult to imagine Congress wanting to penalize such communities for taking a proactive approach to join the digital age. If President George W. Bush is serious about making broadband universally affordable by 2007, it’s doubtful that goal can be reached by relying solely on the private sector, which is only going to deploy services that provide value to shareholders.

In the end, don’t be surprised if this turns out to be one more card to be played in the high-stakes poker game known as the rewrite of the 1996 Telecommunications Act. Remember, legislative nirvana for large telecom incumbents would be for Congress to enact legislation that limits local taxation and fees on their services, waive the need for video franchises and — most important — lift the heavy regulatory burdens.

Such legislation would hit local governmental entities in the pocketbook. Public safety should beware.

E-mail me at djackson@primediabusiness.com.