F.C.C. v The World

American cities are losing the war for internet independence

The Federal Communication Commision has recently released its decision to deregulate and incentivize wireless service providers in the anticipation of 5G wireless services which they have hailed as not only revolutionary tech but also as a critical piece of infrastructure with which to facilitate our daily lives.

Sound familiar? This sort of language was used during the roll out of 4G and other network services in still more remote times (2001 specifically). The idea being that deregulating providers of telecommunication services would lead to increased economic expansion, personal financial prosperity, and exponential market growth by way of competition ensuring an ever more rapidly arriving technological future.

Source: Getty

To be sure, some of that can prove true in certain circumstances, though with respect to the largest wireless service providers in the country these eventualities never fully materialized. What did indeed materialize for these companies, after said regulations were stripped, was a much healthier balance sheet.

In the Beginning

This is a complicated technical and political issue that spans decades and yet boils down to the simplest of reasons for being. Money and power. Plain and simple. The players in this game are numerous but there are a few we should focus on by way of introduction. The FCC, Verizon, AT&T and cities like Santa Monica and the entire South Bay region of California.

As has been frequently reported, our stalwart friends in California have been steadily fighting the rising tide of privatized internet services and constitutionally appropriated local regulatory powers. Acting as vanguard for our entire nation this state of near 40 million  residents has fought back against the repeal of Net Neutrality, reduced potency of environmental standards and the encroachment of federal oversight for seemingly nefarious causes. In the latest chapter of the Californian saga the Bay Area figures prominently as an acting protagonist.

Santa Monica lays it down

Our story does not begin with the Bay. For all intents and purposes our story begins in Santa Monica, circa 1998. Way back then a Telecommunications Master Plan was put into effect and the course has been shepherded by the local government CIO’s and Technology Directors to very successful ends. With Santa Monica realizing the necessity of a connected populous for daily living and the integrity of its high-speed data processing abilities to entice commerce and investment, the choice for installing fiber optic cable beneath all new construction and renovation became obvious.

Source: Past Time Greetings

While installing fiber can be revenue and labor intensive the product itself virtually guarantees unlimited technological (if not physical) longevity. Having a foundation with which to build upon for future generations was crucial to the long-term view of the master plan. This designed longevity has served Santa Monica well and recouped millions in revenue for the city through leases and provided residents and businesses alike access to high capacity broadband at significantly reduced cost when compared to traditional wireless networks and copper line technologies.

We FC-See You

Santa Monica is not the only example of a successful pairing of municipal governments enacting policy to build networks that serve the greater citizenry and community of business alike. San Francisco has been at the game for a few years now working to provide fiber to a greater portion of its residents and with their practices, have developed a strategy to lease dark fiber, or passive sections of installed fiber optics, to Internet Service Providers (ISP) looking to connect to previously unreachable customers.

So why, when these practices have been so successful, does the FCC wish to restrict cities’ capacity to conduct business in this way? Money and Power. But the FCC is a federal bureaucracy, what need have they of money and power? How do they, or individuals therein, even stand to gain any?

Well, that is a question for the lawyers and that other Federal Bureau. Taken in aggregate, the aggressive expansion of latitude provided to private wireless carriers seems to paint an unusual bias for an FCC administrator. FCC Chairman, Ajit Pai has certainly displayed such an affinity for the telecom giants; the motivation for which is to be determined by history, and a jury.

Risk Averse. But whose risk?

A sensibly risk-averse government is a good thing. When a municipality is trying to hedge its future economic risk by implementing a strategy to include a modern technological commodity for its residents and businesses, it should be considered an act done in the name of the people’s best interest. To suppress that ability or outright block it at a federal level is tantamount to disservice at the very least and outright corruption at most.

Source: Strategic Couch

How then does this scenario play out at the hands of an administration that has traditionally been pro-home rule/state’s rights and definitively anti-federal involvement? In cases past, where private sector business comes out ahead with a Republican minority party at the federal level, and GOP influenced state houses, we often see the scales tipping to the pro-home rule stance. Where the GOP has been the incumbent party of the nation, we see a shift to federal overreach by way of a dismantling of regulations that supplant the state and local level.

The suggestion here by the GOP led FCC is one that highlights regional cooperation alongside local autonomy as an invalid concept. They see this dichotomy as nullifying, therefore, any possibility of a regional municipal fiber-optic network would be a thing of fiction. Re-enter the Bay Area.

The Bay Leads the Way

Sixteen Southern Bay Area city councils have signaled their support of a regional fiber optic network that would connect cities, even having gone so far as to request bids for its’ construction. This network would serve as a backbone that would be constructed through cost sharing, private investment, local cooperation and public utilities. This foundation would provide high-speed broadband access to consumers, diversify competition, lower price points and drive revenue back to the city.

In response, the FCC has declared this to be unlawful. They do so by citing the very decisions that have reinforced local municipalities’ ability to invest in network connectivity and provide their state or region expanded e-commerce. Interpreting past decisions in a manner favorable to the FCC’s objective of ensuring ISP monopolies through federally mandated policy, allows for unmitigated control over product, placement, availability and evolution.

Decisions, Decisions

An FCC decision from 2015 citing the matters argued by Wilson, North Carolina and Chattanooga, Tennessee, state the need clearly in the introduction. The excerpt reads as follows:

  “The private sector has invested billions of dollars upgrading their broadband networks throughout the United States, and current deployment data indicate that 92% of Americans in urban areas, and 47% in rural areas, have access to fixed broadband with speeds of at least 25/3 Mbps. But those actions, while vital, do not address the needs of all Americans because financial incentives for private deployment of competitive networks are sometimes insufficient. As recognized by Congress in section 706, the need for broadband is everywhere, even if the business case is not.”

Yet the FCC has since determined by way of their expert status and technical translators that Congress had meant it otherwise. Determining the intent to provide private companies the ability to install tech by way of federally forced local permissions if not granted within the predetermined shot clock (acceptable time frame) and use the public utility as a means of transmission, yet reap the financial benefits alone.

Slow Burn

There is an advantage to the slow burn for private companies like Verizon and AT&T. Slower growth and forced adoption of incrementally new tech provides an almost limitless revenue stream. Similar to the yearly production of new cell phones. It has become all flash and no fire; but it’s the hype that sells. A slightly different size, a modicum of increased speed, a shiny new bezel. All these are window dressing on something you have seen many times before, and will again, in a different color.

Source: Rebrn

Controlling the tech burn by limiting access maintains the status quo. Incrementally increased speeds at moderately increased prices feeds the economic fire. But while we fight amongst ourselves and squabble like greedy children out for the last piece of pie the rest of the world is moving forward with an agenda to show America how it’s done.

The FCC might be able to go one on one with American cities, but can it take on the world?

  • Continue to unfold the story in part two of “The FCC vs. The World”.