Major Private Tech Company Now Supports NC Municipal Broadband

Late last month, we reported on how big US ISPs are lobbying the state of North Carolina to block municipal internet from coming to two cities. Now it seems that private tech companies are throwing their support behind the Greenlight project.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

Time Warner and Embarq, the two major US ISPs in the area have already showed signs that they are not happy that a new ISP is coming – particularly because it’s very possible that the new ISP could out-compete them. This was particularly prevalent in the state government where two bills entitles ‘level the playing field’ were tabled.

Now, there is a new development in a municipal vs state issue that has the entire world watching. It seems that a private tech company has sent a letter to the state withdrawing their support for the ‘level the playing field’ legislation.

“On behalf of Alcatel-Lucent,” the letter says, “I am writing to request withdrawal of support for HB 1252, the Level Playing Field/Cities/Service Providers Act. HB 1252, which is currently pending before the Science and Technology Committee, would prevent municipalities from delivering the promise of next generation broadband to the residents of North Carolina through the application of burdensome financial and administrative regulations, and competition policy that deprives North Carolinians of the benefits of next generation broadband infrastructure deployment.”

It’s worth noting that this is no small upstart company. According to their website, Alcatel-Lucent has “operations in more than 130 countries and the most experienced global services organization in the industry, Alcatel-Lucent is a local partner with a global reach. Alcatel-Lucent achieved revenues of Euro 16.98 billion in 2008 and is incorporated in France, with executive offices located in Paris.” Clearly a large force to be reckoned with.

Here’s another sample from their letter:

Alcatel-Lucent supports a level playing field between public and private service providers. HB 1252, however, only serves to endanger the ability of municipalities to offer next generation broadband services where private service providers have not made next generation broadband investments or are not providing next generation broadband service.

HB 1252 would create extraordinary financial accounting and administrative burdens on municipal broadband providers that would render their existence fiscally difficult, if not impossible. The bill also subjects municipalities to the new jurisdiction of the North Carolina Utilities Commission, while not requiring the same of private providers. Also troubling is the injunctive relief provision, which could encourage litigation for purposes of gaining competitive advantage. Furthermore, the legislation appears to prevent municipalities from pursuing alternative funding sources, such as broadband grant programs included in the Federal stimulus bill, the American Recovery and Reinvestment Act of 2009.

HB 1252 includes exemptions that appear to allow for municipal broadband in markets unserved by the private sector. Those exemptions, however, fail to distinguish current generation broadband — DSL or cable modem service, for instance — from next generation broadband, such as FTTN [Authors note: Fibre to the Node] and FTTH [Fibre to the Home]. It seems counterintuitive for a market with only current generation
broadband available to be considered as “served,” and foreclosed to municipal entry, when a municipal service provider is prepared to deploy next generation broadband FTTH networks enabling speeds of 50 to 100 Megabits per second downstream. It should be noted, particularly in these difficult economic times, that the overwhelming majority of the cost of building FTTH networks — approximately 70 to 90 percent — goes towards labor and construction employment, not to broadband equipment itself.

Clearly, this company sees the real problems with barricading competition to a given area. There are plenty of companies who provide the technology to lay the groundwork for additional internet connectivity and it would be a boon to such a business if competition like this were to be introduced. One would think that companies who are part of the process of making internet connections possible would be quick to condemn legislation that would bar competition from a given area. It’s a huge business opportunity. At least this company seems to get that.

If more companies jump on board with increasing the number of ISPs in a given area, maybe we’d see less abuses by incumbent telecom companies and more improvements on the networks in the United States. Putting pressure on existing ISPs would be a small price for those ISPs to pay, but it would be interesting to see how those ISPs react when real competition rolls in to town. One could easily suspect that customers would very likely benefit from all of this in terms of quality of service. Of course, as we’ve seen in the past, ISPs that are already in the area aren’t willing to give up their duopoly so easily. It’s going to be quite a showdown.

[Hat tip: Save NC Broadband]

Drew Wilson on Twitter: @icecube85 and Google+.

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