Tell The Story We Know: Broadband Competition is Too Limited

I was General Counsel of the Federal Communications Commission when it sought the preemption of state laws in Tennessee and North Carolina that limited the ability of municipalities to promote broadband. We failed in that effort, but the case laid out the key facts. The FCC found that the provision of municipal broadband in Chattanooga, Tennessee, led to lower rates, increased investment, and improved service from an incumbent broadband provider. Similarly, in Wilson, North Carolina, when faced with a municipal broadband entrant, an incumbent cable company held rates flat even as it raised rates in nearby geographic areas by up to 40 percent for comparable offerings. By the FCC’s calculation, new competition saved Wilson’s approximately 50,000 residents more than $1 million per year. This is a familiar story, known to the members of CLIC but not given sufficient attention generally. The competition story needs to be told: We can expect people with only one choice to pay monopoly prices, and people with only two choices to pay the higher prices typically charged by duopolies. People with three or more choices typically pay less. Clearly, people who can barely afford to pay a competitive price, say, low-income Americans, are particularly vulnerable to artificially high prices.