The National Broadband Plan and Localities

The FCC's plan advocates policies that would expand federal influence over local broadband practices.
by | April 6, 2010

With the FCC's recent release of its National Broadband Plan, the commission is poised to dictate local governments' handling of broadband infrastructure. The plan makes numerous recommendations for achieving goals like connecting 100 million households to affordable 100 Mbps service, hooking up anchor institutions (like schools and government buildings) to speeds of at least 1 GB per second and creating a national public safety broadband network.

To reach those goals, the National Broadband Plan encourages legislation that could affect whether or not local governments can collect fees from broadband providers for using street space, how anchor institutions acquire funding for high-speed connectivity and the standards agencies should follow for building public safety broadband networks. Legal analysts caution that the National Broadband Plan is only a set of recommendations, not laws. It does, however, reveal the biases that FCC officials and legislators will bring to the process of establishing the actual laws for a national broadband plan, according to Nicholas Miller, attorney with Miller & Van Eaton, a Washington,D.C.-based communications law firm representing local governments.

Local Revenue Source Becomes Vulnerable

Current "right-of-way" case law enables local governments to charge fees to broadband providers for running their fiber along public streets. Those fees have become a sizable revenue source for local governments. Language in the National Broadband Plan, if put into law, could eliminate this funding stream, says Miller. For years, local governments and vendors fought over how to interpret language in the Telecommunications Act of 1996 regarding whether or not governments could charge such fees. Vendors wanted to use the street space for free, while local governments wanted compensation. The dispute seemed settled after a 2009 decision from the U.S. Court of Appeals for the Eighth Circuit favored the local government interpretation.

Then, when the FCC solicited public input for its National Broadband Plan, vendors lobbied successfully for the plan to reflect their preferred interpretation of the language. This threatens local governments because if legislators put that interpretation into law, it could override the decisions currently allowing them to charge the fees. "It's a huge amount of money," Miller said. "Many of the municipalities in Texas believe that something close to 15 percent of their city revenue is related to right-of-way fees."

As a glimmer of hope for local governments, the National Broadband Plan does call for a task force to resolve disputes over the language. However, reopening the matter for discussion leaves municipalities on more uneven footing than before.

Potential Obstacle for Muni-Owned Networks

Local governments wanting to finance their own broadband networks could face legal obstacles if plan recommendations become law, according to Miller. On one hand, the plan's wording encourages local governments to build their own networks, but says it should not displace private sector investment.

If a local government decides to finance its own broadband network, funding for it would usually come from a ballot bond, said Miller. He said a government would have a hard time selling voters on the bond if it couldn't guarantee that a vendor wouldn't be able to come along and challenge the project mid-stream, professing intent to build a private sector network. "It seems to say that before you proceed with a fiber-to-the-home project, you have to prove that the private sector won't do it," Miller commented. "You're proving a negative."

New Funding Advocate for Anchor Institutions

Given that the National Broadband Plan calls for 1-GB-per-second speeds at anchor institutions, the plan advocates for the FCC to form a nonprofit group dedicated to helping them capture necessary funding to do so. The money would come from the Universal Service Fund, a federally mandated fund into which all telecommunications providers pay to subsidize services for schools, libraries, hospitals, and other community organizations. Historically, the USF supported dial-up services, and the FCC is recommending that it begin subsidizing broadband networks.

Oakland, Calif.- based municipal broadband analyst Craig Settles warned that local governments should lobby legislators to make sure vendors don't get access to the money without endorsements from local governments. His concern is that vendors will use the money for networks that will only benefit those vendors, irrespective of the governments' needs. "That's the part where cities and counties need to play an aggressive role because that's billions of dollars and policy that specifically affects them," Settles said.

Miller said the USF was already good about empowering local governments to choose which vendors get funding for dial-up. He hopes the FCC will continue that approach.

The National League of Cities expects the availability of such money to stimulate interest in government IT upgrades, according to Julia Pulidindi, spokesperson for the NLC. Better broadband would enable high-performance, Web-based applications that can't function on dialup.

Next-Generation 911 Networks

The National Broadband Plan recommends a nationwide network of 911 call centers that can receive calls made over the Internet, via programs like Skype. However, Miller said the plan's specifics on how that should happen are unclear. It recommends mandating that all networks providing access to the 700 MHz band of spectrum give public safety responders priority for emergency purposes. Miller remarked that providers wouldn't likely tolerate such an intrusion into their systems.


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