Net Neutrality Repeal Could Be Bad News for Cities, Mayors Warn

They say their economies could suffer if the FCC repeals net neutrality regulations.
by | December 8, 2017
Demonstrators rally in support of net neutrality outside a Verizon store in New York. (AP/Mary Altaffer)

One week before the Federal Communications Commission (FCC) is scheduled to vote on repealing net neutrality regulations, nearly 60 U.S. mayors signed a letter in opposition.

The repeal proposal, they argue, would lead to greater digital inequality, harm small-business growth and violate principles of local control. It includes a provision blocking state and local governments from enacting their own rules on net neutrality.

“The Commission’s proposal seeks to compound its prioritization of the broadband industry above all others, and above local communities, by broadly preempting state and local government ability to respond to the unique challenges faced in our communities,” the letter reads.

The concept of net neutrality has been widely embraced by tech companies -- including Google and Facebook -- and generally opposed by Internet Service Providers (ISPs), which include cable companies like Comcast and wireless providers like Verizon. It's the principle that ISPs should be required to treat all internet content equally, without slowing or blocking content, especially not for business advantage or monetary gain.

Proponents of the principle argue that regulations are necessary to maintain a free and open internet where even the smallest startups can compete with big, established companies. Without net neutrality, the argument goes, large companies could pay to get their content to users at premium speeds, leaving smaller competitors in the dust.

Opponents of net neutrality argue that the rules are a cumbersome and unnecessary regulation on business. They say that large ISPs have already promised not to block or slow content, and that the Federal Trade Commission would have the authority to halt anti-competitive practices.

The repeal could have huge consequences on the local level, particularly for communities that rely on small businesses for economic growth, says Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance.

“If your city has a lot of small companies relying on [net neutrality principles] to survive, you might not have as bright of an economic future after this vote,” he says.

Andy Berke, the mayor of Chattanooga, Tenn., agrees. Since the city built its own fiber internet network in 2010, it has attracted dozens of small and mid-sized companies, which have become a boon for the town’s economy.

“Chattanooga has a burgeoning tech culture ... our tech community is growing, so we have one of the highest wage growths in the country,” Berke says. “There needs to be a free and open internet so we can compete with the giants in the city.”

Chattanooga’s city-owned ISP (and the more than 100 other city-owned ISPs across the country) could also end up at a competitive disadvantage with telecom giants like AT&T or Comcast. They aren't usually the only available internet provider in a given area, meaning they have to stay competitive to keep customers. Meanwhile, many customers of big ISPs like Comcast have only one option for broadband service, allowing those companies to block or throttle as they please with little worry that customers will leave.

Of course, this could also work in municipal-owned networks' favor: If large ISPs block or throttle too much or become too expensive, community broadband services could become an attractive alternative to customers, Mitchell says.

Mitchell says cities who own their own internet services will almost certainly not block or throttle content because even if they wanted to, they lack the influence that giant ISPs have. Threatening Netflix with slower service unless they pay the city more, for example, likely won’t even merit a call back from the streaming giant.

“What does Netflix care if it loses 5,000 people in Kentucky [on a city-owned broadband network]? That’s not worth paying extra money for.”

Perhaps the most wide-reaching concern for cities regarding the net neutrality vote is digital equity, the idea that everyone should have access to fast and affordable internet services. This has become a growing concern for local governments, as access to the internet has become crucial for everything from schoolwork to job applications to job training services, says Jim Loter, director of digital engagement for the city of Seattle.

The repeal of net neutrality would put lower-income internet users at particular risk, Loter says, because they may not be able to pay for the premium services they need in their everyday lives.

“On the consumer level, there’s now a door for providers to charge people for tiered services like they do cable TV offerings,” he says. “We are looking at a possibility where low-cost services only get you access to certain sites.”

The repeal vote on Dec. 14 is expected to succeed, given the FCC's Republican majority. (In general, Republicans favor repealing the net neutrality regulations while Democrats oppose it.)

While the FCC would block state and local governments from enacting their own rules on net neutrality, Mitchell says there's at least one way they can try to fight back: start their own broadband network. That, of course, comes with financial risks.

“Comcast is not going to invest in Denver to make Denver a world-class city,” Mitchell says. “So if you’re the mayor of Denver, you want to find a way to make sure you have a world-class network.”