In December, the City of Seattle set out to discover whether a big-enough market exists to support the creation of a new, publicly owned municipal broadband network.
The short answer, in a report delivered to Mayor Ed Murray in mid-June, was no: According to the study, to be sustainable, this new network would need to capture over “40 percent of the broadband market at a subscriber cost of $75 per month to be financially viable over the long term,” and “no other municipal broadband utility in the country has reached enrollment rates at that level.”
Still, municipal broadband advocates vow to keep fighting for public Internet in Seattle, and several city council candidates are running on the issue of creating a city-owned broadband network.
But while Seattle continues to flirt with saying hello to public internet, the region’s second-biggest city is going in a decidedly different direction: Tacoma has had public internet for years, but is now considering getting rid of its broadband network, Click.
“Initially, when Click was built in the ’90s, it was a really good thing for the community,” Click spokesperson Chris Gleason said. “Click introduced competition into the market, and kept prices in Tacoma quite a bit lower than [in] surrounding cities. The early business models anticipated that Click would get 50 percent of the cable market and 25 percent of the Internet market.”
But Click couldn’t anticipate the growth of the Internet. Entering the 2000s, Gleason explained, the Internet market increased and the cable market decreased. Click’s cable subscriptions are actually being cannibalized by their own Internet subscriptions, because of streaming services like Netflix and Hulu. Now, losing money, Click is considering selling out to a private company.
But Tacoma’s bad experience isn’t necessarily a bad omen for Seattle. Municipal broadband is nuanced, technical, and downright confusing.
“My suspicion is it’s meant to be confusing,” said city council candidate John Roderick, who has made the creation of municipal broadband in Seattle a campaign platform. “The companies in the cable market are threatened by this and they have very powerful lobbies.”
Seattle is intimidated. Introducing publicly owned broadband as another player in the market, next to monopolistic corporate giants like Comcast, could be a costly fail. What if Seattle’s municipal broadband were to follow Click’s life cycle? What if, after the investment in building a FTTP network, consumers simply weren’t interested, and stuck with their current Internet service providers?
On the other hand, Chattanooga, Tenn., offers a small window of hope. Known now as “Gig City,” the midsized town invested in its future in 2008 when it formed the Electric Power Board (EPB) and began to construct a “smart grid” to better serve the city’s power needs. Now the network provides Internet that is 50 times faster than the average American connection, for under $70 a month.
It started as an attempt to rectify the losses from power interruptions. A 2005 UC Berkeley study estimated that society loses $80 billion a year from such interruptions. Chattanooga was losing $100 million a year, according to EPB spokesperson Danna Bailey.
Bailey says having access to true high-speed broadband has given her city a platform to innovate and contributed to a vibrant startup scene and business growth. Sound like familiar buzzwords, Seattle?
“I’d like to point out, customers all over the country are losing $80 billion,” Bailey said. “Our system we chose to modernize was no better or worse than others in the country.”
Essentially, an investment in building a municipal broadband network relies on the assumption that customers would switch from their current ISPs to the public utility. The verdict is still out in Tacoma, but Chattanooga has seen incredible results.
“Chattanooga’s EPB didn’t have to cut out Comcast and impose its own monopoly—it’s simply beating them with faster Internet and superior customer service,” The Huffington Post reported. (Comcast was awarded the title Worst Company in America by the website Consumerist—twice.)
In Chattanooga, Comcast’s Xfinity scores a measly one star overall on Yelp. (“Their advertising campaign says ‘Don’t fall for EPB!’ ” Yelp user Rusty W. wrote in a review. “What a joke. Just try Comcast. You won’t ‘fall’ for EPB, you’ll RUN to EPB!”)
What Seattle’s municipal-broadband plan needs is support—evidence that more than 40 percent of residents would ditch corporate broadband and make the switch to public.
“There are plenty of people 100 years ago who wanted to tell us electrical should be a private company, sewer should be a private company,” Roderick said. “We decided these were necessities and made them public. Once a thing goes from a luxury to a necessity, it makes sense for it to go from a private company to a public utility.”