Opinion: Three Senate Democrats join Obama in backing municipal broadband

Responding to a push from President Obama, three Senate Democrats introduced legislation Thursday to revoke state laws that hinder local governments from getting into the broadband business.

The Community Broadband Act by Sens. Cory Booker of New Jersey, Edward J. Markey of Massachusetts and Claire McCaskill of Missouri would make it illegal for state or local governments to prohibit or substantially inhibit “any public provider” from offering broadband services or capabilities. The measure is aimed at the approximately 20 states that have laws intended to stop local agencies and municipal utilities from competing with private-sector Internet service providers.

Earlier this month, Obama announced his support for municipal broadband efforts. However, instead of calling for Congress to intervene, he urged the Federal Communications Commission to use the Telecommunications Act of 1996 to preempt the state barriers. Section 706 of the act instructs the commission to encourage the deployment of advanced networks through “measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.”

Obama’s appointee as FCC chairman, Tom Wheeler, said last year that he thought the commission should preempt the disputed state laws.

Booker’s bill seems like a long shot, considering that the Republicans who lead the relevant House and Senate committees offered their own bill last week to gut Section 706. Such a move would leave Wheeler no power to override the state laws against municipal broadband.

Republicans are eager to stop public agencies from competing with private ISPs, and Democrats are eager to bring more competition to the cable and phone companies’ local broadband duopoly. But what’s happening in New York City shows that there’s much more at stake in this debate than whether local power companies will go head to head with Comcast or AT&T.

In the Big Apple, a consortium known as CityBridge has a contract with the city to install gigabit Wi-Fi hot spots in as many as 10,000 payphone sites across the five boroughs. The phones will be replaced by tall kiosks that, in areas that aren’t purely residential, will sport 55-inch-diagonal flat-screen advertising displays. Within each LinkNYC kiosk will be a 10-inch tablet computer that offers free Internet access and free domestic long-distance calls.

Gigabit Wi-Fi may seem like overkill today, considering that most computers in use aren’t equipped to connect at that speed. But more speed also means more capacity to share, which is crucial on a public network. And though LinkNYC is intended for mobile users, the network will also be available to anyone who happens to live within the hot spots’ 150-foot range.

“If people want to use the system, our philosophy is let them use the system,” explained Colin O’Donnell of Control Group, a member of the CityBridge consortium. But the group’s main hope, he added, is that the abundance of bandwidth provided by LinkNYC will “change behaviors.”

For example, he said the free Wi-Fi along the streets could enable more sidewalk, curbside and “pop up” businesses that rely on connectivity. The ultra-high speed also could power a new generation of data-hungry start-ups, he said, adding, “What’s the new YouTube for gigabit Wi-Fi?”

The business model for LinkNYC isn’t novel: The consortium plans to finance its construction costs (more than $200 million, spread over several years) and operational expenses by selling ads on the kiosks and, possibly, sponsorships for the Wi-Fi connections and phone calls. What’s unusual is that advertisers will be able to target their messages to people around each kiosk based on data collected from those who use that kiosk’s Wi-Fi, said Dave Etherington of Titan, another member of the consortium.

He added that the data would be aggregated and anonymized, and that the consortium wouldn’t release the data to anyone. Ultimately, Etherington and O’Donnell said, the system could work much like online contextural ads do, with much more dynamic and relevant messaging than the typical poster at a bus stop.

“We’re going from wood pulp and wheat paste to insights in digital placement,” O’Donnell said.

And that’s just the basic stuff. In a recent interview, the pair threw out a host of other ideas for how light, noise and temperature sensors at the kiosks could be used by advertisers, or how the screens could interact with beacons in the smartphones carried by passersby. At the same time, O’Donnell acknowledged that the potent mix of sensors, beacons and advertising raised important privacy issues, and that the onus will be on the consortium to answer them.

But back to the push by Booker et al., Obama and Wheeler. Some state laws on municipal broadband are so restrictive that local agencies can’t even lease assets to competitive broadband providers, as New York is doing. Others would require state agencies to obtain voters’ approval before moving ahead. Any state law that raises the chance of being tied up in court or having to win a fiercely contested vote makes it that much harder for upstart broadband providers to raise the money needed to build a network.

Not many locales may be ripe for the LinkNYC treatment, which is designed for a densely developed, walkable city. But every government has assets that could help a broadband provider get established, whether it be utility poles, conduit under the streets or possibly even fiber-optic lines connecting public buildings.

The upfront costs can be enormous, and there’s no shortage of examples of city broadband ventures that went belly-up. (Here’s one: Provo, Utah, sunk $39 million into a fiber optic network, only to sell it to Google for $1 after determining the service was a money-loser.) But as The Times’ editorial board argued Thursday, cities and their residents are the ones that shoulder the risk, and they’re best able to weigh it against the potential benefits of building a competing network that’s more advanced than the ones offered by local ISPs (assuming that there’s more than one, which often isn’t the case).

If Republicans really don’t want to see the FCC plow ahead, the Booker bill offers more protection for local phone and cable companies in the event that a local government decides to get into the broadband business. The bottom line of the bill, however, is that state laws shouldn’t stand in the way of competition, and that’s the right principle.

Follow Healey’s intermittent Twitter feed: @jcahealey