Shadow Cast on the Spread of Municipal Broadband Networks, Implications for Rural Businesses

Cecilia King reported in today’s New York Times that, “On the first day of the harvest last week, a line of trucks brimming with sweet potatoes rolled into Vick Family Farms, headed for a new packing plant that runs on ultrafast internet.

“The potatoes were tagged with online bar codes to detail the plots where they grew, their types of seed, and dates and times picked. On a conveyor belt, 50 flashing cameras captured and sent images of the spuds to an online program that sorted the Carolina Golds by size and quality and kicked them into boxes.

The Vick family built the plant only after the nearby city of Wilson [North Carolina] agreed early last year to bring its municipal broadband service to the 7,000-acre farm. Since the plant opened in October, the farm’s production and sales to Europe have jumped.”

The article noted that, “But now, after a legal battle between state and federal officials over broadband, the farm and hundreds of other customers in the eastern region of the state may get unplugged.

“‘We’re very worried because there is no way we could run this equipment on the internet service we used to have, and we can’t imagine the loss we’ll have to the business,’ said Charlotte Vick, head of sales for the farm.

“Vick Family Farms got caught between the Federal Communications Commission and North Carolina state legislators over the spread of municipal broadband networks, which are city-run internet providers that have increased competition in the broadband market by serving residents where commercial networks have been unwilling to go.”

The Times article indicated that, “This month, the United States Court of Appeals for the Sixth Circuit upheld restrictive laws in North Carolina and Tennessee that will halt the growth of such networks. While the decision directly affects only those two states, it has cast a shadow over dozens of city-run broadband projects started nationwide in recent years to help solve the digital divide.

In siding with the states, the court hobbled the boldest effort by federal officials to support municipal broadband networks. While the court agreed that municipal networks were valuable, it disagreed with the F.C.C.’s legal arguments to pre-empt state laws.

Now, cities like Wilson fear they have little protection from laws like those in about 20 states that curb municipal broadband efforts and favor traditional cable and telecom firms. City officials say cable and telecom companies that have lobbied for state restrictions will be encouraged to fight for even more draconian laws, potentially squashing competition that could lead to lower prices and better speeds to access the web.”

Today’s New York Times article added that, “The F.C.C. does not plan to appeal the federal court’s decision ‘after determining that doing so would not be the best use of commission resources,’ Mark Wigfield, a spokesman for the agency, said in a statement. That means municipalities that want to keep expanding their municipal broadband networks will have to fight to overturn state laws on their own.

“The legal fight is being closely watched by other cities in states that have similar broadband restrictions, such as Colorado and Washington. Even big cities like Los Angeles and San Francisco are in the early stages of exploring municipal broadband networks, which they view as crucial to serving low-income families who cannot afford service from cable and telecom companies.”

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