FCC Acts to Unshackle Municipal Fiber

The higher profile vote today will be about network neutrality. But the FCC’s vote on a somewhat less widely known issue today may have a more immediate effect. Nobody is on the brink of commercializing a fast lane of any note, but municipal fiber projects have been chomping at the bit for years.

The FCC today has voted to overturn state laws blocking or otherwise impeding towns and municipalities from building their own FTTH networks. Cable and incumbent telecom operators have lobbied heavily for such restrictions, arguing that having taxpayer-funded networks would result in unfair competition. But municipalities say that if they don’t build it, nobody else apparently will either.  The two petitioners in this case where from Chattanooga TN and Wilson NC.

Now, there have been plenty of muni fiber projects that bombed – in some cases spectacularly. But then we can say the same thing about the other side if we are honest and think back to the bubble.  It’s only been in the past half decade that we’ve really started to do it right in either case.

Despite the FCC’s vote, it’s not clear to me just where this will all wind up, except Federal court – that part is for sure. The two Republican commissioners argue that the FCC has no business overturning state laws about local issues. The three Democratic commissioners on the other hand say broadband is interstate in nature and therefore can be regulated by the agency.  One has to figure that the Supreme Court’s natural inclination today would be to side with the states, but who knows when this issue will get to them.

But on the other hand, once the fiber is in the ground, it’s in the ground. What we may see in the shorter term is a municipal fiber land rush, getting projects going while the going is good. That may not be economically sensible in all cases, but that’s not always what muni fiber is about at its core.  And in response, we may see some operators move to build out networks where they think they can mollify the locals.

Sitting pretty though is Google, which has been proving out a third path — albeit in cherry-picked markets. When the relationship between corporate and municipal is a happy one, everyone gets their fiber. Perhaps what municipalities and cables and incumbent telcos really need is a bit of couples therapy…  The business model isn’t as hard as it used to be, maybe a bit of cooperation now would go a long way.

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Categories: Fiber Networks · FTTH · Government Regulations