updated 04:22 pm EDT, Tue September 2, 2014
Letter to FCC alleges that government owned networks hold undue power
Given the opportunity to petition against the expansion of municipal broadband expansion in Chattanooga, Tennessee and Wilson, North Carolina, AT&T has taken the opportunity to remind the government of its role in the state of Internet connectivity in the US. In its filing with the US Federal Communcations Commission, the telecom giant lays out its case against why local broadband, or "Government-Owned Networks" (GON), shouldn't be allowed.
The FCC requested the letters from interested parties, evaluating whether or not Chattanooga's and Wilson's networks should be allowed to expand to underserved areas very close to the epicenter of the service. Both networks serve large areas, are established and thriving, and both face legal challenges from private industries seeking to thwart expansion.
After visiting Tennessee in June, FCC chairman Tom Wheeler voiced the path that the FCC plans to take regarding municipal broadband. Wheeler stated that he thought it was in the best interest for competition and consumers that the FCC use its regulatory power to prevent state laws from being able to restrict the community-based services. In fact, he stated that the FCC would get involved should the need arise.
In the five-page filing, AT&T says that despite some successes, especially in Chattanooga, "GONs should not be utilized where the private sector already is providing broadband or can be expected to do so in a reasonable timeframe," essentially asserting a right to be a monopoly for a given area. Rural zones outside Chattanooga have been told that AT&T needed tens of thousands of dollars to even provide a quote on how much it would take to get service, to say nothing of actually laying cable to the areas -- exactly the reason that municiple broadband networks were set up in the first place. AT&T believes that these areas are possible to service in the aforementioned "reasonable timeframe," and as such, should be blocked from building out its own network.
Additionally, AT&T claims that municiple Internet providers shouldn't be given tax breaks on income generated, despite being part of the government. The company believes that "indeed, any tax incentives or exemptions should be provided, if at all, to private sector firms to induce them to expand broadband deployment to unserved areas."
AT&T alleges that it may have problems competing in an area served by a community-based network if it is given preferential treatment by the government in any way. It said in the letter that "any commercial entity will be concerned about further investment in an area in which it would be forced to operate at a competitive disadvantage, including with regard to access to and rates for rights of way, and the use of taxpayer funds to subsidize a competing service." Critics claim the term "forced to operate at a competitive disadvantage" is code for "lower rates."
The FCC is facing pressure from outside sources on the matter, including the House of Representatives and the National Conference of State Legislatures (NCSL). The Republican-led House recently passed an amendment to an appropriations bill, championed by Representative Marsha Blackburn (R-Tennessee), which could prevent FCC funding from being used to fight any state law present or future over the issue. The NCSL threatened legal recourse against the FCC should they infringe upon the Constitutional rights of the states.