Saturday, August 13, 2016
Another Study in Inconsistency: North Carolina Politics
North Carolina has a lot to offer including world class beaches, technology parks and barbeque. Sadly it also leads the nation in partisan and checkbook politics. This state’s majority party appears obsessed with remedying non-existent election fraud, bathroom gender ambiguity and the scourge of municipal broadband service. Let’s consider the latter topic.
From my perspective, municipal Wi-Fi and wired broadband offer a community service in the same vein as libraries, parking decks, parks, zoos, water authorities, etc. For many types of services, it makes no sense to wait for, and rely on, the marketplace to recognize and serve consumers’ wants, needs, or desires. The concept of market failure also applies when private industry refrains from providing a service based on forecasts showing insufficient returns on investment.
Municipalities provide Wi-Fi and fiber optic broadband largely based on the view that the service enhances the welfare of residents while also accruing intangible, or at least hard to quantify benefits. The Wilson, N.C. local government invested in broadband early, opting not to wait for the possible market expansion by incumbents, or newcomers. The city mothers and fathers properly concluded that no venture would consider it worthwhile to invest in infrastructure for such a small and relatively isolated place. Bear in mind that fiber optic ventures, such as Verizon’s FiOS, simply do not extend far from the most densely populated portions of the United States.
Even though incumbent carriers have little likelihood of actually providing Wi-Fi or any alternative to metered service, they want the “right” to foreclose even cities from resorting to self-help. In Pennsylvania, Bell of Pennsylvania secured a legislatively conferred right of first refusal for the entire state, except for Philadelphia. Predictably, the company never acted on this option, but simply having it has achieved the goal of blocking home grown initiatives.
In North Carolina, incumbent carriers simply convinced legislators that municipal broadband networks would unfairly compete with private ventures who have to enter the private debt and equity market instead of having captive taxpayers bear the financial burden. In reality, incumbents simply bought a way to preempt town wide, unmetered Wi-Fi, or wired broadband. Residents, not within the original broadband service footprint, and in countless other localities have to pay on a metered basis for wireless broadband, or be grateful that they live in a location where cable modem or DSL service is available.
Elsewhere in North Carolina, Google has installed a major server farm in Lenoir and recently announced that it will include Raleigh in future extremely high speed wireless projects. In one state, we can see how cutting edge technologies contribute to the tax base, employ people and enhance community welfare. Elsewhere, checkbook politics blocks community initiatives that would enhance the livability and commercial appeal of a rural locale.