Obama calls for government-run broadband service

President Obama has called on cities and towns to create their own broadband service for their residents to compete with large corporations.

Obama was in Cedar Rapids, Iowa touting the plan to get states to relax their rules against municipalities setting up their own networks. Cedar Rapids got an exemption from the FCC to create their own networks a few years ago.

Republicans in Congress reacted immediately.

The Hill:

"In Tennessee we have a term to describe people like President Obama — tone-deaf,” Rep. Marsha Blackburn (R-Tenn.) said in a statement.

“At a time when Americans think the biggest problem facing our nation today is big government, you would think he'd have gotten the message by now,” she added. “We don't need unelected bureaucrats like FCC [Federal Communications Commission] Chairman Tom Wheeler dictating to our states what they can and can't do with respect to protecting their limited taxpayer dollars and private enterprises.”

In 19 states, there are laws on the books limiting local governments from building out their own municipal Internet services.

The FCC has been asked by two cities — in North Carolina and in Tennessee — to override those laws. Obama on Wednesday urged the FCC to do just that.

“I’m on the side of competition,” Obama said during his speech at a Cedar Falls utility plant.

Supporters of the move say that it would help create more competition for broadband service, and many Democrats cheered Obama’s call. According to the FCC, more than half the country has just one option for high-speed broadband Internet service with download speeds of 25 Mbps or higher.

Critics, however, say that it would amount to Washington intervention in local laws.

Sen. Deb Fischer (R-Neb.), who worked on laws to limit municipal broadband networks when she was in the state legislature, accused Obama of advancing a “Washington-centric” approach that would “set a dangerous precedent and have real impacts on local communities and businesses.”

The FCC will vote on the request to preempt state laws in North Carolina and Tennessee at its meeting next month.

Both Republicans on the five-member commission blasted Obama’s call on Tuesday, likely setting the stage for a narrow vote along party lines.

The problem isn't that local government broadband is necessarily a bad thing. The problem is in the usual, Washington "one size fits all" solution." That, and the federal  government interferring in purely local affairs.

For instance, Chicago has an ambitious plan to develop WiFi for parks and plazas across the city. There is also a plan to bring high speed fiber optic internet to underserved areas where rents are cheap and start-ups can take advantage of gigabit speed internet. But the city has no realistic way to fund these plans, relying instead on infrastructure already in place, like unused fiber optic networks belonging to the subway.

One can imagine cash strapped localities facing similar obstacles. In the end, we're probably looking at federal grants to help cities and town establish these networks, with subsequent strain on the budget, not to mention dicates from Washington on who gets it and for how much.

More competition would be helpful. But private companies competing with governments rarely works out to the benefit of the consumer. Perhaps a partnership between localities, private companies, and state governments would be more effective in lowering the cost of high speed internet for the consumer.

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