MUNICIPAL BROADBAND NETWORKS CIVIC PROMOTERS OR UNFAIR COMPETITORS?

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1 MUNICIPAL BROADBAND NETWORKS CIVIC PROMOTERS OR UNFAIR COMPETITORS? Stefan M. Lopatkiewicz, Esq. Dorsey & Whitney LLP Washington, D.C. Wireless Community & Mobile User Conference Monterey, CA June 2,

2 A FRAMEWORK FOR DISCUSSION The subject is not wireless communications Broadband Role of municipalities and other local governments in provision of telecommunications services as a utility Municipalities DSL/Cable Providers State Governments 2

3 Telecommunications Act Preserves Local Government Regulation of Rights of Way Section 253(c): Nothing in this [Act] affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis. Applies equally to copper wire, fiber optic, wireless 3

4 SUPREME COURT RULING IGNITED CURRENT DEBATE Section 253(a): No State or local statute or regulation may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service. March 2004, Supreme Court resolved dispute over ability of states to regulate municipalities provision of telecommunications services; held cities are not any entity under Section 253(a) Nixon v. Missouri Municipal League, 124 S.Ct

5 THE PHILADELPHIA STORY Philadelphia effort to launch a city-wide mesh hotspot met fierce resistance from Verizon and Comcast Result was H.B. 30 compromise Texas H.B. 789 resulted in almost three days of highly publicized committee hearings 5

6 THE BATTLE IS JOINED 616 municipalities operate some form of telecommunications system Hundreds across the country are now examining their broadband options Philadelphia, New York, Chicago, San Francisco, Las Vegas Wireless and fiber-optic choices RBOC and cable company response has been impressive Many states are considering preemptive or restrictive legislation 6

7 STATES WITH EXISTING PROHIBITIONS/RESTRICTIONS ON LOCAL GOVERNMENTS OPERATING SYSTEMS 7

8 STATES WITH EXISTING PROHIBITIONS/RESTRICTION ON LOCAL GOVERNMENTS OPERATING SYSTEMS 8

9 STATES CONSIDERING RESTRICTIVE LEGISLATION 9

10 THE ARGUMENT AGAINST MUNICIPALITIES New Millenium Research Council Report (Feb. 2005) Viability of municipal operations of WiFi systems Unfair competition against private sector Economic impact for municipalities Progress & Freedom Foundation has also weighed in against cities 10

11 CHOOSING SIDES Consumer Federation of America High Tech Broadband Coalition Charges that think tanks have been used by commercial sector Intel 11

12 THE MUNICIPAL RESPONSE Private sector has refused or failed to deploy everywhere Kutztown, PA; St. Francis, KS; Scottsburg, IN Price disparity impacting rural areas warrants public sector intervention Essential to attract 21st century industry Broadband is a utility Electrical grid, highway precedent of last century 12

13 INTERNATIONAL PERSPECTIVE ITU reports that U.S. fell from 13th to 16th internationally in broadband penetration South Korea, Hong Kong, Japan, Netherlands, Denmark, Switzerland, Canada, Norway, Israel Question as to how meaningful this statistic is China? Role of private sector 13

14 MIXED SIGNALS FROM THE ADMINISTRATION We ought to have universal, affordable access for broadband technology by the year and then we ought to make sure as soon as possible thereafter consumers have got plenty of choices when it comes to [their] broadband carrier. Promoting Innovation and Competitiveness, President Bush s Technology Agenda, March 26, 2004 No comprehensive Administration program for implementation The demise of UNEs under 1996 Telecom Act Brand X case 14

15 POTENTIAL ROLE FOR CONGRESS Telecom Act rewrite process has begun Overturn Nixon decision? Local governments have been invited to appear before House Telecom Subcommittee Role of House Rural Caucus 15

16 CONCLUSIONS Potential meeting grounds for opposing sides Local governments partner with private sector Possible different solution for rural versus urban areas Danger of state legislative initiatives preempting existing public-private sector initiatives, including role of non-profit organizations 16

17 Stefan M. Lopatkiewicz Dorsey & Whitney, LLP Washington, D.C