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Obama outlines broadband boost via executive action

Matt Hamblen | Jan. 15, 2015
President Obama said today he will take executive action to boost broadband speeds and connections at lower prices, especially in inner cities and rural areas.

In his Iowa remarks, Obama argued that municipal broadband is not a partisan issue, noting that Yuma County, Colo., voted in favor of adding a community broadband service in November even while voting 85% in favor of a Republican state senator. "It's not a red or blue issue," he said.

More choice in broadband providers would be good, especially for small and medium-sized businesses that don't have cost-effective options and can't afford Ethernet-based broadband, said Gartner analyst Bill Menezes.

Choice is key

"Average consumers and home-based businesses would rather have a choice of more than one or two broadband providers in their neighborhood in terms of price and performance," Menezes said. Most cities have a history of granting exclusive franchise agreements that keep broadband choice limited to the local cable company and the local telephone provider, which beyond Verizon and AT&T is typically just DSL service.

"The laws the White House wants to address have cemented the cable-telco duopoly by barring municipalities and commercial providers, including Google, from deploying new broadband networks," Menezes noted.

In Colorado, where Menezes works in a home-based office, voters can decide to opt out of the restrictions, but their efforts are fought with well-funded campaigns by the incumbent providers. "Clearly, the average consumer needs someone on their side in this battle," he said.

Jack Gold, an analyst at J. Gold Associates, said political realities, not technology, have shaped the broadband debate. While cities try to implement affordable broadband for underserved constituents, their efforts conflict with the business models of major carriers, he said.

"Cities are saying they want to empower everyone and install technology since commercial companies aren't doing an adequate job, but legislatures often side with business, saying municipal efforts will put unfair competition on businesses that make a profit doing it," Gold said.

"Can Obama force the issue?" Gold asked. "Yes and no. He's trying to get the FCC to adopt rules that bypass the local laws, but it's likely that if they do so, Congress will get involved and negate the rules. There are powerful lobbying forces on both sides and there's no way to tell which camp wins."


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