"Community-Based Broadband Solutions: the Benefits of Competition and Choice for Community Development and Highspeed Internet Access"

Community-Based Broadband Solutions: the Benefits of Competition and Choice for Community Development and Highspeed Internet Access is a 37-page legal document that was released by the Executive Office of the President of the United States on January 1, 2015 and used nation-wide.

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COMMUNITY-BASED BROADBAND
SOLUTIONS
THE BENEFITS OF COMPETITION AND CHOICE FOR
COMMUNITY DEVELOPMENT AND HIGHSPEED
INTERNET ACCESS
The Executive Office of the President
January 2015
1
COMMUNITY-BASED BROADBAND
SOLUTIONS
THE BENEFITS OF COMPETITION AND CHOICE FOR
COMMUNITY DEVELOPMENT AND HIGHSPEED
INTERNET ACCESS
The Executive Office of the President
January 2015
1
Contents
Executive Summary ........................................................................................................................... 3
Economic Benefits of Broadband ...................................................................................................... 5
Challenges in Broadband Access and Adoption ............................................................................... 6
Broadband Competition .................................................................................................................. 10
Community-Based Broadband ........................................................................................................ 13
Chattanooga, TN: Gigabit service drives investment, innovation .............................................. 13
Wilson, NC: Municipal broadband encourages private competition ......................................... 14
Lafayette, LA: Network increases customer savings, strengthens local anchor institutions .... 15
Scott County, MN: Municipal government sees savings for county, school operations ........... 16
Leverett, MA: State and federal programs enable local investment ........................................... 17
Choctaw Nation Tribal Area, OK: Public private collaboration brings broadband to new
communities .................................................................................................................................. 17
Promoting Broadband that Works .................................................................................................. 18
Appendix 1: U.S. Municipalities with Broadband Networks .......................................................... 20
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Executive Summary
Affordable, reliable access to high speed broadband is critical to U.S. economic growth
and competitiveness. Upgrading to higher-speed broadband lets consumers use the
Internet in new ways, increases the productivity of American individuals and
businesses, and drives innovation throughout the digital ecosystem. As this report
describes, while the private sector has made investments to dramatically expand
broadband access in the U.S., challenges still remain. Many markets remain unserved or
underserved. Others do not benefit from the kind of competition that drives down costs
and improves quality. To help fill the void, hundreds of towns and cities around the
country have developed their own locally-owned networks. This report describes the
benefits of higher-speed broadband access, the current challenges facing the market,
and the benefits of competition – including competition from community broadband
networks.
~
Since President Obama took office, the United States has significantly expanded its
broadband network and increased access. Investments from the federal government
have helped deploy or upgrade more than 78,000 miles of network infrastructure since
2009, and more than 45 million Americans have adopted broadband Internet during the
President’s time in office. Today, more than 90 percent of Americans can access the
Internet on a wired line and 98% by either wired or wireless connection.
Competitive markets have helped drive expansion in telecommunications services as
strong infrastructure investments and falling prices have opened up a wide range of new
communications products and services. Where there is strong competition in broadband
markets today, it drives similar improvements. Unfortunately, competition does not
extend into every market and its benefits are not evenly distributed. While the U.S. has
an extensive network “backbone” of middle-mile connections (long, intra- or interstate
physical fiber or cable network connections) with the capacity to offer high-speed
Internet to a large majority of Americans, many consumers lack access to the critical
“last-mile” (the last legs of the physical network that connect homes and businesses to
the broader system), especially in rural areas. It is these last-mile connections that make
higher speeds possible. For example, 94 percent of Americans in urban areas can
purchase a 25 Mbps (megabit per second) connection, but only 51 percent of the rural
population has access to Internet at that speed.
Competition has also been slow to emerge at higher speeds. Nearly forty percent of
American households either cannot purchase a fixed 10 Mbps connection (i.e. a wired,
land-based connection), or they must buy it from a single provider. And three out of four
Americans do not have a choice between providers for Internet at 25 Mbps, the speed
increasingly recognized as a baseline to get the full benefits of Internet access.
Without strong competition, providers can (and do) raise prices, delay investments, and
provide sub-par quality of service. When faced with limited or nonexistent alternatives,
consumers lack negotiating power and are forced to rely on whatever options are
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available. In these situations, the role of good public policy can and should be to foster
competition and increase consumer choice.
At the federal level, the government has already taken active steps to support
broadband, committing billions of dollars to deploy middle-mile and last-mile
infrastructure, and to ensure that our public schools and libraries have high speed
broadband connections.
But local governments also have an important role to play. As this report details,
communities around the country like Chattanooga, TN and Wilson, NC have developed
a variety of strategies for building locally-owned broadband networks and promoting
higher-speed Internet access. Over the past few years, these municipal networks have
emerged as a critical tool for increasing access, encouraging competition, fostering
consumer choice, and driving local and regional economic development. Local
investments have also spurred the private sector to compete for customers, improving
services, increasing broadband adoption, and providing more choice for consumers.
Not all communities, however, have the choice to pursue a local broadband network. 19
states currently have barriers in place limiting community broadband and protecting
incumbent providers from competition. President Obama believes that there should be a
level playing field for community-based solutions and is announcing today a series of
steps that the Administration will be taking to foster consumer and community choice.
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Economic Benefits of Broadband
In technical terms, broadband refers to a method of transmitting information using
many different frequencies, or bandwidths, allowing a network to carry more data. For
most Americans, however, the term broadband simply refers to a fast Internet
connection—whether fixed or wireless.
Over time, our perceptions of what constitutes a “fast” Internet connection have
changed. As consumer and business uses of the Internet evolve, and new applications
become more deeply embedded into everyday life, higher speeds frequently shift from
being a luxury to a requirement for many users. For example, beginning in 2000 the
Federal government defined “broadband” as any service with a download speed of 200
kilobits per second (kbps) or faster.
In 2010, the Federal Communications Commission
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redefined “basic” broadband service as a connection with speeds of at least 4 megabits
per second (Mbps) downstream – 20 times faster than the 2000 definition – and at
least 1 Mbps upstream.
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Today, as everyday experiences for tens of millions of Americans suggest, even these
speeds are insufficient for some applications, particularly when a connection is shared
by several users. In recognition of the growing need for increased bandwidth, the FCC is
considering further revisions to the definition of broadband, and has expressed interest
in raising the threshold to 10 or even 25 Mbps downstream and from 1 Mbps to 3 Mbps
upstream.
The following chart provides a sense of what these definitions mean by
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showing how long it would take a single user to upload or download different types of
content at various connection speeds.
Time Required for Selected Internet-Based Activities at Different Speeds
3 Minute Song
2 Hour Movie
20 Photographs
5 Minute Video
5 MB (Download)
5 GB (Download)
40 MB (Upload)
200 MB (Upload)
256 Kbps, 256 Kbps
2m36s
43h24m
20m50s
1h44m
2000 Broadband
4 Mbps, 1 Mbps
10s
2h46m
5m20s
26m40
2010 Broadband
25 Mbps, 3 Mbps
1.6s
26m40s
1m46s
8m53s
Advanced Broadband
Source: CEA Calculations Note: These numbers assume that the ISP is meeting its advertised speed. Download times may be greater during periods of peak traffic.
Demand for Internet access is growing quickly. Total wired and wireless Internet access
revenues in 2013 were $140 billion, and have increased by about 15 percent per year in
real terms since 2005.
The rapidly growing demand for bandwidth is driven by new
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applications of the Internet that effectively require a broadband connection. These
applications, which are increasingly central to everyday life for many Americans, include
video streaming, which is used for education, entertainment, and communication;
teleworking; cloud storage that allows users to store their files on the Internet, share
them, and access them from any device; and online games that allow users to interact
with one another in a virtual environment.
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