Wi-Fi Everywhere: Universal Broadband Access as Antitrust and Telecommunications Policy
104 Pages Posted: 22 May 2006
Cheap, ubiquitous high-speed Internet access promises to accelerate economic growth, create new jobs and industries, advance education and lifelong learning, inform and improve health care decision-making, and raise living standards. Conversely, foregone broadband access by low income and other underserved Americans is imposing high economic and social costs. As much as $1 trillion in economic growth may be delayed due to structural and legal limitations on U.S. broadband access.
Since 2004, city officials across the U.S. have increasingly endorsed the idea of providing universal broadband access to their citizens. They hope to deploy wireless fidelity (Wi-Fi) mesh networks to cast high-speed Internet signals across entire metropolitan areas. San Francisco mayor Gavin Newsom has proclaimed that he will not rest until every San Franciscan has access to free wireless Internet service. Philadelphia is planning to provide Wi-Fi broadband access for a mere $20 a month throughout 135 square miles of the city. Other cities, from New York City and Atlanta to Chicago and Portland considered ways to equalize high-speed Internet service through publicly-funded Wi-Fi clouds wafting high-speed Internet signals across many miles. Finally, New Orleans has launched the nation's first free city-owned wireless broadband network, with plans to expand citywide to spur economic redevelopment. Citywide Wi-Fi as a public service is no longer a bureaucratic pipe dream, but has the backing of America's technological titans, as Google and Earthlink have offered to provide free ad-sponsored citywide Wi-Fi broadband in the city of San Francisco, and Intel has endorsed legislation that would liberate municipalities from anticompetitive restraints on their ability to contract with technology companies for city-supported Wi-Fi.
Although universal access to telecommunications services is at the core of American telecommunications law and policy, the U.S. has fallen far short of achieving this goal. Forty percent of American homes lacked Internet access in 2003, often because it was too expensive. Roughly two-thirds of American households did not have high-speed Internet access in 2005. One-fifth of Americans had never used the Web at all. The provision of high-speed Internet access by private industry alone is leaving behind most of the poor, vast numbers of racial and ethnic minorities, and many residents of rural and inner-city communities. Forbidding monthly fees and surcharges for broadband, at up to five times the cost of a dialup Internet connection, remain the principal obstacle to universal broadband connectivity to the Internet. For tens of millions of other families, including over twenty million American households in rural or underserved areas as of 2005, broadband access is totally unavailable.
The most controversial proposed solution to these gaps in broadband access has been for municipal governments, i.e. cities and counties, to offer broadband access as a public service. Over 600 municipalities offered such service as of 2005, a small but rapidly growing percentage of the over 18,000 municipalities in the U.S. Currently, however, more than fourteen U.S. states prohibit or restrict cities and counties from ensuring universal broadband access. Despite the proliferation and growing importance of such state law restraints, most legal scholarship on broadband policy has focused on common carrier rules imposed on broadband infrastructure providers, rather than federal and state laws on municipal competition in broadband markets.
The primary thesis of this article is that Congress and the states should encourage cities and counties to provide free and low-cost Wi-Fi broadband to their citizens. The American public has a compelling national interest in equalizing access to computers and the Internet across racial, economic, and geographical lines. Municipal broadband projects, and particularly the provision by cities and counties of free or low-cost wireless broadband networks subsidized by tax revenues, hold great potential to bridge the digital divide. Existing municipal broadband efforts in the U.S., as well as state-subsidized broadband deployment in other nations, have already successfully brought broadband to previously underserved areas. Many nations with higher broadband penetration rates than the U.S., including Canada, Sweden, Japan, and South Korea, have developed municipal and government-supported broadband infrastructure to universalize access.
Part II describes the history of the broadband market in the U.S., and the anticompetitive implications of the market's natural monopoly and network industry characteristics. Part III contends that a trio of recent Supreme Court cases construing the Telecommunications Act of 1996 achieved a sweeping deregulation of the broadband industry. An in-depth analysis of these cases - Nixon v. Missouri Municipal League, 541 U.S. 125 (2004), Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), and National Cable & Telecommunications Ass'n v. Brand X Internet Services, 125 S. Ct. 2688 (2005) - reveals that they have empowered the owners of broadband infrastructure with natural monopoly characteristics, such as telephone and cable networks, to act with near impunity in impairing their smaller rivals' ability to compete. As a result, congressional action is necessary to reinvigorate competition and promote municipal participation in the broadband marketplace. Finally, Part IV argues that a federal ban on municipal entry into broadband markets that has been proposed in the U.S. Congress represents an unsound public policy in light of the growing digital divide, and the capacity of municipal Wi-Fi networks to remedy it. Congress can best promote the federal policy of ensuring universal broadband service at affordable prices by passing legislation, such as the Community Broadband Act of 2005, which would preempt state laws prohibiting the municipal provision of broadband to underserved communities.
Keywords: Internet, Broadband, Wireless, Wifi, Wi-Fi, Antitrust, Telecommunications, Verizon, Trinko, Brand X, Missouri, Municipal, Carrier, Access, Facilities, Essential, Bell, Bellsouth, Atlantic, AT&T, DSL, cable
JEL Classification: K21, K23, L12, L13, L41, L43, L96
Suggested Citation: Suggested Citation