Several years of contentious debate over the Internet’s future come to a head next week. On February 26 the U.S. Federal Communications Commission (FCC) will decide whether local communities can take a more active role in upgrading their access to high-speed broadband. During the same session, the regulatory agency will vote on the so-called “Net neutrality” issue that would ban paid prioritization of Internet traffic as well as the blocking and throttling of online content and services.
The idea of local governments taking it upon themselves to improve community broadband speeds has caught on in recent years, particularly in towns and cities that host major universities craving greater network bandwidth. In 2011 a group of universities and their surrounding municipalities formed the University Community Next Generation Innovation Project, commonly referred to as Gig.U. The project’s goal has been to accelerate the deployment of next-generation networks in the U.S. by encouraging researchers—students and professors alike—to develop new applications and services that can make use of ultrafast data-transfer rates.
Pres. Barack Obama has come down in favor of municipal broadband services as an alternative to commercial Internet service providers (ISPs). He touted the high-speed fiber work done in Cedar Falls, Iowa, on January 14 during a speech to promote the FCC’s plans to enable municipalities to expand their broadband networks to a greater number of users, even if they reside in states whose laws prohibit such expansion. Obama told those gathered for his speech in Cedar Falls, “I’m directing federal agencies to get rid of unnecessary regulations that slow the expansion of broadband or limit competition.”
The FCC will decide whether—citing Section 706 of the 1996 Telecommunications Act—to remove impediments that prevent Chattanooga, Tenn., Wilson, N.C., and other cities from building their own infrastructure to compete with incumbent providers such as Comcast and Verizon. Chattanooga's Electric Power Board and the government of Wilson, both of which are looking to expand their existing gigabit broadband networks, filed petitions in July to bypass state laws that regulate the geographical area and pricing of publicly run broadband. Wilson representatives have argued that private broadband companies are offering download speeds of 768 kilobits per second, a far cry from the FCC’s latest benchmark for broadband, which is 25 megabits per second (mbps) for downloads and three mbps for uploads. Even the FCC’s previous benchmark of four mbps downloads/one mbps uploads surpassed what has been available to Wilson residents.
Incumbent ISPs and members of Congress who oppose the expansion of municipal broadband counter that Section 706 does not give the feds the right to interfere with state regulatory powers. Not surprisingly, Senate and House leaders who support legislation that would restrict the FCC's authority under Section 706—preventing the agency from using that portion of the law as a regulatory tool for broadband—have received generous campaign contributions from some of the largest ISPs.
FCC Chairman Tom Wheeler will also propose at the February 26 meeting that the agency use its Title II authority under the Telecommunications Act to support the so-called “open Internet,” more commonly referred to as Net neutrality, the chairman wrote earlier this month in Wired. Such a move would reclassify Internet access as a telecommunications service rather than an information service.
Net neutrality essentially requires increased regulation of the Internet, in that it will not allow ISPs to speed up or block different Web sites and services. Opponents of the measure—in this case, again, large ISPs and the politicians they support—say that it will raise costs and discourage telecoms from investing in network upgrades. They call on the FCC to delay its vote so that Congress can pass legislation that does much of what the FCC’s plan calls for without broadband reclassification. Congressional Democrats introduced three bills related to the open Internet last year but little action has been taken on them. Congressional leaders claim to be working on their own version of a Net neutrality law that does not reclassify broadband using Title II, but there is little to show for that effort so far.
In an effort to sort through these and other issues impacting how people will access and use the Internet for years to come, Scientific American spoke with Lev Gonick, CEO of OneCommunity, an ISP for Case Western Reserve University, University Hospitals and another 1,800 public-benefit organizations in northeastern Ohio. Gonick previously served as the chief information officer at Case Western and helped oversee the launch of Gig.U.
[An edited transcript of the interview follows.]
Gig.U launched in 2011 with 37 schools to accelerate the deployment of “ultra high-speed” broadband services to their campuses and communities. How has the program progressed since then?
The original idea with Gig.U was to overcome first mover’s dilemma, that is, to demonstrate to the investment community as well as the incumbent telcos [telecoms] and emerging entrepreneurs that there was indeed demand for next-generation networks. Since the launch there have been a number of efforts to expand these next-generation networks beyond neighboring communities, as we did at Case Western University by covering 130 homes and apartments with fiber and very high-speed connections—one gigabit per second or faster. Other original players were able to be more ambitious, the best example being the [University of Illinois] at Urbana–Champaign. They installed a fiber network across the entire city as part of their UC2B project.
A third example is a group of universities and local municipalities who’ve formed the North Carolina Next-Generation Network in that state’s Research Triangle, led by Duke and N.C. State universities, to create a regional high-speed fiber network. This was a really good example of overcoming new mover’s dilemma because now AT&T and Google are also saying they want to create fiber networks in that region. On an even larger scale Connecticut—home to a number of Gig.U universities—has a statewide initiative for fiber to the home and the institutions there. Gig.U helped spawn all of these efforts.
How do you define “ultra high-speed” services?
Our goal at OneCommunity is to, within three to five years, make 100 mbps the entry point to service that’s considered “ultra high speed.” One gigabit per second will be the midrange and leading-edge networks will provide speeds of 100 gigabits per second or more. We’re talking about symmetrical upload and download services.
Given the existing disparity between upload and download speeds, what would symmetrical speeds enable that is not possible today?
Existing asymmetrical upload/download speeds are put in place for economic reasons. People currently consume more than they produce, so the emphasis is on high quality downloads. When high definition telemedicine or microscopy become more prevalent, however, you need to be able to upload a lot of information as well as download it. Also take into account all of the work being done on next-generation applications that can produce content in 3-D and high resolution video formats such as 4K and even 8K in some places. As soon as symmetrical service becomes an option and people experience it, they will wonder how they lived without it.
Why has there been so much controversy over the FCC’s upcoming vote over whether to support broadband service delivered by cities and municipalities?
Incumbent broadband service providers don’t exactly have monopolies on their respective markets, but it’s pretty close. As a result, these incumbent ISPs are best served, in their own view, by keeping new service providers out of their markets. That’s how they maintain shareholder value. Their position is rhetorically couched in the idea that the taxpayer should not subsidize a public competitor to the incumbents, that the market should do its thing. The way they see it, if there were a market demand for next-generation networks, then the market would respond by building them.
That is the assumption, but it is actually a classic economic dilemma. When does the government intervene in the marketplace to ultimately help the marketplace? It’s either when there is no market—I would say that we’re early in the development fiber networks, so there is currently no market for it—or when there are significant challenges in the marketplace with equity, which is not the issue right now. Municipal network projects [such as those in Chattanooga, Tenn., and Wilson, N.C.] very much feel like they are not being served by the incumbent providers [in terms of bandwidth speeds]. They are saying that for their goals of attracting and retaining talent, quality of life for residents, efficient running of their utilities—whatever the factors are—they need upgraded networks to meet their needs.
How have state laws restricting publicly managed broadband networks impacted Gig.U and its expansion?
Ohio doesn’t have one of the restrictive laws, so there’s been no impact here. But certainly there are in places such as North Carolina and South Carolina where such laws have been a problem. In fact, a number of research universities across the country chose not to join Gig.U, initially because they were concerned about their state legislatures’ position on regulating municipal networks. Wisconsin and Indiana universities—two great universities with great networking capabilities—were very deliberate in not joining Gig.U in the beginning because they were concerned about pushback from state legislators. [Indiana has since joined Gig.U.] WiscNet—Wisconsin’s research and education network—has faced constant challenges by the state legislature regarding the incumbents [in particular AT&T and CenturyLink].
What are the chances that state laws barring or restricting federally backed Internet service providers can be displaced?
I think federal preemption of state laws is what’s going to come down on February 26, most likely by a vote of three to two. They will say that if a city or another public agency—such as a utility—wants to extend services outside its political boundaries and those locations aren’t being served by minimum 25 [mbps] down and four up, the federal government preemption will supersede any state legislation that might otherwise restrict those city or municipal agencies from providing those services. I think the Net neutrality vote will go the same way: three to two in favor of it. Both decisions will no doubt be challenged in the courts. But I think in both cases there’s a fairly high probability that they will withstand court challenges.
What impact do publicly run broadband networks have on existing service providers, such as AT&T, Comcast, Time Warner and Verizon?
If the FCC were proposing a sustained program with decades of public subsidy, there might be a case made that that represents an unfair advantage for the publicly managed networks. But that is not what is in play. To be clear, Internet service providers—including the big boys AT&T, Verizon and so forth—are also highly subsidized by you and me, the taxpayers. The FCC’s Universal Service Fund pays them a ransom sum for delivering phone services into rural communities and even into some urban settings. Those are delivered as a form of commitment to universal access, which at this point could be much better delivered by a competitive alternative. The point behind the FCC’s proposed rule changes is to help set the country on a path for a network upgrade so that a decade from now there are two kinds of cities, those that have [co-axial cable–only] networks and those that offer consumers the choice between co-ax and fiber. Those cities that have both co-ax and fiber will have a more competitive, robust and diverse set of options.
How does the FCC’s recent decision to set a new, higher standard for “advanced broadband services” affect what is likely to happen regarding publicly owned broadband?
There has to be an upgrade path for broadband. The FCC to its credit has taken the 2009 National Broadband Plan, which put out there the goal of giving a fairly substantial number people [100 million U.S. homes] access to 100 mbps Internet service [for downloads], and they acknowledged from day one that that number would have to be increased over time. They moved it out beyond 700 kbps connectivity. Then they raised it to 25 mbps, and I think future FCC rulings in the next three to five years will probably move it further still in order to keep the country moving forward toward the 100 mbps goal. Publicly owned broadband over fiber meets the National Broadband Plan’s goals and begins to create a market for next-generation networks. The government takes the first-mover risk here. This in turn gives institutional investors and banks confidence that investments related to higher speed networks will yield a predictable return.
What should the FCC do about Net neutrality when it likewise addresses that issue on February 26?
The new rules that the FCC will propose would reclassify Internet access from an information service to a telecom service. Those who feel the new rules disadvantage them will object. Yet when the chairman recently played out his hand in terms of what he was going to recommend on the 26th with respect to Net neutrality, the stock market price for the cable companies [Comcast, Time Warner Cable, Charter and Cablevision] went through the roof. The way I choose to read that—that is because investors in these companies are saying this will now provide an opportunity for cable companies to have a predictable path, because the rules will actually provide guidance that make it safe not just for the adventurous investors but for the institutional investors as well. In other words, net neutrality removes the prospects of speed bumps and guarantees unfettered access to any application or service.
With both municipal broadband and net neutrality, the chairman is trying to get the market to be more competitive. These new rules will allow for less oligopolistic-like behavior, which takes place when big corporations see large acquisitions and competitor consolidation as their only way to increase shareholder value, with the pending Comcast–Time Warner Cable merger serving as a prime example. The new rules will actually make it possible to imagine scenarios where corporate strategies will shift from strictly conglomeration acquisition to picking up earlier stage investments—something that could become the new Instagram.
How do the new rules encourage large ISPs to invest in start-ups?
Current rules drive merger and acquisition as a growth strategy. Network neutrality will catalyze more interest in investments that lead to a bandwidth upgrade, which in turn will unleash new start-ups that develop services and products that are designed by constrained bandwidth assumptions. There will be a clear advantage to the large ISPs to partner and/or deliver leading-edge services like home health and wellness, new cloud services and new mobile products that take advantage of next-generation bandwidth.
How will the expected legal challenges to any FCC rulings impact their effectiveness in paving the way for faster broadband?
I think the courts will stay the FCC’s position, and the chairman has already tended to a lot of the concerns about outdated Title II language. [In his Wired op–ed Wheeler stated there will be “no rate regulation, no tariffs, no last-mile unbundling.”] The investment market, the scientific market and the innovator’s market will all respond positively—and the problem of how do we create value in an open and nondiscriminating marketplace rather than how do we game the system so that we can become part of a universal “acquired by NBC” or “acquired by Comcast” ecosystem, who then own the content and the means for delivering that content [will be solved].