Market Failure

Many Americans pay too much for slow internet with terrible customer service and poor coverage. In local markets, where market concentration matters most, there is often only one broadband provider; in 2018, the FCC found that 30% of Americans have only one broadband provider, and 13% have zero.

The telecommunications sector is a natural monopoly: fixed costs are high, marginal costs are low. It’s expensive to start an internet service provider and cheap to add a new subscriber, giving the incumbent provider a huge advantage. Further compounding this is cable’s rising domination over fixed-line broadband as telephone companies refuse to upgrade their infrastructure. Despite the government’s largesse to corporate internet service providers through hundreds of billions of dollars in subsidies and tax breaks, they have not provided better service to Americans. Large internet service providers such as Comcast and Charter, drunk on their avarice, lobby state legislatures to impose legal barriers and bans on publicly owned networks. At the time of this writing, 17 states have these anti-competitive laws:

Enter: The Public Option

This plan blends the benefits of public internet with the innovation, expertise, and large capital reserves of private internet service providers. All people shall have the option to choose from a public internet utility while allowing private internet service providers to compete. This enables more options for consumers and lowers costs. The public option is also superior to mere Title II regulation. Here’s how it works:

1. States create a public agency that commissions a contractor to build a fiber network across the state’s counties.
2. All municipalities shall hold referenda on whether to create an internet utility. Those that do shall connect to the state network.
3. Private internet service providers and cooperatives may lease bandwidth from the network.
4. All providers using the public network must adhere to the following:
   • Strong privacy protections for users. This means no collection on any usage data not necessary for the provision and maintenance of the service
     • Additionally, data shall not be shared to any third party and turned over to law enforcement when required by a warrant only. Users shall be notified when law enforcement makes a request.
   • Net-neutral treatment of all content
5. Municipal providers must additionally provide:
   • Equal-access for all residents
   • Public Wi-Fi accessibility
   • Uncensored access to all lawful online content
   • Publicly available user agreements

Public Network Corporation

A state legislature shall establish a dedicated, independent agency to coordinate and manage public investments in deploying the fiber network. They are also responsible for planning and contracting with companies to build the network.

Municipal Broadband

All municipalities in the state would hold referenda at the next regular election on whether to create a public internet utility. If a simple majority agrees, the network agency shall partner with the municipality to draft plans, finance, and build the infrastructure at the last mile. The share of financing from the municipality depends on their fiscal capacity and shall be jointly agreed upon by the network agency and the municipality. The network agency shall give priority to the most disconnected communities.

Fiber Mandate

All public funds invested in this project shall go to fiber optic. By doing this, we’re future proofing the network to handle increasingly large volumes of traffic at greater speed. The maximum network throughput of high quality fiber optic cable is in the hundreds of terabits per second.

Open Access

To ensure that neither private nor public providers monopolize, the network shall provide non-exclusive contracts with private providers that want to lease bandwidth from the state network. They shall abide by the lease mandates of strong privacy protections and network-neutrality, subject to continual audits to ensure compliance.

Additional Rules for Municipalities

Public broadband must adhere to the Constitution and fairness. Equal-access to all residents, regardless of income level or area, is imperative; municipalities can serve areas that private providers historically neglected and will likely continue to neglect. Furthermore, protecting the first amendment and open access is critical for any government provided service. We must never demand less.

No Corporate Subsidies

The network agency shall not give any public money to private internet service providers. Providers like Frontier have misused federal grants to bolster their monopoly power. Moreover, in the best scenarios, these subsidies are less efficient than making direct investments into a public fiber network bridging all corners of a state.

Conclusion

A public internet option allows for affordable, universal access to the internet in an increasingly digital world. It costs less than continuing handouts to the large fixed-line broadband providers. Although this is a state-level plan, legislators can adapt this to be a nationwide one if desired.