Are City-Owned Municipal Broadband Networks Better?

Cable providers are among the least-loved companies in Consumer Reports surveys. Some of the biggest—such as Comcast and Spectrum—earn low scores in multiple categories, including value and customer service.

Unfortunately, consumers have few options. A 2015 White House study found that three out of four Americans had access to only one broadband provider offering speeds of at least 25 Mbps, the threshold for high-speed service recognized by the Federal Communications Commission.

One response to this problem is municipal broadband, in which towns and cities launch their own internet services to serve both residents and local businesses. But these networks can be controversial. Some have faced lawsuits from private providers, and about two dozen states have passed laws that discourage municipalities from acting.

Where Municipal Broadband Works Well

Most municipal broadband providers are too small to make it into Consumer Reports' ratings. One exception is EPB-Chattanooga, a municipal broadband provider in Tennessee that is one of the top-rated services.

EPB launched as a public power company back in 1935 and added its internet service about 15 years ago. According to MuniNetworks.org, a website that tracks municipal broadband deployments, it is one of more than 500 such networks in the U.S. run directly by a local government or in cooperation with a private company.

Why There Is Debate

Municipal broadband has its naysayers. One concern is that the systems put taxpayers at financial risk.

A recent study by the University of Pennsylvania Law School’s Center for Technology, Innovation and Competition suggested that many public broadband networks may be unable to cover their operating costs going forward. Provo, Utah, spent $39 million on a network and operated in the red for several years before essentially giving it to Google Fiber, an ISP that operates in several cities.

Consumers Union, the policy and mobilization arm of Consumer Reports, opposes restrictions on municipal broadband. Senior policy counsel Jonathan Schwantes says, “Local governments should have the freedom to provide their residents with alternatives that hopefully spur additional competition.”

Editor's Note: This article also appeared in the August 2017 issue of Consumer Reports magazine.

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