Cities that build their own highspeed internet services

Several American cities have put together their own highspeed Internet services:

Chattanooga isn’t alone. Cities like Wilson, North Carolina and Lafayette, Louisiana have likewise given up on waiting for private companies and started their own ultra-highspeed internet services. But some community efforts have been stymied by state laws prohibiting governments from competing with private internet providers…

The debate over the future of municipal broadband is central to both the economic development of communities across the US—and to the future of investment in broadband infrastructure. Improvements to the state of broadband can’t come soon enough. The US lags behind countries like South Korea and the Czech Republic in both speed and cost of internet access.

Sure, the rise of Google Fiber has spurred competition both in cities lke Austin, where Google has only recently begun rolling out service, and areas that some providers think could be next on Google’s list. But there’s no guarantee that Google Fiber will spread beyond a very limited number of cities, and some communities are being left further behind in the broadband revolution than others. While 94 percent of Americans living in urban areas can purchase broadband faster than 25mbps, only 51 percent of rural Americans can purchase access at those speeds, according to the report.

The report also says that 30 percent of homes have no broadband connection, and high prices for access is a big part of that. Plus, there’s not much competition in most cities: 40 percent of US citizens have only one company in their area that can provide fixed line connections faster than 10mbps—if they have any option at that speed at all. “Without strong competition, providers can (and do) raise prices, delay investments, and provide sub-par quality of service,” the report says.

While this article tends to emphasize the public vs. private provision of the Internet, I wonder how much these projects are intended to help raise the profile of these cities and give them an edge in attracting businesses and residents. Cities compete through a variety of variables including tax breaks, the existing collection of businesses, the human capital of residents, the cultural and entertainment amenities that each place has. I would guess highspeed Internet could provide an edge, particularly for firms that want to be part of an innovative and enterprising community.

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