Cable Companies Calling On FCC To Block High-Speed Internet Expansion

Aric Mitchell

Block high-speed Internet expansion.

That's the message that cable companies are sending to the Federal Communications Commission (FCC) concerning the plans of Wilson, North Carolina, and Chattanooga, Tennessee. On Friday USTelecom, which represents cable giants Comcast, Time Warner and others, told the FCC that the "success of public broadband is a mixed record, with numerous examples of failures."

Writing in a blog post, the conglomerate (or should we say duopoly), wrote: "With state taxpayers on the financial hook when a municipal broadband network goes under, it is entirely reasonable for state legislatures to be cautious in limiting or even prohibiting that activity."

According to a report from the Guardian, Chattanooga boasts the largest high-speed internet service in the United States, providing its customers access to speeds of 1 gigabit per second (around 50 times faster than the U.S. average, read: what USTelecom companies provide).

Municipally owned EPB provides the Tennessee-based service, and their performance has ignited a boom in the tech industry for the city while putting the world on notice. "EPB is now petitioning the FCC to expand its territory," The Guardian adds, noting "Comcast and others have previously sued unsuccessfully to stop EPB's fiber optic roll out."

In Wilson, North Carolina, the town's 49,000 inhabitants are set to benefit from the Greenlight project after complaints about price and quality were leveled against telecom giant Time Warner, which has responded by lobbying state government to ban the service.

More from the blog post:

"States have adopted a wide range of legislative approaches on how much authority they give local governments to build, own and operate broadband networks. Some states require an election or public hearings before a public project can move forward. Others ask for competitive bids, and still others put restrictions on the terms of service so the public entities bear the same regulatory burdens as private service providers … States are well within their rights to impose these restrictions, given the potential impact on taxpayers if public projects are not carefully planned and weighed against existing private investment."

Translation: if cities are allowed to expand their own broadband, it could force Comcast and Time Warner to stop practices like data throttling that squeeze businesses, such as Netflix that have grown successful playing by the rules. Netflix recently agreed to pay Comcast a toll to keep from losing additional customers over the black hat practice of slowing down content that users are already paying for.

This essentially creates a chain reaction: Netflix has to pay more than they should to reach customers, who are already paying the telecom company for the service Netflix provides. When Netflix pays more, customers pay more, too. Thus, a company like Comcast is able to advertise top Internet data plans capable of carrying the Netflix load. They get customers to pay that freight, and then they turn around and charge Netflix more to deliver it, which in turn creates an added financial burden passed along to the customer.

Do you think that cable companies are right to block high-speed Internet expansion in municipal areas? Sound off in our comments section.

[Image via ShutterStock]