What is municipal broadband?

Robin Layton
RL
Robin Layton

Feb 23, 2024 — 3 min read

Community-based public internet providers see success in some states, are banned in others.

Two adults looking at handheld pad.

Municipal broadband has caused a stir among internet service providers and government agencies. It is an internet network owned by public entities instead of private companies that is centered around providing communities with a public-owned, affordable internet option. Setting up such a community broadband network isn’t allowed in several states.

New York is a success story in municipal broadband, having launched pilot projects in 2022 and receiving new federal funding for another municipal project in 2024. Iowa and Vermont also have successful programs.

With the disbursement of the Broadband Equity, Access and Deployment (BEAD) program, the legal and financial landscape for municipal broadband projects has never been more uncertain. Significant changes via state and federal regulations are underway, both to hinder and to help cities and towns interested in growing their internet network.

Pros and cons of community broadband

Benefits

  • Extends better access equity to rural areas and other populated locations that don’t represent profit potential to private companies.

  • Can provide affordable broadband internet access in locations that may only have minimal or prohibitively expensive alternatives.

  • Expanding internet access creates jobs and boosts remote work in rural areas.

Drawbacks

  • Lack of profit incentive can lead to reduced efficiency in infrastructure expenditures, leading to greater costs.

  • Significant debt assumed due to large upfront costs (infrastructure and more).

  • Municipal internet projects tend to be charged significantly higher rates for pole attachments (the cost charged by utility companies to attach lines to and use their infrastructure).

How common are municipal internet providers?

According to the Institute for Local Self-Reliance, there are currently 447 municipal broadband networks in the U.S. The development of these programs is relatively recent, with the last decade seeing their primary push so far.

One of the biggest success stories has happened in Chattanooga, which was the first to offer gigabyte speeds through its community network. Not only has the infrastructure remained strong enough to handle a combination of high demand and fast speeds, but the city has also managed to charge roughly half of what private companies did for similar speeds.

Prices and speeds vary significantly between municipalities and providers, but prices are around $50/mo. are standard, as are speed ranges of 25 Mbps to 1 Gbps. Below are examples of municipal broadband providers currently operating and offering cheap broadband for residents.

Legal challenges facing municipal internet projects

There are a handful of states that currently have legal roadblocks in place for municipal broadband projects, but some are in the process of contesting or changing those laws. Right now, there are 53 million households in 17 states that have laws restricting municipal broadband:

At the federal level, lawmakers are divided on municipal internet providers. Some Congress members favor paving the way for more municipal broadband projects, both financially and legally. In contrast, others have recently introduced bills to ban the entire practice at a federal level. If that were to happen, municipal broadband could become illegal in every state.

How will federal funding impact municipal broadband?

In late 2021, Congress passed H.R.3684, also known as the Infrastructure and Investment and Jobs Act. The bill allocated significant sums of money to facilitate broadband access and affordability to U.S. households, including more than $40 billion on a Broadband Equity, Access and Deployment program (BEAD).

The federal law says that states “may not exclude” local networks from accessing the funding, but the National Telecommunications and Information Administration (NTIA) — the organization responsible for distributing funds to states — has said it won’t delay funding to states with pre-existing laws restricting municipal broadband.

The creation of BEAD has pushed public broadband into the national spotlight like never before. For now, states are scrambling to study related issues and put relevant legislation into place to keep up with federal requirements, citizen internet needs, and private ISP stakeholder concerns. As this issue evolves over the coming years, the state-level responses and the successes and failures of municipal internet projects will become more apparent.  

The bottom line

With the largest-ever federal investment in broadband, internet providers are scrambling to show states that they’re the ones who can expand internet service the best. But with municipal broadband success stories like Chattanooga, there’s an argument to be made that broadband should be treated like water, electricity, or any other public utility.

Keep an eye on Allconnect’s News Hub for more updates on BEAD funding and municipal broadband.

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Robin Layton

Written by:

Robin Layton

Editor, Broadband Content

Robin Layton is an editor for the broadband marketplace Allconnect. She built her internet industry expertise writing and editing for four years on the site, as well as on Allconnect’s sister site MYMOVE.com. … Read more

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