Why Community Broadband Makes Sense

Cedar Falls Utilities provides electricity to approximately 18,000 customers in Cedar Falls, Iowa. This week, the utility made national headlines, thanks to a visit from President Obama who applauded the city for building its own broadband network two decades ago. And it’s no ordinary broadband network — it’s 100 times faster than the national average!

Cedar Falls is just one of our nation’s not-for-profit, community-owned electric utilities that power homes, businesses and streets in nearly 2,000 towns and cities, serving 47 million Americans. More than 100 public power utilities (and this number is growing) provide some kind of advanced communication service — high-speed Internet access, cable television, local and long-distance telephone, and voice-over-Internet-protocol. Since 1996, the number of public power utilities providing or planning to provide communication services has increased ten-fold and continues to grow. A recent White House report highlights successful community broadband initiatives in the public power communities of Lafayette, Louisiana; Chattanooga, Tennessee; and Wilson, North Carolina.

Approximately 70 percent of public power utilities serve cities with less than 10,000 residents. Many of these utilities were established because private utilities failed to provide affordable electricity to smaller communities. Today, these public power utilities are meeting the new needs in their communities by providing broadband services where no other providers will and by facilitating competition where service is inadequate or too expensive.

Now, as the President himself pointed out, community broadband may not be for everyone. However the success stories in Cedar Falls, Lafayette, Chattanooga, and Wilson point to the value of a community-owned model for Internet connectivity, a service that’s becoming as essential to our lives as electricity and water. It’s the model that public power electric utilities have followed for more than 100 years.

When a city or county decides to invest in municipal broadband, the public power business model offers three key advantages.

— First, the fact that public power utilities are locally grown and locally owned means they are part of the community and understand its needs and challenges as no outside corporation can. As American Public Power Association president and CEO Sue Kelly said, “Our guys live in the same towns as their customers. They go to church with them. They go to Rotary with them. When we say it’s community power, we mean it.”

— Second, public power utilities are owned by the community, not by shareholders. With no obligation to deliver a profit, they can keep costs affordable for customers, while providing reliable service.

 — Third, the ability to finance capital projects through the issue of tax-exempt municipal bonds has allowed public power utilities to innovate and remain responsive to changing customer needs.

In 2015, Congress plans to examine and update federal communications laws and to spur broadband deployment and adoption. APPA urges Congress to continue to recognize the important role that local governments, including those that own their electric utility, can play in stimulating local economies and accelerating universal broadband deployment. As some state actions limit or prohibit public power utilities from providing advanced communications services, Congress must adopt legislation that affirms the right of units of local government to decide how best to serve their residents.


Desmarie Waterhouse is Senior Government Relations Director & Counsel for American Public Power Association (APPA)

Morning Consult