How to create a non-competitive environment

Lamar Norton, GMA Executive Director

January 30, 2012

Lamar Norton

Lamar Norton

Senate Bill 313, the Broadband Investment Equity Act, makes it much more difficult for a city or county to implement a broadband, cable or telecom system, even if such a system is wanted by that jurisdiction’s residents and business interests.

It’s ironic that SB 313 would limit the ability of some Georgia communities to attract new and better jobs when the just released final report of Governor Nathan Deal’s Competitiveness Initiative contains recommendations to allow Georgia to attract new investment and jobs.

In the press release announcing the bill’s introduction, the bill’s author, Sen. Chip Rogers (R-Woodstock), is quoted:

“Broadband is a vital tool for education reform and economic development. This bill will allow for robust competition in the communication marketplace and encourage continued economic growth throughout our state.”

We couldn’t agree more with Sen. Rogers’ assessment that broadband availability is a critical tool for economic development. But city officials and others wonder how this bill would allow for “robust competition.” The simple truth is that the limited number of cities that are in this business got into it in the first place because of a lack of investment and initiative of private providers.

SB 313 would require a local government to get the “permission” of the state legislature to provide a local service in order to meet a local need, and then would require a local referendum before it could even begin to provide the service. It also would prohibit existing municipal providers from providing service outside its city limits. And the most ironic thing of all is that the city could not provide the service at a cost lower than what a competing provider would charge for a comparable service, even if the city could actually provide the service more cheaply!

Not one of these restrictions helps the cause of creating jobs in Georgia; rather, all they do is restrict the ability of communities to invest in the infrastructure needed to create a high quality-of-life.

Gov. Deal’s competitiveness Initiative report outlines opportunities in a number of key areas. One of the key points it makes in the chapter on infrastructure is the following:

Parts of rural Georgia are at a competitive disadvantage because of lack of access to broadband networks.

So very true, and that’s why Adel, population 5,334, invested in not just high-speed internet access a little less than 10 years ago, but went the extra distance and provided high-speed wireless Internet service as well.

From a story in Georgia Cities in November, 2004:

"We had to have it," said City Manager Jerry Permenter. "A lot of our existing industries wanted true, high speed service without telephone lines. With the available technologies, wireless was the way to go."

"The city began offering the service about a year ago and currently has about 300 customers. During that time, the city has grown to include several new businesses, including J.M. Manufacturing, the largest manufacturer of PVC in the world, Sanderson Farms and the South Georgia Motor Sports Park."

"Although there were other providers offering limited high speed Internet service, city residents – who were accustomed to the high level of service they receive from Adel – asked the city to add this to its list of services. "We were being pushed by local citizens who felt that the city would be more responsive than other providers," said Permenter.

"Getting into wireless was a leap of faith, but also one that we thought was necessary. Sometimes you have to take your future into your own hands."

Adel was able to offer service county-wide through a public-private partnership. In 2005, the Intelligent Community Forum named Adel as a “Smart 21 Community” Finalist for its Top Seven Intelligent Broadband Communities Worldwide for 2006.

When the city got out of the business in 2010, it was because other providers were by then providing the needed services. If the Broadband Investment Equity Act had been in place ten years ago, Adel would not have been able to make the investments it felt needed to be made in order to spur the type of economic development it wanted.

Adel's initial decision to get into the business led to significant job growth and was responsive to the desires of the business community and taxpayers. The city's investment in high-speed wireless broadband services is what contributed to the “robust competition” that allowed the city to eventually get out of the Internet business.

Georgia’s city officials would love to see increased investment by private companies in high-speed telecommunication across the state. It would be their preference. But if these types of investments don’t meet the bottom-line needs of a private company, then the state shouldn’t preclude cities and counties from deciding to invest in and foster their own future prosperity.

Competitiveness shouldn’t be limited to just the private sector. Just think of where Georgia would be today if the state had imposed prohibitions on the development of publicly owned airports, water/sewer systems, and gas and electric systems.