« Texas Two Step - Backwards | Main | Pro-Broadband Muni Issue Goes National »

June 02, 2005

Texas Sets Key Precedent for Other States in Refusing to Ban Municipal Wireless

Last week, despite huge efforts mounted by the incumbent carriers, the Texas legislature adjourned without support for a proposed incumbent-backed bill that would have outlawed or severely restricted municipal wireless networks.  This decision by Texas will undoubtedly be the “Gold Standard” precedent that other states look to when evaluating this issue on their own.  As such, one can anticipate many other state legislatures standing up for the rights of their citizens by denouncing the incumbent efforts to restrict competition, and resultantly slow the deployment of broadband in the U.S. 

The reason the Texas decision was such a landmark event is that it was the first time that both the incumbents and the pro-competition broadband proponents were geared up to fight the battle at the same time.  The Pennsylvania decision was done quickly before the pro-broadband team was organized.  As such, the state-by-state battles in the future are much more likely to look like Texas than Pennsylvania.  In addition, this time everyone was watching.  As noted by Forrest Miller, SBC's group president for external affairs and planning, on May 12th and prior to the decision, "Federal legislators will have an eye on how this (sweeping telecom dereg bill) is being viewed in Texas."  Everyone knew how much was at stake. 

It is remarkable how much effort the incumbents put into trying to outlaw and restrict muni-broadband in Texas.  The incumbents staffed over 160 lobbyists in Texas alone.  That is more than one lobbyist for every voting district.  The key members of the telecom committee, like Phil King of Weatherford, were all bathed in campaign donations.  They also encouraged self-funded “research” groups to write articles about “why municipal broadband won’t work,” completely ignoring the hundreds of city-wide deployments where it already works.  After the pro-broadband movement resulted in the language being removed from the house bill in committee, a representative from San Antonio added it back at the last minute on the house floor.  A similar trick was planned in the Senate, but by then the pro-broadband movement had gained too much steam.  The incumbents should be thankful to Phil King, who, though he failed, put the interests of the incumbents above his own citizens from the beginning, through the middle, and all the way to the end. 

The CEO of Verizon even chimed in with a remarkably proficient viewpoint; "That could be one of the dumbest ideas I've ever heard."  He went on to suggest that cities will be unsuccessful because they will be inept at deployment.  There is incredible irnoy in the notion that these incumbents are spending so much time and effort working to block a competitor that they also declare will be pathetic at implementation.  Are they really that fearful of "all" competition?  Even those that they have already self-prescribed as weak?

The reason the pro-broadband movement was successful is because they organized, they gathered the real data on the success of municipal wireless deployments, and they were able to inform the citizens about this effort by the incumbents and their key legislators to use regulation to restrict competition.  They leveraged the Internet, blogs, and mailing lists, and made a huge difference.  The tech community also played a role with the AEA, the Broadband Coalition, and TechNet all speaking out against this effort to intentional slow technical progress.  These lessons and resources are now focusing on other states to ensure the Texas outcome.

One should note that carrier sponsored broadband deployments didn’t end in Texas last week.  No one cancelled DSL or cable modem initiatives.  In fact, many next generation FTTH initiatives from multiple carriers are happening right in Texas.  No one “stopped” those efforts simply because cities are now free to deploy low-cost broadband to their citizens “if they chose”.  Competition doesn't slow alternate deployments, it speeds them up.  DSL speeds in Japan are approaching 50Mbps at prices at or below those in the U.S.  This is not because the Japanese government removed all competition to make it easy on NTT.  This is because they made it possible for Yahoo!BB and others to launch competitive services.  As the U.S. falls from 13th per capita in the world in broadband deployments to 16th, we can only wish we were as lucky as the Japanese.

Posted by Bill Gurley on June 2, 2005 at 10:15 PM | Permalink

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d834202a5153ef00d83423468b53ef

Listed below are links to weblogs that reference Texas Sets Key Precedent for Other States in Refusing to Ban Municipal Wireless:

» Nebraska bans municipal broadband from Muniwireless
I should have titled this article "Nebraska shows world how to protect monopolies". The governor of Nebraska has just... [Read More]

Tracked on Jun 5, 2005 5:33:48 AM

» Where not Why Incumbents Failed in Texas? from Om Malik's Broadband Blog
As you may or maynot know, Texas legislature failed to pass a bill that would have banned municipal networks. Bill Gurley, highlights that incumbents had 160 lobbyists in Texas, one per district really, trying to get municipal networks banner. He lauds... [Read More]

Tracked on Jun 7, 2005 9:38:45 PM

» MP3 Download Archive. Find Your Favorite MP3s from MP3 Download, music mp3 downloads. ALLOFMP3
We Offer 150000 mp3 Downloads from an Archive to browse from. Download songs, download full albums, download MTV charts, lyrics. Updated Daily. [Read More]

Tracked on Mar 4, 2006 6:33:26 PM

Comments

The comments to this entry are closed.

DISCLOSURE: The information contained Above the Crowd has been obtained from sources believed to be reliable but is not necessarily complete, and its accuracy cannot be guaranteed. Any opinions expressed herein are subject to change without notice. The author is a general partner of Benchmark Capital, a venture capital firm in Menlo Park, Calif. Benchmark Capital and its affiliated companies and/or individuals may have economic interests in the companies discussed herein. © J. William Gurley 2005-2006. All rights reserved.