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A Public Option for the Internet

A new proposal outlines the way Democrats can make greater broadband access a reality.

Sean Gallup/Getty Images

American politicians of every stripe have long bemoaned the lack of high speed internet access across the country. Despite being the center of technological innovation for the past 60 years, average internet speeds in the United States lag behind those in South Korea, Hong Kong, Singapore, and a host of European Union countries. Outside of big cities, high-speed internet access is often unavailable, which slows economic development and affects education.

There are a few reasons for this. The first is that the U.S. is a very big country, and large swaths of it are sparsely populated, making it inefficient to connect small, rural communities to high-speed networks. The telecommunication industry, meanwhile, is highly concentrated—many areas only have one internet service provider—meaning that companies are not competing for customers in ways that push them to expand their networks. These companies have not, moreover, been incentivized by the federal government to expand their networks.

Former President Barack Obama pushed philanthropists to tackle the problem late in his second term and proposed a broadband subsidy for poor households. Hillary Clinton pledged to “connect every household in America to broadband by the year 2020,” via public-private partnerships. And earlier this year, President Donald Trump signed an executive order that ostensibly aimed to make it easier for internet companies to connect rural communities, but didn’t actually accomplish much of anything.

But the best solution isn’t philanthropy or public-private partnerships—it’s what effectively amounts to a public option for the internet. And Abdul El-Sayed, who is running for governor of Michigan, just laid out an ambitious program that could serve as a model for states across the country.

In a policy proposal announced on Monday evening, El-Sayed’s campaign laid out what effectively amounts to a public-public partnership, called “MI-Fi.” The state would provide cities and municipalities with funding to share the cost of constructing their own high-speed broadband networks. These networks would then be run by the cities themselves—in some cases, in competition with private companies. Governments would charge users a fee to access the service, either by providing their own retail service or by outsourcing to a state-run internet service provider that would assist communities unable to handle their own service.

Without shareholders or the profit motive, research suggests that this public internet would result in lower costs for consumers. El-Sayed’s plan, moreover, would create a series of smaller internet companies—rather than a large state monopoly—so there is little reason to believe that another behemoth, which would in turn create costs to support its expansive overhead, would be created.

El-Sayed’s plan doesn’t just focus on rural communities—although it’s likely they would benefit the most from such a plan. In Michigan, 40 percent of urban residents don’t have access to high-speed internet and the plan outlined on Monday includes funding to expand internet access in cities, where many last-mile connections have not been made.

Similar plans have worked in other places, albeit on a smaller scale. Chattanooga built its own municipal broadband service and subsequently experienced an economic boom. Unemployment dropped, wages grew, and manufacturers—notably Volkswagen—moved to the city. “We know that the wage rise is linked to internet jobs and particularly the technology sector,” the city’s mayor told The Tennessean in 2016.

“It’s an explosion of growth in our technology sector,” he added. “That has sparked not only this (downtown) living but restaurants and bars and music and the quality of life that truly makes a city interesting, cool, hip, vibrant and energetic.” Chattanooga’s service was, however, blocked from expanding beyond the city by state legislators and the program was eventually stifled by the FCC, limiting its impact outside the city.

Chattanooga may be an outlier—high-speed internet is not a magic bullet for every struggling municipality. But at the very least, an ambitious public option for the internet would dramatically lower the cost for consumers and encourage outside investment in communities that have been hurt by deindustrialization. And, with net neutrality being eroded in Washington, D.C., the plan has the added effect of implementing net neutrality at the state level.

“The internet is the highway of the 21st century,” El-Sayed said in a statement. “But too few have access because internet service monopolies have held universal internet hostage to their own profits. MI-Fi is our solution; publicly-owned broadband infrastructure can ensure that every household in rural and urban Michigan has the access they need to protect net neutrality in our state.”

Aside from being sensible, a public option for the internet has the added benefit of being politically beneficial for Democrats. Telecom companies have used their expanding market power to gouge consumers and provide subpar service for years. Running on providing better, cheaper internet access is also running against corporate concentration and monopoly power—which is what congressional Democrats are aiming to do in 2018 in their “Better Deal.”

There are some open questions, however. Because a plan like this has never been attempted at this scale, it’s not yet clear how much it could cost. El-Sayed’s proposal would involve devoting “$1.5 billion to developing broadband networks through public-public partnerships,” even though that number is “probably not enough to connect all of the 250,000 households without internet.”

To get to that point, of course, El-Sayed, who was endorsed by Bernie Sanders’s PAC Our Revolution, would first have to win August’s gubernatorial primary, where he is facing a tough race against establishment favorite Gretchen Whitmer and the controversial Shri Thanedar, who has described himself as a “fiscally savvy Bernie.”

Still, with plans for high-speed internet expansion stalled at the national level, states have an opportunity to step in. El-Sayed’s plan for a public option for the internet is the most ambitious yet.