Return to Nicholas Johnson's Cyberspace Law Seminar 2006 Site
 
 

      A. Government involvement

 The Internet can, and sometimes does, have a positive impact on citizens' participation in their government.  It is becoming increasingly important in distributing information that traditional forms of media used to provide. The "big three" (the ABC, CBS, and NBC networks) have significantly reduced their coverage of political events.14 This is a concern because the distribution of political information is fundamental to a well functioning democracy.  Access to election information via the Internet increases the likelihood that an individual will become involved in an election.15  More information about political leaders and issues makes the process more transparent, fostering trust in the process.  Additionally, Internet use has been shown to have a positive effect on civic engagement and trust in government.16 Lesser participation in the political process by those with low levels of income and education leads to disproportionate representation of those with greater social advantages.17  Increasing access to the Internet will lead to better representation of those that are currently under represented and greater efficiency in representing those that already have a voice.

      B. Economy

 Investment in public infrastructure is at the heart of productive, vibrant communities.18  The expansion of local Internet access has real potential to enhance local economic growth.19  It opens markets and brings together market participants, lowers transaction costs, and makes prices more accessible.20  Much like the railroad grew in importance relative to the great waterways of the United States, broadband infrastructure is becoming as, or more important as traditional forms of infrastructure for sustained economic vitality. 21  Broadband availability can have a substantial positive impact on total economic develop generally, and IP sector growth in particular.22  Broadband lowers entry barriers for new firms and encourages self-employment.23 George Ford and Thomas Koutsky reported that the Bureau of Economic advisors, examined the 1999 Annual Input Output Accounts, and concluded an estimated three-fold return on broadband investment.24  In a study done on Lake Country, Florida, which invested millions of dollars in a broadband network, Ford and Koutsky found that the county experienced a doubling of economic growth relative to other similar Floridian counties.25

      C. Education
 
Internet access in general, and wireless broadband in particular, have great potential for improving education.  Education does not stop at the door of the local school, and many of the benefits of having broadband inside the classroom readily transfer outside the classroom. There are at least four benefits broadband can offer: improving the learning experience, increasing the ability of inter-institutional collaboration, reducing administrative costs, and increasing access to education.26  On a more individualized level, some scholars have concluded that access to the Internet both at school and at home have become necessary to the development of the skills that comprise "being educated" in the 21st Century.27

      A. The Current State of Law and Municipal Options

  The case of Nixon v. Missouri Municipal League, 541 U.S. 125, reached the U.S. Supreme Court in 2004. The F.C.C., having considered preemption of states’ limitations on municipal broadband, failed to act. Missouri had a law that prevented political subdivisions of the state (cities) from offering telecommunications service. The statewide organization of cities, the Missouri Municipal League, challenged the Commission’s failure to act. The question before the Court was whether the language of Section 253(a) (prohibiting states from limiting the ability of “any entity” to provide service) included municipalities within the definition of “any entity.” The Court concluded that it did not. Thus, states are free to prevent cities from offering broadband service.
      The majority argued that it did not want to create a "national crazy quilt" where municipalities in one state were protected by §253 and municipalities in neighboring state were not. 28  This argument fails to take account of the fact that in our great experiment in democracy, municipal governance is something of a "crazy quilt" with each state having particularized laws setting forth the powers and limitations of local government.29

      1. The Residue of §253 Protection After Nixon

 Nixon did not resolve the issue of whether §253 preempted municipally owned utilities chartered as independent corporations or some other affiliated entity.30 The F.C.C. views municipally-owned utilities as pro-competitive, furthering Congress's goal in the 1996 Telecommunications Act by increasing competition in telecommunications to benefit consumers.  They will likely preempt any state statute that raises a barrier to entry to this type of entity. Chairman Kennar and Commissioner Tristani expressed this idea when they denied the Missouri Municipal League's petition for preemption:  "We do find, however, that if a municipally-owned utility has an independent corporate identity that is separate from the state, it can be considered an entity for which 253 preemption is available." Additonal support can be found in Commissioner Ness' separate statement from the hearing:

"[T]oday's decision not to preempt a Missouri statute does not indicate support for a policy that eliminates competitors...municipal utilities can serve as key players in the effort to bring competition to communities across the country, especially those in rural areas...I urge states to adopt less restrictive measures, such as separation or nondiscrimination requirements, to protect utility ratepayers or address any perceived unfair competitive advantages."31

      2. The Line Between "Political Subdivisions" and "Independent Entity"

 "Any entity" in §253(a) excludes any entity that exists as a "political subdivision." 33 Black's law dictionary defines "political subdivision" as "a division of a state that exists primarily to discharge some function of local government."34  Under Black's simplistic "primarily to discharge a governmental function" test, it seems no entity created by a municipality to provide telecommunications would ever receive §253 protection.
      The test is not so restrictive.  The line between "government entity" and "not government entity" has been drawn in two major types of cases: Those involving government privileges and those involving government obligations.35  A municipally-created entity unencumbered by the governmental burdens imposed by the Constitution should be included in the § 253 definition of "any entity" because no governmental entity can be immune from Constitutional obligations.36  To put it another way, it becomes clear that the entity is no longer a mere convenient agency for exercising State power when it is no longer encumbered by the burdens of the Constitution.37
      In Lebron v. National Railroad Passenger Corporation the Court set about the task of determining whether Amtrak was a government entity for the purpose of First Amendment obligations. While Lebron involves the Federal Government and whether an entity of it's own creation is free from the obligations of the Constitution, the principle is the same. To the extent that state law affects the issue, the Federal test should be determinative because §253 is a preemptive Federal law.
      In Lebron, the Court articulated a two-part test to determine when a corporation is part of the government for Constitutional purposes. First, did the government create the corporation by law for the purpose of furthering governmental objectives? Second, assuming the answer to the first question is "yes," does the government exercise control over the corporation by retaining permanent authority to appoint a majority of the corporation's directors?38  The second prong of the test has been inconsistently interpreted.  At least one court has interpreted the second prong not in terms of "retaining the ability to appoint a majority of directors," but, rather, in terms of whether the government is "controlling" the entity.39
      In Illinois Clean Energy Community Foundation v. Filan, a state was tried to compel an entity it created to turn over the entity's funds.  The entity brought suit, asserting that the state's action was an unconstitutional taking.  The court held that the state did not have control over the entity.   Control in the entity was divested in a system where there were six trustees. One trustee was appointed of which was appointed by an outside private corporation.  The five other trustees were appointed by the Governor, speakers of the house and senate, and the minority leaders of the house and senate.  The court reasoned there was no state control over the entity because even if the Governor exercised control over the two of the appointers, he could not control the make-up of the board.40
      Three lessons should be taken from Filan.  First, government officials may appoint a majority of directors to a corporate board, if the appointers are from different branches of government and different political parties, such that one member of government cannot exercise control over the make-up of the board.  Second, some courts may focus less on the means of control, e.g. "by appointing a majority of directors," and more on whether actual control exists. Third, Filan offers an example of the consequences of giving away control of government entity.  The entity that the state created and funded refused to comply with a demand to turn over 125 million dollars to the state's general fund.  The directors owed no duty to the state, rather they had a fiduciary duty to the company to protect its assets.
 Additionally, the court's opinion in Livestock Marketing Association v. US Dept of Agriculture indicated more than mere appointment of a majority of directors when determining whether an entity is part of government.  That court looked for actual control and connectedness and held: 1) the status of board members as private individuals rather than government actors was relevant to determine whether the government had control 2) the fact that the government retained control on whether to certify individual board members as "qualified" for duty did not create a per se presumption of that the association was a government entity. 3) the board's accountability, or lack thereof, to a government organization weighed to the issue of actual exercise of control 4) the sources of the entities finances spoke to the issue of actual exercise of control 41
 Lebron and its progeny, provide guidance to municipalities creating an entity that will receive §253 protection.  Under Lebron, municipalities can bring their telecom corporations under the protection of §253 by creating a corporation and not retaining the permanent authority to appoint a majority of the corporation's directors. More specifically there are five points to take from this analysis. First, absolute control must be temporary.  The exact amount of time that a municipality can retain control is uncertain, but it seems that absolute control no longer than is necessary to get the corporation in operation might be the standard.  Second,  the municipality,  must not retain the power to appoint more than fifty percent of the board of directors. Third, it is unlikely that appointing less than fifty-one percent of the board makes the corporation separate from the government in all cases.  That is, if a court finds actual control it is being exercised by the municipality even though there is literal compliance with the test articulated in Lebron,  the entity may not be within the protection of §253.  Fourth, it may be appropriate for some extension of the municipality to retain a pro forma certification duty in qualifying members of the board of directors.  Fifth, municipalities need to keep in mind that appointees of the board owe fiduciary duties to the corporation, not to the municipality.

      3. Problems with the §253 Option

 While municipalities may be able to create an entity that is protected under §253, this is not necessarily a great option.  First, it is unclear exactly how much "actual" control a municipality may retain, and for how long. Conceivably, a municipality could create an entity well within the letter of Lebron yet still maintain control through some of the standard measures taken by other corporations to protect their incumbents.  Second, the directors of corporation have a fiduciary duty to the corporation, not to municipality.  The potential for disjointed interest could reduce the entities effectiveness is furthering municipal goals, as would be the case in deciding whether to extend services out to less profitable, but underserved areas.  Third, giving away control of the entity could be problematic as was demonstrated in Filan. Fourth, creating an entity separate from government could create a host of financing issues at both the state and Federal level.

      B. Protecting the Municipal Option

 The Community Broadband seeks to further the goal of increasing access to advanced telecommunications services.  There are four issues that may arise when courts apply the act to state laws.  First, while the bill prevents States from raising most types of barriers to telecommunications entry, be they by statute, regulation or "other State legal requirement," the ability of states to erect financial obstacles to municipal broadband is not explicitly proscribed.42 Second, the bill limits immunity to public providers providing "advanced" capability.  This creates the potential for protection for only riskier, cutting edge technologies. Third, the scope of service that municipalities may provide services is unclear.43 44 Fourth, in order make the bill effective, a clause should be added that requires private parties bringing suit under the bill to pay legal costs for a municipality's successful, or partially successful defense.

      1. Controlling the purse strings

 The first problem with the first task of protecting the municipal option has to do with funding.  States while unable to erect "legal requirements" standing in opposition to municipal broadband, could create financial barriers.  The argument is that financial barriers are not legal barriers. The Court in Nixon noticed this potential disconnect.45 The authority of municipalities to levy tax, charge use fees, or borrow funds varies depending on the state.46  States set the procedures, limits, and remedies for municipal borrowing.  States limit municipal debt quantity by setting debt limits.  States create rules and regulations, such as referendum procedures regarding the issuance of municipal debt that must be strictly adhered to.  Improperly executed municipal bonds are void, leaving lenders in precarious positions for recourse.47
      Assuming that the bill occupies the entire scope of the Federal Government's power to legislate in this area, what is the limit of the Federal Government's power to legislate state funding?  This is an issue where the Commerce Clause and the Tenth Amendment collide. It is clear that the Tenth Amendment limits Congress's power; including the enumerated powers in Article I.48
      Even the broadest interpretation of the bill's scope would be entitled to a presumption of Constitutionality.49 A 10th Amendment challenge to Congress prohibiting discriminatory State funding against municipal broadband initiatives is unlikely to be successful.  The Tenth Amendment provides structural protection, not substantive protection.  That is, "States must find their protection from congressional regulation through the national political process, not through judicially defined spheres of unregulable state activity."50
      The exception to this rule occurs when there is a failure in the political process.51  Federal prohibition of discriminatory state funding practices could be such an activity.  In New York v. U.S., the state of New York challenged a bill that required states to either take ownership of nuclear waste produced by private companies in the state or regulate the disposal of nuclear wastes according to the desires of Congress. The Court held that the "take title" provision of the bill impinged on the State's sovereignty.52  The Court reasoned that a bill impinged on State sovereignty when it required expenditure of a state's funds, or participating in federal programs without the support of local residents.53  Thus, because the take title provision "commandeer[ed] the state government into the service of federal regulatory purposes," the bill exceeded the scope of the Commerce power.54
      In Garcia v. San Antonio Metropolitan Transit Authority, the Court found that a Federal bill that set minimum wage requirements for state transportation workers did not violate a state's sovereignty.55 Setting wage minimums for transportation is similar to setting telecommunications entry requirements for local governments. However, preventing states from discriminatory funding practices against municipal provision of telecommunications services is more like wage requirement than a take title provision.
      The political process is protected.  The decision to commence and fund a local program is politically visible to local government whereas a nuclear waste "take title" requirement is not.  Consider bond issues, some states require a majority vote, others require a super majority.  The result is that before a municipality can get funding its residents know what they are getting into.  In case of tax revenues, the management of the city is quite visible to its citizens, and any reduction of services to offset the poor performance of another municipal project will undoubtedly bring cries from the affected citizens.  The Federal Government isn't forcing municipalities to offer telecommunications capability and services, it is merely setting as minimum requirement that states have to allow municipalities the option of doing for themselves what the market has failed to do for them.

      2. How advanced is advanced?

 The bill prohibits state entry barriers to public providers offering "advanced telecommunications capability or any service that utilizes the advanced telecommunications capability provided by such provider."56 There are two problems with this language.  First, the bill offers no definition of "advanced telecommunications capability."  The danger is that cutting-edge technology may be the only technology public providers could offer.  Such a definition would substantially increase both the costs and risks associated with municipal broadband deployment. "Advanced" could also be defined in relation to the current wired technologies, where anything better than legacy technology would qualify.  The closer the definition of "advanced" is pushed to the cutting edge, the more potential projects become prohibitively expensive and unnecessarily risky.
      There is support for the proposition that "advanced telecommunication capability" means "better than legacy" rather than cutting edge. The term shows up in the Federal Agriculture Improvement and Reform Act of 1996, however no explicit definition is offered in the text of the bill.57 A prior version of the act stated that" the goal of Federal Government was to make affordable advanced telecommunications available to rural residents, including services such as reliable facsimile document and data transmission...interactive audio and visual transmissions...and other advanced telecommunications services."58 Clearly, a 90's definition of "advanced telecommunications capability" is outmoded, but the types of technology mentioned were of the sort that were readily available and had widespread use in other areas, especially urban areas.

      3. What services may a municipality offer?

 Another problem that may arise under the current text of the bill involves the type of telecommunications related services that would be immune from state entry barriers. The bill protects not only telecommunication capability, i.e. the infrastructure, but also any service that utilizes that infrastructure as well.  Proponents of the bill likely envision new infrastructure as capable of consolidating television, phone, and Internet service.   Municipalities' ability to consolidate services would allow for greater gains in inefficiency.  Broad interpretation of the utilizing advanced telecommunications capability language would allow for unimagined communications, and information services attached to the capabilities of advanced networks.  Opponents of the bill would seek to limit the definition of "any service" to the connection between a client and the host, thus keeping municipalities from offering more advanced information services like e-mail.  The result of such a narrow reading of the bill would restrict municipal broadband to a role much like digital subscriber line providers.   The information services, like email or web page hosting, would be a separate service distinguished from the connection into the Internet. Support for this narrow definition is found by looking at the definitions section in the Telecommunications chapter of the U.S. Code.
      The Code defines "telecommunications service" as "the offering of telecommunications."59  "Telecommunications" means "the transmission...of information of the users choosing, without change in the form or content of the information as sent and received."60  In the same chapter the term "information service" is defined and distinguished from telecommunications service.  "Information service" is the "offering of a capability for generating, acquiring, storing, processing, retrieving, utilizing or making available information via telecommunications...but does not included any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service."61
      The Community Broadband Act explicitly separates "capability" from "service that utilizes the capability."  However, because of the separation of "telecommunications service" and "information service" in the definitions portion of the U.S. Code, and the fact that the that "information service" does not include the use of capability for the management, control, or operation of the telecommunications service, there is serious doubt as to whether public providers can offer advanced information services in addition to those services that are essential to the merely providing telecommunications capability.

      4. Liability For Lawsuits Intended To Raise Cost Of Entry

      The goal of The Community Broadband Act is to increase access to advanced telecommunications. Legal fees represent a real barrier to entry, and any clarification Congress can make in enacting the bill will prevent States and incumbent carriers from raising the cost of entry to the point where the goals of the bill are defeated.  To protect municipalities from this threat the bill should be amended to provide municipalities with compensation for any legal fees they incur in successful or partially successful defenses of any challenges made under the bill.  Such a provision would keep incumbent providers or other special interests groups from bringing lawsuits against municipalities for the purpose of raising the cost of entry or prolonging the status quo.

 Advanced telecommunications capability and services is an area in which local governments should be involved. Municipal participation is an effective means to achieve the goals of a national telecommunications policy.  There are at lease three arguments supporting municipal broadband as being part of a national telecommunications policy.
      First, advanced telecommunications services in general, and broadband in particular possesses characteristics that make the occurrence of market failure more probable than with other types of goods.  Second, even if the only appropriate role of municipalities is to encourage competition in a free market, public providers do not unfairly compete in the market because of competitive advantages not enjoyed by private competitors.  Third, the financial risk of investment in wireless broadband is not outside the range of acceptable levels of risk for local governments.

      A. Competitive Markets

 Generally, open markets are the best way to achieve efficiency-related goals, such as gaining productivity through increases in information availability, transfer speed, and capacity.62  However, given the current state of broadband deployment in the United States relative to other countries it seems that competition for competition's sake is doing little to serve the interests of the public. This section makes two arguments for municipal entry into the broadband industry.  Free market competition is not the best way to deploy broadband because it is a public good.  Second, presuming that a competitive market is better way to distribute broadband services in the United States, municipal entry into the market will facilitate competition.
  The telecommunications market has two problems.   First, incumbent firms have both the incentive and ability to keep new entrants from the market.63  Owners of current telecommunications platforms have the incentive keep other firms, as well as substitutions for their legacy products out of the market.  The companies that are in the legacy broadband industry have already invested in network infrastructure to provide their service.  The current network is profitable.  The current network requires no new risk of capital.
      There is no reason for a legacy broadband provider to compete against its self.  Rolling out a new network would millions of dollars to build the infrastructure, and would significantly reduce the profitability of the legacy network.  As a demonstration of incumbent foot dragging consider that at the current rate of deployment it will take sixty years to get broadband to ninety percent of the population in the US.64 Compare this with Japan where every person will have it by 2010.65  New firms will not enter these underserved markets with a vastly superior broadband product because the cost of market entry can be prohibitive and no one wants to poke the sleeping bear.  Telecommunications company companies can be tenacious in protecting profits, when they face competition.66
      Second, because private providers can only capture a small portion of the benefits that flow to a community in the form of profits they will not invest in new broadband networks.67  As mentioned earlier, every dollar invested in broadband infrastructure returns to a community three-fold.  The community receives benefits in terms of education, economic development, and governmental participation.  With each additional subscriber to a broadband network the value of the network becomes greater to all individuals.  If municipalities lack the power to enter the telecommunications market they face a Hobson's choice of inadequate service, or no service at all.

      1. Broadband Is Underproduced In A Free Market

      Broadband and other advanced telecommunications capabilities are an animal similar to water, roads, power, schools, police protection.  At the same time-- it is none of these.  Broadband possesses characteristics that facilitate market failure. There are great external benefits and broadband access is earmarked by great social inequity.
      Broadband is nearly a public good.68 Each individual's consumption of the good does not result in a subtraction of the benefits of the good to others. Individuals consume bandwidth, but they do not consume network access. In this way, last mile connection, the type of connection offered by municipalities is more like using a road or a bridge than eating an apple.   In fact, as noted earlier, each additional consumer of the network adds value rather than consuming it.
      The benefits of broadband are ubiquitous; there are benefits that flow to third parties that do not actually buy the service.   The more people who have access to broadband the greater the benefit to society.  Yet another problem that demonstrates market failure is the fact that those that would profit the most from broadband access, the uneducated, the unemployed, and the disenfranchised are also the least likely to be able to pay for the access to the network.  While the availability of access is only one part of the broadband equation, it is a limiting factor as the cost of legacy broadband is expensive, with a year of service costing almost as much as a new computer.69 Further, because computers have life cycles much longer than most consumers choose to realize, there is a fair supply of inexpensive used computers.
      Last, broadband as network communications services lends itself to monopolization.  For much of early 20th century economists viewed communications networks as natural monopolies.70 The public provider is in a much better position to respond to consumer, i.e. constituent demand. When dealing with an incumbent customers voice complaints with their wallets. Complaints have little effect in a monopoly because profit margins are large.  Consumers are forced to accept inferior product because Internet access is quickly becoming a necessity, much like in house plumbing or electricity.  Local governments offering broadband as a public utility would be more sensitive to customer demands because they would be politically accountable for their actions.71

      2. Municipalities Can Play Fairly In A Competitive Market

 If role best role of municipal broadband is to spur competition in uncompetitive markets, then it is clear that municipalities can play fair in a free market.  Opponents to municipal broadband question the ability of municipalities to act as both regulator and market participant.  Such a position they argue, allows municipalities to protect their status as incumbent, stifle innovation, and make an otherwise inefficient entity a powerful competitor in th market.72
      The practices at issue are charging franchise fees, regulating utility poles, or charging public rights-of-way fees to private competitiors while exempting themselves from such fees and regulations.73  Subsection two of the Community Broadband Act provides that any rules and ordinances shall be applied without discrimination.  To the extent that these fees and regulations represent costs to the community, either in terms of real cost or opportunity costs, competitors should be required to pay these fees and abide by the regulations.  Franchise telecommunications installation has real costs in terms of consuming public access space, lowering street life-cycle,74 and administration of the system.  Municipal telecommunications should not have to bear these costs because they would be charging themselves for services they perform.
 The biggest concern on the topic of fair play is the issue of cross-subsidization.75  Cross-subsidization is when revenues from other municipal services or the community's general fund are used to price the subsidized service below cost.76  This argument is weak because political accountability acts as a check on cross-subsidization.  Cross-subsidization would result in citizens seeing that their tax dollar doesn’t stretch quite as far as it used to.  As a result the municipality would need to raise taxes or rates on other utilities to deliver the expected amount of benefit.  If taxes are raised or services are cut to offset the subsidization in, the political process will make sure those that raised taxes or cut service are not in office to continue the subsidy.
 There is another point under the issue of cross-subsidization; the idea of piggy backing other city services onto the new network.  Communities are realizing that a communications network has the potential to make other public services more efficient.77  Communities are using the network for automating utility meter reading, protecting public property, mobilizing city services like building permits, licensing, and inspection, public transportation, vehicle tracking and accountability, police and other emergency services.  If communities realize gains due to the efficiency of piggy backing city services when rolling out wireless municipal broadband, any such gains should count as a reduction in the cost of the network without cries of foul play.
 The third purported advantage municipalities have over private companies is that they are exempted from Federal, state, and local taxes.78  An argument that has been advanced regarding the difference between tax exempt credit unions and taxed commercial bands that readily applies here is that because of the difference in goals of a private and public entity regarding profit, the profit motive of the private entity outweighs the benefits of a municipality's tax exemption.79  Because of a desire to fulfill goals like expanding access to unprofitable areas, the municipality has less of a drive towards profits, and therefore less efficiency in turning a profit.  Even if they are slightly less efficient competitors, any competition is better than no competition at all.  If the free-market system is the best way to deploy broadband, incumbent firms need opponents to, force innovation, and increase efficiency.

      B. Wireless Broadband Is Not Too Risky For Public Funds

 Those opposed to municipal broadband point to the fact that some municipal projects have poorer than expected financial performance.  Poor financial performance is due to poor financial modeling.80  Cities have underestimated the cost of capital investments and continued operations, and at the same time they have overestimated penetration rates and end product price.81  Some argue that municipal leaders think they are getting into an underserved market, but they are actually getting into a market with "formidable foes."82  Why is it taking municipal entry into the market to force these incumbents to lower prices, and increase innovation?
      A good example of this is found in Ms. Tounge's article. When Harlan, IA decided to enter the cable television service the incumbent firm was offering 34 channels for $20.64/month.83 The city's new service offered 43 channels for $18.95/month.84 The incumbent responded with new digital service which resulted in more channels, better pictures and cheaper prices.85 Apparently this price and service dance is happening with increasing frequency because publicly owned cable systems enter local telecommunications markets.86
      The solution to poor financial modeling isn't exclusion, its using better models.  Cities seeking to challenge incumbents need to account for the fact that the incumbents are sleeping bears, prone to respond to a competitive poke.  Further, when critics evaluate municipal wireless performance they are unlikely to attribute any improvement in the market to the expenditures of the municipality.  While the poor financial performance of the municipal broadband networks may cost taxpayers, this loss is partially offset by improved service and lower prices.
      Some argue that a municipality entering the telecommunications industry is indiscriminately forcing taxpayers to accept risk without regard to the expected level of benefit they will receive.87  First, for every investment a municipality makes, there are differing levels of benefit to individuals.  Infrastructure, education, economic development, and parks all have different levels of benefit to particular individuals.  The tax exemption for the company creating 100 jobs benefits the formerly unemployed more than most, but all taxpayers assume the risk that the tax burden will not outweigh the benefits the new company will bring to the community.

      E. Conclusion

 The United States is lagging in deploying broadband in this country.  The United States is failing to get broadband service to the people and communities that need it the most.  Even if broadband service is available, service costs for a year are more than price of a new computer.  Local government needs the option to do for its self what incumbent broadband providers and the free-market has been unable to do-- deliver broadband access to every United States resident.
      Communities are different.  That is the fundamental principal that makes the availability of municipal option essential to broadband deployment.  Different communities will benefit differently from different deployments of broadband.  Inner-city Philadelphia has different needs and obstacles than Harlan, IA.  The Community Broadband Act allows local citizens and government to take into account the unique circumstances of their community when deciding the best method to deploy broadband services. The act is not about forcing municipal wireless upon communities that don't want it-- the bill is about giving communities an alternative means to obtain the benefits of the technological progress. The Community Broadband Act should be passed because communities to adopt structures, risks, and policies that are tailored to the unique circumstances of the community in a comprehensive strategy to capture the benefits that broadband has to offer.

1 http://muniwireless.com/municipal/projects/295/.
2 Community Broadband Act, S. 1294 109th Cong.(2005).
3 Reed E. Hundt & Gegory L. Rosston, Communications Policy for 2006 and Beyond, 58 Fed. Comm. L.J. 1, 2 (2006).
4 U.S. Dept. of Commerce, A Nation Online: Entering the Broadband Age, 6 (2004).
5 Id.
6 Leonard Ray. New Arguments for Municipal, Broadband Properties, Sept. 2005 at 48.
7 Robert W. Fairlie, Are We Really A Nation Online? Ethnic and Racial Disparities in Access to Technology and Their Consequences (Leadership Conference on Civil Rights Education Fund) (2005), available at http://www.freepress.net/docs/lccrdigitaldivide.pdf.
8 Jefferey Boase, Et. Al., The Strength of Internet Ties, (PEW Internet & American Life Project) (2006).
9 Trends and Transitions Editor. WiFi, Why not? 31 State Legislatures 9 (2005).
10 66 Pa. C.S.A. §3014 (West 2006).
11 See H.B. 789, 79th Leg. Reg. Sess. (Tx. 2005)
12 Preserving Innovation in Telecom Act of 2005, H.R. 2726, 109th Cong. (2005).
13
14 Caroline Tolbert & Ramona McNeal, Unraveling the Effects of the Internet on Political Participation?, 56 Political Research Quarterly 175, 183 (2003).
15 Id. at 177.
16 Id.
17 John L. Sullivan, Et. Al., A Tale Of Two Towns: Assessing the Role of Political Resources in a Community Electronic Network,  24 Political Behavior 55-84 (2002).
18 George Ford & Thomas Koutsky, Municipal Broadband Networks and Economic Development: A Case Study from Florida, Applied Economic Studies (2005), available at http://www.freepress.net/docs/broadband_and_economic_development_aes.pdf
19 Robert E. Litan & Alice M. Rivlin, Projecting the Economic Impact of the Internet, 91 The American Economic Review, 313, 317 (2001).
20 Id.
21 Ford supra note 18.
22 William Lehr, Et. Al., Measuring Broadband's Economic Impact 16 (Jan. 17, 2006) (unpublished manuscript presented at the 33rd Research Conference on Communicaiton, Information, and Internet Policy), available at http://cfp.mit.edu/groups/broadband/docs/2005/MeasuringBB_EconImpact.pdf.
23 Id.
24 Ford, supra note 18 at 3.
25 Id.
26 Broadband Stakeholder Group, Opportunities and Barriers to the Use of Broadband in Education 6 (Broadband Stakeholder Group) (2003), available at http://www.broadbanduk.org/reports/report03_appendix2.pdfhttp://www.broadbanduk.org/reports/report03_appendix2.pdf
27 Henry Jay Becker, Who's Wired and Who's Not: Children's Access to and Use of Computer Technology, 10 Children and Computer Technology 44 (2000).
28 Nixon v. Mo. Mun. League, 541 U.S. 125, 136 (2004).
29 Fred Morrison, The Insolvency Of Public Entities In The United States, 10 Am. J. Comp. Law 567, 568 (2002).
30 Id. at 130.
31 In re The Mo. Munc. League 16 FCCR at 1173.
32 Nixon, 541 U.S. at 131, see also In Re The Mo. Munc. Leauge, 16 FCC RCd. 1157, 1158. (2001).
33 Nixon,541 U.S. at 130.
34 Black's law dictionary (8th ed. 2004).
35 See Lebron v. Nat'l Rail Road Passenger Corp., 513 U.S. 374, 398 (1995).
36 See Id. at 397.
37 See Nixon, 541 U.S. at 141.
38 Lebron, 513 U.S. at 400.
39 Ill. Clean Energy Cmty. Found. v. Filan, 392 F.3d 934, 937 (CA7 2004).
40 Id. at 938.
41 Livestock Marketing Ass'n v. U.S. Dep't of Agric., 207 F.Supp.2d 992 (D.S.D 2002).
42 Id.
43 See Morrison supra note 29 at 569.
44 See Id.
45 See Id. at 134.
46 Morrison supra note 29.
47 Nixon, 541 U.S. at 571.
48 U.S. v. Morrison, 529 U.S. 598, 608 (2000), Nat'l League of Cities v. Usery, 426 U.S. 833, 842 (1976).
49 Morrison, 529 U.S. at 607.
50 South Carolina v. Baker, 485 U.S. 505, 512 (1988).
51 Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 554 (1985).
52 See N.Y. v. U.S., 505 U.S. 144, 175 (1992).
53 Id. at 174.
54 Id. at 175.
55 Id.
56 H.R. 1294.
57 § 7 U.S.C. 950aaa-1 (1996).
58 Federal Agriculture Improvement and Reform Act of 1996, Pub. L. No. 101-624, 104 Stat. 4017 (1990).
59 § 47 USC 153(46) (1997).
60 § 47 USC 153(43) (1997).
61 § 47 USC 153(20) (1997).
62 Hundt supra note 3 at 2.
63 Id.
64 Ray supra note 6 at 51.
65 Id.
66 Infra note 84.
67 Ford supra note 18 at 3.
68 Paul Samuelson, The Pure Theory Of Public Expenditure, 36 Review of Economics and Statistics, 387-389 (1955).
69 Internet service costs around $20 to $50 per month, an adequate new system can be found at http://www.pricewatch.com for than $200.
70 Michael J. Balhoff, Et. Al., Municipal Broadband: Digging Beneath the Surface 63 (Balhoff & Rowe L.L.C.) (2005), available at  http://www.balhoffrowe.com/pdf/Municipal%20Broadband--Digging%20Beneath%20the%20Surface.pdf.
71 John S. Niles, Digital Infrastructure: The New Public Works?, New Telecom Quarterly, Fourth Quarter at 15-22 (1997), available at http://www.tfi.com/pubs/ntq/articles/view/97Q4_A3.pdf.
72 Kathryn A. Tongue, Municipal Entry Into The Broadband Cable Market: Recognizing The Inequities Inherent In Allowing Publicy Owned Cable Systems To Compete Directly Against Private Providers, 95 Nw. U. L. Rev. 1099, 1117 (2001).
73 Id. at 1118.
74 Id. at 1109.
75 Id. at 1113.
76 Id.
77 See Intel Corporation, Digital Community Deployments, (Intel Corporation) (2005), available at ftp://download.intel.com/business/bss/industry/government/digital-community-deployments.pdf.
78 Tongue supra note 72 at 1116.
79 http://strategiccounselor.blogspot.com/2006/03/competition-verses-tax-exemption.html.
80 Balhoff supra note 70 at 78.
81 Id.
82 Id.
83 Tongue supra note 72 at 1100.
84 Id.
85 Id.
86 Id.
87 Balhoff supra note 70 at 100.