UTelco: Will Municipalities Answer the Call?

When talking about telecommunications service providers, municipalities don’t tend to be brought up as part of the conversation. We think of them as separate entities that have little to do with one another and are viewed not as possible competitors but as customers when mentioned at all. However, one expert with a deep background in telecom public policy believes municipalities should get into the service provider game to offer citizens another alternative and become central players in the major shifts in the economic and social landscape now underway.

According to a recent Alcatel-Lucent (News - Alert) GridTalk article, Building for the New Creative Economy,  John Eger, former Director of the White House Office of Telecommunication Policy, and currently the Director of the Creative Economy Initiative at San Diego State University, explores the current status of telecommunications, how it relates to the economic development and social interactions and the role municipal owned utilities, particularly electric ones, can and should play in provider citizens the full capabilities of broadband.

 In an environment where knowledge is king, those without adequate access to high-speed broadband to access that knowledge will limit their ability to develop economically. The UTelco, as Eger refers to his vision of a municipally-owned broadband and electric utility, could provide businesses, residents and others throughout the community with access to enhanced services. “Right now we’re going through what’s been called a ‘jobless recovery…and when the dust settles after all of the outsourcing and off-shoring, as Steve Jobs (News - Alert) told Barack Obama, ’Those jobs aren’t coming back.’ In fact, the U.S. Department of Education projects that 80 percent of the jobs by 2020 are going to require some college or higher education.”

Eger believes broadband today is as important as railways, waterways and highways were to our ancestors. In the past, with municipalities leading the charge to ensure the implementation of infrastructure, cities were able to develop and compete on a global scale. These same municipalities, through their owned and operated capabilities, and through public-private partnerships and acting alone or in concert with other local governmental entities in under-served areas, need to take a leadership role assuring citizens can fully participate in the broadband digital economy. 

Eger notes that while the advancement of its citizens should be a priority for municipalities, consideration of a UTelco can be foundational because of its importance for generating economic development and enhancing regional business growth. He cites municipal electric companies as bearing a particularly significant responsibility here as a means to utilize their rights of way and access to customers and new telecom infrastructures as a means leverage the provision of broadband communications more attractive to business. He cautions that to do so, they must develop a compelling and cohesive strategy that can be clearly articulated to get community buy-in.  

“Each community has to assume the responsibility for this,” Eger added. “Is there business awareness of the benefit? Yes, I think there is, and that is clearly spelled out in most corporate strategies. But is there a widespread public awareness? No, certainly not of the regulatory issues. And I don’t think that the market players, and particularly the local municipalities, are doing enough to educate the community.”

Eger hits on an important point – are the municipalities themselves educated enough on the benefits and importance of telecommunications, as it relates to economic development and quality of life, to put together a viable strategy for growth and become meaningful players in providing next generation access to their communities? The first step may be to identify who bears the responsibility of communicating the message and clearly defining the business case for investments. 

We hear a lot about the digital divide and efforts to serve the under-served in non-urban areas. Reality is municipalities in these areas have an opportunity, and one could even say almost an obligation to step up when the marketplace is under willing to fill the void. Using the assets they to have like municipally owned electric utilities, either acting alone or through creative public-private partnerships is a tantalizing way to create a win/win situation. As Eger notes the idea of municipalities becoming next generation service providers has been around for a long time. It may be that his formulation of UTelco is an idea whose time has come. 

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