^{Democracy & Technology Blog} Mayors just don’t get it

The U.S. Conference of Mayors have written a letter to the chairman and ranking member of the House and Senate commerce committees opposing franchise reform. One sentence (“Congress may ensure our citizens and businesses benefit from the rewrite of the Communications Act through preserving local franchising authority”) may have been unintended or may reveal profound ignorance and profound arrogance.
Many local officials see the primary value of the franchise process as an opportunity to extract noncash concessions from new entrants. That’s understandable. Although local revenues are increasing, Medicaid and education continue to devour city budgets. What are local politicians to do? In the late 1990s, local officials and their consultants at Miller & Van Eaton took broadband deployment for granted and argued that cities should be allowed to charge competitive local exchange carriers whatever the market would bear for access to public rights of way. In comments filed with NTIA and in other fora, the consultants argued that rights-of-way should be managed like shopping malls (“percentage of gross revenues”) or Alaska oil fields (12.5% royalty). No one ever stopped to consider what was more important: a few extra bucks for the city treasury, or the advantages of having broadband competition. It apparently still hasn’t occurred to these people that if they don’t welcome private investment it will go elsewhere.