Municipal broadband networks appear to offer cheaper Internet service than commercial providers, according to a new study by Harvard's Berkman Klein Center for Internet & Society.
For the study, researchers compared prices of 27 community-owned broadband networks that offered fiber service at speeds of at least 25 Mbps downstream with prices of private networks in the same communities.
Twenty-three of the community-owned networks offered cheaper service -- significantly less expensive, in some cases -- than the private networks, when the price was averaged over four years, according to the study. The report also says that the community-owned networks' prices were "clear and unchanging," while private carriers tended to charge low teaser rates that rose after 12 months.
The researchers originally planned to compare pricing between community and commercial networks in 40 areas, but were only able to carry out the research for 23 communities. One reason was because private carriers in eight communities had language in their terms of service that discouraged the research. "The [terms of service] for AT&T, Verizon, and Time Warner Cable (now owned by Charter), were particularly strong in deterring such efforts; as a result, we did not record data from these three companies," the study states.
The 23 community-owned networks with cheaper service charged consumers 2.9% to 50% less than private providers. In the other four communities, private providers charged between 6.9% and 30% less for broadband than the community-owned networks. Researchers collected the data in 2015 and 2016.
The new research comes about two years after the Obama administration issued a report touting community-based broadband.
Currently, about 20 states have laws that restrict towns from creating their own networks. The Federal Communications Commission attempted in 2015 to invalidate those restrictions, but an appellate court later ruled that the agency lacked the authority to do so.