After suffering through years of rising rates and limited expansion of services, some small U.S. cities have decided to challenge the private monopolies of cable giants by building competing, publicly owned cable systems. So far, the municipally owned cable systems number in the hundreds and can be found in places like Glasgow, Kentucky; Kutztown, Pennsylvania; Cedar Falls, Iowa; and Provo, Utah. In most cases, they’re operated by the community-owned, nonprofit electric utilities. There are more than two thousand such municipal utilities across the United States, serving about 14 percent of the population and creating the potential for more municipal utilities to expand into communications services. As nonprofit entities, the municipal operations are less expensive for cable subscribers, too.
The first town to take on a national commercial cable provider (Comcast now runs the cable service there) was Glasgow, Kentucky, which built a competing municipal cable system in 1989. The town of fourteen thousand now has seven thousand municipal cable customers. William J. Ray, the town’s Electric Plant Board superintendent and the visionary behind the municipal communications service, argues that this is not a new idea:
Cities have long been turning a limited number of formerly private businesses into public-works projects. This happens only when the people making up a local government believe that the service has become so essential to the citizens that it is better if it is operated by the government. In colonial America, it was all about drinking water…. In the twentieth century, the issue was electric power and natural gas service. Now, we are facing the same transformation in broadband networks.25
More than a quarter of the country’s two thousand municipal utilities offer broadband services, including cable, high-speed Internet, and telephone. How will commercial cable operators fend off this unprecedented competition? According to Ray: “If cable operators are afraid of cities competing with them, there is a defense that is impregnable—they can charge reasonable rates, offer consummate customer service, improve their product, and conduct their business as if they were a guest that owes their existence to the benevolence of the city that has invited them in.”26