Toronto is giving up on North America’s largest municipal broadband network

The city council is set to pull back on its plans for a municipal network after concerns from council members and telecom companies. …

In January of 2021, the city of Toronto announced a sweeping new initiative to improve internet access for its 3 million residents. By building a broadband network owned by the city, the program called ConnectTO would give low-income residents struggling with high prices and slow internet speeds an affordable option. The proposal, received favorably by local community groups and internet-access advocates, was passed by the city council less than a month later in February 2021.

Now, barely a year later, the plan for municipal broadband in Toronto is on its way out.

Toronto’s city council is being encouraged by technology specialists on the city staff to abandon recommendations to pursue a municipally-owned network as it considers progress on ConnectTO at an upcoming meeting on May 4. Toronto’s network would have been one of the first municipal broadband services in North America to serve a large urban population where cables, towers, and other infrastructure for broadband exist, but cost prohibits everyone from accessing it.

The Toronto Star reports that the move comes after a lobbying campaign by two of Canada’s largest telecom companies. The private-sector companies argued the city would struggle to build their own broadband network, and could better allocate money to subsidize existing internet services for low-income residents.

Toronto’s decision marks a major setback for what would have been one of the largest municipal efforts to establish broadband services. If it fails, it raises questions about how local governments can ensure access to high-speed internet, an essential service for many workers in the modern economy.

Toronto’s plan for city-owned broadband

Toronto’s goal wasn’t to build out a new internet service provider from scratch, but rather to build on existing city assets to create a more affordable internet option for some residents. With monthly broadband charges as high as $100, the cost precluded many residents from accessing crucial internet services.

Since the city already owns a cable fiber network for municipal operations and services such as transit and traffic management, ConnectTO was conceived as a way to build more connections to this network, while partnering with a private-sector ISP to deliver internet into people’s homes, especially in underserved areas of the city. People would still pay for their internet service, but the revenue generated would be put towards reducing internet bills for those who could least afford it. The designers of ConnectTO took pains to point out that it is not its own ISP meant to limit competition among existing providers, but a way to grow the existing network to “fill in…internet connectivity gaps.”

But city staff  have now cut out the recommendation that the city “endorse the proposed creation of a City-owned high-speed Municipal Broadband Network,” that would eventually be used to power city facilities and services and “help ensure equitable access to broadband internet for residents regardless of their financial means or circumstances.”

A representative from the city insisted that ConnectTO will continue and that the city will focus on improving the city’s existing broadband network and creating some extra capacity. But without the mandate to work with ISPs to use city-owned assets to provide affordable broadband access, the centerpiece of the policy has been gutted, at least in the eyes of a community justice organization that championed it.

Telecom giants Bell Canada and Rogers Communications firms lobbied city officials, especially members of the executive committee, the leadership board within the city council that sets its priorities. In a letter to the committee, a Bell representative insisted that a city-owned broadband network was unnecessary, saying that it would  “duplicate” existing infrastructure, and questioned the city’s ability to offer internet that is both high-speed and low-cost. The letter also pointed out that the city’s request for proposals for partners received no bids.

Members of the executive committee seemed to cast doubt on the viability of the city’s plan, though at least one member told the Toronto Star that his doubts weren’t based on information he received from Bell.

Chattanooga’s path to municipal internet

Local governments, especially in rural areas, have taken it upon themselves to build their own broadband networks as broadband internet has come to be seen as a critical piece of infrastructure over the past two decades. But they’ve faced an uphill battle from regulators and private companies looking to curb competition.

North American cities that have tried to roll out their own broadband networks have faced opposition from telecom companies, as well as state-level governments who—at the telecom companies’ request— have restricted local governments’ ability to run their own networks. Such restrictions exist in at least 18 states in the US.

But a few places have managed to build despite these odds. Chattanooga, Tennessee is the most successful example of a municipal broadband network. The city of 180,000  built out its own fiber-optic network managed through its electric utility commission. Despite lawsuits from Comcast and AT&T, Chattanooga built out its own high-speed internet network. By 2021, it served more than 120,000 households with 300 megabits per second broadband (compared to a US average of around 150 mbps)  In the decade since coming into existence, Chattanooga’s municipal broadband has created $2.69 billion (pdf) in “community benefit”, while also posing a viable competition to private ISPs in the area. The municipal service is able to offer faster speeds at lower prices than private competitors.

For big cities like Toronto where the primary barrier to broadband for many people isn’t connectivity but cost, going toe-to-toe with the ISP to offer an alternate service may be a riskier bet. Bell suggested that the city’s resources would be better spent on subsidy programs to help people afford their internet bills rather than bringing down costs overall.

City representatives have said that they are now focusing ConnectTO to improve connections within the city’s existing broadband network and expand access to free public wifi at public spaces such as libraries and community centers. Such measures will certainly improve broadband access, but lower prices may not happen unless the city can encourage more competition among the small number of for-profit companies dominating Toronto’s broadband market.

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