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Monday, June 9, 2014

Acxiom VP tells lawmakers the state should allow school districts to use public internet infrastructure; private internet providers aren’t happy

Posted By on Mon, Jun 9, 2014 at 8:43 PM

click to enlarge Jerry Jones of Axciom
  • Jerry Jones of Axciom
In yet another Education committee meeting this morning about expanding broadband internet access to school districts, an executive vice president of Acxiom said he “wholeheartedly endorsed” the report released last month that recommends a public-private partnership to bring the state’s subpar K-12 internet connectivity up to national standards. Jerry Jones, who also chairs the FASTER Arkansas task force established by Gov. Beebe last year to study the issue, urged legislators to change a law that currently prohibits schools from connecting to the state’s existing fiber optic pipeline for public universities, the Arkansas Research and Education Optical Network (ARE-ON). Internet providers such as Cox and AT&T quietly won passage of that law in the 2011 legislative session and are now fighting to keep it in place. Letting schools use ARE-ON — a public entity — would unfairly cut into their market share, they argue.

There are plenty of powerful interests who want the change as well, including the governor, the Walton Family Foundation, and the state’s association of school superintendents. As a senior executive in a global technology company, Jones’s ringing endorsement carries major weight. It also makes the position of the internet providers look less like defense of free market principles and more like protection of a narrow parochial interest. Still, with profits at stake, they can be expected to fight tooth-and-nail to keep the law in place.

“Some schools are paying 300 percent more for internet than others,” said Jones. He also suggested that the ever-growing importance of the internet means Arkansas’ widening gap in bandwidth between districts could threaten its compliance with adequacy requirements under the Lake View ruling. “We are almost per se inadequate if we do not provide high speed internet access to every public school in Arkansas,” he said.

Jones noted that changing the law would merely allow schools to use ARE-ON, not require it. In many places, schools might opt to continue buying internet from private providers, while rural districts that now pay very high rates for broadband might get a cheaper price on their bandwidth with the addition of a little competition.

“It’s an alternative, not a mandate to use it,” he said. “I’ve never seen anything that doesn’t benefit from alternatives and competition...if that alternative exists, costs will come down, the price will come down.”

That raises an interesting point. The private providers have argued all along that the internet deficiency in Arkansas schools is largely fabricated. The needed bandwidth potential is out there, they say; districts just need to access it. In other words, they’ll be happy to invest more money in fiber optic infrastructure if schools just pony up the money. Meanwhile, school advocates have struggled to provide data to back up their argument that the broadband deficiency is real. Jones’ comments indicated why: internet access isn’t just about infrastructure, but is just as importantly a function of cost.

This is the sort of issue in which both sides have unspoken arguments they’d rather not articulate too clearly. The providers want to preserve their virtual monopolies in rural areas, obviously; if a public network can do the job more cheaply than they can, the providers lose out on (taxpayer-funded) business from schools. But the folks on the FASTER Arkansas task force and their allies want to do something that’s even more taboo in today’s political climate — inject a little government into a private market on behalf of the wider public good.

The whole thing is highly reminiscent of the national debate over the “public option” back in 2009, when many Democrats argued that the feds should allow all citizens to buy into Medicare to obtain their medical coverage (hard to remember now that that was a real policy possibility only a few years ago). Then, as now, the argument from private industry was basically that there is something unholy about a public entity actively competing against private companies. A government-run plan would enjoy an unfair advantage in the long run, said big insurers. It would potentially threaten their very existence — a rich claim of frailty from giants such as BlueCross.

Back then, advocates of the public option responded with arguments similar to Jones made today: establishing a public health insurance plan provides an alternative rather than a mandate. What’s wrong with simply providing an alternative? If private industry provides a superior product, what does it have to worry about? And yes, competition tends to drive down costs, which is the ultimate goal all along, right? That answer depends on whether you’re the one paying or getting paid.

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