Comcast's Deep Pockets Fund False Claims in Longmont Referendum

We have been closely following the referendum in Longmont, Colorado, that will allow the local government to use an existing fiber loop to sell telecommunications services to the private sector and residents.

Comcast and CenturyLink are opposed because local businesses would have more choices for broadband services -- which would require Comcast and CenturyLink to actually invest in their offerings rather than simply collecting the benefits of a de facto monopoly. It is more profitable for them to invest in astroturf opposition to the referendum than in their physical infrastructure.

When this came up previously, Comcast and its allies spent an unprecedented $245,000 to defeat it by confusing and lying to voters. This time around, big cable may outdo itself. It looks like Comcast and anti-competition allies in the Colorado Cable Telecommunications Association have already spent some $239,000 [pdf] in glossy mailers and phone calls and door knockers to scare Longmont's voters into defeating the 2A ballot initiative.

The Comcast-sponsored Vote No group is called "Look Before We Leap and has already been busted for lying about the Mayor's position on the referendum, claiming he supported their position when he has been emphatically on the record in support of 2A. In fact, his challenger in the Mayoral race also supports 2A, as detailed here in the statements from both candidates on the issue.

Public Persuasion Logo

So who exactly is "Look Before We Leap?" They cannot point to any real local support in the community. The web site is registered to "Melisa Kotecki Schlote" of a PR firm, Public Persuasion that lists both Comcast and the Colorado Cable and Telecommunications Association as clients (with a testimonial from Comcast). But she is out of Denver, not Longmont.

The Vote-No phone calls that direct people to "Look Before We Leap" are filled with lies about the experience of other communities that have built full networks -- which is not even what Longmont is proposing to do. When pressed, the callers have claimed they are "volunteering" their time and refusing to divulge who pays them. A letter to the editor of the Times Call reports on one experience with the calls:

At 5:30 p.m. Sept. 24, I received a call from a listing called FAX GLOBAL 303-648-4835. An older woman began telling me that a yes vote for 2A was a mistake because 80 percent of cities that have done this failed. I asked who was sponsoring this call and she said it was volunteers. I asked who was paying for the equipment and got the runaround. I asked if the call center was in Longmont and she hung up. I dialed back and got a fax tone. The phone is a land line in south metro Denver.

Hard to imagine why anyone is volunteering to call people in another town and lie to them about a referendum.

The letter writer goes on to discuss the absurdity of Comcast's position that a yes vote is a risk for the community:

If I have a building that is paid for (as is the fiber-optic network) and is one-third rented and have the opportunity to rent the empty space and the renter goes bust, I have made money with little expense.

Longmont Seal

The grassroots groups supporting the initiative seem to have spent substantially less -- far less than even 1% of what Comcast is dropping to maintain its monopoly on fast broadband. But they are springing for pizza at a Vote Yes on 2A event next Friday.

We have an event scheduled for Friday, October 21st, from 3:00pm to 8:00pm at Left Hand Brewery in Longmont. We want to encourage the public to stop by and see high-tech displays showing what YES on ballot issue 2A COULD mean to them.

There is also a meeting tonight where the Longmont Tea Party will discuss the referendum. It will be curious to see who they side with -- the distant mega-corporations overcharging them for telecom or the local government that is directly accountable to the voters.

AT&T Takeover of T-Mobile Will Kill Tens of Thousands of Jobs

Harold Feld details "double speak" from Deutsche Telekom in the matter of the AT&T takeover of T-Mobile. They have admitted it will kill jobs and is in no an essential outcome for either company.

Two weeks ago, Deutsche Telekom (DT) Chief Technology Officer Olivier Baujard accidentally spoke truth about T-Mobile to an audience of German investment analysts. After running through the usual company talking points about the effort to sell T-Mobile to AT&T (e.g., it will happen, DoJ is just playing hardball with negotiations, etc.), Baujard said at a public presentation at a Paris broadband conference that: “any rational company had a Plan B and that Deutsche Telekom had other opportunities for its U.S. operations should the U.S. Department of Justice succeed in terminating the deal.”

This is vitally important because, after accidentally shooting the “this is the only way to bring 4G to rural America” argument in the foot by accidentally leaking documents proving AT&T could bring 4G to rural America whenever it wants, and T-Mobile killed the ‘this will create jobs’ argument by confirming that it was preparing pink slips for more than 20,000 employees after the acquisition gets approved, the “T-Mobile is a sickly gazelle” argument is about all AT&T and it supporters have left. Unfortunately for AT&T, this is not the first time Deutsche Telekom has screwed up the “sickly gazelle” storyline by revealing inconvenient truths about its other options. And while there is usually a rule in Washington that “we totally ignore what you say to investors when it contradicts your chosen story,” this deal is sufficiently high profile and has sufficient problems that eventually someone may notice if AT&T’s “Sickly Gazelle Chorus” keeps getting thrown off key by Deutsche Telekom’s “We Have Lots of Other Options Counterpoint.”

Harold offers much more on this job killing merger in his excellent Tales of the Sausage Factory blog.

Coincidentally, the Washington Post ran a front page story about the "fuzzy math" used by big companies in job creation claims.

... A wide array of businesses are saying they can help solve the country’s unemployment crisis if only the government would roll back some regulations, approve their big mergers or lower their taxes.

Yet the industry often touts debatable jobs numbers. Mergers between big companies, for instance, tend to result in layoffs rather than new positions overall.

Small businesses create jobs - big Fortune 500 companies put small businesses out of business. Community broadband networks encourage small businesses to create jobs. Massive cable and telcos strangle local businesses with inflated charges and poor customer service.

Video Showing Importance of Fast, Affordable Broadband to Wisconsin Governments

Another video from the Building Community Capacity through Broadband project (hosted by the University of Wisconsin Extension service) takes a look at how local governments use broadband and the importance of high capacity, reliable connections that they can actually afford. 

Video: 
See video

Rachel Maddow: Public Investment in Broadband is Important

Rachel Maddow reminds us that many areas of America still do not have broadband in her coverage of the broadband stimulus funds prior to an interview with USDA Secretary Vilsack on October 5 (transcript).

While introducing Secretary Vilsack, Rachel had a terrific explanation of why public investments into broadband are essential:

The idea here behind spreading broadband to America`s rural areas is the same one behind the rural electrification program from the 1930s. The idea that even if it`s not profitable for private industry to extend the basics of modern economic life, electric light then and the Internet now, even if it`s never going to be profitable to some private company to extend those things to every last home down every long dirt road in America, it is worth it to America, worth it to us, that everybody has access to those things. That we`re all plugged in.

It is the right kind of jobs investment for the country to put people to work laying those lines and connecting those Americans to the grid and it is the right things to do for the rural parts of the country so that people and businesses in every part of the country can compete economically.

Extremely glad to see Rachel devoting time to this important issue.

Visit msnbc.com for breaking news, world news, and news about the economy

Astroturf Org in Longmont Accuses City of Distributing Propaganda

Just one day after getting busted for lying about its supporters, a group funded by self-interested groups outside the community is accusing the City of distributing propaganda regarding an upcoming referendum over whether the City should have the authority to use an existing fiber-loop to spur economic development.

We developed a comic that explored the ways cable and phone companies use dirty tricks to fool people into voting against more competition in broadband (such as this "Look Before We Leap" Vote no group).

As if to prove our point for us, that group was busted for outrageously claiming the Mayor wanted people to vote no when the Mayor has been explicit in not just supporting the referendum but in condemning outsider groups like theirs from coming into the community to do the dirty work of anti-competitive incumbents.

Bryan Baum has appeared at several forums in support of 2A, including a Longmont Area Chamber of Commerce forum in which he urged out-of-town opponents of the ballot question to "get out of town" and let Longmont settle its own issues.

The group said "This is obviously a mistake," Merritt said. "We'll get that fixed." Yeah sure. Whoops. We accidentally claimed a prominent figure as a supporter. Their response? They took his name off that list but left his wife's name on their site!

Comcast's front group has zero credibility

This is a group with absolutely zero credibility. But they have tons of funding -- likely from Comcast and incumbent trade groups that fight these initiatives everywhere to preserve what is essentially a monopoly for the cable and telephone companies. We just republished an op-ed outlining some these tactics from 2009.

Now the "Look Before We Leap" group is accusing the City of distributing propaganda.

Longmont's pamphlet, on the cover, states that the contents are "intended to provide a factual summary, including arguments both for and against the proposal, of issues of official concern to Longmont voters. It is not intended to urge a vote in favor of or against Ballot Question 2A." Inside, it gives the text of the ballot question, a brief history of Longmont's fiber optic network and the restrictions on it, election dates, and sections titled "What is being asked of voters?", "Those in favor believe" and "Those opposed believe."

"The city used taxpayer dollars to campaign with a glossy mailer, complete with high-quality pictures, an inaccurate history, a lengthy advocacy section and a clearly token statement that does not show how most other cities fail when they enter this unpredictable business," said George Merritt, a senior strategist for Onsight Public Affairs of Denver and spokesman for Look Before We Leap.

Of course, as we discuss on a daily basis, the vast majority of communities have succeeded in this space. Even if one narrows the field to communities that have attempted the most difficult challenge of building citywide networks (which is not what Longmont presently plans), there are very few failures. In the case of Longmont, where the city already has built the asset, the only risk lies in not using it to its full potential.

This is simply another case of a few massive companies using their power to prevent new competition that would greatly benefit the community and create new jobs. The question is whether the majority of voters will be able to see through the blizzard of propaganda pushed by Comcast's "Look Before We Leap" proxies.

Longmont: Beware the Robo-Calls From Mega-Corporations

Vince Jordan, an advocate for broadband competition in Longmont, Colorado, wrote the following op-ed for the local paper about the upcoming referendum 2A. He has given us permission to reprint it here.

“There you go again” (to quote President Ronald Regan).

Well, it has already started. The folks who spent almost a quarter of a million dollars in the elections two years ago to convince the citizens of Longmont that being able to take further advantage of the fiber network they already own and are using is too dangerous for them, are at it again. No doubt by now, many of you have received one if not multiple “robo-calls” trying to convince you that the City is going to raise your taxes as a result of a yes vote on 2A. The first three words of Ballot Issue 2A say, “Without raising taxes”, but, since the opponents of this ballot, (those being the two mega-corporations who stand to benefit from you voting against 2A), can’t come up with any good reasons against the measure, they are resorting to the tired old cry of “they are going to raise your taxes!”

Citizens of Longmont, from 1997 to 2005, we had the right to use the asset that the city owns, namely the fiber network, to the benefit of ALL of the businesses and citizens of Longmont. The same corporations that are trying to “buy” your vote again, as they successfully did in 2009 with their “No Blank Check” campaign, in 2005 were able to lobby for and buy a law that took away our right to fully utilize this city owned asset. What ballot issue 2A is asking is for the citizens of Longmont to take back a right they once had.

This fiber network, which is fully operational today and used by the city for city purposes, and in fact already benefits the citizens of Longmont to some degree by keeping city service communications cost low, can do so much more. Our fiber network can be used to enhance the three Es, Employment, Education and Entertainment, here in Longmont. Low cost communications is as much a necessity today as is low cost power and water. Longmont already benefits from the lowest power rates in the country and the best service. Why wouldn’t we want the same advantage in the communications network that serves our businesses, our schools and our homes? Do you really believe the opponents of this measure, the lawyers from Denver being paid for by Comcast and CenturyLink, (stated so in a recent Chamber of Commerce session by the very lawyer), and the folks from Colorado Springs being funded by the same organizations, REALLY have YOUR best interest at heart? Do you think these folks would even be here if they weren’t being paid by these corporations?

When the election was over in 2009 and we lost by a very slim margin and the city was then able to explain more clearly what we lost, many of you wrote to the editor of the paper stating that if you had known what the ballot issue was actually about, instead of the “No Blank Check” that you had been convinced it was about, you would have voted for it. Well, here is your second chance Longmont. Don’t let the two mega-corporations “buy” your vote with robo-calls and the mis-information mailings that will no doubt start this week. Be informed and take back the right you had to an asset that you already own, to the benefit f our businesses, our schools and ourselves.

Vote YES! on 2A! Visit Longmont's Future. Be part of Longmont’s Future!

Robo Call graphic courtesy of Mike Licht, NotionsCapital.com

Broadband and Second Order Benefits

In a recent post about AT&T's funding of astroturf groups to promote its agenda, I took aim at the Internet Innovation Alliance, which has long promoted AT&T goals around the country.

Despite this criticism of them, they have produced a very good infographic (included below) that discusses the relationship between broadband and jobs. I would like to draw your attention to number 5 below in particular.

“10

#6 is a great explanation of why communities should directly invest in broadband. Local economic growth and secondary investment enabled by broadband expansion is 10 times the initial investment.

Think about that. While private companies have long built, owned, and operated most of the broadband networks, they have seriously underinvested. They underinvest because they cannot monetize many of the benefits from broadband. Faster, more reliable connections simply do not translate into more revenue for cable and telephone companies. So the big incumbents have largely ceased investing in next-generation networks.

These massive corporations do not care about the growth of secondary investments or other spillover effects from better broadband in communities because it does not change their bottom line -- the one thing they are supposed to prioritize over all other matters.

This is why communities should be investing in themselves. Communities do care about secondary investments and spillover benefits from broadband. In fact, they are specifically tasked with investing to benefit the community!

So when it comes to maximizing the benefits of broadband, community investments tend to make a lot of sense... and other secondary benefits.

Lafayette Dealing with Expected Headaches

No matter how much community broadband advocates prepare the community and elected officials for the expected difficulty of building a successful local project, in the midst of the deployment, times are tough.

A local paper in Lafayette claims "LUS Fiber [is] at a crossroads" but starts with an admission that these problems were forecast and expected:

Competitors will pay less for programming than you do, and in turn play hard ball by lowering rates for customers. Good luck keeping up with technological advances, expansion needs and growth costs; it's a risky proposition for a public entity used to maintaining rather than adapting. Your opportunities will be limited because you can't provide services outside the city limits. You'll be criticized for offering programming such as adult movies, and you'll be told you really should be focusing on your core business: running power, water and wastewater plants.

Terry Huval delivered that message in 2000, long before Lafayette committed to building their community fiber network -- a network that delivers some of the fastest speeds in the nation at the lowest rates and has already delivered hundreds of jobs.

Nonetheless, LUS Fiber is behind the take rate goals they had set in the business plan. The expenses are higher than forecast because Lafayette was unfairly denied entry to a coop that secures lowers rates for television contracts for members. The only discernible reason for rejecting Lafayette is that Cox joined the coop after Lafayette committed to building its network. There is little doubt that Cox was influential in denying Lafayette's application, likely increasing LUS Fiber expenses for offering cable channels by more than 20%.

This is just one of the many ways that the telecommunications market is rigged to benefit incumbents at the expense of all of us -- residents and small businesses alike. We will not have real choices in competition until government policy treats telecom like the essential infrastructure it is.

Mike Stagg, a long time supporter of the network is quoted in the article, challenging LUS Fiber to improve its marketing:

Can they do better? Probably so. Part of it is the fact that, just from a mindset standpoint, LUS is a utility and utilities generally do not compete," Stagg said. "I think that has been an issue that they have had to grapple with and can get better at. I think there was just this perception inside LUS that everybody knew about the service and how good it was. But they didn't. I just don't think they have been aggressive enough as marketers in pushing their service and highlighting the advantages. They have a great price. There are no tricks in it. It's straightforward. You can't live anywhere else in the U.S. and get this kind of bandwidth."

Marketing can be very difficult, particularly for public entities that are not used to revising their approach on a regular basis to quickly fix what goes wrong and improve upon what works. Big companies like Cox will saturate the market with advertising and promotional rates - communities have to find their own ways of responding by capitalizing both on their technical advantages as well as being the local provider with better customer service and non-gimmick pricing.

The "crossroads" article is odd because the "crossroads" is somewhat a headline fabrication, as explained by John at Lafayette Pro Fiber.

The theme of the front page story, LUS Fiber at a crossroads, is that some sort of decision needs to be made soon about whether or not to commit to the project or dump it. But nothing in the story itself warrants such a theme. There's nothing in the story that should make any reasonable reader think LUS Fiber is anywhere near failure and plenty of evidence that it is over the hump and is well on its way to success in what is hugely capital intensive business that nobody ever thought would make money in the first years. But more to the point: frankly the choice of whether or not to go forward has already been made: back on July 16th, 2005 when the citizens voted in the new public utility. The community now has the system that the citizens wanted. The discussion is no longer about "whether;" the discussion is now only about how to make sure it succeeds—and having succeeded how to make sure it is run so as to most fully benefit the community. Those are not trivial questions and I don't intend to underplay them. But pretending that there might be a choice, well, it might make a better headline but it doesn't help inform the real project at hand.

We recently evaluated the LUS evaluation and our conclusion has been that while it has not fulfilled all of its high expectations, it has greatly benefited the community already.

Sometimes we have to remember why Lafayette built this network. Once again, John reminds us:

What's disappointing is the claim that the system is rudderless, that it lacks clear goals. That's just silly. Of course it has a clear purpose and one that its leaders clearly honor:LUS Fiber is a public utility and its purpose is to put an essential service under the control of the community, to provide a first rate example of the service, and to provide it as cheaply as it is possible. That is i's fundamental purpose and I submit that there is no question but that it is meeting that standard. LUS Fiber is, for every service, cheaper than the private alternative. It is available to each and every citizen of the city; something no private provider would promise. The services are high quality—the video and phone services are at least as good as the former monopolies and the internet is unarguably not only cheaper but better.

BVU Optinet Logo

And another recent article in Lafayette reminds us that Lafayette's build has come during a debilitating recession:

Rosenbalm [President of BVU, which operates a muni fiber network in southwest Virginia] said LUS Fiber's struggles as a new business venture were likely multiplied by the fact that the system launched during the worst economic time in recent memory. Although Lafayette did not feel the effects of the recession as strongly as other parts of the country, there was an impact that may have led to some potential customers opting not to change, or that affected price points.

"You've been through, arguably, the second-worst economic time in the history of this country," Rosenbalm said. "They came into the business at a tough time, and the early years are hard within themselves. They just have to keep pushing though, and I think their growth from here on will be far more than it has been already."

These networks are very hard to build -- especially in the first 3-4 years. While it is important to ask tough questions and ensure the project is on track to meet community expectations, it is also important to take a broad view of the network's impact. The network has lowered prices, created jobs, improved access to education, and many second, third, and fourth order effects.

LUS should take a hard look at its business processes to make sure it is sufficiently nimble to operate against an opponent unafraid of fighting dirty.

But it should also make sure that someone is telling the LUS story. Where are the charts showing community savings as a result of more competition? Who is shouting out the success stories? Who is calculating how much more money stays in Cajun Country because it goes to Lafayette Utilities rather than Cox Communications?

This isn't just LUS's responsibility -- after all, it is a community network.

Longmont Fiber Ring Referendum

Residents in Longmont, Colorado are preparing for a municipal referendum to utilize an existing fiber optic network.

The referendum is set for Tuesday, November 1, 2011.

At issue is how the city can use a ring of fiber-optic cables it built around the city in the late 90's as part of its electrical infrastructure.  Much of the capacity on the ring remains unused but the city requires approval of the voters in a referendum before it can offer services to local businesses -- which will encourage economic development by creating more telecommunications choices in the community for businesses and residents (some background here).  

This is referendum question 2A:

Ballot Question 2A: Without increasing taxes, shall the citizens of the City of Longmont, Colorado, re-establish their City's right to provide all services restricted since 2005 by Title 29, article 27 of the Colorado Revised Statutes, described as "advanced services," "telecommunications services" and "cable television services," including any new and improved high bandwidth services based on future technologies, utilizing community owned infrastructure including but not limited to the existing fiber optic network, either directly or indirectly with public or private sector partners, to potential subscribers that may include telecommunications service providers, residential or commercial users within the City and the service area of the City's electric utility enterprise?

Big cable and telco operators  have wasted no time in spreading fear and false information to scare voters into voting against using a valuable asset owned by the community. When the community organized a debate for the end of September, the only people willing to defend Comcast's position came from far outside the community to do it.  

Trying to get in the mind of the big incumbents of Longmont, we developed this cartoon (the style is an homage to the "Get Your War On" comic).

Longmont 2A Opposition

Download a higher quality pdf version.

Citizens have responded by joining together to support the referendum to encourage economic development in their community.

Learn more at Longmont's Future.  Also the local Free Range blog has posted an article: Join forces for “YES” on Longmont’s Fiber Optic Referendum

Learn more about Longmont's journey from stories in our archive:

AT&T Takes Its Astroturf Show on the Road, Midwest Edition

As AT&T tries to buy out its competition via the T-Mobile merger, it has sent out its allies and minions to push the company line in communities around the country. Here are two events in Minnesota and Wisconsin you should be aware of.

On Monday, October 3rd, the Humphrey School of Public Affairs at the University of Minnesota is going to host a debate between Amalia Deloney (MAG-Net Coordinator and friend of MuniNetworks.org) and Former Congressman Rick Boucher on the subject of AT&T's attempt to buy T-Mobile (which just happens to be the low cost provider in the wireless space).

A few short years ago, one would have expected Rick Boucher to champion opposition to this anti-competitive merger, but alas, the good citizens of his district rewarded his many years of hard work in Congress by voting for his opponent in the last election. As one often expects to see in DC, Rick took a new job and now works for a law firm with AT&T as a client.

Suddenly Rick Boucher is the Honorary Chairman of the "Internet Innovation Alliance," a group that has a name that sounds like he should head it. But the IIA is little more than a puppet for AT&T and like interests. They use it as part of their astroturf campaigns to further AT&T's agenda -- ensuring that most Americans are stuck using a network designed for AT&T's interests rather than the public interest.

We wish Amalia the best in the debate. This is a far better program than the last time AT&T came to the U's Public Policy school, which featured a blatantly one-sided program attacking inter-carrier compensation rules that have been essential for supporting rural network investment.

If you want to attend, you should RSVP to the Center for Science and Technology Public Policy. It will be at 2:00 in the Wilkins Room. Unfortunately, I have a prior appointment and cannot attend.

But the fun doesn't stop in Minnesota - it continues to Wisconsin on Oct 12 when The Internet Innovation Alliance joins a panel at an event by WisBusiness in Madison. Once again, the panel is greatly tilted in favor of a few self-interested industry voices that will undoubtedly explain how what is good for a few giant corporations is best for America.

One hopes for a future where we can have real debates about these important issues without playing the "who is puppeteer" game. AT&T has a legitimate point of view and should be free to advocate for it -- but should do so openly.