Community Broadband Bits 12 - Todd Murren with SpringNet, Missouri

The 12th episode of the Community Broadband Bits podcast features an interview with Todd Murren of SpringNet, in Springfield Missouri. SpringNet delivers blazing broadband over Ethernet to businesses in the community. We talk about Missouri's strong restrictions on local authority around broadband and the history of SpringNet.

We also discuss how SpringNet has led to hundreds of new jobs in the community from one single employer, to say nothing of the many others.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 30 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here.

Thanks to Fit and the Conniptions for the music, licensed using Creative Commons.

Carl Sagan on Technology

We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology.

Google Fiber Spurs Digital Divide Discussions

“I’m concerned that the digital divide” — the gap between electronic haves and have-nots — “will be exacerbated by the fact that you’ll have extremely fast Internet in some neighborhoods while people in neighborhoods with fewer resources will be left even further behind,” said Christopher Barnickel, an assistant director at the Kansas City, Kan., Public Library.

Christopher Barnickel, speaking with Scott Canon of the Kansas City Star, echoed the growing concerns of many in Kansas City. The Google fiber initiative, meant to offer the fastest broadband, may leave many behind. Google is connecting neighborhoods that met a minimum threshold for service, creating concern that low-income neighborhoods will not meet that threshold. Of the 202 possible neighborhoods, 22 will not be connected.

We discussed in a previous post how Google is in the unique position of being able to offer their gigabit service for such a low price. But one of the reasons they make it work is by building only in areas where people are ready to sign up today. Their agreement with the City is very clear that they do not have to serve everyone.

Google's Kansas City preregistration just ended. But Canon's words from 2 weeks ago remain important: 

Two weeks remain for dozens of neighborhoods to sign up enough potential customers to qualify for Google’s service before a Sept. 9 deadline. But many neighborhoods — chiefly the least prosperous pockets of the metro area — remain far behind the pace needed to hit the Google-established thresholds of customer penetration.

That means many of the free connections Google agreed to make to public buildings, library branches and community centers won’t happen.

At that time, the map was fairly divided among income lines. 

West of Troost Avenue, the map is mostly green, indicating neighborhoods with plenty of eager customers. East of Troost, pre-registrations largely are low. In Kansas City, Kan., the map looks more quilt-like. Places where incomes are lower seem to have little chance of getting Google’s Internet service.

But we will know more on Thursday, when Google announces the schedule of when neighborhoods will be connected.

In addition to private citizens' concern over whether or not they will get the chance to access the new gig network, schools are worried about a new divide they had previously worked to diminish:

The city’s school district is worried that many of its buildings will be left without the fiberoptic connections that will blossom in areas that are better off.

“We worked hard to close the technology divide between our kids and more-resourced communities,” said school district spokesman David Smith.

All students in the district high schools, for instance, are issued laptops.

“It is unimaginable to us to have that divide reopen,” Smith said.

Some say the bridge over the digital divide now seems like a mirage.

“It does not have the feel of the universal access that was part of the initial description,” said Karen Hostetler, a resident of the East Argentine section of Kansas City, Kan.

Kansas City Logo

The municipal government of Kansas City should be responsible for making sure every school has the connections they need. Leaving it up to a distant, private company's marketing gimmicks rather than taking responsibility for a core city function is really poor public policy. It is also smart marketing for Google, which seems to be the message reporters are spreading.

Some have organized grassroots efforts to sign up more pre-registrants in low-income areas and results are mixed because obstacles in economically challenged areas are numerous. Some are not aware of the initiative, others don't trust door-to-door volunteers, and still others don't have the pre-registration fee of $10.

At Juniper Gardens, a University of Kansas research center dealing with children’s developmental disabilities, it has sparked a tone of worry. The downtown Kansas City, Kan., office is staffed by people fearing it won’t get Google Fiber or its potential for long-distance, high-definition video to analyze kids and train their parents.

“The potential is great,” said Jay Buzhardt, a professor at Juniper. “We just don’t want to miss out.”

While we remain hopeful that the Google effort in Kansas City helps to demonstrate the importance of next-generation broadband, we also believe the hype around it is hitting noxious levels, often from commentators who have no idea what they are talking about (and are attacking Google to defend the companies like Time Warner Cable that indirectly pay their salaries). Therefore, it was with relief that we read Timothy Lee's Ars Technica article explaining to free market glibertarians that Google's Kansas City network is fundamentally not an example of the free market working.

In fact, the local government is subsidizing this network in ways that local governments generally do not. Google has used its fame and its technical prowess to get a great deal from the City in terms of access to public right-of-way and instant inspections. 

We are strong supporters of local authority and do not believe that such a subsidy is poor policy per se. And we do defend the ability of communities to choose to partner with corporations in this manner. However, when we see that Kansas City will not get universal access and has no real decision-making power in regard to the network, we have to wonder how good of a deal they are getting. Kansas City, Missouri, may have been the better negotiators, as Google is installing an additional conduit and is charging them less than industry standards to do so.

In the short term, they get an incredible network and tons of publicity. But in the long term, we'll see -- because these networks will still be important in 10, 20, 30 years. And who knows what Google will be doing then.

Breaking the cable/DSL monopoly/duopoly is very difficult given the power of the massive corporations responsible for it, but we continue to see the largest gains going to the communities who have shouldered the greater risk of building their own network to achieve self-determination.

But viewed differently, the greatest risk lies in hoping distant corporations will provide the network a community needs to succeed in the digital economy.

A Match to Watch: Tennis Channel v. Comcast

Back in 2010, we reported on the merger between Comcast and NBC, which was in the works at the time. One of the issues that came up was how programming is chosen.

At the time, the Tennis Channel had filed a suit against Comcast, alleging that Comcast did not make Tennis Channel programming available to as many subscribers as the Golf Channel and NBC Sports (both belong to Comcast). Comcast, under the Communications Act and Commission rules, is required to place channels owned by others on tiers equal to its own similar types of channels and can't play favorites.

The FCC had reviewed the case at various levels for two years (there was an appeal) and finally, in July of this year, issued a decision in favor of the Tennis Channel. The Tennis Channel alleged discrimination, Comcast argued the Tennis Channel was using the FCC to get out of a contract it wanted to escape. According to a Meg James LA Times article:

The FCC ordered Comcast to provide the Tennis Channel with distribution comparable to the two sports channels, which would effectively increase its coverage by about 18 million homes, and force Comcast to pay Tennis Channel millions of dollars more each year in programming fees.

It was the first time that a major cable operator has been found in violation of federal anti-discrimination program carriage rules that were established in 1993.

Comcast was ordered to remedy the situation within 45 days, a window that would make the Tennis Channel available in more homes during one of the biggest tennis events of the year, the U.S. Open in New York. The channel is currently available in about 34 million homes nationally.

Comcast immediately asked for a stay from the remedy, appealing to the U.S. Court of Appeals for the D.C. Circuit. Comcast was granted the stay while the case is argued on appeal. Once again, Comcast's army of lawyers  are strategically using the court as a way to slow down an adversary's remedy.

We expect to see more video legal issues arise in the near future. As broadband transforms the way people receive video signals, how those signals are governed will inevitably affect license agreements, rules, and regulations.

In an informative blog post, Susan Crawford gives us the heads up on where problems dwell and the attitudes that will drive litigation and policy. Unfortunately, now that few people watch video for free, the usual participants will tussle for a very large pie. Will the consumer be considered? Early indications don't seem to suggest that. From Crawford:

The consumer, who is being squeezed the most, would like to watch what he/she wants, when he/she wants, and doesn’t want to be stuck with enormous must-buy bundles. But no one is talking about that.

The ever-growing Comcast is a threat to those who have innovative ideas for video content. If you want people to see your content, you need to get it in a cable lineup or online... but the big cable providers are trying to wrestle back control over online video with monthly bandwidth caps.

And even when Comcast does violate the law, it knows how to string out the process long enough that the harmed party has to fold or negotiate directly with them because they'll go bankrupt waiting for justice. 

Martinsville, Virginia, Investigates Network Expansion

Not long ago, we shared information on MINET, the municipal network in Martinsville, Virginia, that serves schools, municipal facilities, and about 30 local businesses. We noted that businesses are attracted to the area and cite the capabilities of the fiber network as a driving force.

The Martinsville Bulletin now reports that city leaders have been approached by more local businesses interested in saving money by connecting through the network. The Bulletin spoke with City Manager Leon Towarnicki who said "we are essentially maxed out”  in staff and resources. Obviously, economic development through MINET is moving along well. The City Council is now considering the costs and benefits of expanding.

The city is working with CCG Consulting to develop a business plan. CCG will soon begin a business and residential survey and review of the city's current network. The survey and plan will explore the possibility of deploying a fiber-to-the-home network and communication system, but Martinsville will shy away from operating a cable television system. From the article:

Asked if the city would try to provide cable TV service again, City Attorney Eric Monday said, “We tried it. We litigated. We lost. We’re done.”

Martinsville made an attempt to acquire a retail cable television service in 2006, but found itself in a long and expensive court battle. Adelphia had previously provided cable in the area but filed for bankruptcy in 2002 and as a result, failed to honor its franchise agreement. At the time, the city landfill had just closed and the city was looking for other ways to generate revenue. They wanted to purchase the network and tried to block Time Warner Cable and Comcast from doing so. Time Warner Cable wanted to purchase the network and then engage in a like-kind exchange. This technique is a common tool large cable corporations have used to ensure geographic monopolies.

Martinsville argued that they were grandfathered in, as in the case of Bristol, and thought it could take advantage of another exception by claiming it had installed a cable television "headend" before December, 2002. Virginia law effectively revoked local authority for communities to build triple-play networks unless they built the headend prior to that date. But the court disagreed with Martinsville; the judge ruled that contracting with Adelphia to install the headend was not the same as installing it themselves. 

According to a 2006 Martinsville Bulletin article, the City Council admitted they had made mistakes in being transparent in the effort to take over the failed Adelphia franchise:

Martinsville City Council members said Tuesday they should have kept the public better informed about their attempt to buy the local cable television franchises from Adelphia.

There is "a fog amongst the public" as to how the council made decisions regarding the purchase attempt, said Councilman Mark Anderson.

"I believe we could and should have been more open," said Councilman Ron Ferrill. "Perhaps we were too protective of our negotiating situation."

The City Council is engaging in a transparent process this time and carefully exploring the economic development possibilities of MINET. From the recent article on expansion talks:

[Mayor Kim Adkins] emphasized that all of the customers approached the city about using its system; the city did not approach them.

When businesses and residents approach a local government like Martinsville and asks for options, the community should have the authority to follow through without burdensome regulations that only apply to local governments and not to private sector companies. 

Antitrust Allegations Against Comcast Nothing New

We have frequently written of Comcast's anti-consumer actions past posts, so we were not surprised to learn that the Department of Justice (DOJ) recently decided to investigate the cable company for antitrust. The borders between antitrust and hyper competitive business practices are grey; Comcast has experimented in the shadows on more than one occasion. We looked into one nine-year-old case, that recently advanced in the Pennsylvania courts.

The Behrend v. Comcast class action case began in 2003 against the cable giant. The suit alleges that Comcast violated the Sherman Antitrust Act by building itself into an “illegal monopoly.” The plaintiffs are current and former customers of Comcast and damages are estimated at $876 million, although the amount could be tripled under the Act.

The plaintiffs claim that Comcast’s strategy was to “cluster” as a way to eliminate competition and be able to raise rates above the market. “Clustering” involved acquiring the cable systems of other large multi-system operators that operated and offered multichannel video programming distributor service in various franchise areas in the Philadelphia area. There are internal documents, referred to in the April 12 Summary Judgment Memorandum [pdf], supporting the argument that Comcast’s business strategy was to eliminate competition through clustering.

Growing by gobbling up smaller entities in the same industry is not a new idea and certainly not illegal on its face. The issues in the 2003 case were how Comcast went about expanding, why they did it, and to what extent they took steps to hinder competition. There was a cable system asset swap with AT&T and the two worked together to divide up the Philadelphia assets of former MediaOne, rather than compete with each other during the bidding process. Other swaps involved Aldelphia, Time Warner, and even smaller operators, like Patriot Media & Communications.

Swapping and clustering with intent to eliminate competition may be considered Sherman Act violations. There were also allegations that Comcast took steps to prevent a new company from overbuilding, including requiring contractors to enter into non-compete agreements. They offered long term contracts with special discounts and penalty provisions in the areas where the possible competition planned on competing.

Allegations are that such practices harmed the members of the class – the customers. By eliminating competition and creating barriers to new competition, Comcast was able to keep the rates artificially high.

Comcast argued that no company wants to compete in the Philly areas they serve. Another cable company, RCN, tried to overbuild;the Philly market at the time and failed. Whether or not it was due to RCN’s failures, Comcast’s activities, or both, will be examined at trial. Comcast has also argued that the philosophy of clustering allowed it to offer new products and the benefits should justify their business decisions.

Seeing as how Comcast has tremendous margins on its products, particularly broadband, and it is consistently rated as one of the most hated corporations in America, we find it very hard to believe that other companies simply don't want to go head to head with them. The question is whether the legal system is equipped to deal with the harm Comcast is doing to millions of American households.

Community Broadband Bits 11 - Steve Reneker of Riverside California

In our 11th episode of the Community Broadband Bits podcast, we interview Steve Reneker -- the Chief Innovation Officer & Executive Director of SmartRiverside -- of Riverside, California.

We discuss why Riverside built its own wired and wireless networks and how it is using them to improve the efficiency of local government operations and increase digital inclusion. Riverside has received numerous awards for the local government and the nonprofit SmartRiverside program.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 17 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here.

Thanks to Fit and the Conniptions for the music, licensed using Creative Commons.

Longmont Fiber Considers Streaming Instead of Cable

In our recent podcast interview with Vince Jordan of Longmont Power and Communications (LPC), we shared the story of Colorado's newest community network. Vince told the story of the community's struggle to overcome a massive misinformation campaign by Comcast and progress since. LPC is proving itself to be innovative, creative, and centered on community - all attributes that should drive their success.

We asked what future plans may be in the works for the expanding the network or the different potential services coming to residents and businesses, wondering if triple-play services may be offered. Vince noted that in LPC's current online survey, video and voice are two products that have sparked the public's interest. Because video can be one of the most expensive and least profitable ventures, LPC is once again approaching the community desires creatively.

LPC is looking into options for video and voice services that are accessible with a blazing broadband connection and plan to create a clearinghouse for customers on their website. Direct links and information on Hulu, Netflix, Roku, Skype, and other video and voice applications will all be in one place. The idea is to empower customers so they can use their inexpensive LPC Internet connection to stream video and voice. LPC is also exploring the possibility of establishing relationships with video and voice providers and providing access to serve the community.

The project is expected to go live in late October. LPC continues to research options for their customers but the idea has been received with positive community input. As we continue to monitor the evolving business models of community networks, we'll keep an eye on Longmont.

Verizon and Big Cable Win - Competition Loses

Once again, we are witnessing the federal government allowing a few massive telecommunications companies to collude rather than compete. Verizon is about to ally itself with major cable companies, to the detriment of smaller competitors in both wireless and wireline.

One of the reasons we so strongly support the right of communities to decide locally whether a community network is a smart investment is because the federal government does a terrible job of ensuring communities have fast, affordable, and reliable access to the Internet. By building their own networks, communities can avoid any dependence on the big cable or telephone companies that are more interested in consolidating and boosting shareholder dividends than they are in building the real infrastructure we need.

The Department of Justice released a statement on August 16th, that it will allow the controversial Verizon/SpectrumCo deal to move forward with changes. We have watched this deal, bringing you you detailed review and analysis by experts along with opinions from those affected. One week later, the slightly altered deal was also blessed by the FCC.

Many telecommunications policy and economic experts opposed the deal on the basis that it will further erode the already feeble competition in the market. In addition to a swap of spectrum between Verizon and T-Mobile, the agreement consists of side marketing arrangements wherein Verizon agrees not to impinge in the market now filled with SpectrumCo (Comcast, Time Warner Cable, Cox, and Bright House Communications).

Verizon has been accused of hoarding spectrum it doesn't need. The marketing arrangements constitute anti-competitive tools that the DOJ has decided need some adjusting. From the announcement:

The department said that, if left unaltered, the agreements would have harmed competition by diminishing the companies’ incentive to compete, resulting in higher prices and lower quality for consumers.

The deal was considered inevitable when FCC Chairman Julian Genachowski released a statement indicating that his agency had no problem following the DOJ. A PDF of the FCC statement can be viewed here.

In scrutinizing the deal, the FCC and DOJ bisected the analysis, which worked in the parties' favor. Susan Crawford looked at the process:

Bottom line: The companies involved in the transaction can credibly claim that the deal itself is not going to change the facts on the ground for most Americans. Without “merger-specific harms,” and with an impressive display of bureaucratic sleight-of-hand – FCC got the spectrum part of the deal but DOJ got the joint marketing arrangements, and the two agencies have different statutory authority and DNA, leading to lots of finger-pointing and careful behavior – the companies will avoid being interfered with unduly by the feds.

FCC Logo

Harold Feld, another strong critic of the deal, recently commented on the issue of FCC authority in this particular review. Feld notes that challenging FCC authority is a growing trend, and not good for telecommunications policy. Those who challenge it are diluting at what many consider an already tepid application. In essence, the "repeat loudly and often and eventually they will believe you" phenomena is creeping in and even FCC Commissioners are buying it. From Feld:

Given all this, it is rather difficult to understand why both Commissioner McDowell and Commissioner Pai likewise question the FCC’s authority to engage in ongoing monitoring in the wake of the agreements.  Given that this transfer involved spectrum, cable, broadband, and even broadcasters (shout out to my NBC peeps! What it is O & Os!), the only way this could implicate more FCC jurisdictions would be if one of the parties owned a maritime radio service.

...

Given that there is no question that the FCC has authority to entertain complaints going forward, and certainly has authority to monitor how the markets under its jurisdiction are developing, it is hard to understand the jurisdictional argument even as the worship of empty formalism.

...

I would think that “we’ll keep an eye on things, anyone with complaints can file over here” would be applauded as the lightest touch possible rather than condemned as regulatory overreach.

Feld goes on:

Which requires me to point out one of the more unfortunate problems in telecom policy (and regulatory policy) these days. There is a huge difference between “it’s bad policy, don’t do it” and “you don’t have authority.” It is unfortunate that those who agree with the FCC on matters of policy increasingly seek to cast their arguments as arguments of regulatory authority. I get that if you don’t like the policy, you would prefer the FCC not have authority to implement it. But just as real lawyers read the footnotes, real lawyers (and non-lawyers) ought to be honest about the difference between policy and authority. Certainly there are times when authority is genuinely contestable, and I will never blame a litigant for making the traditional Hail Mary pass at jurisdiction. But where, as here, the authority of the FCC over reseller agreements is well established, attacks on authority can only be the interpreted as careless or disingenuous.

The FCC and the DOJ may have tried to lighten the negative impact this deal will have on competition by making slight adjustments. Their efforts amount to putting a band aid on a bullet wound. The decision to allow this deal to move forward was telecommunications business as usual.

Crawford, like many others, sums up this deal for what it is:

"...the SpectrumCo transaction is an outcome, not a cause, of the primitive approach to communications that characterizes this country."

Humboldt County Requests Veto of California ALEC Bill

The California Legislature recently passed SB 1161 (dubbed "California's Worst Telecom Bill Ever") and the bill is on the Governor's desk. Utility reform group, TURN, and the New America Foundation are two groups that have opposed this ALEC supported bill from the start. We reported on it in June and shared with you how it will negatively impact the ability for local communities to invest in broadband.

The Humboldt County Board of Supervisors sent a letter to Governor Brown formally opposing the legislation and asking for a veto. According to the an Access Humboldt press release:

In a letter yesterday (August 28, 2012), the Humboldt County Board of Supervisors requested Governor Brown to veto SB 1161, noting: "SB 1161 weakens open Internet protections and subverts long held State policy 'To continue our universal service commitment...' Why abandon our commitment to least served people and places?"

The Board officially expressed their opposition to the bill in May, noting that holes in the legislation ignored public safety, privacy, and consumer protection issues. No amendments were adopted to address those concerns.

You can view a PDF of the veto request here. We encourage you to take an active part in helping stop this legislation by contacting Governor Jerry Brown directly.

You can also read Susan Crawford's take on it and similar efforts in other states.