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Cable Companies Lose Big at FCC, Barriers to Community Broadband Struck Down

For Immediate Release: February 26, 2015

Contact: Christina DiPasquale, 202.716.1953, Christina@fitzgibbonmedia.com

BREAKING: Cable Companies Lose Big at FCC, Barriers to Community Broadband Struck Down

Two southern cities today persuaded the Federal Communications Commission to recognize their right to build their own publicly owned Internet networks where existing providers had refused to invest in modern connections. The 3-2 FCC vote removes barriers for municipal networks in Chattanooga, Tennessee and Wilson, North Carolina, to extend their high-quality Internet service to nearby areas.  

Said Christopher Mitchell, Director of Community Broadband Networks at the Institute for Local Self-Reliance:

“Cable companies lost their bet that millions spent on lobbying to stifle competition was a wiser investment than extending high-quality Internet to our nation’s entrepreneurs, students and rural families. 

“Preventing big Internet Service Providers from unfairly discriminating against content online is a victory, but allowing communities to be the owners and stewards of their own broadband networks is a watershed moment that will serve as a check against the worst abuses of the cable monopoly for decades to come.”

The FCC decision sets an historic precedent for towns working to offer municipal broadband networks in twenty states that have enacted limits or bans on local governments building, owning, or even partnering to give local businesses and residents a choice in high speed Internet access. Three-quarters of Americans currently have either no broadband or no choice of their Internet provider. 

Christopher Mitchell, the Director of Community Broadband Networks at the Institute for Local Self-Reliance, has traveled to over 20 states and spoken with over 100 community groups looking to provide high-quality Internet for their residents. He has also advised members of the FCC on related telecommunications issues in the lead-up to the decision.

For interviews around the FCC decision, please contact Christina DiPasquale at 202.716.1953 or at christina@fitzgibbonmedia.com. To view a map tracking local government investments in wired telecommunications networks and state laws that discourage such approaches, please visit: http://www.muninetworks.org/communitymap.

Municipal broadband networks (munis):

  • Create thousands of new private sector jobsA collaborative muni effort in Georgia between five towns, is credited with bringing over 6,000 new jobs to the region by building and sustaining their network. The muni in Springfield, MO convinced online travel company Expedia to move to the town and has 900 local jobs because their network allowed the company to stay and expand.
  • Protect consumers by offering competitive pricing. During the period of 2007-08, Time Warner Cable increased rates up to 40 percent in some of the areas in Raleigh, NC, while not increasing rates in nearby Wilson—which has a strong muni. Chattanooga’s muni grew from a basic connection of 15 Mbps, when it was first founded, to 100 Mbps today–without raising prices once. The slowest connection available in Chattanooga from the utility is 10 times faster than the average American connection.
  • Provide higher speed Internet that allows for increased business activity. The largest employers in Wilson, NC rely on the municipal broadband network for their transactions. The muni in Springfield, MO, attracted John Deere Remanufactured and the McLane Company to the area. 
  • Do not rely on taxpayer financing, like large private telephone companies. Most municipal networks are financed through methods that do not involve raising taxes: revenue bonds, interdepartmental loans and savings created by ending expensive leased services. Dakota County in MN has saved $10 million over 10-15 years by building their own network and ending leases. Over $2 million in revenues from the Thomasville, GA network contributed to the town’s ability to eliminate its local fire tax.
  • Receive broad support from voters, regardless of party affiliation. Roughly 3 out of 4 cities with citywide munis reliably vote Republican and polling shows that 2 out of 3 Republicans, Independents, and Democrats prefer that decisions about how to best expand their Internet access be made by local governments.
  • Foster the strength of local businesses. Politically conservative communities in Chanute, KS, and Lafayette, LA, have munis that are working on the deployment of fiber networks to encourage economic development by allowing businesses to market themselves and compete online in the global marketplace. Lafayette has added over 1,000 tech jobs in 2014 alone.
  • Expand educational opportunities. The muni in Longmont, CO, is now providing 10 times the bandwidth that their school district previously received from a private provider at an annual savings of $100,000. Munis in Carroll County, MD, and Chanute, KS, have both allowed schools they service to offer new distance learning classes in multiple locations via video streaming. The city of Rockport, ME, partnered with a nonprofit college to bring students upload speeds 200 times faster than Time Warner Cable’s package for the area.

City Council Moves Forward on Muni Project in Ellsworth, Maine

The Ellsworth City Council voted on February 9th to proceed with the first steps to developing yet another municipal fiber network in Maine. Community leaders plan to develop open access fiber infrastructure. Five ISPs have already expressed an interest in working with the city to provide services via the network.

Ellsworth is home to approximately 7,500 people and is located along the south not far from the central coast.

The Ellsworth American reports that council members decided unanimously to lease a parcel of land on which to place a headend facility. The Ellsworth Business Development Corporation (EBDC), which also obtained a $250,000 grant to expand high-speed Internet in Ellsworth, will lease the property. The grant came from the Northern Border Regional Commission in 2014.

The Council also agreed to commit $28,445 in tax increment financing (TIF) funds toward the project. Those funds will be used for the headend building and to install a two mile stretch of fiber to tap into the community's abundant fiber resources. Community leaders want to create options for local businesses and the numerous home based businesses in Ellsworth.

“You have the superhighway already,” said Andy Hamilton, an attorney with Eaton Peabody who serves as legal counsel to EBDC. “But you need the off-ramp and the local roads to take you to the office buildings.”

Indeed, a report from Portland-based Tilson Technology Management said Ellsworth is located at “an information superhighway crossroads” and that it has a lot of fiber optic infrastructure — “more than most Maine communities.”

The network project is being developed in conjunction with a business incubator project in Ellsworth. Biotech and health science related businesses are abundant in the region and city leaders want to make the city attractive to the industry.

Council members are also considering the long term:

Lili Pew, a real estate agent who heads the EBDC broadband committee, pointed out many people have home-based jobs or businesses. She said the number one question she hears from her clients looking at Ellsworth is, “Do I have access to high-speed broadband?”

Running fiber lines to every residence in Ellsworth would be cost-prohibitive — in the range of $8 million to $12 million, according to Tilson — but there are other ways to reach parts of the city that Pew said are “in the black hole of technology right now.”

“This is more important to have in the city than natural gas, right now,” he said, referring to higher-speed Internet. “This is a utility that is really going to help us get ahead.”

Rochester Pursues Business Case Study for Muni Network in Minnesota

The Rochester City Council recently voted unanimously to move forward with a study on the possibilities of publicly owned broadband in this southeastern city. Rochester will then decide whether to move forward with bids to form a public-private partnership for a network, or pursue another path.

After receiving dozens of calls from his constituents, City Councilman Michael Wojcik is asking his colleagues to consider a municipal network. Rochester’s area holds a population of about 110,000, and is home to the world-famous Mayo Clinic

According to the Rochester Post-Bulletin, Charter Communications operates its cable TV and Internet services under a franchise agreement with the city. That agreement is up for a renewal on March 31.

Wojcik said his constituents have been angered over issues such as digital box fees, but most of the complaints are about broadband service, which Wojcik said is essential. He said Charter's recent price increase for stand-alone broadband from $55 to $60 per month makes the service unobtainable for a percentage of area families with children in school.

"Broadband is key for information for a lot of people, particularly younger generations, and going forward, it becomes more and more critical," he said.

In 2010 Wojcik asked the council to investigate options for publicly owned infrastructure, but the measure did not advance. Wojcik says he hopes that citizen outrage with poor Charter service and contract negotiations will encourage city council members to take action.

The Council invited Chris to offer expert opinion. KIMT TV covered the decision and spoke with him after the meeting: 

“I think it’s a necessary step for the Rochester City government to get involved, because over ten years of experience suggests that the private sector alone is not going to solve this problem, that if Rochester needs higher quality internet access it may have to do it itself.”

Here is vide of KIMT TV's coverage:

Community Broadband Media Roundup - February 20

Next week the FCC will make a landmark decision that will affect the future of community networks. Here's a roundup of stories.

Hate Your Internet Service Provider? You Should Have Feb. 26 Circled on Your Calendar by Daniel B. Kline, Motley Fool

The state of city-run Internet by Allan Holmes, Center for Public Integrity

The Center and Reveal revisited Tullahoma, Tennessee and Fayetteville, North Carolina, where state laws restrict municipal broadband growth. 

How Will the Fight over Public ISPs and Net Neutrality Play Out? by Larry Greenemeier, Scientific American

In an effort to sort through these and other issues impacting how people will access and use the Internet for years to come, Scientific American spoke with Lev Gonick, CEO of OneCommunity, an ISP for Case Western Reserve University, University Hospitals and another 1,800 public-benefit organizations in northeastern Ohio. 

“The idea of local governments taking it upon themselves to improve community broadband speeds has caught on in recent years, particularly in towns and cities that host major universities craving greater network bandwidth.”

Idaho: 

Judge's ruling worsens Idaho's high school Internet headache by Bill Roberts, Idaho Statesman. We have long argued that throwing money at the biggest carriers is poor policy and a waste of taxpayer dollars.

A deadline for the loss of service looms as officials scramble for solutions.

Iowa:

Providers: Iowa's broadband expansion will take time, money by Barbara Rodriguez, News Tribune

Illinois:

Search still on for immaculate reception by Rich Warren: News-Gazette: Champaign, Illinois

“The FCC may truly blast open the cable industry to competition by overruling laws in Tennessee and North Carolina, which could create a precedent in the remaining 20 states that restrict municipal/public Internet providers. Unfortunately, huge corporations, such as Verizon, threaten to fight this in court to the bitter end.”

Maine:

Town weighing options to create a fiber optic broadband network by Robert Levin, Mount Desert Islander

The town will spend up to $20,000 to study the feasibility of constructing its own fiber optic network to link town buildings, schools and possibly private businesses and residences to high-speed broadband Internet.

Massachussets:

Baker pledges $50 million for Western Mass. broadband by Jack Newsham, Boston Globe

Missouri:

Schaefer seeks to block Columbia from creating high-speed Internet utility by Rudi Keller, Columbia Tribune

In a letter to committee Chairman Eric Schmitt, a coalition of private companies and industry associations said the bill would hinder economic growth, especially in rural areas where private companies are reluctant to invest.

“These communities should be free of artificial barriers, including the cumbersome, time-consuming, expensive, and ambiguous requirements” of Schaefer’s bill, said the letter, signed by Google, Netflix, the Telecommunications Industry Association and the American Public Power Association, among others.

Minnesota:

Broadband appetite grows in Upper Minnesota River Valley by Tom Cherveny 

Green Isle, Townships Nearing Final Phase for Fiber Project OK by Belle Plaine Herald

Ohio:

Cleveland seen pioneering a new kind of smart growth, Internet driven development: the Mix by Robert L. Smith, The Plain Dealer 

Tennessee:

TUB rural broadband gets another hearing  by Marian Galbraith

Texas:

EUB member proposes municipal-owned fiber-optic network by Matt Dotray, A-J Media

West Virginia:

W.Va. bill to build $78M rural broadband network advances by Eric Eyre, West Virginia Gazette

Oh Snap! House buckling to Frontier, Republican delegate alleges by Eric Eyre , West Virginia Gazette

“No wonder they’re called Frontier, Those are the kinds of speeds you’d expect on the American frontier in the 17th century,” Smith said in a press release.  

“I may be alienated by my party in the end, but right is right, and wrong is wrong. [Internet companies] ought to be held accountable for what they’re providing.”

Opinion:

Editorial: Let cities compete for broadband: Our view USA Today

Why should they be powerless as big companies route the information superhighway around them?

Editorial: Broadband development holds possibilities by Watertown Daily Times

Broadband is better as a public-private partnership By Ben Franske, MinnPost 

 

Internet and Education:

Technology at their fingertips, but lacking Internet

Students have access to the gadgets, but when Internet is lacking at home, they may fall behind. 

 

Comcast:

Comcast agent tells customer that data caps are “mandated by law” by Jon Brodkin, Ars Technica

Comcast forced to clarify that "there is no law" requiring data caps.

Cable customer service “unacceptable,” says cable’s top lobbyist

Former FCC Chairman Michael Powell loves cable, but facts are facts.

USA Today Leadership Latest to Support Munis

USA Today recently joined the growing list of national press to publicly support local telecommunications authority. In its February 16th opinion piece, the Editorial Board commented on the proposed rule being considered by the FCC that would allow local communities to chart their own course with no preemption from state legislatures:

The FCC should stand up to the broadband lobby and approve the rule. The laws in question have not been passed in the name of limited government but rather in the name of limiting competition.

USA Today recognizes that many of the communities that invest in infrastructure do so out of necessity when they cannot draw the interest of the big players that fight to limit their ability to make those investments. Whether or not a community decides to deploy a muni should always be left up to the people who live there, argues the Editorial Board:

The question, however, is not whether these systems are good, but whether they should be quashed by acts of legislatures. The answer is no.

Municipal Networks and Small ISP Partners to FCC: Title II Not a Problem

A group of municipal leaders and their private sector small ISP partners submitted an ex parte filing with the FCC today stating that they see no reason to fear Title II reclassification of Internet access. The statement, signed by a variety of towns and providers from different areas of the country is reproduced in full:

Dear Chairman Wheeler,

As a group of local governments and small ISPs that have been working to expand the highest quality Internet access to our communities, we commend you for your efforts to improve Internet access across the country. We are committed to a free and open Internet without blocking, throttling, or discriminating by ISPs.

As local governments and small ISPs, we wanted to ensure you are aware that not all local governments and ISPs think alike on matters like reclassification. For instance, on July 18, 2014, the mayors of New York City; Portland, Oregon; and San Francisco called on you to issue the strongest possible rules to guarantee Net Neutrality. Each of these communities is also taking steps to expand and improve high quality Internet access to their businesses and residents.

Our approaches vary but are already resulting in the highest level of service available because we are committed to expanding high quality Internet access to supercharge local economies and improve quality of life. We have no interest in simply replicating older triple play model approaches. We want to build the infrastructure of the future and we see nothing in the proposed Title II reclassification of Internet access that would hinder our ability to do that. As Sonic CEO Dane Jasper has strongly argued, ISPs that don’t want to interfere with their subscribers’ traffic should expect a light regulatory touch.

We thank you for your leadership during this difficult period of transition. We understand that many of our colleagues have trouble trusting the FCC given a history that has, in many cases, ignored the challenges small entities face in this industry. But whether it has been increasing the speed definition of broadband, or calling for the removal of barriers to community networks, we have been impressed with your willingness to take on powerful interest groups to ensure the Internet remains a vibrant, open platform.

We look forward to working with you to ensure that future rules recognize the unique challenges of small providers and innovative approaches to expanding access.

Sincerely,

  • Peter d'Errico, Town of Leverett MA, Municipal Light Plant, Town of Leverett MA Select Board
  • Fletcher Kittredge, President and CEO, GWI, Maine
  • Rick Bates, Town Manager, Town of Rockport, Maine
  • Kevin Utz, Mayor, Westminster, Maryland
  • Dr Robert Wack, Council Member, Westminster, Maryland 
  • R. Brough Turner, Founder and CTO, netBlazr Inc., Boston, MA
  • Pete Ashdown, Founder and CEO of XMission, Salt Lake City, Utah
  • Elliot Noss, CEO, Tucows / Ting
  • Kim Kleppe, Information Systems Director, City of Mount Vernon, Washington
  • Dana Kirkham, Mayor, City of Ammon, ID
  • Levi C. Maaia, President, Full Channel Labs, Warren, Rhode Island

You can also view the PDF of the filing at the FCC website.

For more on Title II and how it may or may not affect municipal networks and their private partners, listen to Chris interview Chris Lewis from Public Knowledge in Episode #138 of the Community Broadband Bits podcast.

Grover Beach Chooses Local Partner to Improve Local Connectivity for Businesses

After several years of considering options for a municipal network, the community of Grover Beach, California, is improving local connectivity options through a collaboration with private partner Digital West

According to the San Luis Obispo Tribune, the City struck a deal last fall with the local firm that will provide gigabit connectivity to local business customers. A city staff report states that Grover Beach will install and own a series of conduit that will house fiber owned by Digital West. 

The company, a data storage and web hosting firm located in nearby San Luis Obispo, will manage the fiber network. Digital West will lease conduit space from the city for 5.1% of its gross revenue from its operation of the private portion of the system. The initial lease is for a 10-year term. The company will also transfer ownership of some of the fiber to the city for public purposes. San Luis Obispo (SLO) County also wants to connect its facilities in the area and will contribute to the cost of the project. It appears as though SLO County will use the fiber provided to Grover Beach.

Grover Beach will contribute $500,000; SLO County will contribute $268,000; Digital West will contribute $159,000 to the total cost of $927,000 of the project. The parties agree that the city's contribution will be capped at $500,000. The staff report recommends an interdepartmental loan to finance the city's portion of the conduit installation.

Digital West has been an instrumental player in the city's quest for improved connectivity for several years. The company provides Internet service in SLO County and manages a private network offering connectivity, colocation, and cloud services to commercial clients. 

Grover Beach is also the location of the Pacific Crossing trans-Pacific fiber cable, connecting to Shima, Japan. In 2009, Digital West began working with Grover Beach to find ways to take advantage of the pipe. The city and Digital West have sence developed a Technology Master Plan and an Implementation Plan.

AT&T, Level 3, CenturyLink, and Verizon operate in the area, but Digital West plans to offer more affordable options. The city's vision includes providing more options for the numerous small businesses and to encourage more home based business. The staff report quoted Digital West estimated pricing at $100 per month for 100 Mbps and $150 per month for 1 gigabit service. Similar services in the area run between $250 per month and $500 per month according to the report.

Answering Questions About Title II and Munis - Community Broadband Bits Episode 138

As we near the FCC open meeting at the end of next week, when it will decide on both the Chattanooga and Wilson petitions regarding their wish to expand as well as a proposal to reclassify Internet access a Title II service in order to ensure it can maintain the same open Internet we have long loved. We have mostly focused on the muni petitions, but after hearing some concerns from some munis regarding Title II, we realized we have to delve into the Title II reclassification more deeply.

Enter Chris Lewis, VP of Government of Affairs for Public Knowledge. I've always enjoyed talking with Chris on various issues around telecom policy and we asked him to come on and answer some of the questions we have heard.

We talk about the prospects of rate regulation, unbundling, transparency requirements, and the process for filing complaints until Title II. Overall, our conclusion is that the rules as we understand them, are quite reasonable and should not pose a problem to munis that are already committed to providing a high quality service.

You can read a Fact Sheet about the proposed rules here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 22 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Persson for the music, licensed using Creative Commons. The song is "Blues walk."

Time Warner Cable Successfully Blocks Funds for Community Network in Maine; Project to Continue

Time Warner Cable recently fought to prevent a collaborative project in Maine from receiving $125,000 in state broadband funding, reported the Bangor Daily News

We reported in December that Old Town, Orono, the University of Maine, and GWI had been awarded ConnectME funds. The collaborators earmarked the funding for a stretch of about 4 miles of fiber which could serve about 320 subscribers and would ultimately be integrated into a much larger network for businesses and residents. The network would connect to Maine's Three Ring Binder network.

Old Town and Orono want to establish gigabit connectivity to a nearby industrial area to transform it into a technology park for economic development purposes. Several businesses, including a health clinic that, have expressed interest in setting up shop in the planned development.

Old Town and Orono formed OTO Fiber, an independent entity to have authority to design, install, maintain, and manage an open access network. In typical fashion, TWC took action prevent local citizens and businesses from ever capitalizing on a gigabit, rather than work with the municipalities to deliver TWC services over the publicly owned infrastructure.

The ConnectME Authority voted in TWC's favor, based on the arguments as presented in an earlier Daily News article:

The company argues that the agency only has the ability to give grants in areas it deems “underserved” or “unserved,” and that projects getting grants should overlap with less than 20 percent of the customers of an existing provider.

The towns, which formed the company OTO Fiber to develop the project, argue that the service does not duplicate existing services and that other Internet service providers would be able to contract with the company to use the open network that would be built by Networkmaine, a unit of the University of Maine System.

TWC's behavior is by no means surprising. Nevertheless, the project will proceed:

Belle Ryder, assistant town manager for Orono, told the board Thursday that the project still would move ahead, but with municipal funds that, with the grant, would have gone toward other municipal uses.Ryder told the Bangor Daily News on Thursday that the town has money from a tax-increment financing district that could be used for the purpose.

Rural Colorado Internet Access and Mountain Connect - Community Broadband Bits Episode 137

Last year was the first year I attended Mountain Connect, an event in the Rockies west of Denver that discusses approaches to improving Internet access. Historically, they focused on rural communities but as co-chair of the event Jeff Gavlinski notes in our discussion this week, they are expanding it to include more urban issues as well.

Mountain Connect is growing in many ways and I am excited to return to it in early June.
As Jeff and I discuss, it is focused on all solutions to expanding access - whether private sector, coop, muni, partnership, etc.

Colorado has a lot of activity from munis and especially munis that are looking to partner, but also has a state law that requires a time-and-energy consuming referendum before the community can really do any planning or take action to improve its situation.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 18 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Persson for the music, licensed using Creative Commons. The song is "Blues walk."