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"Level Playing Field" Padded With Public Dollars to Private Providers

Municipal broadband networks have been gaining traction across the country. It's easy to see why: In many rural and low-income communities, privately offered broadband services are nonexistent. In its 2012 Broadband Progress Report the Federal Communications Commission counted nearly 20 million Americans (the vast majority living in rural areas) beyond the reach of broadband.

The Free Press' Timothy Karr's words are supported by the growing number of pins on our Community Network Map. We connect with places nearly every day where municipal networks fill the cavernous gaps left by the massive corporations. Large cable and telecom providers do not hide their aversion to servicing rural areas, yet year after year their lobbying dollars persuade state politicians to introduce bills to stop the development of municipal networks. Karr reviewed recent efforts to use state laws to stifle community owned networks in a Huffington Post article.

As readers will recall, this year's front lines were in Atlanta, where HB 282 failed. We hope that loss may indicate a turning point in advancing municipal network barriers because the bill lost on a 94-70 vote with bipartisan opposition. If it had succeeded, Georgia would have been number 20 on a list of states that, thanks to ALEC and big corporate sponsors like AT&T, Comcast, Verizon, and Time Warner Cable, have decided to leave their citizenry begging for the private market to come their way.

Time and again, the supporting argument goes like this:

"A vote 'yes' for this bill means that you support free markets and free enterprise," [Rep Hamilton, the Chief Author of HB 282] said [on the House Floor].

A 'no' vote means that you want more federal dollars to prop up cities, Hamilton said.

But Karr points out that some policy makers are starting to question that argument, with good reason. From his article:

"They talk about [the companies] as if they are totally free market and free enterprise, but doesn't AT&T get some tax breaks?" [Rep. Debbie Buckner] asked. "Didn't Windstream get some stimulus money? Isn't that government money?"

Indeed, phone and cable companies have been on federal welfare since their inception. A 2011 Institute on Taxation and Economic Policy study shows AT&T and Verizon receiving more than $26 billion in tax subsidies from 2008 through 2010. The FCC's 2012 report on Universal Service Fund subsidies shows nearly $3 billion in federal payments to AT&T, Verizon and Windstream.

In 2010, Windstream, Corp. -- a telecommunications company with services across the South -- applied for $238 million in federal stimulus grants to improve its service in 16 states. More than 16 million taxpayer dollars went to upgrade the company's services in Georgia.

So, while AT&T, Verizon, and Windstream continue to work with legislators and lobbyists who advance bills that maintain an environment rife with corporate welfare, rural Americans get nothing for their contributions. As the word spreads and more people learn about the benefits of community networks, we anticipate more people will recognize their value. In addition to saving public dollars, increasing connectivity, and spurring economic development, local networks are accountable to the communities they serve, unlike the big corporate ISPs, who are accountable to shareholders.

"The private companies have not been there for us," said Rep. Buckner, who represents rural parts of Talbot and Meriwether Counties. "And if they say they're going to come and be there for us, we don't know how long it will take them to find us."

In Georgia, Tech City Opposed HB 282 With Official Resolution

We were happy to report when HB 282 failed to advance on the floor of the Georgia General Assembly House in a bipartisan vote. We were equally pleased to learn that at least one Georgia community passed an official resolution opposing the bill while it was making its way through the committee process. 

Alpharetta, an Atlanta suburb, is home to 57,000 people and calls itself the "Technology City of the South." The community has no municipal network and no current plans to invest in one, but nevertheless passed a resolution on February 25th which opposed HB 282.

A Bob Pepalis article on the decision quoted Councilman Jim Gilvin:

"Once again I think this is just a state legislator jumping into local business. And I appreciate their concerns, but we do a pretty good job around here, I think. And if residents don't think so, they will be more than happy to let us know," Gilvin said. "I'd appreciate it if they'd just let us handle our government."

Pepalis heard similar sentiments from Councilman Chris Owens via email

"This goes not only beyond local control, but also impacts our ability and other communities ability to be masters of our own destiny and influence on development as well as provides services to their constituents, both residential and commercial," Owens said. "If that's something in a community's best interests, who better to make that decision than a community rather than the state on behalf of the community."

First, the resolution [PDF] sums up the real world affects of the proposal, if it had passed:

WHEREAS, House Bill 282 would tie the hands of municipal officials in their efforts to build digital networks they need to attract economic development and create a high quality of life for their citizens; and

WHEREAS, House Bill 282 is a bill that would undermine self-determination of cities in the digital age as illustrated by the following:

  • Before a city could provide new high speed Internet, cable, telecom or broadband service, it would be required to:

-Receive the permission of the Public Service Commission; and

-Prove to the Public Service Commission that each census block the city wants to serve has no existing broadband service (Census blocks are the smallest geographic area the Census Bureau uses for data collection. There are 291,086 census blocks in Georgia).

  • Existing local government cable, high speed Internet, telecom and broadband providers would be subject to the following service area restrictions:

-A city would not be allowed to expand its network to provide service to any customers unless the customers have no existing broadband service, regardless of the speed; and

-The city would not be allowed to provide the service even within the city’s boundaries.

Alpharetta seal

The resolution also called out the bill's authors and supporters:

And WHEREAS House Bill 282 would reduce Georgia's competitiveness and ability to attract new jobs as illustrated by the following:

  • Many Georgia communities have slow or limited access to the Internet compared to regional and international peers. This Bill sends a strong state message to these areas – “we don’t care.”
  • This is an effort to “protect” profits for private companies and ignores the economic development challenges many communities face.
  • The final report of Governor Deal’s Competitiveness Initiative indicates that many parts of rural Georgia are at a disadvantage because of a lack of broadband service. House Bill 282 would limit the ability of communities to bridge the digital divide where private providers have decided those investments do not fit their business model.
  • While the proposed legislation purports to exclude “unserved” areas from its purview, the definition of “unserved” is so narrow that virtually no community would ever fall under the exception.

NOW, THEREFORE, the Mayor and Council hereby RESOLVE that the passage of House Bill 282 (Preemption on Municipal Broadband), as well as any similar legislation, is hereby opposed as not being in the best interest of the City of Alpharetta and other municipalities within the state; and IT IS FURTHER RESOLVED that a copy of this Resolution be delivered to members of the City’s local delegation.

While resolutions like Alpharetta's are not the only contributing factor to a state bill success or failure, it is another tool in the toolbox for local leadership. In addition to raising awareness at the local level, official resolutions give state and federal leaders a clear indication of how their constituents feel about specific proposals, providing a hook for media to cover the larger story.

Democracy Now! Segment on Community Owned Networks

Last week, Catharine Rice and I were guests on a Democracy Now! segment filmed at the Freedom to Connect conference. We discussed what community broadband is, how it has benefited communities, and how a few big cable and telephone companies are trying to stop it.

Georgia Bill to Limit Internet Investment Dies on House Floor

We've been writing about Georgia's HB 282 for weeks, discussing the likely impact from limiting who can build Internet networks in communities that have the most basic Internet connections.

When the bill finally hit the House Floor, it failed in a bipartisan vote of 70 ayes to 94 nays. Many groups helped to educate the public and make sure many were informed about this legislation as it made its way through the Georgia House. Our full coverage of it is here.

Yesterday, CBS Atlanta ran another segment on this story, noting the overblown promises Windstream was making despite being unable to fulfill them (video below).

We will be running more stories on Georgia as we continue to cover the grassroots effort to protect local authority over this matter and continue to educate elected officials about community owned networks.

This is the second year in a row we saw Georgia consider a bill to limit local authority in this matter and we expect to see it again. We hope people in all 50 states are taking some time to tell their elected officials what they think about their access to the Internet and making sure that whenever a decision is made, it be made by the community without unnecessary barriers imposed by states or Washington, DC.

CBS Atlanta 46

CBS Atlanta Asks Tough Questions of Georgia Anti-Community Broadband Bill

We finally see television news outlets asking the tough questions of bill pushed by powerful cable and telephone companies to prevent giving residents a real choice in cable and Internet service providers. We been covering this Georgia bill closely, and were glad to see this segment:

CBS Atlanta 46

The segment makes an error in suggesting that tax dollars are commonly used by local governments in building networks. They are not. Most municipal networks are built using revenue bonds, where the community does not pledge its full faith and credit. Instead, they sell bonds to private investors who are then repaid by the revenues generated by the network.

But this mistake is more than outweighed with the reveal at end of the video, that the municipal network in Thomasville allowed the city to drop its local property entirely. Yet another community benefiting tremendously from owning its own network.

The Monopoly Magnate Helps Big Cable to Ban Community Networks in Georgia

We continue tracking the progress of Georgia's HB 282, a bill to limit investment in Internet networks. The bill basically says that if some people in a community have access to 3 Mbps (moderately slow DSL) connections, the community cannot invest in its own advanced networks - even to connect just local businesses that would spur job growth. This bill could be discussed on the Georgia House Floor any day. If it passes there, the Senate will take it up.

However, even if we can kill it this year, we can expect to see the big companies raise it again next year. It got us to wondering how anyone could consider this a good idea ...

Monopoly Magnate Comic

Feel free to share this comic, but link back to this page where possible. This link makes it easy to Share or Like on Facebook.

Read all of our coverage of this bill using this tag: HB 282 2013

If you want to stay up to date on these issues more generally, sign up for our one-email-per-week list of recent stories about community owned networks.

We previously created a comic about the Comcast astroturf campaign in Longmont, Colorado.

Feel free to share this video below with those who may not be aware why some communities have decided to build their own networks.

Video: 
See video

Community Leaders Testify Against HB 282, Bill Passes Anyway

Community leaders from several Georgia cities made the trek to Atlanta to oppose HB 282 on Thursday, February 28th. Opposition to this bill to limit investment in Internet networks includes community leaders, high tech companies, and citizens all over the state. Nevertheless, legislators on the House Energy, Utilities, and Telecom Committee chose to ignore the needs of communities, prefering to tell them from afar how to run their towns. Winners? Incumbents Windstream, AT&T, CenturyLink, and Comcast.

A substitute bill [PDF] was introduced that exempts communities with municipal electric utilities from the prohibtion to provide telecommunications. Additionally, the bill's definition of "broadband service" is now defined as service equal to or greater than 3.0 Mbps. "in the faster direction." While these look like compromises at first blush, they do very little to change the real world application of the bill.

Our earlier analysis of the bill addressed the fact that the expense and time required  to prove locations of unserved areas as defined by the bill, would foreclose the possibility of communities making investments in this essential infrastructure. Likewise, communities that already have networks would be similarly burdened.

While the muni electric exemption is clearly aimed at cities that might oppose the bill, community leaders from some of those target cities strongly spoke out against the revised HB 282. Elberton, Thomasville, and LaGrange, are a few of the communities who sent representatives and all know the power of their community owned networks. Concerned citizens who see the negative impact of this bill also showed up to speak their minds.

Mayors from Elberton and Thomasville testified along with the Elberton and LaGrange City Managers. The Georgia Municipal Association, spearheading the effort against the bill, covered the meeting for their blog.

City of Elberton Seal

City leaders expressed dismay over the bill and described how it would affect their own communities and rural Georgia. Here are some highlights:

"Let’s talk about economic development,” said Elberton Mayor Larry Guest. “Georgia should be promoting a pro-business, inclusive approach to broadband deployment, especially in rural areas of the state,” he said. “Competition ensures market-based pricing and faster delivery of state-of-the-art services. We have to do everything we can to attract jobs. If we don’t do that, business will not select rural Georgia. High speed access is essential to us."

When the bills author pressed the fact that the original bill had been amended to exempt cities that provide electric service, Mayor Guest responded:

"Other Georgia cities deserve the right to do what Elberton did, and their residents deserve the services Cumming has,” said Guest. “We are not second class citizens because we decided to live in rural Georgia.”

(The bill's chief author, Republican Rep. Mark Hamilton, represents a district that encompasses Cumming.)

Economic development was a big concern for community leaders:

“The concern that I have is the underserved areas around us,” said Thomasville Mayor Max Beverly. He noted that the bill prohibits cities from investing in, or expanding current broadband services, if any commercial carrier offers 3.0 Mbps where the city wants to offer that service.

“Three megabits is not adequate to do functions in a modern telecommunications world,” Beverly said. Beverly explained that Thomasville is preparing for its customers to use 20 megabits of bandwidth per second. “We are expecting the demand on bandwidth to double in the next five years and this bill does not address that,” he said. “There is going to be bandwidth inflation. Please consider the rest of rural Georgia.”

Residents also showed up to testify, driving home that fact that this issue is not only about business customers. A citizen from Dawsonville also spoke at the meeting:

"I am fighting to get the service I am paying for,” he said, adding that the company took federal stimulus money—$181.3 million according to the company’s 10K filed with the FCC—to invest in their infrastructure but he has not benefitted from any so-called investment.

“I want competition,” he said. “If my city wants to give [the private sector] some competition, I am worried that this bill would prevent my city from doing that.”

LaGrange, Georgia

Tom Hall, City Manager from LaGrange, summed up the potential power of HB 282:

LaGrange City Manager Tom Hall said the bill has the effect of picking winners and losers, “not only communities but whether businesses will have choices. You are throwing up barriers to communities to not be able to make choices in the best interest of their community and that is not necessarily wise public policy.”

A word about the process: The House Energy, Utilities & Telecommunications subcommittee met on Wednesday to discuss the bill and to listen to this testimony but did not take any action. The next day, Thursday, the subcommittee met again without testifiers and passed the bill. Later that same day, the full committee also met and passed the bill, again without the benefit of testifiers. The bill is now in the House Rules Committee, which will determine whether or not it will be voted on by the House. If the entire House votes on the bill on or before the 30th day of session (a day which has not yet been designated), and it passes, it will be sent to the Senate for consideration.

We continue to monitor this bill and to urge you to contact the Rules Committee (Committe Roster here). Tell them this bill is a bad idea and should not move to the House Floor. Policies like this, designed to take away rights from local communities to provide for their local residents, businesses, and government, are bad for Georgians and bad for the rest of us.

High Tech Companies Oppose Bill to Limit Internet Investment in Georgia

Several high tech companies and trade associations have sent a joint letter to Georgia legislators to oppose HB 282, a bill designed to limit investment in Internet Networks.

The letter has already been signed by Alcatel-Lucent, Google, Atlantic Engineering, Gigabit Squared, OnTrac, FTTH Council, American Public Power Association, NATOA, SEATOA, Utilities Telecom Council, and the Telecommunications Industry Association. The full letter is available here [pdf]:

Dear Chairman Parsons:

We, the private-sector companies and trade associations listed below, urge you to oppose HB 282 because this bill will harm both the public and private sectors, stifle economic growth, prevent the creation or retention of thousands of jobs, hamper work force development, and diminish the quality of life in Georgia. In particular, HB 282 will hurt the private sector in several ways: by curtailing public-private partnerships; by stifling the ability of private companies to sell equipment and services to public broadband providers; and by impairing economic and educational opportunities that contribute to a skilled workforce from which businesses across the state will benefit.

The United States must compete in a global economy in which affordable access to advanced communications networks is playing an increasingly significant role. As Federal Communications Commission Chairman Julius Genachowski recently noted in calling for broadband providers and state and municipal community leaders to come together to develop at least one gigabit community in all 50 states by 2015, “The U.S. needs a critical mass of gigabit communities nationwide so that innovators can develop next-generation applications and services that will drive economic growth and global competitiveness.”The private sector alone cannot enable the United States to take full advantage of the opportunities that advanced communications networks can create in virtually every area of life.

As a result, federal and state efforts are taking place across the Nation, including Georgia, to deploy both private and public broadband infrastructure to stimulate and support economic development and job creation, especially in economically distressed areas. HB 282 would prevent public broadband providers from building the sorely needed advanced broadband infrastructure that will stimulate local businesses development, foster work force retraining, and boost employment in economically underachieving areas.

Consistent with these expressions of national unity, public entities in Georgia and across America are ready, willing, and able to do their share to bring affordable high-capacity broadband connectivity to all Americans. Enactment of direct or effective barriers to public broadband initiatives, including HB 282, would be counterproductive to the achievement of these goals. HB 282 is also inconsistent with America’s National Broadband Plan, which calls on States to remove existing barriers to community broadband initiatives and to refrain from enacting new ones.

We support strong, fair and open competition to ensure that users can enjoy the widest range of choices and opportunities. HB 282 is a step in the wrong direction. It is bad for Georgia’s communities, bad for Georgia’s private sector, particularly high-technology companies, and bad for America’s global competitiveness. Please oppose HB 282 and any amendment or other measure that could significantly impair community broadband deployments or public-private partnerships in Georgia.

Atlanta Writer Looks to Chattanooga, Fears State Bill to Prevent Internet Investment

Chattanooga continues to receive attention because of the incredible community owned network they built for themselves. We recently came across an article from Tom Baxter of the Atlanta SaportaReport. In his article, Chattanooga: Eating our lunch in liveability, Baxter expresses the envy he feels as an Atlantan as he considers the way Chattanooga has transformed itself. From the article:

Yes, Chattanooga. Seldom do we think of our neighbor across the Tennessee line as much of a competitor. When they built an aquarium, we just built a bigger one. But for nearly three decades, since a group of civic leaders got together in 1984 and committed themselves to doing something about Chattanooga’s image as the dirtiest city in America, and in the view of some the dullest, they have been eating our lunch on the playing field of liveability.

Baxter mentions Georgia's HB 282, a bill we are following closely, and notes how its passage would drive more distance between livability in Georgia and the increasing quality of life in Chattanooga:

Chattanooga’s broadband system, the fastest in the Western Hemisphere,  could run at a gigabyte a second, if anybody could really use that kind of speed. Meanwhile, in Georgia, there’s a bill currently proposed which would prohibit public broadband carriers like the one in Chattanooga from expanding into any area if even one consumer in an entire census block has private broadband service of 1.5 megabytes a second or larger. (A gigabyte is equal to 1024 megabytes.)
...

Having a fiber-optic broadband system like Chattanooga’s  in 2013 is like having an airport like ours was in 1963. And in 2057, given recent climate projections, having several decades of experience in energy efficiency and green growth will be priceless.

We ignore this at our peril. Cities we used to ignore, like Chattanooga and Greenville, S.C., have made enormous strides over the past few decades because they’ve tried harder. That’s what they used to say about Atlanta.

We are glad to see that Tom gets it, but we had to offer a gentle correction in that network speeds are typically measured in megabits, not megabytes. His analysis is spot-on, just a bit of word confusion.

LaGrange Muni Network Serves Business and Government in Georgia

As the Georgia legislature considers HB 282, a bill that will restrict local governments from investing in telecommunications networks, we are continuing coverage of the communities that will be harmed by passage of the legislation.

Should the restrictions become law, existing networks will not be able to expand. No expansion means fewer opportunities to reap the benefits that flow naturally from community networks. While this means few residents will receive access in places like Thomasville and Moultrie, it also means fewer businesses will receive access in places where networks exclusively serve commercial customers and government offices. 

LaGrange's IT Director, Alan Slaughenhaupt, told us a little about its municipal network that began in 1996. The community decided to build its own network when no private provider would. The first goal was to get the K-12 schools connected. Bonds funded the network build out and were paid off within five years. At the time, the city partnered with ISN (Later Earthlink) to get the schools connected. LaGrange now partners with Charter Communications to bring connectivity to students.

The LaGrange network now connects hospitals, most city, county, and state government facilities, and provides connectivity for businesses.  Alan describes how a T1 connection cost local businesses $2,300 per month in 1996. Now, thanks to competition created by the community owned network, local businesses can pay just $100 for a connection with better capacity. The municipal network serves about 400 commercial customers.

Kia Logo

Alan explained that the automaker Kia moved a manufacturing facility near LaGrange in 2009 that used Just-In-Time inventory control. It needed a high-speed connection between the main plant and suppliers that LaGrange could deliver.

The move created 2,500 new jobs at the factory, each paying between $14.90 and $23.50 per hour. Along with the positions in the factory, came 3,000 auto-related jobs with suppliers located near the facility. Today, Kia has moved its main manufacturing to a different location and a different network, but its suppliers still use the LaGrange network. The Kia story is only one of many ways the network has contributed to LaGrange's economy since 1996.

Because of the competitive rates, the personal customer service, and quick responses to network problems, businesses continue to seek out LaGrange network services. Alan says there is no advertising and the network continues to grow. It has never been in the red. This network, like many others operated on a local level, is successfully serving the community.

Like other community leaders we talk to about HB 282, Alan fears the long term result if the bill becomes law. The community of LaGrange has not fit into the bill's definition of "unserved" in years, which means expansion would end. Without the ability to grow, Alan feels it would only be a matter of time before the network would eventually end. Economic development, useful connections for the schools, libraries and hospitals, and substantial public savings would also end.

We encourage you to contact Georgia Legislators to voice your opposition.