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Montrose Asks Voters to Take Back Authority to Establish A Telecommunications Utility

Colorado communities continue to seek to restore local authority for telecommunications. In April's election, elected officials of Montrose will ask voters to approve a measure that gives the municipality the right to establish a telecommunications utility.

Centennial, a Denver suburb, approved a ballot initiative last fall to use city fiber resources as a way to provide indirect telecommunications services. Centennial's community leaders want to create the most business friendly environment as possible to spur economic development

Montrose is taking a similar approach, although the language on this ballot does not limit the City to "indirect services." Elected officials have not mentioned the desire to provide any specific services yet, but the language of the ballot question suggests they do not want limited possibilities.

The City Council approved the following language for the April 1, 2014 ballot:

"Without increasing taxes, shall the citizens of the City of Montrose 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?"

A Montrose Daily Press covered the decision:

“We’ve been working on improving our broadband in the community for quite some time,” Virgil Turner, city director of innovation and citizen engagement, said. “The city has recognized that broadband is an area where we are not on equal footing with the Front Range.”

The city sees the lack of broadband connectivity as such a hindrance, particularly in the business sector, that it is ready to explore options to provide that service itself, either directly or through a public ­private partnership.

In 2005, Colorado's state legislature passed new rules that prevented municipalities from providing any telecommunications services unless the community passes a referendum reclaiming the authority. As we saw in Longmont, large incumbents use their deep pockets to launch astroturf campaigns, media blitzes, and price gimmicks to mislead the community into a negative result.

Montrose, home to about 15,000 people, is on the far west of the state in Montrose County. Elected officials know that lack of broadband is a hindrance to schools, government, and the business community. Like other rural communities who have been left behind by large providers, Montrose wants to retain a quality workforce by bringing employers to the area. From the article:

“Those communities like Montrose have a different motivation than do the incumbent telecommunication providers,” Turner said. “Our motivation is that we have a great quality of life here, but our lack of broadband availability ... is degrading that quality of life. It’s forcing people to move to the areas where they can get the level of service they need. We see that as something that we can’t stand for.”

The language of the ballot measure clearly eliminates a tax increase as part of the initiative. According to the article, general support is strong:

“I don’t think it’s a tough sell,” [Mayor Judy Ann Files] said. “We can expect some opposition from the big corporations; it’s the big companies that have the state of Colorado tied down.”

FCC to Investigate Barriers to Community Networks

We are supportive of the announcement today from the Federal Communications Commission. We salute the FCC for beginning to examine how state level barriers against municipal networks deter investment in the networks both communities and the nation desperately need.

From the statement:

The Commission will look for opportunities to enhance Internet access competition. One obvious candidate for close examination was raised in Judge Silberman’s separate opinion, namely legal restrictions on the ability of cities and towns to offer broadband services to consumers in their communities.

The FCC has a history of encouraging states not to pass such laws (Commissioner Clyburn, previous FCC Chair, former Commissioner Copps) and the National Broadband Plan made recommendation 8.19: "Congress should make clear that Tribal, state, regional and local governments can build broadband networks."

Even if communities choose not to build their own networks, having that capacity changes the dynamic of the big cable and telephone companies - something Franklin D. Roosevelt described as the "birch rod" in the cupboard (regarding municipal electricity):

But on the other hand the very fact that a community can, by vote of the electorate, create a yardstick of its own, will, in most cases, guarantee good service and low rates to its population. I might call the right of the people to own and operate their own utility something like this: a "birch rod" in the cupboard to be taken out and used only when the "child" gets beyond the point where a mere scolding does no good.

With the recent network neutrality decision from the Circuit Court, the FCC has a very clear path to ensure all local governments can decide locally whether such an investment is wise, rather than being preempted by a state legislature that may have been misled by powerful lobbyists.

We are calling on our readers, local governments, and all concerned citizens to applaud the FCC decision to examine these barriers. One thing you can do to help is to reach out to Senators and your representatives in DC. Make sure they know you support a local decision-making process rather than one-size-fits-all rules dictated by those in the capital.

If you want more background on Section 706 and municipal networks, listen to our recent podcast interview with Harold Feld.

We are also cheered by the continued stated committment of the FCC to preserving the open Internet and hope this process will achieve that end. We continue to believe that properly classifying Internet access as a telecommunications service and appropriate forbearance for unnecessary regulations is the best approach for safeguarding the Internet. However, we recognize the intense pressure by some of the most powerful corporations in DC not to take that route. Our work is cut out to ensure there are no loopholes that would damage the Internet.

Fork in the Road For UTOPIA: Forward or Backward? Community Broadband Bits Episode #85

The Utah Telecommunications Open Infrastructure Agency, which we have written about many times, is at a crossroads. An Australian corporation specializing in infrastructure is prepared to infuse $300 million into the project but the Utah Legislature may prohibit it from expanding and even from using existing connections outside member cities.

We asked Jesse Harris of Free UTOPIA and Pete Ashdown of XMission to join us for Community Broadband Bits Episode #85 to sort out the stories.

Jesse explains the potential Macquarie investment and how the bill HB60 could hurt both that deal and more broadly, connectivity in the area. Pete Ashdown discusses how he learned of the bill and what it would mean to his business if the network were able to be expanded.

Read the transcript from this episode here.

We previously spoke with Pete Ashdown and Todd Marriott about UTOPIA in Episode 3 of this podcast.

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

Kansas Community Benefits from Community Owned Networks

Even though the Kansas cable lobby have temporarily retracted their competition-killing telecom bill, we still want to highlight the benefits of preserving full home rule, local authority by focusing on a number of communities, including Chanute, Ottawa, and Erie.

Chanute

We have reported on Chanute's municipal network for years. The community leveraged its electric utility assets and incrementally built an extensive publicly owned gigabit fiber network. Over several decades, the community expanded its network to serve schools, libraries, local government, and businesses. Chanute took advantage of every opportunity and created a valuable asset with no borrowing or bonding.

Several business, including Spirit AeroSystems, chose to locate in Chanute because of its incredible fiber network. Spirit brought approximately 150 new jobs. The network also retained jobs when incumbents refused to provide needed upgrades to local businesses. Rather than leave town, the businesses connected to the City's network and increased their productivity. 

Former City Manager J.D. Lester referred to municipal broadband as “the great equalizer for Rural America,” saying: “You don’t have to live in Kansas City to work there.” (See our case study Chanute's Gig: One Rural Kansas Community's Tradition of Innovation Led to A Gigabit and Ubiquitous Wireless Coverage [PDF])

Kids in Chanute have access to connectivity other schools can only dream about. The local community college has expanded its distance learning program with higher capacity broadband. Free Wi-Fi hotspots are all over town; money otherwise sent to distant providers stays in the community. Chanute has invested in a WiMAX wireless system that serves public safety all over the region, not only in town. Their other utilities use the network for automatic metering and SCADA applications, saving energy and allowing customers the chance to reduce utility bills.

Chanute Logo

In addition to savings public dollars by reducing the cost of municipal connectivity, the broadband utility generates $600,000 and contributes 5 percent of that to the general fund.

Community leaders recently began planning for a FTTH expansion to bring fiber Internet to every home in town. If SB 304 finds its way into the books, those plans will be derailed and residents will be left with slow cable and DSL access.

Erie

Erie, southeast of Chanute, also utilizes Chanute's extensive fiber network for affordable school connectivity. When it was time to upgrade, Erie approached incumbent Cox. Cox's proposal for 100 Mbps to the high school alone was $5,000 per month. With its microwave network, Chanute is able to provide Internet service to the Erie community where already fiber connects the school facilities. Chanute serves Erie's high school, grade school, administration offices, and the bus barn where students learn auto mechanics. Like Chanute schools, Erie is guaranteed 100 Mbps but able to burst up to 300 Mbps when capacity allows. Erie pays only $5,100 per month and 80% of its connectivity fee is reimbursed by the federal E-rate program.

Ottawa

Inspired by Chanute's success, nearby Ottawa launched its fiber network in 2013. Ottawa joined forces with its school district and county government. Ottawa used an existing patchwork school district and county fiber, linking them together as a community network backbone. Each entity retained ownership of their resources but shared fiber strands with the City.

Ottawa businesses were dissatified with services from incumbents who were not interested in upgrading. Choices were expensive and slow T1s or an uber expensive DS3. Multiple appeals to incumbent AT&T yielded no results.

Schools, the area community college, and a farmers' cooperative connect to the network for better capacity and lower prices than AT&T will offer. The school district has cut its connectivity fees in half from $6,000 per month to $3,000 per month, by switching to Ottawa as a service provider. They now receive double the speed they used to purchase because the community network takes a much different approach than AT&T. From our April 2013 article on Ottawa:

Ottawa followed Chanute's example by providing a floor instead of a ceiling as the foundation for service. In other words, customers contract for minimum capacity but are allowed to burst to whatever capacity is available at any given time. For example, the School District will soon connect with a minimum 250 Mbps with the ability to burst to 500 Mbps.

UTOPIA Again Targeted by Bill in State Legislature

Kansas is not the only place where the cable and telecom lobbies are attacking publicly owned networks. Jesse Harris from FreeUtopia.org reports that State Rep. Curt Webb has introduced HB60, aimed at UTOPIA. From the story:

As the bill is currently written, UTOPIA wouldn’t just be prevented from building to people willing to pay for it. They could also be required to shut down any existing services and be prohibited from maintaining their backbone that links cities together. It would effectively be a death sentence on any network that isn’t entirely within member cities AND can connect to an exchange point to reach ISPs and the rest of the Internet.

FreeUtopia also reports that the bill does not affect cable, DSL, wireless, or any other technology. Harris writes:

Naturally, I had to follow the money and it explains a lot. Rep. Webb has taken contributions from CenturyLink and the Utah Rural Telecom Association. 

As an observation, I take issue with the state's fiscal note on HB60. It reports that enactment of the bill "likely will not result in direct, measurable costs for local governments." The fiscal note also concludes that "enactment of this bill likely will not result in direct, measurable expenditures by Utah residents or businesses."  

If this bill ends UTOPIA in certain areas, affected government, residential, and business customers will lose the competitive rates they now enjoy - direct and measurable! See Pete Ashdown's comment on Jesse's story - he runs XMission, a beloved local ISP that uses UTOPIA to connect to some subscribers.

This bill is another example of how cable and telephone company lobbyists are not just trying to shut down municipal networks, but any possible public private partnerships. This is emphatically not about tax dollars, as Jesse rightly notes:

These extensions help lessen the burden on taxpayers as a whole by shifting more of the costs onto subscribers, but it doesn’t cost any city a red cent.

A Roadmap for the FCC To Ensure Local Authority to Build Networks - Community Broadband Podcast #84

When the DC Circuit Court handed down a decision ruling against the FCC's Open Internet (network neutrality) rules, it also clarified that the FCC has the power to overrule state laws that limit local authority to build community networks. Harold Feld, Senior Vice President for Public Knowledge, joins us for Community Broadband Bits Episode #84 to explain the decision.

Harold exlains what Section 706 authority is and how all the DC Circuit judges on the case felt that the FCC, at a minimum, has the authority to strike down laws that delay or prohibit the expansion of broadband infrastrcturue.

We then discuss how the FCC can go about striking down such laws to reestablish local authority - a community in a state like North Carolina could file a petition with the FCC for action or the FCC could decide to take action itself. Either way, it will have to build a record that laws revoking local authority to build networks are harmful to expanding this essential infrastructure.

Finally, some of this power filters down to state public utility commissions, but just how much is unclear at present.

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

Kansas Anti-Competition Bill Authored by Cable Lobbyists

We learned a lot today about the anti-competition bill (SB 304) in Kansas to limit Internet network investments. Ars Technica's Jon Brodkin discovered the source of the bill, the Kansas Cable Telecommunications Association:

That's a lobby group with members such as Comcast, Cox, Eagle Communications, and Time Warner Cable. The bill was introduced this week, referred to the Committee on Commerce, and scheduled for discussion for Tuesday of next week.

That hearing will now be delayed as the cable lobbyists strategize on a bill that less transparently serves only their interests. As usual, we see the cable lobbyists claiming that municipal networks use taxpayer dollars, despite the reality that most do not.

Much of what I see in Kansas points to Time Warner Cable being behind this - a lame attempt to stop Google Fiber using lobbying power rather than innovating and investing. However, the bill has tremendously negative implications for rural Kansas because local governments are often the only entities that care if their communities have the Internet access they need in the modern economy.

It stretches credulity to think Kansas would pass a bill that would prevent Google from expanding its network in the region. But we have seen a number of states (ahem, North Carolina) pass cable-authored bills that prevent communities from building fiber optic networks if they have anything faster than dial-up available in even part of town.

The cable lobby would consider it a win if they can still push a bill through that would kill municipal networks while allowing approaches like Google Fiber and Wicked (in Lawrence) to expand.

Fortunately, Google has a history of opposing restraints on local authority to build networks and it is part of a business coalition opposing this bill. As with most Americans, that coalition believes any decision on whether a network is a wise investment should be made locally, not in Topeka or in DC.

Craig Settles' had a Chanute official on the Gigabit Nation audio show to discuss the bill and impact on rural Kansas:


Online Internet Radio at Blog Talk Radio with cjspeaks on BlogTalkRadio

Others writing about this bill and negative impact on Kansas included Karl Bode at Broadband Reports, the Consumerist, Newspoodle, and Daily Kos.

And finally, Chanute created a video about this bill:

Video: 
See video

Businesses Mount Opposition to Anti-Competition Cable Bill in Kansas

In a very quick turnaround, a number of prominent companies have signed on to a letter opposing the Kansas bill to block competition for existing Internet providers, like Time Warner Cable. Firms signing the letter sent to the Commerce Committee include Alcatel-Lucent, American Public Power Association, Atlantic Engineering Group, Calix, CTC Technology & Energy, Fiber to the Home Council, Google, National Association of Telecommunications Officers and Advisors, OnTrac, Telecommunications Industry Association, Utilities Telecom Council. The Committee will hear the bill on Tuesday morning. We understand that no recording or live streaming is planned.

Update: When originally posting this, I failed to credit Jim Baller - who organized the letter and works to preserve local authority, so communities themselves can decide whether a network is a wise investment.

We, the private-sector companies and trade associations listed below, urge you to oppose SB 304 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 Kansas. In particular, SB 304 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 the Federal Communications Commission noted in challenging 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 Kansas, to deploy both private and public broadband infrastructure to stimulate and support economic development and job creation, especially in economically distressed areas. SB 304 would prevent municipalities from working with private broadband providers, or developing themselves, if necessary, the 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 Kansas and across America are ready, willing, and able to do their share to bring affordable high-capacity broadband connectivity to all Americans. Enactment of barriers to public broadband initiatives, including SB 304, would be counterproductive to the achievement of these goals. SB 304 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. SB 304 is a step in the wrong direction. It is bad for Kansas communities, bad for the private sector, particularly high-technology companies, and bad for America’s global competitiveness. Please oppose SB 304 and any amendment or other measure that could significantly impair community broadband deployments or public private partnerships in Kansas.

Early Reactions to Anti-Competition Broadband Bill in Kansas

Following the introduction of SB 304 to limit investment in Internet networks in Kansas, which we covered on Tuesday, we saw some early reactions from those who fear the bill will effectively stop new investment in networks, much to the benefit of the big cable and telephone companies already providing service.

We quickly saw a new Facebook page - Kansans for Broadband Access - and a related website by the same name.

In Chanute, a rural community with an impressive municipal network serving businesses and anchor institutions, the local paper covered overwhelming disapproval.

The city opposes the bill because it’s legislation that allows lawmakers in Topeka to define what local communities can or cannot do.

“It’s about home rule, local choice,” Chanute Utilities Director Larry Gates said. “It’s not about what happens in Topeka.”

And a local business weighed in, noting that the City service is essential because the private providers have refused to upgrade and offer modern services:

Phil Jarred of Jarred Gilmore & Phillips PA said the two private companies providing internet services, CableOne and AT&T cannot meet the needs his business requires.

“Both services are not fast enough,” Jarred said. “It costs us too much not to have the fiber optics.”

Stacey Higginbotham at GigaOm noted that it curiously bans both municipal networks and the types of partnerships that Google and Kansas City formed, finishing with "it looks like incumbent providers are fighting back with politics."

This is nothing new of course - companies have sought for years to protect their businesses with laws limiting the competition rather than investing or being innovative. But when it comes to an essential infrastructure, we should be particularly careful.

Kansas Legislature Introduces Bill to Limit Internet Investment

Get updates to this story here.

With Senate Bill No. 304 [pdf], the Kansas Legislature will consider a bill to revoke local authority to build networks. If passed, this bill would create some of the most draconian limits on building networks we have seen in any state.

The language in this bill prohibits not only networks that directly offer services but even public-private partnerships and open access approaches. This is the kind of language one would expect to see if the goal is to protect politically powerful cable and telephone company monopolies rather than just limiting local authority to deliver services.

The bill states that the goal is to

encourage the development and widespread use of technological advances in providing video, telecommunications and broadband services at competitive rates; and ensure that video, telecommunications and broadband services are each provided within a consistent, comprehensive and nondiscriminatory federal, state and local government framework.

Yet the bill does nothing but discourage investment, with no explanation of how prohibiting some approaches will lead to more investment or better services. It does not enable any new business models, rather it outlaws one possible source of competition for existing providers.

The bill contains what will appear to the untrained eye to be an exemption for unserved areas. However, the language is hollow and will have no effect in protecting those who have no access from the impact of this bill.

The first problem is the definition of unserved. A proper definition of unserved would involve whether the identified area has access to a connection meeting the FCC's minimum broadband definition delivered by DSL, cable, fiber-optic, fixed wireless or the like. These technologies are all capable of delivering such access.

However the bill also includes mobile wireless and, incredibly, satellite access. As we have noted on many occasions, the technical limits of satellite technology render it unfit to be called broadband, even if it can deliver a specific amount of Mbps. Satellite just does not allow the rapid two-way transmitting of information common to modern Internet applications. Mobile wireless comes with high costs, prohibitively low monthly caps, and often only works in some areas of a rural property. This is not a proper measure of having access to the Internet.

The second problem with the fake unserved exemption is the challenge of demonstrating an area meets it. If one suspected that a territory with over 90% of the residents did not meet the overly broad definition, one would have to engage in an expensive survey to prove it at the census block level. Data is not ordinarilly collected at that granular level - and even when it is, it is often based on unverified claims by existing carriers.

Even if anywhere in Kansas qualified as unserved under this definition, the cost of proving it would only add to the extremely high cost of building to such a low density population, breaking any business plan that could attempt it.

This is not the absolute most restrictive bill we have seen revoking local authority to build networks, but it is second. It does allow communities to build networks for public purposes, including schools, which is the differentiator in this case.

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These types of bills make a mockery of our political system. Whether to invest in essential infrastructure (or how to) is a decision that should be made at the local level, where people know how their unique mix of assets and challenges relate to ensuring everyone has fast, affordable, and reliable access to the Internet. There is no need for the state or federal authority to overrule local decision-making. The only reason we see it popping up in state after state (most recently Georgia) is because powerful cable and telephone companies want to ensure they face no competition - even in the most rural areas of the country.

This is not a matter of taxes. As we note in a recent fact sheet, most community networks have not used taxpayer dollars. Meanwhile, the cable and telephone companies have a history of benefits from the public sector, from ongoing subsidies to having built their networks originally as monopolies protected from competition.

For those new to this issue, I highly recommend our fact sheets on community networks, videos, and our interactive map of community networks.

We have covered many stories in Kansas over the years, including the network in Chanute that has helped many local businesses (see our case study) and a more recent investment by the city of Ottawa.

We will provide ongoing coverage as this bill moves forward.