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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. 

Georgia Mayor: "I Hate to Think What Our Community Would Be Like Without Our Network"

Recently on Gigabit Nation, host Craig Settles visited with Mayor Max Beverly from Thomasville, Georgia. As our readers know, the Georgia General Assembly is again considering a bill to limit municipal efforts to bring connectivity to local residents and businesses. That bill is currently scheduled to be heard on Tuesday afternoon, 2/26, but many people have already expressed their anger at it in Facebook comments on the bill page.

HB 282 sets a very low bar for what is considered "served" - 1.5 Mbps - and prohibits municipal networks from serving those areas while also imposing a new heavy cost on investing in unserved areas. 

Mayor Beverly discusses how he and other Georgia community leaders are fighting HB 282 through education. Speaking from first-hand experience, he finds that elected officials often turn from support to opposition when they hear about the incredible success of Thomasville. 

Mayor Beverly finds himself sharing the story of Thomasville's victories that are all tied with the network, created in 1999. In Thomasville:

  • direct profits from the telecommunications utility have eliminated city taxes - police, fire, and other city services are funded through the $2 million+ contributed to the general fund
  • over 500,000 people in south Georgia have received state-of-the-art healthcare services which could not have been delivered without the incredible capacity of the network over a multi-county area
  • over 6,000 jobs (including many in the hospital and its clinics) have come to Thomasville through employers that would not have been able to locate there prior to the services offered through the network
  • about 70 schools over a 10 county region receive network services that Mayor Beverly describes as a "game changer" in educational opportunity

Settles and Mayor Beverly also spent time on what makes Thomasville such a success. The Mayor attributes the community's entrepreneurial approach and their unsurpassed customer relationships. The network and its staff are local and accountable to the people it serves so there is no place for anything other than superb customer service.

The business and residents depend on the Thomasville network. Mayor Beverly, like all the other officals we talk to, can't imagine life in their town without the network. While fighting legislation like HB 282, Mayor Beverly has encountered other elected officials from places where community owned networks are being planned or considered. He says that those leaders all have the same message for the legislature: "Our areas are behind now and if you pass this bill we will always be behind."

Listen to the entire interview on Gigabit Nation to learn about Thomasville's incredible network.

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Kentuckians Once Again Fighting to Keep Landlines

Last year, we reported on the failed SB 135, which would have eliminated the "carrier of last resort" requirement in the state. The bill, sponsored by Republican Senator Paul Hornback would have let AT&T decide who could receive basic telephone service and would have limited consumer protections.

Last year's bill did not become law, but a progeny, SB 88, has already passed in the Kentucky Senate and was received in the House on February 15th. (We'd like to report what committee will hear it first but the Kentucky Legislative web has not yet published that information.) Senator Hornback is again the chief author of the bill, crafted by AT&T and its ALEC pals.

The Kentucky Resources Council (KRC) provides an analysis of SB 88 and a prognosis on how it would affect Kentuckians. KRC must be feeling deja vu, as are many organizations looking out for rural dwellers who depend on their landlines. These bills continue to be introduced year after year as large telecommunications companies spend millions of lobbying dollars, also year after year.

WMMT, Mountain Community Radio in Whitesburg, Kentucky, recently reported on the legislation. Sylvia Ryerson spoke with Tom Fitzgerald from KRC, who discussed the analysis. From KRC's report on the legislation:

At potential risk is the opportunity for existing and new customers, to obtain stand-along basic telephone services from the incumbent telephone utility, or “Plain Old Telephone Service (POTS)” as it is called. Those most adversely affected by this loss of access to basic, stand-alone, telephone service are those least able to obtain affordable and reliable alternatives – those who live in rural, lower density areas, and the poor in dense, urbanized areas who have no affordable alternative priced as low as POTS.

Kentucky Resources Council

The main concerns with the bill include:

Removal of power from the Public Service Commission to hear and resolve complaints about local exchange service. This would affect voice service, operator assistance, directory assistance, and accurate 911 assistance. Restoring lost service is often a waiting game for rural customers served by AT&T. With no where to go, customers can lose their connection to family and the outside world for even longer periods. As with many other provisions of this bill, the elderly are the biggest casualty. Healthcare matters are  often handled over the phone, including my dad's pacemaker monitoring.

In areas where there are more than 5,000 households, offering basic stand-alone service would be at the provider's discretion. Service could be terminated without prior regulatory approval if there are any other voice services offered to the customer, even if that service was from an affiliate. This lack of competition would likely lead to cost increases for people who cannot afford them. Another scenario would be the company's requirement for customers to bundle services, forcing those least able to afford it to purchase services they do not need or want just to get telephone service.

In communities where there are fewer than 5,000 households, the current providers (AT&T, Windstream, or Cincinnati Bell) could cease to offer stand alone landline service of there was available voice wireless service, even if that service was less effective for 911 purposes. Again, the "forced bundle" would be an issue.

They could also petition to be relieved of the obligation to provide basic telephone service if they meet certain criteria regarding the availability of voice services from other providers in the area. For example, if there is a broadband provider "capable" of providing voice services (contrasted with one that actually "does provide" voice services) the provider could be relieved of the obligation. Again, that "capable" provider does not have to offer the service as a stand alone, but may require bundling.

Providers can use any technology they wish if they decide to continue the "provider of last resort" obligation, which will make that obligation completely deregulated. This tactic is the backbone of the private sector's efforts to deregulate. For more on this strategy, we encourage you to listen to our conversation with Harold Feld on the 23rd episode of the Broadband Bits Podcast.

Telephone

For more detail on the bill, and all its shortcomings, take a few moments to review the detailed analysis by KRC. The full text of the bill, its amendments, and the status, are available on the Kentucky General Assembly website.

So what could be gained for Kentuckians by passage of such a bill?

From a Courier-Journal report by Joseph Gerth:

Proponents of Senate Bill 88 say the bill would allow companies like AT&T, Cincinnati Bell and Windstream to sink more money into expanding wireless broadband communications rather than costly old, outmoded land lines.

History shows us, however, that promises made by regulated companies today often end up as foggy memories tomorrow. We have seen time and time again how dergulation given in exchange for promises results in a breach of the social contract. This is known as Kushnick's Law:

"A regulated company will always renege on promises to provide public benefits tomorrow in exchange for regulatory and financial benefits today."

Rather than wait to be taken advantage of again, we encourge you to call the toll-free legislative message line 1-800-372-7181 and leave a message that will be delivered to all legislators. This is especially critical if you live in Kentucky, but legislation like this will march across all states if it passes here or elsewhere. 

FCC Chairman Issues Statement Opposing State Muni Broadband Limitations

Last Friday, FCC Chairman Genachowski issued a statement discouraging states from creating (or maintaining) barriers to community owned networks. This statement came just days after Georgia began considering a bill to limit local authority in deciding whether a network were a wise decision.

As we’ve recognized in law and policy for many years, public-private partnerships are also essential for driving broadband deployment. Public-private partnerships like the Connect America Fund, which drives universal broadband deployment, and municipal and public -private projects like those in Chattanooga, Tennessee and San Leandro, California are also vital components of our national broadband strategy. Our Gigabit City Challenge and the important work of Gig.U to drive ultra -fast broadband centers for innovation can also benefit from innovative local approaches to broadband infrastructure. That’s why the National Broadband Plan stated that, when private investment isn’t a feasible option for broadband deployment, local governments ‘have the right to move forward and build networks that serve their constituents as they deem appropriate.’

If a community can’t gain access to broadband services that meet its needs, then it should be able to serve its own residents directly. Proposals that would tie the hands of innovative communities that want to build their own high-speed networks will slow progress to our nation’s broadband goals and will hurt economic development and job creation in those areas. I urge state and local leaders to focus instead on proposals that incentivize investment in broadband infrastructure, remove barriers to broadband build-out, and ensure widespread access to high-speed networks.”

This is a welome development as the FCC has long opposed such barriers (thank you Commissioner Clyburn as well for long speaking out on this issue) but the Chairman himself has not been as direct as this.

The Chairman regularly uses Chattanooga as an example of a tremendously successful network and again noted that community in this statement. This provides some explanation for what it means when private investment isn't a feasible option -- as Chattanooga already had DSL and cable Internet access from its incumbent providers.

Georgia's leaders need to pay attention to this fact because the ultimate question is not whether a community has DSL, cable, or wireless but whether its telecommunications services are meeting the needs of local businesses and residents.

That is the real test and can only be evaluated on a case-by-case basis by the community itself.

Roundup of Coverage of Georgia Bill to Slow Telecom Investment

In just a few days, we have seen many articles discussing how unwise and dangerous HB 282 is for the future of economic development in Georgia. This bill will revoke local authority to decide for themselves if any public investment in telecommunications is a wise choice.

We already noted coverage from DSL Reports, Free Press, and Stop the Cap. Here are some others.

CivSource, a news source for civic leaders, quickly wrote about the bill, placing it in national context.

Municipal broadband has been under steady attack nationwide by incumbent broadband providers like Comcast, AT&T, and Verizon. They contend that networks built by cities and counties that also offer subscription options for residents amount to unfair competition. They won this fight in North and South Carolina, but, following more coverage of the issue, fights in Minnesota, Wisconsin, and Georgia have been harder to win.

Ars Technica's Timothy Lee also covered the bill, including common pro and con arguments. But he gets something that many other reporters don't notice,

Moreover, limiting which parts of town a municipal fiber network can serve might make it impossible for that town to cost-effectively reach under-served sections with broadband service. It's often more cost-effective to deploy fiber to an entire town than to deploy fiber selectively to only certain parts of town. The neighborhoods being served by an incumbent are likely to be the wealthiest and densest parts of town. Banning towns from deploying fiber to those parts of town may make it impossible to cover the fixed costs of a municipal fiber project.

GamePolitics.com, a site focusing on that area where politics and video games collide, ran an article entitled, "How Georgia Lawmakers Are Working to Keep its Citizens' Broadband Connections From Improving."

But there's a quiet movement - a greasing of the wheels, if you like - to put a stop to that by telcos and low-end broadband providers that rely on old infrastructure. The latest state to try and legislate limits on what towns and cities can do to improve broadband is in Georgia, where state lawmakers have introduced Georgia House Bill 282, or "the Municipal Broadband Investment Act."

And finally, MediaPost discussed the propose limitations on muni broadband:

The Georgia Municipal Association intends to rally opposition to the bill. "Broadband is economic development," Amy Henderson, communications director for the GMA, tells MediaPost. She adds that cities "don't want the possibility of it being restricted." Currently, 13 cities have created their own broadband networks in the state.

The municipal group points out on its blog that a recent report from the governor's office said that rural parts of the state "are at a competitive disadvantage because of lack of access to broadband networks.

Georgia Anti-Internet Bill Hearing Rescheduled for Next Week

In the 30 hours since we learned of a bill in Georgia to revoke local authority to decide for themselves if a broadband network is a wise investment, we have seen a big response! Some of that is detailed below, but what matters for now is that HB 282 was bumped from today to next week.

The committee roster is here, please keep spreading the word and making phone calls. If you have contacts in Georgia that want more detail, send them our way.

The Georgia Municipal Association Blog quickly explained why this bill limits the ability of towns to attract jobs to their communities.

The fundamental question is rather simple, does Georgia want local leaders to determine the economic and investment strategies for their communities or do we want those decisions to be made solely on the business plan of companies based outside of the state?

And they go on to quote the former City Manager of Adel:

After much deliberation and public demand, the City of Adel launched our wireless internet system, Southlink, in 2003. There were NO INCUMBENT, HIGH-SPEED PROVIDERS at that time with no indication of interest by anyone. The City of Adel did what no investor-owned company would consider, yet the citizens and businesses in Adel deserved the service just as much as those citizens of Atlanta, Macon, Augusta or Savannah. The business plan worked and we gained customers. Within four years of our launch, both Alltel and Mediacom launched true high-speed service to the area. With our original intent served, we then dismantled the wireless system in 2009 and 2010 and the citizens had service options.

We did not launch the service to compete with incumbent providers and we gave them every chance to provide the service. Did our positive action create the impetus for other providers to bring in their service? I will let you decide that.

And finally, the video below notes how the city of Thomasville benefited from building its own network.

Karl Bode, of DSL Reports, sounds off on this attempt to restrict competition:

As is usually the case, the industry argues that it's simply unfair for them to have to compete with government, yet the reality is they're using government to ensure they never have to compete with towns -- or anybody else. If Windstream and AT&T were providing adequate service in Georgia, towns and cities in the state wouldn't be attempting the very difficult task of trying to wire themselves.

We have seen these attempts before. Recall that Time Warner Cable, AT&T, and CenturyLink spent more than $1 million over many years in North Carolina to limit competition -- something we documented in a recent report. Since passing that bill, North Carolina has seen its broadband prices rise and investment in rural areas remain stagnant.

Video: 
See video

Op-Ed: NC In Bottom of Broadband Barrel

Common Cause's Todd O'Boyle and myself have just published an opinion piece in the North Carolina News & Observer to highlight the foolishness of the General Assembly revoking local authority to build broadband networks.

Todd and I teamed up for a case study of North Carolina's most impressive fiber network, Greenlight, owned by the city of Wilson and then turned our attention to how Time Warner Cable turned around to lobby the state to take that right away from communities. That report, The Empire Lobbies Back, was released earlier this month.

An excerpt from our Op-Ed:

The Tar Heel economy is continuing its transition from tobacco and textiles to high technology. Internet startups populate the Research Triangle, and Charlotte’s financial services economy depends on high-quality data connections. Truly, next-generation Internet connections are crucial to the state.

It is deeply disturbing that the Federal Communications Commission ranks North Carolina at the bottom nationally – tied with Mississippi – in the percentage of households subscribing to a “basic broadband” connection. The residents and businesses of nearly every other state have superior connections.

Read the whole thing here.

Susan Crawford's Captive Audience Book Reviewed

I quickly read the just-released Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, and came away quite excited by Susan Crawford's new book.

Susan Crawford has been supportive of community owned networks and a loud voice against the poor policies that have allowed a few massive cable and telephone companies to monopolize our telecommunications. Her new book is a good resource for those just getting interested in this issue.

After the book was released last week, Susan Crawford appeared on the Diane Rehm show -- an excellent 50 minute interview that comes highly recommended. Be aware that the cable/telephone industry is engaging in character assassination to prevent Susan's message from reverberating around the country.

The book led to Sam Gustin's article in Time, "Is Broadband Internet Access a Public Utility?"

State and local laws that make it difficult — if not impossible — for new competition to emerge in broadband markets should be reformed, according to Crawford. For example, many states make it very difficult for municipalities to create public wireless networks, thanks to decades of state-level lobbying by the industry giants. In order to help local governments upgrade their communications grids, Crawford is calling for an infrastructure bank to help cities obtain affordable financing to help build high-speed fiber networks for their citizens. Finally, U.S. regulators should apply real oversight to the broadband industry to ensure that these market behemoths abide by open Internet principles and don’t price gouge consumers.

Art Brodsky also reviewed the book on the Huffington Post. He leads with a reminder of the damage done by the NFL's replacement refs, an apt comparison given how poorly the FCC and Congress have protected the public.

Susan will be our guest for the Community Broadband Bits Podcast (episode 29) on Tuesday, Jan 15, and I will be offering periodic thoughts on passages from the book in coming days/weeks.