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Circuit Court to FCC: You Can Restore Local Authority to Build Community Networks

As we noted yesterday, the DC Circuit of Appeals has decided that the FCC does not have authority to implement its Open Internet (network neutrality) rules as proposed several years ago.

But the court nonetheless found that the FCC does have some authority to regulate in the public interest, particularly when it comes to something we have long highlighted: state barriers to community owned networks. For example, see North Carolina and recent efforts in Georgia.

States have been lobbied heavily by powerful cable and telephone companies to create barriers that discourage community owned networks. Nineteen states have such barriers (see our map with the states shown in red), largely because communities have nowhere near the lobbying power of massive cable and telephone companies, not because the arguments against municipal networks are compelling.

For those who remember a certain Supreme Court decision called Nixon v Missouri, the Court has once weighed in the matter of state barriers to community networks. In the '96 Telecom Act, Section 253 declares "No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service."

However, the Supreme Court decided in 2004 that Congress was insufficiently clear in its intent to preempt state authority - that "any" did not mean "any" but rather meant something else. In making this decision, it ignored a legislative history with plenty of evidence (see Trent Lott for instance) that suggested Congress meant "any" to mean "any."

ANYway, we lost that one. States were found to have the right to limit the authority of communities to build their own networks. But we have long felt that a different grant of authority gave the FCC the power to overrule state limits of local authority to build networks, Section 706.

Preemption Map

And this is where yesterday's decision comes in. Circuit Judge Silberman concurred in part and dissented in part - but more importantly for us, he explained Section 706. Read along with your own copy from here [pdf].

The statute directs the Commission to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans . . . by utilizing . . . price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.”

As I said, we have long felt the FCC had the power to remove state barriers that limit local authority to build fiber networks under its section 706 authority but we did not know whether the courts would read it in the same way. In describing the difference between its authority to promote competition vs. its power to remove barriers to infrastructure investment, he notes:

An example of a paradigmatic barrier to infrastructure investment would be state laws that prohibit municipalities from creating their own broadband infrastructure to compete against private companies.

The footnotes cites this Wired article for further information. It's "kind of a big deal."

We now have a clear roadmap: Section 706 gives the FCC the authority to remove barriers to infrastructure investment and to promote competition. Restoring local authority to build networks achieves both. The Nixon v. Missouri decision is irrelevant, based on a different section of law. And we have plenty of evidence that when allowed to build their own networks, communities can do a wonderful job... that is what we have been documenting for years.

Network Neutrality Decision and Importance of Community Owned Networks

In a decision announced a few hours ago, the DC Circuit of Appeals has largely ruled against the Open Internet, or network neutrality. These are rules established by the Federal Communications Commission to prevent massive ISPs like Comcast and AT&T from degrading or blocking access to certain sites on the Internet. Decision here [pdf].

The goal is to prevent these big firms from being able to discriminate - to pick winners and losers. For instance, Comcast could charge subscribers an extra $10 per month to access Netflix while not charging to visit similar sites that it owns. The rules were intended to prevent that.

However, the FCC has a history of decisions that have benefited big telecom corporations more than citizens and local businesses. Those decisions limited how it can protect the public interest on matters of Internet access.

This court decision decided that the way the FCC was attempting to enforce network neutrality was not allowed because of how it has decided to (de)regulate the Internet generally. In essence, the FCC said that it didn't want to regulate the Internet except for the ways it wanted to regulate the Internet. And the Court said, somewhat predictably, that approach was too arbitrary. Moving forward, the FCC has the power to enforce this regulation, but it will have to change the way the Internet is "classified," in FCC lingo - which means changing those historic decisions that benefited the big corporations.

Groups like Free Press are pushing to make this change because it will ensure the FCC has the authority it needs to ensure everyone has access to the open Internet.

The lesson for us is that communities cannot trust Washington, DC, to ensure that residents and local businesses have universal, fast, affordable, and reliable access to the Internet. Communities should be investing in themselves to build networks that are accountable to the public and will not engage in anti-consumer practices merely to maximize their profits. Such behavior is inappropriate on matters of essential infrastructure.

Even if the FCC now gets this right and protects the public interest, that may last only as long as this FCC is in power. Communities that trust the FCC to protect them in this matter of incredible importance to their local economy may find that with a new administration, companies like Comcast have a free hand to again insert themselves as a tollbooth between subscribers and the Internet.

As a final word, this is nothing new. In putting together the Standard Oil monopoly, Rockefeller knew the value of cutting special deals with the railroads to benefit his firm at the expense of any potential competitor. When the Schuylkill Canal was built in Pennsylvania, the state decreed that the canal owner could not have an interest in mining, because the ownership of the canal meant it could disadvantage any competitors that needed to use it to ship their materials.

Network neutrality is a common sense regulation so long as we have to deal with monopolies like Comcast - we cannot stand to let Comcast or any other firm impose itself as a gatekeeper between us and anyone with whom we want to communicate or do business.

Addendum: Thanks to Harold Feld for noting that the opinion reinforced the FCC's Section 706 authority, which we believe could be used by the FCC to strike down state laws that limit local authority to build networks:

As we explain in this opinion, the Commission has established that section 706 of the Telecommunications Act of 1996 vests it with affirmative authority to enact measures encouraging the deployment of broadband infrastructure.

Read our further coverage of how this decision impacts muni networks.

Solar Powered Wireless on the Reservation - Community Broadband Bits Episode #76

When it comes to building a community owned wireless network, few have more experience than Matthew Rantanen, our guest for the Community Broadband Bits podcast this week. Rantanen has an impressive list of titles, two of which are Director of Technology for the Southern California Tribal Chairmen's Association (SCTCA) and Director of the Tribal Digital Village Initiative.

We discuss the need for better network access on reservations generally and how several reservations in southern California were able to build their own wireless networks using unlicensed spectrum and the power of the sun. This success has inspired others, including in Idaho, to take similar approaches to ensure modern connectivity.

We also discuss the importance of unlicensed spectrum to ensure that underserved communities can build the networks they need without having to ask for permission and the role that Native Public Media plays in expanding access to media across North America.

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 16 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 Haggard Beat for the music, licensed using Creative Commons.

Rural Broadband Association to FCC: "Satellite Is Not Broadband"

The Rural Broadband Association (NTCA) recently filed a report with the FCC as it examines the role of the Universal Services Fund (USF) in communications. Telecompetitor reports that NTCA filed the report as part of comments on November 7, 2013. The report by Vantage Point telecommunications engineering firm criticizes the argument that satellite is a magic pill for rural broadband availability. You can view a PDF of the report at FCC.gov.

The report lists high latency, capacity limitations, and environmental impacts the three main obstacles that complicate satellite usage. In the Executive Summary, the report goes on to note:

While satellites will continue to provide an important role in global communications, satellites do not have the capacity to replace a significant amount of the fixed wireline broadband in use today nor can they provide high‐quality, low‐latency communications currently available using landline communication systems. While recent advances have increased satellite capacity, the capacity available on an entire satellite is much smaller than that available on a single strand of fiber. 

Telecompetitor speculates that the organization was motivated in part by the potential loss of USF funding to NCTA members. From the article: 

The FCC has previously stated that as it transitions today’s voice-focused Universal Service Fund to focus instead on broadband, it envisions that homes in the areas that are most expensive to serve would receive broadband from a satellite (or possibly broadband wireless) provider. And depending how far the FCC is able to stretch its limited pool of USF dollars, it wouldn’t be surprising for the commission to consider expanding the number of homes targeted for satellite service – a move that eventually could leave some NTCA members without USF funding.

Regardless of the motivation, the fact remains that satellite is a poor replacement for wireline services. Latency, lack of capacity, and environmental factors degrade the quality of the service; data caps degrade its effectiveness. From the report:

Data intensive applications, such as streaming content, online back‐ups, video conferencing and downloading of large files, can cause subscribers to quickly exceed these monthly capacity limits. Other applications that are extremely data intensive, such as telepresence and some medical and educational applications are not even practical.

Common Cause, Network Neutrality, and the FCC Come Together in Episode 73 of Community Broadband Bits Podcast

We welcome Todd O'Boyle of the good government group Common Cause to our Community Broadband Bits podcast this week. He is the Director of the Media and Democracy program there, which recently released an explanation of network neutrality in comic form, which we discuss in our discussion.

We also talk about the impression of municipal networks in Washington, DC, and what the FCC can do about mandating meaningful disclosure of political ads without any action from Congress. These are all issues that impact whether government is responsive to local needs or to a few powerful interests.

Todd and I previously collaborated on two case studies related to his hometown, Wilson in North Carolina. We wrote a case study of that municipal fiber network and The Empire Lobbies Back regarding Time Warner Cable's response to that successful fiber network.

Read the transcript for this episode here

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 23 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 Mudhoney for the music, licensed using Creative Commons.

New Free Press Infographic: Stop the Corporate Cyclops From Gobbling Up Local Media

When we think of the enormous cyclops we don't usually imagine him in a suit and tie but the Free Press does and it works. In their recent Media Giants infographic, the Free Press uses the hulking one-eyed beast to represent corporate behemoths slowly taking control of our media through smaller shell companies.

As media power is consolidated, every one else's voices fade. We all become like the one-eyed cyclops: seeing things through his limited vision. The Free Press sums it up like this:

Media companies are using shady tactics to dodge the Federal Communications Commission’s ownership rules and snap up local TV stations across the U.S.

Gannett, Nexstar, Sinclair and Tribune are on major buying sprees. To grow their empires, these corporations are using shell companies to evade federal caps on how many stations one company can own. And so far the FCC has done nothing to stop this trend.

In some communities, one company owns two, three and even four local TV stations — and airs the same news programming on all of these outlets. The result: An echo chamber where all the news looks and sounds the same.

Take action now through the Free Press' campaign or contact your elected officials directly.

Postcard to Welcome FCC Chair Tom Wheeler

As part of the Media Action Grassroots Network, we are releasing this postcard and have tweeted it to welcome FCC Chairman Tom Wheeler and suggest an action the FCC should take.

Mag-Net Wheeler postcard

Industry Lobbyists Oppose Gigabit Communities Race to the Top Proposal - Part 2

This is Part 2 in a two-part series discussing comments submitted to the FCC in response to a petition filed by Fiber-To-The-Home Council proposing a new Gigabit Community Race to the Top program.

In Part 1 of this post, I focused mainly on the complaints filed by the National Cable & Telecommunications Association (NCTA) against FTTHC’s Race to the Top proposal. While there was nothing new in those arguments (we see them all the time from industry spokespeople), I wanted to highlight their errors in light of this promising proposal to promote community networks. This post will focus on some of the more technical arguments which further demonstrate the industry’s false assertions.

NCTA attacks the FCC’s authority to implement Race to the Top, claiming that neither Section 254 (addressing universal service) nor Section 706 (addressing “advanced telecommunications capability”) of the Telecom Act authorize such a program.

The cable lobby’s argument against Section 254 authority hinges on the statute’s requirement that universal service funds only support services in small and rural markets that are “reasonably comparable” to those available in the rest of the country. Therefore, NCTA argues, Race to the Top would “enable a small number of communities to receive faster broadband speeds than the vast majority of Americans in urban areas have chosen to purchase.”

NCTA essentially believes its members get to dictate American broadband policy. If the majority of Americans “choose to purchase” only single-digit Mbps (megabits-per-second) broadband because that’s the only affordable option in their area, then the FCC cannot subsidize faster networks, anywhere. Or so argues the NCTA.

Even more tortured is the NCTA’s argument against the FCC’s Section 706 authority to implement Race to the Top. Section 706 instructs the FCC to regularly assess the deployment of “advanced telecommunications services,” and when it finds that such services are not rolling out fast enough, the FCC must make efforts to accelerate deployment.

NCTA thinks it’s clever to point out that the FCC “has never defined ‘advanced telecommunications capability’ for purposes of Section 706 to mean gigabit services” and it “has rightly made no finding that the deployment of gigabit services is not reasonable and timely.” But the reason the FCC has not made such definitions or findings is because they are self evident.

The last three FCC Broadband Progress Reports have found that advanced telecommunications services, defined as at least 4 Mbps down and 1 Mbps up (4/1), are not being deployed in a timely manner. If 4/1 broadband is rolling out too slowly, then surely gigabit broadband is rolling out even slower. As a matter of simple logic, accelerating gigabit broadband deployment will also accelerate 4/1 broadband deployment (once fiber is installed, network operators can choose whatever speed they want). Therefore, it follows that if the FCC has the authority to accelerate 4/1 broadband deployment under Section 706, it likewise has the authority to accelerate gigabit broadband deployment.

NTCA Logo

A separate attack on the FCC’s authority was advanced by the Rural Broadband Association (NTCA), which consists of competitive local exchange carriers that already qualify as eligible telecommunications carriers (ETCs). NTCA argues that the FCC is forbidden by law from granting universal service funds to non-ETCs, which is technically true. Aside from this complaint, NTCA fully supports Race to the Top. In other words, NTCA supports a Race to the Top program that only subsidizes ETCs, like its members.

NTCA’s argument disregards one of the FCC’s key powers - forbearance. Forbearance allows the FCC to selectively suspend certain regulations when it finds that the regulation would do more harm than good. Since Race to the Top is based on a competitive bidding process, unnecessarily restricting the number of eligible bidders would make the program less competitive, more expensive and ultimately less effective. So the FCC would certainly be justified in suspending the ETC requirement for Race to the Top, especially since the program has its own eligibility requirements to ensure funds are used effectively.

In conclusion, FTTHC’s Gigabit Community Race to the Top proposal holds much promise precisely because it would be open to a wide variety of applicants including nonprofits and municipalities, and because it focuses on last-mile fiber networks. We optimistically look forward to the FCC opening a formal rulemaking proceeding so we can address the weak opposing arguments discussed here.

Surprise! Industry Lobbyists Oppose Gigabit Community Race to the Top Proposal - Part 1

This is Part 1 in a two-part series discussing comments submitted to the FCC in response to a petition filed by Fiber-To-The-Home Council proposing a new Gigabit Community Race to the Top program.

The Fiber-To-The-Home Council (FTTHC) recently submitted a proposal to the FCC to create a Gigabit Communities "Race to the Top" program. The proposal suggests granting unclaimed portions of universal service funds (USF) to qualifying entities in small and rural markets willing to build gigabit networks. While the proposal may need some adjustments, the idea holds potential for encouraging community owned networks and we hope the FCC takes the next step by opening an official rulemaking proceeding.

What makes this proposal so promising for community networks is that it may not require grantees to qualify as “eligible telecommunications carriers” (ETCs), a technical requirement placed by the FCC on USF recipients. This requirement virtually assures that USF funds go to already established telcos and not to upstart community networks.

Instead, Race to the Top lays out its own qualifying criteria which opens the door for a broader variety of recipients, including co-ops, nonprofits and municipalities, taking a similar approach as the federal stimulus BTOP program. Furthermore, Race to the Top has the potential to improve on BTOP in one major aspect by focusing on last-mile networks, which BTOP grants largely shied away from.

The FCC comment period for this initial proposal has closed and the majority of submitted comments are supportive. But I want to highlight some of the misleading comments submitted by a few industry lobby groups - National Cable & Telecommunications Association (NCTA), Rural Broadband Association (NTCA) and USTelecom. This post will focus on the NCTA, the main lobbying apparatus of the massive cable corporations. A future post, Part 2, will discuss the others.

NCTA opposes the petition on multiple grounds which jump out in bold headings like “Funding Gigabit Networks is a Poor Use of Federal Subsidies” and “Overbuilding of Existing Networks Is Wasteful.” These comments rely on the illusion that cable service is already adequate in rural areas, and where it is not, cable companies will fill the gaps (eventually). A skeptic could also read these comments as a cry for market protection, a plea to not increase competition.

These assertions strike at the heart of why community owned networks are so important - they reflect community self-determination. Communities should not have to wait for a profit-driven corporation to meet local needs; certainly not when it comes to critical infrastructure like broadband.

logo-ncta-old.jpg

NCTA’s aversion to any form of competition is clear from its request that the FCC “not devote limited USF resources to… markets that already have broadband service.” Keeping in mind that industry incumbents consider “broadband service” to mean anything as slow as a few hundred kbps (kilobytes per second), NCTA essentially believes universal service funds should play no role in providing alternatives to outdated networks.

NCTA’s self-serving definition of “broadband service” disregards other statutory requirements of universal service including “quality” and “just, reasonable and affordable rates.” 

NCTA alleges that Race to the Top “relies almost entirely on speculation about the economic and social effect” of subsidizing gigabit networks. Anyone who has been paying attention knows it is not speculation that community owned networks help local governments, schools, businesses and residents save money (I count at least six stories highlighting cost savings on MuniNetworks.org in the past month alone). We have also featured stories about how community networks improve educational opportunities, spark local entrepreneurship, expand community infrastructure, and protect user privacy.

NCTA points to cable-offered “‘business class’ broadband throughout… their hybrid fiber-coax networks” and “Metro Ethernet and other fiber-based services that offer speeds of 1 Gbps or even 10 Gbps.” What NCTA fails to mention is that in many small and rural markets where a cable incumbent offers these services, it is often the only provider of such services, which results in high prices and limited adoption (see this letter for an example of the hoops Redhat had to go through to get advanced services from Time Warner Cable).

The flaw in NCTA’s argument is that it solely treats availability as the ultimate end, completely ignoring affordability. In contrast, affordability is one of Race to the Top’s stated objectives. Time and time again, we see how community owned networks introduce much needed competition which drives prices down and adoption rates up. Race to the Top can help more communities achieve the same result.

Additional comments made by NCTA and the others attack the FCC’s power to implement Race to the Top and the idea of including entities aside from “eligible telecommunications carriers.” I will discuss these comments in Part 2.

Prometheus Joins Us to Discuss Community Radio and Internet - Community Broadband Bits Episode 61

The Prometheus Radio Project is an impressive grassroots organization that has successfully opened the radio airwaves to communities after big corporations had effectively locked up unused radio channel for years. Prometheus Policy Director Sanjay Jolly joins us for Episode #61 of our Community Broadband Bits podcast.

Our conversation ranges from the recent history of pirate radio to the many years of actions and organizing that led to the 2010 Local Community Radio Act. Local groups have an opportunity this fall to apply for licenses to broadcast - a capacity that would well complement a community owned Internet network.

The struggle for community radio has many parallels to community owned Internet networks, particularly the right of people to communicate without a few massive corporations acting as gatekeepers, mediating our broadcasts. Additionally, community radio advocates had to fight through years of junk science and misinformation hiding the plain fact that powerful broadcasters simply didn't want to face competition from locally owned stations. Seems familiar.

Read the transcript of this episode here.

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 20 minutes long and can be played below on this page or subscribe 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 Break the Bans for the music, licensed using Creative Commons.