public interest

While I try to keep postings on this site to the subject of publicly owned networks, I think it important to discuss the ways in which some major carriers routinely flout the public interest. Thus, a little history on how Comcast has acted against the public interest.

Most of the readers of this blog are probably aware that Comcast has been dinged by the FCC following its practice of interfering with subscribers legal content (and undoubtedly illegal content as well) by blocking and disrupting the BitTorrent traffic. BitTorrent is frequently used to transfer large media files because it efficiently breaks large files into many little pieces, allowing the user to download from a variety of sources concurrently - the file is then reassembled.

When Comcast detected BitTorrent connections, it would effectively hang up on them, regardless of the congestion level on the network at the time. The FCC (the Bush Administration's FCC) said it couldn't do that and Comcast is currently in the courts trying to tell the FCC that it can't tell Comcast what it can't do on its network.

Prior to a journalistic investigation that proved Comcast was doing this, net geeks had repeated asked Comcast if it were blocking the BitTorrent protocol. Comcast never admitted to anything, often claiming it did not "block" anything... as time would go on, Comcast would refuse to admit it was blocking anything - as if permanently delaying traffic was anything other than a blockage. "I'm not blocking you, try back in 20 million years."

Around this time, Comcast quietly changed its policy regarding the maximum amount of bandwidth subscribers could consume in a month. At the time, I thought it was a result of the FCC cracking down on the arbitrary policies frequently used by cable companies, but it turns out we can thank the State of Florida for forcing Comcast to enact a transparent cap on monthly usage.

Prior to the official cap, there was an unofficial cap. Every month, some number of people would be notified they were kicked off Comcast's service for using too much bandwidth - but no one knew how much was too much and, perhaps more importantly, how to keep track of how much bandwidth they were using. Discussions on geek-hangout Slashdot suggested a monthly cap of between 100 Gigabytes and 300 Gigabytes depending on the neighborhood. There was no limit documented anywhere and Comcast representatives refused to acknowledge any hard cap.

In stepped Florida's Attorney General, who reached an agreement with Comcast to create a transparent cap and fined them for their actions.

It turns out that Comcast's "network management" strategy was to take the top 1000 subscribers who used the most bandwidth over a month and disconnect them. Harold Feld had the best reaction:

Comcast is almost certainly telling the truth when it says the highest 1000 users were atypically intense bandwidth consumers. duh. Of course the top 1000 out of 14.4 million will be at the high end of the curve.

No, the more interesting question is what the hell kind of a system is it where Comcast simply goes after the top 1000 users no matter how much they actually use, and why Comcast would adopt such a policy if it wants to reasonably manage network congestion? It seems rather . . . inefficient and arbitrary. Unless, of course, one is trying to save money running a crappy network and generally discourage high-bandwidth use.

Now Comcast has a transparent cap - 250 GB/month - that we still have no way of really knowing how close we come to it (nearly all of us don't come close). Was that so hard? Apparently. Meanwhile, they keep claiming that network neutrality requirements would leave them unable to exercise reasonable network management. How would they even know what reasonable network management is?

Though defining the public interest may be difficult, it is easy to show what is against the public interest: Comcast calls you and tells you that you have to use less bandwidth each month. You ask how much you can use and they say they cannot tell you but you need to use less.

Fortunately, we now know how much is too much. If only we could tell how much we were using...

Photo used under Creative Commons license, courtesy of Titanas on flickr.

In a recent post the NY Times Bits Blog, Saul Hansell reports "Verizon Boss Hangs Up on Landline Phone Business" - something we have long known. Nonetheless, this makes it even more official: private companies have no interest in bringing true broadband to everyone in the United States.

Verizon is happy to invest in next-generation networks in wealthy suburbs and large metro regions but people in rural areas - who have long dealt with decaying telephone infrastructure - will be lucky to get slow DSL speeds that leave them unable to participate in the digital age. These people will be spun off to other companies so Verizon can focus on the most profitable areas.

For instance, Verizon found it profitable to spin off its customers in Hawaii to another company that quickly ran into trouble before unloading most of its New England customer on FairPoint, moves that enhanced Verizon's bottom line while harming many communities (see the bottom of this post and other posts about FairPoint).

Isen has been writing about it recently - picking up on FairPoint immediately breaking its promises to expand broadband access in the newly acquired territories. No surprise there.

Isen also delved deeper into Verizon's actions, with "Verizon throws 18 states under the progress train." He is right to push this as a national story - the national media focused intently on the absence of major carriers in the broadband stimulus package but they seem utterly uninterested in major carriers running away from broadband investments in rural areas.

Though Frontier likes to position itself as a company focused on bringing broadband to rural areas, it offers slow DSL broadband and poor customer service to people who have no other choices - more of a parasite than angel. As long as we view broadband as a vehicle for moving profits from communities to absentee-owned corporations rather than the infrastructure it truly is, we will farther and farther behind our international peers in the modern economy.

Perhaps the most frustrating angle of these transactions are the many ways in which Verizon benefits from stranding thousands of communities. West Virginia is one of the states most impacted by the proposed Verizon-Frontier swap and has generated in-depth coverage of the story.

She [Elaine Harris of Communications Workers of America (telephone employees union)] believes the payoff for Verizon is it cannot only make money selling off its assets, but it can take advantage of a federal tax loophole that allows tax-free mergers between companies. The smaller companies are left saddled with debt and, as a result, can't make the necessary upgrades to existing infrastructure, turning off customers and ultimately leading to work force reductions as dissatisfied customers turn somewhere else.

Trying to figure out how to force absentee-owned, profit-maximizing corporations to bring true broadband to everyone ignores the reality of our market system: we are trying to force the square peg through the round hole. These companies may well invest in urban and suburban areas (though these areas continue to fall behind major cities elsewhere in the world) but they have no reason to invest in rural America. To get the job done, we need smart public investments to ensure everyone benefits from the communications revolution.

When we expanded telephone and electrical infrastructure to everyone, everyone in the United States benefited because networks always become more valuable as they increase in size. More people on the network means increased markets, increased productivity, and a higher quality of life.

Ensuring everyone has quality broadband is not charity for rural folks, it is in all of our self-interest. The narrow self-interests of Verizon, Frontier, and FairPoint (this is not a shot at them, companies are designed to have a narrow self-interest for legitimate reasons) do not line up with our larger national interest - something that too few people understand when dealing with broadband policy.

This is a video offering good coverage of the FairPoint problems:

Photo by Derek Jensen, used under creative commons license.

Our focus on the broadband stimulus is almost entirely on last-mile infrastructure because it is the most challenging and expensive problem to solve before all Americans will have affordable access to the broadband networks they need in the modern era. As we are most familiar with Minnesota, we decided to take an in-depth look on who is proposing what projects in our state.

Total Infrastructure Grants Requested for Last Mile solely in MN: at least $240 million
Total Infrastructure Loans Requested for Last Mile solely in MN: at least $85 million

Groups seeking stimulus funds to deliver last-mile broadband access in Minnesota have asked for hundreds of millions of dollars. By my tally, some 17 applicants are seeking to serve Minnesota with last-mile access (I threw out applications pertaining to middle mile infrastructure, digital divide, and those last-mile projects that combine Wisconsin and North Dakota areas) have requested some $240 million in grants and $85 million in loans.

If one assumes that the total amount of money is divided evenly among the states, this is somewhere around 3x as much stimulus money that will be awarded to Minnesota applicants over the course of the multiple rounds of funding.

At some point, this list will have to be winnowed and prioritized, so let's delve into it. All applications still must survive the peer review process (ensuring they met NTIA/RUS requirements), the incumbent challenges (incumbents can veto applications by showing that targeted areas already have broadband advertised to them), and the prioritization of surviving projects by each state (no one seems sure of how this will happen in Minnesota, our Governor is too busy not running for President in 2012).

There are two applications that should be jettisoned immediately, Arvig Telephone Company and Mid-State Telephone Company, both of which are owned by TDS Telecom. [Update: I have now heard conflicting reports on whether Arvig is, in fact, a subsidiary of TDS]

When NTIA formulated the stimulus rules, it ignored Congressional intent by allowing any private company to apply despite the requirement that the company act in the public interest.

Though NTIA ignored the intent of Congress, states like Minnesota should absolutely use that criteria in deciding how to rank projects. You may recall that TDS Telecom filed a frivolous lawsuit against the city of Monticello, which was tossed out of court at the earliest opportunity, but TDS continued obstructing the community's plans until the company ran out of appeals (our coverage here. TDS Telecom abused the court system by using it to delay a network approved by 74% of voters for more than a year in an attempt to prevent competition in the community. Few companies have abused the public trust more egregiously; they should be prohibited from receiving public money.

Further, government grants should certainly not be given to such a profitable company in order to expand their slow DSL services rather than offering the higher speeds that are needed by communities in 2010 and beyond.

Minnesota should prioritize publicly owned networks when it comes to public dollars. Unlike networks run by absentee network owners, these networks are directly accountable to the citizens of the community. Thus, projects like Lake County, Cook County, and City of Windom should all be front-runners. These grants are expensive in the short term, but they are investing in a technology that will last decades, rather than already-obsolete DSL. Rural Minnesotans need broadband, but extending speeds that already lag behind needs is not a wise use of public money.

Other smart projects that will deserve a hard look are the cooperatives that have applied - they have been borrowing from the federal government for years to extend state-of-the-art fiber networks to rural communities. Unlike companies like TDS and Qwest, they find it economical to bring fast and affordable access to their subscribers because they put community needs before profits. This is a model that needs to be expanded in rural areas.

Finally, we also support the applications of Donny Smith in several areas - his Jaguar Communications company runs an open network, allowing competitors to serve the community (again, something that other private companies avoid in order to maximize profits). He is working in several Minnesota regions to build fiber-to-the-home networks.

Basic Information about some MN Broadband Grant Applications available here - apparently, this does not include all applications aimed at Minnesota, but just applicants based in Minnesota.

Photo by Jackanapes, used under creative commons license.

Minnesota is now in poor company, along with several other states that have chosen to use telecom industry-backed Connected Nation (if unfamiliar with CN, read this report) to supply data from Minnesota to the federal government as part of the national broadband map that is being constructed.

Just how this came about explains why a group like Connected Nation thrives in the current telecommunications arena.

Mike O'Connor, the urban users' representative on the Minnesota Governor's Broadband Task Force, explains that the Minnesota Department of Commerce and Department of Employment and Economic Development (DEED) chose Connected Nation absent any public discussion or even consultation of the broadband task force.

Mike is not one to mince words about the deal (which got him picked up by MinnPost):

I'm pretty cranky about this process.  Nice n'cozy.  Nice n'closed.  Nice bypass of the Task Force.  No public input at all as far as I can see.  Looks like there was lots of opportunity for providers to provide input about their confidentiality needs, not too much input about what consumers need.  Look forward to more sub-par optimistic maps, and impossible to use/verify data, peepul.

He references the ample opportunity for providers to express their preferences, this comes from the letter from the two commissioners to the governor:

The other primary reason that we are recommending Connected Nation is that in conversations with and letters from the broadband provider community (including the Minnesota Telecom Association, the Minnesota Cable COmmunications Association, Qwest and Comcast), they have noted their satisfaction with the work Connected Nation as done, the professionalism displayed. Most important, the providers have confidence in Connected Nation's ability to protect their sensitive, nonpublic infrastructure information.

The letter goes on to discuss the other possible mapping entity - the University of Minnesota:

First, the University indicates that it has entered into confidentiality agreements on other projects. However, in speaking with the provider community, it is unclear whether they would be able to reach agreement with the University on nondisclosure agreements (NDAs) in order to turn their infrastructure data over to the University.

So let's clarify all this.

1. Broadband providers across the United States, mostly large private companies like Comcast and Verizon, have failed to invest in the broadband infrastructure we need.
2. In order to discover the magnitude of the problem, we are developing a massive map to show where these companies fail to offer services needed by communities.
3. To gather this data, many states are using Connected Nation, a group created and heavily influenced by these same companies.
4. We are to believe that Connected Nation does a good job because the providers like working with Connected Nation (a group supposedly tasked with demonstrating their shortcomings).
5. We cannot use anyone but Connected Nation because the providers do not want to give this data to anyone but Connected Nation (because it is a secret if you are getting the rates they advertise).

Awesome. Perhaps we could next ask the Minnesota Vikings to create a nonprofit to study whether a new football stadium is a good idea or not.

This is not a broadband policy, it is a giveaway to telephone and cable companies. We know that these companies cannot and will not offer the necessary services to low-density and low-income areas because it is not profitable and these companies exist to increase profits. For how long will we hold communities hostage to whether a company can make a big enough profit for that community to get 21st century infrastructure?

Update: I should have noted that Kentucky, the birthplace of Connected Nation, has decided not to use them to gather and submit this data. It seems that aside from shoddy work, some the cable companies are frustrated that CN may be too biased toward the telcos.

Update 2: It is disappointing to see that only is Minnesota's Department of Commerce committing us to more bad data, it is serving as a reference for CN in other states like Florida.

In the section of the bid asking for references, Connected Nation included recommendations for Connect Minnesota, from Diane Wells of the Minn. Department of Commerce

Photo by Jackanapes, used under creative commons license.