community broadband networks

In June, the city council of Greenacres, Florida, voted to invest $42,550 to connect to Palm Beach County's fiber-optic network. Greenacres joins a growing list of Palm Beach County municipalities who have data-transmission agreements with the County. Other towns include Palm Beach Gardens, Jupiter, Juno Beach, West Palm Beach, Delray Beach and Riviera Beach.

Willie Howard of the Palm Beach Post covered the Greenacres story earlier this month:

Instead of paying AT&T and Comcast $33,360 annually for transmission lines, the city will pay Palm Beach County $8,400 annually.

"It's basically cost sharing as opposed to revenue generating," said Mike Butler, director of network services for Palm Beach County. "We're not in it to make money."

Thomas Hughes, Finance Director of Greenacres, estimates the savings to the City will amount to $124,800 over five years.

In addition to saving money, Greenacres will have the advantage of increased speed. Currently, AT&T and Comcast provide a 1.5 Mbps connections. The new arrangement will provide 10 Mbps from the County - six times faster at a little more than one third the cost. The City can also feel good about keeping the dollars local and will avoid the uncertainty in dealing with remote and giant AT&T or Comcast.

Palm Beach County sits just south of Martin County, where a municipal network saves the County and school district significant dollars for connectivity. You can download our recent case study on Martin County, Florida Fiber: How Martin County Saves Big with Gigabit Network, to learn more about that network.

For those waking up from a two week nap, the publicly owned FiberNet Monticello recently saw the private provider managing it step down, the City tell Bondholders that it would not make up the difference between revenues and debt payments, and us examining what the network has achieved.

On Monday, the Monticello City Council joined forces with Gigabit Squared a new organization with several experienced network operators on board that previously made news by noting it had $200 million to help build next-generation networks and would likely be working closely with Gig.U.

In a few months, they will take over managing FiberNet Monticello from HBC for a short period of time and may then continue with a longer contract.

One of the benefits of the public owning a network is that when the business plan does not work out as expected, the public still has a strong voice in what happens next. Monticello could have decided to give up on it, but we are glad to see it chose instead to try a new approach. If a private company had owned the network, it alone would have decided how to proceed and its competitors would undoubtedly pay a pretty penny to see it disappear.

Given the anti-competitive actions by incumbents (engaging in predatory pricing and frivolous lawsuits), FiberNet Monticello has to work harder to increase its revenues.

Put simply, they have two choices. 1) Expand. 2) Innovate with new, next-generation services.

From what we could tell, HBC was not particularly interested in either option in Monticello. HBC is a very accomplished triple play company (telephone, Internet access, and television) and does not appear focused on innovating new services. In fact, we have heard one of their likely future public partners saying that they would do triple play and nothing else for years.

That may work out well for them and, quite frankly, probably will given their specific circumstances. But we also believe that the rise of next-generation networks (driven by local, public investments, as we detailed in our report on three gigabit cities) will lead to next-generation services and applications. And this is where Gigabit Squared is exciting -- they appear ready to push the envelope. The rest of us should hope that they can find many new ways of using these ultra-high capacity networks to improve services, from health care and education to who knows what.

Big companies like AT&T and Comcast are hoping that their last-generation networks will be sufficient for many years to come because they want to take their massive profit margins and give it to Wall Street rather than investing in better networks in our communities. Smart communities are recognizing that slow DSL and cable networks are insufficient -- and organizations like Gigabit Squared will likely soon prove them right.

In most states, telephone companies are required to serve everyone and when there are problems with the service, the state can mandate that the company fix them. But AT&T and ALEC are leading the charge to let these massive companies decide for themselves who should have access to a telephone, taking state regulators out of the loop.

These big companies use several arguments we are well familiar with - that mobile wireless is already available (in many rural areas, it actually is not available) and there is plenty of competition. If only that were the case.

I was thrilled to see David Cay Johnston cover this in a column on Reuters:

AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as "provider of last resort." They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services.

The new rules AT&T and Verizon drafted would enhance profits by letting them serve only the customers they want. Their focus, and that of smaller phone companies that have the same universal service obligation, is on well-populated areas where people can afford profitable packages that combine telephone, Internet and cable television.

What happens when the states hand over authority to these companies? David has an answer:

AT&T and Verizon also want to end state authority to resolve customer complaints, saying the market will punish bad behavior. Tell that to Stefanie Brand.

Brand is New Jersey's ratepayer advocate whose experience trying to get another kind of service - FiOS - demonstrates what happens when market forces are left to punish behavior, she said. Residents of her apartment building wanted to get wired for the fiber optic service (FiOS) in 2008. Residents said, "We want to see your plans before you start drilling holes, and Verizon said, 'We will drill where we want or else, so we're walking,' and they did," Brand told me.

Verizon confirmed that because of the disagreement Brand's building is not wired. And there's nothing Brand can do about it. Verizon reminded me the state Board of Public Utilities no longer has authority to resolve complaints over FiOS.

Better broadband is not just about technology. FiOS is an advanced fiber-optic network that crushes any cable or DSL network but Verizon still is not accountable to the community. This is exactly why communities are smarter to find ways to build networks that are democratically accountable rather than hoping a private company will make the necessary investment.

The Progessive States Network has been tracking these bills and recently alerted its readers to the threat from these bills:

A rash of backward thinking appears to be taking hold in a number of states that might be better spending their time considering how to create modern technology jobs and skills at home. Some states are considering how best to deploy modern high-speed Internet to ensure their local economies and residents are ready to compete in the global marketplace. But in other states, legislators are debating whether telephone service should be offered at all - leaving many observers wondering whether they would prefer to live in the 19th century, before Alexander Graham Bell's invention became ubiquitous.

Fortunately, consumers and advocates in many states can still stop this horrible legislation - as Kentucky did (with some assistance from the Rural Broadband Policy Group).

Under the bill, AT&T, Windstream and Cincinnati Bell would no longer have to provide basic landline services to all homes and businesses if a competitor were available to provide them. If there were no competitor, a company could provide cellphone service instead.

Opponents, including Tom FitzGerald, executive director of the Kentucky Resources Council, have argued that such a change would be a burden on the poor and the elderly who either can’t afford cellphones or are simply uncomfortable with them.

This came up recently in Mississippi:

A bill before the Legislature would wipe out the obligations of AT&T and some other phone companies to serve expensive customers and would limit the Public Service Commission's remaining authority over those firms.

Public Service Commissioners Brandon Presley, a Democrat, and Leonard Bentz, a Republican, are fighting the move, saying customers need regulators' intervention to get their problems fixed. Other phone companies are opposed to the bill, saying it could cut the connection fees collected by small rural telephone companies.

Minnesota has been considering a similar bill that has bipartisan support. Unfortunately, few in the state have realized just how bad this would be for rural and older residents.

California is considering a bill RIGHT NOW.

"IP enabled communications services include not only broadband internet and online media services, but also the basic voice telephony services that we all use every day," said Sean McLaughlin, executive director of Access Humboldt and a Knight Media Policy Fellow with New America Foundation. "We are concerned that the Public Utilities Commission, along with Counties, Cities, Community Services, School and other special Districts will be hamstrung by SB 1161, prevented from protecting consumers, and hindered from developing community broadband projects that meet our local needs and interests."

Access Humboldt has echoed concerns of The Utility Reform Network (TURN), Mendocino County Board of Supervisors, Rural Broadband Policy Group, and the California Broadband Policy Network, in opposition to SB 1161. TURN is actively organizing statewide consumer opposition to the bill - joined by national organizations such as Free Press and the Rural Broadband Policy Group.

The LA Times has just noted the incredible power of AT&T's lobbyists in Sacramento.

At the 2010 event, AT&T's president and the state Assembly speaker toured Pebble Beach together in a golf cart, shaking hands with every lawmaker, lobbyist and other VIP in attendance.

The Speaker's Cup is the centerpiece of a corporate lobbying strategy so comprehensive and successful that it has rewritten the special-interest playbook in Sacramento. When it comes to state government, AT&T spends more money, in more places, than any other company.

Despite AT&T's massive power in California, there is still time to stop this backward-moving legislation.

Less than a year after North Carolina became the 19th state to create barriers to community networks, effectively outlawing them, the non-partisan organization Follow the Money has crunched the numbers and found that private telecommunications interests donated quite heavily to lawmakers that pushed their bill through the Legislature:

According to a report by the National Institute on Money in State Politics, Dialing Up the Dollars: Telecommunication Interests Donated Heavily to NC Lawmakers, Republican lawmakers and those who held key leadership positions, sponsored the bill, and/or who voted in favor of the bill received considerably more campaign contributions from the telecommunication donors than did their colleagues. For example, lawmakers who voted in favor of HB 129 received on average 76 percent more than the average received by those who voted against the bill. The four primary sponsors of the bill received an average of $9,438 each, more than double the $3,658 given on average to lawmakers who did not sponsor the bill.

Recall that Time Warner Cable pushed this bill for years with some help from AT&T, CenturyLink, and others that stood to benefit by limiting broadband competition. But the Legislature wisely refused to enact it... until 2011.

Now we have a better sense of what may have shifted the balance. Consider this:

Thom Tillis, who became speaker of the house in 2011, received $37,000 in 2010–2011 (despite running unopposed in 2010), which is more than any other lawmaker and significantly more than the $4,250 he received 2006–2008 combined. AT&T, Time Warner Cable, and Verizon each gave Tillis $1,000 in early-mid January, just before he was sworn in as speaker on January 26. Tillis voted for the bill, and was in a key position to ensure it moved along the legislative pipeline.

Running unopposed for office, he collected more money from the cable and phone companies than any other Representative and almost 10 times as much as in the previous two cycle combined. As Speaker, he set the agenda and decided priorities. At a time when communities need as many broadband options as possible, he pushed a bill to limit competition.

It does not prove corruption, but in the immortal lyrics of C&C Music Factory, it "makes you go, hmmmm."

Senator Apodaca, one of the lead supporters of the bill in the Senate, received $21,000 from telecom political action committiees. Only one other Senator came close to that total -- Senate President Pro Tempore Phil Berger. Most Senators collected well under $10,000.

How did others in leadership positions do?

Senate President Pro Tempore Phil Berger received $19,500, also a bump from the $13,500 he received in 2008 and the $15,250 in 2006. He voted for the bill.

Senate Majority Leader Harry Brown received $9,000, significantly more than the $2,750 he received in 2006 and 2008 combined. Brown voted in favor of the bill.

Democratic Leader Martin Nesbitt, who voted for the bill, received $8,250 from telecommunication donors; Nesbitt had received no contributions from telecommunication donors in earlier elections.

None of this data suggests quid pro quo corruption. We are not saying that these people only supported this bill because they got thousands upon thousands of dollars from those who wanted it passed.

Nonetheless, the Legislature decided to prioritize a bill to revoke local decision-making authority from communities to make them more dependent on a small number of cable and DSL companies that just happened to give tens of thousands of dollars to key lawmakers.

Hmmmmm.

No use crying about it now. The question is where we go from here. Time to hold their feet to the fire -- after the bill passed, CenturyLink claimed "Thanks to the passage of House Bill 129, CenturyLink has gained added confidence to invest in North Carolina and grow our business in the state."

Can anyone attest to CenturyLink increasing investment in North Carolina? Almost certainly not. AT&T has admitted it won't continue the U-Verse rollout it once promised state legislators.

Let's collect the stories of people denied fast, affordable, and reliable access to the Internet due to laws limiting local authority. Always feel free to share such stories with us.