There are many places to find information about AT&T's war on WiscNet, a great credit to those who recognize the importance of WiscNet to schools, libraries, and local governments around the state. The best article on the subject may be from Wisconsin Tech News (WTN), with "UW faces return of $37M for broadband expansion in 11th hour bill." This post builds on that as a primer for those interested in the controversy.

Update: Read a Fact Check Memo [pdf] from the University of Wisconsin Extension Service with responses to false allegations from AT&T and its allies.

Synopsis

AT&T and its allies have long made false claims against WiscNet, setting the stage for their lobbyists to push this legislation to kill it. AT&T and some other incumbents want to provide the services WiscNet provides in order to boost their profits. WiscNet not only offers superior services, it offers services the private providers will not provide (including specialized education services). For instance, from the WTN article:

One of features that differentiates WiscNet from a private broadband provider is allowing for “bursting,” so that during isolated periods when researchers send huge data sets, they greatly exceed the average data cap. UW-Madison currently uses seven gigabits on average, and would have to procure 14 gigabits under the new legislation, even though most of the extra seven gigabits would seldom be in use, Meachen [UW CIO] said.

“We'd be paying for the fact that researchers have to send these huge data sets, and not have it take hours and hours to get to where it's going,” Meachen said. “You can't afford to pay for that extra 7 gigabits from the private sector because it's too costly. They increase your charges based on that.”

A private network would not have the necessary capacity for scientists on the UW-Madison campus, who are some of the leading researchers on next generation Internet. A previous recommendation to combine BadgerNet and WiscNet was deemed infeasible, as AT&T would own the network and would not be able to provide sufficient bandwidth at an affordable cost, Meachen said.

WiscNet is a buying cooperative, offering far lower prices to schools, libraries, and local governments than they would have to pay the private sector for similar services. More importantly, its costs increase much more slowly over time than similar connections from the private sector as community anchor institutions need faster and faster connections.

Killing WiscNet means more tax dollars going to AT&T rather than keeping cops on the streets, teachers in schools, and libraries open longer hours. These public institutions are all struggling to make ends meet and an end to WiscNet means radically increasing telecom budgets.

Professor Andy Lewis of the UW Extension Service, explains the cost differential:

While being very reliable BadgerNet is NOT affordable to many community institutions. For example, a 100Mbps service is $6,000 a month and a 1,000Mbps service is $49,500 a month. … The UW grant clearly shows a return on investment of 3.5 – 4.5 years. After that an institution will be able to get 1,000Mbps service for about $10,000 annually vs. $594,000 annually, which is the current BadgerNet rate.

Background

BadgerNet is a physical network comprised of leased lines connecting libraries, schools, local governments, and other public institutions throughout Wisconsin. Badgernet is almost entirely owned by AT&T and its costs are heavily subsidized via state and federal programs. WiscNet provides services over those connections, including Internet access. WiscNet has been providing Internet service since 1991 whereas BadgerNet was built in the mid 90's. For more, this pdf offers background.

Tad Pinkerton, Emeritus Professor of Computer Sciences and "Father of WiscNet" explains WiscNet (with a clarifying comment from me in []):

My colleagues and I brought the Internet to the UW System and to other higher education institutions in Wisconsin, and to public schools and libraries throughout the state through a non-profit association called WiscNet. The budget proposal that would prohibit future work of this kind is a travesty. Research depends on using the very latest communications tools and capacity to be competitive, and these tools are not provided in Wisconsin by telecommunications companies. The UW-Madison must buy its access to them wholesale, and supplement them substantially with its own networking expertise. This expertise and capacity is then made available in the rest of the state through WiscNet [WiscNet contracts for this expertise, it is not provided for free by UW]. WiscNet also provides a collaborative environment in which like public institutions can pool their expertise to maintain services at a high level in this rapidly developing technology. Neither advanced networking nor such collaboration can be provided at retail by Wisconsin's private sector, despite their protestations to the contrary.

Lying and Lobbying

AT&T and its Republicans make the same bogus claims we see across the country in situations like this. They claim that despite being one of the largest corporations in America, they are the underdog and need special legislation to protect their interests. From the WTN article:

Republican lawmakers and the Wisconsin Telecommunications Association say the university should not be in the business of providing telecommunications services, and are in favor of shifting reliance back to BadgerNet, a state-run network that consists of private telephone companies, small and large, including AT&T, that band together to offer services to the education community in the state.

Bill Esbeck, executive director of the Wisconsin Telecommunications Association, says existing state law already prohibits the UW system from offering, reselling or providing telecommunications services that are available from private telecom carriers.

“WiscNet as an entity can continue to operate, we just think it should operate without a taxpayer subsidy,” Esbeck said. “We firmly believe some of the other telecom ventures at the UW are contrary to the existing state statute.”

Of course, if UW is really violating the statute, AT&T can take it to court. Why don't they? Massive incumbents sue competitors all the time for the flimsiest of reasons just to harass and tie them up in court. They don't go to court because WiscNet is not violating the statute and has welcomed a state audit to put an end to these allegations.

AT&T knows it best course is not via the courts, where it will lose but rather in the Legislature, where it vast lobbying power gives it the most advantage.

The charges that WiscNet is somehow competing unfairly with public tax dollars is absurd on its face. Though WiscNet does not receive the subsidy claimed by AT&T and its allies, even if it did, that subsidy is nothing compared to the subsidies provided to AT&T and its allies from state and federal programs to expand broadband access.

Impact

Again, from the WTN article:

Meachen says the telecom provision means high stakes for both the State of Wisconsin and for the university. The provision calls for the UW System to completely disassociate with WiscNet by July 2012.

“We created WiscNet, which is now a member owned and operated cooperative with an independent board,” he said. “So, we are forbidden to work with them, and they are our network provider, so we would have to start over from scratch and completely recreate our network. I can't even estimate the cost of that.”

If the UW System used BadgerNet to meet its current bandwidth requirements, it would pay an estimated $8 million a year, Meachen said. It currently costs the UW System $2 million a year for WiscNet, which is provisioned so that the costs to the customers do not increase with increasing bandwidth. Instead, the fee is based on the size and type of institution.

Using what he calls a conservative estimate, Meachen says the UW System would spend $27 million for BadgerNet by 2016, based on an annual growth rate of 35 percent.

“I, for one, would not want to stand before the taxpayers having just spent $27 million of their money when I knew I could have done the same thing for $2 million,” Meachen said.

The language is so broad, it would preclude participation in essential networks for scientific collaboration, like Internet2. AT&T and its allies claim this is a misinterpretation, but the language is pretty clear, as we noted previously.

Another article looks at the impact on Madison schools:

The Madison Metropolitan School District has used WiscNet as a provider for all of its network services, including Internet, email and online teaching tools, for 17 years. For the last 12 years, the district has been required to bid out to private organizations to see what service was cheaper, and it said WiscNet has always been a better value.

"If we were to change to an alternative Internet service provider right now, my estimate is the immediate cost to the district would be approximately 70 percent higher right now, and that doesn't count the services that WiscNet brings to the table for free," said Mark Evans, director of technology services at the Madison Metropolitan School District.

View the video accompanying that story:

Wisconsin Returns More Stimulus Money

Despite ranking 43'rd in broadband among 50 states on the National Broadband Map, the present Wisconsin state government seems determined to return all federal assistance in expanding broadband access.

This language also requires Wisconsin to return tens of millions of dollars in broadband stimulus awards to a public-private partnership. Returning these funds would be a tremendous blow to Packerland Broadband / CCI Systems, the private sector partner that has already invested millions into the project.

Yes, you read that correctly. AT&T and some other incumbents had their opportunity to work with the partners in this stimulus project and chose not to. Now they are trying to kill the project so they will remain the only remaining option to provide connections to these community anchors… charging far more for far less than the stimulus project would provide.

In order to qualify for the stimulus, those involved documented that the connections they need were not available from incumbents. It is not that incumbents cannot provide services like dark fiber, they just prefer not to because the profit margin is smaller than on the services they want to provide.

If AT&T and allies are successful, they will be proverbial dog in the manger: they will not provide the needed connections on reasonable terms and will use their lobbying clout in the capital to ensure no one else can either.

What to do

If AT&T is really so concerned about WiscNet violating the law, it should pursue the matter in court or in the normal legislative process rather than attaching this language in the 11th hour of the budget process. Just because AT&T has the clout to pass its false talking points off as truth should not make the Legislature agree to kill off an essential tool for schools, libraries, and local governments without a proper hearing.

If you are in Wisconsin, contact your elected officials and respectfully urge them to remove sections 23-26 of the UW System Budget Bill. Explain that WiscNet is essential for schools and libraries across the state and if they Legislature has concerned with how it operates, they should have proper hearings and an audit to establish some facts. Find your legislators using this tool.

Pass resolutions, as some have already started from relevant organizations. Resolutions show support and are a good organizing tool.

If you are not in Wisconsin, alert those who are and encourage them to act immediately. This could be decided as early as Tuesday

For more information or points you can make in your letter or conversation, visit Save WiscNet, this helpful post from ijohnperderson, or the ever-growing list of letters in support of WiscNet.

Pants on fire photo used under creative commons license courtesy of Flickr's Brad Gillette

Bruce Kushnick, a telecom analyst, has long pushed for telcos to live up to the bargains they struck with individual states and federal agencies over the years as part of deregulation policies. They were deregulated and (surprisingly enough) failed to make good on their promises. For the most part, governments have refused to punish them or even learn the lesson that companies like AT&T and Qwest simply cannot be trusted.

If you have ever stared at an incomprehensible telephone bill and wondered just how badly you were getting ripped off, you will be interested in this article discussing the many ways we are ripped off by these companies. Small wonder these companies are so profitable and can afford their legions of lobbyists.

But that is that, and what's done is done, right? Well, Kushnick has another article about the Obama Administration's FCC and approach to expanding broadband.

Long story short, the proposed changes will increase the costs most of those with the least ability to pay and the least likely to benefit from the spending. This approach of expanding broadband is awful - more subsidies to terrible telephone companies that have poor service in rural areas because they are structurally incapable of meeting the infrastructure needs of communities. Massive companies like AT&T and even smaller big companies like Qwest are strangling rural communities while they lobby for bills to prevent those communities from solving their own problems.

Expanding broadband access and availability has costs and some taxes may need to be raised. But those funds should be used responsibly by expanding broadband coverage from entities that are dedicated to serving the community (munis, coops, nonprofits) rather than simply padding the corporate profits of companies that provide terrible service to communities and upgrade far too slowly.

It looks like Palo Alto should move quickly on expanding its publicly owned fiber-based I-NET - as the city renegotiates the cable franchise with Comcast, the private cable company is trying to rip-off taxpayers with exorbitant prices for community anchor tenants.

California is one of several states to recently take negotiating power on cable television franchises away from communities and grant it to the state. Historically, communities negotiated a free or reduced rate for connectivity to schools, public safety buildings and other key community anchors in return for access to community Right-of-Way - an essential permission necessary to build a cable network.

However, as these agreements come up for review, the regulatory landscape is significantly different than it was when they were negotiated in the past. Federal and state decisions have limited the power of communities to gain concessions from cable companies as they continue to raise prices and post large profits.

In response, many communities have embarked on smart efforts to build their own fiber-optic networks connecting key institutions. These networks often save money while greatly increasing available bandwidth, allowing local governments to be more efficient and use cutting-edge applications. In some communities, these Institutional Networks have formed the backbone of next-generation networks that extend full fiber-to-the-home network access to businesses and citizens. Palo Alto has not yet connected all the necessary buildings with its network and still depends on Comcast for bandwidth to those areas.

Communities should beware - network ownership means power. The network owner can decide what price to charge schools - prices that must be paid with tax dollars. Communities building their own networks have slashed these prices and reduced pressure on the tax base. They don't have to worry as much when cable franchise negotiations are up again - like Palo Alto is now.

Joe Saccio, deputy director of Palo Alto's Administrative Services Department, said Comcast's proposed rates for I-Net would essentially enable the cable company to bill the communities twice for the fiber network. The network's construction was funded by cable subscribers and according to the staff report, Comcast has already largely (if not completely) recouped those costs.

"It's felt that all the ratepayers had already paid for the system that Comcast had put into the ground through their rates," Saccio said during the City Council's Oct. 19 study session with state Sen. Joe Simitian. "It's double charging the infrastructure is already paid for and they want to continue to charge the districts for it."

...

"I will say that we plan to and will charge competitive market rates that will reflect the current demand and supply of fiber networks in the Palo Alto region," Johnson [Comcast Spokesperson] said.

This is one of the key problems - there is no competitive market for telecom. Even if there was, it makes far more sense for communities to connect themselves and keep prices low rather than paying full market prices. Why rent when you can own? Companies far smaller than municipal governments build their own fiber network connecting sites because it is the economically rational decision.

Additionally, owning the network allows for better network design - improving reliability by providing more redundancy. Private companies do not always provide redundancy because of the added expense. This may be fine when delivering television service to subscribers but is intolerable when a public emergency knocks out connectivity to the police or fire station. Smart communities control their destiny by building their own network.

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