referendum

The Longmont Times-Call continues its coverage of the community network struggles of a Colorado community. This story has a lot of the history behind how Longmont developed a fiber ring and how they have used it even as they are prohibited from expanding it.

Longmont is not alone in working for upwards of a decade to bring better broadband to the community that actually meets local needs rather than maximizing profits. Other communities have also spent ten, fifteen, or even long with on-gain, off-again plans to build a publicly owned network. This reality provides a handy refutation of state preemptions based on the logic that communities will act too quickly in not considering their plan for a network. Communities take years in researching, planning, and developing networks.

In Longmont, the first public fiber investment came in 1996 and was expanded shortly thereafter by the Platte River Power Authority. The city moved more than 40 facilities to a gigabit network, leaving T1s to communities that prefer to vastly overpay for their telecommunications needs.

They worked with a private company, Adesta, to expand the network to residents and businesses but the company filed for bankruptcy in the following year. The arrangement certainly had its upside though - Qwest and Comcast mysteriously decided to start offering broadband in Longmont shortly after the Adesta agreement. This happens almost every time a community invests in infrastructure -- it leads to increased investment from incumbents.

They quote a techie from the Longmont Hospital who explains the one of the benefits of the publicly owned fiber already in the ground:

“It’s at least a three times reduction in cost,” Niemann said of leasing fiber from the city, versus contracting with a commercial provider. “And oftentimes, if you go with a commercial provider, you have construction costs.”

The city would like to expand the network, both to bring competition to the DSL/cable duopoly, and to invest in smart grid applications for its public power utility. Unfortunately, they have to win a referendum per Colorado's incumbent-protection law. The incumbents are more than willing to spend hundreds of thousands against any such measure, knowing they would lose far more in profits if they had to deal with competition in the community.

As we have noted previously, Longmont, Colorado, has seen a number of private companies attempt to offer Wi-Fi broadband and then go out of business. As Colorado preempts local authority by requiring a referendum by the city before it can offer services itself, Longmont recently had a vote to authorize telecommunications services. Voters defeated the option.

As is common in these referendums, voters were blanketed with reasons to vote against it as incumbents (Qwest and Comcast) spent $200,000 opposing competition whereas the city is prevented by law from advocating for a ballot measure.

Now the Wi-Fi network will be auctioned off in pieces because it cannot pay taxes.

Ohio-based DHB Networks owes the Boulder County treasurer’s office $87,000 in unpaid business personal property tax, and the county demanded the company cease operations unless it pays those taxes.

DHB also owes the city of Longmont. Longmont-based RidgeviewTel is running the network, at least until the Wi-Fi equipment is auctioned off Thursday — at which point, 400 to 600 customers will be without Internet access, RidgeviewTel CEO Vince Jordan said.

Though the city already has fiber assets that could be used for backhaul as well as other expertise it could use in continuing to run the network, it cannot step in to run a network that would be useful to the community:

While the city can step in and operate the system, it would be only for municipal needs — such as police, fire and utility services — and not to provide Wi-Fi to customers.

“Our hands were always tied,” Roiniotis said. “We could buy the system and operate it, but only for our own purposes. We can’t provide the retail part of it.”

The city’s hands also were tied when it came to campaigning. State law bans governments from spending public money to campaign for or against local ballot questions.

Though 400-600 people may not seem like a lot of people to leave stranded, many of those on the network were the ones that needed a low cost alternative. This is one of the reason some hoped for a last minute resolution to the impending auction.

The city doesn’t plan to bid on the Wi-Fi equipment because owning the equipment doesn’t make sense if the city can’t operate an wireless service — or even partner with a private company to provide it, director of Longmont Power & Communications Tom Roiniotis said after the council meeting Tuesday night.

Several residents told the council Tuesday night that they rely on wireless Internet service as a less-expensive alternative to Qwest’s DSL or Comcast’s cable broadband.

Some may believe a required referendum to offer retail telecommunications services is a good idea or at least a relatively harmless barrier as local officials should be able to demonstrate public support for such a significant investment (and Colorado's majority-support referendum is certainly less onerous than Minnesota's 65% super majority requirement).

While it is true that local officials should be able to demonstrate strong community support, the reality is also that a referendum allows absentee opponents a great opportunity to dump a lot of money into the community to confuse and obfuscate the issue while supporters are outspent (often on the order of between 10:1 to 25:1) and City Hall is prevented by law from supporting the referendum.

For this reason, we oppose such referendum requirement -- remember that these decisions remain accountable to the public via the democratic process. Additionally, many communities already place requirements for referendum on communities when they are financing the network, providing an additional check once they have developed a plan.

UPDATE: As for Longmont, the wireless network has found a new private buyer that will be investing in WiMAX apparently.

As I noted previously, a community in Colorado - Longmont - will soon vote on whether the local government should be allowed to sell retail Internet services. This community has tried a number of approaches to expanding broadband competition but have not yet succeeded in getting the networks they need.

The local paper opposes the measure. However, the editorial frames the issue in a curious way. It claims the ballot measure will "override" state law, which is utterly false. State law says the community has to approve it before they can do it - so the City is complying with the state law.

Those against the measure point to failed municipal-run telecommunication efforts as another reason not to support this measure. That’s fairly compelling, especially when we have no specifics about what type of telecommunications projects the city will pursue.

Those against the measure claim that municipal-run telecommunications efforts have failed. They often point at successful community networks (or even failed privately owned networks, oddly enough), call them failures, and rightly assume that no one will fact-check the assertions. Often, they will gin up some false numbers that suggest a far-off network has lost a lot of money (using their same methodology, it would be crazy for anyone to borrow to buy a house).

Regarding the concern over what specific project the city will pursue if authorized, this is an interesting catch-22 because it makes little sense to expend a lot of money on a business plan before a community has the authority to build something. Either decision is difficult and requires a trust in the local leadership and democratic process.

Comments to that editorial rightly note that Comcast and Qwest will not prioritize investments in Longmont until they see competition. The private sector has failed to generate competition on its own, so the community is smart to consider spurring competition themselves. However, both Comcast and Qwest can spend hundreds of thousands of dollars to scare people into voting against competition - it will still be cheaper for the incumbents than having to actually invest in faster networks.

One of the comments provides some interesting background on local broadband:

The Longmont Fiber ring was built by now-defunct Adesta Communications. The City wisely included language in the right-of-way contracts that gave them the right to the fiber if it was abandoned. Currently there is 12% usage and lots of opportunity for the City to resell strands and collect revenues. They aren’t looking to provide IPTV, just access and need [Ballot Question] 2C passed in order to do this. Also, Longmont has been working diligently to keep bandwidth flowing through the DHB wi-fi network and keep the customers online. 2C will give them the authority to salvage the network and get it running in top condition again.

Craig Settles recently wrote a piece looking at Longmont, specifically the role of companies like Comcast who fund groups to spread FUD (fear, uncertainty, and doubt) that is very hard for local governments and truly grassroots organizations to respond effectively to. They are overwhelmed by being outfunded -- sometimes 25:1.

However, communities that move forward overwhelmingly see success - see Craig's story for a few profiles or read the reports that we showcase (particularly the Municipal & Utility Fiber Optics Guidebook and Muni Broadband Policy Brief).

As citizens in Longmont consider their options, I hope they are able to see past the self-interested Comcast and Qwest lies claiming that community-owned networks are doomed. The communities that have failed are those who remain dependent on absentee-companies that put profits above community needs.