You can also read this story over at the Huffington Post.

How can it be that the big companies who deliver some of the most important services in our modern lives (access to the Internet, television) rank at the top of the most hated? Probably because when they screw up or increase prices year after year, we have no choice but sticking with them. Most of us have no better options.

But why do we have so few choices? Government-sanctioned monopolies have been outlawed since the 1996 Telecommunications Act. Unfortunately, the natural tendency of the telecommunications industry is toward consolidation and monopoly (or duopoly). In the face of this reality, the federal government has done little to protect citizens and small businesses from telecom market failings.

But local governments have stepped up and built incredible next-generation networks that are accountable to the community. These communities have faster speeds (at lower prices) than the vast majority of us.

Most of these communities would absolutely prefer for the private sector to build the necessary networks and offer real competition, but the economics of telecom makes that as likely as donuts becoming part of a healthy breakfast. In most cases, the incumbent cable and telephone companies are too entrenched for any other company to overbuild them. But communities do not have the same pressures to make a short-term profit. They can take many years to break even on an investment that creates many indirect benefits along the way.

One might expect successful companies like AT&T and Time Warner Cable to step up to the challenge posed by community networks, and they have. Not by simply investing more and competing for customers, but by using their comparative advantage – lobbying state legislatures to outlaw the competition. As we noted in our commentary and video last week, massive cable and telephone companies have tried to remove local authority to build networks.

These companies frequently claim they are at an unfair disadvantage when they have to compete against a broadband network owned by the local government. This claim resonates strongly with some politicians, particularly those who happen to receive a lot of campaign contributions from big telco and cable companies -- as recently demonstrated in Wisconsin. They say they just want a "level playing field."

We decided to take a deeper look. We compared Time Warner Cable to Salisbury, North Carolina -- which built one of the newest community fiber networks – to see who is at a disadvantage.

Big companies like Time Warner Cable have some big advantages over any community that decides to build a network. Of course, communities do not build their own networks on a lark, they do it because they need fast, affordable, and reliable networks for economic development and maintaining a high quality of life.
But a better comparison goes beyond simply the scale of the competitors in order to complete a more meaningful comparison. For that, we created our “Level Playing Field” video, attached below.

There should be no doubt that massive incumbent cable and phone companies have a monopoly on the “unfair” advantages in telecommunications. Fortunately, community networks have a host of local advantages and often superior technology with which to invest in the networks they need. The question is whether Congress and the states will protect the right of communities to choose for themselves if a local community network is necessary.

Video: 

This is a great inside look at how one community built a globally competitive broadband network (probably the best citywide network in the US) and the barriers they faced from incumbent providers Cox and BellSouth.

Terry Huval, the Director of Lafayette Utilities System in Louisiana, spoke to the U.S. Senate Committee on Small Businesses Entrepreneurship on April 27, 2010, on the topic of: "Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access." Huval's full testimony is available here.

Huval's presentation told the back story of LUS Fiber, focusing on the barriers to publicly owned networks in Louisiana.

The FCC National Broadband Plan, on page 153, includes Louisiana as one of 18 states that “have passed laws to restrict or explicitly prohibit municipalities from offering broadband services.” While the Louisiana law did not prohibit Lafayette from providing broadband services, its mere presence provided, and continues to provide, a fertile playground for BellSouth (and its successor AT&T), Cox and their allies to create mischief, resulting in discouraging local governments from stepping in to provide these services even when the private telecom companies refuse to do so.

Louisiana, as with many other states including North Carolina, has powerful incumbents that claim there is an "unlevel playing field" and that local governments have too many advantages in building broadband networks (incomprehensibly, they simultaneously claim that local governments are incompetent and publicly owned networks always fail). But state legislators - who hear constantly from the lobbyists of these wealthy companies, have passed laws to discourage publicly owned networks.

Huval details just some of the disadvantages the public sector faces in comparison with the private sector (we detail many other disadvantages in our "Breaking the Broadband Monopoly report).

For example, while Cox Communications can make rate decisions in a private conference room several states away, Lafayette conducts its business in an open forum, as it should. While Cox can make repeated and periodic requests for documents under the Public Records Law, it is not subject to a corresponding obligation – a “show me your plans, but don’t dare ask to see mine” mentality. Louisiana law limits the ability of a governmental enterprise to advertise, but nothing prevents the incumbent providers from spending millions of dollars in advertising campaigns. An important focal point of the legal challenges involved the right or ability of Lafayette to pledge assets of the utilities system as security for the bonds, something that the private corporations do all of the time without the slightest scrutiny. To be sure, the “playing field is not level,” but it is the government which is disadvantaged, not the private companies.

Additionally, Cox and BellSouth engaged in many activities to break the will of the community to build a network. Common tactics are "push polls" and glossy mailings with inaccurate claims to scare people - particularly before a referendum. Usually, they are not this silly, but a Lafayette resident recorded one call:

One of the questions alluded to the city requirements for lawn watering during dry summer conditions. The question generally was phrased as “Since the city only allows you to water your lawn only three days per week, how do you feel about the city offering you cable TV service where you could only watch television three days per week?” The community member and, ultimately, the out-of-state questioner in this push-poll, are both heard chuckling at the ridiculous nature of the questions.

Make no mistake though, these polls are often effective at confusing and scaring people away from publicly supporting a community network.

Lafayette, along with other cities like Chattanooga, Tennessee; Bristol, Virginia; and Monticello, Minnesota, had to spend a lot of time in the courts before building the network.

By the time the Louisiana Supreme Court rendered its decision in 2007, almost three years had passed since the city’s first announcement of this project in 2004. The political and legal battles brought and promoted by the incumbent telecoms cost the city of Lafayette nearly $4 million. Interestingly enough, Cox Communications, which had been increasing its rates several times a year prior to Lafayette’s initial announcement to explore its offering of telecommunications services, decided to freeze its rates in Lafayette between 2004 and 2007. At the same time, Cox continued to increase its rates in other parts of the state. Estimates indicate that Lafayette citizens and businesses saved nearly $4 million due to these deferred cable rate increases, so in a roundabout way Lafayette’s citizens saved in reduced cable TV rates the amount the city spent defending itself in this extensive litigation process.

This quote reveals that quantifying the costs and benefits of publicly owned networks is difficult. Communities often see lower rates from all providers when they build a competitive, publicly owned network. The lower rates to everyone in the community are a tremendous benefit of public ownership.

However, the incumbent companies do not always advertise the lower rates directly. These companies can cross subsidize - using their massive profits from communities with no competition - financing large efforts to go door to door, offering special discounts to subscribers to starve the publicly owned network.

Cox has increased its rates in the multi-parish area, which includes Lafayette, and is going door-to-door to offer lower customized pricing to regain customers already being served by LUS Fiber. Apparently the notion of “fairness” espoused by the private companies does not include the increasing of rates to customers in non-Lafayette areas who have very few competitive options which allows Cox to use the resultant higher revenues to offer much lower pricing in Lafayette areas where there is now meaningful competition from LUS Fiber.

Then there is the simple matter of payback. These are powerful companies with massive resources.

In addition, Cox representatives were recently active in attempting to undermine the future of the city’s century-old electric, water and sewer utility system. During a recent rate increase effort for these traditional utilities, Cox representatives were lobbying Lafayette council members to oppose the rate increase in order to adversely affect the utility system’s future viability. All of these examples indicate an underlying strategy to hurt the city simply because the city voters dared to choose to authorize the building of their own telecommunications system.

Building a publicly owned network is a difficult task, but certainly beats the alternative of relying on these companies and their dirty tactics to prevent any competition.

Update: Thanks to Lafayette Pro Fiber for providing time stamps on the video of the committee hearing when Huval speaks.

After focusing on the North Carolina battle at the Legislature (regarding whether cities should be allowed to choose to build their own broadband networks or if they should solely have to beg the private sector for investment), I wanted to check in on Salisbury, which is building a FTTH network.

Salisbury has persevered through many obstacles, including finding financing for the project in the midst of the worst economic downturn since the Depression. They will begin serving customers this August.

After choosing the name "Fibrant" as the name of the network, they have established a slick web presence at fibrant.com. The site has a a blog, but is rarely updated currently.

Earlier in the month, the local paper discussed the ways in which the fiber network will aid public safety. The short answer is video, video, video.

Video can be used for security cameras (both in public places and in private homes) as well as to give officers better situational awareness when they arrive on a scene. But wireless video access is often the key - both so officers can stream video in the cruiser and because wireless video cameras are easier to place (no pesky wires to run) and move around.

Though wireless video is helpful, it creates of a lot of data that is best moved across fast, reliable, wired networks. This is why fiber-optic networks and wireless are better understood as complements than substitutes. A robust fiber architecture greatly eases the problems incurred by creating a wireless network because the wireless nodes will be more efficient if all are tied into a fiber network. Rather than streaming data across the entire city to send a single feed to a cruiser, a local access point will stream it across a smaller footprint.

"They are potentially looking at helmet cams," Doug Paris said, assistant to the city manager. "Those who are sitting outside (the structure) will be able to see what's going on inside."

It would make little sense for the fireman to have wires coming out of their helmets. But that wireless signal from the helmet probably won't propagate to the fire hall or police station. Instead, a wireless access point near the fire can grab the signal and make it available to anyone who needs access to it.

One reason public safety departments may not want to rely on privately owned wireless networks is because they may have dead areas. Consider that wireless carriers may focus investment in the areas that generate the highest revenues -- they may see little reason to ensure their services are reliable in rural areas or warehouse districts, for example. Police officers need access to all their tools everywhere in the community, not just where it is convenient for some company to offer it. Ownership of both the wired and wireless components make a lot of sense to local government.

And finally, just because we cannot get away from it, Salisbury has been involved in fighting back Time Warner's Monopoly Protection Act at the state capital - Raleigh. Both local officials and a private business owner traveled across the state to oppose a bill to prevent communities from building networks.

Local business owner Brad Walser was surprised how much opposition there is to publicly owned FTTH networks:

"I'm a firm believe that fiber optics will open the door to innovation and current high bandwidth applications, such as telemedicine, remote training in education, hoteling and telecommuting," Walser said. "It opened my eyes to how hard the city is having to fight to ensure they can install this fiber network."

He recognized that the unwillingness of incumbent providers to invest in modern networks hurts communities:

"Certain areas within the city limits cannot receive reliable bandwidth. We host websites, e-mails, off-site data storage, and for them to get that data to us, they need a good connection to the Internet."

Around the country, many of us are watching these events in North Carolina, hoping Time Warner and its legion of lobbyists cannot pass a bill to lock communities into their shoddy service.

Stop the Cap! sounded the alarm that North Carolina is once again considering a bill to prevent competition by effectively banning communities from building their own networks.

The Communities United for Broadband Facebook page notes:

The cable industry will be pushing a bill to stop communities from investing in fiber optic infrastructure on April 21st at 9:30am in Raleigh before the Revenue Laws Committee in room 544 of the Legislative Office Building found at 46 W. Lane St, Raleigh, NC.

This bill is being pushed by the private cable and telephone companies that are threatened by the publicly owned FTTH networks already in Wilson and Salisbury. North Carolina has a number of communities that have been inspired by the Gigabit promise of Google and are considering how they can build their own network if Google does not choose them. This bill will prevent communities from building the infrastructure they need to succeed in the future.

I should note that Craig Settles is working with the Communities United for Broadband folks. They have a great slogan: Picking up Where Google Leaves Off.