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Seniors, Low-Income, Disabled Communities Pay the Price in St. Paul

For seniors, low-income residents, and the disabled in Saint Paul, Minnesota, a Comcast discount within the city's franchise agreement is not all it was cracked up to be. The Pioneer Press recently reported that, as eligible subscribers seek the ten percent discount guaranteed by the agreement, they are finding the devil is in the details - or lack of them.

This is a warning to those who attempt to negotiate with Comcast for better service. Comcast may make deals that it knows are unenforceable. 

"No Discount For You!"

For years, Comcast held the only franchise agreement with the city of St. Paul. In 2015, the city entered into a new agreement with the cable provider and, as in the past, the provider agreed to offer discounts for low-income and senior subscribers. Such concessions are common because a franchise agreement gives a provider easy access to a pool of subscribers.

It seems like a fair deal, but where there is a way to squirm out of a commitment, Comcast will wriggle its way out. 

Comcast is refusing to provide the discount when subscribers bundle services, which are typically offered at reduced prices. Because the contract is silent on the issue of combining discounts, the city of approximately 298,000 has decided it will not challenge Comcast's interpretation:

The company notes that the ten percent senior discount applies only to the cable portion of a customer's bill. Comcast has maintained that it is under no legal obligation to combine discounts or promotions, and that bundled services provide a steeper discount anyway.

Subscribers who want to take advantage of the discounts will have to prove their senior status and/or their low-income status. In order to do so, Comcast representatives have been requesting a copy of a driver's license or state issued i.d. 

CenturyLink Picks Up the Baton

In November, the city approved an additional franchise agreement with competitor CenturyLink. That agreement also provides that seniors, low-income households, and disabled residents are eligible to receive a ten percent discount. CenturyLink can, in the alternative, offer a discount of $5 off a subscriber's cable bill if a subscriber applies for the low-income discount. In order to receive this discount, the subscriber must prove they are enrolled in a public assistance program. CenturyLink is not compelled to provide both the $5 reduction and the ten percent discount under the terms of the agreement.

The CenturyLink contract states that bundling discounts will not forfeit the $5 discount but does not say the same for the alternative ten percent discount.

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Seniors on the Chopping Block

Discounts for low-income seniors are at risk in the CenturyLink contract reports the Pioneer Press. The contract offers the company an "out" by allowing it to exchange a senior discount to residents for free gigabit per second (Gbps) service at centralized locations. Rather than offering a ten percent discount to senior subscribers at their homes, CenturyLink can provide the high-speed connectivity to two St. Paul senior centers or to one senior center and a community center and present two training session per year on using the Internet.

My own parents, who are elderly and leave the house less frequently than they have in the past, depend on their Internet connection to stay in touch with their kids. A number of elderly folks are lower-income. Ten percent, a modest sum to a profit machine like Comcast, could be the tipping point for whether or not elderly people living on fixed incomes subscribe.

Would I rather have Mom trudging through the St. Paul snow to wait in line at the senior center to Skype in a noisy room filled with other seniors? No. Will Mom go to the senior center? Probably not. This trade-off is not equitable.

When You're All Lawyered Up, It's Easy to Break Promises

As franchise agreements expire across the country, communities like St. Paul will be negotiating new contracts or considering other options. Companies like Comcast and CenturyLink, backed by armies of lawyers, have turned backhanded negotiating into an art form. Cities like St. Paul employ smart, capable attorneys, but telecommunications is highly specialized; few communities have legal staff experienced in this field.

Lose The Big Companies, Gain Control

Contrary to the typical behavior of Comcast and CenturyLink, publicly owned networks have a history of lowering prices or increasing speeds for free. When we ask why, decision makers usually tell us they make the change because it's good for the community. Subscribers are the shareholders when a network is publicly owned.

Communities that invest in municipal networks shake off dependence on big providers like Comcast and CenturyLink. By investing in their own infrastructure, they spur economic development, save public dollars, and become more self-reliant. 

Steamboat Springs Gets a Grant for Fiber for the Future

Last we checked in with Steamboat Springs they had just finished a connectivity project. Now the community is taking another step to improve local connectivity in this northwest Colorado ski resort town.

The goal is to connect large community anchor institutions throughout town with a fiber backbone which could become the basis for a larger network. Several community anchor institutions have pooled their resources and pledged $748,000 while also securing a matching grant to install 9 miles of fiber across the small town of 12,000. Funding is in place, but the agreement between the institutions must be finalized before sending out an official request for proposals to find a company to install the fiber.

Matching Grants & Community Connectivity

The Colorado Department of Local Affairs (DOLA) intends to match the community’s contributions towards the project. DOLA will provide $748,000 in grant money for the fiber backbone. According to Routt County Manager Tom Sullivan in Steamboat Today, the fiber design will have splice points to allow a private providers to provide last-mile connectivity to residents’ homes and businesses from the fiber backbone.

So far, the large institutions pitching in for the 9 miles of fiber are: Routt County’s public safety complex, Yampa Valley Electric Association, the city of Steamboat Springs Mountain Fire Station, Yampa Valley Medical Center, Colorado Mountain College, and the Steamboat Springs School District. Several of these institutions had previously collaborated with the Northwest Colorado Broadband group and the Steamboat Springs Chamber Resort Association on the community's first connectivity project.

The Carrier Neutral Location

The first publicly owned project in Steamboat Springs was a Carrier Neutral Location (CNL). It's a space owned and maintained by a neutral party where providers can connect to each other to provide redundancy. It's especially useful for middle- and last-mile providers to connect to one another. The facility drives down the cost of bandwidth for community anchor institutions and service providers because they no longer require a separate facility for connections. Put another way, it aggregates the demand for bandwidth and leads to cost-savings.

In Steamboat Springs, the CNL is a room in a school district building. The CNL has allowed local anchor institutions to negotiate tenfold savings. For more information on CNLs, check out our podcast with Tim Miles, the Technology Director at Steamboat Springs and South Routt School Districts.

Voting Matters

In November 2015, citizens opted out of SB152, a state law prohibiting local governments from developing municipal network to improve Internet connectivity. Without that vote, the latest project would not have become a reality due to the state barrier. Now Steamboat Springs has the option to continue developing its infrastructure for high-speed Internet for the whole community, including residents’ homes.

Missouri Legislature Off to Another Anti-Muni Session: Pick Up Your Phone and Call!

If you pay attention to state laws affecting municipal networks in Missouri, you are experiencing an unsettling feeling of deja vu right now. On January 7, Representative Lyndall Fraker introduced HB 2078, a bill much like last year's Senate anti-muni bill. Fraker is Chair of the House Utility Infrastructure Committee, where  the bill is now awaiting a hearing, so it has a good chance of being heard sooner rather than later. 

Your Phone Call Required! 

Time to call Members of the Committee, especially if any of them represent you, and let them know that you expect them to vote against this bill. It is anti-competitive, opposed to local authority, and prevents new investment. Bad bill! 

Preventing Partnerships to Maintain The Status Quo

This bill would not only make it extremely difficult for local communities to invest in publicly owned Internet networks, but would complicate and delay public-private partnerships. A number of communities across the country already own infrastructure and are exploring ways to partner with private providers who want to use it to serve schools, businesses, and residents. If a community wants to lower telecommunications costs or obtain better services, this legislation would have them first jump through a series of obscure, expensive, and cryptic hoops. This legislation creates barriers that serve no purpose except to erect hurdles that discourage local communities from finding better providers.

The requirements in HB 2078 and its companion bill SB 946 are clearly intended to limit competition - to maintain the existing de facto monopolies and duopolies within Missouri. As we have seen in places like Westminster, Rockport, and in Missouri's North Kansas City, partnerships are filling a gap in places where incumbents don't feel justified investing or communities are not ready for their own high-quality Internet networks. A key benefit to allowing partnerships is the establishment of competition in areas where there is only one provider who has no reason to work to please its subscribers.

According to HB 2078, before a community can even consider offering any type of service:

"...the competitive service is not being offered to fifty percent of the addresses by any combination of service providers within the boundaries of such city, town, or village."

In other words, existing de facto monopoly status in places where there is only one provider can be easily preserved by the Missouri State Legislature if this piece of legislation passes.

State Lawmakers Impose Their Will On Local Decisions

The bill also dictates specific criteria for feasibility reports, waiting periods, and fiscal impacts. HB 2078 directs the city on specific loan requirements, limits borrowing to $500,000, and dictates interest terms. Along with other restrictions, the bill shackles local governments to the point where investing in better infrastructure is not practical.

Give the Locals What They Want!

Once again, state lawmakers are stepping over the line when they should be stepping back from it. Missouri has existing barriers that discourage publicly owned networks and negatively impact rural communities overlooked by large corporate providers. Rather than perpetuate this harmful state of affairs, state lawmakers should look to the future, strike down the state's existing barriers, and give local communities full authority to decide their own connectivity future.

Are You From Tennessee? Your Opinion Matters!

For the past several months, we have covered the plight of North Carolina and Tennessee. These states have passed laws that prohibit local governments from expanding beyond their municipal electric utility service area to bring better connectivity to neighboring communities. Even though nearby towns ask places like Chattanooga or Tullahoma to provide services, they are prevented from doing so.

Today we bring to you this news story from Anderson County, Tennessee. Local officials are encouraging residents to tell the state about their horrible connectivity. With a bill in the state legislature to remove the restriction and the state embroiled in a court case to challenge the FCC's decision to roll back the state barrier, local governments are using the survey to connect people with lawmakers.

In Anderson County, some local government agencies have hardcopies of the state’s survey for those without Internet access. Any Tennessee resident with Internet access can take the survey online here

"It's the slow circle of death that you see wheeling around there, and it's waiting and waiting and waiting," -- Steve Heatherly, Anderson County Chamber of Commerce Chairman

Op-ed: Next-Generation Networks Needed

The Knoxville News Sentinel published this op-ed about Tennessee's restrictive broadband law on January 9, 2016.

Christopher Mitchell: Next-Generation Networks Needed

Four words in Tennessee law are denying an important element of Tennessee's proud heritage and restricting choices for Internet access across the state.

When private firms would not electrify Tennessee, public power came to the rescue. In the same spirit, some local governments have built their own next-generation Internet access networks because companies like AT&T refused to invest in modern technology. These municipal networks have created competition, dramatic consumer savings and a better business climate in each of their communities.

The four words at issue prevent municipal electric utilities from expanding their successful fiber optic Internet networks to their neighbors, a rejection of the public investment that built the modern economy Tennessee relies upon.

Current law allows a municipal utility to offer telephone service anywhere in the state, but Internet access is available only "within its service area." This limit on local authority protects big firms like AT&T and Comcast from needed competition, and they have long lobbied to protect their de facto monopolies. To thrive, Tennessee should encourage both public and private investment in needed infrastructure.

These municipal systems have already shown they can bring the highest-quality Internet services to their communities. Chattanooga's utility agency, EPB, built one of the best Internet networks in the nation. Municipal fiber networks in Tullahoma, Morristown and more have delivered benefits far in excess of their costs while giving residents and local businesses a real choice in providers.

Many of these networks are willing to connect their neighbors — people and businesses living just outside the electric utility boundary. If Chattanooga wants to expand its incredible EPB Fiber into Bradley County with the consent of all parties, why should the state get in the way?

Consider that Tennessee metro areas almost always have at least one high-speed Internet option. Those with municipal networks have a real choice in providers. Nashville is slated for Google Fiber. But there is no such hope on the horizon in rural areas, despite the billions of dollars that have been spent on subsidies to providers like AT&T.

While AT&T's lobbyists scheme to prevent competition, the federal government subsidizes AT&T operations with more than $500,000 per month in Tennessee alone. So much for the "private" sector.

When it comes to municipal networks, taxpayer dollars are rarely used. Private investors often finance municipal networks by purchasing long-term bonds and are repaid by the revenues from the network. The Tennessee Valley Authority strictly oversees municipal utilities to ensure they are not cross-subsidizing telecom services with electrical ratepayer revenues.

To the extent municipal networks affect taxpayers, the taxpayers benefit. EPB just announced that in 2015 alone, its payments in lieu of taxes exceeded $19 million to the 17 jurisdictions in which it operates.

When local businesses connect to municipal fiber, more of their money stays in the community. Compare that to how much communities without a real choice send to AT&T and Comcast headquarters in distant states. And thanks to the competition, residents and businesses pay less. Morristown estimates a $3.4 million annual aggregate savings from lower bills.

The state should encourage communities to be more self-reliant and to build resilient regions rather than taking the side of distantly-owned monopolies. The state should be focused on how to encourage investment in next-generation Internet networks, not limit it.

 

Christopher Mitchell is the director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance. He is on Twitter: @CommunityNets.

Op-ed: Spanish Fork Proves Utah Law is Counter-Productive

The Salt Lake Tribune published this op-ed championing local investment in Internet infrastructure on December 11, 2015.

 

Op-ed: Spanish Fork’s success shows municipal Internet networks work

By Christopher Mitchell

For nearly 10 years, large telephone and cable companies have claimed municipal Internet networks are so risky that local government authority should be restricted. But after 15 years of experience, we can only conclude that the cure is worse than the disease.

Utah has three municipal networks, where local governments invested in Internet infrastructure to provide choices in a monopolistic environment. But only two of those networks are regularly discussed and used as examples of why local governments shouldn't be in this business: iProvo and UTOPIA, which were not able to meet their financial targets.

The network missing from the conversation is Spanish Fork Community Network, which has just finished paying off its debt and has generated millions of dollars in surplus revenue for the community. The network is now upgrading from community cable to community gigabit fiber optics.

Of the over 450 municipal networks tracked by the Institute for Local Self-Reliance, Spanish Fork's experience is above average. The vast majority of municipal networks deliver benefits well in excess of costs and do not require subsidies to operate.

It may come as a surprise, but iProvo and Spanish Fork are nearly twins, separated at birth and raised in dramatically different environments. Both were conceived at the same time — the same consultant did the feasibility study for each. But Spanish Fork, being smaller and more nimble, was able to move forward before Utah's Legislature weighed in to restrict local decision-making.

Comcast and the predecessor to CenturyLink crafted the legislation, which was revealed in a brilliant 2011 BusinessWeek article aptly entitled "Pssst … Wanna Buy a Law?" by Brendan Greeley and Alison Fitzgerald.

Since then, any new Utah municipal network has been subject to numerous requirements unlike anything private providers face, including a de facto requirement to use a wholesale-only arrangement.

Provo wanted to use the same business model as Spanish Fork, which we now know was tremendously successful. Whereas Spanish Fork could directly offer services to local businesses and residents, Provo was required to wholesale to other companies that delivered services.

Google has since taken over Provo's network and may soon be building in Salt Lake City, ensuring some competition for Comcast and CenturyLink in the short term at least. Whether they remain for the long term or not is their decision to make, independent of what is best for the community. Where the network is available, the services and prices will be determined from California, not Utah.

This powerlessness to ensure universal high quality access to the most important utility of the 21st century is a legacy of Utah law, which discourages locally-rooted networks. Utah should embrace the leadership from FCC Chairman Tom Wheeler, who has pushed a pro-competition agenda to bring a real choice in high speed Internet access to local businesses and residents.

Ensuring universal high-speed Internet access requires all hands on deck, not only the private companies. We are seeing new local approaches out of smart communities like Ammon, Idaho, where an incremental approach to the wholesale-only model is very promising.

But that model shouldn't be imposed on communities by the state. Especially when those state laws are written by the very industry voices that seek to limit competition. The record is clear — laws revoking local authority to create Internet choice have increased the risk to taxpayers, limited investment in better networks and have only benefited cable and telephone companies monopolies headquartered outside the state.

Christopher Mitchell is the director of Community Broadband Networks at the Institute for Local Self-Reliance in Minneapolis (MuniNetworks.org).

TN For Fiber's New Video On Family Life In Bradley County

In a new video, Tennessee Fiber Optic Communities profiles what it is like for a family living in Bradley County, just outside of the reach of Chattanooga's EPB Fiber Optic network. Debbie Williams describes how she and her family struggle with a long list of issues most of us associate with the bygone era of dial-up Internet. 

Watch this video and you will realize how families just outside of statutory limitations of EPB Fiber are living a different life than families served by the network. No one should have to deal with these kinds of problems. As Debbie puts it, "It's just wrong."


DebbieWilliams from TN For Fiber on Vimeo.

Ting! Holly Springs, NC to Get a Gig

While Google Fiber and AT&T focus on the large cities of the Research Triangle of North Carolina, the small town of Holly Springs is pursuing a third option. 

Holly Springs will be the third town to see Ting’s “crazy fast fiber Internet.” After a successful foray into the U.S. mobile service market, the Toronto-based company Ting has started to provide Internet service by partnering with local governments. Ting will offer 1 Gbps in Holly Springs by building on the town’s $1.5 million municipal fiber network. 

Muni network restricted by state law

Holly Springs, with a population of almost 30,000, has worked hard to improve its connectivity. In mid-2014, they completed a 13-mile fiber Institutional network (often called an “I-Net”) to connect the municipal buildings and other public institutions, such as schools and hospitals. 

Unfortunately, when business and residents wanted to connect to the network, a North Carolina state law prevented the town from providing Internet services directly.  As it became obvious that Google Fiber would not pass through the town, leaders worked with a consulting company to try to draw in a private Internet service provider (ISP).

Ting! Innovative Partnerships

The locked-up potential of that fiber helped attract Ting. The municipal network's unused fiber will function as a backbone for Ting to deploy its own last-mile infrastructure, which will provide connectivity directly to homes and businesses.

Ting has had success with small towns. The first Ting town was Charlottesville, Virginia, where the company bought a local ISP’s existing fiber network, improving the speeds and prices. Most recently, Ting partnered with the city of Westminster, Maryland, to expand broadband access. The National Association of Telecommunications Officers and Advisors dubbed it 2015’s “Community Broadband Innovative Partnership of the Year” and presented the partnership with an award in September. Check out our podcast conversations with Dr. Robert Wack from Westminster and Elliot Noss, CEO of Tucows (parent company of Ting).

Local networks are the solution

Construction on the Holly Springs network is likely to begin in early 2016. Although not all public private partnerships prove successful, Ting’s approaches support the philosophy that communities should be empowered to make these decisions locally. Noss explained in the press release [PDF]:

The problem of slow, expensive and unreliable Internet access is national but agreements like the one reached with Holly Springs further demonstrate that the solution is local.

New Video on Economic Development and High-Speed Connectivity in Tennessee

Tennessee Fiber Optic Communities has released another quality video focused on restoring local telecommunications authority. This three minute feature describes the importance of high speed connectivity to local economic development.

The video offers specific examples of businesses that relocated to places like Jackson and Chattanooga, comparing business connectivity in places with municipal networks to areas where high-speed connections from incumbents are costly and hard to come by.

Check out the video from the Tennessee Fiber Optic Communities:

TNFOC_EconomicDevelopment2 from TN For Fiber on Vimeo.

New York Times Supports Local Authority

In a recent editorial, the New York Times recognized that cord cutting is the wave of the future. They agree with the Coalition for Local Internet Choice, and other advocates for local telecommunications authority that the FCC should take steps to remove barriers to local Internet choice created by states on behalf of cable and telco lobbyists. The Editorial Board notes that laws limiting municipal networks block the ability for consumers to take full advantage of this phenomenon:

Among other things, they should override laws some states have passed that make it difficult or impossible for municipalities to invest in broadband networks.

Even though consumers are moving away from cable TV subscriptions, large corporate providers are making up for losses by an increase in Internet access subscriptions. As a result, they still maintain a significant leverage and consumers still face the same old problem - a lack of competition. Striking down anti-competitive state laws blocking munis would create a healthier balance, argues the Times Editorial Board.

This is an opportunity to respond to customer demand and make policy changes the consumers need, argues the NYTimes. Time to act! 

Customers are clearly saying that they want to watch and pay for TV in a different way. Regulators and media executives ought to heed and respond positively to that message — policy makers by encouraging more competition in the broadband market, and media businesses by making more of their content available online.