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: 

Time Warner Cable's bill to kill competition by limiting the right of communities to build their own broadband networks will have a committee hearing this week in North Carolina's Senate. Stop the Cap! has details in its action alert -- we encourage people to continue contacting their Senators as well as contacting local officials and telling them to contact Senators.

We have seen some interesting news coming out of North Carolina recently, including Salisbury connecting its 500th customer to its publicly owned Fibrant network [pdf]. Additionally, some nine nearby communities have told Raleigh they want to preserve their right to be served by Fibrant (the bill would greatly limit the territory in which Fibrant can expand, unlike private companies which have the freedom to expand across the state). The story starts with a church in one of the communities, Faith:

Mahoney said his church, Faith Baptist, would like faster Internet speeds but can’t afford the $20,000 Time Warner Cable would charge to build a business-class circuit for the church.

Church members are not satisfied with DSL service from Windstream, Mahoney said. But it’s their only option since they can’t afford Time Warner’s price tag, he said.

If Salisbury extends Fibrant to Faith, the church would have another choice for high-speed Internet, said Mahoney, who owns Rowan Onsite Computer Solutions in downtown Salisbury and has Fibrant.

This bill, inaptly named "Level Playing Field" creates new restrictions for publicly owned networks like Fibrant, which under current law can offer services to any community requesting them.

Stop the Cap supplemented this article with more information from a local resident:

“Isn’t it simply amazing that Fibrant is being bashed as a failure-waiting-to-happen by the sponsors of this bill while mayors across two counties are absolutely clamoring to get the service to their residents,” said Stop the Cap! reader Andy Brown who lives near Landis. “How can Marilyn Avila and Tom Apodaca have the slightest bit of credibility on this issue when you see town leaders literally falling all over each coveting a service that these legislative-Friends-of-Time-Warner-Cable have predicted is a certain failure?”

“I want Fibrant in Landis myself, if only for the competition,” Andy shares. “You know, the kind of competition legislators are supposed to support.”

A new bill has been introduced in the Senate to more heavily regulate community networks but in a less heavy handed manner than H129. This bill would totally exempt the existing networks, as opposed to H129 where the sponsors have consistently lied about how it impacts existing networks.

Salisbury, Wilson, Morganton, Mooresville and Davidson argue it’s not fair for the state to change the rules after they borrowed millions of dollars to legally build or buy broadband networks.

“The state approved our debt and Salisbury’s debt,” Shows said. “To retroactively go back and change that is simply unfair. Municipal broadband operations must be run like a business, and like a business, either they’re growing or dying.”

Chapel Hill has joined the list of communities showing concern about how H129 will damage their long term plan to build the essential infrastructure for their digital future.

The town is trimming trees to make way for fiber optic cable, primarily so it can be used for traffic signals. The town plans for the cable to eventually connect town buildings and the wider community with high speed Internet.

But with the possibility of the broadband bill passing, Kleinschmidt said the cable might not be used to its full potential.

“The worst case scenario is that the fiber optic cable will only be used for our traffic signal and its full use will never be tapped,” he said. “The best case scenario is also using it for municipal services too, but even that could be at risk.”

Chapel Hill has been opportunistically adding fiber assets as opportunities arise and having a discussion about whether it wants to create a town-wide publicly owned network. This bill will take that decision out of their hands -- a bunch of politicians in Raleigh will decide for them, after taking a ton of campaign donations from Time Warner Cable and other incumbent telecom companies.

For those who are curious, Chapel Hill is currently doing what a number of other communities have done, adding fiber-optic connections to run traffic signals. As long as the fiber is going in, they might as well get more use out of it and are planning to leverage it over time… if the Legislature doesn't tell them to but out of TWC's exclusive club.

Salisbury's Fibrant network in North Carolina was recently praised in a letter to the editor of a local paper for improving the educational tools in schools. These networks can have a big impact on educational opportunities, from directly improving the connections to the schools (often at lower prices) to lowering the cost of broadband across the entire community, thereby increasing broadband adoption and giving a new educational tool to children in home.

Previously, when the computers in our lab were being used, the entire system was bogged down. We had to limit the use of video and Skype to class periods where the lab computers were not being used. With some programs, we were not able to have a full class on the computers at the same time.

...

Next up, we will be able to establish full connectivity between the main building and the kindergarten building. This will enable our phones, paging system, and file sharing to work together for the first time ever, and we are very excited about that!

Durham's Herald Sun published our op-ed about community broadband networks in North Carolina. Reposted here:

Who should decide the future of broadband access in towns across North Carolina? Citizens and businesses in towns across the state, or a handful of large cable and phone companies? The new General Assembly will almost certainly be asked to address that question.

Fed up with poor customer service, overpriced plans and unreliable broadband access, Wilson and Salisbury decided to build their own next-generation networks. Faced with the prospect of real competition in the telecom sector, phone and cable companies have aggressively lobbied the General Assembly to abolish the right of other cities to follow in Wilson and Salisbury's pioneering footsteps.

The decision by Wilson and Salisbury to build their own networks is reminiscent of the decision by many communities 100 years ago to build their own electrical grids when private electric companies refused to provide them inexpensive, reliable service.

An analysis by the Institute for Local Self-Reliance (http://tiny.cc/MuniNetworks) compares the speed and price of broadband from incumbent providers in North Carolina to that offered by municipally owned Greenlight in Wilson and Fibrant in Salisbury.

Wilson and Salisbury offer much faster connections at similar price points, delivering more value for the dollar while keeping those dollars in the community. For instance, the introductory broadband tiers from Wilson (10 downstream/10 upstream Mbps) and Salisbury (15/15 Mbps) beat the fastest advertised tiers in Raleigh of AT&T (6/.5 Mbps) and TWC (10/.768 Mbps). And by building state-of-the-art fiber-optic networks, subscribers actually receive the speeds promised in advertisements. DSL and cable connections, for a variety of reasons, rarely achieve the speeds promised.

Curbing innovation

The Research Triangle is a hub of innovation but is stuck with last-century broadband delivered by telephone lines and cable connections. In the Triangle, as in most of the United States, broadband subscribers choose between slow DSL from the incumbent telephone company and faster but by no means adequate cable broadband from the incumbent cable company.

A few DSL subscribers may have access to U-Verse, but most are waiting for someone in Texas (AT&T's headquarters) to authorize the upgrade to U-Verse (faster than typical DSL but much slower than full fiber-optics). On the cable side, someone in New York (Time Warner Cable's headquarters) decided to force subscribers in the Triangle to wait for cable upgrades long after many cities had received them.

Perhaps by the end of 2011, all businesses and residents in the Triangle will have access to the best broadband TWC and AT&T have to offer -- which is still inferior to that offered by Wilson, Salisbury, any community with Verizon's FiOS, and just about every major city in Europe or Asia.

The opposition

Under state law, communities can organize and build their own broadband networks to ensure their citizens have world-class access to the Internet. The argument for preempting this local authority features two diametrically opposed claims:

• Communities should not build these networks because they always fail.
• Communities should not compete with the private sector because they will drive the existing provider(s) out of business.

Interestingly, the preponderance of evidence actually weighs against both claims. The vast majority of community fiber networks have performed extremely well against great odds. After winning the costly, frivolous lawsuits filed against communities by incumbents, community networks have successfully competed against temporary, artificially low prices by competitors who use profits from non-competitive areas to subsidize their efforts to deny any subscribers to a new network.

The few community fiber networks that have struggled against these odds are presented as the norm by industry-funded think tanks that try to scare any community considering a broadband investment.

A public monopoly?

There are few, if any, instances where community networks have driven incumbents out of business. It is true that once a community network begins operating, incumbent profits decline, often because they lower prices and increase investments -- each of which greatly benefits the community. But even if that were not true, why should a local government in North Carolina care more for the profits of two massive out-of-state companies than for what is best for their citizens and the future of the community?

The incumbent lobbyists will say that local governments can just raise taxes to unfairly cross-subsidize the networks. The reality is that citizens enjoy having their taxes raised about as much as having their cable rates raised. Citizens have little recourse when cable companies raise their rates, but they can directly express their dissatisfaction with elected officials who arbitrarily raise their taxes, by voting them out of office.

Local control

Remember though, the argument here is not about whether any given community should build a network. Right now, communities make that choice themselves. For years, lobbyists have pushed the General Assembly to take that decision away, either directly or by creating a web of contrived obstacles.

On matters of essential infrastructure, communities should be free to decide whether they will build it or depend on others. For years, Mooresville and Davidson relied on Adelphia for cable access while the network fell into disrepair. In the wake of Adelphia's bankruptcy, they chose to take it over to avoid continued similar problems from TWC. In taking it over, they found it in even worse shape than expected, resulting in higher costs to fix it. This situation, fixing the failure of the private sector, is actually used by telecom companies to argue against public ownership.

There is a very good reason so many communities are considering a variety of broadband investments: private providers are not meeting their needs. The question is whether the General Assembly wants to let communities move forward as they choose, or let out-of-state companies decide the competitiveness of the state.