The following stories have been tagged incumbent ← Back to All Tags

Chanute Receives State OK to Bond for FTTH Deployment

The Kansas Corporation Commission (KCC) will allow the city of Chanute move forward with its plan to serve residents and local businesses with its municipal network reports the Wichita Eagle. KCC staff had recommended that the community, which has built out a network over the course of decades, receive KCC approval. 

In keeping with an antiquated 1947 state law, K.S.A. 10-123, the city needed KCC approval to issue the revenue bonds. In keeping with the statutory requirements, the KCC found that the expansion is necessary and appropriate for the city, its consumers and investors. The KCC also also determined that the expansion will not duplicate an existing utility service.

In its filing [PDF], Chanute indicated that its network is an essential part of the local economy and the community's future:

Chanute is a rural community, and like all rural communities, access to broadband is fundamental to the well-being of its citizens and even to the survival of the community itself. Chanute does not need to convince the Commission of the importance of having access to a high- speed broadband network. The Commission is well aware of that need. The investments contemplated for Chanute's broadband network are necessary and appropriate to allow Chanute to meet that need in its territory.

As the city points out, incumbents AT&T and Cable One, do not offer anything close to the level of service of the planned gigabit FTTH network. As we cover in our 2012 report on Chanute, AT&T and Cable One seem to have no interest in serving the community beyond minimum expectations. It was the need for better services that inspired the city to build out its infrastructure and offer services to local businesses.

Prior the the KCC ruling, the Wichita Eagle reported that AT&T requested and obtained permission to intervene in the proceeding. AT&T's subsidiary Southwestern Bell Telephone Company (SWBT) petitioned to intervene in November [PDF], stating:

SWBT's interests and those of its customers may be affected by any order or determination of the Commission as may hereafter be adopted in the above- captioned proceeding.

AT&T told the Eagle:

“Any decision made by the KCC could impact AT&T’s business operations in the area, which is why we asked to intervene in the proceeding,” the company said in a written response to questions from The Eagle. “AT&T remains interested in both broadband issues and the work of the KCC.”

Larry Gates, Director of Utilities in Chanute, 
told the Eagle that the city is ready to issue the revenue bonds and begin connecting customers as soon as the KCC approves the request.

In their filing, the city also commented on the the outdated nature of the state law requirement. From the Eagle article:

In the commission case, Chanute is arguing that the 1947 law was actually designed to protect municipalities from defaulting on bonds because of private-sector competition, not to protect private-sector providers from competition with local government.

Since then, lawmakers and regulators have almost entirely deregulated telecommunication services, counting on competition in the marketplace to keep providers from charging too much or providing substandard service.

“This reasoning (behind the 1947 law) reflects an environment where construction of a telecommunications network was considered a natural monopoly, where one company could supply an entire market at less cost than two or more companies,” Chanute’s filing said. “That is no longer the case in the telecommunications marketplace.”

The 1947 law “does really sort of fly in the face of everything that has been said about competition,” [David Springe, chief consumer counsel for the Citizens' Utility Ratepayer Board] said. “It’s either a competitive world and you can stand on your own two feet, or it’s not.”

KCC staff agreed with Chanute. At the time the law was implemented, it was meant to protect the interests of the monopolies that served the rural areas, but the Telecommunications Act of 1996 shifted policy to encouraging competition.

There are other providers in the area, writes staff, but none of them can provide the caliber of services Chanute will offer. Because AT&T and Cable One do not offer services anywhere near the gigabit FTTH planned by Chanute's broadband utility, there would be no duplication of services.

Staff also agrees with the city, when it analyzes the need for the expansion. From the staff report [PDF]:

Upgrading Chanute's facilities would not only benefit the citizens of Chanute but its community anchor institutions and community business partners as well. In addition, by improving and expanding upon the fiber optic network currently in place by Chanute, Chanute is protecting its current investment. Staff therefore believes the expansion plans as contemplated are appropriate for the municipality and its consumers, and for the protection of its investors.

For a look back at Chanute's story, listen to episode #16 of the Community Broadband Bits podcast. Chris interviewed Larry Gates and then City Manager JD Lester.

Lake County Provides Gap Funding To Keep Project On Track

Lake County has faced a number of challenges since it began deploying its fiber network in 2012. The latest wrinkle comes as the Rural Utility Service (RUS) is late in distributing funds to pay contractors. The agency is administering the stimulus funds used to build the $66 million project. The Lake County News Chronicle recently reported that the County Board of Commissioners will pay $500,000 to cover expenses until federal funds arrive.

The Chronicle reports:

County Administrator Matt Huddleston said the County typically submits financial requirement statements (FRS) to RUS, and the federal agency usually processes the request for funds within 20 days. FRS 15 was filed more than 50 days ago and RUS still hasn't paid the County. A second, more recent FRS has also been delayed.

Commissioners were concerned delayed payments to contractors would further delay the project, scheduled for completion by September 2015.

After the original partner and the County dissolved their partnership and a threat of a lawsuit from Mediacom slowed deployment, Frontier asserted ownership of a number of utility poles within Two Harbors. According to the Chronicle, Lake Connections and the County recently made the decision to bury fiber instead of stringing them on poles as a way to avoid more delays.

Commissioner Rick Goutermont said he was hopeful after speaking to RUS officials on a conference call Monday that RUS would approve the new plan, the project would move forward and RUS would reimburse the $500,000 quickly.

"If we make some kind of movement in the form of some gap financing ... to keep the boots on the ground out there working on it, I believe that would send a stronger message to RUS of our commitment and that we want to move forward," Goutermont said Tuesday.

We documented Lake County's story in our report, All Hands On Deck: Minnesota Local Government Models for Expanding Fiber Internet Access. 

Vermont Draft Telecom Plan Fails to Deliver on Many Fronts

Last week, the Vermont Department of Public Service began a series of public hearings on the public comment draft of its State Telecommunications Plan. The plan is intended to asses the current state of the telecom landscape in Vermont, map out goals and benchmarks for the next 10 years, and provide recommendations for how to achieve them. The plan sets a target of 100 megabit per second symmetrical connections for every home and business in the state by 2024.

Oddly enough, achieving that even today would put them behind many metropolitan areas across the United States. The technology needed to deliver 100 Mbps connections is essentially the same that would be used to deliver 1 Gbps, begging the question why such a limited goal?

The 100/100 mbps symmetrical target is for 10 years into the future, but in the nearer term the plan calls for universal 4/1 Mbps coverage, raised to 10/1 Mbps coverage by 2020. While it may at first glance seem reasonable to set gradually rising targets, these long and short term goals actually have the potential to conflict with each other.

As pointed out by Vermont Public Radio, the 100/100 Mbps standard would likely require universal FTTH, or at least fiber to the node combined with other technological advances and investments. Meeting this goal would require a huge investment in next generation fiber optic infrastructure, yet the Telecommunications Plan calls for funding priorities to be focused on achieving universal 4/1 mbps coverage for the next 6 years. This lower standard will likely be met with a combination of last generation technologies like copper wire DSL and wireless that are incapable of meeting the 100/100 standard.

Continuing to build out older systems while deferring investments in fiber, which is adaptable to meet just about any future need, seems illogical. It’s a bit like saying you’re going to put all your expendable income for the next six years into repairing your VCR and buying tapes, while promising you’ll buy a DVD player immediately after. 

While the goal of first guaranteeing all Vermonters some basic level of coverage is admirable, Vermont can do better by setting higher goals for itself. However, a real plan would require Vermont to actually invest in better connections rather than continuing to award grants to pokey incumbent providers like Comcast and FairPoint.

EC Fiber Logo

Leslie Nulty, a former Project Coordinator with the locally-owned, open access EC Fiber Network in the eastern part of state, put it best in her scathing criticism of the plan:

The long-range vision is admirable, but unfortunately the plan has no guidance at all as to how to reach it. It’s near-term guidelines, on the other hand, assure that current public policy will hinder, if not completely block, achievement of the long-term “Vision.”

Another concerning piece of the Plan is its decidedly skeptical attitude toward public networks, or anything that deviates from the standard playbook of offering grants to incumbent provider to entice them to build. From page vii of the Telecommunications Plan:

7. Vermont policy makers should carefully consider the potential negative outcomes of state and municipalities directly competing with private firms in the provision of telecommunications services, especially in areas where consumers are adequately served. Vermont should refrain from policies, including financial incentives, that have the net effect of diminishing competitive choice in the marketplace.

There is no evidence that municipal networks diminish competititon while there is plenty of evidence that municipal networks have resulted in more competition and increased investment from incumbent providers. The idea that more competition results in less competition is worthy of an explanation from George Orwell. 

“Competitive choice” is another goal that sounds good, but in this context it is used primarily to discourage investment in local networks that allow communities to determine and meet their own needs. To communities that have limited or no broadband access, this in effect announces that the state has little interest in helping them build their own networks, they should just sit tight until they get an already obsolete 4/1 mbps connection from a private provider, subsidized by the state, sometime around 2017 or 2018. 

On the whole, this Telecommunications Plan offers minimalist requirements for “basic” broadband that are already obsolete, and completely ignores other important measures of quality connectivity, such as latency. It offers essentially no new funding to back up its promises, with only vague mentions of tapping “public and private sources” while using existing revenue streams to invest in meeting outdated standards through private providers. The list of recommendations mostly read like an endorsement of the status quo, which stands at odds with the headline grabbing pronouncements of long-term goals. In short, it seems like a plan designed to have the most public relations impact with the minimal expense of political, financial, or even intellectual capital. 

For a more detailed breakdown of the Vermont Telecommunications Plan’s failings from someone more versed in the local landscape, read the full testimony given by Leslie Nulty [pdf] at a public hearing on the issue. She touches on all the issues mentioned above and a variety of others, from the plan’s lack of support for open access network models to new funding mechanisms preferable to grants to incumbents, such as revolving loan funds to finance network buildouts. 

Multiple Minnesota Projects Submit "Expressions of Interest" to FCC

We reported in February that the FCC sought "expressions of interest" from entities that want a share of Connect America funds. The agency sought feedback on the need and desire for projects across the country from entities that have not traditionally received universal service funds. The FCC received over 1,000 expressions of interest.

Minnesota leads the U.S. in proposed projects. According to a recent MPR News Ground Level article, 62 expressions of interests come from Minnesota. Projects vary in size; some focus on a small number of homes while others plan to bring services to many people.

All of the proposed projects address gaps in rural broadband service. MPR noted that several of the expressions of interest describe community experience with CenturyLink, Frontier, and Mediacom. The RS Fiber cooperative wrote:

“The communities have approached all three providers [CenturyLink, Windstream, and MediaCom] and asked them to work with the communities to build the fiber network. They all refused. Then the communities offered to put up the money to construct the network and the providers could operate and eventually own the network. None of them were interested.”

The MPR article reports the FCC will likely offer approximately $86 million to the three incumbents to bring broadband to unserved and underserved areas. If they refuse, a long line of interested parties are waiting.

Minnesota's desire for broadband caught the attention of state lawmakers. A bill to earmark funds for rural broadband was introduced earlier this session and has received bipartisan support. From the MPR article:

Even if the Minnesota projects go nowhere with the FCC, they already may have had an impact here in the state.

For the first time, lawmakers here are considering whether to spend money on broadband infrastructure, and the idea has backing from Gov. Mark Dayton. But “there was concern from the governor and others there might not be enough interest,” said Christopher Mitchell, analyst with the Institute for Local Self-Reliance. “This answers that.”

The Challenge of Open Access - Lessons Learned Part III

To finalize our series on reflections from Seattle and Gigabit Squared, I discuss open access networks and how the requirement that a network directly pay all its costs effectively dooms it in the U.S. Read part one here and part two here. I started this series because I felt that the Gigabit Squared failure in Seattle revealed some important truths that can be glossed over in our rush to expand access to fast, affordable, and reliable Internet connections.

The benefits of public-private-partnerships in these networks have often been overstated while the risks and challenges have been understated. We have seen them work and believe communities should continue to seek them where appropriate, but they should not be rushed into because they are less controversial than other solutions.

Sometimes we have to stop and remember that we will live for decades with the choices we make now. It was true when communities starting building their own electrical networks and is still true today. I hope the series has provided some context of how challenging it can be without removing all hope that we can stop Comcast, AT&T, and others from monopolizing our access to the Internet.

In this final piece, I want to turn to a different form of partnership - the open access network. I think it follows naturally as many in Seattle and other large cities would be more likely to invest in publicly owned fiber networks if they did not have to offer services - that being the most competitive, entreprenuerial, and difficult aspect of modern fiber networks.

Chattanooga construction

The desire to focus on long term investments rather than rapidly evolving services is a natural reaction given the historic role of local governments in long term infrastructure investments. Fiber certainly fits in that description and as many have noted, the comparison to roads is apt. An open access fiber network allows many businesses to reach end users just as roads allow Fedex, UPS, and even the Post Office, to compete on a level playing field.

In an open access approach, the local government would build the network out to connect all residents and businesses but not directly deliver services. Instead, multiple independent Internet Service Providers (ISPs) would compete on the network for business, ideally specializing in different niches - some providing great video game optimizations and others focusing on meeting small business needs.

Unfortunately, there are reasons we have not seen this approach gain widespread traction. The model is more difficult than is readily apparent.

A large part of the difficulty comes from incumbent providers that refuse to use the fiber network. The cable and the telephone companies claim that they don't want to abandon their assets, but that is not the main reason they have refused to participate in these networks. The big cable and telephone companies know that they have terrible reputations and would be slaughtered in a competitive market - so they put great effort in ensuring that they face as little competition as possible. Allowing the open access market to develop would all but ensure mighty Comcast would have to compete against local providers that offer much better customer service, lower prices, and more.

From an economic perspective, an ideal open access network would be one physical fiber network on which all ISPs compete. With a take rate over 80 percent, the revenue would likely be sufficient to pay the costs of building the network, operating costs, AND the ISP costs. But because the cable and telephone companies have fought against open access, subscribers are often split among three different physical infrastructures (cable, copper telephone lines, and the fiber network), generating too little revenue to pay the costs of building the fiber network.

If a major metro area does a feasibility study to build a citywide open access network fiber, it will find that the network will almost certainly not pay for itself using a conventional private sector accounting system. The interest on the debt required to build the network accrues faster than revenue. Of course, the roads and bridges don't pay for themselves via user fees either, but we still invest in them.

Community BB Logo

In a recent podcast, we discuss how over the first five years, a network can save more in aggregate for the community that it costs to build. But those benefits acrue individually to households. Thus far, very few communities have used this approach - to raise monthly taxes by $3 to save $10 on household telecom bills, for instance. Leverett is a rare example of this approach.

That does leave another option - building an open access network incrementally, as Danville has done in Virginia and Palm Coast FiberNet in Florida, among others. This is a viable option for just about any community but comes with the difficult reality that connecting everyone could take decades. And there are still other gotchas.

Some communities that wanted to build an open access network have found it can be challenging to find service providers that will operate on the network. Sometimes a local ISP can step up, as in Danville and in other cases, but not always. Until a network has thousands of potential subscribers, ISPs may not be interested in offering services. But incremental approaches will often start with just tens or hundreds of subscribers.

We have written elsewhere of how important it is to have at least one strong, trusted provider on the network. An important lesson from Provo, among other places, is the difficulty in recovering once a network has a bad reputation. A bad provider can ruin the name of a perfectly good network, especially as most people will not know whether to attribute any problems to the physical network or ISP.

UTOPIA Logo

All of that said, open access offers a tremendous promise. Networks like UTOPIA and Chelan PUD (Washington) have been unable to pay the capital cost of building the network solely from revenues but offer some of the fastest speeds in the nation at a fraction of the price we pay elsewhere. I recall the testimony of a local business to the Utah Legislature who basically said, "Yeah, my taxes went up a little -- but my monthly telecom bill went down a lot."

Nonetheless, nearly every municipal fiber network has been built and financed with the expectation that it would pay for itself - generally breaking even years after the high upfront investments have been made. Each community should be free to choose what expectations it has in building the network it needs to ensure a vibrant economy and high quality of life for everyone. Our role has been to help them understand that choice and push back on those who want to take it away. I hope this series helps in that effort.

Many of the municipal fiber networks that now directly provide services started with a hope of working with a local partner or building an open access network. As they considered their options, they found they effectively had to choose between doing nothing and venturing into a very challenging business.

There are few easy answers for communities stuck with subpar Internet access, or even for those that regard "par" as unacceptable. When Lafayette Mayor Joey Durel was presented with the idea of a municipal fiber network shortly after taking office, he was skeptical. But he ultimately decided they should examine it - saying "shame on us" if they didn't at least see what they could do. Maybe they would hit a brick wall... or maybe they would build one of the most impressive broadband networks in the country. That was good advice.

No one solution works for every community. Thus our guiding philosophy: communities should be free to choose for themselves the solution they prefer.

Construction photo courtesy of Chattanooga Electric Power Board

"Olds" is First Gigabit Town in Canada

We introduced you to Olds, Alberta and their community network O-Net in 2012. Now this community of 8,500 will be the first Canadian "gig town" where residents will have access to a gig at incredibly low prices. 

CBC News reports that the Olds Institute for Community and Regional Development, the nonprofit organization building the network, recently approved the upgrade. Residents with 100 Mbps will have access to a gigabit with no increase in price. Depending on how they bundle, the price for Internet will range between $57-90 per month.

CBC's Emily Chung noted how much of rural Canada offers only dial-up or satellite. Olds used to have the same problem; businesses were considering leaving town:

"We had engineering companies here who were sending memory chips by courier because there wasn't enough bandwidth to deal with their stuff," recalls Joe Gustafson, who spearheaded the project to bring a fibre network to Olds.

...

"Now there's no talk about people leaving because of bandwidth challenges."

The $13-14 million project, which also included a video conference center and 15 public use terminals for residents, launched in July 2012. The organization acquired a $2.5 million grant from the province of Alberta and a $6 million loan from the town of Olds. When incumbents were not interested in providing service over the network, O-Net adapted:

"We said, 'Well I guess if we're going to do this, we have to do our own services,'" Gustafson recalled.

The Olds Institute spent $3.5 million to buy the necessary electronic equipment to run internet and other services on the network and to build a central office to house it all. Last July, it launched O-Net.

The community-owned service offers not just internet, but also phone and IPTV services — TV signals carried on the network that includes dozens of SD and HD channels, and movies on demand that can be paused and later resumed.

The network will be available to the entire town by 2014. The residential plan brings one gig to access points in town that each serve four or five households. According to [Director of Marketing Nathan] Kusiek, that gig will be shared between households at each access point. There will be no data caps. Dedicated business gig access will be available for $5,000 per month.

The network has transformed teaching and learning. Local Olds College used to connect with 40 Mbps for 4,000 students. 

That made it impossible to push any kind of mobile learning — something that the college was starting to get into with initiatives such as an entrepreneurship course that required students to play an online game as part of its requirements.

Now, every space on campus allows each student to connect two devices at the same time. This September, every new student will receive an iPad and all textbooks will be web-based.

Kusiek said, "Because we're a community-owned project we get to balance out profitability versus what's best for the community."

Reading the comments on the CBC story is instructive of the different culture - the comments are overwhelmingly in support of Olds and castigate incumbent providers.

FCC Prioritizes Incumbent Protection in Data Collection Order

Patrick Lucey of the Open Technology Institute at the New America Foundation, posted this excellent story around the time we published our rant about the FCC's cave-in to industry pressure for no good reason. We liked it so much, we asked to repost it.

In late June the Federal Communications Commission (FCC) issued an order reforming the way it collects data on broadband services. Broadband providers must file forms, known as Form 477, that contain information about their broadband network deployment, customer subscriptions, and speeds offered across the country. The order seeks to expand the FCC’s current broadband data collection efforts and also assume responsibility for administering theNational Broadband Map, initially created by the National Telecommunications and Information Agency (NTIA). Unfortunately, the vast majority of the order’s contents seem out of line with that goal.

Federal authorities need to collect good data in order to make informed policy decisions. However, the June data order does not add broadband pricing information to the data the FCC would seek to collect. The price residential customers pay for internet access is an important piece of information, not only to understand the state of competition for broadband but also to provide insight on whether services are available at affordable rates.

Past surveys from both the FCC and NTIA have shown that the cost of residential services can be a barrier to broadband adoption for many citizens. A recent newspaper article also note that some citizens may be canceling their existing home subscriptions due to the high cost.  Both the FCC’s own National Broadband Plan and Department of Justice recommended that the FCC collect broadband pricing information to inform their analysis of competition and the American public’s access to broadband.

Yet, rather than discuss the need to collect broadband pricing information, a review of the June order indicates a greater focus on accommodating the interests of internet service providers by stressing how the reforms will reduce burdens associated with reporting data. A “Ctrl + F” word search of the order returns 85 mentions of variations on the word “burden” [burden, burdens, burdensome, burdening], including a combined 15 mentions of the phrases “reducing the burden” and “reduce burdens.” Compare that to only four mentions for the word “price.” Three mentions for the word “affordability” [and all three are found in the same footnote]. The word “adoption” is mentioned 15 times, with the phrase “barriers to adoption” mentioned three times.

fcc-data-order-cloud.png

While federal agencies have an obligation to consider the impact or “burden” of regulations and reporting requirements, here it seems to be the overwhelming focus for the FCC in the order.

An encouraging sign are the public statements of Commissioner and Interim Chairwoman Clyburnand Commissioner Rosenworcel. Both acknowledge the need to revisit the topic of collecting broadband pricing information again in the future, with Commissioner Rosenworcel noting how broadband affordability impacts broadband adoption.

Policymakers must be aware of the prices consumers must pay for broadband to understand the state of internet access in America. The FCC should quickly reopen the discussion on Form 477 broadband data and begin collecting price information to make informed policy decisions.

Ketchum, Idaho: No Tolerance for Cox Push Polls

Cox pushed Ketchum one step too far. The community of 2,700 formed a broadband advisory committee in November, 2012, and included a representative from Cox on the committee. Brennan Rego of the Idaho Mountain Express recently reported on happenings in Ketchum.

When residents in Wood River Valley started receiving push poll telephone calls from Cox to poison any possibility of a community owned network, Mayor Randy Hall and city leaders reacted promptly. They booted Cox off the broadband advisory committee.

Consistent with Cox push polls in other places, questions were leading:

 “The questions were so outrageous, I didn’t want to continue with the survey,” [Valley resident Sarah Michael] said. “I got offended. They were inappropriate and misleading.”
 

Michael said that, in essence, one question asked: Would you support Ketchum’s broadband initiative if you knew the city would cut police, fire and other essential services to pay for it?
    

“Who’s going to answer yes to that?” she said.

Michael and other residents who received the calls contacted surprised city staff and Mayor Hall. 

 “As the mayor, I can’t stand by and let somebody imply that I’m going to compromise the Police Department and the Fire Department by taking money away from them and putting it toward a broadband initiative,” Hall said. “That’s insane. I would never do that. I think the survey was trying to create fear.”

Cox claimed the questions were designed to "learn more about the public's opinion" but would not divulge the wording of the survey questions.

The city posted a disclaimer on its website to ensure residents knew the survey was not associated with the committee. 

“Cox is a very valuable member of our community,” Hall said. “But to imply that the city is willing to compromise the health and safety of its citizens by funding a broadband initiative is false and irresponsible.”
    

Hall said he considers Cox’s “unilateral action” in deciding to conduct the survey a “breach of trust,” but that the city would welcome a new representative of the company to the committee.

This behavior from Cox should be unacceptable in any community. Unfortunately, such polls are a common tactic from Cox, which we wrote about in our case study of Lafayette. In that situation, someone recorded the poll phone call, a very smart move that allowed everyone to hear how Cox had worded the questions to turn the community against the project with lies.

South Carolina Cable Association Also Wants to Limit Competition

Many complain about gridlock in Washington, DC, but I sometimes subscribe to the cynical counter-reaction that gridlock is great. It is when the Democrats and Republicans agree that Americans should beware.

Though this may or may not be true about politics, it is certainly true when applied to two of the most hated industries in America: cable television companies and DSL companies like AT&T. When they come to agreement, you can bet that prices are going up for the rest of us.

In our coverage of AT&T's bid to limit broadband competition in South Carolina by revoking local authority to build networks for economic development, we have thus far ignored the position of the cable companies.

We took a tour through the newsletters of the South Carolina Cable Television Association over the course of 2011, which is when AT&T introduced its H.3508 bill.

Unsurprisingly, the cable companies are thrilled at the prospect of limiting competition in communities by cutting off the ability of a community to build a network when the private sector is failing to meet their needs. From the 1st Quarter newsletter [pdf]:

The SCCTA has been actively following the AT&T-backed legislation that would amend the Government-Owned Telecommunications Service Providers Act. House Bill 3508 would impose the same requirements on government-owned broadband operations that are currently imposed on telecommunications operations.

Of course, H.3508 goes far beyond applying the "same requirements." It enacts a host of requirements that only apply to public providers, which are already disadvantaged by being much smaller than companies like Time Warner Cable and AT&T. We have long ago debunked the myth of public sector advantages over the private sector.

The second quarter newsletter [pdf] identifies this bill as the highest priority of the cable association:

H3508, the AT&T backed legislation, has been our dominate piece of legislation in 2011.

Even after the bill was shelved for the year, it remained a high priority for the cable lobbyists (who, of course, need something to do while shmoozing at the capitol day in and day out) according to the 3rd quarter newsletter [pdf]:

The SC Cable Television Association will continue to work to move H3508...

And finally, in the 4th quarter [pdf], we get a sense that all that lobbying has been successful:

When session ended last year, the bill was in Senate Judiciary subcommittee (Sen. Luke Rankin – Chair, Sen. Brad Hutto & Sen. Paul Campbell). Our team of lobbyists have been working very hard meeting with members of the full Senate Judiciary Committee to move this important industry bill forward. As of writing this column, we expect new amendments dealing with Clemson’s Light Rail initiative and Orangeburg County. Our team has been assured the two counties who received the broadband stimulus funds, administered through the U.S. Department of Agriculture’s Rural Utilities Service, will NOT provide service in areas that is capable of receiving other broadband services. This bill is to be heard before full Senate Judiciary and will then head to the Senate floor.

Democracy in action! We know that the private sector will not create competition by itself. In fact, the future will be less competitive as cable systems generally provide faster connections than DSL and wireless, which will compete for those who don't mind slowly surfing.

South Carolina's businesses that want to thrive in the digital economy might consider looking at the nearby job-creator-friendly broadband networks in Brisol, Virginia; Danville, Virginia; Chattanooga, Tennessee; Salisbury, North Carolina; and Wilson, North Carolina. Those communities have the fastest connections in the US at the most affordable prices.

Rural Wisconsin Residents Struggle to Connect to the Internet

A group of rural residents living east of Madison, Wisconsin, gathered near Portage of Columbia County to discuss their lack of affordable high speed access to the Internet. These are people for whom slow, overpriced DSL would be an improvement.

Lack of access to the Internet is a drain on rural economies -- their real estate market suffer and they are unable to telecommute, when they would benefit more from it than most who do have the option. They lack access to long-distance education opportunities in a time when the cost of gas makes driving to school prohibitively expensive.

Andy Lewis, who has been working with the Building Community Capacity through Broadband Project with U-W Extension, was on hand to discuss some of the lessons learned through their work, which is largely funded by a broadband stimulus award.

The incumbent providers encouraged residents without access to aggregate their demand and create petitions to demonstrate the available demand. Of course they did. And if CenturyLink decides it can get a sufficient return on its slow and unreliable DSL, they will build it out to some of those unserved areas. This is a "damned if you do, damned if you don't" scenario for rural residents. DSL was starting to be obsolete years ago.

The better solution is finding nearby cooperatives and munis that will extend next-generation networks that can provide fast, affordable, and reliable access to the Internet. Getting a DSL to a town will do very little to attract residents and nothing to attract businesses. It is a 20th century technology in a rapidly evolving 21st century world.

The Beaver Dam Daily Citizen covered the meeting, which eventually turned away from how to beg for broadband to how they can build it themselves:

But several attendees asked why the government can't play a role in making high-speed service available everywhere, in the same way that the government helped bring about rural electrification and telephone service.

This is a very good question. They may decide not to follow that path, but given the importance of access to the Internet, they should look at options for building a network that puts community needs first. North of Madison, Reedsburg has built an impressive FTTH network and we have been tracking progress of the Fiber-to-the-Farm effort in Minnesota's Sibley County.

Unfortunately, AT&T's incredible influence in the state capital has made it more difficult for communities to build the networks they need -- even in places like Columbia County where AT&T is not and will not connect rural residents. Such is the price of living under governments that make policy based on the interests of powerful special interests.

There was a time when the ideology of self-reliance was considered American and even conservative. But now the idea of self-reliance is largely abandoned as communities first seek to beg distant corporations (with a history of royally ripping them off) to connect them and only consider solving their own problems with local investments as a last-ditch effort, which could be too controversial.

Update: This meeting was hosted by the Public Service Commission as part of a larger effort to create a state broadband plan. Such processes are typically dominated by interests of incumbent providers -- a model that was emphatically rejected by the FDR Administration when developing its plan for electrification. Electrification was wildly successful; expanding broadband by begging incumbents has been a dismal failure.