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FCC's Clyburn at National Town Hall at NCMR

On April 8, 2011, FCC Commissioners Clyburn and Copps spoke at the National Conference for Media Reform, held in Boston by Free Press. The moderator asked Commissioner Clyburn about her comments calling on North Carolina to cease consideration of a bill advanced by Time Warner Cable to preempt local authority to build superior broadband networks.

The entire event is available via Free Press' Conference site but we isolated the comments about local authority here.

Wally Bowen, Tim Karr: Block the Broadband Power Grab

Wally Bowen, the Founder and Executive Director for the Mountain Area Information Network in Asheville, North Carolina, wrote the following op-ed with Tim Karr of Free Press. Wally gave us permission to reprint it here.

North Carolina has a long tradition of self-help and self-reliance, from founding the nation's first public university to building Research Triangle Park. Befitting the state's rural heritage, North Carolinians routinely take self-help measures to foster economic growth and provide essential local services such as drinking water and electric power.

Statesville built the state's first municipal power system in 1889, and over the years 50 North Carolina cities and towns followed suit. In 1936, the state's first rural electric cooperative was launched in Tarboro to serve Edgecombe and Martin counties. Today, 26 nonprofit electric networks serve more than 2.5 million North Carolinians in 93 counties.

Strangely, this self-help tradition is under attack. The General Assembly just passed a bill to restrict municipalities from building and operating broadband Internet systems to attract industry and create local jobs. Although pushed by the cable and telephone lobby, similar bills were defeated in previous legislative sessions. But the influx of freshmen legislators and new leadership in both houses created an opening for the dubiously titled "Level Playing Field" bill (HB 129).

No one disputes the importance of broadband access for economic growth and job creation. That's why five cities - Wilson, Salisbury, Morganton, Davidson and Mooresville - invoked their self-help traditions to build and operate broadband systems after years of neglect from for-profit providers, which focus their investments in more affluent and densely populated areas. Not coincidentally, all five cities own and operate their own power systems or have ties to nonprofit electric cooperatives.

(While the bill does not outlaw these five municipal networks, it restricts their expansion and requires them to make annual tax payments to the state as if they were for-profit companies.)

How does a state that values independence, self-reliance and economic prosperity allow absentee-owned corporations to pass a law essentially granting two industries - cable and telephone - the power to dictate North Carolina's broadband future? This question will be moot if Gov. Beverly Perdue exercises her veto power and sends this bill where it belongs: to the dustbin of history.

However, if the bill is signed into law, its passage could embolden the cable/telco lobby to take aim at the state's many independent, nonprofit broadband networks, primarily in the most rural areas. These networks, with little fanfare or publicity, have made real progress in addressing the rural broadband crisis over the last decade.

These nonprofits include traditional rural electric and telephone cooperatives as well as more recent start-ups such as Mountain Area Information Network (MAIN) and ERC Broadband, both based in Asheville. MAIN launched in 1996 to provide dial-up Internet access via a local call in some of the region's most remote communities. Prior to this, many mountain residents had to call long-distance to reach the Internet.

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The catalyst for ERC Broadband's launch in 2003 was the possible loss of the National Climatic Data Center, which was looking to relocate to a community with more abundant and affordable broadband access. This homegrown fiber network helped keep NCDC and its high-paying jobs in Asheville. ERC's success helped spawn a second nonprofit fiber network, PANGAEA, serving Polk and Rutherford counties. Likewise, the Eastern Band of the Cherokee and a local software firm in Franklin joined forces to launch a third fiber network, BalsamWest, to serve the mountain counties west of Asheville.

This corporate assault on North Carolina's heritage of self-help and self-reliance is all the more bizarre because these out-of-state cable and telephone carriers have begun using the state's nonprofit networks, both rural and municipal, to supplement their network capacity and reduce their bandwidth costs. Common sense dictates that this corporate power-grab should end with a stroke of the governor's pen.

Commissioner Clyburn Opposes North Carolina Bill to Preempt Local Authority

I recently learned that several state legislatures are considering bills that are contrary to the deployment objectives of the Broadband Plan. For example, in North Carolina, the state legislature is currently evaluating legislation entitled ‘Level Playing Field/Local Government Competition.’ ... This piece of legislation certainly sounds goal-worthy, an innocuous proposition, but do not let the title fool you. This measure, if enacted, will not only fail to level the playing field; it will discourage municipal governments from addressing deployment in communities where the private sector has failed to meet broadband service needs. In other words, it will be a significant barrier to broadband deployment and may impede local efforts to promote economic development.

FCC Commissioner: Blocking Local Broadband Authority "'Exactly The Wrong Way to Go"

FCC Commissioner Copps spoke at the SEATOA Conference in Asheville, North Carolina, on Tuesday. He went out of his way to condemn legislation that would preempt the authority of local governments to build broadband networks, echoing a similar statement from his colleague, Commissioner Clyburn.

But he started with a discussion about the importance of broadband access to the Internet:

Getting broadband out to all our citizens is not just something that would be nice for us to do. It is something essential for us to do if we want to provide individuals the opportunity to live productive and fulfilling lives in the Twenty-first century and something equally imperative if we want our country to have a competitive edge in this challenging world.

But he moved on to highlight the importance of communities having the right to build their own networks, should they deem it necessary:

When incumbent providers cannot serve the broadband needs of some localities, local governments should be allowed--no, encouraged--to step up to the plate and ensure that their citizens are not left on the wrong side of the great divide. So it is regrettable that some states are considering, and even passing, legislation that could hinder local solutions to bring the benefits of broadband to their communities. It's exactly the wrong way to go. In this context, too, our previous infrastructure challenges must be the guide. The successful history of rural electrification, as one example, is due in no small part to municipal electric cooperatives that lit up corners of this country where investor-owned utilities had little incentive to go. Those coops turned on the lights for a lot of people! You know, our country would be a lot better off if we would learn from our past rather than try to defy or deny it.

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We strongly support his comments, while emphasizing that an incumbent that simply provides DSL or cable services must not be construed as necessarily serving the broadband needs of communities. Many of the best broadband networks in this country were built by local governments who overbuilt existing DSL and cable systems -- precisely because these last-generation networks were not providing sufficiently reliable, affordable, and fast access to the Internet for all businesses and residents.

His comments, made in North Carolina, come as H 129 sits on the Governor's desk. This was a bill pushed through the legislation by Time Warner Cable explicitly to limit the authority of local governments to build broadband networks. Its language purports to exempt rural areas without adequate service but was deceptively written in such a way as to actually exempt no areas.

If Governor Perdue does nothing, the bill will become law on May 18 20. We cannot help but fear this is the Governor's plan absent more attention, so we continue to join many others in calling for the Governor to veto this job-killing favor to massive incumbents like Time Warner Cable (who just happens to have donated over $6.3 million to North Carolina politicians over the past four years.

Contact Governor Perdue and encourage her to veto this bill.

Wally Bowen and Tim Karr just published an op-ed calling on the Governor to veto the bill:

How does a state that values independence, self-reliance and economic prosperity allow absentee-owned corporations to pass a law essentially granting two industries - cable and telephone - the power to dictate North Carolina's broadband future? This question will be moot if Gov. Beverly Perdue exercises her veto power and sends this bill where it belongs: to the dustbin of history.

Below, we have again embedded the video we created to highlight the impressive community fiber networks already operating in North Carolina, offering the best services available in the state.

Video: 
See video

Leading Critic of Community Network in NC Revealed to Be TWC Employee

It will come as no surprise to those familiar with this space that the leading critic of MI-Connection, a cable network in North Carolina owned by local governments, has been revealed to be an employee of Time Warner Cable. Hat tip to Stop the Cap! for bringing it to our attention last night.

We have long watched massive cable/phone companies flood public meetings (both honestly and surreptitiously) with their employees to give the perception of widespread opposition to a publicly owned network. So while this is nothing new, the practice must be highlighted as something community networks should be aware of -- much like the rampant abuse of the commenting system in the Salisbury Post, where any story that mentions the community fiber network Fibrant is slammed by a few people who post under many different identities to give the impression of widespread disapproval.

MI-Connection has been plagued by problems since buying a system that was in considerably worse shape than expected, thus requiring more capital to rehab and upgrade it. An additional problem has been the image damage done by relentless critics (noted last week):

Venzon [Chairman of Board for MI-Connection] said he’s frustrated because the publicly owned company still fights an image problem.

“With the improvements we made to the system, I thought that people would be lined up out the door,” Venzon said. “I thought they’d see this as ours, this is us, and it just bugs me that we get such poor PR out there. We have not won that battle.

And now we know that a major critic of the network works for Time Warner Cable, a company vociferously opposes muni networks as a threat to their de facto monopoly. It would not be as much of a story though if he hadn't denied his employment with TWC for so long in order for his attacks on the publicly owned network to be more effective.

MI-Connection board chair John Venzon posted the information in a comment on this website Friday. He said Mr. Stevens “has been active in using our publicly available information to turn our potential customers against us and to stir up fear, uncertainty and doubt about MI-Connection while hiding his motives. He does not live in our town or service area, so he does not ‘have a dog in the fight’ unless you consider who signs his paycheck. Could I attend competitors’ regular board meetings to see what they are doing?” Mr. Venzon asked in the comment.

Mr. Venzon also noted that Mr. Stevens has used the state’s open records law, or Freedom of Information Act, to obtain copies of “every communication between the towns, the board and management. So Time Warner does in fact sit in our meetings.”

Under North Carolina Law, those records are open, and the towns have known since they bought the system in 2007 that they had to operate under public scrutiny in a way their private competitors did not. Mr. Venzon acknowledged that, but said he’s unhappy about having a Time Warner employee following the company so closely. “In corporate America, this would constitute espionage. In our situation, it is free and legal. I find it deplorable,” he wrote.

Does it matter that Mr. Stevens is a Time Warner Cable employee? As editor of DavidsonNews.net, it concerns me that Mr. Stevens hasn’t acknowledged his employment when we’ve asked, or when he has commented regularly on this site about MI-Connection.

Stop the Cap! sums it up well:

Indeed, Stevens’ efforts to hide his employer’s identity and his subsequent decision to bring his blog down after the cat was let out of the bag suggests there is nothing for Stevens or Time Warner Cable to be proud of in their relentless, often sneaky efforts to bring community-owned competition to its knees.  When it comes to protecting duopoly profits of local cable and phone companies in North Carolina, it’s total war on all fronts.

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Time Warner Cable may claim that they have no say in what employees do in their spare time, but they keep very close tabs on these networks and absolutely knew that he was leading a fight against another community's network while lying about his motives and employment. TWC regularly labelled MI-Connection a "failure" in its efforts to pass a bill that would preempt local authority to invest in networks that could compete with TWC services.

This entire fiasco serves as a reminder of the massive disadvantages communities have in building their own networks. Companies like Time Warner Cable, which measure their revenue in the tens of billions, have effectively unlimited resources to attack communities who build their own networks. Big companies attack communities in the courts, legislatures, and the media -- while communities have little power to respond in any of those venues (communities don't have the funds to fight in the Legislature or the media and struggle to justify expensive, prolonged court fights). This is the reality in every state.

And in places like North Carolina, it could get a lot worse if the Governor allows h 129 to become law. It is on her desk now and whether she signs it or lets it pass by doing nothing, big companies like Time Warner Cable will have even more advantages while communities will effectively be barred from building their own networks.

Time Warner Cable Monopoly Protection Act Heads to North Carolina Governor

It took far more longer than expected, due to the many phone calls from concerned citizens opposing it, but Time Warner Cable's investments in the North Carolina Legislature have finally paid off. A bill that will crush its only potential broadband competition in the state is sitting on the Governor's desk. We join with SEATOA, the vast majority of businesses in North Carolina who depend on broadband, and local communities in calling on the Governor to veto it.

The NC House had to approve it again due to changes made in the Senate -- including a change that absolutely gutted the rural exemption for communities who are lacking access broadband access to the Internet. Representative Avila and other sponsors have made many promises throughout this process that they never intended to hold true to.

SEATOA has long organized to preserve local authority in this matter and reported:

We made certain Rep. Avila understood that that clarification gutted the exemption and she did not care. e-NC reports that the private sector providers are permitted to report an entire Census Block as having access to internet, if only one home in the block actually has it.  In essence, North Carolina will have no "unserved areas" or communities will have to do their own door to door surveys, an expensive and monumental feat.

But what do you expect from elected officials who calls something a "level field" while bragging that they are crafting rules (such as limited service territories) that only apply to the community networks, which already operate at a disadvantage to a $19 billion a year competitor like bill author Time Warner Cable?

When the bill passed the Senate, a newspaper in Davidson noted its unequal approach that further handicapped communities:

Davidson Mayor John Woods said Tuesday MI-Connection deserves to be treated the same as private companies.

“We strongly object to the territory limits that this bill will impose on MI-Connection which are not imposed on other broadband providers. In addition, MI-Connection would remain subject to open meeting laws, which do not apply to those other providers,” he said.

Mr. Venzon also said local governments already face other rules that put them at a disadvantage to private competitors, including the requirement to operate under the N.C. Public Records Law. That “limits our board from operating as freely as a private company. Could we get access to the strategic plans, pricing strategies and competitive analysis for other broadband, cable and satellite providers? That would level the playing field,” Mr. Venzon told DavidsonNews.net.

Stop the Cap! has a call to action with more information about the final votes to pass the bill. Thanks to Representatives Faison and Luebke for standing up to the massive monied interests (chiefly Time Warner Cable and CenturyLink) that successfully bought legislation in 2011 after four years of trying.

We have provided some of the audio from the House Floor once again - it appears below this call on the Governor to veto the bill by SEATOA [pdf].

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Dear Governor Perdue:

No student in North Carolina, no patient, police officer, lawyer or business can function properly without access to reliable and affordable broadband service. Broadband is a grass-roots issue. Access to advanced broadband networks has now become essential for our citizens and businesses to participate in the global economy and access modern medicine, public safety, energy management and education. North Carolina has long been ahead of the game, with the distinguished history of its public and private sectors working together to make our state a high technology leader. It is for this reason that I write you today requesting that you veto H129 - a bill which threatens to deny large portions of our state access to reliable and affordable broadband service, bring a close to our long history of high technology excellence, and ultimately handicap the ability of our state to compete effectively in the global knowledge-based economy. H129 will bring about these changes in a number of ways:

H129 will effectively prevent our rural communities from providing their citizens and businesses broadband when the private sector will not

Half of North Carolina’s population live in our rural areas, communities where the state’s large incumbent providers have publicly stated their profit requirements prevent them from serving because of their low household densities and incomes. Yet H129 will effectively prevent our communities from providing broadband service, even in areas the private sector refuses to serve, by imposing a series of new onerous regulations on municipalities which do not apply to the private companies. H129’s sponsors claim “unserved” areas are freed from these terminal regulations, but such areas are measured one census block at a time. If 50% of the homes in a census block have access to internet, it is “served.” e-NC reports that private providers are allowed to report that all the homes in a census block have internet service if only one home in the census block has access. As such, North Carolina will have no unserved areas. Because H129 prevents our rural communities from stepping in and providing broadband service when the private sector will not, it will guarantee our rural areas are digital have-nots. (See FCC Commissioner Clyburne press release criticizing H129) For these communities, MCNC’s new fiber middle-mile network will be a bridge to nowhere.

H129 fails to fully exempt North Carolina’s most advanced fiber networks
A handful of communities in our state, including Wilson and Salisbury, have responded to the private sector’s lack of interest in building the kind of fiber networks needed for our businesses and students to globally compete, by building their own fiber to the home networks. These gigabyte networks are the most advanced in the state (and in the country). H129 seeks to shut these systems down because they compete with the large private companies (Time Warner Cable and Centurylink) who are unwilling to invest in similarly advanced technology. H129 imposes numerous regulations on municipally owned systems that would shut a private company down. While the municipally owned systems have been able to obtain a few exemptions to H129, their service areas are micro-managed by the bill in a way which will arrest their growth. Stopping a company’s ability to grow is the best way to shut it down. It will just be a matter of time.

H129 effectively prevents any communities from filling in private sector broadband gaps, even with public private partnerships

The federal government and our own General Assembly (with the Video Services Competition Act), deregulated all voice, video and broadband services, regardless of provider. Yet H129 imposes new regulations only on municipally-owned systems. These regulations include holding special elections (referendum) before a municipality funds any kind of equipment associated with constructing or repairing a new communications system, and the regulation of the rates charged by a municipality, where costs they do not incur (such as personal property tax) must be added to the price paid by customers. Such burdensome and anti-competitive regulations will effectively prevent the financing of these systems, and will prevent any private company from partnering with a North Carolina community on such a project. Private companies seeking partnerships will simply go to states where no such regulations exist, as will the private companies who sell equipment to these advanced broadband systems. The large incumbent carriers serving our state will have no incentive to upgrade their outdated infrastructure because they will be the only option in town. Jobs associated with the existence of advanced broadband will not develop; economic investments will not occur. (See Google et al. letter opposing H129)

H129 shackles the growth and innovation of our state to the decisions of a few multi-billion-dollar, out-of-state corporations
H129 sets a bad precedent of placing the interests of large out-of-state companies ahead of the interests of North Carolina businesses and residents. Time Warner Cable and Centurylink are billion dollar, multi-state companies, loyal only to their shareholders. By effectively prohibiting our local communities from building their own advanced broadband systems, the ability of our state to grow and innovate will be tied to the minimum level of technology these two companies are willing to provide in our state. The result to date, according to FCC data, is that North Carolina’s broadband service is the worst in the country (see attached FCC chart). “North Carolina grown” municipal fiber systems have developed because these local communities, who lost their tobacco economies, recognized that the only way they could survive in the global economy was to match the type of technology Asia and Europe are building. They recognized access to high capacity, affordable, broadband infrastructure is a key driver for jobs and economic growth.

H129 creates state law that is in contravention of both federal law and North Carolina’s constitution.
H129 newly subjects communications services offered only by municipalities to strict rate regulation and oversight by the NCUC (e.g., §160A-340.1(a)8-9; Section 2.(a)).This is in direct contravention to federal laws preempting the regulation of virtually all cable rates (47 U.S.C.§543(a)(1)); all cable system facilities and services (47 U.S.C. §544(a)); state utility regulation of cable systems (47 USC §541(c)); and federal laws and rules prohibiting state regulation of broadband services. H129 also subjects municipal property used for communications purposes to property tax, in direct violation of the North Carolina Constitution. (§160A-340.1(9) and §160-340.5 compared to N.C. Const Art V, §2(3)).

We have lost our tobacco, textile and manufacturing economic base. Access to advanced internet service is the last remaining hope for all our citizens, rural and urban, to compete in the global knowledge based economy using our state’s greatest resource: our ability to innovate. H129 effectively cuts off the ability of our rural communities to provide their businesses and citizens internet access when the private sector will not. It also fails to fully exempt from its onerous regulations, the most advanced municipal fiber systems in our state, with the intention to slowly and painfully put them out of business. North Carolina has a proud history of high-tech leadership in our country. Now is not the time stifle that strong technology history by regulating our North Carolina-based broadband providers for the benefit of a few out-of-state, the multi-billion dollar companies. Now is the time for the public and private sectors in our state to work together so everyone in North Carolina can obtain broadband access. That is what the citizens of North Carolina believe and expect.
Please ensure that will happen by vetoing H129.

Time Warner Cable Bill his Senate Floor, Chaos Ensues

As Time Warner Cable's bill to limit competition from community networks nearly finished its exciting journey through the North Carolina Legislature, it found itself in a madhouse where the sponsor of TWC's bill (Senator Apodaca) accused another Senator of allowing his children to watch adult content.

Stop the Cap! wrote up the details, including a discussion of why Senator Apodaca's amendment to deny adult programming to publicly owned networks violates federal law. This is yet another "level playing field" requirement that handicaps publicly owned networks but does not touch Time Warner Cable -- no surprise given TWC's influence with the current group of Legislators in Raleigh.

One of the most frustrating aspects of this ongoing saga is that it does nothing to help people and businesses get the access to the Internet they need for economic development, better health care and education outcomes, and more. This absurd debate is just about how fast North Carolina can walk backwards. Time Warner Cable and CenturyLink want Time Warner Cable to sprint backwards to protect the monopoly revenues. We are working with North Carolina's communities to stop it from moving backward at all. But nothing in here is helping communities to move forward and be competitive in the digital economy.

There is still time to oppose this bill - contact information here at Stop the Cap!.

Once again, we have some audio clips from the Legislature below.

Time Warner Cable Bill in North Carolina Heads to Senate Floor

A short update on yesterday's hearing of the Senate Finance Committee on Time Warner Cable's bill (HB 129) to level community broadband in North Carolina: the bill was passed and will head to the Senate Floor (but not this week) TODAY.  It has been modified to expand the anti-compettion fence being built around Wilson and Salisbury, both of whom operate muni fiber networks, offering the best connections in the state.  Both will now be able to expand slighty more (as opposed to private companies, who are free to offer service anywhere in the state), which is great for those nearby communities that now have some hope for competition in the future but remains disappointing for the vast majority of the state's residents and businesses, who will shortly have no hope of any real improvement in their access to the Internet.

Senators need to continue hearing from constituents on this bill - they will all be on the spot on the Senate Floor when it comes up for passage.  This will happen TODAY at noon (EDT), listen here for the railroading

The result of this bill will be to lessen any incentive for private companies like Time Warner Cable and CenturyLink to increase investment in the communities they serve because they know the local government now has no power to build a better network that would threaten their monopoly profits.  And in areas without any access to broadband, the present Legislature seems to have no interest in solving that problem until those rural folks can pony up campaign contributions on the level of Time Warner Cable.  

We will plan to get some of the interesting audio clips online when they are avaialble.

Time to Act: North Carolina Senate Finance Committee Votes on H129 on Wed

North Carolina's Senate Finance Committee is poised to take away the right of communities to decide for themselves if building their own broadband network is a good idea or not. If it passes out of this committee, it goes right to the Senate Floor and will likely become law.

We have covered Time Warner Cable's bill to kill community networks in greater depth than any other story -- and now folks in North Carolina have to immediately contact their Senators to oppose this power grab from big companies like TWC and CenturyLink. You can also use this form from Free Press if you are unsure who your Senator is.

In recent weeks, we've posted excellent speeches from legislators opposed to the bill, testimony from concerned citizens, and a variety of resolutions from local governments who are fearful of this bill's impact on public safety networks needed to keep residents and businesses safe.

If you are shy, you can call before or after business hours and leave a message on their voicemail. It takes less than five minutes. Your calls make a huge difference because so few constituents ever call state legislators. Simply let them know you oppose H129 and that the state should concern itself with expanding broadband access, not restricting who can offer it.

And as I have said numerous times, those outside North Carolina should also be contacting their elected leaders -- because everyone lives in a state where powerful lobbyists are trying to preserve and expand the power of a few massive companies like Time Warner Cable and AT&T. Progressive States Network recent covered this topic.

Two weeks ago, I wrote the following op-ed for The Wilson Times, which is behind a pay-wall.

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Time Warner Cable has convinced North Carolina’s House of Representatives to greatly restrict the authority of local communities to build their own broadband networks. Its legislation, H 129, is now being debated in the Senate and will enact a host of special regulations for publicly owned networks that do not apply to networks run by the cable and phone companies.

The “Level Playing Field / Local Gov’t Competition” bill could more appropriately be called the “Monopoly Protection Act.” It creates special provisions to disadvantage public networks – like Wilson’s Greenlight and Salisbury’s Fibrant – that offer superior services compared to Time Warner Cable and CenturyLink.

TWC has convinced many Legislators that a massive $18 billion/year company operating one of the largest telecommunications networks on the planet, is powerless to compete against networks built by a few small towns.

Bill sponsor Representative Avila has simply had enough of “predatory” (her word) local governments shaking down AT&T and TWC. The champion of a similar bill last year, Senator Hoyle, candidly admitted it was written by TWC and there is no reason to suspect anything has changed.

The state of North Carolina’s broadband? Terrible. The FCC has just released a report showing the Tar Heel state has the absolute lowest percentage of households with access to the Internet at minimum speeds identified by the National Broadband Plan as necessary to take advantage of modern technologies.

When Broadband.com launched its new map showing the prices paid by small businesses for broadband, seven of the ten most expensive cities were located in North Carolina. Anchorage barely beat out Greensboro for the highest average price per Mbps. This is why major private sector companies like Google and Intel have gone on the record opposing TWC’s bill.

With most of the businesses and citizens in North Carolina being left out of the digital economy, what is the Legislature’s response? The first priority is a bill long pushed by anti-competitive companies to limit who can build the broadband networks necessary to keep pace with the world, or at least neighboring states.

Fast, reliable, and affordable access to the Internet is essential for communities to thrive in the modern age. This realization led Wilson and Salisbury to build their own globally competitive networks, which offer the best available connections in the state.

Companies like Time Warner Cable and CenturyLink have neither the capacity nor willingness to make similar investments. They require a fast shareholder return on their investments. But next-generation networks take many years to break even – it is simply more profitable to continue offering last-generation DSL and cable services to residents and businesses who have no other choice. In short, these companies are more accountable to Wall Street than Main Street.

They lobby the Legislature rather than invest in next-generation networks, while making absurd claims that no community has succeeded in building its own broadband network. They know legislators will not bother to call Bristol Virginia Utilities to learn the story behind their profitable, job-creating, network – just one of many. BVU’s infrastructure investment attracted hundreds of private sector jobs offering salaries at twice the median wage. Being publicly owned, the network profits are reinvested locally, offering more bang for the buck.

When pressed on specific examples of community network failures, TWC and its allies may cherry pick a few that have legitimately struggled, out of over 130 citywide publicly owned networks. They may cite operating losses from networks only a few years old, conveniently omitting the fact that all networks have operating losses in early years. The business model for building a citywide next-generation network calls for massive up-front expenditures long before revenues begin rolling in – they are not expected to break even for 3-5 years at the earliest.

The track record of community broadband networks is overwhelmingly positive, which is why these few massive companies work so hard to preempt them in state legislatures.

This bill carves out unique barriers for publicly owned networks, such as restricting where they may offer services, a dramatic reversal of the Legislature’s approach to privately owned networks: reducing regulations on where they offer services. TWC and other private companies can offer loss leaders to bleed community networks of revenue but community networks are subject to strict price regulation from the state. Nonprofit networks will be compelled to pay taxes “that would apply” to a private provider, ignoring that TWC routinely avoids paying its fair share of taxes.

Supporters of this bill claim it only creates a few modest hurdles rather than being an effective ban. Of course, when these same voices successfully deregulated the cable companies a few short years ago, they promised it would usher in more competition and lower prices. Instead, North Carolina has fallen farther behind while businesses and residents have suffered with numerous rate hikes.

Legislators should do what is best for the vast majority of businesses and citizens of North Carolina, preserving the ability of communities to decide for themselves whether to build the networks necessary for future economic development, education, health care, and a high quality of life.

Google Gigabit Chief Defends Local Authority to Build Broadband Networks

Google's Gigabit Chief, Milo Medin (actual title: VP for Access Services), told the House Oversight and Government Reform Committee that the FCC takes too long to make decisions, causing uncertainty for a variety of companies and slowing innovation.

But more interestingly, he advocated that federal and state governments stop making it hard for local communities to build their own broadband networks.

Medin also advocated for a policy loathed by some parts of the cable industry: municipal broadband.

"Localities know more about what works for their communities than state governments or the federal government do. In the end, we feel that while this is probably not the right choice in many cases, it is something that should not be prohibited," he said.

Allowing communities to address their own broadband needs could help extend broadband to rural areas, according to Medin.

We have been offering in-depth coverage of Time Warner Cable's efforts to strip communities of that authority in North Carolina as well as other issues around preemption.

Medin's statement echoes that of the FCC National Broadband Plan: "Congress should make clear that Tribal, state, regional and local governments can build broadband networks." This recommendation was recently Reiterated by FCC Commissioner Mignon Clyburn:

I recently learned that several state legislatures are considering bills that are contrary to the deployment objectives of the Broadband Plan. For example, in North Carolina, the state legislature is currently evaluating legislation entitled ‘Level Playing Field/Local Government Competition.’ Last week the North Carolina House passed the bill, and it currently awaits consideration in the Senate. This piece of legislation certainly sounds goal-worthy, an innocuous proposition, but do not let the title fool you. This measure, if enacted, will not only fail to level the playing field; it will discourage municipal governments from addressing deployment in communities where the private sector has failed to meet broadband service needs. In other words, it will be a significant barrier to broadband deployment and may impede local efforts to promote economic development.

The National Broadband Plan recommended that Congress clarify that State, regional, and local governments should not be restricted from building their own broadband networks. When providers cannot meet the needs of local communities, the Plan provides that State, regional, and local entities should be able to respond accordingly, as they were able to do when municipal governments distributed electricity to thousands of rural communities during the 20th Century. Unfortunately, this National Broadband Plan recommendation continues to be ignored by some broadband industry members that are encouraging these misguided efforts.