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Muni Network Debate in Charlotte Observer

In a recent op ed in the Charlotte Observer, Christopher Mitchell delves into why North Carolina ranks last in per capita subscribers to a broadband connection. The state, through its legislature, is held hostage by large providers such as Time Warner, CenturyLink, and AT&T. David Hoyle, a retired Senator who admitted pushing bills written by Time Warner Cable, signed his name to an op-ed arguing cities should not have the authority to make their own decisions in this regard.

Readers know that Time Warner and CenturyLink (formerly EMBARQ) targeted Wilson's Greenlight, leading to restrictive barriers for any similar initiatives. In his opinion piece, Chris delves into how those providers create an environment that kills opportunity for the people of North Carolina and how local publicly owned networks could restore those opportunities.

The Observer edited the original piece for length, but we provide the full version:

If you think you’re being ripped off by the cable and telephone companies, you aren’t alone. These companies rank at the top of the most hated corporations in America, year after year. Given a recent report from the Federal Communications Commission, North Carolinians have more reasons to be angry than most Americans.

Released last month, the FCC’s annual Internet Access Services [pdf] report shows North Carolina last among U.S. states in percentage of households subscribing to high-speed Internet connections as defined in the National Broadband Plan. 

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This news comes on the heels of State Representative Brawley announcing that House Speaker Tillis told him he had a “business relationship” with Time Warner Cable after Brawley introduced legislation opposed by the cable giant. But one alleged relationship does not explain how North Carolina fell to last place in that FCC ranking.

The deeper problem is power Time Warner Cable, AT&T, and CenturyLink have at the General Assembly. These companies successfully lobbied for two flagship bills that increased prices, limited competition, and generally hurt consumers and businesses throughout the state.

Back in 2006, the General Assembly bowed to industry pressure and passed a bill for statewide video franchising. Local governments lost their right to oversee companies offering television services or require them to build out to everyone. North Carolina was promised a new age of cable competition and lower prices.

Prices continued to rise – a 2009 study from the University of Minnesota actually noted that North Carolina’s prices were among the fastest rising in the nation. But even now, most families still have the same limited options for cable and Internet service.

Fed up and recognizing that the cable and phone giants would never allow competition to prosper, the City of Wilson took matters into its own hands by building its own next-generation fiber optic network. Completed by 2009, the network has been a success and Wilson is the first community in North Carolina to have universal access to a gigabit – about 100x faster than cable speeds.

Time Warner Cable, AT&T, and CenturyLink lobbied against Wilson from the start and engaged in a multi-year effort in Raleigh to revoke the authority of any local government in the state to build a similar network. For five years, they worked with the now infamous ALEC, the American Legislative Exchange Council, to push bills that would effectively ban local governments from building networks.

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In 2011, the new Speaker of the House, Representative Tillis, ushered just such a bill through the House after receiving $37,000 from the telecom companies in the previous election cycle. Though he ran unopposed, he received significantly more from that industry than any other candidate, according to a  report from the National Institute for Money in State Politics called “Dialing up the Dollars.”

Strictly speaking, the bill was not technically a ban. We call these “leprechaun-unicorn bills” because a local government effectively has to find a leprechaun riding a unicorn to meet the standard necessary to build a network.

What it really did was revoke local judgment for state authority – something Republicans regularly decry in other circumstances. Opponents of the bill consistently argued that these decisions should be made at the local level, by those who will live with the consequences for better or for worse.

These two bills are essential to understanding why North Carolina has such poor access to the Internet and ever-increasing cable prices. Consumer protections typically come from the market (competition) or government (regulation). But these big companies are too powerful for other private companies to compete against and local governments have no regulatory power to protect consumers. Big cable and phone companies have little fear of competition and little motivation to invest in regionally or globally competitive upgrades.

The Institute for Local Self-Reliance is tracking over 400 local governments across the nation that have invested in telecommunications networks and very few have regretted it. Just outside North Carolina, the cities of Bristol, Chattanooga, Danville, and a few others offer some of the fastest network connections at the lowest prices in the entire United States. If even 10 percent of these networks actually were failures, cable lobbyists wouldn’t have to spend millions lobbying states to revoke local authority to build them.

The General Assembly should return authority to local communities and trust them to make decisions. But as long as big cable and phone companies maintain their “business relationship” with elected officials, you can expect to see more decisions made in Raleigh rather than at the local level.

For the whole story on the war against Greenlight, you can download a copy of our case study, The Empire Lobbyies Back: How National Cable and DSL Companies Banned The Competition in North Carolina.

Responding to "Crazy Talk" - Community Broadband Bits Episode #50

For our 50th episode, we're trying something new: Lisa and I respond to three common claims made by opponents of community owned networks. We owe these three particular arguments to the Executive Director of the trade association of Wisconsin telephone companies. Each of the clips we respond to come from claims he made at a workshop at the 2012 WiscNet conference.

We play a short claim by him and then Lisa and I respond to it. For this show, we look at claims that telephone companies already serve everyone with broadband, that the rapid iteration of mobile phone technology delegitimizes public sector investment in networks, and that public investment "crowds out" private investment.

These are very common arguments offered every time a community considers building its own network, but they are quite weak. As Joey Durel, Mayor of Lafayette, so often reminds us, the big companies don't win by having good arguments. They win by buying steaks and football tickets -- lobbying. Campaign contributions help too.

At any rate, let us know if you like this format and what questions we should consider the next time we do it. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 12 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Eat at Joe's for the music, licensed using Creative Commons.

Accusation of Corruption in Favor of Time Warner Cable in North Carolina General Assembly

Veteran North Carolina legislator Rober Brawley resigned as Chairman of the state Finance Committee, reports local WRAL. According to WRAL's @NCCapitol blog, the Republican from Iredall read his resignation letter during a recent floor debate. He criticized Speaker of the House Thom Tillis, questioning Tillis' ethics and accusing him of special legislative favors specifically for Time Warner Cable.

One bone of contention was a bill introduced by Brawley to expand the service area for the municipal cable network MI-Connection in Mooresville. From the letter as quoted in the article:

"You slamming my office door shut, standing in front of me and stating that you have a business relationship with Time Warner," Brawley wrote. "MI Connections is being operated just as any other free enterprise system and should be allowed to do so without the restrictions placed on them by the proponents of Time Warner."

Stop the Cap covered the background of that bill in its article about this accusation:

House Bill 557, introduced by Brawley, would have permitted an exception under state law for the community-owned MI Connection cable system to expand its area of service to include economic development sites, public safety facilities, governmental facilities, and schools and colleges located in and near the city of Statesville. It would also allow the provider to extend service based on the approval of the Board of County Commissioners and, with respect to schools, the Iredell County School Board.

In 2010 - 2011, Tillis received $37,000 from the telecommunications industry including a $1,000 contribution each from AT&T, Time Warner Cable, and Verizon. At the time of the contribution, Tillis had already won an election in which he ran unopposed and session was just about to start. He is a darling of ALEC, the American Legislative Exchange Council which exists to help corporations rewrite state laws in their favor.

Shortly thereafter, lawmakers passed HB 129 and created insurmountable barriers for local communities interested in building publicly owned telecommunications networks. Other Republican lawmakers who supported the bill received significant contributions from the same clique. We now know Tillis is willing to honor his "business relationships."

Brawley is no stranger to controversy. He introduced a bill this session that would have eased many ethics reforms passed in recent years. Included in the proposed changes was a repeal on a ban of gifts from lobbyists and relaxing requirements that lobbyists disclose those gifts. Earlier this year, Brawley stated to an @NCCapitol reporter:

"I believe in the integrity of people, including legislators and, in over 30 years of serious involvement, have not seen any situation that these [ethics] laws would have prevented or improved."

For those of us who have watched the way Time Warner Cable and others have corrupted the political process in many states, these allegations come as no surprise but are noteworthy for who is making them and the specific allegation of a "business relationship" between Time Warner Cable and the Speaker of the House.

Government Funded Interstates and Fraud

In the coming years, we will continue to see groups and elected officials funded by the big cable and telephone companies try to delegitimize any public sector investment in Internet networks. We have already endured a year of mostly-frivolous charges against BTOP and BIP stimulus programs. At times like this, it may be helpful to look back to other times in history when the federal government engaged in a new program to build essential infrastructure.

This comes from Earl Swift's excellent The Big Roads: The Untold Story of the Engineers, Visionaries, and Trailblazers Who Created the American Superhighways. Please buy it at a local bookstore, not from Amazon.

In fact, the committee did turn up some rotten business. In New Mexico, investigators found that contractors ran roughshod over road officials, exhibiting "open contempt" for construction specs and quality controls as "a continuing course of conduct over a period of almost ten years." They got away with it, Blatnik's people found, because the state didn't know enough to object; its highway department was managed by unskilled laborers who had been advanced up the ranks without a lick of training. Some state men testified that they didn't know how to test roadbed materials, so they OK'ed all that came before them. Their boss admitted he wasn't schooled on how to do this work until after it was finished. The committee discovered on stretch of highway that was in the act of collapsing even as New Mexico officials signed off on it.

The bureau stopped payments to New Mexico until it got itself together, and did the same to Massachusetts and Oklahoma.

There will be mistakes and we will undoubtedly find a case of fraud or two. That doesn't mean the government shouldn't be making these essential investments. And don't even get me off on all the far worse shenanigans of big private companies... Adelphia and Qwest are toward the top of that list.

Alex Marshall Examines Electricty / Internet Parallels

“My answer has been, as it is tonight, to point out these plain principles,” Roosevelt told the crowd. “That where a community -- a city or county or a district -- is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of government, one of its functions of home rule, to set up ... its own governmentally owned and operated service.”

While FDR was referring to electricity in 1932, he could easily be speaking about today's critical need for Internet connectivity. Fortunately for a growing number of people in our country, many local leaders share his sentiments and those communities are investing in community owned telecommunications networks.

Government Technology recently reposted a Governing article by Alex Marshall, a Senior Fellow at the Regional Plan Association in New York City. The Director of our Telecommunications work, Christopher Mitchell, tells me he just bought Alex's new book from a local bookstore and has put it at the top of his reading list: The Surprising Design of Market Economies.

Marshall sees fiber optic connectivity as the utility of today and tomorrow. He explores the question of who should provide access - public institutions or the private market? In his research, Marshall finds that many local communities are not waiting for an "official" answer to that question and are taking control of getting their citizens online.

Marshall spoke with Nick Braden from the American Public Power Association (APPA):

“As was the case when America was electrifying a century ago, many unserved or underserved communities are ready, willing and able to take matters into their own hands, if necessary, to deploy the sophisticated broadband communications networks that will enable their communities and America to continue to be a leader in the global economy,” says Braden. “Many have already done so.”

Marshall notes the private sector's intense efforts to stop local public invest and how those efforts have permeated nineteen state legislatures, even contrary to overwhelming evidence of success. While court battles often end in the defendant's favor, when the private sector sues to stop municipalities and loses, the next step is money and lobbyists. Marshall talked to our own Christopher:

Given that the evidence shows that cities could offer better service at better prices than private companies, the logic behind these laws makes little sense. “They are the kind of arguments that can only work when accompanied by an army of lobbyists and large campaign contributions,” says Mitchell.

While the question will, of course, be debated far into the future, Marshall suggests a look back at 1932 for the right approach:

If the politicians falter, they should remember FDR’s words. It’s clear that fiber networks are a natural monopoly and need to be either run directly by the government, or so heavily regulated that it amounts to the same thing.

In Washington, Mt. Vernon Attracts Businesses with Open Access Network - Community Broadband Bits Episode 38

Nearly 20 years ago, a small community between Seattle and Bellingham, Washington, began building a fiber optic network to connect key municipal facilities. In the years since, Mt Vernon has expanded the network to many community anchor institutions and businesses locally, including in two nearby towns.

Information Systems Director Kim Kleppe and Community & Economic Development Director Jana Hansen join me to explain how they began the network and what benefits they have seen from the investment.

They did not borrow or bond for the network and they don't have a municipal electric department, which makes them particularly interesting in this space. They also run an open access network that allows eight providers to compete in delivering the best services to subscribers. The network has encouraged several businesses to move to the community.

Our interview begins with an introduction from Mayor Jill Boudreau.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to D. Charles Speer & the Helix for the music, licensed using Creative Commons.

Blair Levin Discusses Gig.U and More for Community Broadband Bits Episode #37

Blair Levin is Executive Director of Gig.U. Prior to that, he was in charge of developing the National Broadband Plan and long before that was Chief of Staff for the FCC during the Clinton Presidency. He's had a lot of experience in telecommunications policy but here we focus on what can be done to move America's communities forward.

I asked Blair to join us for the show so I could ask him some hard questions about the Gig.U initiative, including the difficulty of achieving universal service and the tradeoffs around allowing entities not rooted in the community to own (and set the rules for) essential infrastructure. I also challenge Blair's preference for "private sector" investment, asking him what exactly that means.

I hope our discussion is helpful in understanding the tradeoffs communities must make in choosing exactly how to improve Internet access locally. Though Blair and I disagree in some ways, I think we clearly illuminate why we disagree so the listener can make up his/her own mind.

If you have some questions left unanswered or points you wish were made, note them in the comments below and we'll ask him to join us again.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 35 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to D. Charles Speer & the Helix for the music, licensed using Creative Commons.

PR Watch Ties ALEC to Now-Dead Bill in Georgia to Limit Internet Investment

Brendan Fischer of the Center for Media and Democracy's PR Watch examines the ties between HB 282, the people behind it, and how it evolved into a threat to connectivity and local control. Brendan gave us permission to repost the story in full here. Since authoring this story, HB 282 was defeated in Georgia in a floor House vote. However, understanding where these bill comes from is critical, so we still wanted to run this piece.

Community-Owned Internet, Long Targeted by ALEC and Big Telecom, Under Fire in Georgia

Members of the American Legislative Exchange Council (ALEC) in the Georgia Legislature are pushing a bill to thwart locally-owned internet in underserved communities, an industry-sponsored effort that effectively reinforces the digital divide. A vote in the Georgia Assembly is scheduled for Thursday, March 7; if Georgia passes the bill it would be the twentieth state to eliminate community control over internet access.

Rural and Poor Communities Take Control of Internet

As many as one in ten Americans cannot get internet connections that are fast enough for basic activities like streaming video or file sharing, largely because big internet providers like AT&T and Time Warner Cable have refused to provide adequate service to communities where the population is too dispersed or too poor. As local economies become ever more dependent on internet access, though, this digital divide is leaving rural and low-income communities in the dust.

But local governments in places like Wilson, North Carolina and Thomasville, Georgia have taken matters into their own hands: they've built publicly owned high-speed internet to keep their communities viable in the 21st Century. These efforts have created jobs and helped save local economies, with businesses that rely on digital communication remaining in, or relocating to, the newly wired communities. 

Competition from these locally owned providers has irritated the big "incumbent" internet companies, which had managed to put-off upgrading their networks because of near-monopoly power in many areas. Municipal broadband -- which in many cases offers faster internet at a lower price -- "forces companies to invest in their own infrastructure because communities are doing it better," says Catharine Rice, President of the SouthEast Association of Telecommunications Officers and Advisors (SEATOA).

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Instead of responding to competition with improved services, the industry has responded by pushing a raft of bills to crush community and local broadband.

"It is cheaper to hire a lobbyist and push a bill than invest in infrastructure," Rice told the Center for Media and Democracy. 

Georgia's HB 282 would prohibit cities from offering broadband to areas where just one home in a census block has internet speed above 3 Mbps. But 3Mbps is exceptionally slow. Businesses would likely be unable to upload a powerpoint presentation, doctors could not do medical file sharing or remote diagnosis, students could not access virtual education, and users could not access video on demand -- all of which is important for rural areas to remain competitive with the rest of the country, not to mention the world.

If Georgia passes the legislation it would be the twentieth state to preempt local efforts to offer broadband. The spread of these bills can be traced back to ALEC and its "model" Municipal Telecommunications Private Industry Safeguards ActThree of the five named sponsors of Georgia’s HB 282 are ALEC members. 

ALEC Bill Passed in 19 States

Since at least 2001 ALEC has been a conduit for internet providers like AT&T and Time Warner Cable to eliminate competition. As Bloomberg Business Week has described, the bill that became the Municipal Telecommunications Private Industry Safeguards Act was largely drafted by AT&T and other big internet providers, and was first passed in Utah in 2001, after the city of Provo created a municipal broadband system. The following summer, the bill was brought to ALEC’s Annual Meeting in Orlando and adopted as a “model” by the ALEC Telecommunications & Information Technology Task Force.

Since becoming a model bill, the Municipal Telecommunications Private Industry Safeguards Act has spread across the country. Nineteen states now have restrictive municipal broadband bills on the books, according to the Institute for Local Self-Reliance.

Wilson Greenlight Report

It passed most recently in North Carolina, where the exceptionally successful “Greenlight” program in Wilson had prompted incumbent internet providers like AT&T, CenturyLink, and Time Warner Cable to push the legislation starting in 2006. The bill had failed in previous sessions, but after control of the legislature shifted to Republicans in the 2010 elections and big telecom providers gave nearly $1.6 million in campaign contributions to North Carolina legislators over a five-year period, it finally became law in 2011.

In addition to campaign contributions and payments to ALEC, big internet providers have influenced legislators with valuable gifts. For example, AT&T was the second-highest contributor to the ALEC “scholarship” fund that pays for legislators’ flights and hotel rooms to ALEC meetings – a scheme that creates an environment for improper influence and would appear to violate many states’ ethics and lobbying laws. ALEC meetings are often held in fun cities like New Orleans and at swank hotels, and because state legislators earn, on average, about $46,000 a year, these destinations and resorts would otherwise be unaffordable. 

Nationally, AT&T gave $90,000 to the scholarship fund over a three-year period (2006-2008, the only years for which complete information is available). The legislators who are sponsoring the current bill before the Georgia legislature are major recipients of ALEC scholarships. Bill sponsor Representative Don Parsons, who is an active member of the ALEC Telecommunications & Information Technology Task Force, received $5735.48 over those three years, and Representative Ben Harbin received $3546.08 over two years. HB 282 sponsor Representative Mark Hamilton received $3527.80 in "scholarships" in 2008 alone. 

As a further incentive to attend ALEC meetings, elected officials are encouraged to bring their families and offered subsidized childcare and activities for kids six months and older, which they call "Kid's Congress." Time Warner Cable sponsored "Kid's Congress" at ALEC's 2011 Annual Meeting. At the April 2011 meeting, Time Warner Cable invited legislators to an exclusive party box at a Cincinnatti Reds baseball game, with food and drink provided.

If a lobbyist wants to contact a legislator within a state and make their views known, they have their ear for perhaps 15 minutes. They also have to register and report the time and expenditures. But through ALEC, corporate interests can access legislators for three days of meetings, workshops, and parties, where elected officials are basically a captive audience -- and where they know who is footing the bill.

2012 Bill Defeated, Thanks to Business Opposition

Georgia first saw anti-municipal broadband legislation in 2012. That bill was introduced by then-Senator Chip Rogers (R), who was the ALEC State Chair for Georgia (until his retirement in December) and the winner of the 2011 “State Chair of the Year” award.

Oppose SB 313

Sen. Rogers' bill was nearly a word-for-word duplication of what had passed in North Carolina. The bill had the support of the Georgia chapter of the U.S. Chamber of Commerce, says Lou Comer, Director of Local Government Services at the Georgia Municipal Association, but Georgia businesses rallied against it.  

Municipalities reached out to businesses in their communities, who then contacted their legislators to express opposition to the bill. "The businesses made it clear that 'we are getting good service'," Comer said. If municipal broadband were eliminated these companies would have no choice but to return to the high-cost, low-speed internet offered by the incumbent providers, she said.

The big internet providers framed their opposition to municipal broadband in free market terms: the public sector interfering with the private sector, and taxpayer money being "wasted" because municipal projects supposedly are unsuccessful -- the notion that private industry always does things better than government. 

SEATOA's Rice doubts their motives. "Do these multi-billion dollar companies really care about community tax payers?" No, she says: "They care about their bottom line and profit margins."

If, as the industry alleges, municipal broadband projects are going to fail, the incumbent providers would have nothing to worry about. But according to Rice, "they are pushing these laws because they know [municipal broadband projects] don’t fail."

Thomasville, Georgia, for example, built its broadband 14 years ago and has been so successful that local officials have actually eliminated property taxes. Contrary to the industry claim that these projects cost taxpayers money, residents in this community are actually paying less tax.

Municipalities are "all about the private sector because we need them for economic development,” said the Georgia Municipal Association's Comer, noting that many of the rural communities that have built municipal broadband are solidly Republican.

"If the private sector would have come in and provided these services, [the municipalities] never would have needed to build their broadband projects," she said. "They had to do it to save their communities."

Oppose HB 282

Georgia Bill is Back

Georgia's legislation may have been defeated in 2012 but a version is back again in 2013. 

“We are not second class citizens because we decided to live in rural Georgia,” said Elberton, Georgia Mayor Larry Guest in testimony opposing the legislation.

“Georgia should be promoting a pro-business, inclusive approach to broadband deployment, especially in rural areas of the state,” he said.

The bill is again being opposed by businesses in the state, as well as tech companies like Google and Alcatel-Lucent, who argue that the private sector alone cannot build the nation's public infrastructure. Their letter to Rep. Bill Parsons also notes the recent goal outlined by the Federal Communications Commission (FCC) to offer one gigabit access nationwide by 2015.

HB282 has been modified from the 2012 version to exempt some existing broadband projects -- perhaps to neuter opposition from businesses already benefitting from municipal broadband -- but it still creates onerous burdens and thwarts new projects, perhaps even including those already underway. 

"Other Georgia cities deserve the right to do what Elberton did, and their residents deserve the services Cumming has,” Mayor Guest said, referring to two communities that have municipal broadband projects.

“Competition ensures market-based pricing and faster delivery of state-of-the-art services. We have to do everything we can to attract jobs. If we don’t do that, business will not select rural Georgia. High speed access is essential to us.”

A vote on the bill is scheduled for Thursday, March 7.  

If you live in Georgia, you can send a letter to your representative from the Color of Change website urging the defeat of HB 282. 

Georgia Bill to Limit Internet Investment Dies on House Floor

We've been writing about Georgia's HB 282 for weeks, discussing the likely impact from limiting who can build Internet networks in communities that have the most basic Internet connections.

When the bill finally hit the House Floor, it failed in a bipartisan vote of 70 ayes to 94 nays. Many groups helped to educate the public and make sure many were informed about this legislation as it made its way through the Georgia House. Our full coverage of it is here.

Yesterday, CBS Atlanta ran another segment on this story, noting the overblown promises Windstream was making despite being unable to fulfill them (video below).

We will be running more stories on Georgia as we continue to cover the grassroots effort to protect local authority over this matter and continue to educate elected officials about community owned networks.

This is the second year in a row we saw Georgia consider a bill to limit local authority in this matter and we expect to see it again. We hope people in all 50 states are taking some time to tell their elected officials what they think about their access to the Internet and making sure that whenever a decision is made, it be made by the community without unnecessary barriers imposed by states or Washington, DC.

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CBS Atlanta Asks Tough Questions of Georgia Anti-Community Broadband Bill

We finally see television news outlets asking the tough questions of bill pushed by powerful cable and telephone companies to prevent giving residents a real choice in cable and Internet service providers. We been covering this Georgia bill closely, and were glad to see this segment:

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The segment makes an error in suggesting that tax dollars are commonly used by local governments in building networks. They are not. Most municipal networks are built using revenue bonds, where the community does not pledge its full faith and credit. Instead, they sell bonds to private investors who are then repaid by the revenues generated by the network.

But this mistake is more than outweighed with the reveal at end of the video, that the municipal network in Thomasville allowed the city to drop its local property entirely. Yet another community benefiting tremendously from owning its own network.