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Holding Their Breath in Bradley

Cleveland Utilities (CU), serving Bradley County, is carefully searching for the best way to improve connectivity for its southeast Tennessee customers. After exploring a number of possibilities, CU sees a partnership with Chattanooga's EPB as the brightest opportunity but their collaboration rests on lawmakers in Nashville or the U.S. Court of Appeals.

The Need Is There, The Neighbors Are Close

CU President, Ken Webb knows the community needs and wants something better than AT&T for Internet access or cable TV from Charter Spectrum, especially in rural areas. Residents and business owners have gathered at community meetings. Local community leaders have passed resolutions asking the state to roll back restrictions and contacted CU directly but the utility's hands are tied as long as state barriers remain in place.

For over 7 decades, CU has served residents and businesses, providing electricity, water, and sewer. After a 2015 feasibility study revealed a $45 million estimate to build out a triple-play fiber to the entire county, CU began considering a limited pilot project.

They have been talking with their neighbors, EPB, about the possibility of partnering for some time Webb told the Times Free Press:

"We don't want to reinvent the wheel," Webb said Tuesday. "We continue to study our options (for adding telecommunications services), but we would prefer for the state to allow us to have the option of working with EPB."

Waiting...Waiting...Waiting

Right now, the prospect of fiber in Bradley County appears to hinge on two possible outcomes. First, if last year's FCC decision to roll back state barriers is affirmed by the U.S. Court of Appeals for the Ninth Circuit and legal review stops there, the EPB will not need to worry about a legal challenge. 

Bradley County residents and businesses may also have a chance at fiber if the state legislature adopts legislation introduced last year by Cleveland's Representative Kevin Brooks. Senator Janice Bowling sponsored the Senate version last year and the two vowed to carry on advancing the bill this year. The bill, that would restore local authority to invest in Internet networks, received backing from a number of organizations and local communities.

Hamilton County, home to Chattanooga and its world famous gigabit municipal fiber, is located immediately west of Bradley County and ready to expand to the communities that want access to the EPB gigabit. Due to Tennessee's restrictive state laws, EPB cannot serve beyond its current electric service footprint:

DePriest, who is also chairman of the Tennessee Fiber Optic Communities, said the Chattanooga utility is eager to expand into the parts of Hamilton County it doesn't currently serve, which includes about 9,000 homes in east Hamilton County, and into all of Bradley County, which has more than 50,000 homes and businesses.

"We have developed some plans and we will develop more," DePriest said. "We've already had more than a thousand people from that area write us, email or call us asking when they can get our (broadband service)."

"We think we have the expertise and the infrastructure already in place so that expanding into these areas would help them and help us," he said. "We would have to work out the arrangement with Cleveland Utilities and Volunteer Electric because this is their territory and we're not going to go anywhere where we are not invited and where it doesn't make good business sense."

Are You From Tennessee? Your Opinion Matters!

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

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

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

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

Op-ed: Next-Generation Networks Needed

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

Christopher Mitchell: Next-Generation Networks Needed

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

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

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

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

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

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

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

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

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

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

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

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

 

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

Bradley County Urges Tennessee Lawmakers: High-Speed Internet Now!

Just this past week, we reported on the plight of Bradley County in Tennessee. Cut off from connectivity, families and businesses are considering leaving to nearby Hamilton County which has Chattanooga’s high-speed fiber network.

By a 12-1 vote, the Bradley County Commission urged the Tennessee legislature to pass a bill (Tennessee HB 1303/SB 1134) enabling public utilities to bring high-speed Internet to Bradley County residents. Current state law - right now embroiled in legal disputes - prohibits public utilities from expanding high-speed Internet access. 

Near-Unanimous Vote (12-1)

As reported in the Chattanoogan, the only naysayer to the resolution was the vice-chairman. He agreed that Charter and AT&T had failed to provide adequate Internet access to the county, but he expressed opposition to municipal networks. Although disagreeing with the resolution, he underscored how local control had disappeared with the current state law:

He said local governments at one time had leverage over providers when they had to come to them periodically for charters, but he said that control went away with the passage of the current law that he said was heavily lobbied.

The commissioners, however, felt that this vote was the only way forward. Some described how dependent their homes and businesses have become on Internet access, and others reiterated that the community suffered die to the lack of competition.

An Engaged Public Speaks Out

According to the Cleveland Daily Banner, the meeting attracted enough residents to pack the room. The people of Bradley County see the importance of better access in their future. Blake Kitterman, president of the Bradley County Young Democrats, told the Commission:

“When Bradley County citizens succeed, we all succeed, and EPB broadband expansion means an interconnected community…It means opportunities for businesses to affordably advertise their products, and students to be able to take part in higher forms of learning.”

According to the Banner, the crowd applauded every point supporting the resolution. The loudest and longest ovation was in response to Commissioner Mike Hughes when he summarized sentiment about incumbent providers Charter and AT&T:

““They had their opportunity, and they failed,” Hughes said. “It’s time to open it up.”

Speedy Holiday Gift in Tullahoma

Tullahoma Utilities Board LightTUBe customers are once again receiving a special holiday gift via the municipal fiber network. As of December 5th, subscribers got a boost in speeds with no boost in price.

From the LightTUBe Facebook page:

lightube-fast-speed-fb-2015.png 

More good news is on the way after the first of the year. According to General Manager Brian Skelton, rates for the two highest tiers will decrease. Symmetrical gigabit Internet service will drop from $99.95 per month to $89.95 per month and 200 Megabits per second (Mbps) symmetrical Internet service will decrease from $79.95 per month to $74.95 per month.

Unlike the big corporate providers that increase rates whenever the opportunity arises, Tullahoma prefers to increase speeds for free and sometimes even lower rates. Publicly owned networks focus on serving the community rather than maximizing profits; the decision to increase speeds and lower prices comports with their mission.

Happy Holidays, LightTUBe subscribers!

PILOTing Positive in Tennessee

As the Sixth Circuit Court of Appeals reviews the FCC's February decision to scale back state anti-muni laws in Tennessee, at least two munis in the Volunteer State are giving back by saving dollars. Networks are also contributing substantially to  public coffers via Payment in Lieu of Taxes.

Clarksville, Tennessee, Network Becomes Revenue Positive in 2015

As of June 2015, the city’s utility provider CDE Lightband paid off all outstanding expenses related to their fiber optic network. General manager Brian Taylor described how the network has improved the city’s utility services and overall economic picture:

Our fiber project has proven to be an investment that benefits the electric system, the customers and the community. It has allowed us to enhance our distribution system and improve our system reliability; provide customer choice in video, Internet and telephone services and offer another tool in economic development. Every year access to high speed Internet becomes more critical in the recruitment of new business. We are proud to be an integral part of the growth and development of our community.

In a recent press release, CDE Lightband said their 1,200 mile fiber optic network saves the City of Clarksville a total of $4.5 million annually through technological upgrades that have improved the overall safety, reliability, and speed of electrical maintenance and service. The city has also seen 27% growth in broadband service customers over the past year. The network’s cost savings, along with direct revenues from electrical and broadband services, spell major dividends for CDE Lightband coupled with continued optimism for future growth.

Total revenues since the inception of CDE Lightband in the form of Payments in Lieu of Taxes (PILOT or PILT) exceed $37 million, with annual PILOT compensation payments of $5 million to continue indefinitely. PILOT compensation is a type of recurring payment that non-taxable organizations make to government entities for the use of government-owned property.

Chattanooga’s Unstoppable EPB

Chattanooga’s EPB network also continues to see remarkable evidence of success. PILOT compensation since Chattanooga built the EPB network six years ago is at $140.5 million with $19.2 million paid out this year alone. Today, EPB contributes more in PILOT compensation than any other taxpayer or PILOT contributor in all of Chattanooga and Hamilton County.

It Doesn't Stop with PILOT

Clarksville and Chattanooga are well-established networks that have served the community well in a number of ways. In addition to providing PILOT and more efficient electric services, benefits extend to better connected schools and anchor institutions, savings for public facilities, and economic development.

new study from a University of Tennessee-Chattanooga economist reveals EPB’s fiber network has added an estimated $865.3 million to $1.3 billion to the local Chattanooga economy in the past 6 years. In addition, the study says Chattanooga’s fiber optic network has also generated at least 2,800 new jobs in the local economy. The same study estimates that job growth due to the network may be as high as 5,200 new jobs, depending on the parameters.

Chattanooga and Clarksville are two examples of what is possible when local communities have the ability to exercise their own authority. Those that will live with the results and reap the benefits are best suited to decide the strategy to improve local connectivity.

No Love Lost Between North Carolina A.G. And State Barrier

The State of North Carolina is currently awaiting a decision from the U.S. Sixth Circuit Court of Appeals as the court considers the FCC's February decision to roll back state barriers. North Carolina Attorney General Roy Cooper's office is heading up the state's appeal, but is his heart in it?

Cooper is running for governor and, in a recent interview, expressed his views about H129, the focus of the appeal in North Carolina [emphasis ours]:

The Legislature has passed a lot of bad laws, but it is the job of the attorney general to defend state laws...And I wish the governor and the General Assembly would stop passing so many bad laws that create litigation. We’ve seen that in many instances. This is another situation where the attorney general’s office is duty bound to defend state law.

"Bad law" accurately describes H129, which is the reason why the FCC rolled it back in February. Perhaps Cooper's candid comment suggests that, if he one day becomes Governor, he will work with his colleagues in the state legislature to repeal it.

Rather than having to contend with this type of "bad law," local communities need the authority to make their own telecommunications decisions. After all, local folks are the ones that live with the results.

"Little Gig City" And Friends Go to Nashville to Fight for Local Authority

As the people of Tennessee wait for the court to determine their broadband future, state and local leaders in Nashville are hearing municipal network advocates and foes.

The bipartisan Tennessee Advisory Commission on Intergovernmental Relations, anticipating state legislation aimed at removing state anti-muni laws next session, recently heard from advocates of municipal networks. Those in favor of keeping state barriers in place also took a seat at the table. The Commission includes state legislators and local community leaders. The Sixth Circuit Court of Appeals is now considering Tennessee's petition to vacate FCC's February decision to overturn state laws against local authority.

The Same Old Argument

The Tennessee Cable Association (TCA), representing large incumbent cable providers, repeated the same misinformation we have heard before - that municipal networks are "failures." Their lawyer pointed to debt as proof-positive that "these communities that have gone into this business have done very poorly," reported the Johnson City Press.

Chattanooga's EPB President Harold DePriest summed up the weakness of that statement when he said, “It’s the same reason you have a 30-year mortgage on your house, instead of a 5-year mortgage.” It's about long-term vision and planning.

A number of representatives from Tennessee communities served by municipal networks attended the meeting and presented the facts. Chattanooga's world-famous fiber network is often in the limelight, but smaller Tennessee towns with networks like Erwin and Jackson have benefitted from their investments and other communities, such as Cleveland, have plans to follow suit.

Erwin Making Strides

Erwin Utilities sent fiber optic engineer John Williams who called out TCA for using the word "failure" and describing it as a mischaracterization. Williams noted that Erwin Utilities, who initiated a pilot project last March, is already serving 200 of 300 potential customers after only 7 months of operation. Customers in Erwin have access to symmetrical 25 Mbps, 100 Mbps, and 1 Gbps connectivity along with telephone service. Internet access from Erwin Utilities is available for $49.95, $69.95, and $199.95 respectively; you can call Erwin "Little Gig City."

The fiber system was originally deployed to manage the electric utility smart meter system, so much of the infrastructure is already in place.

logo-erwin-fiber.jpg

Erwin has not incurred any debt to deploy its fiber pilot project, says Williams. The utility has taken an incremental approach, leasing out excess capacity from the electric system and using proceeds to build out one section at a time. For phase one, scheduled to start any day, Erwin Utilities only needs 15 percent of current electric customers with smart meters to sign up for fiber-to-the-home (FTTH) services for the network to pay for itself. They plan on offering FTTH across the entire service area within five years.

A small town like Erwin, population 6,000, does not have the density to attract large providers for fast, affordable, reliable connectivity. Their municipal utility has a plan to serve people which will not violate Tennessee's state restrictions, but Williams spoke before the Commission in support of removing those limitations:

I would argue that every municipal broadband deployment has been successful...The biggest thing we like to point out about municipal projects, specifically ours, is the availability to rural customers who may be underserved by existing services. In Unicoi County, only 75 percent is covered by a cable company, so 25 percent of our electric service area doesn’t have access to broadband.

A Cooperative Point of View

In addition to Erwin Utilities, Cleveland Utilities CEO Ken Webb and Ben Lovins, Senior Vice President from Jackson Energy Authority's Telecommunications Division (JEA) supported the notion of removing state prohibitions blocking Chattanooga, Erwin, and others from expanding to other areas. Also providing perspective was Tennessee Electric Cooperative Association's Mike Knotts, reported the Chattanoogan.

Knotts drew a parallel between the expansion of broadband today and the roll out of electrification in the 1930s in which rural cooperatives played in instrumental role. He suggested nonprofit entities with the ability to spread costs out over long periods of time, rather than private companies, would be the best option to get the job done once again:

That was the very simple magic that took, in 10 years, less than 10 percent of American farms being electrified to 100 percent — not much more in the secret sauce other than that.

Pilots and Plans: It's All About The Local

In addition to serving 18,000 customers, the JEA telecom division brings in annual revenue of approximately $30 million, according to Lovins. Small-businesses, students, and ratepayers are only a few of the many who benefit. Lovins went on to provide numerous examples of how the investment has improved the quality of life in Jackson.

The network has kept the town competitive when, in the late 1990s, the incumbent provider told community leaders there was no need to upgrade because Jackson didn't need high-speed connectivity. Lovins told the Commission, "All of this was achieved through local choice, no taxes and no government funding."

Cleveland's Webb advocated for striking down the law because it prevents the Chattanooga EPB from serving neighbors who want and need fast, affordable, reliable service.

Cleveland, also working on a pilot project, points out that access to connectivity is no longer a luxury. The community's pilot project aims to fill in gaps in service created by poor coverage from incumbents. According to Webb, he recently spoke with a local attorney who finally obtained adequate Internet access at office after 24 years of requests to the local incumbent. Cleveland leaders don't want to wait another 24 years to fill the gaps in service that plague local businesses.

Webb told the Commission:

Cleveland wants to offer its citizens the absolute best that we possibly can. … We don’t want to fall behind in Cleveland.

Legislative state barriers accomplish nothing except prevent better connectivity in urban and rural areas. Local communities feel the impact of local decisions. As the Court considers the Tennessee petition, they will understand local communities better if they take to heart the words of JEA's Ben Lovins:

Give local leaders the choice to work solutions that best fit their communities and that includes allowing our municipal systems to work together to help our neighbors.

While 6th Circuit Reviews Appeal, Organized Attack Begins In House

As the Sixth Circuit Court of Appeals considers the FCC's decision to roll back Tennessee and North Carolina anti-muni laws, elected officials opposed to local authority are mounting an assault to head off possible enabling legislation. Their first target is the House of Representatives.

Poison Pens

South Carolina Governor Nikki Haley, North Carolina Attorney General Roy Cooper, Tennessee Attorney General Herbert Slattery, Tennessee Governor Bill Haslam, and Alabama Attorney General Luther Strange all sent letters to the Chairman of the House Energy & Commerce Committee, Fred Upton (R-MI). Their letters express derision at the thought of allowing local communities the ability to make decisions for themselves when it comes to ensuring local businesses and residents have the Internet access they need.

Communities with publicly owned networks such as Chattanooga, Tennessee, and Wilson, North Carolina, have prospered compared to those relying only on the large incumbent cable and telephone companies like Comcast and AT&T. Data suggest access to publicly owned networks contribute to local prosperity. Nevertheless, these elected officials have chosen to support big ISPs rather than their own constituents.

Elected Officials Protecting Campaign Interests

When the FCC released its Opinion and Order scaling back state restrictions in Tennessee and North Carolina, legislators backed by ISP powerhouses took up arms. They introduced bills, wrote editorials, and delivered speeches that put profits of AT&T and Comcast before the rights of Tennesseans and North Carolinians to have fast, affordable, reliable Internet access.

Tennessee Governor Haslam and North Carolina AG Roy Cooper each filed an appeal, to reverse the FCC's decision and keep the laws limiting competition in place. Those appeals have been consolidated and are being considered together in the Sixth Circuit.

According to Stop the Cap!, advocates for better local connectivity have observed the way telecomunications legislation is passed in Tennessee:

Haslam’s critics contend the governor has delegated his own power to protect the interests of large telecommunications corporations operating in his state — companies the critics claimed wrote and lobbied for a state law that established anticompetitive broadband corporate protectionism in Tennessee. Among Haslam’s top campaign contributors are AT&T and Comcast — Tennessee’s two largest telecommunications companies.

Haslam is not the only state leader to speak out who has a vested interest in keeping restrictions in place.

As Stop the Cap! notes, all four of these prominent politicians received considerable campaign contributions from powerhouse ISPs with an interest in limiting competition.

For a quick rundown, we collected some links:

Early Attack

The latest assault is an effort to head off federal action to guarantee local Internet choice. In addition to the FCC Order in February, Senator Cory Booker introduced such a bill last January with the support of Senators McCaskill and Markey. The issue has gained more attention over the past year as word spread of the benefits experienced in Chattanooga, Wilson, and other cities with publicly owned networks.

Big incumbent providers write checks to state lawmakers with one hand as they write legislation with the other. This is just one of the many problems with massive monopolies cornering the market in essential services: they have all the access they need to stifle competition. As long as this is the preferred campaign finance method, voters are the only ones who can punish elected officials who put big corporate interests ahead of local needs.

Resource Central: TN and NC Appeal FCC Decision to Restore Local Authority

Nine months ago, the FCC voted to peel back laws in Tennessee and North Carolina that eliminate local authority and discourage expansion of broadband investment. As was expected, both states filed appeals and those appeals were consolidated for review by the U.S. Court of Appeals for the Sixth Circuit covering Michigan, Ohio, Kentucky, and Tennessee.

It has been a long and arduous journey for the parties, their attorneys, and local authority advocates. In order to help MuniNetworks.org readers stay informed of the parties and their arguments, we gathered together a collection of resources related to the original Order and the Appeal. 

Downloads of briefs are available as attachments here.