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Responding to Crazy Talk: Arguments Against FCC Restoring Local Authority - Community Broadband Bits Episode 120

Lisa Gonzalez and I have been wading though all kinds of crazy talk since the cities of Wilson and Chattanooga filed petitions with the FCC to strike down state laws that prevent them from offering Internet access to their neighbors.

In our first episode of Crazy Talk since way back in episode 72, we deal with claims that municipal networks often fail, whether the FCC has authority to restore local authority, and whether the state barriers in question are actually barriers at all.

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 16 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

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

Thanks to Jessie Evans for the music, licensed using Creative Commons. The song is "Is it Fire?"

Wheeler Praises Lafayette's Network Deployment at NATOA Conference

At the 2014 Annual Conference of the National Association of Telecommunications Officers and Advisors (NATOA), FCC Chairman Tom Wheeler praised Lafayette, Louisiana, home of muni LUS Fiber, during his keynote address. 

Wheeler addressed a variety of issues, including wireless broadband, the drive to increase competition, and a thoughtful transition to IP based 911 service.

While he did not address the pending petitions from Wilson, North Carolina and Chattanooga, Wheeler did express his admiration for LUS Fiber and the tough persistence of the local community:

However, I do encourage you to consider how local choice and competition can increase the broadband opportunities for your citizens. I love the story of Lafayette, Louisiana where the local incumbent fought the city’s fiber network tooth and nail, bringing multiple court challenges and triggering a local referendum on the project. Thankfully, none of the challenges managed to prevent deployment – sixty two percent of voters approved of the network in the referendum, and the Louisiana Supreme Court unanimously sided with the city – but they did delay deployment almost three years. When the network was finally built, the community experienced the benefits of competition, as the local cable operator decided to upgrade its network. Local choice and competition are about as American as you can get.

We were pleased to hear the Chairman acknowledge the spirit of the community and how their efforts have paid off. Just this year, the community and its network attracted three new companies and approximately 1,300 new permanent and seasonal jobs. Lafayette has focused on improving its tech workforce in order to complement its next generation network - two critical ingredients to creating the Silicon Bayou.

Read more about Lafayette and LUS Fiber in our report, Broadband At the Speed of Light: How Three Communities Built Next Generation Networks.

For the entire text of Chairman Wheeler's key note address, check out the transcript PDF online. You can also read more about the NATOA Annual Conference, held this year in St. Paul, Minnesota's Lowertown. 

Columbia Takes Next Step Toward Municipal Network Infrastructure

A consultant report recommends the City of Columbia tap into its existing fiber resources to develop an open access municipal telecommunications network. The City recently issued a request for proposals for a business plan to press forward with the recommendation, reports the Columbia Daily Tribune.

Last year the City, Boone County, and the University of Missouri jointly hired a firm to conduct a survey and analyze existing connectivity. An August Tribune article by Andrew Denney reported that the the community was found lacking in reliable connectivity. The survey indicated that 84% of businesses reported "moderate, severe, or total disruption of their business from Internet problems related to reliability or speed." The survey also revealed 84% of businesses contend with Internet speeds "insufficient for their business needs due to reliability and speed issues." The reasonable conclusion is that commercial Internet access in Columbia is too expensive, too slow, and too unreliable for local businesses.

The Columbia Water and Light Department (W & L) now leases its dark fiber to approximately 30 entities, reports the Tribune. The leases bring in approximately $876,000 per year. The consultant recommends expanding existing resources in order to entice more providers who want to serve last-mile customers.

The report also examined continuing the W & L dark fiber leasing program without significant changes and expanding the dark fiber leasing program by adding last-mile deployment. Maintaining the current dark fiber program will not require capital but won't stimulate the area's economic development possibilities either.

Expanding the dark fiber program would improve the broadband infrastructure situation because providers would be able to offer leases to customer premises rather than only within the middle-mile network. This type of change would not improve affordability because it would not increase competition.

The August Tribune article reported:

[The consultant] suggests if the city decides to light up its fiber network, it would be able to enter into public-private partnerships with service providers but remain a neutral party to providers. The network would increase competition by allowing users to access multiple providers over the city’s network, the consultants’ report said.

More recently, the Tribune reported:

[The consultant] estimates that the city would be able to develop a broadband network to serve businesses and organizations based in the “downtown core” for a price ranging between $2.5 million and $3.5 million, which the firm suggested could be paid through debt instruments like loans and bond sales.

At an August 18th City Council meeting, CenturyLink area operations manager Kevin Czaicki addressed the Council before they voted to instruct staff to move forward. In true incumbent fashion, Czaicki told the Council that a network would create financial challenges for the city. The Tribune reported:

Czaicki also said that, if the city proceeded with the idea, it would amount to a taxpayer-subsidized entity wading into competition with private business. “This violates the spirit of the law, if not the rule,” Czaicki said.

Last August, CenturyLink announced some properties in Columbia and Jefferson City would obtain access to gigabit service. Once again, the prospect of a municipal network appears to inspire private investment.

“We would be paving a road that currently, in our opinion, does not exist now,” [W & L Assistant Director Ryan] Williams said.

Read the PDF of the report Executive Summary online for more details.

New Report Details Local Government Efforts to Improve Minnesota Connectivity

In our latest report, All Hands On Deck: Minnesota Local Government Models for Expanding Fiber Internet Access, we analyze how local governments in 12 Minnesota communities are expanding 21st century Internet access to their citizens.

In 2010, the Minnesota legislature set a goal for 2015 - universal access to high speed broadband throughout the state. Even though we have the technology to make that vision a reality, large swaths of the state will not meet that goal. Nevertheless, local folks who have chosen to take control of their connectivity are finding a way to exceed expectations, surpassing the choices in many metropolitan regions.

Some of the communities we cover include:

  • Windom, which is one of the most advanced networks in the state, built their own network after their telephone company refused to invest in their community.
  • Dakota County showed how a coordinated excavation policy can reduce by more than 90 percent the cost of installing fiber.
  • Lac qui Parle County partnered with a telephone cooperative to bring high speed broadband to its most sparsely population communities.

We delved into networks in Anoka, Carver, Cook, Lake, and Scott Counties. The report also shares developments in the municipalities of Chaska, Buffalo, and Monticello. We tell the story of RS Fiber, located in Sibley and part of Renville County. These communities provide examples of municipal networks, a variety of public private partnerships, and "dig once" policies.

This week in Minnesota, the governor’s office began accepting applications for the state’s new $20 million initiative Border-to-Border program. We hope this new report will serve as a resource for potential applicants and other community leaders across the U.S. interested in taking charge of their broadband destinies.

Read and download the full report [PDF].

Local Tennessee Communities Rally Behind EPB

As the FCC contemplates the fate of the Chattanooga EPB's ability to expand to surrounding communities, some of those Tennessee communities are publicly announcing their support. The Town of Kimball and Marion County, both part of the Chattanooga metro area, have passed resolutions asking state legislators to reconsider Tennessee's anti-muni law.

The Times Free Press reports that Kimball's Board of Mayor and Alderman unanimously and officially asked their state officials to introduce legislation enabling local authority. They requested action as early as the next legisaltive session.

Marion County passed a similar resolution in August - also unanimously. According to Kimball's City Attorney Bill Gouger:

"It is a situation where there are providers out there who would like to extend fiber-optic cable and high-speed Internet-type systems throughout our county," Gouger said. "The simple fact is, right now, our state laws make that really difficult to do, if not impossible."

County Mayor David Jackson is reaching out to the other municipalities in Marion County to increase support. From the article:

High-speed Internet access is "very important" for the entire county, said Jackson.

"It would, hopefully, give us another edge in getting new industry and other businesses to our county," he said. "It [quality Internet access] is very vital. We've got some industries now that are really struggling because they have limited Internet access."

Gouger said commercial and industrial developments are making high-speed Internet access a "requirement" for setting up shop in rural areas like Marion now.

"If we can't get those types of things throughout our county, it's going to disqualify us from some future growth," he said. "That's the whole purpose of this resolution."

Blackburn and Wheeler: Awkward Penpals

Back in June, some sixty House Republicans led by Tennessee’s Marsha Blackburn sent an open letter to FCC Chairman Tom Wheeler expressing their “deep concern” with his support for community networks. They took issue with comments he made at a House Energy and Commerce hearing in May, indicating his willingness to preempt incumbent-sponsored anticompetitive state laws that handicap or outright ban municipal networks. 

In the the views of Rep. Blackburn and her allies, this “sets a dangerous precedent and violates state sovereignty in a manner that warrants deeper examination.” They demanded answers from Chairman Wheeler on a set of eight questions so leading that they would make even the most partisan pollster blush. They featured many of the same “states’ rights,” “unelected federal bureaucrat,” and “unconstitutional authority” talking points used later in the floor debate over Blackburn’s anti-muni amendment, softened up and rephrased just a bit for polite company. 

In late July, Chairman Wheeler offered a formal written response. He opened with a diplomatically worded overview of the U.S. broadband sector, before launching into the heart of the matter:

“...Many states have enacted laws that place a range of restrictions on communities’ ability to make their own decisions about their own future. There is reason to believe that these laws have the effect of limiting competition in those areas, contrary to almost two decades of bipartisan federal communications policy that is focused on encouraging competition. I respect the important role of state governments in our federal system, but I also know that state laws which directly conflict with critical federal laws and policy may be subject to preemption in appropriate circumstances.”

While the legal debate is all about the extent of federal authority, Chairman Wheeler correctly identifies the real policy issue: "communities' ability to make their own decisions about their own future." Preemption [meaning removing state preemption] is about enabling choice, not forcing any particular option on a local community. Conversely, "states' rights" is used by Rep. Blackburn and her allies as a blanket permission to dictate to every county, township, and municipality in a given state that they must take service from monopolistic incumbents or go without broadband entirely.

 

Chairman Wheeler gamely answered each of the questions in Blackburn’s letter, despite the fact that some were little more than veiled threats:

[Blackburn et. al:] “1. If the courts struck down the FCC’s ploy to override state laws restricting municipal broadband do you believe that such a decision would weaken the credibility of the FCC?” 

[Wheeler:] The commission gives careful consideration to all relevant factual, policy, and legal issues before making decisions…As you know, final Commission decisions are typically subject to judicial review, but I do not believe that is a reason to shy away from making important decisions. 

Translation: 

Blackburn: Don't even think about it, we will sue you. 

Wheeler: Fine by me.

Several of the other questions were variations on the theme of “How dare you!”:

[Blackburn et. al:] “2. Why does the FCC believe state governors and state legislators should not have a say over how to govern the political subdivisions of their state even though that is what they are elected to do by voters?”

and 

[Blackburn et. al] “7. Did you ever ask Congress for the authority to override states’ rights with respect to municipal broadband?”  

In defending the legal soundness of preemption, Chairman Wheeler quoted both the language of Section 706 of the 1996 Telecommunications Act as well as several favorable circuit court decisions that “specifically characterized preemption of state laws restricting municipal broadband as a ‘paradigmatic’ example of the authority given by Congress to the FCC under Section 706.”

Perhaps the best encapsulation of the entire tense Blackburn-Wheeler correspondence is given in the following exchange: 

[Blackburn et. al:] “6. How does the FCC believe Section 706 authority trumps the states’ rights in the Constitution?”  

[Wheeler:] As explained above, Section 706 establishes a strong federal policy of ensuring that broadband is available to all Americans in a reasonable and timely fashion. When state laws come into direct conflict with critically important federal law and policy, it is a long-standing principle of Constitutional law that state laws can be subject to federal preemption in appropriate cases. I do not view federal preemption as a matter to be undertaken lightly. Such action must be premised on careful consideration of all relevant issues. As noted above, in any proceeding involving these issues, the Commission will consider all relevant factual, policy, and legal issues presented to determine the appropriate course of action. 

This is the correspondence in a nutshell: Blackburn and her allies are hopping mad about the prospect of their big telecom donors having to compete with municipal networks or private companies partnered with municipal networks, and Chairman Wheeler is striking a measured, non-provocative tone while sticking to his guns on the need to restore local authority to increase competition. The qualifying phrase “the Commission will consider all relevant factual, policy, and legal issues presented” appears, by my count, eight times in Wheeler's four page letter. 

The Blackburn-Wheeler exchange stands in contrast to the response letter sent by Wheeler to Pennsylvania Democrat Representative Mike Doyle, which contains much of the same language and phrases but strikes a decidedly different tone. Chairman Wheeler apparently had no objections to Rep. Doyle’s pro-municipal network letter, and was in fact “heartened by [his] support for community broadband.” 

While the FCC rulemaking process sometimes seems like a black box, there are many political aspects to its decisions that extend into the public arena. Reading the tea leaves on exchanges like these between Congress and the FCC does not necessarily offer definitive answers, but it does appear to indicate that Chairman Wheeler is leaning in the right direction and may be willing to take the inevitable heat that a decision in favor of restoring local authority would bring.

ILSR Statement on FCC Call for More Competition: A Step In the Right Direction

There is little doubt that our readers are aware of Chairman Wheeler's remarks on September 4th at 1776, a start-up incubator in D.C. His message echoed what policy leaders have repeated countless times - competition is lacking in the world of broadband.

Telecommunications has become a popular topic in the past few months as decision makers are discovering that constituents DO care about online access, economic development, and exessive consolidation. ILSR was pleased to see the Chairman address the issue of lack of competition and released the following statement:

The Institute for Local Self-Reliance applauds FCC Chairman Tom Wheeler’s Agenda for Broadband Competition. We feel it is a positive step coming from the nation’s top communications official.  

“These gigabit developments are positive, but they are not yet pervasive,” Wheeler said. “Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans.”

Wheeler's recognition that Americans lack a true choice in fast, affordable, and reliable Internet access is an important development. If we want real options for next-generation connectivity, local governments must be free to build then own networks. 

If there is one thing we have learned from the history of essential infrastructure, it is that local governments must have the option of building and owning it themselves. 

Hundreds of communities have already invested in their own fiber networks, keeping money in the local economy and spurring job growth.” says Community Broadband Networks director Chris Mitchell.

Community Broadband Media Roundup - September 6

Chairman Wheeler chose the 1776 start-up incubator office as the backdrop for his comments Thursday that outline a new agenda for big telecom: Competition, Competition, Competition.

IDG News Service Grant Gross reported on the chairman's comments.

"At the low end of throughput ... the majority of Americans have a choice of only two providers," Wheeler said. "That is what economists call a duopoly, a marketplace that is typically characterized by less than vibrant competition."

Wheeler unveiled a new broadband competition agenda, which charges the FCC to:

  • Protect competition - including generally opposing merger efforts...
  • Encourage competition - including opening up new spectrum...
  • Work to create new competitors - in a place where "meaningful" competition is not available.

Time magazine's Haley Sweetland Edwards wrote that critics will believe it when they see it: 

But it seemed to some consumer advocates to be disingenuous in a climate where the FCC is widely expected approve of a massive planned merger between Comcast and Time Warner Cable in the next six months.“The real proof will be in the agency’s actions and not just its speeches,” wrote advocacy group Free Press’ policy director, Matt Wood, in a prepared statement.

The Switch's Brian Fung noted that Wheeler kept specifics to a minimum but, 

"He emphasized that the FCC would continue extending broadband to rural areas by supporting "whomever steps up to the challenge" — a veiled reference to competitive entities, such as city governments, seeking to challenge large, incumbent ISPs."

Last week’s FCC deadline for Chattanooga, TN and Wilson, NC petitions made for a treasure trove of broadband-related media hits last weekend and into this week.

First things first, we've said it before and we'll say it again. Allan Holmes with the Center for Public Integrity wrote a must-read. "How Big Telecom Smothers City-Run Broadband" is insightful, in-depth, and really explains how we've gotten to where we are now in this national fight. 

Ellis Smith offers a human element to this issue:

When Joyce Coltrin looks outside the front door of her wholesale plant business, her gaze stops at a spot less than a half mile away.

All she can do is stare in disbelief at the spot in rural Bradley County where access to EPB's fiber-optic service abruptly halts, as mandated under a Tennessee law that has frozen the expansion of the fastest Internet in the Western Hemisphere.

And Dominic Rushe of The Guardian quotes our own Chris Mitchell:

It’s a story that is being watched very closely by Big Cable’s critics. “In DC there is often an attitude that the only way to solve our problems is to hand them over to big business. Chattanooga is a reminder that the best solutions are often local and work out better than handing over control to Comcast or AT&T to do whatever they want with us.” 

On Friday, USTelecom, which represents the Big Cable Duopoly wrote wrote a little blog post on the subject, The Inquisitr.com helped translate:

"If cities are allowed to expand their own broadband, it could force Comcast and Time Warner to stop practices like data throttling that squeeze businesses, such as Netflix that have grown successful playing by the rules. Netflix recently agreed to pay Comcast a toll to keep from losing additional customers over the black hat practice of slowing down content that users are already paying for."

The Verge's Jacob Kastrenakes covered the filing and blog post. He states that the industry giants argue the FCC simply doesn't have the power to preempt state law.

While USTelecom is right that some public broadband networks have turned into blunders, many have been incredibly successful and have actually proven to be legitimate competitors to private networks. 

AT&T filed its petition Friday as well, arguing that municipal networks should not be given tax breaks, but of course they make no such claim for companies like themselves. 

Ars Technica’s Jon Brodkin wrote about the doublespeak Tuesday:

“’Community broadband networks “should not receive any preferential tax treatment,” AT&T argued. Only private companies should be given special treatment, the company said. “Indeed, any tax incentives or exemptions should be provided, if at all, to private sector firms to induce them to expand broadband deployment to unserved areas,’ AT&T wrote.”

Several other journalists echoed his reporting.

IDG News Service's Grant Gross reported on several petitioners, including Todd Patton, of North Carolina:

"There is very little competition for broadband services in most areas today, leaving consumers at the mercy of a small handful of huge multi-national corporations like Time Warner Cable and AT&T to raise prices as they see fit," he wrote. "Municipal broadband offers consumers an affordable choice and often at higher speeds than the big corporations choose to offer." 

The Electronista and Brittany Hillen from Smash Gear noted that AT&T argues that allowing muni networks to exist would make private companies operate at a disadvantage.

Meanwhile, Sam Gustin from Motherboard spoke with one tech expert that noted the irony:

“You almost have to admire AT&T’s chutzpah in saying that, given the concessions they wrung out of communities over the years for promised AT&T broadband deployments that never even materialized,” said Lauren Weinstein, a veteran tech policy expert who supports community broadband initiatives. 

AT&T reported more than $18 billion in net income in 2013. . .

Brad Reed from BGR’s story got picked up by YahooNews. He wrote that AT&T argued it simply shouldn’t have to compete with municipal broadband networks in places where they offer 6Mbps or greater, “even if the municipal network would deliver speeds of 1Gbps or higher for it’s users.”

And DSLReports added a little history to the mix, reminding us of AT&T’s polls that insinuated that muni networks would result in pornography and government rationing of TV usage. 

AT&T wasn’t the only company that filed a letter to the FCC. Netflix also joined the preemption fray. The streaming giant filed its comments Tuesday, saying, 

"Federal preemption is appropriate when state laws unduly interfere with municipal broadband."

Because we follow the good, the bad, and the ugly, we have to mention some misguided politicians with the National Association of Governors. 

RBR.com (which regards itself as “The Voice of the Broadcasting Industry”) brought up claims that state sovereignty is the real issue, and the “FCC has no right to supersede any federal, state, or local law.” 

And Eric Boehm of Watchdog.org, an arm of the Center for public integrity noted:

“The local governments say they want to grow the taxpayer-funding, public Internet access to compete with Internet giants like Comcast.

Essentially, they are asking their biggest brother — the federal government — to back them up in a fight with their bigger brothers in state government.”

Again we note the double-speak. Boehm first argues that muni networks would be too difficult to compete with for private companies, and then calls them out as "boondoggles.” We encourage these organizations to at least try to get their stories straight before they hit the big red “publish” button. 

A couple of cities are announcing their interest in city-owned broadband. 

First posted in The Coloradoan and also covered by InnovationNews: Fort Collins city manager Darin Atteberry announced a Broadband Strategic Plan proposal as part of his 2015-2016 budget. 

Atteberry said the proposal is in response to citizen comments about slow Internet speeds in the city and new, next-generation high-speed Internet services becoming available across the nation.

More Syracuse officials are announcing their support of a city-owned network. Nader Maroun, a Syracuse Common Council member says Syracuse MetroNet has been actively involved in researching how a network could be run in the city:

Significantly, this municipal network would not involve any local public funding nor would it be built and managed by the city. Instead it would be created by a new nonprofit organization specifically tasked for this purpose. Since Dr. Nulty's study, we have been exploring ways in which such a network might be financed, built and managed.

Community Broadband Media Roundup - Week of August 29, 2014

"When private industry does not answer the call because of market failures or other obstacles, it is appropriate and even commendable, for the people acting through their local governments to improve their lives by investing in their own future."

~ John McCain, 2005

Wait. What? Brendan Sasso from The National Journal brought up some excellent points this week-- some things we’ve been pondering for a good long while.

Why would so many republican lawmakers who claim to value self-determination and self-rule deny citizens the right to take on Big Telecom? Why would Republicans who rally for smaller government and healthy competition turn around and argue that the State should step in and bar citizens from having their basic broadband needs met?

That quote from Sen. John McCain was spoken when McCain and a bipartisan group of senators (Republicans John McCain, Lindsey Graham, and Norm Coleman and Democrats Frank Lautenberg, John Kerry, and Russ Feingold) introduced a bill to block states from restricting local governments' ability to provide publicly run and funded Internet service. It can be explained pretty simply, According to Sasso: 

“President Obama has taken a position on the issue this time around. That’s why 11 Republican senators are “deeply troubled” that the FCC would "force taxpayer funded competition against private broadband providers."

Municipal Broadband got a shot in the arm this week from the Center for Public Integrity as well. Allan Holmes wrote extensively about how Big Telecom spends millions of dollars in litigation, advertising and lobbying “instead of investing in improving infrastructure in these communities.” 

“On a scale of 1 to 10 on who is the most powerful lobbying presence in Tennessee, AT&T is a 12,” said a long-time lobbyist in Nashville who asked not to be identified so he could speak candidly about lobbying in the state. “They are the big horse in the race, and they are unstoppable.”

AT&T and its president of Tennessee operations Joelle Phillips didn’t respond to CPI emails asking for comment, but Alex Wilhelm of TechCrunch definitely added his own thoughts. He outlines some of his concerns:  

“Increasing competition is good. Helping bring more American citizens onto the Internet at high speeds is good. And it is especially good to bring quick digital access to the world’s information to rural areas that are not currently served by private enterprise. As such, there is a place for municipal broadband in America.

More broadly, if citizens want to come together and build a service for themselves using monies that they elect to raise, they should be able to. I struggle to understand how that idea is controversial.”

The initial comments period for the Time Warner merger plan came to an end Friday. Before it closed, ILSR and 64 other reform groups made their voices heard. Value Walk staff reprinted our comments, the basis of the argument is this:

“The merger would give Comcast too much control over the future of the Internet and communications infrastructure and undermine the diversity of ownership and content in media.” 

We couldn’t have said it better ourselves…

Muni Fiber as Real Estate - Community Broadband Bits Episode 111

Hunter Newby is back for his second appearance on Community Broadband Bits to discuss his thoughts on carrier neutral approaches to spur our economy with more investment in better networks. We just talked with Hunter in episode 104 on carrier neutral approaches to middle mile networks.

Now we discuss these types of approaches within communities - how to spur more competition without the owner of the infrastructure actually offering services directly. This has been a challenge historically, but we continue to see signs that this approach can be viable in the future.

Hunter Newby is the CEO and founder of Allied Fiber.

Read the transcript for episode 111 here, courtesy of Jeff Hoel.

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 20 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

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

Thanks to Waylon Thornton for the music, licensed using Creative Commons. The song is "Bronco Romp."