community broadband networks

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.

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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.

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:

CBS Atlanta 46

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.

Community leaders from several Georgia cities made the trek to Atlanta to oppose HB 282 on Thursday, February 28th. Opposition to this bill to limit investment in Internet networks includes community leaders, high tech companies, and citizens all over the state. Nevertheless, legislators on the House Energy, Utilities, and Telecom Committee chose to ignore the needs of communities, prefering to tell them from afar how to run their towns. Winners? Incumbents Windstream, AT&T, CenturyLink, and Comcast.

A substitute bill [PDF] was introduced that exempts communities with municipal electric utilities from the prohibtion to provide telecommunications. Additionally, the bill's definition of "broadband service" is now defined as service equal to or greater than 3.0 Mbps. "in the faster direction." While these look like compromises at first blush, they do very little to change the real world application of the bill.

Our earlier analysis of the bill addressed the fact that the expense and time required  to prove locations of unserved areas as defined by the bill, would foreclose the possibility of communities making investments in this essential infrastructure. Likewise, communities that already have networks would be similarly burdened.

While the muni electric exemption is clearly aimed at cities that might oppose the bill, community leaders from some of those target cities strongly spoke out against the revised HB 282. Elberton, Thomasville, and LaGrange, are a few of the communities who sent representatives and all know the power of their community owned networks. Concerned citizens who see the negative impact of this bill also showed up to speak their minds.

Mayors from Elberton and Thomasville testified along with the Elberton and LaGrange City Managers. The Georgia Municipal Association, spearheading the effort against the bill, covered the meeting for their blog.

City leaders expressed dismay over the bill and described how it would affect their own communities and rural Georgia. Here are some highlights:

"Let’s talk about economic development,” said Elberton Mayor Larry Guest. “Georgia should be promoting a pro-business, inclusive approach to broadband deployment, especially in rural areas of the state,” he said. “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."

When the bills author pressed the fact that the original bill had been amended to exempt cities that provide electric service, Mayor Guest responded:

"Other Georgia cities deserve the right to do what Elberton did, and their residents deserve the services Cumming has,” said Guest. “We are not second class citizens because we decided to live in rural Georgia.”

(The bill's chief author, Republican Rep. Mark Hamilton, represents a district that encompasses Cumming.)

Economic development was a big concern for community leaders:

“The concern that I have is the underserved areas around us,” said Thomasville Mayor Max Beverly. He noted that the bill prohibits cities from investing in, or expanding current broadband services, if any commercial carrier offers 3.0 Mbps where the city wants to offer that service.

“Three megabits is not adequate to do functions in a modern telecommunications world,” Beverly said. Beverly explained that Thomasville is preparing for its customers to use 20 megabits of bandwidth per second. “We are expecting the demand on bandwidth to double in the next five years and this bill does not address that,” he said. “There is going to be bandwidth inflation. Please consider the rest of rural Georgia.”

Residents also showed up to testify, driving home that fact that this issue is not only about business customers. A citizen from Dawsonville also spoke at the meeting:

"I am fighting to get the service I am paying for,” he said, adding that the company took federal stimulus money—$181.3 million according to the company’s 10K filed with the FCC—to invest in their infrastructure but he has not benefitted from any so-called investment.

“I want competition,” he said. “If my city wants to give [the private sector] some competition, I am worried that this bill would prevent my city from doing that.”

Tom Hall, City Manager from LaGrange, summed up the potential power of HB 282:

LaGrange City Manager Tom Hall said the bill has the effect of picking winners and losers, “not only communities but whether businesses will have choices. You are throwing up barriers to communities to not be able to make choices in the best interest of their community and that is not necessarily wise public policy.”

A word about the process: The House Energy, Utilities & Telecommunications subcommittee met on Wednesday to discuss the bill and to listen to this testimony but did not take any action. The next day, Thursday, the subcommittee met again without testifiers and passed the bill. Later that same day, the full committee also met and passed the bill, again without the benefit of testifiers. The bill is now in the House Rules Committee, which will determine whether or not it will be voted on by the House. If the entire House votes on the bill on or before the 30th day of session (a day which has not yet been designated), and it passes, it will be sent to the Senate for consideration.

We continue to monitor this bill and to urge you to contact the Rules Committee (Committe Roster here). Tell them this bill is a bad idea and should not move to the House Floor. Policies like this, designed to take away rights from local communities to provide for their local residents, businesses, and government, are bad for Georgians and bad for the rest of us.

Last year, we reported on the failed SB 135, which would have eliminated the "carrier of last resort" requirement in the state. The bill, sponsored by Republican Senator Paul Hornback would have let AT&T decide who could receive basic telephone service and would have limited consumer protections.

Last year's bill did not become law, but a progeny, SB 88, has already passed in the Kentucky Senate and was received in the House on February 15th. (We'd like to report what committee will hear it first but the Kentucky Legislative web has not yet published that information.) Senator Hornback is again the chief author of the bill, crafted by AT&T and its ALEC pals.

The Kentucky Resources Council (KRC) provides an analysis of SB 88 and a prognosis on how it would affect Kentuckians. KRC must be feeling deja vu, as are many organizations looking out for rural dwellers who depend on their landlines. These bills continue to be introduced year after year as large telecommunications companies spend millions of lobbying dollars, also year after year.

WMMT, Mountain Community Radio in Whitesburg, Kentucky, recently reported on the legislation. Sylvia Ryerson spoke with Tom Fitzgerald from KRC, who discussed the analysis. From KRC's report on the legislation:

At potential risk is the opportunity for existing and new customers, to obtain stand-along basic telephone services from the incumbent telephone utility, or “Plain Old Telephone Service (POTS)” as it is called. Those most adversely affected by this loss of access to basic, stand-alone, telephone service are those least able to obtain affordable and reliable alternatives – those who live in rural, lower density areas, and the poor in dense, urbanized areas who have no affordable alternative priced as low as POTS.

The main concerns with the bill include:

Removal of power from the Public Service Commission to hear and resolve complaints about local exchange service. This would affect voice service, operator assistance, directory assistance, and accurate 911 assistance. Restoring lost service is often a waiting game for rural customers served by AT&T. With no where to go, customers can lose their connection to family and the outside world for even longer periods. As with many other provisions of this bill, the elderly are the biggest casualty. Healthcare matters are  often handled over the phone, including my dad's pacemaker monitoring.

In areas where there are more than 5,000 households, offering basic stand-alone service would be at the provider's discretion. Service could be terminated without prior regulatory approval if there are any other voice services offered to the customer, even if that service was from an affiliate. This lack of competition would likely lead to cost increases for people who cannot afford them. Another scenario would be the company's requirement for customers to bundle services, forcing those least able to afford it to purchase services they do not need or want just to get telephone service.

In communities where there are fewer than 5,000 households, the current providers (AT&T, Windstream, or Cincinnati Bell) could cease to offer stand alone landline service of there was available voice wireless service, even if that service was less effective for 911 purposes. Again, the "forced bundle" would be an issue.

They could also petition to be relieved of the obligation to provide basic telephone service if they meet certain criteria regarding the availability of voice services from other providers in the area. For example, if there is a broadband provider "capable" of providing voice services (contrasted with one that actually "does provide" voice services) the provider could be relieved of the obligation. Again, that "capable" provider does not have to offer the service as a stand alone, but may require bundling.

Providers can use any technology they wish if they decide to continue the "provider of last resort" obligation, which will make that obligation completely deregulated. This tactic is the backbone of the private sector's efforts to deregulate. For more on this strategy, we encourage you to listen to our conversation with Harold Feld on the 23rd episode of the Broadband Bits Podcast.

For more detail on the bill, and all its shortcomings, take a few moments to review the detailed analysis by KRC. The full text of the bill, its amendments, and the status, are available on the Kentucky General Assembly website.

So what could be gained for Kentuckians by passage of such a bill?

From a Courier-Journal report by Joseph Gerth:

Proponents of Senate Bill 88 say the bill would allow companies like AT&T, Cincinnati Bell and Windstream to sink more money into expanding wireless broadband communications rather than costly old, outmoded land lines.

History shows us, however, that promises made by regulated companies today often end up as foggy memories tomorrow. We have seen time and time again how dergulation given in exchange for promises results in a breach of the social contract. This is known as Kushnick's Law:

"A regulated company will always renege on promises to provide public benefits tomorrow in exchange for regulatory and financial benefits today."

Rather than wait to be taken advantage of again, we encourge you to call the toll-free legislative message line 1-800-372-7181 and leave a message that will be delivered to all legislators. This is especially critical if you live in Kentucky, but legislation like this will march across all states if it passes here or elsewhere.