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FCC Chairman Wheeler on Removing Anti-Competitive Bans on Muni Networks

If the people, acting through their elected local governments, want to pursue competitive community broadband, they shouldn’t be stopped by state laws promoted by cable and telephone companies that don’t want that competition.

I believe that it is in the best interests of consumers and competition that the FCC exercises its power to preempt state laws that ban or restrict competition from community broadband. Given the opportunity, we will do so.

Checks and Balances

The Supreme Court unanimously rejected efficiency as an excuse for industrial dictatorship when it ordered the breakup of Standard Oil despite the fact that the company had lowered the cost of a gallon of kerosene by more than half. The Supreme Court unanimously rejected the efficiency argument again in 1935 when it ruled President Roosevelt's National Industrial Recovery Act unconstitutional. In every case, the American people embraced not efficiency but freedom and moved to protect that freedom through the erection of intricate systems of checks and balances designed to scatter power.

Community Networks: Checks and Balances

As both AT&T and Comcast seek to increase their market power by buying rivals instead of competing, Barry Lynn reminds us of our history of fighting such consolidated power. From Cornered: The New Monopoly Capitalism and the Economics of Destruction.

In the modern era in the United States, efficiency was a favorite defense by industrial autocrats like John D. Rockefeller and financial autocrats like J.P. Morgan of their used of corporate power to arbitrarily determine particularly political economic outcomes. The progressive elite, meanwhile, later turned efficiency into a veritable religion.

That's why the American people learned long ago to reject efficiency as either a goal or a means to public or private governance, and why we consistently rejected it for the first two hundred years of our nation. We understood that efficiency was a code word for top-down autocratic rule by the lords and the private corporate estates or the "public" state. Hence we rejected efficiency in the Declaration of Independence and again in the Constitution. We rejected efficiency when we wrote the Sherman Antitrust Act, then reiterated our rejection time and again in our other antimonopoly laws.

The Supreme Court unanimously rejected efficiency as an excuse for industrial dictatorship when it ordered the breakup of Standard Oil despite the fact that the company had lowered the cost of a gallon of kerosene by more than half. The Supreme Court unanimously rejected the efficiency argument again in 1935 when it ruled President Roosevelt's National Industrial Recovery Act unconstitutional. In every case, the American people embraced not efficiency but freedom and moved to protect that freedom through the erection of intricate systems of checks and balances designed to scatter power.

FCC's Wheeler Forging Ahead As Support Grows to Restore Local Decision-Making

In a June 10 Official FCC Blog post, Chairman Tom Wheeler's words show continued resolve to restore local decision-making to communities that want to evaluate their own investments and partnerships. This is the latest in a series of public statements indicating the agency is ready to assert authority and remove barriers to community networks.

Wheeler writes:

If the people, acting through their elected local governments, want to pursue competitive community broadband, they shouldn’t be stopped by state laws promoted by cable and telephone companies that don’t want that competition.

I believe that it is in the best interests of consumers and competition that the FCC exercises its power to preempt state laws that ban or restrict competition from community broadband. Given the opportunity, we will do so.

In April, Wheeler raised a few lobbyist eyebrows in a speech on the role of municipal networks at the Cable Show Industry conference in Los Angeles. In this latest post, he notes that Chattanooga's network transformed it from "a city famous for its choo-choos," into the "Gig City." The network spurs economic development, improves access, and inspires innovation, notes our FCC Chairman.

The National Journal also takes note of the FCC blog post. Its article points out that Wheeler criticizes Tennessee's state law restricting Chattanooga's ability to expand. Even though nearby communities want service from EPB, the City is forbidden from serving them. Not acceptable, says Wheeler.

While the National Journal suggests Tennessee may be the first state to face FCC authority to eliminate state barriers, policy experts have no expectations yet. From the article:

Harold Feld, the senior vice president of consumer advocacy group Public Knowledge, said Wheeler will probably not launch a broad initiative to attack state laws around the country. Instead, the FCC chief will probably wait for groups or individuals to file complaints about specific state laws, Feld predicted.

Chairman Wheeler's sentiments comport with the growing movement to support local authority for infrastructure investment. In addition to communities expressing their desire to decide for themselves, the Coalition for Local Internet Choice (CLIC) has just announced its formation. The group brings together policy leaders, including ILSR's Chris Mitchell, to defend the proposition that decisions over whether to invest in a community network should be made at the local level.

We encourage you to join CLIC through the CLIC website. You can also follow localnetchoice on Twitter. In addition to getting the latest updates on CLIC's activities and research, you can share your support for local Internet self-reliance.

To learn more about the many benefits EPB Fiber bring to Chattanooga, read our case study. The report provides a detailed account of how the community deployed the network and offers some hard data on the many ways it saves public dollars, drives economic development, and improves access. Also take a few minutes to listen to episode #59, our discussion with EPB Fiber's Danna Bailey.

Wheeler's closing is unambiguous:

Removing restrictions on community broadband can expand high-speed Internet access in underserved areas, spurring economic growth and improvements in government services, while enhancing competition. Giving the citizens of Chattanooga and leaders like Mayor Berke the power to make these decisions for themselves is not only the right thing to do; it’s the smart thing to do.

You Are Cordially Invited: June 17th Discussion on Cable Companies, Monopolies, and Community Networks

On Tuesday June 17th, Chris will be participating in a conversation hosted by the Media Consortium as part of its Media Policy Reporting and Education Program (MPREP). You are invited to sit in on what is sure to be a spirited discussion on community networks and the lack of competition in the cable industry.

What: Community Fiber Networks: A Realistic Solution to Cable Monopoly?

When: Tuesday, June 17, 3pm ET/ 12 PT

Who: Joining Chris will be:

Ryan Radia, Associate Director for Technology Studies at the Competitive Enterprise Institute. He is critical of government-run or regulated projects in general, and specifically critical of community networks. 

Wayne Pyle, City Manager and CEO of West Valley City, Utah's second largest municipality, and also  chair of the board of UTOPIA, the Utah Telecommunications Open Infrastructure Agency, a community network serving 11 cities.

This is the first of several monthly briefings hosted by MPREP to discuss media policy issues. Everyone is welcome to participate. Register online for this discussion.

Governing Looks at What the Comcast - Time Warner Cable Merger Could Do to Munis

The debate surrounding the proposed Comcast Time Warner Cable merger continues. The Department of Justice and the FCC ruminate over the deal while the media speculates about the future.

Governing recently published an article on potential side effects for the municipal network movement. Tod Newcombe reached out to Chris for expert opinion.

From Governing:

Partially thanks to Comcast and other cable giant's lobbying, 19 states have already passed laws that ban or restrict local communities from setting up publicly owned alternatives to the dominant provider in the area. Municipalities that pursue publicly owned broadband often cite several reasons for their efforts, ranging from lack of competition and choices in the area to a desire for faster speeds at lower costs. But Mitchell fears the lobbying power of a combined Comcast-Time Warner would choke off what little leverage remains for local governments when it comes to gaining state approval to build publicly owned broadband networks.

Unfortunately, the cable company cyclops borne out of this deal would create a ginormous lobbying monster. Comcast and Time Warner Cable wield significant political influence separately; a marriage of the two would likely damage the municipal network movement. The Center for Responsive Politics reports Comcast spent over $18 million in 2013; Time Warner Cable spent over $8 million.

Chris told Governing:

"Judging by the amount of opposition to the merger, I think people are seeing that we're at a tipping point and that there are ways they can make investments at the local level and control their own destiny," said Mitchell. "A lot of people and local businesses understand that the Internet is really important and that we can't trust it to a few corporations. But I don't see that level of understanding from most elected officials yet."

Network Neutrality Update

The FCC is hearing the massive public outcry over its plan that would allow the big cable and telephone companies to create fast and slow lanes on the wires most of us depend on to access the Internet. Chairman Wheeler has made some bold claims that he would not allow commercially unreasonable deals but many doubt the FCC has the authority to enforce his tough talk.

Now we see that FCC Commissioner Rosenworcel wants to slow down the rulemaking for "at least a month" given the outcry.

Resistance to the plan does seem to be building with the emergence of over 100 Internet-dependent companies decrying the possibility of fast and slow lanes. Full letter here [pdf].

Mozilla has developed an alternative approach to reclassification that some are saying just might work, but as a naturally conservative person, I will want to see it vetted by trusted experts like Harold Feld. The main problem with reclassification seems to be that Republicans would demagogue it as Obama attempting to take over the Internet - a problem for Democrats already facing an uphill battle in November.

However, Barbara van Schewick - one of the most knowledgeable people on this matter - makes a strong case for the FCC rebooting the whole process, gathering more input, and ultimately reclassifying Internet access as Title II while forebearing many of the Title II powers that would allow the FCC to wield too much control over access to the Internet.

Much like the FCC has long overseen telephone access without censoring the content of our speech, it would be possible for the FCC to reclassify Internet access without getting involved in content.

However, the larger problem remains - the market power of the massive firms like Comcast and AT&T. As long as they continue to wield the power they do (which will grow if consolidation continues), they will buy support in Congress and use the FCC's revolving door to their advantage; no amount of regulation will ultimately contain them.

To preserve the open Internet over the long haul, we have to reduce the overwhelming power of those companies. We can do that with an "all hands on deck" approach to expanding Internet access - ensuring local governments are free to build their own networks as they choose or partner with trusted entities. On this matter, Chairman Wheeler has said he will use FCC power to remove state barriers to communities make those decisions, a tremendous step forward for preserving the open Internet.

This is a very important moment. We need the FCC to preserve the open Internet by continuing to prevent paid prioritization schemes and we need to create alternative networks to end the cable monopoly and reduce their power in DC and state houses.

Below is an excellent video on this subject that explains the problem and what can be done. As we noted in our podcast with Scott Bradner, the way this video presents the key question of who should pay who represents a break with the past traditions, but it may be time to reconsider who should pay when faced with a cable monopoly for Internet access.

Video: 
See video

Bill Moyers on Network Neutrality and Threat from Comcast

Bill Moyers has returned to again discuss Network Neutrality with guests Susan Crawford and David Carr from the New York Times. The show is embedded below and well worth watching, especially toward the end as Bill reveals the revolving-door between the top levels of the Federal Communication Commission and industry lobbyists.

During the show, they also discuss the importance of ensuring communities are able to build their own networks as an alternative to the massive cable monopolies.

Finally, a post from John Nicols on BillMoyers.com outlines what action you can take to ensure the FCC protects the open Internet. Scroll about halfway down for the specific steps.

Video: 

Wheeler Tells Cable Industry He Intends to Remove Anti-Competitive State Laws

FCC Chairman Tom Wheeler is prepared to roll back restrictions that prevent local governments from deciding if a municipal network would be a wise investment. At the Cable Show Industry conference in Los Angeles, Wheeler told cable industry leaders the FCC will wield its powers to reduce state barriers on municipal networks.

Wheeler spoke before the National Cable & Telecommunications Association (NCTA) on April 30. These words perked up our ears and those of community networks advocates across the U.S. From a transcript of Wheeler's speech

"One place where it may be possible is municipally owned or authorized broadband systems. I understand that the experience with community broadband is mixed, that there have been both successes and failures. But if municipal governments—the same ones that granted cable franchises—want to pursue it, they shouldn’t be inhibited by state laws. I have said before, that I believe the FCC has the power – and I intend to exercise that power – to preempt state laws that ban competition from community broadband."

As our readers remember, a January DC Circuit Court of Appeals decision opened the path for the FCC to take the action Wheeler proposes. Since then, communities have expressed their desire for local authority with resolutions and letters of support. Communities in Michigan and Louisiana, Georgia and Idaho, Illinois, Maryland and Kansas, have shared their resolutions with us. A number of other communities have issued letters of support encouraging action under section 706.

Ars Technica contacted the FCC for more information on Chairman Wheeler's statements. Ars reported:

An FCC spokesperson contacted by Ars said that Wheeler "is not trying to make a distinction between 'ban' or 'limit.' The point is to look at the effect of the law."

The spokesperson said, "We will be taking up this issue in the technology transitions proceedings, and there should be an announcement about this in the next few weeks." It's too early to say "how [Wheeler] will address existing state laws."

As the big companies like Comcast consolidate, enforce bandwidth caps and continuously raise prices, municipal networks are more important than ever. Community owned networks are accountable to the people who use them and put the public good ahead of profit. Community networks are managed in your neighborhood, not in a corner office thousands of miles away.

The content of Wheeler's statement and his choice of venue inspires advocates for publicly owned networks. In order to keep a strong momentum rolling, we encourage you to express your support. The cable and telecommunications lobbyists are already working to prevent the FCC from taking action. When the FCC begins to act, we will want to demonstrate support.

Join our one-email-per-week newsletter to stay in the loop on these developments! If you are excited to demonstrate local support via a resolution or similar effort, let us know.

CenturyLink Seeks Apartment Buildings for Gigabit in Portland

In the wake of Google's announcement that Portland could be one of the next communities for the Google Fiber network, CenturyLink is circulating an offer to select apartment buildings to apply for CenturyLink fiber.

This appears to be more than the standard fiber-to-the-press-release responses we often see from the big telephone companies that prefer to lobby, litigate, and lie rather than invest in next-generation networks. CenturyLink notes it has the "ability to do approximately 15 total" apartment buildings.

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The promotional sheet claims CenturyLink will offer speeds "up to" 1 Gig for $79.95/month for 12 months. 100 Mbps runs $49.95 and 40 Mbps is $29.95 - each for 12 months. No mention of upload speeds but CenturyLink has demonstrated a real aversion to symmetry so users can expect far slower upstream than what modern municipal networks and Google fiber deliver.

The standard operating procedure in apartment buildings will be for CenturyLink to try to lock up the internal wiring to buildings and deny it to competitors. FCC rules make exclusive agreements with landlords unenforceable, but there are a host of tricks that incumbents use to prevent any competition and landlords getting a kickback often have little reason to encourage competition.

The CenturyLink copy notes that its fiber optic GPON option is "up to" more than 92 percent energy efficient than cable modem Internet access. I have to wonder how it compares to DSL energy efficiency and whether that number holds up better than the "up to" 12 Mbps claims they make on DSL circuits that seldom peak at 5 Mbps.

At any rate, it is more than we can expect in the many communities CenturyLink is serving where there the local government have done nothing to spur competition by investing in publicly owned assets that could form a municipal network or be used to entice independent service providers to enter the market. In particular, I would be curious where else CenturyLink is rolling out fiber to buildings without any upfront charges.

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