christopher mitchell

Tagged Stories

Atlantic Cities: How the Telecom Lobby is Killing Muni Broadband

Publication Date: 
November 2, 2011
Author(s): 
Emily Badger
Publication Title: 
The Atlantic

An excellent article drawing wide lessons from the referendum battle in Longmont between the community and Comcast.

The city of Longmont, Colo., built its own 17-mile, million dollar fiber-optic loop in the mid-1990s. The infrastructure was paid for by the local city-owned electric utility, though it offered promise for bringing broadband to local businesses, government offices and residents, too.

For years, though, the network has been sitting largely unused. In 2005, Colorado passed a state law preventing local governments from essentially building and operating their own telecommunications infrastructure.

Behind the law was, not surprisingly, the telecom lobby, which has approached the threat of municipal broadband all across the country with deep suspicion and even deeper pockets. Companies like Comcast understandably want to protect their corner on the market from competition with city-run non-profits. What’s less understandable is the route their interests have taken: Residents and state legislators from Colorado to North Carolina have been voting away the rights of cities to build their own broadband, with their own money, for the benefit of their own communities.

Comcast v. Community in Colorado

Below, you'll find a commentary I just posted on the Huffington Post.

Longmont, Colorado has become ground zero for the battle over the future of access to the Internet. Because big cable and telephone companies have stopped us from having a real choice in Internet Service Providers and failed to invest in adequate networks, a number of communities have built their own networks.

Chattanooga boasts the nation's best citywide broadband network, offering the fastest speeds available in the nation -- and the community owns it. That means much more of the money spent by subscribers stays in town, supporting local jobs.

Longmont, a town near Boulder with 80,000 people, offers a glimpse at how difficult it can be for communities to make any level of broadband investment -- the big cable and phone companies hate any potential competition, no matter how limited.

Longmont's elected officials all agree they need better broadband options to spur economic development. That's why they put a referendum on the ballot that will allow the city to use its existing assets to improve local broadband access. Not only are the mayor and city council unanimous in support of the referendum (2A) necessary for this, their opponents in the city election overwhelmingly agree also! And the local paper just editorialized in favor of it as well.

Who then, is spending hundreds of thousands of dollars to derail it? Comcast and its allies, of course. And this isn't the first time.

Back in the 1990s, the municipality-owned electric utility built a fiber ring to modernize its electrical grid. They took the opportunity to lay more fiber-optic cables than they would need, knowing that they could later be used by the city or partners to expand broadband access for all businesses and resident.

Over several years, the City worked with a variety of partners to spur broadband deployment locally but a new state law in 2005 gutted their ability to work with private partners to expand broadband. Qwest had just pushed what become known as the "Qwest law" through the Colorado legislature. Starting in 2004, telephone and cable companies used their clout in legislatures across the nation to prevent communities from investing in broadband infrastructure. Now Longmont would have to pass a referendum to allow local businesses and resident to use a network the town built years earlier.

In 2009, Longmont attempted to pass the referendum but Comcast and allies dumped over $245,000 into a "Vote No" campaign that spread fear and misinformation far and wide, resulting in 56% of the voters saying no. They set a record in local campaign spending, dwarfing previous amounts from all sides in any Longmont election.

But after the election, when many learned they had been fooled by anti-competition propaganda, they wanted to revisit the issue. On November 1, they have their chance. But again, Comcast and allies are pouring millions into a campaign of misinformation. Their group has already been busted for erroneously claiming the mayor is against the initiative when he has been unequivocally in favor of it. With two weeks to go before election day, they have already surpassed their previous records by spending $275,000 while the pro-2A groups have yet to expend even $5,000. The true grassroots groups are making do with a website and volunteers countering Comcast's misinformation.

Longmont Comcast Comic

The question is whether big companies like Comcast can again fool more then 50% of the voters with their glossy mailers and robo-calls. This is the real problem -- the debates have shown that the opposition to this measure comes almost entirely from outside the community. But Comcast's ability to flood the papers, airwaves, phones, and mailboxes with market-tested anti-government messages is unrivaled. The big cable and phone companies use the same tactics across the U.S., protecting their high prices and poor services from the only real threat of competition they face -- local community investment.

The most recent mailer threatens that a broadband project would raise taxes, an outright lie given that the referendum text starts, "Without increasing taxes, shall the citizens of the City of Longmont..." But the anti-2A groups care about preserving Comcast's market power, not being truthful.

Longmont could join the growing movement of communities that invest in their own broadband networks to ensure fast, affordable, and reliable connections creating local jobs and offering local benefits.

While big citywide networks like Chattanooga's Gig Network have captured plenty of attention, hundreds of communities have made smaller investments -- like the ring Longmont build 14 years ago. Often without even borrowing money, local governments are expanding fiber-optic rings and connections to encourage economic development, create jobs, and lower the cost of providing city services.

This could be the future of access to the Internet -- local initiatives benefiting local stakeholders, putting the needs of the community before the desires of distant shareholders. Longmont makes its decision on November 1. When will your community make yours?

Christopher Mitchell on PK's In the Know Podcast

Public Knowledge recently had me as a guest on their "In the Know" weekly podcast. Our interview is the last half of the show. The videos we reference in the discussion are embedded below.

Video: 
See video
See video

Policy In-Depth: Debate over Muni Broadband Competing With Private Sector

On June 1, the Information Technology and Innovation Foundation held an oxford-style debate over the proposition: "Governments should neither subsidize nor operate broadband networks to compete with commercial ones."  

Jim Baller and I spoke against the proposition while Rob Atkinson and Jeff Eisenach defended it during the 2 hour, 15 minute session.  I was unable to be in DC and thus participated by the magic of modern telecommunications.  

This is a long but valuable and unique discussion.  We left talking points behind, actually responded to the points raised by the other side, and presented both sides of this debate in a reasonable manner.  In short, this is exactly the kind of discussion we would elected officials to consider before legislating on the matter.  But it very rarely happens -- nothing even remotely close to it occured in North Carolina when Time Warner Cable pushed its bill through the Legislature to enact a de facto ban on muni networks in the state.

You can watch it here.

 

Video: 
See video

Mitchell and Baller Defend Community Networks in ITIF Debate on June 1

Sign up for a live webcast (or if you are in DC, please attend) of Jim Baller and Christopher Mitchell engaging in an Oxford-style debate on the subject of community broadband with Rob D. Atkinson and Jeff Eisenach on June 1 at 9:00 EDT.

The statement to be debated is: "Governments Should Neither Subsidize nor Operate Broadband Networks to Compete with Commercial Ones."  Guess which side Jim and I will take?

Government Technology on TWC Bill in North Carolina

Government Technology has run an excellent article discussing the passage of Time Warner Cable's bill in North Carolina. We couldn't pass up reposting some of the quotes used in "Municipal Broadband Networks Slammed in North Carolina."

“Essentially this bill is a cable monopoly protection bill,” said Doug Paris, assistant city manager of Salisbury, N.C., another city with its own broadband service. “It protects Time Warner Cable and ensures they will continue to do what they’ve been doing for decades, which is serving where they want to serve and not serving where they don’t want to serve.”

And though it may be tacky to quote myself, I do quite like the quote…

Christopher Mitchell, director of the Telecommunications as Commons Initiative for the Institute for Local Self-Reliance, a nonprofit economic and community development consulting group, agreed and said that there is “almost no chance” another community in North Carolina will be able to build a new broadband network under the law.

“The Legislature, in passing laws like this, shows just how out of touch they are,” Mitchell said.


 
“It’s very clear to me that North Carolina’s legislators don’t understand the difference between a slow DSL connection and a modern, reliable fiber-optic connection. They don’t understand that what Time Warner [Cable] and CenturyLink are selling isn’t helping communities be competitive in the modern era.”

I hope communities and activists around the country have taken note of the power incumbents wield and are starting to talk to elected officials to educate them and build the relationships necessary to counteract all the money in politics.

Time to Act: North Carolina Senate Finance Committee Votes on H129 on Wed

North Carolina's Senate Finance Committee is poised to take away the right of communities to decide for themselves if building their own broadband network is a good idea or not. If it passes out of this committee, it goes right to the Senate Floor and will likely become law.

We have covered Time Warner Cable's bill to kill community networks in greater depth than any other story -- and now folks in North Carolina have to immediately contact their Senators to oppose this power grab from big companies like TWC and CenturyLink. You can also use this form from Free Press if you are unsure who your Senator is.

In recent weeks, we've posted excellent speeches from legislators opposed to the bill, testimony from concerned citizens, and a variety of resolutions from local governments who are fearful of this bill's impact on public safety networks needed to keep residents and businesses safe.

If you are shy, you can call before or after business hours and leave a message on their voicemail. It takes less than five minutes. Your calls make a huge difference because so few constituents ever call state legislators. Simply let them know you oppose H129 and that the state should concern itself with expanding broadband access, not restricting who can offer it.

And as I have said numerous times, those outside North Carolina should also be contacting their elected leaders -- because everyone lives in a state where powerful lobbyists are trying to preserve and expand the power of a few massive companies like Time Warner Cable and AT&T. Progressive States Network recent covered this topic.

Two weeks ago, I wrote the following op-ed for The Wilson Times, which is behind a pay-wall.

logo-wilsontimes.png

Time Warner Cable has convinced North Carolina’s House of Representatives to greatly restrict the authority of local communities to build their own broadband networks. Its legislation, H 129, is now being debated in the Senate and will enact a host of special regulations for publicly owned networks that do not apply to networks run by the cable and phone companies.

The “Level Playing Field / Local Gov’t Competition” bill could more appropriately be called the “Monopoly Protection Act.” It creates special provisions to disadvantage public networks – like Wilson’s Greenlight and Salisbury’s Fibrant – that offer superior services compared to Time Warner Cable and CenturyLink.

TWC has convinced many Legislators that a massive $18 billion/year company operating one of the largest telecommunications networks on the planet, is powerless to compete against networks built by a few small towns.

Bill sponsor Representative Avila has simply had enough of “predatory” (her word) local governments shaking down AT&T and TWC. The champion of a similar bill last year, Senator Hoyle, candidly admitted it was written by TWC and there is no reason to suspect anything has changed.

The state of North Carolina’s broadband? Terrible. The FCC has just released a report showing the Tar Heel state has the absolute lowest percentage of households with access to the Internet at minimum speeds identified by the National Broadband Plan as necessary to take advantage of modern technologies.

When Broadband.com launched its new map showing the prices paid by small businesses for broadband, seven of the ten most expensive cities were located in North Carolina. Anchorage barely beat out Greensboro for the highest average price per Mbps. This is why major private sector companies like Google and Intel have gone on the record opposing TWC’s bill.

With most of the businesses and citizens in North Carolina being left out of the digital economy, what is the Legislature’s response? The first priority is a bill long pushed by anti-competitive companies to limit who can build the broadband networks necessary to keep pace with the world, or at least neighboring states.

Fast, reliable, and affordable access to the Internet is essential for communities to thrive in the modern age. This realization led Wilson and Salisbury to build their own globally competitive networks, which offer the best available connections in the state.

Companies like Time Warner Cable and CenturyLink have neither the capacity nor willingness to make similar investments. They require a fast shareholder return on their investments. But next-generation networks take many years to break even – it is simply more profitable to continue offering last-generation DSL and cable services to residents and businesses who have no other choice. In short, these companies are more accountable to Wall Street than Main Street.

They lobby the Legislature rather than invest in next-generation networks, while making absurd claims that no community has succeeded in building its own broadband network. They know legislators will not bother to call Bristol Virginia Utilities to learn the story behind their profitable, job-creating, network – just one of many. BVU’s infrastructure investment attracted hundreds of private sector jobs offering salaries at twice the median wage. Being publicly owned, the network profits are reinvested locally, offering more bang for the buck.

When pressed on specific examples of community network failures, TWC and its allies may cherry pick a few that have legitimately struggled, out of over 130 citywide publicly owned networks. They may cite operating losses from networks only a few years old, conveniently omitting the fact that all networks have operating losses in early years. The business model for building a citywide next-generation network calls for massive up-front expenditures long before revenues begin rolling in – they are not expected to break even for 3-5 years at the earliest.

The track record of community broadband networks is overwhelmingly positive, which is why these few massive companies work so hard to preempt them in state legislatures.

This bill carves out unique barriers for publicly owned networks, such as restricting where they may offer services, a dramatic reversal of the Legislature’s approach to privately owned networks: reducing regulations on where they offer services. TWC and other private companies can offer loss leaders to bleed community networks of revenue but community networks are subject to strict price regulation from the state. Nonprofit networks will be compelled to pay taxes “that would apply” to a private provider, ignoring that TWC routinely avoids paying its fair share of taxes.

Supporters of this bill claim it only creates a few modest hurdles rather than being an effective ban. Of course, when these same voices successfully deregulated the cable companies a few short years ago, they promised it would usher in more competition and lower prices. Instead, North Carolina has fallen farther behind while businesses and residents have suffered with numerous rate hikes.

Legislators should do what is best for the vast majority of businesses and citizens of North Carolina, preserving the ability of communities to decide for themselves whether to build the networks necessary for future economic development, education, health care, and a high quality of life.

Listen to Progressive States Network Phone Call about Community Broadband

I just noticed that Progressive States Network has published the audio from a phone call we did on March 31 about community broadband networks. I was one of the four guest speakers -- we each spoke for 5-10 minutes and then answered questions from the audience. Progressive States Network has long advocated in the states to recognize and preserve local authority to decide whether to build a community broadband network.

Other guests included:

  • Washington State Representative John McCoy
  • Ben Lennett, Senior Policy Analyst, New America Foundation
  • Craig Settles, Founder and President, Successful.com

Breaking Through Time Warner Cable's Misinformation in North Carolina

I wrote an op-ed for the Durham Herald Sun about the efforts in North Carolina to limit local authority to build community networks. We will continue heavy coverage on North Carolina and other states in danger of passing anti-competitive, pro-monopoly legislation proposed by powerful, massive carriers. Here is the op-ed:

After more than four years of lobbying, Time Warner Cable may finally succeed in restricting the authority of local communities to build their own broadband networks.

Its legislation, H 129/S 87, will enact a host of special requirements for publicly owned networks that do not apply to networks run by the cable and phone companies.

The "Level Playing Field / Local Gov't Competition" bill could more appropriately be called the "Monopoly Protection Act." Rather than actually leveling the playing field, this bill solely disadvantages publicly owned networks.

Time Warner Cable has convinced the House that a massive $18 billion-per-year company operating one of the largest telecommunications networks on the planet, is powerless to compete against a community-owned network like Greenlight in Wilson or Fibrant in Salisbury.

Bill sponsor Rep. Marilyn Avila has simply had enough of "predatory" (her word) local governments shaking down AT&T and TWC. The champion of a similar bill last year, Sen. David Hoyle, candidly admitted it was written by TWC. There is no reason to suspect anything changed this year.

But perhaps the more fantastical element of this story is that the Legislature's biggest broadband priority is to limit, not expand, broadband investments in the state ranked 41st in broadband. Just how bad is North Carolina's broadband? When Broadband.com launched its new map showing the prices paid by small businesses for broadband, seven of the 10 most expensive cities were located in North Carolina. Anchorage barely beat out Greensboro for the highest average price per Mbps. This is why major private sector companies like Google and Intel have gone on the record opposing TWC's bill.

Fast, reliable, and affordable access to the Internet is essential for communities to thrive in the modern age. This realization led Wilson and Salisbury to build their own globally competitive networks, which offer the best available connections in the state.

Companies like Time Warner Cable and CenturyLink have neither the capacity nor willingness to make similar investments. They require a fast shareholder return on their investments. But next-generation networks take many years to break even.

It is more profitable to continue offering last-generation DSL and cable services to residents and businesses with no better options. In short, these companies are more accountable to Wall Street than Main Street.

They have found it more expedient to lobby the Legislature than invest in next-generation networks, while making absurd claims that no community has succeeded in building its own broadband network.

BVU Logo

They know legislators will not bother to call Bristol Virginia Utilities to learn the story behind their profitable, job-creating, network -- just one of many. BVU's infrastructure investment attracted hundreds of private sector jobs offering salaries at twice the median wage. Being publicly owned, the network profits are reinvested locally, offering more bang for the buck.

When pressed on specific examples of community network failures, TWC and its allies may cherry pick a few that have legitimately struggled, out of over 130 citywide publicly owned networks. Or they cite networks that are a few years old and have operating losses -- as they have done with Wilson. But any major telecommunications network, public or private, suffers losses in the early years. Networks require massive upfront investments long before they can start collecting revenue. And the process of connecting subscribers takes time -- especially when they do not rudely rush through the process.

Business plans forecast and expect these losses.

The track record of community broadband networks is overwhelmingly positive, which is why companies like TWC and CenturyLink work so hard to preempt them in state legislatures.

This bill carves out unique barriers for publicly owned networks, such as restricting where they may offer services, a dramatic reversal of the legislature's approach to privately owned networks: reducing regulations on where they offer services.

TWC and other private companies can offer loss leaders to bleed community networks of revenue but community networks are subject to strict price regulation from the state. Nonprofit networks will be compelled to pay taxes "that would apply" to a private provider, ignoring that TWC routinely avoids paying its taxes.

By implementing this de facto ban, North Carolina would be the 19th state to create hurdles specifically for community broadband. Of the other 18 states with barriers, most are less restrictive, preserving some local right of self-determination. This bill makes building a community network all but impossible.

Legislators should do what is best for the vast majority of businesses and citizens of North Carolina, preserving the ability of communities to decide for themselves whether to build the networks necessary for future economic development, education, health care, and a high quality of life.

Read more: The Herald-Sun - Corporations are trying to monopolize broadband