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Content tagged with "incumbent"

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Connected Nation Captures Minnesota

Minnesota is now in poor company, along with several other states that have chosen to use telecom industry-backed Connected Nation (if unfamiliar with CN, read this report) to supply data from Minnesota to the federal government as part of the national broadband map that is being constructed. Just how this came about explains why a group like Connected Nation thrives in the current telecommunications arena. Mike O'Connor, the urban users' representative on the Minnesota Governor's Broadband Task Force, explains that the Minnesota Department of Commerce and Department of Employment and Economic Development (DEED) chose Connected Nation absent any public discussion or even consultation of the broadband task force. Mike is not one to mince words about the deal (which got him picked up by MinnPost):
I'm pretty cranky about this process.  Nice n'cozy.  Nice n'closed.  Nice bypass of the Task Force.  No public input at all as far as I can see.  Looks like there was lots of opportunity for providers to provide input about their confidentiality needs, not too much input about what consumers need.  Look forward to more sub-par optimistic maps, and impossible to use/verify data, peepul.
He references the ample opportunity for providers to express their preferences, this comes from the letter from the two commissioners to the governor:
The other primary reason that we are recommending Connected Nation is that in conversations with and letters from the broadband provider community (including the Minnesota Telecom Association, the Minnesota Cable COmmunications Association, Qwest and Comcast), they have noted their satisfaction with the work Connected Nation as done, the professionalism displayed. Most important, the providers have confidence in Connected Nation's ability to protect their sensitive, nonpublic infrastructure information.
The letter goes on to discuss the other possible mapping entity - the University of Minnesota:
First, the University indicates that it has entered into confidentiality agreements on other projects.

Statewide Video Franchising: Bad for Communities

Folks who are mostly interested in broadband are probably unfamiliar with video franchising laws. Many people still apparently believe that cable companies are able to get exclusive franchises from the city (granting them a monopoly on providing cable television). However, that is not true and has not been true for many years. Most cable companies still have a de facto monopoly because it is extremely difficult to overbuild an existing cable company - the incumbent has most of the advantages and building a citywide network is extremely expensive. This is not a naturally competitive market; it is actually a natural monopoly. However, most people want a choice in providers (something that goes beyond a single cable company and a satellite option or two depending on whether you rent/own and your geographic location. In talking with many local officials and the National Association of Telecommunications Officers and Advisers (NATOA), it seems that almost every local government wants more competition in its community too. This is where telephone and cable company lobbyists have stepped in - more successfully at the state level than at the federal level. They have convinced legislators that the barrier to more competition is local authority over the franchise (the rules a company agrees to in return for the right to use the community's Right-of-Way in deploying their network). These rules include red-line prohibition (you cannot refuse to serve poor neighborhoods), an affordable "basic" tier of service, local public access channels, broadband connections at public buildings, etc. Some states have listened to the lobbyists and enacted statewide franchising - where local communities are stripped of the authority to manage their Right-of-Way and companies can offer video services anywhere in the state by getting a state franchise from the state government. Every year, we gather more data that this practice has hurt communities, raised prices, and barely spurred any competition. Most of the competition it is credited with spurring came from Verizon's FiOS deployments, which would have occurred regardless of state-wide franchise enactment. This touches directly on broadband because the statewide franchises often give greater power to companies like Verizon to cherry-pick who gets next generation broadband.

WashPo: Headline Wrong, Story Mostly Correct

Cecilia Kang, telecom writer for the Washington Post, recently looked into why major carriers are not applying to the broadband stimulus program. The implication of the title - "Major Carriers Shun Broadband Stimulus: Funds would come with tighter rules" is because of the rules. I'm sure she didn't write the title or sub, that usually goes to the editor. But it would appear whoever wrote the title did not read the piece because she shows that the rules are a minor factor at best. Unfortunately, Kang also makes a significant error in not appearing to have read the stimulus legislation because she seems surprised that major carriers are not interested in the stimulus. The stimulus was emphatically not targeted at those carriers. As I detailed here previously, Congress intended the stimulus to boost public and nonprofit investments though private carriers could apply if they met a public interest requirement - an intention that NTIA ignored when making the rules. Reading the legislation, it was never aimed at the large carriers so their lack of interest is no surprise -- unless you are Robert Atkinson of the Information Technology and Innovation Foundation...
"If you want to get broadband out, you have to do it with [those] who brought you to the dance in the first place, and in this case it is the incumbent cable and telephone carriers who have 85 percent of lines in the country," said Robert Atkinson, president of the Information Technology and Innovation Foundation, a Washington tech policy think tank.
Mr. Atkinson appears to educate himself solely with the press releases and reports of incumbent-financed think tanks. He has systematically ignored the potential for publicly owned networks - as we have shown, these networks are some of the fastest and most affordable networks in the country. Instead, he opines about the need for incumbents to build more of their super slow DSL networks - as though that is what the country needs to remain competitive in the 21st century.

National Broadband Plan: Early Outlook is Glum

When it comes to the National Broadband Plan that the FCC is tasked with developing, we at muninetworks.org have a red line. No matter what the federal policy, all communities must reserve the right to invest in and own their own networks. These networks are essential infrastructure; no community must be left incapable of securing its future prosperity. FDR recognized this important community right:
I therefore lay down the following principle: That where a community--a city or county or a district--is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up, after a fair referendum to its voters has been had, its own governmentally owned and operated service. That right has been recognized in a good many of the States of the Union. Its general recognition by every State will hasten the day of better service and lower rates. It is perfectly clear to me, and to every thinking citizen, that no community which is sure that it is now being served well, and at reasonable rates by a private utility company, will seek to build or operate its own plant. But on the other hand the very fact that a community can, by vote of the electorate, create a yardstick of its own, will, in most cases, guarantee good service and low rates to its population. I might call the right of the people to own and operate their own utility something like this: a "birch rod" in the cupboard to be taken out and used only when the "child" gets beyond the point where a mere scolding does no good.
We believe a national broadband policy could go much farther to strengthen communities by spurring fast networks everywhere, but we also recognize a political reality: incumbents providers have little to gain from a national broadband plan (especially one that goes so far as to encourage actual competition) and while their networks fall behind the times, they are able to pump all kinds of money into DC (and state legislatures around the country). Therefore, we stand by our red line. We will hope for more, but early signs are not good. Karl Bode offers 5 signs the broadband plan is already in trouble.

FairPoint unfairly competing with UMaine?

FairPoint's lobbyists in Maine have gone on the offensive, arguing that another group attempting to get stimulus funds is competing unfairly. FairPoint, you may remember, has already accomplished the improbable: it took over the dilapidated networks in New England from Verizon and made them worse. The charge of unfair competition, even if it were true, would be silly because FairPoint has proven it cannot provide these important services. Karl Bode put Fairpoint in its place:
Even if the company was competing directly with UMS, at least Maine residents could be certain the University will even exist a year from now. But as it stands, Fairpoint isn't competing with the University of Maine. They're competing with a public private partnership of which the University is only a member. Applications for Federal funds are open to public entities and private companies. Given recent history, giving taxpayer dollars to somebody other than the regional dysfunctional incumbent might not be the worst idea in the world.
Bangor Daily News argues that rural Maine cannot afford to fight over who will expand broadband access. Unfortunately, Bangor Daily News' why-can't-we-all-just-get-along approach ignores the very real damage Fairpoint has already done to the state. Their suggestion that these competing networks just "be merged" seems like a call for open access but ignores the need for Fairpoint to maximize profits (right after it gets out of bankruptcy) rather than invest in communities. The larger point is ominous: the idea that large institutions should suffer with whatever crummy service Fairpoint provides (at the high prices they will provide it) in order that Fairpoint can expand its poor DSL service to rural areas, misses the important point that Fairpoint cannot and will not offer the services that Maine needs. As Mayor Joey Durel of Lafayette suggested, maybe Maine should just send its jobs down to Lafayette, where they are building the necessary infrastructure for the future.

Virginia County Looks to Wilson for Muni Network Inspiration

Folks in the Isle of Wight County in Virginia are looking to Wilson, NC, (which runs its own FTTH network called Greenlight) for inspiration as Charter will not expand broadband access locally. Interestingly, industry-backed Connected Nation would not consider these people to be unserved because they could buy wireless broadband cards that offer slow speeds at expensive prices and are still often capped at a monthly transfer of 5 Gigabytes ... which is to say not really a broadband option. Charter will not expand their cable networks because
Charter requires that an area have a density of at least 30 rooftops per square mile in order to offer service, which leaves large swaths of the county, especially southern and western areas, without access.
Sounds like a good opportunity to investigate a publicly owned network.

Stimulus Updates

Free Press Responds to 'Sloppy' Incumbent Broadband Arguments

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The American Recovery and Reinvestment Act of 2009 directed the Federal Communications Commission (FCC) to develop a national broadband strategy. FCC invited comments and then invited replies to those comments in summer 2009. The Free Press Reply Comments deserve to be singled out for revealing some of the lies of large telecommunications companies like Verizon, AT&T, Comcast, Qwest, and others. It also describes many of the ways that these companies harm the communities that are dependent on them for essential services. I've highlighted some passages below that show the ways in which these companies put profit above all else. These companies claim that regulation discourages investment and deregulation (allowing a higher degree of concentration or larger monopolies) encourages increased investment in better networks - an incredibly self-serving claim that Free Press shows to be false on pages 13-29.

Competition -- meaningful and real competition -- and not regulation is the primary driver behind investment decisions. Where meaningful competition exists, incumbents are compelled to innovate and invest in order to maintain marketshare and future growth. Where competition is lacking -- such as it is in our broadband duopoly -- incumbents will delay investment, knowing full well they can pad their profits on the backs of captured customers who have no viable alternatives. (Page 14)

Regulations like open access and non-discrimination encourage competition and should be strengthened. Free Press offers an in-depth explanation of how Verizon has dumped millions of customers on other companies that clearly could not handle the burden.

Verizon began the purging of less lucrative areas with the sale of Verizon Hawaii to the Carlyle Group in 2005, a company that had no previous experience in operating telecommunications services. By Dec. 2008, the company, now called Hawaii Telecom, had lost 21% of customers and filed for bankruptcy. (Page 26)

Verizon then sold most of their New England lines to Fairpoint, which is currently heading for bankruptcy. Fairpoint's customers are not the only ones suffering - the independent companies that resell services over that infrastructure are also suffering because Fairpoint is utterly unable to meet its obligations.

Roundup: Lafayette, Syracuse, Incumbent Bailout, and MAIN

Another roundup of semi-recent news:
  • Lafayette's groundbreaking network is exciting the folks at Governing.com - they say, "The Future of the Internet is in Lafayette, Louisiana." Ellen Perlman hints are future coverage of the network as well:
    To put it in perspective, that's 10 times faster than already very fast Internet. And more than 100 times faster than the Internet "starter" plan that, for example, Verizon is offering. Basically, Lafayette will have a city Intranet, the way universities and technology companies do. So residents will have a very fast connection within the city-parish "campus." Critics wonder why residents need such speeds and why the city had to build its own network. An August story in Governing will get into detail about that.
  • Green Party Candidate for the Syracuse City Council speaks out on the need for a publicly owned fiber network in the city:
    Hundreds of US cities have municipal ownership of their broadband utilities and their customers pay 30% less on average for cable TV, internet, and phone. Time Warner’s cable franchise is up for renewal. Now is the time to municipalize our broadband utility for (1) lower fees, (2) community control of available channels (from Democracy Now to the NFL Network), (3) quality Public Access, Education, and Government (PEG) programming, (4) universal access to high-speed internet, and (5) up-to-date public access video and web-based media creation centers. Every Syracuse should have first-class, affordable access to internet, cable, and phone communications. The Syracuse economy needs first-rate affordable broadband to progress. The profits now exported to Time-Warner can stay in the community for our own benefit through municipal cable.

    Advocates for such a fiber network in Syracuse have a website loaded with resources.

How NTIA Dismantled the Public Interest Provisions of the Broadband Stimulus Package

After winning the election, the Obama Administration announced that broadband networks would be a priority. True to its word, the stimulus package included $7.2 billion to expand networks throughout the United States. A key question was how that money would be spent: Would the public interest prevail, or would we continue having a handful of private companies maximizing profits at the expense of communities?

Creating the Broadband Stimulus Language

The debate began in Congress as the House and Senate drafted broadband plans as part of the American Recovery and Reinvestment Act The House language on eligibility for stimulus grants made little distinction between global, private entities and local public or non-profit entities.
the term `eligible entity' means--
(A) a provider of wireless voice service, advanced wireless broadband service, basic broadband service, or advanced broadband service, including a satellite carrier that provides any such service; (B) a State or unit of local government, or agency or instrumentality thereof, that is or intends to be a provider of any such service; and (C) any other entity, including construction companies, tower companies, backhaul companies, or other service providers, that the NTIA authorizes by rule to participate in the programs under this section, if such other entity is required to provide access to the supported infrastructure on a neutral, reasonable basis to maximize use;
The Senate language clearly preferred non-profit or public ownership.
To be eligible for a grant under the program an applicant shall—
(A) be a State or political subdivision thereof, a nonprofit foundation, corporation, institution or association, Indian tribe, Native Hawaiian organization, or other non-governmental entity in partnership with a State or political subdivision thereof, Indian tribe, or Native Hawaiian organization if the Assistant Secretary determines the partnership consistent with the purposes this section
The final language, adopted by the Conference Committee and passed by both houses in February was a compromise. It favored a public or non-profit corporation but allowed a private company to be eligible only if the Assistant Secretary of the Department of Commerce found that to be in the public interest.