Georgia's broadband map shows just a smattering of 50Mbps broadband. That is half the speed required to attract new businesses, says the IEDC.

Suffering the Great Recession blues?  As communities continue to face the loss of manufacturing, heavy industry, and textile jobs to overseas outsourcing, local economic development specialists have discovered one of the most effective ways to lure new high-tech industry into areas hard-hit with job losses is the availability of cheap, plentiful, and fast broadband.

• 42% believe that that 1Gbps is the minimum speed needed to lure new businesses.
• 35% believe the minimum must be at least 100Mbps.
• Rural economic developers appear to be well ahead their urban counterparts in the area of planning. 58% of rural respondents either have broadband strategies and tactics worked into their economic development plans or are writing plans with these elements. Only 39% of urban respondents have done the same.
• 92% see no benefit from the FCC’s minimum broadband standard of 4Mbps, defined largely to suit telephone company DSL service common in rural areas.

Why are rural economies benefiting from better broadband planning? Because in the absence of commercial providers willing to provide the service, an increasing number of small towns and cities are building their own municipal networks to get the job done themselves.  Those networks are routinely superior to the facilities provided by most cable and phone companies serving less populated areas.

Community broadband is working in Wilson and Salisbury, N.C., where a transition from a textile/tobacco-based economy into higher-tech knowledge economy jobs required state-of-the-art broadband as a foundation.  Chattanooga, Tenn.-based EPB Fiber has already attracted dot.com giants like Amazon.com, creating hundreds of millions in local investment and thousands of new jobs.  Why Chattanooga?  Gigabit broadband for just a few hundred dollars a month is just one phone call away.

Relying on commercial providers to build 21st century broadband as a platform for economic transformation has delivered uneven results, especially outside of the largest cities. Large cities traditionally get most of the provider’s time, attention, and upgrades.  Smaller, more out of the way places often see little or nothing.

That is why this year’s latest push in Georgia and South Carolina to tie the hands of communities trying to remake themselves with modern broadband is so risky. While AT&T and the cable companies may position their argument as “protecting consumers,” in fact they are only protecting their own interests, even if it means the next Amazon.com distribution facility or Google data center finds a better home somewhere else.

Updated 3:55pm ET: We added a link to the full report, with appreciation to the author.

AT&T’s vision for 21st century broadband will not extend beyond the 30 million homes that can or will soon be able to access the company’s fiber-to-the-neighborhood service U-verse.

Speaking on an investor’s conference call to discuss 4th quarter earnings results, AT&T CEO Randall Stephenson announced the expansion of its fiber to the neighborhood service is now effectively over.

“Our U-verse build is now largely complete, so we have in place an IP video and broadband platform that reaches 30 million customer locations, which gives us significant headroom now to drive penetration,” Stephenson said.

In practical terms, Stephenson’s announcement means AT&T will continue work on building its U-verse platform in cities where the service is already available, but other areas are unlikely to see an introduction to the service anytime soon.  AT&T President John Stark originally envisioned U-verse for 30 million homes and that vision remains unchanged today.

AT&T’s news for its rural customers is worse.  The company admits it has run out of ideas how to provide rural broadband to its landline customers.

“We have been apprehensive on moving, doing anything on rural access lines because the issue here is, do you have a broadband product for rural America?,” Stephenson said. “And we’ve all been trying to find a broadband solution that was economically viable to get out to rural America and we’re not finding one to be quite candid.”

If you can buy it at any price

Stephenson was hoping LTE 4G wireless service could provide a rural broadband solution, a central theme in AT&T’s lobbying campaign for a buyout of T-Mobile, since abandoned.

“That having been set aside, now we’re looking at rural America and asking, what’s the broadband solution? We don’t have one right now,” Stephenson said.

Stephenson earlier told a July meeting of the National Association of Regulatory Utility Commissioners that DSL, the most common form of broadband in rural America, was “obsolete.”

The two announcements immediately raised questions in South Carolina and Georgia where AT&T and other telecommunications companies are fiercely lobbying for restrictions on community-owned broadband.

Broadband advocates in both states are wondering why the company is spending money trying to stop other broadband projects while not spending on building better broadband service in those areas themselves.

Sen. Chip Rogers' vision of rural Georgia's broadband future

Sen. Chip Rogers (R-Woodstock) thinks he knows broadband.  He, along with several other Georgia legislators well-compensated by some of the state’s largest telecom interests, have defined appropriate Internet speeds at a remarkably low “200 kilobits per second,” less than four times faster than your old AOL dial-up Internet account.  The one you canceled in 1998.

With a background like that, it was no surprise last Thursday when technology leaders and city representatives from across Georgia testified before the Senate Regulated Industries & Utilities Committee, strongly objecting to Rogers’ SB 313, a bill bought and paid for by the very companies the legislation would effectively protect from competition.

Rogers argues he wants to “level the playing field” between private providers that currently dominate broadband service in Georgia, and the long-suffering communities in rural areas that have waited for faster Internet since the Clinton Administration.

City officials from Dalton, Newnan, Elberton, Thomasville, Cartersville, LaGrange, Hogansville and Monroe collectively noted the proposed legislation hardly represents a level playing field when it fully exempts the bill’s backers from any of its provisions.  Thomasville mayor Max Beverly noted the same cable and phone companies that fiercely fought for statewide cable franchises for themselves now want to impose rules that forbid publicly-run companies from operating outside of their respective city limits.

“We would have to turn off service to the county’s two largest employers,” Thomasville Mayor Max Beverly told the Senate panel. “There is no telling what that would do to jobs in our area.”

Those testifying uniformly noted they entered the broadband business because private providers refused to deliver adequate service in their areas.

What community broadband provides communities the big phone and cable companies don't.

“We started our cable system not on a whim but on a demand from our citizens to provide a higher level of service for cable TV and Internet,” said Newnan Mayor Keith Brady. “We got into the cable business originally to provide fiber optics and broadband because Charter Communications would simply not invest in our community.”

Now cable and phone companies across Georgia are supporting legislation that would make that community service next to impossible to provide.

“The most ironic part of legislation like SB 313 is that cable and phone companies only take an interest in rural broadband when they ghostwrite bills like this to stop other people from providing the service themselves,” said Stop the Cap! reader Max Curr. “When I lived in Hiltonia, some of these same companies laughed at me when I asked about broadband. It simply was not profitable, they were not going to provide it, and with this bill, they will make sure it stays that way.”

But the cost to consumers extends way beyond the most rural corners of the state. SB 313 also hurts existing cable and phone customers who pay higher rates because of the lack of competition.  That assures the kind of anemic broadband Rogers and his friends in the cable and phone industries are only too happy to define as 200kbps.  At least that is 10kbps more than a similar bill being pushed by telephone and cable operators in South Carolina.

Brady says their community-owned system not only provides broadband where Charter would not, the cable company also was forced to reduce their rates for consumers in nearby communities, saving taxpayers across the entire city and county millions.

In Elberton, the lack of broadband was so pervasive the 4,700 local residents demanded the city provide the service themselves. Commercial providers had stonewalled the county seat of Elbert County for years until the city broke ground on a broadband project in 2001.

Dalton Utilities' CEO Don Cope (left), Newnan mayor Keith Brady (right) (Photo: Georgia Municipal Assn.)

Elberton City Manager Lanier Dunn complained SB 313 undercuts the rational definition of minimum Internet speeds to levels most Americans would not even consider “broadband.”  Dunn noted that the 2010 National Broadband Plan calls for download speeds 250 times greater, and by 2020 500 times greater, than what Rogers’ bill currently defines as broadband service.

“We should be reaching for higher and faster speeds, not relegating ourselves to barely just above dial-up,” Dunn said.

Don Cope, president and CEO of Dalton Utilities, demonstrated that municipal broadband systems are not the financial risk large telecommunications companies always claim they represent.  In fact, Dalton’s system has never received a penny of tax revenue and its accounting is open to public scrutiny to prove it.

Cope noted SB 313 imposes restrictions on community providers, but completely exempts those owned by the companies pushing the bill.

“I would ask that you look at the private providers in the state,” Cope said. “Look at their reports, and you would see how many dollars that are provided to them from the federal government. We are talking about in the billions of dollars. All the [private telecommunications entities] that I know about have some form of government support.”

Dalton isn’t the only city in Georgia with a successful community-owned operation.

The city of Newnan found their system such a valuable asset, they sold it at a profit to a private company in 2008 and used the proceeds to pay off its remaining construction costs.

Perhaps the most the world ever hears about the tiny British island of St. Helena, a home in the South Atlantic for 4,000 residents, is the annual St. Helena Radio Day when the nation takes to the shortwave radio dial to say hello to friends on every continent.

Beyond that, St. Helena is mostly known as an out-of-the-way tourist destination and potential point of contact for ships traversing the South Atlantic between South America and southern Africa.  St. Helena’s residents live with three television stations, two radio stations, two newspapers, and a single satellite connection to the Internet providing one 10/3Mbps circuit shared by all 4,000 residents.

Signing up for “broadband” is an expensive ordeal.  Individual residents can purchase strictly usage-limited DSL Internet service at prices ranging from $31 a month for 128/64kbps service (limited to 300MB per month) to $190 for 384/128kbps service, with a 3.3GB monthly allowance.  Overlimit fees start at around $0.15 per megabyte.

St. Helena

Local residents find life without the modern day definition of broadband service a major hindrance, especially for education.  Students have left St. Helena for the United Kingdom to pursue studies.  Economically, self-sustained employment is next to impossible on the island.

“I’m an IT engineer and I would love to return to my island to start an IT business, but because of the slow, expensive and unreliable Internet connection this is simply impossible,” said Jonathan Clingham, an IT infrastructure engineer now working in Wiltshire, England.

Now a grass-roots campaign has been launched to help convince several telecommunications companies financing a new underseas fiber cable project laid between Brazil, Angola, and South Africa to reroute the cable slightly through the island of St. Helena, opening the door to modern broadband for the island.

The group is calling on supporters to help draw attention to the project, arrange for the British government to help underwrite the expense of an extra 50 kilometers of cable needed to reach St. Helena, and providing assistance to lease a circuit on the new cable:

• If you are an British citizen or UK resident please sign our e-petition to connect St Helena.
• Show your support by liking our Facebook page.
• Spread the word and let everybody know about our campaign.
• Ask the following entities/persons for support:
  • the UK Foreign & Commonwealth Office
  • the UK Department for International Development
  • as a UK citizen your MPs and Lords

A coalition of high tech companies including Google and Alcatel-Lucent are warning South Carolina legislators they are playing with future high tech jobs and will stifle the state’s digital economy if they grant the request of large phone and cable companies to make it difficult, if not impossible for community-owned broadband to compete.  Alcatel-Lucent, American Public Power Association, Atlantic Engineering, Fiber to the Home Council, Google, OnTrac, Southeast Association of Telecommunications Officers and Advisors, Telecommunications Industry Association, and the Utilities Telecom Council all co-signed the letter addressed to the state’s Senate Judiciary Committee:

Dear Senator McConnell and Members of the Senate Judiciary Committee:

We, the private-sector companies and trade associations listed below, urge you to oppose H.3508 because these bills, on top of South Carolina’s existing barrier to public communications initiatives, codified in SC Code §§ 58-9-2600 et seq., will harm both the public and private sectors, stifle economic growth, prevent the creation or retention of thousands of jobs, hamper work force development and diminish the quality of life in South Carolina. In particular, these bills will hurt the private sector in several ways: by curtailing public-private partnerships, stifling private companies that sell equipment and services to public broadband providers, and impairing educational and occupational opportunities that contribute to a skilled workforce from which businesses across the state will benefit.

Clearwire's coverage map shows no service in South Carolina.

The United States continues to suffer through difficult economic times.  The private sector alone cannot lift the United States out of this crisis.  As a result, federal and state efforts are taking place across the Nation to deploy both private and public broadband infrastructure to stimulate and support economic development and jobs, especially in economically distressed areas.  For example, in South Carolina, Orangeburg and Oconee Counties have received broadband stimulus awards to bring much-needed broadband services and capabilities to communities that the private sector has chosen not to serve adequately.  H.3508, together with SC Code §§ 58-9-2600 et seq., would impose burdensome financial and regulatory requirements that will prevent public broadband providers from building the sorely needed advanced broadband infrastructure that will stimulate local businesses development, foster work force retraining, and boost employment in these economically depressed areas.

Consistent with these expressions of national unity, public entities across America, including South Carolina, are ready, willing, and able to do their share to bring affordable high-capacity broadband connectivity to all Americans. Enactment or retention of direct or effective barriers to community broadband, such as H.3508 and SC Code §§ 58-9-2600 et seq., would be counterproductive to the achievement of these goals.  These measures are also inconsistent with our country’s National Broadband Plan, which recommends that no new barriers be enacted and that existing barriers be removed.

We support strong, fair and open competition to ensure that users can enjoy the widest range of choices and opportunities.  H.3508 is a step in the wrong direction.  South Carolina should be removing barriers to public broadband initiatives rather than establishing new ones, so that high technology companies can spread and prosper into all the communities in this beautiful state.  Please oppose H.3508, repeal SC Code § 58‑9‑2600 et seq., and reject any future measures that could significantly impair municipal broadband deployments or public-private partnerships in South Carolina.

Stop the Cap! earlier noted this legislation is heavily sponsored by AT&T and other telecommunications companies already operating in South Carolina.  Several months ago, we reported on South Carolina’s woeful broadband: A Corridor of Shame, with large sections of the state without anything close to “broadband” service, even as state legislators in 2009 leased away the state’s publicly owned Educational Broadband Service-spectrum to private companies like Clearwire that don’t appear to be delivering any service in South Carolina.

HissyFitWatch: Damn you FCC!

For the first time in a long time, AT&T did not get what it wanted from Washington regulators and legislators. The repercussions of the company’s failure to secure its controversial merger with Deutsche Telekom’s T-Mobile USA has been one HissyFit after another, including the resignation-retirement of Forrest Miller, a 30-year veteran who was the company’s head of corporate strategy and mergers and acquisitions. After heads rolled, there was the small matter of the multi-billion dollar “breakup fee” payable to T-Mobile. Now someone has to pay:  You.

At Stop the Cap!, we scrutinize quarterly conference calls at major telecommunications companies so you don’t have to. We’ve sat through renditions of “we’re sorry” when Charter Communications’ executive management allowed the company to be flushed into bankruptcy, we’ve heard the Excuse-o-Matic from Frontier Communications about why their broadband service is woefully overloaded with promises of better days ahead, and a whole lot of creative spin to emphasize cord-cutting-bad-news at the nation’s largest cable companies isn’t really a problem all — it’s the housing market, it’s the ‘seasonal residences’ or ‘college students going home’ problem… or sunspots.  Who really knows?  It’s definitely not that they’re charging too much.

Whether it has been Time Warner Cable’s Glenn Britt, or Verizon’s Ivan Seidenberg, chief executives always project a cool, calm, steady authority that leaves shareholders and financial analysts with an impression the adults are in charge, even if they tell little white lies to keep the stock price up.

And then there is AT&T’s chief executive — Chairman Emperor Randolph Stephenson, who used the occasion of AT&T’s 4th Quarter earning results conference call to become a spectacle that brought the house down.

As we look ahead, the issue that gives me the most concern, quite frankly, isn’t our ability to execute. The #1 issue for us as we move forward, and for the industry, I believe, it continues to be spectrum. This industry continues to see just explosive mobile broadband growth and is providing one of the few bright spots in the U.S. economy, but I think we all understand this growth cannot continue without more spectrum being cleared and brought to market. And despite all the speeches from the FCC, we’re all still waiting.

He didn’t stop there.  In an impromptu rant, Stephenson lectured Washington from afar, excoriating all-concerned for failing to agree with their multi-million dollar propaganda campaign that merging America’s second and fourth largest wireless carriers in a market with just four national providers was good for consumers and would bring wireless nirvana to the heartland and lower prices for all.  Evidently America was not ready to accept the word of AT&T-compensated telecommunications experts at the NAACP, the Special Dream Farm, the Shreveport-Bossier Rescue Mission and cattle ranchers a combination of T-Mobile’s spectrum and AT&T’s would ease the capacity crunch, bring 4G to Beaver, Oklahoma, and stop driving AT&T customers nuts with dropped calls and reception black holes.

How it usually works in Washington.

AT&T would have gotten away with their merger if it weren’t for those darned kids (consumers), the FCC and Justice Department ruining everything.

“The last significant spectrum auction was nearly 5 years ago now. And this FCC has made it abundantly clear that they’ll not allow significant [mergers and acquisitions] to help bridge their delays in freeing up new spectrum,” Stephenson complained. “So in the absence of auctions, our company and others in the industry have taken the logical step of entering into smaller transactions to acquire the spectrum we need to meet this demand. But even here, we need the FCC’s action and leadership, and unfortunately, even the smallest and most routine spectrum deals are receiving intense scrutiny from this FCC, oftentimes taking up to a year and sometimes longer before these are approved.”

Stephenson ignores the fact the FCC has rubber-stamped a number of wireless mergers over the past several years, which is why consumers no longer buy competitive service from Cingular, Alltel, Dobson Communications, Centennial Wireless, West Virginia Wireless, Unicel, Ramcell, or SureWest Wireless.  All of these former competitors are now a part of the nation’s two largest carriers AT&T and Verizon Wireless.  Even more impressively for the man in full denial, the FCC just quickly and quietly approved AT&T’s spectrum transfer purchase from Qualcomm.

“Now I hope I’m wrong, but it appears the FCC is intent on picking winners and losers rather than letting these markets work,” the chief executive said.

In other words, AT&T’s definition of letting markets “work” means letting them write their own laws governing the pesky concepts of antitrust, monopoly/duopoly market power, anti-competitive activity, etc.  AT&T has no problem picking winners and losers in the community-owned broadband front, lobbying its way through state legislatures trying to block new networks from being built, even while slapping usage limits on their own customers’ DSL and U-verse accounts because of “capacity” concerns.

In the wireless marketplace, Charlie Sheen would declare AT&T “winning,” considering it has achieved 1/3rd of the U.S. wireless market.  It wants more of course, even though Trefis, a market research firm, noted that had the FCC granted Stephenson’s wishes for three national carriers, AT&T, Verizon Wireless and Sprint “will control more than 90% of the U.S. wireless market, resulting in lower competition and higher prices for consumers.”

No problem there.

Stephenson also noted a lot of the company’s close friends were on their side (and handsomely compensated along the way we might add):

A lot of recent comments and speeches about certain members of this FCC suggest that they and not Congress should decide how spectrum auctions are conducted, including who can participate and what the conditions should be for participating. Meanwhile, we pile more and more regulatory uncertainty on top of an industry that is a foundation for a lot of today’s innovation*, making it difficult for all of us to allocate and commit capital. And in this industry, we all know capital investment equals jobs*. So the end result of this is we have a industry that is just really stuck in terms of creating real capacity*.

(*- except when community-based, publicly-owned networks are involved. They must be stopped at all costs.)

No matter that AT&T continues to sit on earlier spectrum acquisitions it continues not to use.  It only grudgingly agreed to roaming agreements with the company it preferred to dismantle altogether: T-Mobile.  In earlier, accidental disclosures, it was clear even before the merger and the newly-reticent FCC, AT&T preferred to raise prices, restrict service, and hang onto its profits instead of sufficiently investing them back into its network.  Verizon Wireless has a 4G network, no dropped-call-syndrome, fewer signal black holes, and no apparent spectrum panic attacks.

Part of Sprint's fact sheet opposing the merger deal.

AT&T bit off more than they could chew through, and now faces the humiliating prospect of paying off its gambling debts.  Only now, AT&T has effectively declared they are not going to pay for their costly mistake. Customers are.

Stephenson: Payback time.

The company introduced new, higher prices for its smartphone data plans this month, and intends to continue to increase prices and crack down on data use with speed throttles in 2012 and blame it on the “spectrum crunch”:

“In a capacity-constrained environment, usage-based data plans, increased pricing, managing the speeds of the highest volume users, these are all logical and necessary steps to manage utilization,” Stephenson said.

But AT&T’s chief executive also told shareholders repeatedly those increased prices were key to boosting company revenue and profits:

“We’ll expand wireless and consolidated margins. We’ll achieve mid-single-digit EPS growth or better. Cash generation continues to look very strong again next year. And given the operational momentum we have in the business, all of this appears very achievable and probably at the conservative end of our expectations.”

AT&T’s chief financial officer John J. Stephens put a spotlight on it:

In 2011, 76% of our revenues came from wireless and wireline data and managed services. That’s up from 68% or more than $10 billion from just 2 years ago. And revenues from these areas grew about $7 billion last year or more than 7% for 2011. We’re confident this mix shift will continue. In fact, in 2012 we expect consolidated revenues to continue to grow, thanks to strength in these growth drivers with little expected lift from the economy.

[...] We also continue to bring more subscribers onto our network with tiered data plans, more than 22 million at the end of the quarter, with most choosing the higher-priced plan. As more of our base moves to tiered plans and as data use increases, we expect our compelling [average revenue per subscriber] growth story to continue.

Phillip "Rural Georgia Isn't On AT&T's Mind" Dampier

Columbia County, Georgia has been talking about fiber optic broadband for two years — two years that the state’s largest phone and cable companies have not stepped up to provide suitable broadband to local schools, residents, and libraries.  In 2010, enough was enough and the county applied for, and won, a $13.5 million Broadband Technology Opportunity Program grant to increase broadband and wireless access to the Internet throughout the area.  Local taxpayers chipped in about $4.5 million in 1-percent sales tax dollars, and in-kind voluntary donations worth $2.3 million fulfilled the grant requirement that local matching funds be provided.

To residents long-suffering with satellite-delivered Internet, usage-capped mobile broadband, spotty DSL service, and frequent outages and slow speeds, a modern fiber network would help 120,000 county residents obtain the kind of broadband service people elsewhere take for granted.  Columbia County’s rural character is evident when you consider it contains only two small incorporated cities and 91 percent of the population lives in unincorporated areas, making the eastern Georgia county an afterthought for big phone and cable companies who see better profits in bigger cities.

Now these companies, with the help of a campaign contribution-gorging state legislator, are intent on stopping projects even in areas they could care less about.

The News-Times captured this image from the groundbreaking ceremony for Columbia County's new fiber network in 2010. Big phone and cable companies would like them to run this picture again at the project's burial.

Columbia County’s local newspaper, the News-Times, is alarmed at the prospect of public tax dollars already spent on the project burned for the benefit of Big Telecom companies:

Republican State Sen. Chip Rogers, fueled by generous contributions from telecommunications companies, has filed a bill in the Georgia Legislature that, he claims, would protect private service providers from unfair competition by government-subsidized broadband systems.

Nonsensically, some in Columbia County welcomed the news as a slap at the county’s government. While we’re on record opposing the concept of the $13.5 million federal grant that allows the county’s entry into broadband, the fact remains that the project already is underway.

That federal program is designed to expand broadband Internet service to rural areas that, because of the up-front infrastructure costs, aren’t deemed profitable by private companies. Our county has plenty of those areas, served at best only by spotty, expensive cellular-based services.

Columbia County’s program wouldn’t compete with private companies. Instead, it uses the federal grant and local sale-tax funding to build that high-speed infrastructure, which private companies can then lease to provide Internet service to underserved areas.

Rather than undercutting local communities and sacrificing rural customers on behalf of the private companies, Rogers ought to look for ways to improve such public-private partnerships. Columbia County taxpayers had better hope so, too, unless they want all the money they’ve spent wiring the county with fiber optic cables to have been wasted.

SB. 313 is just another contract taken out on community-owned broadband networks that could deliver competition (and worse — far better service) to areas of Georgia where even conservative-minded voters wary of spending public money on anything are simply fed up with the status quo.

Columbia County, Georgia

So much for the Columbia County Broadband Network, a 220-mile, county-wide fiber middle mile network that will connect nearly 150 community anchor institutions and enhance health care, public safety, and government services throughout the county. Anchor institutions hoping to be connected at broadband speeds of 100 Mbps to 10 Gbps include K-12 schools, fire and emergency facilities, public libraries, Augusta Technical College, and the Columbia County Health Department. The project also planned to facilitate the creation of a high-capacity data center at the Medical College of Georgia, support a sophisticated county-wide traffic and water control system, and construct five wireless towers to enhance public safety communications as well as improve wireless communications capabilities throughout the region.

If Rogers’ bill passes, the county may have to go back to begging for access from the companies that have repeatedly said it wasn’t worth the investment or their time.

County officials have been more generous, offering all along to share access to the fiber network with the very providers who are seeking to destroy it.  So far, that hasn’t changed any minds.

“If we don’t own it, that means we don’t want you to have it” is standard operating procedure for the state’s phone and cable operators, even in the service areas they routinely ignore, even if it means flushing millions of dollars already spent on new networks down the drain.

That’s money-fueled politics.  State legislators with Big Telecom dollars in their eyes can’t see the 120,000 Columbia County residents waiting years for better broadband.  Perhaps the best way to reach legislators in Atlanta is to condemn them to the same kind of broadband service local residents in Evans, Martinez, and Appling are forced to endure, if they have it at all.

A group whose national umbrella organization has close connections to the nation’s largest phone companies estimates 5.3% of residents in the state of Tennessee now have access to world-class fiber broadband at speeds up to 1Gbps, but no thanks to AT&T or Comcast.

As part of updated broadband availability estimates, the group noted that only a fraction of the state gets access to the community-0wned Chattanooga-based utility that provides fiber to the home service, EPB.

Key findings from this update include:

• 95.2% of Tennessee households have access to fixed broadband service of at least 768 Kbps downstream and 200 Kbps upstream (excluding mobile and satellite services).
• 93% of Tennessee households have access to fixed broadband service of at least 3 Mbps downstream and 768 Kbps upstream (excluding mobile and satellite services).
• 4.8% of Tennessee households remain unserved by any fixed broadband provider, representing approximately 120,000 unserved households that do not have access to a fixed wireless or wired broadband service offering (excluding mobile and satellite services).
• Across rural areas of Tennessee, the percentage of unserved households by any fixed broadband service is 8.4%, representing approximately 110,000 unserved rural Tennessee households.
• 5.3% of Tennessee households now have access to broadband service of at least 1 Gbps, marking the first time in Tennessee.

Most households receiving the slowest speeds get them from phone-company marketed DSL service and some fixed wireless ISPs operating in the state.

In Chattanooga, consumers have a choice between AT&T U-verse in selected neighborhoods, Comcast Cable, or EPB Fiber.  Recently, Christopher Mitchell at Community Broadband Networks alerted us that The Chattanoogan newspaper shared the difference between Comcast and EPB customer service:

You’ve got to be kidding me, Comcast! Several days ago our On Demand stopped working with a message to contact customer service and report that error seven occurred.

My husband called and after being given the self-help/troubleshoot option over the phone selected and requested a signal to be re-sent to the box. The box had already been unplugged, the appropriate amount of time waited, and the box plugged back in. No luck. The box was sent the refresh signal…it didn’t work; surprise.

So, he called back and spoke with someone who wanted to re-send the signal again and if that didn’t work then a technician would be needed.

[...]

I called Comcast this morning to schedule the technician to be told that it was going to cost me $30 for them to come out regardless of the problem. Let’s see, Comcast’s DVR box that they own and I rent shot trouble and I have to pay them another $30; I asked at least twice – “if Comcast’s equipment is the problem, I still have to pay $30?” “Yes, mam”.

They should bring out a replacement DVR for me, adjust my account for the days we’ve been without the On Demand plus an amount plus or minus $30 for the time we’ve had to take to mess around with this; not counting the time that will have to be arranged to be taken to have their technician come out.

Since I’m going to have to arrange to take more time, maybe we’ll just have someone else come out and put in something other than Comcast and they can have their broken DVR and all their other stupid little additional cable boxes returned to them.

Melanie Henderson
Hixson

EPB provides municipal power, broadband, television, and telephone service for residents in Chattanooga, Tennessee

The community-owned broadband alternative, EPB Fiber

We experienced the same “customer service” issues with Comcast. We finally cancelled our service when the tornado came through our neighborhood and we were forced to move for six months. When we finally moved back home we became EPB customers.

We have had one instance where we needed to contact customer service, and the problem was fixed quickly and easily by the most polite customer service rep I’ve ever dealt with.

Comcast came by recently to offer us a “substantial savings” if we’d make the switch back to them. My question was, why now? I was a customer for years and treated poorly as rates increased exponentially. Now the offer the discount? No thanks.

For the $5 extra per month that we pay for EPB, we receive better features, prompt and polite customer service, and an all around trouble free experience. Thanks EPB!

Leah Crisp
Harrison

Sen. Chip Rogers, a new-found friend of Comcast, AT&T, Charter Cable, Verizon, and the Georgia state cable lobby.

A new bill designed to hamstring local community broadband development with onerous government regulation and requirements has been introduced by a Republican state senator in Georgia, backed by the state’s largest phone and cable companies and the astroturf dollar-a-holler groups they financially support.

Sen. Chip Rogers (R-Woodstock), is the chief sponsor of the ironically-named SB 313, the ‘Broadband Investment Equity Act,’ which claims to “provide regulation of competition between public and private providers of communications service.”  The self-professed member of the party of “small government” wrote a bill that creates whole new levels of broadband bureaucracy, and applies it exclusively to community-owned networks, while completely exempting private companies, most of which have recently contributed generously to his campaign.

SB 313 micromanages publicly-owned broadband networks, regulating the prices they can charge, the number of public votes that must be held before such networks can be built, how they can be paid for, where they can serve, and gives private companies the right to stop the construction of such networks if they agree to eventually provide a similar type of service at some point in the future.

Even worse, Rogers’ bill would prohibit community providers from advertising their services, defending themselves against well-financed special interest attacks bought and paid for by existing cable and phone companies, and requires publicly-owned networks to allow their marketing and service strategies to be fully open for inspection by private competitors.

Rogers’ legislation is exceptionally friendly to the state’s incumbent phone and cable companies, and they have returned the favor with a sudden interest in financing Rogers’ 2012 re-election bid.  In the last quarter alone, Georgia’s largest cable and phone companies have sent some big thank-you checks to the senator’s campaign:

• Cable Television Association of Georgia ($500)
• Verizon ($500)
• Charter Communications ($500)
• Comcast ($1,000)
• AT&T ($1,500)

A review of the senator’s earlier campaign contributions showed no interest among large telecommunications companies operating in Georgia.  That all changed, however, when the senator announced he was getting into the community broadband over-regulation business.

It is difficult to see what, besides campaign contributions, prompted Rogers’ sudden interest in community broadband, considering Georgia has not been a hotbed of broadband development.

Rogers claims cities like Tifton, Marietta and Acworth have tried unsuccessfully to be public providers and that the legislation “levels the playing field for public and private broadband providers.”  Hardly, and the senator’s dismissal of earlier efforts fails to share the true story of broadband expansion in those communities.

The new owner of Tifton's CityNet carries on the tradition the city started providing broadband to a woefully underserved part of Georgia.

Tifton: Either the city provides broadband or no one else will

Tifton’s misadventure with the city-owned CityNet, eventually sold to Plant Communications, was hardly all bad news.  When city officials launched CityNet a few years ago, much of the community was bypassed by broadband providers.  Today, the new owner Plant continues competing with bottom-rated Mediacom, which admitted in 2001 it bought an AT&T Broadband cable system that “underserved” the residents of Tifton.  At the same time, the Tifton Gazette, which has loathed CityNet in editorials from its beginnings, freely admits the network brought lower prices and competition to Tifton residents over its history:

At the same time, having CityNet here has meant increased competition and therefore lower service rates for residents. We would probably have had to wait longer for high-speed Internet to make it to Tifton, and the system makes it possible for local governments to receive services here.

That’s a far cry from Rogers’ claim that the “private sector is handling [broadband] exceptionally well.”

“What they don’t need is for a governmental entity to come in and compete with them where these types of services already exist,” Rogers added.

In fact, in Tifton they needed exactly that to force Mediacom to upgrade the outdated cable system they bought from AT&T.

The Curious Case of Marietta FiberNet: When politics kills a golden opportunity

On track to be profitable by 2006, local politics forced an early sale of the community fiber network that was succeeding.

In Marietta, the public broadband “collapse” was one-part political intrigue and two-parts media myth.

Marietta FiberNet was never built as a fiber-to-the-home service for residential customers.  Instead, it was created as an institutional and business-only fiber network, primarily for the benefit of large companies in northern Cobb County and parts of Atlanta.  The Atlanta-Journal Constitution reported on July 29, 2004 that Marietta FiberNet “lost” $24 million and then sold out at a loss to avoid any further losses.  But in fact, the sloppy journalist simply calculated the “loss” by subtracting the construction costs from the sale price, completely ignoring the revenue the network was generating for several years to pay off the costs to build the network.

In reality, Marietta FiberNet had been generating positive earnings every year since 2001 and was fully on track to be in the black by the first quarter of 2006.

So why did Marietta sell the network?  Politics.

Marietta’s then-candidate for mayor, Bill Dunway, did not want the city competing with private telecommunications companies.  If elected, he promised he would sell the fiber network to the highest bidder.

He won and he did, with telecommunications companies underbidding for a network worth considerably more, knowing full well the mayor treated the asset as “must go at any price.”  The ultimate winner, American Fiber Systems, got the whole network for a song.  Contrary to claims from Dunway (and now Rogers) that the network was a “failure,” AFS retained the entire management of the municipal system and continued following the city’s marketing plan.  So much for the meme government doesn’t know how to operate a broadband business.

Acworth: Success forces the city to sell to a private company that later defaults

Acworth CableNet: Too popular for its own good?

But of all the bad examples Rogers uses to sell his telecom special interest legislation, none is more ironic than the case of Acworth, Ga.  The Atlanta suburb suffered for years with the dreadfully-performing MediaOne.  Throughout the 1990s, MediaOne spent as little as possible on its antiquated cable system serving the growing population, many working high-tech day jobs in downtown Atlanta.  MediaOne had no plans to get into the cable broadband business, while other cable systems around metro-Atlanta had already begun receiving the service.  That left Acworth at a serious disadvantage, so local officials issued $6.8 million in tax-exempt bonds to construct Acworth CableNet.  Demand was so great, the city simply couldn’t keep up.

As Multichannel News reported in 2002, “the Atlanta suburb of Acworth, Ga., isn’t selling because business is bad. Rather, officials said they’ve received so many requests for service from outside the city limits that they’ve decided to sell the operation to an independent company that may expand beyond Acworth’s borders.”

That is where the trouble started.  The city contracted with United Telesystems Inc. of Savannah, Ga., a private company, first to lease and then eventually buy the cable system, maintaining and expanding it along the way.  But in 2003, United Telesystems defaulted on its lease-sale agreement, forcing the city to foreclose on the system and ultimately sell it to a second company.

Acworth’s “failure” wasn’t actually the city’s, it was the private company that defaulted on its contract.

So much for Rogers’ record of municipal broadband failure.

The Hidden Problems of Industry-Funded Research Reports

In fact, many of Rogers’ talking points about his new bill come courtesy of the industry-backed astroturf group, the “Coalition for the New Economy.”  With chapters in the Carolinas, Georgia, and Florida, this tea-party and AT&T/Time Warner Cable-funded group takes a major interest in slamming community broadband.

Most of their findings come courtesy of a shallow dollar-a-holler study, The Hidden Problems with Government-Owned Networks, by Dr. Joseph P. Fuhr, Jr., professor of economics at Widener University.  The report, mostly an exercise in Google searching for cherry-picked bullet points highlighting what the author sees as weaknesses and failures in community broadband, even slams success stories like EPB Fiber.  The Chattanooga, Tenn., network just earned credit for helping to attract hundreds of millions in new private investment and jobs from Amazon.com, but Fuhr’s conclusion is that EPB operates without any “real business plan concerning EPB’s investment.”

Fuhr and his friends at Heartland Institute even misrepresent EPB as delivering only 1Gbps service at $350 a month in an attempt to illustrate municipalities are out of touch with the private broadband marketplace.

Christopher Mitchell at Community Broadband Networks dismisses the bill as more of the same from a telecommunications industry that wants to tie down community broadband networks in ways that guarantee they will fail:

In short, this bill will make it all but impossible for communities to build networks — even in areas that are presently unserved. The bill purports to exempt some unserved areas, but does so in a cynically evasive way. The only way a community could meet the unserved exemption is if it vowed to only build in the least economical areas — meaning it would have to be significantly subsidized. Serving unserved areas and breaking even financially almost always requires building a network that will also cover some areas already served (because that is where you can find the margins that will cover the losses in higher expense areas).

The bill is presently in the Senate Regulated Industries and Utilities committee.  Stop the Cap! urges Georgia residents to contact state legislators and ask they oppose this special-interest legislation that is designed primarily to protect the broadband status quo and provider profits in Georgia, instead of allowing communities to manage their broadband needs themselves.  After all, they are accountable to the voters, too.

Obama

In his State of the Union address last night to Congress, President Barack Obama complained that America’s digital infrastructure is inadequate to allow entrepreneurs and small businesses to successfully market their goods and services over the Internet.

“So much of America needs to be rebuilt. We’ve got crumbling roads and bridges, a power grid that wastes too much energy, an incomplete high-speed broadband network that prevents a small-business owner in rural America from selling her products all over the world.

During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our states with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

In the next few weeks, I will sign an executive order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.”

President Obama also touched on the problem of online piracy and imported counterfeit goods.  Last week, controversy over online piracy legislation including the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA), brought consumer opposition to both, temporarily shelving the measures.  But the president acknowledged the problem was not going away.

“It’s not right when another country lets our movies, music, and software be pirated,” he said. “Tonight, I’m announcing the creation of a Trade Enforcement Unit (TEU) that will be charged with investigating unfair trading practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders.”

Upton

Republicans fired back at the president over his rural broadband remarks, accusing the administration and the Federal Communications Commission of supporting pre-conditions on forthcoming spectrum auctions.  One House committee chairman tasked with broadband issues said the FCC was supporting policies that could reduce auction proceeds by reserving certain frequencies for up-and-coming wireless competitors or restrict how much spectrum a current market leader like AT&T or Verizon Wireless could acquire.

“The President said we have an incomplete high-speed broadband network, but his Federal Communications Commission is protecting its turf instead of joining us to free up airwaves to build the next generation communications networks,” said House Energy & Commerce Committee chairman Rep. Fred Upton (R-Mich.).

FCC chairman Julius Genachowski has had little regard for the House Republican-backed proposal that could potentially tie the FCC’s hands to set rules for spectrum auctions.  House Republicans also oppose setting aside certain spectrum for free, unlicensed high-power Wi-Fi use, preferring to auction as much spectrum as possible.

Earlier this month, Upton blasted the FCC chairman for opposing a “winner take all” auction approach:

“Bluster aside, it sounds like we have a federal agency more concerned about preserving its own power than offering serious improvements as we prepare to finalize this legislation. We worked with the FCC’s auction experts to give the agency the legitimate flexibility it needs to design the mechanics of the auction. It’s time to stop the FCC from engaging in political mischief that will hurt competition and steal money from the taxpayer’s coffers. Don’t take our word for it – look at the 2008 auction. The FCC imposed conditions on the C and D blocks that ultimately prevented the D-block from selling and pushed smaller carriers out of the auction. Taxpayers lost somewhere in the neighborhood of $5 billion, and spectrum remains sidelined. And speaking of protecting taxpayers, it’s time for the FCC and others to be honest about how taxpayers would be affected by their plans to give away valuable spectrum to favored constituencies. Our goal is to strike the right balance by keeping plenty of opportunity for unlicensed use without forcing taxpayers to forfeit any return on a resource that everyone agrees is worth billions.”