Qwest, the former-Baby Bell serving the upper midwest, mountain west, and desert states got caught on tape telling customers the company’s intent is to eliminate competition from independent Internet Service Providers by banning them from their network.
One such ISP, XMission, has blown the whistle on the anti-competitive practice, noting they could potentially be run out of business if Qwest manages to keep them from delivering competitive service over Qwest’s upgraded partly-fiber network.
In 1997, XMission first started providing service over Qwest’s DSL. We have literally paid millions of dollars of revenue to Qwest for the privilege, all the while relieving them of the difficult task of providing excellent customer support. In 2008, Qwest launched their “Fiber-to-the-Node” product which is usually falsely advertised as just plain “fiber”. Unlike the UTOPIA system which runs fiber optics all the way to the home, Qwest FTTN runs fiber to a neighborhood, then copper DSL lines to the customer. Because of the subsequent shorter distances on copper, they are able to attain download speeds of up to 40Mbit to the customer and 5Mbit from the customer. This is normally referred to “download” and “upload” respectively.
There is one key difference in the FTTN product. Qwest is not not allowing 3rd party ISPs like XMission to sell their own service over it, as we traditionally have with their first DSL product. In addition, Qwest has been notorious for disinformation and service problems that motivate customers to drop their current ISP and change over to Qwest. Technical problems exist, such as radio interference that degrades existing XMission customer DSL speeds, sometimes making their Internet connection unusable. The solution offered by Qwest was not to shield the radio interference, but to switch customers off XMission and to their own product. We have also had reports and in one case, a recording, of Qwest sales representatives telling customers that Qwest’s intent is to “eliminate” 3rd party ISPs. Today, I received an email from a customer who was told by Qwest that XMission’s equipment is “too slow” to handle FTTN service. Considering that we service customers on fiber and in our data center with up to a gigabit in solid bandwidth, one has to wonder why Qwest feels the need to lie to sell their service. There is no technical reason why Qwest could not allow 3rd party ISPs like XMission to provide service over their FTTN network.
XMission has been hemorrhaging DSL customers for the past year, and I really don’t blame them for looking for bigger Internet connections. I personally can only get 3Mbit download and 500Kbit upload to my own home and it is not enough bandwidth for me. With Netflix, Hulu, Youtube, and other services demanding more and more bandwidth, homes will need larger and larger connections. Unless they’re in a UTOPIA connected city, chances are that they are going to choose from two companies to buy Internet from in the future, neither of them stellar.
UTOPIA is Utah’s publicly-owned fiber optic platform delivering competitive choice to residents of 16 Utah cities. Residents enjoy true fiber optic service and can select from 11 different Internet Service Providers, each offering their own speed levels, bundles, and pricing. How many ISPs can you choose from?
Qwest’s newest network upgrades deliver service somewhat comparable to AT&T’s U-verse — faster broadband through a hybrid fiber, copper phone line-based network. Qwest also sells traditional DSL service over standard phone lines, including so-called “dry loop” service that delivers broadband service without also buying a phone line. While competing providers can sell service over many of Qwest’s DSL lines, they have been barred from selling access over these new, faster-speed lines.
Customers have been unimpressed with Qwest’s traditional DSL services which often promises far more than it actually delivers.
Alex Langshall in South Salt Lake was guaranteed 7Mbps DSL service from Qwest, but ended up with only 640kbps. The reason? His distance from the central office and the deteriorating quality of Qwest’s landline network. Qwest’s technicians told Alex even after line conditioning and rehabilitation, he would only get 1.5Mbps service.
XMission publicized this recording between Qwest and one of their customers about the phone company’s intentions for independent ISPs on their network (July 21, 2010) (3 minutes)
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A telecom industry front group acknowledged today American broadband in the last decade has not won any awards for speed or price, but if you just give the industry ten more years of deregulation, there will be more competition than ever to change that.
For the Internet Innovation Alliance’s Bruce Mehlman, the cable and phone companies have done a fine job bringing broadband to Americans, especially considering the industry is only ten years old. If you leave things the way they are today, the next decade will bring even more competition from phone and cable companies, he promises.
But consumer groups wonder exactly how a duopoly will ever deliver world class service in the next ten years when it has spent the last ten hiking prices on slow speed broadband and now wants to limit or throttle usage.
This afternoon, National Public Radio’s All Things Considered tried to referee the broadband debate, pondering whether America is a world leader in broadband or has just fallen behind Estonia. Reporter Joel Rose was perplexed to find two widely diverging attitudes about broadband, each with their set of numbers to prove their case.
On one side, consumers and public interest groups like Consumers Union and Free Press who believe deregulation and industry consolidation has created a stagnant broadband duopoly that only innovates how it can get away with charging even higher prices.
On the other, the phone and cable companies, the groups they finance, and their friends on Capitol Hill who believe there isn’t a broadband problem in the United States to begin with and government oversight would ruin a good thing.
Compared with other nations, the United States has continued to see its standing fall in broadband rankings measuring speed, price, adoption rates, and quality. When East European countries and former Soviet Republics now routinely deliver better broadband service than America’s cable and telephone companies, that story writes itself. Embarrassed industry defenders prefer to confine discussion of America’s broadband success story inside the U.S. borders, discounting comparisons with other countries around the world.
For Rep. Joe “I Apologize to BP” Barton (R-Texas), it’s even more simple than that. Even questioning the free market is downright silly.
“As everybody knows, if it’s not broke, don’t fix it,” Barton said at a March congressional hearing to discuss broadband matters. “And y’all are trying to fix something that in most cases isn’t broke. Ninety-five percent of America has broadband.”
Industry-financed astroturf and sock puppet groups readily agree, and dismiss industry critics.
Bruce Mehlman, co-chair of the industry-supported Internet Innovation Alliance, which opposes more regulation, acknowledges that the story of broadband in the U.S. is a classic glass-half-full, glass-half-empty predicament. Still, he says he thinks broadband adoption in the U.S. is going pretty well considering broadband has only been available for 10 years.
“For the optimist, you’d say within a decade we’ve seen greater broadband deployment than you saw for cell phones, than for cable TV, than for personal computers,” Mehlman says. “It’s one of the great technology success stories in history.”
Mehlman says Americans don’t need more government intervention to make broadband faster and cheaper. “We haven’t yet and that’s in the first decade,” he says. “In the second decade, the marketplace is only going to be that much more competitive.”
Kelsey
The problems go further than that, however.
Derek Turner, research director for the public interest group Free Press, told NPR broadband rankings tell an important story. “For the providers to try to say that there’s no problem, it’s merely just a smoke screen,” he says.
Providers would prefer to measure their performance against each other instead of comparing themselves with foreign providers now routinely providing better, faster, and cheaper service than what American consumers can find. They have to, if only because of those pesky international rankings illustrating a wired United States in decline.
Joel Kelsey at Consumers Union tells NPR there is an even bigger question here — what role broadband plays in our lives.
Because 96 percent of Americans can only get broadband from a duopoly — the phone or cable company, the only people truly singing the praises of today’s broadband marketplace are the providers themselves and their shareholders. Consumers see a bigger problem — high prices, and particularly for rural consumers, slow speeds.
“If you talk to [the] industry,” Kelsey says, “they think of broadband as a private commercial service akin to pay TV or cable TV.”
On the other hand, Kelsey says, “There’s a lot of folks who think it is an essential input into this nation’s economy — an essential infrastructure question.”
National Public Radio reporter Joel Rose dived into the battle over broadband numbers between consumer groups and industry representatives. Is America’s broadband glass half-full or half-empty? (June 28, 2010) (4 minutes)
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Telstra is Australia's largest telecommunications company. (Photo: Telstra)
It’s not as if the Australian government didn’t warn private broadband providers, notably Telstra. For the past several years, Australians have endured expensive, slow, heavily usage-limited broadband service that has put the country well behind many other Commonwealth nations. Australian Communications Minister Stephen Conroy finally warned the nation’s largest telecommunications provider if it didn’t move forward on upgrades and improved service, the government would be forced to step in to protect the national interest.
Instead of improving service, Telstra spent years stonewalling the government and the Australian public, while banking high profits for broadband service. That’s a familiar story for North Americans, stuck with companies like Bell, Rogers, AT&T, Comcast and Verizon — all of whom seek ultimate control over what kind of service you receive, what you pay for it, and what websites you can and, perhaps down the road, cannot visit without paying a surcharge.
Australia is closing the chapter on this story with a happier outcome for its 22 million citizens. Perhaps the United States and Canada could learn a thing or two from the folks down under.
Bringing U.S. Oligopoly-Style Management to Australian Broadband: The Sol Trujillo Years — 2005 to 2009
Telstra, a former government monopoly comparable to the American Bell System, was privatized in the late 1990s. Telstra looked to the United States for a chief executive that had experience navigating that transition. They found Sol Trujillo working his way up the management ladder at AT&T, finally culminating in chairmanship of former Baby Bell Qwest Communications. Would Trujillo like to take on the challenge of managing Australia’s largest phone company? Trujillo signed on with as Telstra’s CEO in 2005 promising to modernize the business and to bring American-style innovation to the South Pacific.
Instead, Trujillo established an American-style rapacious oligopoly.
Channel Nine in Australia reported on Telstra’s sudden interest in union-busting after Sol Trujillo arrived in 2005. (1 minute)
Sol Trujillo
In his first year at the company, Trujillo started an all-out war to get rid of Telstra’s organized labor, slashing 10,000 jobs to “save the company money” all while boosting his own salary. What started as $3 million in compensation in 2005 would rise to more than $11 million dollars just four years later, even as the value of Telstra declined by more than $25 billion on his watch.
Trujillo alienated his employees and officials in the Australian government. Then-Prime Minister John Howard attacked Trujillo’s salary boost as abusive.
“I’m not complaining about the salary I get but I do think the average Australian, who gets paid a lot less than I do … regards that sort of salary as being absolutely unreasonable,” Mr Howard said on Southern Cross radio. “And it doesn’t help the capitalist system, which I believe in very passionately, that some people appear to abuse it.”
Trujillo’s salary was 38 times greater than the highest official in Australia’s government.
The average Australian retiree gets by on $219AUS a week.
Trujillo had to make due with more than $211,000 a week.
Channel Nine ran this report on the controversy over Sol Trujillo’s compensation package. That old meme about having to pay high salaries to attract quality talent would have been more convincing had Trujillo’s policies not caused a $25 billion reduction in Telstra’s value. (2 minutes)
Customers weren’t exactly endeared to spending more of their money on Telstra products and services. Telstra had already embarked on cost controls for network upgrades, leveraged its monopoly power in many parts of the country with high rates for usage-restricted service, and bungled a critical application to participate in Australia’s National Broadband Network.
Australia’s National Broadband Plan, a roadmap for broadband improvements, set pre-conditions to involve small and medium-sized businesses in network construction. Trujillo balked, demanding that Telstra — and only Telstra — should have the right to determine what kind of network should be built in the country. More importantly, unless they exclusively ran it, the company would do everything in its power to block or destroy it.
Internet Overcharging schemes limit enjoyment of broadband usage across Australia. Telstra provides a usage meter estimator that includes all of the useless measurements for e-mail, images, and web browsing. But throw in some movie watching and the gas gauge really starts to spike.
The Sydney Morning Herald business reporter Ian Verrender was stunned:
Telstra has employed a three-step strategy to muscle out any competition.
It can be neatly condensed into three words: Bluster, Belligerence and Obfuscation. We [just] saw it again in spades.
Telstra has been excluded from one of the most ambitious infrastructure projects announced by a Federal Government in decades: the construction of a national broadband network.
Could it really be that Telstra’s board and management were so incompetent that they could not get past stage one in a tender process of this magnitude?
After all, there were only four main criteria that had to be met. The first was the proposal had to be lodged in English. The second and third had equally low hurdles. Metric measurements – not the old inches, feet and miles – were required and the bid had to be signed. Nothing too difficult there.
But the fourth criterion appeared to stump Telstra. It didn’t include any plan for the inclusion of small business. And so the Communications Minister, Stephen Conroy, was obliged to exclude Telstra, an announcement that shook 12 per cent from the value of the country’s biggest telecommunications company.
This was no accident on Telstra’s part. It knew it was lodging a non-conforming proposal. Why, you ask?
The answer is simple. Telstra does not want a national broadband network, particularly one that involves anyone else. That includes taxpayers.
And if one has to be built, Telstra will do everything in its power to delay or kill the process. Yesterday marked stage one in a protracted war, ultimately designed to defeat one of Prime Minister Kevin Rudd’s key election promises.
Trujillo claimed yesterday that Telstra had been unfairly excluded from the process on a technicality. That’s just rubbish.
In recent months, the company, its chairman, Don McGauchie, and Trujillo repeatedly threatened to walk away from the tender process, and lodged the proposal only a few hours before the deadline.
Trujillo’s rhetoric yesterday was laced with the usual mixture of bravado and threats. He compared Australia to North Korea or Cuba. He declared only Telstra was capable of building the type of network required by the Government.
But two lines stand out. First this: “Customers make the choice of who they do business with; regulators and governments and others do not.” And then: “We reserve our rights regarding future action.”
The message is clear. Telstra will launch legal action at every opportunity – and even when there aren’t opportunities.
That time-honored American practice of simply suing your way through any legislative or regulatory roadblocks threatened to come to Australia.
The exclusion of Telstra from such a revolutionary broadband project didn’t sit well with the board or shareholders, and directly led to Trujillo’s ouster in 2009. By then, he had alienated customers, the government, and just about everyone else. Perhaps the government would allow a second look at a Telstra broadband application if it was submitted by someone other than Sol Trujillo? It couldn’t hurt to find out.
Payback time. Trujillo threw a hissyfit in a BBC interview calling Australia’s lack of laissez-faire regulatory policies backwards, and treatment towards him racist. (Channel Nine – 1 minute)
The Post-Trujillo Era: More Arrogance and Ruthlessness, But a Communications Minister Outmaneuvers the Telecom Giant — 2009 to Present Day
Telstra spent the summer of 2009 attempting to heal the Trujillo-caused wounds with conciliatory statements in the Australian media. Telstra’s new chief executive, David Thodey, admitted the company’s customer service record needed improvement. He distanced himself from some of the more caustic comments from the former CEO, and claimed the company was on-track to be a major participant in improving Australia’s broadband experience.
Conroy
But as the months progressed, Australia’s Communications Minister, Stephen Conroy ultimately concluded he was getting the lip service treatment that Telstra had delivered Australians for years. Conroy, already suspicious of the company’s control-minded tendencies, quietly began bending the ear of Prime Minister Kevin Rudd. Conroy had watched Telstra’s steadfast refusal to work constructively towards a National Broadband Network (NBN). By last summer, the company was making proposals for underwhelming broadband expansion. Fiber optic broadband was unnecessary and expensive, they said. Besides, the service Telstra was providing was already good enough.
Australians didn’t agree. Part of the platform that brought the Rudd government to power was the promise of better broadband service in Australia. Waiting for Telstra to provide it was a futile exercise.
Conroy told Rudd the government should not be setting its broadband policy agenda based on what worked most conveniently for private providers. If they won’t move, then let’s get them out of the way, Conroy suggested. Rudd, working for the interests of the Australian people — not just a handful of telecom companies seeking riches with substandard service at monopoly prices, agreed.
After reviewing the proposals submitted to design and construct 21st century broadband service for Australia, Rudd dismissed them all, calling them inadequate. The government, he announced, would go it alone and build the network itself — delivering a fiber to the home network for 90 percent of Australians on an open network available to any provider that wanted to rent access at wholesale rates.
More importantly, Conroy was not going to allow Telstra to continually block progress on the NBN. Conroy was not some supine minister willing to compromise away the goal of super-fast affordable broadband. His critics called him Machiavellian, slashing and burning anything that stood in his way. But Conroy was steadfast — corporations would never be allowed to dictate broadband terms to the government. He warned Telstra to cooperate or face the consequences.
Telstra continued to stall and stonewall, and last September, the Rudd government delivered what it promised — a forced break-up of Telstra. The company was given a choice — either sell back its copper wire landline network to the government or divest itself of satellite TV service Foxtel and lose access to any additional wireless mobile frequencies for Telstra’s cellular service.
The equivalent in the United States would be to declare fiber to the home to be in the national interest, and if AT&T and Verizon didn’t deliver it to nearly every home in their service areas, the government would move in and do it themselves, taking back ownership of the AT&T and Verizon’s infrastructure along the way.
Channel Nine ran several reports on the announced breakup of Telstra, including an interview with the opposition. (6 minutes)
Australia Declares Broadband a Utility Service that Private Providers Cannot Control
Monday marked a day in history for Telstra, agreeing to sell back its copper wire landline business (for which it will receive $11 billion in compensation). In return, Telstra is assured wholesale access to the new fiber broadband network, and can market products and services on it. It cannot, however, serve as a gatekeeper to keep competitors out nor maintain virtual monopoly service, especially for less suburban and rural customers.
Some telecom analysts believe the deal is actually good news for Telstra, if they’d see beyond their control tendencies. After all, they say, Telstra gets to rid itself of a legacy copper-wire landline network that is expensive to maintain and serves a dwindling number of consumers, many who have switched to wireless. They also get to develop and market new high bandwidth applications on a network they are no longer responsible for financing.
It’s a win for the government as well who gets a single, national fiber network built in the public interest, which makes it far easier to recoup the billions in costs to build it. They’ll even likely make a profit suitable to defray the costs of subsidizing wireless broadband service for Australia’s rural residents, to be served with at least 12Mbps connections. No cost-recovery fees on customer bills, no usage limitations that restrict innovation, and broadband that serves everyone, not just a handful of corporations that seek to monetize every aspect of it.
Conroy wouldn’t think much of America’s National Broadband Plan, which relies near-exclusively on private providers voluntarily doing the right thing. Conroy stopped putting blind faith in Australia’s large telecommunications companies. The Obama Administration hasn’t.
We’ve seen millions spent lobbying to permit a handful of providers to control broadband service on their terms. Few will provide fiber to the home service and many are content leaving rural Americans with dial-up service. With dreams of Internet Overcharging schemes to manipulate usage to maximize profits even higher, things could get much worse. What’s right for AT&T isn’t right for us.
For Australia, who has lived under such monopolistic broadband regimes for over a decade, a National Broadband Network without arbitrary usage limits and available to all — rural and urban — is the promised land. It will leapfrog Australia well ahead of the United States and Canada, with far faster speeds and better prices, all because a government stood up to a corporate provider that preferred to overpay its executives instead of getting the job done right.
Australia had a reality check — broadband is a utility service necessary for every citizen who wants it. Just as electrification and universal phone service became ubiquitous in the last century, broadband will also join those services in the years ahead as commonplace in nearly every home.
If only the strength and conviction that is fueling Australia’s broadband future could also be found in the United States, where too often what is urgently needed today gets frittered away into “maybe we can have it someday” compromises with big telecom and their lobbyists. That isn’t good enough.
ABC National Radio interviewed telecom analysts about the implications of today’s deal with Telstra to retire Australia’s copper wire phone network (June 21, 2010) (4 minutes, 17 seconds)
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Senator Queen worked hard to try and strip the one year moratorium out of Senator Hoyle's anti-consumer bill
With the League of Municipalities essentially cutting a deal to sit on a municipal broadband study group that includes no actual consumers, voting for big telecom’s favorite bill of the year became a no-brainer. It was a real shame to see the voting results on S.1209, despite pleas from consumers and some of North Carolina’s most rural representatives demanding to keep the municipal broadband option open. They understand reality — while a handful of politicians in Raleigh cash big corporate contribution checks from the cable and phone companies, those out in the rural real world live with the results — no broadband.
We don’t need a one year moratorium on municipal broadband. If the state government wants to study the issue, so be it, but a one year suspension on municipal broadband is a stall technique that big telecom providers are celebrating across the state.
Residents across North Carolina owe Sen. Joe Sam Queen a special thank-you for leading the charge for better broadband for rural residents. He offered an amendment that would let the study go forward, but stripped out the anti-consumer moratorium.
Mark Binker of the Greensboro News & Recordexplained what happened next:
During the debate Monday night, Sen. Joe Sam Queen, a Waynesville Democrat, offered an amendment to allow the study to go forward but remove the moratorium.
Sen. David Hoyle, a Dallas Democrat and the Rules Committee chairman, offered a substitute amendment that essentially altered the bill’s language a bit but kept the moratorium around. Hoyle is one of the bill’s primary architects.
“We do not need a moratorium on the expansion of broadband across North Carolina,” Queen said. “This will only pour cold water on a very innovative sector.”
Now for a word on substitute amendment: When a substitute amendment is offered and accepted, it has the effect of wiping out the first amendment, which then can’t be offered again during the debate. It’s a way of doing away with things that the majority really doesn’t want to vote on.
During the past five years, I’ve mostly seen it used in the Senate my Democratic leaders to do away with Republican amendments they view as noxious – typically politically charged measures that could be awkward votes for rank and file members. I can’t recall the last time I saw a Dem on Dem substitute amendment.
I don’t know what, if any, conclusion can be drawn other than Hoyle was going to make darned sure his bill went through as is. Vote for the final measure was 41-7.
When big telecom pays the way, Senator Hoyle knows their needs must be met at all costs, no matter that his transparent shilling for the industry steamrolls over his fellow Democrats. Besides, with his retirement looming (we’ll be watching to see where he lands next), who cares if his constituents are upset? Certainly not Hoyle.
Fifteen Senate members stood against Hoyle’s ridiculous moratorium and deserve some recognition as well:
Courtesy of Mark Turner, here is the audio from the Senate floor debate over S.1209 and the arguments for and against a municipal broadband moratorium. (June 7, 2010) (30 minutes)
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Tomorrow, the fight in the House begins with a call to action to start flooding members of the House Ways and Means/Broadband Connectivity Committee with calls and e-mails. In the short House session, there are plenty of opportunities for us to derail this anti-consumer gift to the state’s cable and phone companies. I’ll have a contact list up tomorrow.
S1209 would have sailed through the North Carolina Senate 39-5 this afternoon had it not been for Sen. Joe Sam Queen who objected to the third reading of the bill. Senator David Rouzer (R-Johnston, Wayne) also changed his vote from “no” to “yes” which would have ultimately left the count at 40 for and 4 against. After that, the Senate adjourned and will take up the bill once again on Monday. What a job well done… for the cable and phone companies.
Brian Bowman reports that none of the Wake County senators opposed the bill or asked that the moratorium be removed.
Out of the entire North Carolina Senate, there are just four good guys?:
Senator Joe Sam Queen (Haywood, Yancy, Avery, Madison, McDowell, Mitchell) Joesam.Queen@ncleg.net
Senator Steve Goss (D-Alexander, Ashe, Watauga, Wilkes) Steve.Goss@ncleg.net
Senator James Forrester (R-Gaston, Iredell, Lincoln) James.Forrester@ncleg.net
Senator John Snow (D-Cherokee, Clay, Graham, Haywood, Jackson, Macon, Swain, Transylvania) John.snow@ncleg.net
Be sure to send all four of these folks your enormous thanks for doing the right thing. Apparently that is becoming more and more difficult these days.
For those who forgot why this fight matters, here’s a reminder. Watch it.
The people in Mars Hill, N.C. cannot afford to forget.
Now let’s talk reality for a moment. I’ve been involved in legislative battles on issues regarding telecommunications policy all the way back to the late 1980s when I was fighting for home satellite dish-owner rights. Back then it was a struggle against big cable, too. It took several tries, but we eventually won that one. Along the way, a lot of the same legislative trickery involved in S1209 reminded me of similar experiences back then. We shouldn’t make the same mistake twice. Let’s take a look:
The revised S1209 establishes a subcommittee to study municipal broadband funding issues while buying the industry a one year reprieve from any other cities or town going their own way. The members on this fact-finding endeavor are specifically defined:
A cable service provider.
A wireless telecommunications service provider.
A local exchange provider that is not a wireless telecommunications service provider.
A local exchange provider that is a wireless telecommunications service provider.
A city that operates a cable system and an electric power system as a public enterprise.
A city that operates a cable system as a public enterprise and does not operate an electric power system as a public enterprise.
A city that is a member of a joint agency established under G.S. 160A-462 for the operation of a cable system as a public enterprise.
The North Carolina League of Municipalities.
Now, can anyone reading tell me who is -not- on the list? Have you guessed?
-You- are missing from this list!
Everyone else is in the back room — cable and phone companies, cities, and a lobbying group representing cities. But not one North Carolina consumer who lives with broadband challenges day in and day out has a place at that table. What do they know anyway?
Brooks Townes in Weaverville doesn’t have a seat at the table, either.
How ironic that everyone holding a seat claims their interests coincide with ordinary citizens like you and I. After all, we’re supposed to be what this fight is all about. Sometimes, our interests will meet. Other times, especially when it comes to legislative strategies, they might not.
An Uncomfortable Revelation Caught On An Open Mike
Thanks to WUNC’s Laura Leslie, you can listen yourself as Senator Clodfelter, not realizing his mike was on, tells Senator Blue, “Now I’ll tell you that the … what I call the crazies who circulate around this issue are not going to like this [S1209 revision with a moratorium], but the municipalities are all on board. They negotiated it, they negotiated it so it’s not possible….” Blue asks Clodfelter how long he’s been talking with the groups representing municipalities. Clodfelter’s response: “We’ve been meeting daily — twice daily, so they’re all on board with this precise text.” The recording ends with Clodfelter presumably tapping his mike. Is this thing on? You bet it is. (June 2, 2010) (50 seconds)
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We already know what Senator Clodfelter feels about the people who are appalled at yet another embarrassing year of legislators falling all over themselves to do big cable and phone companies another favor. In his mind, we’re the “crazies” — the indignant citizens fed up with the time, money, and effort not spent building 21st century broadband networks, but instead devising strategies to prevent building them.
Corning has a plant in North Carolina that manufacturers endless miles of fiber optic cable that 40 members of the North Carolina Legislature just said they don’t need. Send it somewhere else.
Those 40 senators just told citizens — who are still using dial-up Internet access in the Appalachians, or who can’t afford the asking price for service in Spring Creek, or who only get excuses from AT&T why certain homes in Alamance County can have broadband, but they cannot — they really don’t care. What AT&T, Time Warner Cable, and Embarq wants is much more important.
…More important than the needs of folks like those in Spring Creek.
So while they propose to hold a debate over the merits of the free market vs. community’s doing-for-themselves when the free market fails them, countless thousands of North Carolina’s residents go without or are still hearing modem tones as they connect at speeds dozens of times slower than everyone else.
With a legislature hellbent on stalling or stopping projects that ameliorate this serious problem, no wonder North Carolina’s broadband rankings are falling fast. In 2007, the Census Bureau ranked North Carolina 35th in broadband adoption. A year later, the state was down to 41st. At least you can be proud you’re not West Virginia, right?
But then again, there are eight more positions to drop, so there is still room to make things even worse.
Now I ask myself, what could have possibly happened to deliver 40 votes into the hands of big cable and phone company interests.
Could it have been the time honored trick of dividing and conquering the opposition? For cities who want to deliver service, the threat of “either/or” seemed particularly effective. Either take our one year moratorium -or- face the ludicrous original legislation that required a community-wide referendum if Mrs. Nickels over on Fairfax Drive needs a new cable installed at her home to get a better picture. Either way, because certain folks didn’t say no way to either choice, it’s a victory party for Time Warner Cable, with no need to BYOB — they’ll provide it themselves. Besides, say the bill’s supporters, we’re offering a chance to hear your voice and views on our stall-tactic fact-finding subcommittee. Senator Clodfelter even thanks you for being reasonable and adult about all this.
AT&T thanks you as well.
Just keep those “crazies” out of the room.
Cable and phone companies get seats, so they can continue to deliver their talking points that don’t actually deliver broadband to any underserved area of North Carolina. Haven’t they said enough already? As Senator Queen asked, where is the broadband service for my communities?
In the end, the fact finding mission (cough) will deliver a watered-down report that will find its way into the nearest recycling bin. The cities’ strong views on municipal broadband will be diluted because they’ll have four competing voices from private industry saying the exact opposite. Besides, after yesterday’s performance in the Senate Finance Committee, does anyone really believe members like Senator Hoyle care what the subcommittee will have to say? He can just make it up as he goes along, just as he did when supposedly quoting the mayor of Salisbury.
After all the years spent watching negotiations over legislation, allow me to share this one piece of advice — collaborate and compromise with interests that seek to bury you at your own risk. Big money interests will call you every name in the book for standing and fighting for your principles (and a few legislators too), but if you make it known it’s time for the other side to start compromising — by actually delivering service and charging a reasonable price for it, there wouldn’t have been a need to engage in this battle in the first place.
That’s why this “crazy” website didn’t back down when Time Warner Cable brought its “new and improved” Internet Overcharging scheme to the table after consumers rebelled against the original plan. The cable company promised a listening tour, to take advice from reasonable consumers, and to modify its plans accordingly. Some folks played the game on their field — debating numbers back and forth about what an appropriate amount of rape and pillaging of our wallets was tolerable. Time Warner changed a few numbers and blessed us with a counteroffer that would have only tripled broadband prices for the same level of service. Couldn’t we be reasonable and take their offer?
We said no and stood by it, even if it meant going down with a fight. By not backing down, we won the battle knowing full well the war wasn’t actually over yet. But you can’t win a battle, much less a war, if you surrender and refuse to fight.
In the end, we were right and they were wrong. We even proved they were never really interested in listening in the first place.
The correct way forward is to remain 100 percent committed to opposing S1209, so long as it stalls, bans, slows, or sets onerous conditions on providing broadband relief. That means calling every senator between now and Monday and then doing the same in the House.
The three words you need to remember are real simple:
Kill this bill.
If you are spending time negotiating over who gets to sit in what chair on the subcommittee, you are not paying attention.
Kill this bill.
If you are trying to split the difference over how long the moratorium is going to last, you do not understand.
Kill this bill.
If you are trying to extract some extra concessions to reduce the rape and pillaging of your citizens, stand up, take a deep breath, go outside, and then tell the first person you see to call their representatives and tell them to:
Kill this bill.
If you are a consumer, you’re probably already upset. In a polite, persuasive, and persistent way, tell your elected officials you understand S1209 has been modified thanks to a compromise, but nobody bothered to compromise with you. You aren’t interested in this bill in any form, and you know that legislator is going to do the right thing and vote no to:
Kill this bill.
If they vote yes, all they’ve managed to kill is your faith in them as your elected representative. That’s something that can be taken care of at the next election.
Maybe people like me are crazy to dare to presume that our elected officials work first and foremost for “we the people” and not for the phone and cable company. Maybe it’s nuts to spend so much time and energy fighting legislation that is so obviously written by and for the industry that cuts a check to the first representative willing to put their name on it and introduce it. We’ve seen the merits of those who tried the same thing last year. Only one of them is no longer with the state legislature, brought down on ethics charges. How surprising. This year’s fight is lead by a retiring senator who will never endure the satisfaction voters might get disconnecting him from the legislature for selling them down Telecom River. That is not too surprising either.
Senator Hoyle turns his back on consumers and reads from his industry-provided talking points to stop municipal broadband
[Phillip Dampier co-authored this piece.]
North Carolina communities seeking to provide Internet access to their residents would have to wait a year while legislators argue over their terms of entry under a revised bill that swept through the Senate Finance Committee yesterday on a voice vote.
S1209, originally a poison pill bill that would effectively kill municipal broadband projects, was revised into a demand for further study, accompanied by a one-year moratorium for any city contemplating its own broadband project.
That concerns officials in several cities across the state, especially Greensboro, who wants to preserve the option of municipal broadband should Time Warner Cable revisit an Internet Overcharging experiment attempted in 2009 which would have drastically limited broadband usage for its customers.
The bill’s passage with a calling of the “yeas and nays” made it impossible for members of the public to know who voted for and who voted against the compromise measure. But an accidentally open microphone allowed many to get a real sense of how much one member of the Committee disliked consumers fighting back against telecom special interests pulling all the strings.
Senator Daniel Clodfelter (D-Mecklenburg) nearly raised a toast to his fellow members during the session praising them for doing the “grown-up” thing and agreeing to his manufactured compromise that phone and cable companies are celebrating as a victory today:
“This is not, I would say to you, a peace treaty. It is an armistice. And what the bill does is provide an armistice so that the shooting war stops and a conversation will occur among those people who’ve been meeting with each other in those conference rooms for the past week,” Clodfelter said. “Thank you all, because you did the grown-up thing, and I really appreciate it.”
Clodfelter’s seemingly-sincere comments might have gone off better had the audience not heard Clodfelter’s private remarks to Senator Dan Blue (D-Wake) a few minutes earlier, inadvertently captured by a live microphone:
“The — what I call the crazies that circulate around this issue are not gonna like this,” Clodfelter told Blue.
Observed WUNC reporter Laura Leslie: “I’m sure Clodfelter isn’t the first lawmaker to think so, but most of them cover the microphone before they say it out loud.”
The bill’s author, Senator David Hoyle (D-Gaston), who spent the day mangling the words “fiber optic,” condescendingly lectured his colleagues and communities about their opposition to his bill. Mistakenly called a Republican in the pages of the Greensboro News-Record, Hoyle complained cities don’t belong in the broadband business. He doesn’t want government competing with private industry, which might explain why the newspaper switched his party affiliation. But considering the amount of telecom special interest money that has flowed into the retiring senator’s campaign coffers, there may be much more to this than a philosophical debate.
Hoyle has gone all out in the North Carolina media on behalf of his telecom industry benefactors.
Money makes legislators do strange things... like disrespect their constituents with obvious industry-backed protectionist legislation
Delivering a series of eyebrow-raising one-liners, Hoyle is hardly ingratiating himself with cities and towns across the state. He inferred most city and town leaders were naive, telling ENC Today he expects all of the attention on municipal broadband will only cause more municipalities to get into the business.
“There are a whole lot of cities that can’t wait to jump on the bandwagon — monkey see, monkey do,” Hoyle said, using language that some have since called inappropriate.
Hoyle argues these systems are destined to fail. Once again he called out the cities of Davidson and Mooresville completing required upgrades to an old Adelphia cable system the community acquired nearly three years ago.
“There’s a couple of cities in this business that they should sure wish the heck they were not into, and that’s Davidson and Mooresville,” Hoyle said.
That came as news to MI-Connection, the municipal provider providing service to the two communities, whose revenues for the quarter that ended March 31st were up 9.4 percent from a year earlier.
MI-Connection General Manager Alan Hall also told the News the entire board has concerns about these kinds of bills.
Hoyle and his telecommunications industry friends may wish the communities weren’t in the business, but MI-Connection believes otherwise.
As Stop the Cap! has reported on several occasions, MI-Connection’s challenges have hardly been unique to Davidson and Mooresville. Time Warner Cable ditched over 125 Adelphia systems it purchased, and the company is still coping with legacy equipment left in place at the former Adelphia system it now runs in Calabasas, California. The cost of upgrades for the old Adelphia systems kept by both Time Warner Cable and Comcast ran well into the millions.
Another messy misstep for the state senator has been what one could charitably call “stretching the truth.”
Mayor Susan Kluttz, representing the people of Salisbury, N.C., was called a "gentleman" and "he" by an out of touch David Hoyle
“I got a call from a gentleman yesterday, Mayor Kluttz from Salisbury, and I mean he laid me out. He called me dumb. I had no idea,” Hoyle complained to other members on the Senate Finance Committee.
One person who was not amused by that story was Salisbury Mayor Susan Kluttz, who was seated directly in front of Hoyle. She had no idea what Hoyle was talking about. I later spoke with a representative of the city who told me no one from their staff called Hoyle. With a mistake like that, maybe that phantom caller was onto something after all. Listening to Hoyle, the self-appointed expert on municipal fiber projects, refer to them as “fiber opticals,” “fiber opt,” “fiber install and do all the things they’re going to do,” and “totally fiber project any city,” did not inspire confidence.
At the heart of Hoyle’s opposition is the idea that local municipalities should not be involved in the private sector… ever. In his mind, broadband service is a luxury, and the private marketplace is best equipped to decide who gets it, and who does not. Hoyle brings no answers to the table for communities bypassed by the duopoly of providers who are increasingly focusing their time, attention, and resources on larger cities where average revenue per customer can be higher than in rural areas. If the local cable or phone company doesn’t provide the service, that’s just too bad.
Mirroring the attitude of the state’s telecommunications companies, Hoyle believes municipalities or even private providers that seek broadband stimulus money represent unfair competition, even in cases where existing providers refuse to offer service.
That is the ultimate dilemma. If you believe broadband is not becoming an essential component of most American lives and is simply a nice thing to have, it’s not insane to agree with Hoyle. But hundreds of thousands of North Carolina residents don’t believe that. Parents of children in broadband-disadvantaged schools quickly learn their kids fall behind their peers in larger, wired communities. Businesses will not locate in areas where inadequate broadband exists. Digital economy entrepreneurs cannot start new businesses without good broadband either. Even senior citizens, who are among the most resistant to broadband adoption, often complain about the inherent inequity of being forced to rely on dial-up service.
Senator Purcell
Some of the same arguments about disparity of access went on during the early 1900s in rural North Carolina, deprived of electricity and telephone service by private providers. Once President Roosevelt effectively declared these types of services as essential utilities, where private providers didn’t go, municipalities and co-ops did. In North Carolina, keeping the brakes on an expansion-minded state government came even before Roosevelt was president, with the passage of the 1929 Umstead Act — a law that prohibits the state from directly competing with private enterprise.
The Umstead Act has been seized on by the telecommunications industry, arguing municipal broadband violates the spirit of the law, even though it never applied to local municipalities. Besides, the law has been amended since 1929 because, free market theory notwithstanding, free enterprise doesn’t have every answer and cannot meet every need. Just ask BP.
Only Ayn Rand could appreciate that Hoyle and his allies support an entrenched duopoly that embraces its profitable urban customers while they fight for restraining orders like S1209, blocking efforts by others to deliver service the duopoly won’t provide. We call that corporate welfare and protectionism. But some in the state legislature can’t see that because of the blizzard of cash being dropped in front of them by that duopoly, just to leave things entirely in their hands.
Hoyle noted nobody, including himself, liked the final bill. In Hoyle’s eyes, that adds up to a “good bill.”
Other members on the Committee had different views to share.
Senator William Purcell (D-Anson, Richmond, Scotland, Stanly) is the former mayor of Laurinburg — the same city from the 2005 court victory in BellSouth/AT&T v. Laurinburg, which paved the way for municipal broadband in the state. He asked pointedly, “What assurances do we have that the private companies are going to provide [service] to smaller areas?”
Senator Queen
Hoyle answered by pulling out his talking points generously provided by the cable and phone companies and delivered a non-answer, finally stating, “we are not going to get broadband to everyone in the state.” Perhaps Hoyle is foreshadowing his next job after he retires from the Senate — working for the same telecom companies he seems to represent now.
Senator Joe Sam Queen (D-Avery, Haywood, Madison, McDowell, Mitchell, Yancey) delivered the most passionate presentation of the day on behalf of his constituents, among the least likely to have broadband service available to them. As Hoyle disrespectfully rolled his eyes and winked at the cable industry lobbyists in the audience, Queen blasted the industry’s record of performance in his district, which covers the High Country — the rural Appalachian mountain counties in the western half of the state.
“We don’t have last mile access in the mountains,” Queen told the Committee. “[My constituents are] frustrated that it’s not getting done by the cable companies, the network companies, whoever’s doing it. They’re just cherry-picking and leaving off so many of our citizens, and that’s just unacceptable.”
Queen noted the private industry that refuses to serve many of his areas also refuses to allow others to provide that service.
“The private sector is not getting it done fast enough,” he added. “We have electricity to everybody, we have water to everybody. We should have Internet to everybody in the 21st century. In my counties, we are still struggling to make that happen. Our children don’t have the virtual broadband educational opportunities that they have in the urban areas. Our business owners don’t have the access to markets that our urban citizens have.”
Senator McKissick
One senator had a question about the year-long moratorium. Senator Floyd B. McKissick, Jr. (D-Durham) asked if no action was taken by the end of the 2011 session, would the moratorium expire automatically? Although provisions in S1209 do provide for a firm sunset date, Paul Myer from the North Carolina League of Municipalities told me nothing precludes the Senate from quietly extending the moratorium, or removing the sunset provision altogether, effectively making the ban permanent.
Meanwhile, communities contemplating such projects would have to give 15-days written notice to every private provider potentially impacted, providing more than two weeks for a fear-based opposition propaganda campaign. And we know where they’ll get the money to pay for it, too.
The only good news out of all this:
Cities already providing or constructing broadband projects may continue;
A Google Fiber city in North Carolina gets a pass;
Federal broadband grant recipients may proceed, although many of those grants are going to existing providers anyway;
The bill is headed next to the House, where we have a new opportunity to derail it.
Recognizing the spirit of this entire proceeding which left consumer interests out in the cold, no public comments were heard and no recorded vote was taken.
Needless to say, the revised S1209 is only slightly less loathsome than the original, and must be opposed. But more on that coming shortly.
We couldn’t close this piece without recognizing that when all the talk was over and vote was taken, it was rest and relaxation time for selected senators, brought to you by Electricities who picked up the tab for a fabulous spread of food and drink. WUNC reporter Laura Leslie wrote about what she called an Irony Supplement.
The S1209 compromise also won the grudging support of Senator David “Business-Friendly” Hoyle (D-Gaston).
After telling Senate Finance that “Somebody, maybe a lot of bodies, needs to stand up for our free enterprise system,” Hoyle went on to knock the state’s biggest public utility co-op: “If anybody thinks that the experiment with Electricities was a resounding success, I’d like for you to raise your hand.”
No one did.
But after session today, quite a few of the Hons found their way across the street for free food and drinks provided by – wait for it – Electricities.
As one House Republican told me tonight, “If you can’t bash them and then eat their hors d’oeurves, you’re in the wrong business.”
No, sir, I’m not. But I’m thinking you might be.
Senate Finance Committee deliberations on a revised S1209, a bill to establish a one year moratorium on municipal broadband projects. (June 2, 2010) (34 minutes)
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As I have been reporting here, the moratorium on municipal broadband is alive and well in the legislative halls of Raleigh. Senator David Hoyle (D-Gaston), sponsor of last year’s consumer atrocity HB1252, is back again asking Senator Daniel Clodfelter (D-Mecklenburg County) for a vote May 5th on a proposed moratorium for municipal broadband projects. Hoyle is not running for re-election.
While no new legislation has surfaced yet, several legislators continue to hint that a new bill is forthcoming. Be assured any such legislation will be designed to protect today’s monopoly/duopoly marketplace for broadband service in North Carolina.
Senator David Hoyle calls on the legislative committee to introduce and vote for a moratorium on municipal broadband projects in North Carolina. (April 21, 2010) (1 minute, 30 seconds)
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Meeting Highlights:
Senator Daniel Clodfelter (D-NC)
• Senator Clodfelter opened the meeting stating that he “wants to focus on revenue issues/financing, not whether or not high speed Internet is a good thing.”
• Heather Fennell, from the research division at the General Assembly gave a presentation citing laws that govern cities, the original lawsuit that established precedent for cities to construct municipal fiber networks, what cities have them, and who pays the taxes on different systems.
• Vance Holloman, Deputy Treasurer-State and Local Finance Division spoke next. He assured the committee and attending audience that North Carolina’s existing municipal systems are in good standing and he expected they would be able to pay down debts incurred from initial construction and deployment costs. Holloman added the Local Government Commission, which has to approve the financing of these systems, believed these projects represent “solid economic development investments.” Holloman’s strong presentation should have encouraged legislators to favor economic development from fiber optic broadband, but we had a strong sense several members had already made up their minds made up to oppose these projects. You will have to convince them to reconsider.
• The next part of this session divided 50 minutes between private commercial providers and municipalities to share their views.
The commercial providers went first, beginning with attorney Marcus Trathen from the law firm Brooks/Pierce. Today, he was representing the North Carolina Cable Communications Association (NCCCA). Trathen has also appeared at prior meetings representing the interests of Time Warner Cable.
Trathen’s presentation was about as expected – talking points loaded with misrepresentations and misinformation. Trathen told the committee the industry does not object if cities build private networks for internal communications (how generous), but doesn’t want those networks competing with NCCCA members.
Kelli Kukura, NC League of Municipalities
Suddenlink Communications’ Bill Paramore and AT&T lobbyist Herb Crenshaw also spoke, speaking in glowing terms about investments already made to improve service in the state. Crenshaw claimed AT&T is providing U-verse service in North Carolina after spending $1.2 billion dollars on system upgrades, an amount some have questioned (a 2007 press release pegged it at $350 million.) Of course, North Carolina’s cable and broadband customers who were promised savings from all this “robust competition” have instead been stuck paying annual rate increases that more often than not exceed the rate of inflation.
Next up were the municipalities.
Kelli Kukura from the North Carolina League of Municipalities started by challenging industry propaganda designed to downplay the benefits of municipal broadband. Kukura noted at least 30 North Carolina communities enthusiastically applied for Google’s proposed 1 gigabit fiber to the home network, illustrating intense interest in fiber networks. Google has also been an active proponent of municipal broadband, Kukura noted, reminding legislators the search engine giant defended the rights of municipalities seeking to deploy next generation broadband networks.
Among the communities that have their own municipal systems, job growth grew by an average of 6.4 percent. Kukura cited broadband success stories in Bristol, Virginia and Wilson, North Carolina.
Salisbury small businessman Brad Walser, owner of Walser Technology Group testified that North Carolina community’s new municipal broadband network Fibrant would meet his company’s needs for broadband capacity not available from commercial providers. Walser noted Salisbury is suffering from an unemployment rate exceeding 14 percent. Advanced broadband, he believes, could help the city attract new businesses that will help create new, high paying jobs. Fibrant is expected to launch later this year.
EPB provides broadband service for residents in Chattanooga, Tenn.
Some of the strongest testimony came from Colman Keane, senior strategic planner for municipally-owned EPB Telecom. Keane traveled all the way from EPB’s home in Chattanooga, Tennessee to share his experiences confronting a telecommunications industry hostile to the prospect of facing a new competitor. Keane has seen and heard the industry arguments all before, noting Chattanooga heard the exact same scare stories legislators in Raleigh were hearing today. Chattanooga also faced a proposed one year moratorium and a blizzard of industry-backed lawsuits, all which were won by the city.
The benefits of fiber optic broadband in Chattanooga include dramatically-improved broadband speeds as well as a more efficient power grid made possible from smart meters that help Chattanoogans reduce their peak power usage, saving money. I want to thank Colman for making the long journey on behalf of consumers in North Carolina.
• Finally, Raleigh community activist and former city council candidate Octavia Rainey spoke out against municipal broadband, which concerned me. Rainey spent her time seated with the telecom lobbyists, and her presentation illustrated the impact of astroturf efforts to co-opt good-hearted consumers into the industry cause. I hope to establish a dialogue with Ms. Rainey to share our information with her and learn more about how she reached her views on this subject. More to come.
The complete hearing of the Revenue & Laws Committee of the North Carolina Legislature on the issue of the financial implications of municipal broadband, chaired by Senator Daniel Clodfelter (D-Mecklenburg County) (April 21, 2010) (2 hours, 8 minutes)
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[Octavia has a long history of community involvement in Raleigh, trying hard to improve her neighborhoods and life in general for area residents, something she is to be applauded for doing. I suspect Ms. Rainey has formed her views on municipal broadband in part from her close working relationship with AT&T, who has a long history trying to make friends with various community groups in part to win favor for their corporate agenda. In this case, Octavia admits AT&T's Cynthia Mitchell and her have become "great partners." AT&T provided support in building an area playground and also paid for lunch for volunteers working on the project, adding the company wanted to be a part of the Raleigh community. There is nothing wrong with that, of course, but one wonders if the conversation also drifted into AT&T's talking points along the way.
Ms. Rainey also praised AT&T for delivering free Internet service to 290 Raleigh-area families last fall, which would make it ironic if she didn't support municipal broadband, which has a proven track record of erasing the digital divide and lowering prices for hard-pressed consumers. These are the people that need some fact-based information about the true benefits of municipal broadband. -- Phillip Dampier]
Today was expected, but disappointing nonetheless. Hoyle actually suggested that fiber networks may be obsolete in five years and we may be moving to wireless. If that were true, why is he hellbent on a moratorium and the banning of such networks at the industry’s behest? Why would the telecommunications industry be concerned about “obsolete fiber networks?” The only thing obsolete here are the broadband networks owned by big cable and phone companies Hoyle wants to preserve and protect.
Rep. Pryor Gibson (D-NC)
Rep. Pryor Gibson, who we noted is a manager for Time Warner Cable Construction agreed to recuse himself from this issue after it became a point of contention and sat in the back corner of the room.
Continue writing and calling the legislators below and asking them to oppose a moratorium on municipal broadband. Make plans on May 5th to come to Raleigh and be part of the crowd that opposes the moratorium. I will post meeting details as they develop.
Please thank the legislators we have identified on this committee as friends of our cause:
Sen. Daniel T. Blue, Jr. Wake Dan.Blue@ncleg.net (919) 733-5752 Democrat (919) 833-1931 Attorney
Sen. Fletcher Lee Hartsell, Jr. Cabarrus, Iredell Fletcher.Hartsell@ncleg.net (919) 733-7223 Republican (704) 786-5161 Attorney
Sen. Josh Stein Wake Josh.Stein@ncleg.net (919)715-6400 Democrat (919)715-6400 Lawyer
Rep. Paul Luebke (Co-Chair) Durham Paul.Luebke@ncleg.net 919-733-7663 Democrat 919-286-0269 College Teacher
Rep. Jennifer Weiss Wake Jennifer.Weiss@ncleg.net 919-715-3010 Democrat 919-715-3010 Lawyer-Mom
The rest of the lot either doesn’t support North Carolina consumers or have not yet made their views known on this issue. We must pin them down and identify those elected legislators that represent the people versus those representing big cable and phone interests. Be sure to tell them you will interpret any support for a moratorium on municipal broadband to mean they are opposed to competition, opposed to lower prices for consumers, opposed to job creation and economic growth, and obviously for the cable and phone interests that will stop at nothing to keep these systems from being built.
Ask them how they could possibly support keeping North Carolina 41st in the country in broadband rankings, why they are against reducing the 11.2 percent unemployment rate (10th worst in the country) in North Carolina, and how they can justify a vote that guarantees exactly more of the same. If you are from a city that applied for Google Fiber, remind your legislator passing this kind of hostile moratorium delivers a strong message this state is not serious about the next generation of broadband, and Google should look elsewhere.
Above all, note now that they understand the true implications this moratorium will have on constituents, you are confident there is no way they could ever support such a bad idea. Their delivery of a strong “no” vote reminds you why you supported them in the last election and will consider doing so again in the next.
Always be polite, professional, and persuasive in your correspondence, but deliver a clear and firm message that supporting a moratorium is completely unacceptable. Finally, be sure to ask them to get back in touch with you regarding their position on this issue as soon as possible. Then let us know!
Sen. Daniel Gray Clodfelter (Co-Chair) Mecklenberg Daniel.Clodfelter@ncleg.net (919) 715-8331 Democrat (704) 331-1041 Attorney
Sen. Peter Samuel Brunstetter Forsyth Peter.Brunstetter@ncleg.net (919) 733-7850 Republican (336) 747-6604 Attorney
Sen. David W. Hoyle Gaston David.Hoyle@ncleg.net (919) 733-5734 Democrat (704) 867-0822 Real Estate Developer/Investor
Sen. Samuel Clark Jenkins Edgecomb, Martin, Pitt Clark.Jenkins@ncleg.net (919) 715-3040 Democrat (252) 823-7029 W.S. Clark Farms
Sen. Jerry W. Tillman Montgomery, Randolph Jerry.Tillman@ncleg.net (919) 733-5870 Republican (336) 431-5325 Ret’d school teacher
Rep. Harold J. Brubaker Randolph Harold.Brubaker@ncleg.net 919-715-4946 Republican 336-629-5128 Real Estate Appraiser
Jesse and his nearby neighbors on the west side of Milton are frustrated. They live just 20 minutes away from Burlington, the largest city in the state of Vermont. Despite the proximity to a city with nearly 40,000 residents, there is no cell phone coverage in western Milton, no cable television service, and no DSL service from FairPoint Communications. For this part of Milton, it’s living living in 1990, where dial-up service was one’s gateway to the Internet.
Jesse and his immediate neighbors haven’t given up searching for broadband service options, but they face a united front of intransigent operators who refuse to make the investment to extend service down his well-populated street.
“After many calls to Comcast, they eventually sent us an estimate for over $17,000 to bring service to us, despite being less than a mile from their nearest station,” Jesse tells Vermont Public Radio. “They also made it very clear that there was no plan at any point in the future, 2010 or beyond, to come here unless we paid them the money.”
Jesse and his neighbors want to give Comcast money, but not $17,000.
For at least 15 percent of Vermonters, Jesse’s story is their story. Broadband simply remains elusive and out of reach.
Three years ago, Vermont’s Republican governor Jim Douglas announced the state would achieve 100 percent broadband coverage by 2010, making Vermont the nation’s first “e-State.”
Vermont Public Radio reviewed the progress Vermont is making towards becoming America’s first e-State. (January 20, 2010) (30 minutes)
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Gov. Douglas
In June 2007 the state passed Act 79, legislation that established the Vermont Telecommunications Authority to facilitate the establishment and delivery of mobile phone and Internet access infrastructure and services for residents and businesses throughout Vermont.
The VTA, under the early leadership of Bill Shuttleworth, a former Verizon Communications senior manager, launched a modest broadband grant program to incrementally expand broadband access, often through existing service providers who agreed to use the money to extend service to unserved neighborhoods.
The Authority also acts as a clearinghouse for coordinating information about broadband projects across the state, although it doesn’t have any authority over those projects. Lately, the VTA has been backing Google’s “Think Big With a Gig” Initiative, except it promotes the state as a great choice for fiber, not just one or two communities within Vermont.
Vermont used this video to promote their bid to become a Google Fiber state. (2 minutes)
Some of the most dramatic expansion plans come from the East Central Vermont Community Fiber Network. ECFiber, a group of 22 local municipalities, in partnership with ValleyNet, a Vermont non-profit organization, is planning to implement a high-capacity fiber-optic network capable of serving 100% of homes and businesses in participating towns with Internet, telephone and cable television service. In 2008, the group coalesced around a proposal to construct a major fiber-to-the-home project to extend broadband across areas that often don’t even have slower speed DSL.
The ECFiber project brought communities together to provide the kind of broadband service private companies refused to provide. Vermont Public Radio explores the project and the enthusiasm of residents hopeful they will finally be able to get broadband service. (March 8, 2008) (24 minutes)
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ECFiber's Partner Communities
The Vermont towns, which together number roughly 55,000 residents, decided to build their own network after FairPoint Communications and local cable companies refused to extend the reach of their services. Providers claim expanding service is not financially viable. For residents like sheep farmer Marian White, interviewed by The Wall Street Journal, that means another year of paying $60 a month for satellite fraudband, the speed and consumption-limited satellite Internet service.
White calls the satellite service unreliable, especially in winter when snow accumulates on the dish. Unlike many broadband users who vegetate for hours browsing the web, White actually gets an exercise routine while trying to get her satellite service to work.
“I open a window and I take a pan of water and, a cup at a time, I launch warm water at the satellite dish until I have melted all the snow off the dish,” Ms. White says. “It works.”
Other residents treat accessing the Internet the same way rural Americans plan a trip into town to buy supplies.
Kathi Terami from Tunbridge makes a list of things to do online and then, once a week, travels into town to visit the local public library which has a high speed connection. Terami downloads Sesame Street podcasts for her children, watches YouTube links sent by her sister, and tries to download whatever she thinks she might want to see or use over the coming week.
A fiber to the home network like ECFiber would change everything for small town Vermonters. The implications are enormous according to project manager Tim Nulty.
“People are truly afraid their communities are going to die if they aren’t on the communications medium that drives the country culturally and economically,” he says. “It’s one of the most intensely felt political issues in Vermont after health care.”
Despite the plan’s good intentions, one obstacle after another has prevented ECFiber from making much headway:
The VTA rejected the proposal in 2008, calling it unfeasible;
Plans over the summer and fall of 2008 to approach big national investment banks ran head-on into the sub-prime mortgage collapse, which caused banks to stop lending;
An alternative plan to build the network with public debt financing, using smaller investors, collapsed along with Lehman Brothers on September 14, 2008;
An attempt by Senator Pat Leahy (D-Vermont) to insert federal loan guarantees into the stimulus bill in February 2009 was thwarted by partisan wrangling;
Attempts to secure federal broadband grant stimulus funding has been rejected by the Commerce Department;
Opposition to the plan and objections over its funding come from incumbent providers like FairPoint, who claim the project is unnecessary because they will provide service in those areas… eventually.
For the indefinite future, it appears Ms. White will continue to throw warm cups of water out the window on cold winter mornings.
Vermont Edition takes a comprehensive look at where the state stands in broadband and wireless deployment. (April 8, 2009) (46 minutes)
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For every Tunbridge resident with a story about life without broadband, there are many more across Vermont living with hit or miss Internet access.
Take Marie from Middlesex.
Most residents in more rural areas of Vermont get service where they can from FairPoint Communications
“I am in Middlesex, about a half-mile off Route 2, and five minutes from the Capitol Building. Yet up until just recently, we had no sign of high-speed Internet. I understand that my neighbors just received DSL a few weeks ago, but when I call FairPoint, they tell me it’s still not available at my house, which is a few hundred yards up the hill. Hopefully, they’re wrong and I’ll see DSL soon,” she says.
Marie is pining for yesterday’s broadband technology — FairPoint’s 1.5Mbps basic DSL service, now considered below the proposed minimum speeds to qualify for “broadband” in the National Broadband Plan. For Marie, it’s better than nothing.
Geryll in Goshen also lacks DSL and probably wouldn’t want it from FairPoint anyway.
“We have barely reliable landline service. A tech is at my house at least three times per year. I was told the lines are so old they are decaying. Using dial-up is impossible. I use satellite which is very expensive and is in my opinion only one step up from dial-up. I am limited to downloads and penalized if I reach my daily limit,” he says.
Many Vermonters acknowledge Douglas’ planned 100-percent-broadband-coverage-by-2010 won’t come close to achievement and many are highly skeptical they will ever see the day where every resident who wants broadband service can get it.
Chip in Cabot is among them, jaded after six years of arguments with FairPoint Communications and its predecessor Verizon about obtaining access to DSL. It took a cooperative FairPoint engineer outside of the business office to finally get Chip service. His neighbors were not so lucky, most emphatically rejected for DSL service from an intransigent FairPoint:
“I laughed when Governor Douglas announced his e-State goal “by 2010″ three years ago. Now I’m thinking I should have made some bets on this claim. It took years of legal battles and a zoning variance to obtain partial cell coverage here in Cabot. Large parts of the town still do not have any cell coverage. Governor Douglas can perhaps be forgiven – he has no technical knowledge, and as a politician would be expected to be wildly optimistic about such “e-State” claims. The Vermont Telecommunications Authority and the Department of Public Service should know better however. We’re talking about rural areas where there is no financial incentive to provide either DSL or cell service. It will take a huge amount of money to provide service to those remaining parts of the state. I’m not optimistic.”
The Wall Street Journal chronicled the challenges Vermonters face when broadband is unavailable to them. ECFiber may solve these problems. Some of the stories in our article are reflected in this well-done video. (3/2/2009 — 4 Minutes)
AT&T had to pay considerably more in taxes last year than Verizon did
One of the most common talking points among pro-business tax cutting advocates is the claim that companies in the United States face the highest corporate tax rate in the world. But that assumes corporations actually pay taxes at that rate, which few do. In fact, this week Forbes discovered that many of the country’s biggest, most profitable corporations enjoy a far lower tax rate than you do–that is, if they pay taxes at all.
While the biggest tax savings were grabbed by the bailed-out banks, the nation’s two largest telecommunications companies — AT&T and Verizon didn’t do too badly for themselves.
Of the two, AT&T had the higher tax bill, paying an effective tax rate of 32.4 percent. But AT&T is still prone to avoid paying corporate taxes wherever it can. In Connecticut, AT&T’s maneuvers are fueling a campaign for state tax reform to close the loopholes.
AT&T Corp. has emerged as the poster child for these shenanigans.
A state Department of Public Utility Control audit found AT&T to be engaging in a tax-avoidance scheme sometimes called the Las Vegas Loophole. Over a period of 2.5 years, AT&T shifted about $145 million in Connecticut earnings to a subsidiary in Nevada, ostensibly paying licensing fees for the right to use the company’s own name and logo. Nevada has no corporate income tax, so the shifted earnings went untaxed and Connecticut lost out. If it sounds fishy, that’s because it is. AT&T is not alone. Many large corporations use sham transactions designed to move profits generated in Connecticut to a different state where they won’t be taxed.
AT&T’s executives benefit from creative tax accounting themselves, earning a stipend of up to $14,000 a year to hire high-priced accountants that specialize in finding ways to reduce their own personal tax bite. But no matter — AT&T covers the taxes CEO Randall Stephenson has to pay on some of his benefits anyway.
While the rest of the country plods through a jobless recovery, Stephenson decided the time was right to get a base salary increase and resume taking a bonus — a big one, too. His effective compensation package rose by a third in 2009.
Among Stephenson’s compensation and perks:
$1.45 million in base salary, up two percent over 2008;
$12.1 million in options and performance-based stock incentives;
$216,000 in rebates to cover his club membership dues;
$200,000 to cover his life insurance premiums;
$140,576 to cover any taxes he is forced to pay on his benefits package.
Verizon gets to use partner Vodafone's British address to help reduce exposure to U.S. corporate taxes. It reports much of its income through its British partner, which helps reduce its American tax liability.
Meanwhile, over at the nation’s 12th largest company, Verizon has managed to cut its tax rate to just 10.5 percents. That’s because on paper, Verizon’s British partner Vodafone gets much of the income, while the U.S. side gets lots of expenses. That dramatically reduces the corporate taxes incurred by the company in the United States. That tax rate is even lower than Steve Forbes’ much-promoted 15 percent flat tax.
Verizon’s compensation to Uncle Sam calls out the myth of America’s corporate tax rate. With creative accounting work, companies can slash their tax obligations.
That gives Verizon more money to spread around to top executives at the company, all while Verizon lays off thousands of workers and leaves retirees wondering how long the company will stand behind its pension and health coverage benefits.
Some shareholders are rankled by news CEO Ivan Seidenberg is on track to receive an $11 million stock grant if the company makes it as low as 25th among 34 similar Dow Jones-ranked companies, and a doubling to $22 million, if the company ranks among the top four. That’s hardly a high hurdle to achieve an $11 million bonus.
That kind of compensation raises the ire of former employees of Verizon, who launched the Association of BellTel Retirees to protect the pension and health care benefits of retirees.
“Large payouts for below-median performance does not adequately align pay with performance,” said Bill Jones, the retiree group’s president, a former managing director at NYNEX, now a part of Verizon.
The group is well known for its high profile pressure on Verizon to stop providing a largess of benefits for top management for merely doing their jobs.
This year, the Association will demand a vote on a resolution to better tie stock awards to stock performance and limit executive compensation. It also wants to stop expensive windfall golden parachute packages, such as Seidenberg’s $33.1 million dollar bon voyage, which he receives if he’s fired or retires.
While a handful of Verizon executives fight to preserve their generous compensation packages, Verizon retirees are fighting to get their doctor bills paid. Jones’ group is strongly advocating new legislation to stop companies from walking away from their agreements with retired employees.
Bill Jones appeared on WOCA-AM Ocala, Florida in February to discuss the threat retirees face when companies walk away from their pension and health care plans for former employees. (28 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.
H.R. 1322, the Emergency Retiree Health Benefits Protection Act, was introduced into the 111th Congress by Rep. John Tierney and would:
Prohibit group health plans from making post-retirement reductions in retiree benefits;
Require plans to adopt provisions barring post-retirement cuts in retiree health benefits;
Require employers to restore benefits reduced after retirement;
Provide an exemption for employers who are unable to restore benefits because they would experience substantial business hardship to be determined by the Secretary of Labor; and,
Create a loan guarantee program to assist employers in restoring retiree health benefits.
Time Warner Cable may be robocalling you any day now with news that your set top box is getting what the cable company is calling an upgrade.
Time Warner Cable is making this robocall to customers with set top boxes announcing an upcoming upgrade. (1 minute)
You must remain on this page to hear the clip, or you can download the clip and listen later.
Calls are being made to customers with set top boxes in Buffalo and Rochester notifying them an upgrade to the new Mystro platform begins as early as April 13th, depending on the box being used. Syracuse and southern tier residents can expect their upgrade to commence in May. The company maintains a website that will let you find the exact schedule for the Mystro upgrade in your area.
Time Warner Cable’s Navigator software displays the electronic program guide, helps you program and control your DVR, and also includes the setup menu for the box.
The upgrade will result in a dramatic change in the look and feel of the box’s on-screen graphics, change how you navigate through the program guide, and provide more options for hooking up today’s HDTV sets. If you have a DVR box from Time Warner Cable, the upgrade sets the stage for an upcoming feature that will let you remotely program your DVR while away from home.
Not everyone is thrilled with the upgrade, however. In fact, a Google search for “Time Warner Navigator upgrade” reveals a large selection of websites and forums filled with complaints. Regularly reported problems include:
Sluggish performance, especially on older set top boxes;
Poor responsiveness on fast forward/rewind functions for DVRs, making it difficult to land precisely where you want to be;
The loss of “virtual HD” channels which some boxes passed through to even standard analog-only TV’s (albeit not in HD of course);
DVR bugs that made recording reliability inconsistent;
A DVR menu that makes it difficult to record only new episodes of series that repeat regularly on the channel lineup;
Box crashes, lost program guide data, and issues with the box retaining settings, especially for more complex HDTV setups;
Time Warner Cable began testing Mystro at least two years ago in selected markets, and the company believes it has worked out a number of the bugs noted above along the way. Time Warner plans to systematically upgrade their customers to the new platform nationwide now that testing has been completed.
This customer was so bemused with the Time Warner Navigator upgrade, he made a video illustrating the absurd journey he took to find a science-fiction movie to watch.
Rasputin1357: Why can't we bring back tar and feathering? This jackass looks to be the perfect candidate for that treatment!...
Terry: This makes it look as if you don't understand business. The content producer sets their asking price. The delivery provider negotiates the price to wh...
Dave Hancock: Phillip, one thing that you said peaked my interest:
"Subscribers on Time Warner Cable’s blog keep coming up with an innovative idea to solve thes...
Jason!: Am I surprised? No, I am not surprised....
DM: I hate hearing statements like this because this has been the cable industry’s exact attitude for the past five years.
Regarding internet services,...
Jeremy: That's their whole plan so they can justify ripping off consumers with lousy bandwidth and caps....
Uncle Ken: Just great/ If what Kent says is true we will drop to the bottom
of the rest of the earth and be back on dial up all in the name of stock
holders. M...
Earl Cooley III: They should pay the various channels whatever fees they want, and finance it by dramatically slashing executive compensation, using the extra money le...
Phillip Dampier: In other words, some automated test procedure is being run on a periodic basis that resets your line speeds lower (how many have ever gotten faster sp...
Zaii: I've been having this issue for months now. I had 1792 d/l for years rock solid connection then I got "optimized" to 1504.
Contacted Verizon direc...
Phillip Dampier: In Australia or New Zealand, where flat rate broadband was around only very briefly back when "online streaming" meant a low bitrate Real Audio stream...
Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about. Members of Broadband for America Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to [...]
Astroturf: One of the underhanded tactics increasingly being used by telecom companies is “Astroturf lobbying” – creating front groups that try to mimic true grassroots, but that are all about corporate money, not citizen power. Astroturf lobbying is hardly a new approach. Senator Lloyd Bentsen is credited with coining the term in the 1980s to [...]
Hong Kong remains bullish on broadband. Despite the economic downturn, City Telecom continues to invest millions in constructing one of Hong Kong’s largest fiber optic broadband networks, providing fiber to the home connections to residents. City Telecom’s HK Broadband service relies on an all-fiber optic network, and has been dubbed “the Verizon FiOS of Hong [...]
BendBroadband, a small provider serving central Oregon, breathlessly announced the imminent launch of new higher speed broadband service for its customers after completing an upgrade to DOCSIS 3. Along with the launch announcement came a new logo of a sprinting dog the company attaches its new tagline to: “We’re the local dog. We better be [...]
Stop the Cap! reader Rick has been educating me about some of the new-found aggression by Shaw Communications, one of western Canada’s largest telecommunications companies, in expanding its business reach across Canada. Woe to those who get in the way. Novus Entertainment is already familiar with this story. As Stop the Cap! reported previously, Shaw [...]
The Canadian Radio-television Telecommunications Commission, the Canadian equivalent of the Federal Communications Commission in Washington, may be forced to consider American broadband policy before defining Net Neutrality and its role in Canadian broadband, according to an article published today in The Globe & Mail. [FCC Chairman Julius Genachowski's] proposal – to codify and enforce some [...]
In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre. Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers. Ted Rogers and Jim Shaw drew a line on the western Ontario [...]
Just like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them. This time, Frontier is issuing a self-serving press release touting their investment [...]
I see it took all of five minutes for George Ou and his friends at Digital Society to be swayed by the tunnel vision myopia of last week’s latest effort to justify Internet Overcharging schemes. Until recently, I’ve always rationalized my distain for smaller usage caps by ignoring the fact that I’m being subsidized by [...]
In 2007, we took our first major trip away from western New York in 20 years and spent two weeks an hour away from Calgary, Alberta. After two weeks in Kananaskis Country, Banff, Calgary, and other spots all over southern Alberta, we came away with the Good, the Bad, and the Ugly: The Good Alberta [...]
A federal appeals court in Washington has struck down, for a second time, a rulemaking by the Federal Communications Commission to limit the size of the nation’s largest cable operators to 30% of the nation’s pay television marketplace, calling the rule “arbitrary and capricious.” The 30% rule, designed to keep no single company from controlling [...]
Less than half of Americans surveyed by PC Magazine report they are very satisfied with the broadband speed delivered by their Internet service provider. PC Magazine released a comprehensive study this month on speed, provider satisfaction, and consumer opinions about the state of broadband in their community. The publisher sampled more than 17,000 participants, checking [...]
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Qwest, the former-Baby Bell serving the upper midwest, mountain west, and desert states got caught on tape telling customers the company’s intent is to eliminate competition from independent Internet Service Providers by banning them from their network.
UTOPIA is Utah’s publicly-owned fiber optic platform delivering competitive choice to residents of 16 Utah cities. Residents enjoy true fiber optic service and can select from 11 different Internet Service Providers, each offering their own speed levels, bundles, and pricing. How many ISPs can you choose from?
