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Pre-Empting Moronic Broadband Law Means Everything to Rural North Carolina

greenlightThe community of Pinetops, N.C. has finally got 21st century gigabit broadband, but no thanks to a state legislature so beholden to Time Warner Cable, it let the cable giant write its own law to keep potential competitors away.

The passage of H129 was almost a given after Republicans regained control of both chambers of the state legislature in 2011 for the first time since 1870. The bill made it almost impossible for any of the state’s existing community-owned broadband networks to expand out of their immediate service areas. It also discouraged any other rural towns from even considering starting a public broadband network to solve pervasive broadband problems in their communities.

It was not the finest moment for many of H.129’s supporters, who had to explain to the media and constituents why the state’s largest cable operator needed protection from potential competition and more importantly, why public officials were catering to the corporate giant’s interests over that of the public.

"I wish you'd turn the camera off now because I am going to get up and leave if you don't," said Rep. Julia Howard

“I wish you’d turn the camera off now because I am going to get up and leave if you don’t,” said Rep. Julia Howard

Rep. Julia Howard (R-Davie, Iredell) found herself losing her cool when WNCN reporters in Raleigh caught up with her and confronted her with the fact her campaign coffers had been filled by the state’s largest telecom companies. She didn’t have an answer for that. Moments later, she appeared ready to flee the interview.

“I wish you’d turn the camera off now because I am going to get up and leave if you don’t,” Howard told the reporter.

Rep. Marilyn Avila was so close to Marc Trathen, then Time Warner Cable’s top-lobbyist in the state, we decided five years ago it would be more accurate to list Time Warner Cable as her sole constituent. Avila’s name appeared on the bill, but it was readily apparent Time Warner Cable drafted most of its provisions. The nearest city in Avila’s own district wanted no part of H129, and neither did many of her constituents.

The bill managed to pass the legislature and after becoming law effectively jammed up community broadband expansion in many parts of the state.

It would take the Federal Communications Commission to pre-empt the legislation on the grounds it was nakedly anti-competitive and prevented broadband improvements in communities major telecom companies have ignored for years.

As a result of the FCC’s actions, the community of Pinetops now has access to gigabit broadband, five years late, thanks in part to Rep. Avila who got a $290 dinner for her efforts and was honored as a guest speaker at a cable industry function in recognition of her service… to Time Warner Cable.

Rep. Avila with Marc Trathen, Time Warner Cable's top lobbyist (right) Photo by: Bob Sepe of Action Audits

Rep. Avila with Marc Trathen, Time Warner Cable’s top lobbyist (right) Photo by: Bob Sepe of Action Audits

Greenlight, Wilson’s community-owned fiber to the home provider, switched on service in the community this spring to any of the 600 Pinetops homes that wanted it, and many did.

“We just love it!” said Brenda Harrell, the former acting town manager.

In fact, Greenlight is now delivering the best broadband in Edgecombe County, and deploying fiber to the home service was hardly a stretch for Greenlight, which was already installing fiber optics to manage an automated meter infrastructure project. The only thing keeping better broadband out of the hands of Pinetops residents was a law written by an industry that loathes competition and will stop it at all costs. Time Warner Cable didn’t bother to offer service in the community even after its bill became law and residents endured years of unreliable DSL or dialup access instead. Talk about a win-lose scenario. Time Warner Cable got to keep its comfortable cable monopoly while many families had to drive their children to businesses miles away just to borrow their Wi-Fi signal to finish homework assignments.

Faster broadband is likely to be transformative for the quiet rural community. Current town manager Lorenzo Carmon sees more than nearby fields of sweet potatoes and soybeans. With gigabit fiber and cheap local housing, Pinetops could become a bedroom community for upper income professionals now living in Greenville, a university town heavily populated by doctors, students, and high-tech knowledge economy workers. If and when they arrive, they’ll find a tech-ready community, right down to the local Piggly-Wiggly supermarket, which now has fiber fast internet service too.

pinetopsPinetops offers proof of the obscenity of bought-and-paid-for-politicians supporting corporate protectionism that harms people, harms education, harms jobs, and leaves rural communities with no clear path to the digital economy of the 21st century. Legislation like H129, which continues to be enforced in more than a few U.S. states, needs to be pre-empted nationwide or even better repealed by state legislators.

But North Carolina’s legislature still isn’t getting the message. They are outraged the FCC outsmarted Time Warner Cable and them, and are now wasting time and resources to have the FCC’s pre-emption overturned in court, evidently so that rural North Carolina can continue to tough it out with DSL indefinitely. That’s political malpractice and North Carolina voters need to show the door to any elected representative that cares more about the interests of a giant cable company than what is good for you and your community. Reps. Avila and Howard don’t have to live with 3Mbps DSL, so why should you?

“If the private sector is not providing the services, the government has to step in,” said Carmon. “The internet is just like electricity. You can’t live without it.”

We couldn’t agree more.

Hillary Clinton’s Broadband/Tech Policies: Aspirational, Bureaucratic, and Often Vague

(Editor’s Note: In keeping with the changes introduced by the latest “AP Stylebook 2016,” as much as it pains us, starting today we will refer to the “internet” in lowercase.) 

clintonThe internet.

“I have a plan for that.”

High tech jobs.

“I have a plan for that.”

Facilitate Citizen Engagement in Government Innovation.

Yes, Democratic presidential candidate Hillary Clinton has a plan for that, too. Whatever “that” is, there is essentially a four-year plan.

Hillary Clinton’s Initiative on Technology & Innovation” runs 15 pages and immediately reminds readers of the menu at Cheesecake Factory. There is literally something for everyone. It’s surprisingly robust for someone who professed she didn’t understand much of the email controversy she entangled herself in while serving as Secretary of State and admittedly doesn’t know how to work a fax machine. The question is, if voters choose Mrs. Clinton as the next president of the United States, how can they be sure her administration will achieve those promises, starting with a commitment to bring internet service to 100 percent of the country.

opinionBelieve it or not, there are organizations out there that track just how many of these pledges are actually kept during each administration, and surprisingly the track record is better than you might think. Politifact’s Obameter shows the Obama Administration achieved the majority of its tech policy objectives, compromised on a few others, and broke its promise on just one: Requiring companies to disclose personal information data breaches.

After almost two decades of telecommunications deregulation, President Obama turned plenty of attention to internet issues in the last two years of his second term. His de-facto enforcer turned out to be FCC Chairman Thomas Wheeler, who has been tenaciously dismantling years of an industry-fueled “trust us, we know best” regulatory policy framework partly established during the (Bill) Clinton Administration. An exception to the usual revolving door of regulators taking well paid jobs in the private sector after leaving government, Wheeler has gone the other way — leaving the private sector as a former telecom lobbyist and venture capitalist to serve as FCC chairman during Obama’s second term. He’s a huge improvement over former chairman Julius Genachowski, who was typically resolute on telecom issues until he wasn’t.

Politifact's Obameter gives high marks to President Obama for delivering on his tech issues platform.

Politifact’s Obameter gives high marks to President Obama for delivering on much of his tech issues platform.

Many progressives looking to keep or even build on Wheeler’s willingness to check telecom industry power are unsure whether Hillary Clinton will be tenacious like Sen. Elizabeth Warren or get up close and personal with big telecom companies, like former Tennessee congressman Harold Ford, Jr., who still serves as honorary chairman of the industry front group Broadband for America.

Progressives with long memories do not fondly recall the first Clinton Administration’s willingness to compromise away or abandon major policy positions it seemed steadfast on during two campaigns. After the 1992 election, Knight-Ridder Newspapers compiled a list of 160 specific commitments made by Bill Clinton. As he approached the end of his first term, the newspaper chain found Clinton managed to achieve 106 of them — a surprising 66% success rate. The reason for the perception-reality gap? Many of those commitments involved low-key, barely noticed policy changes or were originally so broadly defined as to make them achievable based on even the thinnest evidence of change.

The George W. Bush administration managed worse under a perpetual cloud of post Bush v. Gore partisanship and a change in priorities after 9/11, leading to a failure to deliver on most of his policy positions and pledges, according to CBS News. But the Bush Administration’s love of deregulation was well-apparent at the FCC during his two terms in office under FCC chairmen Michael Powell (now a top cable industry lobbyist) and Kevin Martin. Some of those deregulation policies have been reconsidered during the Obama Administration, and some voters are wondering if that will stay true should Mrs. Clinton be our next president.

Many of Clinton’s pledges on tech issues are bureaucratic crowdpleasers that have little immediate relevance or understanding outside of Washington. There are expansions in various federal programs, appointments of new federal overseers to keep a lookout for burdensome regulations on the state and local levels, and a variety of programs to expand broadband at a growing number of “anchor institutions” (not your home or business) through the use of public-private partnerships. It is worth noting many similar projects have already been up and running for at least a decade. Some of these anchor institutions cannot afford to pay the ongoing cost of getting service from these projects, and many are already served more than adequately, with capacity to spare. As we reviewed Mrs. Clinton’s tech policy positions, it also became clear the greater the scope and likely cost of any single pledge, the more vague it seemed to be, especially regarding the money required to pay for it and how its success will be measured.

America's rural broadband problem.

America’s rural broadband problem.

In particular, Mrs. Clinton is promising to “finish the job of connecting America’s households to the internet, committing that by 2020, 100 percent of households in America will have the option of affordable broadband that delivers speeds sufficient to meet families’ needs.”

Left undefined: what is “affordable,” what speeds are “sufficient” to meet families’ needs, and what technologies will be used to deliver it. Mrs. Clinton is satisfied with “directing federal agencies to consider the full range of technologies as potential recipients—i.e., fiber, fixed wireless, and satellite—while focusing on areas that lack any fixed broadband networks currently.” In other words, doing exactly the same thing they already do today.

Satellite internet access, as it now exists, often performs much slower than the FCC’s definition of broadband – consistent download speed of 25Mbps. Most Americans subscribed to traditional DSL service don’t receive true broadband speeds either. Since satellite internet technically reaches the continental United States already, there will be plenty of ways for Mrs. Clinton to “declare victory” on this pledge without allocating the billions needed to provide quality wired or high-speed wireless broadband to still-unserved rural America.

Mrs. Clinton also proposes a new “model digital communities” grant program that will “leverage the $25 billion Infrastructure bank she plans to establish” to facilitate access to high-speed internet. Again, much of this proposal is left woefully undefined. Structured properly, this could be used to develop high-tech cities with high-speed service such as in Kansas City (Google) or Chattanooga (EPB Fiber). These could offer a road map for other communities. The problem is finding the money to build such networks. Private providers will argue they already have advanced networks that don’t require public tax dollars, so these projects are unnecessary. Local governments might admit if they don’t secure similar federal funding that “model cities” get to help cover some of the costs, they won’t proceed. Others may philosophically object to having the federal government meddling in overseeing local projects. Some others might prefer the money be simply spent to wire up rural communities that don’t have any access at all and call it a day.

Put it (almost) anywhere.

Put it (almost) anywhere.

The Clinton campaign is also sure to attract fans among the country’s wireless carriers because her campaign promises to review regulatory barriers the phone and cable companies deal with, particularly pole access, zoning and cell tower issues, streamlining small cell placement, and continued promotion of “climb/dig once” policies which encourage placing fiber and/or conduit in trenches whenever/wherever a utility performs upgrades or outdoor maintenance. Oh, and she’s for 5G spectrum allocations as well. None of this, pardon the pun, is groundbreaking either.

Clinton is more specific supporting the Obama Administration’s Net Neutrality policy, backed by Title II authority, allowing the FCC latitude to manage abusive ISP behavior in a barely competitive marketplace. But she stops well short of criticizing companies about some of their current abusive, anti-consumer policies. She has nothing to say about data caps or zero rating, pricing or poor service, and doesn’t lament the sorry state of competition in the American broadband marketplace.

Clinton’s policy positions seem to suggest the federal government will have to help multi-billion dollar phone and cable companies get over their Return On Investment anxieties by subsidizing them to encourage rural broadband or enhancing outdated infrastructure. We’d prefer a position that moves this country towards universal broadband service, even if it comes at the price of short-term profits at the nation’s top ISPs. It would be useful to see some politicians stand up and suggest Comcast and AT&T, among others, are not entirely paragons of virtue, and they need to do more to solve this pervasive problem. That is something their customers already understand. In return for the billions in profits they earn annually in a de facto duopoly, they should be willing to devote more energy towards network expansion and less on cooking up schemes like data caps/zero rating and the usual share buybacks, dividend payouts, acquisitions and executive compensation. Asking nicely doesn’t seem to work, so now it’s time to tell them.

Although we’ve been a bit tough on Mrs. Clinton, we have not forgotten her likely opponent, Donald Trump, so far lacks any coherent summary of his tech policies. We do know he opposes Net Neutrality because he believes it is an Obama-inspired “attack on the internet” in a “top-down power grab.” Trump believes Net Neutrality will somehow be used to “target conservative media.” That makes about as much sense as saying pistachio is a liberal ice cream flavor. Trump’s team has a lot of work to do before November.

Cable Industry Frets Over FCC’s “Artificial Competition” Requirement in Charter Merger

loophole_breakfast_of_lawyers_smallA condition imposed by the Federal Communications Commission requiring newly merged Charter-Time Warner Cable-Bright House to expand service into at least two million new homes already served by another cable or phone company already offering High Speed Internet is causing heartburn for smaller cable and phone companies that fear government-mandated competition in their service areas.

FCC chairman Thomas Wheeler has long believed that cable operators could compete against one another for customers, driving down prices for consumers while forcing service improvements. One of the conditions approving the Charter deal could have put Wheeler’s theory to the test, but not if Charter can help it.

Charter CEO Thomas Rutledge implied that he will continue to shield fellow cable operators from unwanted competition.

“When I talked to the FCC, I said I can’t overbuild another cable company, because then I could never buy it, because you always block those,” Rutledge said at last month’s MoffettNathanson Media & Communications Summit. “It’s really about overbuilding telephone companies.”

It seems unlikely Charter will ever directly overbuild one of its friends in the cable industry, especially important ones like Comcast, Cox, and Cablevision. Smaller independent cable companies don’t feel as secure, which is why the trade group that represents many of them, the American Cable Association, has tried to get the FCC to back off.

charter twc bh“The overbuild condition imposed by the FCC on Charter is stunningly bad and inexplicable government policy,” ACA president Matthew Polka said in a statement. “On the one hand, the FCC found that Charter will be too big and therefore it imposed a series of conditions to ensure it does not exercise any additional market power. At the same time, the FCC, out of the blue, is forcing Charter to get even bigger.”

The FCC probably crafted the deal conditions to force Charter to compete with other cable operators, because one million of those new customer locations must be where at least 25Mbps broadband service is already available. That protects many phone companies still offering DSL as an afterthought, because most don’t offer speeds anywhere close to 25Mbps. But the FCC left several counter-intuitive loopholes in the language that Republican FCC commissioner Ajit Pai says lends credibility to the ACA’s argument.

“Unless Charter chooses to exclusively overbuild areas served by Comcast, which I find highly unlikely, Charter’s increased broadband market share will come at the expense of smaller competitors,” Pai wrote in comments about the proposal.

unitelNotably, Charter is allowed to buy up other small telecom companies and count up to 250,000 of their customers towards the one million new homes served requirement. If those are small rural cable companies, that means the FCC is allowing Charter to grow even larger instead of providing more competition. Charter could also choose to overbuild municipal broadband providers and co-ops, especially in areas next to existing Charter/TWC/Bright House systems. That would harm the FCC’s current interest in removing roadblocks to publicly owned broadband networks. Enthusiasm for such networks could be dampened if Charter is willing to wire the area at their own expense.

Rutledge’s announcement is sure to make life uncomfortable for a number of rural phone companies that have invested in fiber network upgrades and now face the potential of Charter taking away customers that are helping to pay off those upgrades.

An unintended consequence of the FCC’s various loopholes could place a heavy burden on independent telephone companies that invested in network upgrades for faster broadband even as wealthier and larger phone companies are protected from that competition by delivering frustratingly slow DSL.

One potential target for a Charter overbuild could be UniTel, headquartered in Unity, Maine. UniTel offers residential customers in Albion, Dixmont, Newburgh, Thorndike, Troy, and Unity broadband speeds up to 1 gigabit. Unity is located between Bangor and Portland — both served by Time Warner Cable (now Charter).

Phone companies like UniTel call the FCC’s mandate “artificial competition” that could put it and other rural independent phone companies into financial distress. UniTel has a speed edge over anything Charter plans to offer customers in the immediate future as it deploys fiber to the home service, but television is another matter. One of the benefits of being a large cable company is volume-discounted pricing for cable television networks. Smaller independent operators cannot compete when wholesale television programming discounts are calculated in, allowing larger companies to undercut smaller ones with lower pricing.

UniTel officials criticized the FCC for creating deal conditions that Charter will exploit to the detriment of improving rural broadband service.

“Rather than allow New Charter to unilaterally narrow the scope of the buildout condition to meet its own business objectives, UniTel respectfully urges that the Commission should act to narrow the scope of any buildout condition, not to meet the private business objectives of New Charter, but rather to meet the public policy objectives of universal service in rural areas,” the company argued in its filing with the FCC.

A handful of rural telecom associations generally agree with UniTel and want the FCC to retarget Charter’s buildout requirements to fixing the rural broadband problem by expanding into unserved service areas instead.

Digital Sub-Channels, Cost-Cutting Cause Havoc for Adjacent Market Cable-TV Carriage

wbngTime Warner Cable subscribers in Otsego County, N.Y. have been able to watch WBNG-TV, the CBS affiliate in Binghamton, since there has been a cable company called Time Warner Cable. But as of yesterday, that is no longer the case. In Baxter County, Ark.,  Suddenlink customers suddenly lost KARK (NBC) and KTHV (CBS), two stations from Little Rock, after the cable company decided it would henceforth only carry KYTV (NBC) and KOLR (CBS) instead. Part of the problem for subscribers is those two stations are located in Springfield, Missouri, a different state.

Time Warner Cable wasted no time yanking WBNG off the lineup of their Oneonta and Cooperstown cable systems. WBNG received a letter informing them of the decision on June 16. Two weeks later, the channel was replaced with WKTV from Utica, which is a secondary affiliate of CBS (WKTV has been an NBC affiliate for decades, but through the use of digital subchannels, WKTV has managed to lock down affiliations with CBS, NBC, CW, and Me-TV). Time Warner argues Otsego County is in the Utica television market, such as it is, so there is no reason to spend more to put Binghamton stations on the lineup as well.

Oneonta, N.Y. is located between Binghamton and Utica.

Oneonta, N.Y. is located between Binghamton and Utica.

karkAnother cable company with cost-cutting fever is Altice-owned Suddenlink, which stopped carrying the two Little Rock-based broadcast stations in northern Arkansas on June 7, leaving KATV (ABC) as the only central Arkansas-based news outlet on the cable provider’s Mountain Home-area system.

The decision to drop the two Little Rock channels was made at the corporate level, local employees told The Baxter Bulletin, and the Mountain Home office had no input in that decision and were not allowed to talk about it.

The mayor of Mountain Home sure is, however.

“We’ve had a lot of people calling in, coming by the office,” Mayor Joe Dillard told the newspaper. “Several have been in a couple times. I do not understand why we got two of our main channels in the state taken away.”

An authorized Suddenlink spokesperson finally admitted it was about the money.

“In recent years, local broadcast station owners have begun asking for increasingly larger amounts of money in exchange for allowing us to renew contracts to carry their stations,” said Gene Regan, senior director of corporate communications for Suddenlink. “To help keep down the costs of providing services to our customers, we have made the decision to drop out-of-market stations that duplicate network affiliations with other existing in-market stations.”

That policy has been gradually implemented in a growing number of Suddenlink-served communities, which are often exurban or rural towns located between two larger metropolitan areas. These are the areas most likely to receive multiple network affiliates from different nearby cities.

mountain homeSuddenlink has standing orders from Altice to look for savings wherever possible, but none of those savings are returned to subscribers. The loss of the stations has not reduced anyone’s cable bill and Suddenlink recently moved TBS and INSP — a Christian cable network — to a more costly Expanded Basic tier. In place of the two networks dropped from the Basic package are home shopping networks that actually make Suddenlink money – Evine Live and Jewelry TV.

“I’m disappointed,” Anna Hudson of Bull Shoals told the newspaper. “I have friends in Little Rock, in Batesville. I like to know what’s going on in Arkansas, not in Missouri. It doesn’t help when the Legislature is in session, that will not be covered by the Springfield stations.”

America’s 5G Revolution Comes By Giving Wireless Industry Whatever It Wants

Wheeler

Wheeler

FCC chairman Thomas Wheeler today told an audience at the National Press Club that 5G — the next generation of wireless networks — “is a national priority, and why, this Thursday, I am circulating to my colleagues proposed new rules that will identify and open up vast amounts of spectrum for 5G applications.”

Wheeler’s proposal, dubbed “Spectrum Frontiers,” is supposed to deliver wireless connectivity as fast as fiber optic broadband, and in Wheeler’s view, will deliver competitive high-speed access for consumers.

“If the Commission approves my proposal next month, the United States will be the first country in the world to open up high-band spectrum for 5G networks and applications,” said Wheeler. “And that’s damn important because it means U.S. companies will be first out of the gate.”

Central to Wheeler’s 5G proposal is opening up very high frequency millimeter wave spectrum — for unlicensed and licensed data communications. Wheeler named two in his speech: a “massive” 14GHz unlicensed band and a 28GHz “shared band” that will allow mobile and satellite operators to co-exist.

“Consider that – 14,000 megahertz of unlicensed spectrum, with the same flexible-use rules that has allowed unlicensed to become a breeding ground for innovation,” Wheeler said.

5g“Sharing is essential for the future of spectrum utilization. Many of the high-frequency bands we will make available for 5G currently have some satellite users, and some federal users, or at least the possibility of future satellite and federal users,” Wheeler noted. “This means sharing will be required between satellite and terrestrial wireless; an issue that is especially relevant in the 28GHz band. It is also a consideration in the additional bands we will identify for future exploration. We will strike a balance that offers flexibility for satellite users to expand, while providing terrestrial licensees with predictability about the areas in which satellite will locate.”

The CTIA – The Wireless Association, America’s largest mobile carrier lobbying and trade association, is all for opening up new spectrum for the use of their members — AT&T, Verizon Wireless, Sprint, T-Mobile, among others. They just don’t want to share it. Ironically, they are calling on the FCC to regulate who gets access to what frequencies and what services can use them. They’d also appreciate federal rules restricting or preempting local officials responsible for approving where new cell towers can be located, and some form of price regulation for backhaul services would also be nice:

First, we need the right rules for high-band spectrum based on a time-tested regulatory framework. It must strike a reasonable balance for licensed and unlicensed use while promoting investment with clear service and licensing rules. We should avoid experimenting with novel spectrum sharing regimes or new technology mandates.

Second, we need the right rules to help build our 5G infrastructure. Traditional spectrum travels many miles, depending on large cell towers to transmit signals. In contrast, high-band spectrum – capable of carrying greater amounts of data –travels meters, not miles and will require the deployment of thousands of new small cells the size of smoke alarms. This network evolution requires a new infrastructure approach, and Congress, the FCC and states must streamline and simplify local siting and rights of way rules.

Wheeler recognizes that 5G services will work very differently from the 3G and 4G networks we’ve used in the past.

ctia

CTIA is the wireless industry’s biggest lobbyist and trade association.

“5G will use much higher-frequency bands than previously thought viable for mobile broadband and other applications,” Wheeler said. “Such millimeter wave signals have physical properties that are both a limitation and a strength: they tend to travel best in narrow and straight lines, and do not go through physical obstacles very well. This means that very narrow signals in an urban environment tend to bounce around buildings and other obstacles making it difficult to connect to a moving point. But it also means that the spectrum can be reused over and over again.”

In other words, think about 5G as an initially limited range wireless network that may turn out to be best suited for fixed wireless service or limited range hotspots, especially before network densification helps make 5G service more ubiquitous. The wireless industry doesn’t think Wheeler’s vision will be enough to resolve capacity issues in the short term, and is calling on the FCC to release even more low and mid-band spectrum in the 600MHz range that can travel inside buildings and offer a wider coverage area.

Wheeler’s recognition that 5G’s shorter range signals will likely require a massive overlay of new infrastructure has also opened the door for the CTIA to call on the FCC to revisit local zoning and antenna placement rules and policies, with the likely goal of preempting or watering down local authority to accept or reject where cell phone companies want to place their next small cell or cell tower. Wireless companies are also expected to push for easy access to utility poles, time limits to approve new cell tower construction applications, and pricing regulation for fiber lines needed to connect 5G infrastructure to backhaul networks.

Cell tower camouflage failure.

Cell tower camouflage failure.

On the issue of backhaul — the connection between a cell tower and the wireless carrier’s network, the FCC is planning a pro-regulatory “anchor pricing” approach to benefit wireless companies. Consumers can also relate to being overcharged for slow speed Internet access with little or no competition, but the FCC is only acting for the benefit of the wireless companies for now — the same companies that would undoubtedly complain loudly if anchor pricing was ever applied to them.

“Lack of competition doesn’t just hurt the deployment of wireless networks today, it threatens as well to delay the buildout of 5G networks with its demand for many, many more backhaul connections to many, many more antennae,” complained Wheeler. “Before the end of this year the Commission will take up a reform proposal – supported by the nation’s leading wireless carriers, save one – that will encourage innovation and investment in Business Data Services while ensuring that lack of competition in some places cannot be used to hold 5G hostage.”

While Wheeler’s goals are laudable, there are stunning examples of hypocrisy and self-interest from the wireless industry. Yet again, the industry is seeking regulatory protection from having to share spectrum with unlicensed users, existing licensees, or competitors.  No letting the “free market” decide here. Second, there are absolutely no assurances the wireless industry will deliver substantial home broadband competition. Verizon and AT&T will be effectively competing with themselves in areas where they already offer wired broadband. Is there a willingness from AT&T and Verizon to sell unlimited broadband over 5G networks or will customers be expected to pay “usage pack”-prices as high as $10 per gigabyte, which doesn’t include the monthly cost of the service itself. Offering customers unlimited 5G could cannibalize the massive profits earned selling data plans to wireless customers.

Cactus or cell tower

Cactus or cell tower

Upgrading to 5G service will be expensive and take years to reach many neighborhoods. Verizon’s chief financial officer believes 5G wireless will be more cost-effective to deploy than its FiOS fiber to the home network, but considering Verizon largely ended its deployment of FiOS several years ago and has allowed its DSL customers to languish just as long, 5G will need to be far more profitable to stimulate Verizon’s interest in spending tens of billions on 5G infrastructure. It does not seem likely the result will be $25/month unlimited, fiber-like fast, Internet plans.

Although the mobile industry will argue its investment dollars should be reason enough to further deregulate and dis-empower local officials that oversee the placement of cellular infrastructure, it would be a tremendous mistake to allow wireless carriers to erect cell towers and small cells wherever they see fit. Most small cells aren’t much larger than a toaster and will probably fit easily on utility poles. But it will likely spark another wave of pole access controversies. The aesthetics of traditional cell tower placement, especially in historical districts, parks, and suburbs, almost always create controversy. The FCC should not tip the balance of authority for tower placement away from those that have to live with the results.

The mobile industry doesn’t make investments for free, and before we reward them for investing in their networks, let’s recall the United States pays some of the highest mobile service prices in the world. The industry argues what you get in return for that $100+ wireless bill is better than ever, an argument similarly used by the cable industry to justify charging $80 a month for hundreds of channels you don’t watch or want. Therefore, incentives offered to the wireless industry should be tied to permanent pro-consumer commitments, such as unlimited 5G broadband, better rural coverage, and the power to unbundle current wireless packages and ditch services like unlimited texting many customers don’t need. Otherwise, it’s just another one-sided corporate welfare plan we can’t afford.

Slow Broadband = Low Usage, Finds New Study

kcl-logoHow much you use the Internet is often a matter of how fast your broadband connection is, according to a new study.

King’s College London researchers found a clear correlation between bad broadband and low usage rates, as customers avoided high bandwidth apps like online video because they were frustrating or impossible to use. One analyst said the findings show rural areas are being “deprived of the full benefits of broadband.”

One of Britain’s most used apps is the BBC iPlayer, which streams live and on-demand programming from multiple BBC radio and television networks. It is a well-known bandwidth consumer, using a significant proportion of a customer’s broadband connection to deliver up to HD-quality video streams. The study found users in South Ayrshire, Ards, the Isle of Wight, the East Riding of Yorkshire, North Down and Midlothian were among the areas where people used iPlayer the least. It wasn’t because they didn’t want to. Those areas were identified by Ofcom, the British telecom regulator, as receiving some of the worst Internet speeds in the UK. Conversely, areas with robust broadband, including London, south Gloucestershire and Bristol, showed above average usage.

Dr. Sastry

Dr. Sastry

“It is clear that high-speed broadband is an important factor in the use of bandwidth-intensive applications such as BBC iPlayer,” said Dr. Nishanth Sastry, a senior lecturer at King’s College London and the lead researcher. “With technological advancements, it is likely that more services important to daily life will move online, yet there is a significant proportion of the population with inadequate broadband connections who won’t be able to access such services.”

Ian Watt, a telecommunications consultant with the analyst Ovum, said broadband speeds must get higher to assure users can watch HD video and simultaneously share their Internet connection with other members of the household.

“Recent Ovum research indicated a speed of 25Mbps was an appropriate target access speed to provide a high quality experience for video services,” Watt said. In the United States, 25Mbps is the current minimum speed to qualify as broadband, according to the most recent FCC definition.

The findings may also explain why U.S. broadband providers only capable of delivering relatively low-speed Internet access report lower average usage than those capable of providing service at or above 25Mbps. Those offering the fastest speeds are also the most likely to attract higher volumes of Internet traffic as customers take advantage of those speeds.

Middle Mile Madness: Rural Florida Blows $24 Million on Wireless Network Serving Nobody

12126179-florida-rural-broadband-alliance-logoA word to the wise: using public money to build a middle mile broadband network without any customers lined up to sign up is a disaster waiting to happen.

In April, the disaster arrived in the form of a Chapter 7 bankruptcy filing on behalf of the Florida Rural Broadband Alliance (FRBA), which threw away $24 million in federal grants on a network that was so unviable, the contractor that was supposed to run it apparently ran away instead, resulting in confusion and an eventual declaration it was “doomed to fail” anyway.

The sordid story started almost seven years ago when Florida’s Heartland Regional Economic Development Initiative (FHREDI) and Opportunity Florida (OF) — two non-profit organizations dedicated to spurring economic development across rural Florida, discovered federal grant money was available for rural Internet expansion as part of the Obama Administration’s 2009 American Recovery and Reinvestment Act. The two groups fashioned a broadband proposal they were confident would win approval. At the time, rural broadband across northwest and south-central Florida was dismal at best, with only 39% of homes covered. Largely unserved by cable and barely served with DSL from AT&T and other telephone companies, the two groups believed a wireless network would be the best solution for Hardee, DeSoto, Highlands, Okeechobee, Glades, Hendry, Holmes, Washington, Jackson, Gadsden, Calhoun, Liberty, Gulf and Franklin counties.

empty-office

$24 million spent and nothing to show for it.

Although $24 million is not an insubstantial sum, it was clearly never adequate to build a comprehensive rural broadband network reaching homes and businesses. Instead, the two groups envisioned a “middle mile” network funded by the government, with central offices in Orlando and Tallahassee equipped with microwave dishes and computer servers. Unlike most middle mile networks, the one proposed by the FRBA would rely on a network of microwave towers instead of fiber optics, and would ultimately serve all of its customers over a wireless network.

When complete, the wireless network was supposed to deliver up to 1Gbps capacity throughout the region, relying on leased space on existing cell towers to support microwave links that would bounce signals from one area to the next. Initially promising to serve more than 174,000 homes and 16,400 businesses, the one immediate flaw noticed by those skeptical of the proposal was the lack of a definitive plan to sell Internet service to paying residential and business customers. The brochures suggested existing commercial Internet Service Providers would magically step into that role. Early critics called that “wishful thinking.”

Despite what some felt was an untenable business plan and an incomplete application, the group won its federal “BTOP” grant of $24 million in 2010 and began a very lengthy planning process using well-paid consultants to get the network fully scoped out and built. Within a year, controversy quickly threatened to swamp the project, and a congressional oversight investigation quickly found evidence of wasteful spending and put its funding on hold. That would hardly be the first allegation raised against the FRBA and those overseeing it. By 2013, the Columbia County Observer had run more than a dozen stories reporting irregularities and other problems with the project. Few were noticed more than the report Rapid Systems, Inc., one of the contractors on the project, had filed a $25 million lawsuit replete with soap operatic allegations against FRBA for not being paid for its work.

Rapid Systems CEO, Dustin Jurman and CFO/VP Denise Hamilton. (Image: Columbia County Observer)

Rapid Systems CEO, Dustin Jurman and CFO/VP Denise Hamilton. (Image: Columbia County Observer)

Rapid Systems alleged everything from fraud and double-dipping to sexual promiscuity over what it called the “FRBA Fraud Scheme.”

At the heart of the lawsuit were allegations money was being misspent, “to pay inflated salaries to employees, who then fled to South America, and that grant money was used for inflated fees to consulting companies which were owned by FRBA principals.”

Rapid Systems claimed FRBA was very generous paying management consulting fees of $10,000 a month to an entity known as the Government Service Group (GSG), along with a pro rata share (3% of the grant) for a “Grant Compliance Fee” and an additional 13% of the grant as a “Capital Improvement Program Administrative Fee.” And you thought only Comcast and Time Warner Cable were creative conjuring up fees. When added up, it appeared just one consultant — GSG — would walk away with 16% of the entire grant — nearly $4 million in total “management fees” before a single broadband connection would be made.

The lawsuit also claimed the grant money was gorged on by the leadership of both non-profits, one who allegedly relocated to South America the lawsuit states in another aside. The two “were being paid fees in the amount of $8,500 a month to themselves cloaked as administrative and community outreach funds,” according to the lawsuit.

Phillip Dampier: To be a credible supporter of community broadband, it is responsible to call out the disasters so that they are not repeated.

Phillip Dampier: To be a credible supporter of community broadband, it is responsible to call out the disasters so they are not repeated.

Meanwhile, the public eagerly awaiting something better than the non-broadband AT&T and some independent phone companies were supplying in the region couldn’t get answers about the project’s progress. Neither could the media, which reported the business phone number for the FRBA would ring unanswered for hours or days. Those hired to provide community outreach about the broadband project were frequently unable to answer even basic questions about the network or its status, or where the principals involved in the project even met.

By 2014, Opportunity Florida’s Facebook page claimed the network was 90% complete. But the project now decidedly downplayed how many homes and businesses would get service. Instead, the middle mile network promoted itself as an institutional network, dedicated primarily to serving “community anchor institutions:”

The FRBA system provides lower cost, high capacity broadband to Community Anchor Institutions, commonly referred to as “CAIs.” CAIs include local government and public agencies including schools, libraries and hospitals. The NTIA grant was initiated with these unserved or underserved CAIs as the intended target. Most government and public services have moved, or are in the process of moving, to paperless transactions and record-keeping and need the additional broadband and Internet based capabilities. Another benefit of the FRBA system will be capacity to schools and libraries as both those institutions face online and digital mandates.

Commercial ISPs willing to use the network to offer service to individual non-institutional customers were invited to visit an Opportunity Florida webpage (now gone) for more information. There is no evidence any major ISP ever bothered. In fact, even institutional users didn’t seem very interested. We remain unclear if there was ever a single paying customer on the network, despite a report filed by the NFBA with the federal government that claimed through September 30, 2012, the NFBA had 11 anchor institutions, zero residents, and zero businesses hooked up to its network.

A year later, the Columbia County Observer went further and called some of those involved in evangelizing the project “clueless,” and based on the post-mortem of what has happened since, they may be right.

Those directly involved in the project have since displayed a stunning lack of knowledge about its operations and practices, or what has become of the $24 million:

The unfortunate "I see nothing, I hear nothing, I know nothing" brigade.

The unfortunate “I see nothing, I hear nothing, I know nothing” brigade answers questions from the media.

  • Gina Reynolds, the last executive director of FHREDI, which administered FRBA, claimed the network was running fine when she left in the summer of 2015 to start her own economic development consultancy. She may be among the very few that got out before the project ultimately fell apart. Although FHREDI managed to pay her for her services, it suddenly lacked any resources to pay anyone to replace her after she left;
  • Greg Harris, a Highlands County commissioner and FHREDI director, disclosed at a recent county commission meeting FRBA was in Chapter 7 bankruptcy and the group that oversaw it — FHREDI, was being dissolved. But like the phoenix rising from the ashes, some of those involved in FHREDI and FRBA are now associating themselves with a new group called the Florida Heartland Economic Region of Opportunity (FHERO). Says Harris: “We didn’t really know what FHREDI was doing. They were spending most of their opportunity on FRBA and the rural broadband. It got away from what we really needed to focus on.”
  • Terry Burroughs, an Okeechobee County commissioner, is FHERO’s chairman. But last year, the ex-telephone company executive was a FHREDI board member. His memory is excellent about where the taxpayer-funded equipment to run the network eventually ended up: in warehouses in Lake Placid and Tallahassee. But his answers were more vague when asked how things went so wrong. Burroughs tried to put substantial distance between himself and the failed wireless broadband network: “When I first got on the board, they were trying to negotiate with a contractor. Gina [Reynolds] was working with that, and it went on and on and on. There was probably a network at some given time, but I don’t think a last mile ever deployed. When I got there, the last mile was dark. … I never knew of a paying customer. They were trying to build a telephone company, and they were doomed to failure.”
  • Paul McGehee, business development manager for Glades Electric and a FHERO director, did an even better job explaining he knew nothing, saw nothing, and heard (almost) nothing: “The operator who was contracted to run it as a company stepped away from it,” McGehee said, adding he could not recall the contractor’s name. The flaw in FRBA’s plan, according to McGehee, was that while the grant bought the equipment, there were no federal funds for operations. “No one wanted to step up and operate the network, and there was no way to pay the tower leases… The end product wasn’t a viable sustainable thing.”

fhrediToo bad nobody bothered to consider that before spending $24 million of the taxpayers’ money on a non-viable network.

Commissioner Jim Brooks didn’t seem too bothered by the admissions of total failure. After hearing an explanation about the network’s demise and the money spent on it, he told his fellow commissioners he “didn’t have a problem with it.”

A multitude of articles that have documented this disaster (including our own from September 2011) illustrates what can happen when over-enthusiastic consultants overwhelm projects with happy talk not recognized as such by a board that has little or no understanding of the technology, the broadband business, or, in this case, the project itself. The claims and projections consistently simply bore no reality… to reality. What is even more concerning is some of those consultants didn’t work for free, and may have tapped a substantial portion of the total available grant for themselves.

It is also remarkable and disappointing to read candid assessments about a project “doomed to failure” from those with direct knowledge and or involvement only after the liquidator from the federal government turns up. As stewards of public taxpayer money, one expects more than a shrug of the shoulders and a quiet shuffle dance out of FHREDI into a new, reincarnated “rural economic development” initiative. How can we trust the same mistakes won’t be made again?

We remain strong supporters of community broadband, but messes like this hand potent ammunition to corporate-ISP-funded think tanks that use these kinds of failures to sully all public broadband projects. We must call out of the bad ones to be seen as credible supporting the good ones. It also never hurts to learn from others’ mistakes.

Among the biggest reasons this project was a flop (beyond the dubious skills of those in charge of overseeing it) was its size, scope, and technology choice. The biggest challenge to any rural broadband project is always “the last mile” — the point where the connection leaves a regional fiber network and reaches a nearby neighborhood’s utility poles and finally enters your home. It also happens to be the most costly segment of the network, and often the hardest to fund with government subsidies. But it is the one that makes the difference for individual homeowners and businesses who either have broadband or don’t.

Rural Floridians endure more broken promises for better broadband.

Rural Floridians endure more broken promises for better broadband.

Like too many middle mile projects of this type, the story initially fed to the press and supporters is that such networks will somehow alleviate rural broadband problems. Only later do supporters realize they are actually getting an institutional middle mile network that will offer service to hospitals, schools, and public safety buildings — not to homes and businesses. Ordinary citizens cannot access such networks unless a commercial ISP shows interest in leasing it to resell, which is unlikely. The closest most will ever get to experiencing an institutional network they paid for is staring at the fiber cable stretched across the utility poles in front of your house.

FRBA was too ambitious in size and scope, and a credible consultant should have advised those in charge to get credible evidence that a network built with grant money could be sustained without it going forward. If not, scale back the project or don’t apply for the grant.

This project proposed a wireless backbone to power a large regional wireless network. Winning support among anchor institutions was predictably difficult, because many already have existing contracts with commercial telecom companies. With government funding available in many instances, an institution can get full fiber or metro Ethernet service easier than a rural farmer can get 6Mbps DSL from a disinterested phone company.

The evidence shows there were few takers — institutional or otherwise — of what FRBA had to offer. Did the project organizers not see this lack of interest as a problem as the network prepared to launch? After launch, there were almost immediate signs it lacked enough of a customer base to sustain itself. Did the project backers assume the government would bail out the network or dump millions more into it to make it viable to sell to homes and businesses? Such assumptions would have been irresponsible.

There are too many underutilized middle mile or institutional fiber networks already built with taxpayer dollars that remain off-limits to those who paid to build them. Utilizing those networks by extending grant funding for last mile projects would be helpful, as would sufficient subsidies to assure middle mile construction is followed by last mile construction and actual service. We remain big believers in fiber to the home service. Although expensive, such projects are best positioned for success and future viability and can take advantage of the massive amount of dark fiber already laid in many areas. Some cities prefer to run the networks themselves, others contract day-to-day operations out to independent operators. Either would be preferable to a network that took six years to build and fail, without any evidence it could attract, support and sustain enough customers to support anything close to viability.

Spring 2016: An Update and Progress Report for Our Members

stcDear Members,

We have had a very busy winter and spring here at Stop the Cap! and we thought it important to update you on our efforts.

You may have noticed a drop in new content online over the last few months, and we’ve had some inquiries about it. The primary reason for this is the additional time and energy being spent to directly connect with legislators and regulators about the issues we are concerned about. Someone recently asked me why we spend a lot of time and energy writing exposés to an audience that almost certainly already agrees with us. If supporters were the only readers here, they would have a point. Stop the Cap! is followed regularly by legislators, regulators, public policy lobbyists, consumer groups, telecom executives, and members of the media. Our content is regularly cited in books, articles, regulatory filings, and in media reports. That is why we spend a lot of time and energy documenting our positions about data caps, usage billing, Net Neutrality, and the state of broadband in the United States and Canada.

A lengthy piece appearing here can easily take more than eight hours (sometimes longer) to put together from research to final publication. We feel it is critical to make sure this information gets into the hands of those that can help make a difference, whether they visit us on the web or not. So we have made an extra effort to inform, educate, and persuade decision-makers and reporters towards our point of view, helping to counter the well-funded propaganda campaigns of Big Telecom companies that regularly distort the issues and defend the indefensible.

Four issues have gotten most of our attention over the last six months:

  1. The Charter/Time Warner Cable/Bright House merger;
  2. Data cap traps and trials (especially those from Comcast, Blue Ridge, Cox, and Suddenlink);
  3. Cablevision/Altice merger;
  4. Frontier’s acquisition of Verizon landlines and that phone company’s upgrade plans for existing customers.

We’ve been successful raising important issues about the scarcity of benefits from telecom company mergers. In short, there are none of significance, unless you happen to be a Wall Street banker, a shareholder, or a company executive. The last thing an already-concentrated marketplace needs is more telecom mergers. We’re also continuing to expose just how nonsensical data caps and usage-based billing is for 21st century broadband providers. Despite claims of “fairness,” data caps are nothing more than cable-TV protectionism and the further exploitation of a broadband duopoly that makes it easy for Wall Street analysts to argue “there is room for broadband rate hikes” in North America. Stop the Cap! will continue to coordinate with other consumer groups to fight this issue, and we’ve successfully convinced at least some at the FCC that the excuses offered for data caps don’t hold water.

Dampier

Dampier

FCC chairman Tom Wheeler’s broadening of Charter’s voluntary three-year moratorium on data caps to a compulsory term as long as seven years sent a clear message to broadband providers that the jig is up — data caps are a direct threat to the emerging online video marketplace that might finally deliver serious competition to the current bloated and overpriced cable television package.

Wheeler’s actions were directly responsible for Comcast’s sudden generosity in more than tripling the usage allowance it has imposed on several markets across the south and midwest. But we won’t be happy until those compulsory data caps are gone for good.

More than 10,000 Comcast customers have already told the FCC in customer complaints that Comcast’s data caps are egregious and unfair. Considering how unresponsive Comcast has been towards its own customers that despise data caps of any kind, Comcast obviously doesn’t care what their customers think. But they care very much about what the FCC thinks about regulatory issues like data caps and set-top box monopolies. How do we know this? Because Comcast’s chief financial officer this week told the audience attending the JPMorgan Technology, Media and Telecom Broker Conference Comcast always pays attention to regulator headwinds.

“I think it’s our job to make sure we pivot and react accordingly and make sure the company thrives whatever the outcome is on some of the regulatory proposals that are out there,” said Comcast’s Mike Cavanagh. We suspect if Chairman Wheeler goes just one step further and calls on ISPs to permanently ditch data caps and usage billing, many would. We will continue to press him to do exactly that.

Stop the Cap! supports municipal and community-owned broadband providers.

Stop the Cap! supports municipal and community-owned broadband providers.

Other companies are also still making bad decisions for their customers. Besides Comcast’s ongoing abusive data cap experiment, Cox’s ongoing data cap trial in Cleveland, Ohio is completely unacceptable and has no justification. The usage allowances provided are also unacceptably stingy. Suddenlink, now owned by Altice, should not even attempt to alienate their customers, particularly as the cable conglomerate seeks new acquisition opportunities in the United States in the future. We find it telling that Altice feels justified retaining usage caps on customers in smaller communities served by Suddenlink while denying they would even think of doing the same in Cablevision territory in suburban New York City. Both Suddenlink and Cablevision have upgraded their networks to deliver faster speed service. What is Altice’s excuse about why it treats its urban and rural customers so differently? It frankly doesn’t have one. We’ll be working to convince Altice it is time for Suddenlink’s data caps to be retired for good.

We will also be turning more attention back on the issue of community broadband, which continues to be the only competitive alternative to the phone and cable companies most Americans will likely ever see. The dollar-a-holler lobbyists are still writing editorials and articles claiming “government-owned networks” are risky and/or a failure, without bothering to disclose the authors have a direct financial relationship to the phone and cable companies that don’t want the competition. We will be pressing state lawmakers to ditch municipal broadband bans and not to enact any new ones.

We will also continue to watch AT&T and Verizon — two large phone companies that continue to seek opportunities to neglect or ditch their wired services either by decommissioning rural landlines or selling parts of their service areas to companies like Frontier. AT&T specializes in bait-n-switch bills in state legislatures that promise “upgrades” in return for further deregulation and permission to switch off rural service in favor of wireless alternatives. That’s great for AT&T, but a potential life-threatening disaster for rural America.

We continue to abide by our mandate: fighting data caps and consumption billing and promoting better broadband, regardless of what company or community supplies it.

As always, thank you so much for your financial support (the donate button that sustains us entirely is to your right) and for your engagement in the fight against unfair broadband pricing and policies. Broadband is not just a nice thing to have. It is an essential utility just as important as clean water, electricity, natural gas, and telephone service.

Phillip M. Dampier
Founder & President, Stop the Cap!

TDS Gets Tedious With 250GB Usage Cap

tds cap

TDS DSL customers have a 250GB data cap in their future.

Arch, a Stop the Cap! reader in eastern Kentucky, just received a notification letter informing him his Internet access is about to be rationed, and unless he buys additional usage before June 1, TDS is likely to charge him penalty overlimit rates.

tds cap optionsLike some data caps of the past, TDS is giving customers a small break by remaining unlimited during the overnight hours, but for many customers, it won’t be enough to prevent a higher broadband bill.

“We are writing to you inform you TDS s implementing data-usage allowance plans in your area,” reads TDS’ letter. “Beginning with the June billing period, data usage will be measured during peak time (6am-midnight CST). Data usage during non-peak time will be unlimited. In June and thereafter, if your monthly data usage exceeds the 250GB allowance you will be assessed a $20 overage fee for every 250GB exceeded (up to $60).”

TDS advises Arch that based on his prior usage, he’s very likely to exceed his cap and face overlimit fees.

“My mother got a similar [letter],” writes Arch. “Mine states I am likely to be affected by the cap and my mother’s letter says she will likely not be affected.”

Of course, customers can make the usage cap less of an issue by agreeing to buy more usage up front:

  • a 500GB Data Allowance runs $10 extra a month;
  • 750GB costs an extra $20 a month;
  • 1TB (1,000GB) is priced at an additional $30 a month.

TDS does not offer any justification for their data caps, but it doesn’t have a lot to fear imposing them.

“TDS has no competition at all in my area except for fraudband satellite,” Arch reminds us.

That is also likely true across many other TDS service areas, where the company’s 1.2 million customers live in more than 150 different communities, many rural or suburban.

AT&T Ghostwritten Bill Would Allow End of Rural Landline/DSL Service in California

att californiaIn California, AT&T’s money and influence has the power to bend reality for some members of the California legislature.

This spring, AT&T is lobbying hard for a bill it largely wrote itself that vaguely promises 21st century technology upgrades if the state’s politicians agree to near-total deregulation and permission to scrap landline service and DSL for rural residents.

Assembly Bill 2395, introduced by Assemblyman Evan Low (D-Silicon Valley), allows AT&T to decommission wired service across the state, so long as the company replaces it with any alternative capable of connecting customers to 911. Smoke signals might qualify, but most suspect AT&T’s true agenda is to replace its legacy wireline network with wireless service in areas where it has no interest upgrading its facilities to offer U-verse.

Members of the Assembly’s Utilities & Commerce Committee were easily swayed to believe the company’s claims this will represent a massive upgrade for California telecommunications. At least that is what the company is saying in their lobbying pamphlets. In April, committee chairman Michael Gatto (D-Los Angeles), one of the bill’s strongest advocates, told his fellow committee members it was safe to trust AT&T’s assurances it was not using the bill to kill rural landline telephone service.

“We have a very, very good perspective on history in this committee and you can rest assured that nobody will tear up any copper line infrastructure,” said Gatto, who gradually became less sure of himself as he pondered the impact of AT&T scrapping the one option many rural Californians have to connect to the outside world. “The cost of it, to tear up every street in the United States and take out the copper is not going to happen. At least, I don’t think it’ll happen…. This committee will not let it happen.”

Low

Low

Despite that less-than-rousing endorsement, and the fact the bill’s language would allow AT&T to do exactly that, the bill sailed to approval in the committee. It was also endorsed by a range of non-profit and business groups, including the Boys & Girls Club, Black Chamber of Commerce, Do It Yourself Girls, The Latino Council, NAACP-Los Angeles, San Jose Police Officers’ Association, and the United Women’s Organization — almost all regular recipients of “contributions” from AT&T.

Consumer groups are largely opposed to the measure, because it gives AT&T near carte blanche to disconnect rural residents and leave them with inferior and more expensive wireless alternatives. It also scraps most oversight over AT&T’s business practices in the state, which are not stellar. Those living in rural areas are opposed even more.

The Rural County Representatives of California, representing the interests of local leaders in 35 rural counties across the state, came out strongly against AB 2395, pointing out earlier deregulation efforts and a largely hands-off California Public Utilities Commission (CPUC) helped create the digital divide problem that already exists in the state, and AT&T’s bill proposes to make it worse.

S

Frentzen

“While AB 2395 offers the promise of a more modern communications system for California, the bill devises a scheme that minimizes consumer protections and provides avenues for telecommunication providers to abandon their current subscribers from ever experiencing these modern telecommunications options,” said the group. “RCRC would have far more comfort with relinquishment proposals if California’s telecommunications stakeholders, including the CPUC, had met their obligations in providing near universal access. And that access included quality, demand-functions found in other areas of the state. Unfortunately, much of California has either no connectivity (unserved) or inferior connectivity (under-served). Until this digital divide is eliminated, we cannot support changes in the regulatory and statutory environment which furthers this gulf between who gets access and who does not.”

While AT&T continues to deny it will do anything to disconnect rural California, the company vehemently opposes efforts to drop language from the bill that would grant them the right to retire landline service. AT&T’s lobbyists insist the legislature can still trust the company, an idea that failed to impress Shiva Frentzen, the supervisor of El Dorado:

Trust is something that you earn. It’s built over time. We have a rural county each constituent, all your consumers, pay into the infrastructure, but we don’t see the high-speed coming to the rural parts of the county because it does not pencil out. For larger companies to bring the service in those areas – the infrastructure costs a lot and the monthly service does not pay for it. So that is the experience we’ve had with larger providers like yourself. We have not had the trust and the positive experience for our rural county, so that’s why we are where we are.

Editor’s Note: My apologies to Steve Blum, who didn’t get full credit for gathering most of the quotes noted in this piece. We’ve linked above (in bold) to several of his articles that have followed the AT&T lobbying saga, and we’ve added his blog to our permanent list of websites we can recommend.

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