America’s established cable and telephone companies are pulling out every stop to impede the Obama Administration’s broadband stimulus program.

Comcast alone, the nation’s largest cable company, has filed thousands of objections to proposed broadband projects in communities large and small, claiming those projects have the potential of introducing competition in their service areas, whether or not actual broadband service is being provided to residents in those communities.

Most large providers like Time Warner Cable, Comcast, and many national phone companies have steered clear of applying for broadband stimulus money.  They don’t like requirements that could force them to adhere to Net Neutrality provisions, sharing equal access to their networks.  But they don’t want anyone else on their turf getting funding either, and they’re spending enormous amounts of time and money objecting to anything and everything that seeks funding in their respective service areas.

It’s nothing short of a Broadband Blockade, and it is dramatically slowing the government’s ability to pour over thousands of applications.

Settles

Dan Hays, from consulting firm PRTM, told USA Today as a result of the delays, there’s significant doubt as to whether the monies can be awarded before the end of September when the funding authorization expires.

Could that be part of the plan all along?

“They aren’t leading, they aren’t following, and they won’t get out of the way,” said Craig Settles, a municipal broadband expert. “They’re not going to put proposals on the table because they don’t like the rules. Yet they’re not going to cooperate with the entities that are going after the money.”

“There are 11,000 public comments (about the funding applications), and I’m willing to bet that 9,000, at least, were a challenge or protest of one sort or another,” says Settles.

“We’re at a point where it’s the general public’s interest vs. the entrenched incumbents,” Settles added.

When giant telecommunications providers are threatened, they run to lawmakers for special protection, and they’re getting it.

National Public Radio ran this report about the problems awarding broadband stimulus grants. (5 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Coming next…

FairPoint – Bankrupt And Soaking in Failure – But Still Has Enough for Lobbyists, Attorneys to Fight Broadband Projects On Its Turf

In Maine, bankrupt FairPoint Communications managed to scrape up enough cash to launch a lobbying effort to get a bill introduced, tailor-written to prohibit stimulus award winners from… helping provide improved broadband service to Maine residents.

Marrache

Incredibly, Sen. Lisa Marrache, D-Waterville, the assistant Senate majority leader, has introduced a bill that would ban the system from using any tuition money to help pay for efforts to expand broadband access. Marrache mouthed FairPoint’s talking points as she suggested poor college students’ tuition money would be diverted for broadband projects. She claimed the bill was introduced because constituents FairPoint’s lobbyists and employees were calling her about it.

The fact Marrache so misunderstood a public-private partnership between the University of Maine, Great Works Internet, and two private investors to improve the Internet “backbone” in Maine should be of grave concern to her constituents. Unless some campaign contributions from FairPoint and its executives make their way to Marrache’s next campaign, voters must be wondering whether the majority leader has a grip on the technology matters before her.

Indeed, the University of Maine explained the “middle mile” improvement program was not going to steal students’ lunch money, but rather dramatically improve broadband capacity for all comers — something FairPoint couldn’t be bothered with while breaking promises to expand broadband service themselves.

Jeff Letourneau, associate director of information technology at UMS, told the Bangor Daily News, “as for tuition subsidizing our broadband efforts, that does not happen and will not happen.”

[flv]http://www.phillipdampier.com/video/WABI Bangor Federal Funding of Maine’s Rural Broadband 12-17-2009.flv[/flv]

WABI-TV in Bangor reported on the announced funding of broadband projects in Maine designed to improve rural broadband service statewide (12-17-2009 — 2 minutes)

Ironically, the network that will be built with the help of the broadband stimulus program will be open to any and all providers, including FairPoint, on a wholesale cost basis. But of course FairPoint would not own and control it, so it’s bad for them, and they’re trying to convince Maine lawmakers it’s bad for Maine residents as well.

Great Works Internet has had a running dispute with FairPoint

But then, FairPoint has had a vendetta of sorts against Great Works Internet for months, trying to overcharge the independent ISP for connectivity it obtained under provisions established in the Communications Act of 1996.

Also running interference for FairPoint is Rep. Stacey Fitts, R-Pittsfield, who serves on the Legislature’s Utilities and Energy Committee. His bill prevents any “undue” competition by UMS with existing broadband providers. In other words, he has written the FairPoint Entrenched Provider of Mediocre Broadband Protection Act. Fitts said he has concerns that the university’s efforts could have unintended consequences on private companies (read that FairPoint) that “already provide access.” It will have directly intended consequences on GWI by further disadvantaging them and potentially sinking their efforts to provide better service in Maine.

“If the university is able to bypass some of the competitive markets, and cherry pick, it could affect the ability to deliver broadband to others,” he said.

Exactly how it affects the ability of FairPoint to deliver what it has failed to demonstrate it is capable of delivering is a question Fitts doesn’t answer.

Fitts

“I know this will cause a lot of discussion in committee,” he told the newspaper. “But we need to have that discussion.”

Maine Public Radio covered the introduction of Rep. Fitts’ bill, and the debate swirling around it. (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Constituents need to have a discussion with him. Unless he wants to be known as the representative from FairPoint, he might want to get out of the way of a project that has a chance of improving broadband in his state, as opposed to the empty promises from a bankrupt provider. If he wants to tie himself to FairPoint’s record of failure, voters can choose someone else to represent them at the earliest possible opportunity.

Those with a need for high speed broadband have tried, and failed, to obtain better service from FairPoint. As Stop the Cap! has reported in exhaustive detail, FairPoint was preoccupied in delivering third world phone service at the time, finally collapsing on the courthouse steps under the weight of its bankruptcy filing.

Bills like these in Maine are further evidence that Congress needs to act on the federal level to pass the Community Broadband Act, which would overturn these kinds of bought-and-paid-for protectionist bills passed in several states. Communities must have the right to bypass companies in the broadband shortage business.

[flv width=”352″ height=”264″]http://www.phillipdampier.com/video/WLBZ Bangor Broadband Stimulus Will Help Maine Health Care 12-2009.flv[/flv]

WLBZ-TV in Bangor showed what broadband brings to Maine’s health care system and other business.  (3 minutes)

[flv]http://www.phillipdampier.com/video/MaineBiz Broadband Special 11-2009.flv[/flv]

MaineBiz Sunday spent nearly an hour going in-depth into broadband challenges in Maine, the problems with FairPoint Communications, the dispute with GWI, and more.  Appearing on the show, which originally aired last November: Fletcher Kittredge CEO of GWI, Phil Lindley of the ConnectMaine Authority, Steve Hand of Know Technology and Rep. Cynthia Dill of District 121 in Cape Elizabeth. (36 minutes)

Coming up…

Comcast Is Allergic to the Word “Free” Except When They Are the Recipient

Providing computers in income-challenged neighborhoods and free access to wireless Internet for Philadelphia’s poorest neighborhoods simply won’t do in Comcast’s home city. The cable giant has filed objections to a proposal to bring access to those who would never be able to afford Comcast’s asking price for broadband.

Comcast Center in Philadelphia

Comcast executive vice president David Cohen made it all too clear in a story from Bloomberg News:

“Those applications don’t qualify for funding primarily because they are applications to provide service in areas where there is already broadband service,” Cohen said. He didn’t provide an estimate of how many applications would be implicated, and said Comcast would point out only applications that would serve areas where it provides Internet service.

“We would mostly care if it goes to an area where we’re the broadband provider,” Cohen said.

Comcast has concerns about tax dollars and other benefits going to projects that could compete with Comcast’s offerings. But Comcast’s rank hypocrisy is on full display when one considers public funding is a-okay when it is directed towards Comcast:

Comcast executives lobbied the state government for financial assistance to build their new Center City headquarters. The firm unsuccessfully sought a Keystone Opportunity Zone (KOZ) designation for its building, which would have provided local and state tax relief. Despite the fact that KOZs are intended to spur development in areas of blight, not prosperous Center City locations, the $30 billion company almost succeeded with the help of Gov. Rendell. Had the Comcast effort prevailed, the company would have been exempt from state and local business taxes until 2015.

The Pennsylvania Legislature defeated Comcast’s and the governor’s efforts. The governor then made an end-run around the legislature, funneling nearly $43 million in taxpayer money to aid Comcast and pay for infrastructure near the Comcast building, prompting outrage from many. Comcast’s direct incentives were nearly $13 million. The economic development funds equated to roughly 10 percent of the building’s cost.

Rival office landlords complained bitterly about the public subsidies, fearing that Comcast Center will lead to a glut of downtown office space and lure away their corporate tenants.

Isn’t that a familiar argument. The state of Pennsylvania didn’t help matters when it didn’t include the project on a list of “recommended projects” it sent to federal officials.

Coming up…

American Cable Association Complains Their Lobbying Wasn’t As Effective as the Telephone Companies

It’s not just the big players that are trying to game the broadband stimulus system.

Tiny Pine Telephone Company of Broken Bow, Oklahoma was the only ACA member to secure a $9.5 million stimulus grant

One way to assure the winners and losers of broadband stimulus funding is who gets to write the application rules. The broadband stimulus program includes a scoring system, assigning points of merit to applicants who meet certain criteria. Provide proof of community support, earn a few points. Demonstrate a commitment to serving broadband to the unserved, earn some more points. Offer 21st century broadband speeds of 20Mbps or more, earn a lot more points.

The American Cable Association (ACA), a trade association for smaller independent cable companies, feels the point system has been weighted to favor phone company projects. Both cable and telephone company lobbyists offered their “suggestions” for criteria to be scored. The rural telephone company lobbies won.

Fierce Telecom notes a key criterion is whether the applicant borrowed funds under Title II of the 1936 Rural Electric Act, and it appears that telcos led that charge. Anyone that did borrow the funds under that program got five points so ACA asked the grant makers to reduce the emphasis of that criteria from five to one. Apparently, ACA not only didn’t get their wish, the grant makers upped the points on that issue from five to eight.

With federal funding programs, it’s not uncommon for the rules to be written in such a way that helps politically-connected applicants in the qualification process. ACA was simply outgunned during this round, and after the first round of projects to be funded was announced, only one rural phone company, Pine Telephone, was deemed a winner.

“The American taxpayer will be disappointed to learn that the program was changed to give greater priority to awarding particular segments of the telecommunications industry with broadband funding over equally or better-qualified applicants, including ACA members, that could provide the same broadband service at a lower cost,” ACA President and CEO Matthew Polka said.

Had the reverse been true, the press release from the rural telephone trade association would say the same thing — only the names would have changed.

Coming up…

Sticking it to Frontier Communications — “Just Say No” Applies to America’s ‘Rural Phone Company’ As Well

Frontier's broadband stimulus requests were also shot down when West Virginian cable operators objected

Even companies whose raison d’être these days is to provide better phone and broadband service to rural Americans are being turned down. Frontier Communications, who wants to take control of 617,000 phone lines in West Virginia from Verizon was, in part, promoting rural broadband stimulus funding as a benefit of the deal. After all, a phone company specializing in serving the underserved would stand a better chance of securing broadband stimulus money than a telephone behemoth like Verizon.

Apparently not. The feds turned down their $55 million dollar broadband stimulus application, too.

Frontier applied for two stimulus grants, one to provide fiber optic connections to schools, libraries and health care facilities, the other to fund broadband expansion in West Virginia.

West Virginia’s incumbent cable companies teamed up and just said no.

Opposition piled on from Armstrong Cable Services, Comcast, JetBroadband and Suddenlink urging federal officials to deny Frontier’s applications. They claimed the phone company was trying to secure taxpayer money to provide broadband service in their territories, making the application redundant.

“They had said this was a reason to grant approval, that this would really boost broadband deployment,” Patrick Pearlman, deputy director of the state PSC’s Consumer Advocate Division, which is opposing the Frontier-Verizon sale told the Charleston Gazette. “They went on about how they’re going to get all this money and bring all this, but apparently they couldn’t count on the feds.”

Frontier didn’t blame themselves for the failure, of course. They blamed state officials for holding up their deal with Verizon.

“This is one of the reasons why we have asked this and other commissions to act expeditiously in their review of the proposed transaction,” Daniel McCarthy, Frontier’s chief operating officer told the Gazette.

State regulators should take the rejection as a lesson learned if they believed Frontier’s claims that approving the deal would result in an improved position for broadband stimulus funding. It was not to be. Even small cable companies will pounce on applications that suggest competition might be on the way.

More and more, it appears likely the grand plan for vastly improved broadband will be reduced to funding a handful of showcase rural broadband projects that solve some of the nation’s broadband deficiency woes, but after telecommunications industry and their lobbyist friends are done chewing up the project, plans of expanded broadband providing Americans with better choices at reasonable prices will remain a broadband pipe dream.

[flv]http://www.phillipdampier.com/video/TDS Telecom CEO Announces Broadband Grants for Michigan 12-2009.flv[/flv]

TDS Telecom’s grant for broadband expansion is an example of showcasing hit or miss rural broadband projects.  The company secured $8.6 million to expand broadband Internet services to TDS customers in one Chatham Telephone Company exchange in northern Michigan.  Considering TDS serves largely rural customers in 30 states, winning expansive broadband improvement for all Americans is about as likely as winning the Powerball jackpot. TDS CEO Dave Wittwer explains the stimulus funding to customers in this video. (1 minute)