Travesty: North Carolina’s Telecom Companies Oppose 4Mbps Broadband Service in Rural Areas

Despite today's setback, North Carolina's broadband hero is Rep. Bill Faison, who stood up for rural broadband.

In the North Carolina legislature’s Finance Committee, a one week timeout “to hear views from the public” actually means giving breathing room for cable and phone lobbyists to strip away surprise amendments not to their liking.  This morning, in a catastrophe for consumers, the state’s largest phone and cable companies got legislators to wipe out a provision that would have helped guarantee rural North Carolina at least 4Mbps broadband service, either from existing providers or new ones that develop in their absence.

During debate of H.129, the anti-Community Broadband bill, North Carolina consumer interests were kept out of sight and mind as lobbyists worked their magic to get rid of Rep. Bill Faison’s (D-Caswell, Orange) amendment that would set the state’s minimum acceptable definition of broadband at 4Mbps with a 1Mbps upload speed.  With the help of several flip-flopping representatives, they got their wish.

Faison’s amendment was designed to open the door to someone — anyone — to bring broadband into rural areas of the state.  While Time Warner Cable, AT&T, and CenturyLink dawdle, large numbers of rural residents simply go without any broadband service.  Faison’s amendment was simple and reasonable — if at least half of an area is not served with 4/1Mbps service, provisions should be made to allow local communities, if they wish, to establish service themselves to get the job done.

Last week, when Faison’s amendment appeared to be headed for incorporation into the bill, industry lobbyists blanched and fled the room, raising vocal objections and demanding a week timeout before a vote was taken.  After winning their reprieve, they managed to get the Republican majority in line to throw rural North Carolina under the bus, uniformly opposing Faison’s amendment.  Two Democrats, one representing the city where Time Warner Cable’s regional division is headquartered, joined them.

Hall of Shame: Rep. Carney does not care about North Carolina's digital divide.

In its place, they substituted a new amendment which defined broadband in the state of North Carolina as any service occasionally capable of achieving 768kbps downstream and 200kbps upstream.  That represents “well-served” among these industry-friendly legislators.

Among the worst offenders that stood out today were Reps. Jeff Collins (R-Nash) and Becky Carney (D-Mecklenburg).  Last week, they were standing with North Carolina consumers.  This week, they are voting for the interests of the cable and phone companies.  Rep. Carney, who lists her occupation as “homemaker”, voted to guarantee North Carolina families years of slow, expensive and erratic broadband service, if available at all.  Collins supported an amendment that says Nash County residents should do just fine with broadband speeds that don’t even manage to break 1Mbps.

The bill next moves to the floor of the House for consideration.

What is missing from this debate is a realization on the part of the legislature cable and phone lobbyists do not want anyone delivering basic broadband service in rural North Carolina unless it comes from them, and to date they have shown no interest in delivering it.

After all the debate, here is a fact no one can ignore.  The only networks in the state capable of delivering world class 100Mbps broadband are two fiber based community-owned networks in Wilson and Salisbury.  The companies that want to see them out of business see 768kbps as more than adequate to define broadband availability in North Carolina.  When members of the Finance Committee agreed, it helps explain how the state has managed to rank 41st in broadband excellence.

It’s time to ask your legislators what side they are on.  Yours or the state’s cable and phone companies.

AT&T Data Caps: Gizmodo’s Joe Brown In Over His Head on G4TV’s Attack of the Show

Joe Brown was obviously not the right person for G4TV’s Attack of the Show to talk to about the issue of Internet Overcharging.

As AT&T begins notifying their DSL and U-verse customers they are about to face usage limits on their broadband service, G4TV sought out reaction from the features editor of Gizmodo.com, who was wholly unprepared to inform viewers about the facts behind AT&T’s usage caps and their implications for customers.

While Brown and G4TV were joking about users having to curtail game downloads, for millions of AT&T customers, it’s no laughing matter.

AT&T’s announced 150-250GB limits will eventually cost customers $10 or more for each extra 50GB allotment, on top of their already-expensive broadband service package.

“It really had to happen eventually I think,” Brown told viewers.  “People are using a lot of bandwidth.”

Gizmodo's Joe Brown talks with G4TV's Attack of the Show

But Brown’s observation conflicts with AT&T’s own claim “only a tiny minority of customers” will use more than the company wants to allow, with the average AT&T customer consuming 18GB per month.  AT&T isn’t telling the full story about that either.

For those “heavy users” AT&T wants to restrict first, the implications go well beyond curtailing Netflix and playing online games.

“As a software developer who works under a Linux environment and is forced to telecommute from home one week per month, these caps would absolutely kill me,” writes Joe Stein from Sparks, Nev.  “If you are a retired person using your computer to check e-mail and browse the headlines, you will obviously never exceed AT&T’s caps, but for technology innovators and those like me in the software development field, 150GB is nothing.”

Stein downloads regular updates for Linux, exchanges software back and forth with the office several times a day, and uses video conferencing regularly when he works from home.

“Not all online video is about adult entertainment or downloading movies,” Stein says.  “Usage caps hurt anyone who has to work with large files or business-related video, and after the events this week, AT&T can afford to leave off the caps.”

Brown claims AT&T conducted “a study” in two cities which found that 98 percent of their customers used far less than the usage caps would allow.  What Brown does not know is that those two cities are Beaumont, Texas and Reno, Nevada — hardly superstars in the tech revolution.

“Nobody moves to greater Reno to be a software superstar, which is why I am in San Jose, Calif., all the time,” Stein says.  “But there is more to this area than casinos.”

Stop the Cap! has been helping consumers in both cities avoid AT&T because the company’s “study” came at the same time it was experimenting with an Internet Overcharging scheme that limited customers to as little as 20GB of usage per month — a strong incentive for customers to avoid high bandwidth services,  or better yet AT&T.  So it’s no surprise broadband users who know better chose an alternative provider, including Stein.

“I first became aware of the usage cap debacle a few years ago when AT&T tested usage caps in the Reno area, which covers Sparks,” Stein says.  “I saw the impact first hand when customers started getting notified they would have to pay substantially more for basic Internet service.”

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AT&T first limited their broadband customers to as little as 20GB of usage per month, then claimed the average customer only uses 18GB, making their 150GB DSL cap "generous."

Stein left for the cable company — Charter Communications, and they have usage caps too, but they are rarely enforced and much higher than what AT&T offers DSL customers, Stein says.

Brown claims AT&T is trying to “get out ahead of people using too much,” a point in conflict with the fact AT&T is willing to sell consumers additional bandwidth on its “overcongested” network.

Brown’s suggestion that “bandwidth costs money” is partially true, but not in the context of AT&T’s usage limits.  The company that can afford fiber optic upgrades to deliver limitless television and telephone service apparently cannot afford the pennies in bandwidth costs customers consume as part of their broadband service, which can run $50 a month or more.

Pondering broadband usage “fairness” is a losing proposition for consumers… and reporters, too.

Once someone blindly accepts the premise AT&T needs data caps, with no evidence usage presents a technical or financial challenge for the company, the debate is quickly reduced into a numbers game about “how much usage is fair.”

Clearly for Brown and his friends, who admit they are dangerously close to reaching or exceeding AT&T’s limits, the answer to Brown wondering aloud if the caps would “do it for him” should be no.

Stop the Cap! believes no cap is worth living with, especially on AT&T’s enormous-sized broadband network, now increasingly designed to handle the multimedia rich Internet and their U-verse platform.

It is doubtful many will be assuaged by Brown’s comments that “AT&T sounded pretty cool” about how they will deal with those who exceed their arbitrary usage limits.  Why?  Because after the “fair warnings” AT&T will provide customers on its artificially limited network, they will drop the sledgehammer of higher bills on top of customers’ heads.

Brown should know better, especially after finding AT&T unwilling to discuss how often it intends to revisit its usage cap levels.  AT&T’s counterparts in Canada have already foreshadowed the answer.  Once the cap regime is in place, several companies lowered them, sometimes repeatedly, to further monetize broadband usage.  They also raised the prices of overlimit fees, often substantially.

AT&T depends on uninformed consumers and reporters not understanding the true facts about Internet Overcharging schemes.  It’s not too late for reporters like Joe Brown to undo the damage, however.

Stop the Cap! strongly encourages everyone to examine the evidence we have compiled here over the past two and a half years.  It’s not hard to discover AT&T’s usage caps have nothing to do with fairness, are arbitrary and unnecessary, and come as a result of providers seeking higher profits in an undercompetitive marketplace.

If we do not uniformly and loudly oppose usage limits, America’s broadband rankings, digital economy innovation, and high technology jobs are all at risk, just to satisfy AT&T’s insatiable appetite for higher profits.

(P.S. – Joe: How did you miss Comcast has been capping their customers at 250GB for two years now.  Say it ain’t so, Joe!)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/G4TV Attack of the Show ATT Caps Their Data Usage 3-15-11.flv[/flv]

G4TV’s ‘Attack of the Show’ misses the boat on AT&T’s Internet Overcharging scheme.  They did better covering Time Warner Cable’s attempt at Internet Overcharging in 2009.  It’s time to revisit this issue and get involved in the fight that could hurt the very audience watching this show.  (6 minutes)

NC Politician Under Fire for ‘Pay to Play’ Telecom Politics; Demands TV Camera Be Shut Off During Interview

"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. (WNCN-TV)

Rep. Julia Howard (R-Davie, Iredell) threatened to get up and leave an interview with a Raleigh television reporter if the NBC station didn’t “switch the camera off” after she was questioned about her support of an anti-consumer, anti-broadband bill written by the same telecommunications companies that donated more than $7,200 to her political campaign.

Howard was being interviewed by WNCN-TV in Raleigh about her strong support for legislation that would likely end community-owned broadband in one of America’s least-wired states.  The reporter asked Howard to explain her support for H.129, the so-called “Level Playing Field” bill that has received a considerable push from the state’s largest telecommunications companies, including Time Warner Cable, AT&T, and CenturyLink.

At first, Howard tried to defend her support for the bill, despite claims from the watchdog group Democracy North Carolina that the legislation raises ethical questions about the influence of money in state politics.

“I don’t care what they say. That’s not who I am,” she said. “As long as I’m here, I’m going to do what I feel like is right for the people of the state.”

But moments after being confronted with the fact she has received considerable financial support from all three companies, Howard demanded the reporter turn the cameras off.

“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.

Bob Hall, director of Democracy North Carolina called the bill a classic example of “pay to play” politics — where large companies pay to get legislation favoring their businesses before the state legislature.

“The relationships that are built because of money that’s given, that then warps the whole discussion,” Hall said.

The Raleigh NBC affiliate uncovered pages of campaign contributions to lawmakers supporting H.129 from the state's largest cable and phone companies. (WNCN-TV)

Howard chairs the Finance Committee that will hear the bill tomorrow morning after a week’s delay.  Surprise amendments that would help hold existing networks exempt from the onerous provisions of the legislation and an easing of the bill’s requirements for unserved areas upset cable industry lobbyists.  In the interim, a growing number of media reports have called attention to the corporate contributions that seem to be helping drive the bill forward.

“There are a handful of politicians in the legislature that are either on the take or wear blinders when it comes to the real interests of voters like myself,” writes Raleigh resident Susan, who follows Stop the Cap! “Watching Julia Howard squirm in her chair when being asked pointed questions serves her right.”

Susan, who notified us of tonight’s news report, doesn’t believe for a moment Howard’s “feigned shock” over questions being asked by the reporter.

“Anyone pushing H.129 is a shill for Time Warner Cable, because there is not one single part of this bill that brings one new Internet connection, it just guarantees we will all pay higher rates so the cable company can donate more money to Howard’s campaign.”

Stop the Cap! continues to recommend North Carolina residents contact members of the Finance Committee and tell them to vote NO on H.129.  Tell Rep. Howard and others it is not too late to do the right thing and withdraw this bill from further consideration.  Explain to her that if her word is her bond, she can prove her honorable intentions by asking Rep. Avila to pull the bill because it is a mistake and won’t bring better broadband to anyone.  We want Rep. Howard to retain the goodwill of the people of North Carolina, but that becomes increasingly difficult if she can’t even defend what she is doing to a reporter asking if there is a connection between her support and the thousands of dollars of campaign contributions she has received from the industry that wrote the bill.

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WNCN-TV caught Rep. Julia Howard off guard when she was confronted with thousands of dollars in campaign contributions from large telecommunications companies and asked if this played a role in her support for their custom-written proposal to abolish community-owned networks in the state.  (2 minutes)

Finance Committee Members

(click each name for contact information)

Senior Chairman Rep. Howard
Chairman Rep. Folwell
Chairman Rep. Setzer
Chairman Rep. Starnes
Vice Chairman Rep. Lewis
Vice Chairman Rep. McComas
Vice Chairman Rep. Wainwright
Members Rep. K. Alexander, Rep. Brandon, Rep. Brawley, Rep. Carney, Rep. Collins, Rep. Cotham, Rep. Faison, Rep. Gibson, Rep. Hackney, Rep. Hall, Rep. Hill, Rep. Jordan, Rep. Luebke, Rep. McCormick, Rep. McGee, Rep. Moffitt, Rep. T. Moore, Rep. Rhyne, Rep. Ross, Rep. Samuelson, Rep. Stam, Rep. Stone, Rep. H. Warren, Rep. Weiss, Rep. Womble

FCC Chairman Opens Wireless Industry Convention Mouthing AT&T Talking Points

Phillip Dampier March 22, 2011 AT&T, Broadband "Shortage", Competition, Editorial & Site News, Public Policy & Gov't, T-Mobile, Wireless Broadband Comments Off on FCC Chairman Opens Wireless Industry Convention Mouthing AT&T Talking Points

Genachowski

Federal Communications Commission Chairman Julius Genachowski spent this morning in Orlando delivering a keynote address opening the wireless industry’s annual trade show.

Stop the Cap! spent part of the morning following the event over a live stream that most wireless customers would never dare to watch — fearing they’d blow past their monthly usage limits.  Genachowski steered well clear of commenting on yesterday’s merger announcement between AT&T and T-Mobile.  But then AT&T must have hacked their way into the tablet the FCC chairman was reading from, because he suddenly launched into a series of talking points that could have come right off of AT&T’s government affairs website.

“Mobile broadband is being adopted faster than any technology in history, but there’s a catch,” Genachowski said. The chairman said the demand for wireless broadband is overwhelming the country’s wireless infrastructure. “The coming spectrum crunch threatens America’s leadership in mobile,” Genachowski said.

It appears Julius has been listening to AT&T executives who have made the spectrum crunch and “America’s leadership in wireless broadband” bullet points a hallmark of their argument for a merger with T-Mobile.

In fact, although T-Mobile delivers AT&T additional mobile broadband capacity in selected major cities, the company is likely to find many of T-Mobile’s cell sites redundant, and some of T-Mobile’s spectrum is incompatible with AT&T’s network unless customers are handed new devices.

America’s “leadership in mobile broadband” can be judged in many different ways.  For example, we feel many in Washington are helping AT&T lead the way to a mobile duopoly.  We are also leading with some of the most expensive mobile broadband service in the world, a fact of life that will never change in America’s shrinking competitive landscape.

Spectrum issues are solvable by the FCC without destroying competition with yet another colossal merger.  The chairman’s telegraphing of AT&T’s talking points can only be seen as an encouraging road map by which the huge telecom company can sell its deal to regulators by selling out consumers.

North Carolina Media Review Shines Spotlight on Anti-Community Broadband Legislation

Rep. Marilyn Avila (R-Time Warner Cable)

Rep. Marilyn Avila (R-Time Warner Cable) is coming under increasing scrutiny across North Carolina as her cable lobbyist-written, anti-community broadband bill — H.129 — faces negative reviews in the media across the state.

Avila’s bill would set conditions under which community-owned broadband networks could operate, while specifically exempting existing cable and phone companies.  Most observers on the ground predict Avila’s bill would kill any further expansion of public broadband networks in the state and tie the hands of those already in operation, which would inevitably drive them out of business.  Avila’s bill, ghost-written by the state’s cable companies, even has the prescience to allow the fiber systems to be sold off to cable and phone companies at fire-sale prices for as little as pennies on the dollar, without a public vote.

Last week, the state legislature’s Finance Committee put Avila’s bill on a temporary hold “to allow public input” on the bill, but also to permit scrambling by lobbyists to deal with several surprise amendments that attempt to exempt existing community networks.

That time-out has given the press a chance to examine the proposed legislation and its impact on North Carolina’s efforts to improve its mediocre broadband rankings, now 41st in the country.  More than a few in the media do not like what they see in H.129.

The Associated Press notes the state legislature was finally allowing the public to weigh in on a matter that directly impacts their Internet experience:

North Carolina lawmakers aiming to stop cities from building their own broadband networks decided Thursday to allow public comments the next time they consider the latest effort by telecom companies to keep local governments out of the business.

The House Finance Committee will hear from the public next Wednesday as it reviews legislation that would sharply restrict the chances for municipalities to step in when cable and phone companies decide not to build high-speed Internet systems in lightly populated areas. Opponents say telecom companies aren’t extending super-fast Internet at reasonable prices, and that keeps smaller communities behind in the wired world of commerce.

“They don’t want to provide these services in a lot of areas because it’s expensive, and they don’t want municipalities to offer these services. That’s an unlevel playing field for our citizens,” said Rep. Deborah Ross, D-Wake.

Legislation unveiled Thursday was changed to ease the rules for communities in which at least half the households have no access to high-speed Internet except through a satellite provider. Another change ensures the new rules don’t affect the municipal networks already established in Wilson, Salisbury, Morganton and Iredell County, which have borrowed to build their systems.

Cable and phone companies have been urging the General Assembly to restrict municipal broadband services since a 2005 state appeals court ruling upheld the right of towns and cities to offer their residents broadband. Companies argue that local governments have an unfair advantage because they don’t have to pay taxes and can subsidize their rates by shifting profits from their electricity or gas customers, undercutting the corporate competitors.

Except community broadband providers in North Carolina are not doing any of those things.

In fact, smaller providers start at a competitive disadvantage because they cannot enjoy the savings larger providers get from their extensive buying power — winning lower costs on everything from programming to equipment and services.

Community providers are not winning most of their customers from “underpricing” their service — they are earning them by delivering better service, which was precisely the point.

The original argument communities like Wilson and Salisbury had with state cable and phone companies was with the quality and level of service offered in their communities.  They solved the problem themselves with the development of fiber optic service that provides ultra-fast broadband connections that residents and small businesses simply could not get from other providers.

Some lawmakers believe community networks get in the way of cable jobs and phone company investment, and they want to “clear the playing field for business.”  But for many communities in the state, the playing field is empty and will remain so indefinitely.

Broadband: Utility or Convenience

For some lawmakers, the debate is both generational and philosophical.  Ruth Samuelson (R-Mecklenburg), told the AP she doesn’t believe providing broadband is a core part of government.

Among the older population who have not grown up with the Internet, broadband can be seen more as a luxury and less of a utility.  A few generations earlier, a similar debate erupted over telephone and electric service, which faced identical controversy in regions underserved by private utilities.

A reminder of these earlier challenges was part of the Winston-Salem Journal’s argument against H.129’s adoption:

“The broadband battle is not being waged in the heavily populated portions of the state such as the Triad. Here, the for-profit companies moved in a long time ago. They can make a very nice profit here because the population density is adequate to provide a good return on the infrastructure needed for high-speed Internet service.

“Over the past decade, however, North Carolina’s smaller municipalities, such as Wilson, Salisbury and Morganton, have built their own systems because their leaders recognized that broadband Internet is now an essential utility, just as electricity and natural gas are. The Internet-service providers did not step up to provide that essential service, so the municipalities did. In doing so, the cities followed a path they took nearly a century ago when the biggest electrical power companies did not provide service to these areas.”

North Carolina blogger-activist Mark Turner wrote in the News & Observer broadband has the capacity to transform North Carolina’s economic future in much the same way power and phone service did a century earlier:

While farm life has never been easy, at one time it was significantly harder. In the mid-1930s, over 97 percent of North Carolina farms had no electricity, many because private electric companies couldn’t make enough money from them to justify running the lines.

Aware of the transformational effect of electrification and recognizing the need to do something, visionary North Carolina leaders created rural electric cooperatives, beating passage of FDR’s Rural Electrification Act by one month. Through the state’s granting local communities the power to provide for their own needs where others would not, over 98 percent of farms had electricity by 1963, and our state has prospered.

The Internet is no less transformational than electricity. Through this world-changing technology, lives are being shared, distance learning taking place and innovative new businesses springing up. Sadly just as in the days before electrification, many North Carolina communities (particularly rural ones) are being left behind, stuck in the Internet slow lane.

The Journal argues Internet Service Providers essentially want to keep these communities in the slow lane, with a powerful cartel that doesn’t deliver service, and does not want cities to provide it either.  The cable and phone companies can’t have it both ways, the paper says. “They can’t delay bringing high-speed service to North Carolina communities but then turn around and lobby the legislature to deny local governments the authority to establish municipal service if their residents want it,” the paper editorializes.

“The private providers are trying to make a big-government argument here, one that includes clichés about unfairness and Big Brother. But that is not the case. In this situation, residents and businesses are tired of waiting for Internet-service providers to arrive, so they’ve exercised their democratic rights to seek an alternative solution through their local governments.

“Had the private companies tried to make their argument 15 years ago, they might have deserved some sympathy. But not in 2011. The Internet and high-speed access to it have now been available in North Carolina homes for well more than a decade.

“They ignored a market, and local governments stepped in to provide a critical service. The legislature should kill this bill.”

Mark Turner in the News & Observer argues nothing about H.129 is really an ideological right or left-wing debate.  He reminds readers the Internet itself was a government invention delivered through public rights-of-way established by local and state government, or over airwaves that are literally owned by the public.

“Like the electric lines that were once strung by hand to all corners of our state, our cities should retain the right to bring Internet service to their communities – especially where the private providers will not,” Turner wrote.

The Rural-Urban Disconnect: Choices in Raleigh, Sneaking Onto Wi-Fi in Spruce Pine

Spruce Pine, N.C., where one of the most popular hangouts in town is a parking lot where Wi-Fi signals deliver the only Internet service some residents can get.

The Journal points out North Carolina’s broadband debate is taking place in the state capital – Raleigh, a city much like the Triad region, served by both cable and phone companies.  Against that backdrop, legislators may assume ubiquitous urban and suburban broadband leaves local governments with few excuses for getting into the business in the first place — an argument the cable lobby is using to its advantage with some legislators.  But as soon as one ventures off Interstates 40, 77, or 95 — it does not take too long to find oneself in a broadband backwater.

“Here in Spruce Pine, broadband is a fabled, magical thing we read about, but don’t have — a big reason why my 17 year old son cannot wait to move out of here,” shares Stop the Cap! reader Morgan.  “Everything you see on television shows with people using the Internet for practically everything just does not happen here.”

Morgan shares one of the community’s broadband secrets: local hotels and other business establishments have parking lots filled with cars with people still in them sneaking online.

“They are hopping on board business and motel Wi-Fi connections to pay their bills, apply for jobs, or just complete homework assignments that require an Internet connection,” Morgan shares.  “Some businesses have locked down their Wi-Fi with passwords to stop the traffic, so there is an active underground trade of passwords of different wireless connections around the area.”

Morgan called the phone company wondering when DSL service might reach her house.

“Never, came the eventual reply — and the guy was laughing about it,” Morgan says.  “He told me if I want something better, I should probably move.”

“What burns me up is these state legislators on the other end of the state are spending their time and energy defending the companies in the broadband shortage business.  If they spent half as much time working for better broadband in western North Carolina, we would not be in this position today,” Morgan writes.  “I mean we’re at the point where people take Internet access for granted in this society and they treat places like Spruce Pine as an escape from that technology ‘to get away from it all,’ all while we live in that world perpetually.”

Morgan is hardly alone living a life without broadband.  In communities from Mars Hill to Marshall, large sections of the state simply go without.  Avila’s bill does nothing to help — it actually hurts.

The Public-Private Partnership: A Solution for North Carolina’s Unserved?

In some areas of the state, public-private partnerships (PPP’s) — also rejected in Avila’s bill — are making a difference getting broadband into rural North Carolina, reports Craig Settles, a broadband activist.

“Last year, North Carolina broadband advocates began formulating policy recommendations to make PPPs something of a standard in business models for communities that want better broadband,” Settles writes in a piece for Government Technology. “When legislation was introduced earlier this year that would effectively end further development of municipal networks in the state, this seemed like the right time to promote PPPs. Unfortunately the legislators pushing the bill effectively shut out these muni-network proponents from offering a compromise in separate negotiations.”

PPPs over some creative solutions to rural broadband challenges — especially in addressing return-on-investment concerns that keep private providers from building out networks to reach rural populations.  A community or non-profit collaborative finances and builds the infrastructure to supply the service with a much longer payback period.  While many commercial companies want a return within five years, co-ops have been comfortable paying off infrastructure projects over 10, 20, or even 25 years.  Then, the private company can hop on board the constructed network at a wholesale price that helps pay off construction costs, and allows the provider to market its services and run its own business.  The only requirement, and the one some private companies hate, is that the network is operated in the public interest and good, meaning -any- competitor can compete over the same facilities.

A successful public-private partnership in western New York could be a model to help rural North Carolina get broadband.

In the Finger Lakes Region of western New York, a hallmark PPP project has brought Ontario County a fiber network that can deliver faster broadband than anything available in nearby Rochester.  And it has the support of TW Telecom, Verizon, Frontier Communications and other companies who can use it as part of their business plans.

“This is a winning scenario,” said Ed Hemminger, CIO of Ontario County, N.Y., and CEO of Axcess Ontario, the county’s 180-mile fiber network project. “It’s the only way some communities may be able to get fiber broadband. They can finance the buildout with bond financing with a 25-year payback term. If a muni is going to partner in this manner, be extremely cautious and ensure that it’s a true open access model that not only benefits providers in the area, but also allows others to come in and compete.”

“The beauty of this scenario is that it enables private-sector companies to overcome one of their biggest hurdles to deploying networks in rural and low-income areas: the cost of laying fiber or building wireless infrastructure,” Settles writes. “Municipalities, if they’re able to swing the financing, can take up to 25 years to pay off the debt. Providers, on the other hand, have to make their money back in three to five years.”

Rebuilding America’s Economy: Investing in Infrastructure

Providing suitable broadband infrastructure is increasingly important in small cities that are afterthoughts for many cable and telephone company providers.  For Wilson, N.C.,  creating the infrastructure of a 21st century broadband network is part of an investment to attract future jobs for a city reinventing itself.

“The city council realized that it would be a very competitive world to attract and retain the best jobs in the future,” Grant Goings, Wilson city manager told The Sun News. “Well, you can’t talk about jobs without talking about the infrastructure that brings them and keeps them. Short and simple advanced broadband is critical infrastructure.”

The Sun News reports on the state’s broadband controversies from the epicenter — Wilson is the first city in the state to deliver a fiber optic-based broadband network that beats all the others on speed.

This year, Wilson signed on its first 100 megabits per second residential customers and is the first to have residents using the highest speeds available in North Carolina, said Brian Bowman, Wilson public affairs manager.

For Wilson and other communities building out better broadband networks, using fiber optics was a natural decision because of its capacity and future ease of upgrades. The cable industry has long argued broadband is a constantly-changing business and cities have a poor track record of keeping up, but Wilson’s GreenLight service has turned the tables on that argument, leaving Time Warner Cable — the state’s largest operator — well behind the municipal provider cable interests predicted would be a failure.

Wally Bowen, founder and executive director of the nonprofit Mountain Area Information Network (MAIN), which provides broadband services in and around Asheville, says this year’s anti-broadband bill, like the others, leaves cities vulnerable to political posturing and special interest legislation. He’s tried to outmaneuver legislators who work for the interests of Time Warner and CenturyLink by building non-profit or co-op ownership into the infrastructure, if only to protect networks from being forced to play defense year after year as private companies try to pick them off in the state legislature.

“Government-owned infrastructure creates political vulnerabilities given how incumbents are behaving,” Bowen said. “Our nonprofits are comprised of representatives from private-sector companies, private colleges, hospitals and so forth, in addition to local government. So there are limited legal grounds for attacking the nonprofit via laws passed in the legislature.” Some incumbent Internet service providers still will try these tactics anyway, but the makeup of these nonprofits can give them a stronger position from which to defend themselves.”

For many voters in the state, watching certain legislators toil on behalf of billion-dollar phone and cable companies while ignoring North Carolina’s broadband problems should bring consequences.

“My friends and I continue to watch these events with interest and will vote against those legislators who obviously would feel more comfortable working inside Time Warner Cable’s headquarters, because they are effectively on their payroll already,” Morgan says.

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