When Stop the Cap! reader Nancy learned earlier this year AT&T was pushing yet another deregulation bill in the Michigan legislature allowing the company to abandon landline service if and when it chooses, she called AT&T and her state representatives to protest.

“When I called AT&T, the representative literally told me if the company ever did decide to stop offering basic phone service in Michigan, I should just ‘get a cell phone,'” Nancy reports.  “Naturally they tried to sell me one of theirs and I replied I was not likely to be loyal to a company that was willing to abandon me and hundreds of thousands of other rural customers.”

As in Wisconsin, AT&T’s lobbying efforts follow the same basic playbook: use friendly legislators and dollar-a-holler groups financed in part by AT&T to push deregulation as “improving competition” and making the state “business friendly.”  But as Nancy learned from experiences in Wisconsin, those are empty promises when rates go up.

“These same people pushed to deregulate cable in Wisconsin so they could offer AT&T’s cable TV service, promising lower prices if we had AT&T competing against Time Warner Cable,” Nancy remembers.  “Time Warner and AT&T raised their rates for both services, instead.”

Nancy has a good memory.  So do we.  Yet again, AT&T’s chief Astroturfer is Thad Nation, this time under the name of the Midwest Consumers for Choice and Competition.  While consumers get ignored, Nation gets time to testify before the House Energy and Technology Committee.

Nation, who runs a lobbying firm, told legislators companies like AT&T should not have to invest in old copper-lines that consumers don’t care about.  He claims it prevents AT&T and other companies from investing in broadband and wireless.

The only thing missing from this group are actual consumers. Instead, their "partners" include: AT&T, groups funded by AT&T, and several chapters of the Chamber of Commerce.

In reality, legislation pushed by AT&T will allow them and other phone companies to abandon providing even basic landline service in the rural areas they no longer care about. There is no evidence (and no regulation) AT&T will invest in either broadband or improved wireless service in rural areas where the company is unlikely to quickly recoup its investment.

Our friends at the Michigan Telephone Blog pointed us to a piece in the Huron Daily Tribune, a newspaper at ground zero for rural Michigan’s potential loss of landline service should the deregulation bill pass.

Located in Michigan’s “thumb” — the northeastern part of the state separated by Saginaw Bay, Tribune reporters drilled down into the implications for the loss of traditional landline service in this largely-rural area of Michigan.

Huron County Commissioner John Bodis, who chairs the Legislative Committee, said he’s aware of the bill and foresees some issues with it, particularly in regard to the provision allowing phone companies to discontinue landline service in an area where Voice over Internet Protocol (VoIP) or cell phone service is available.

“If it’s not mandated, they’re not going to do it,” he said. “So, I’m hoping the Senate version will tweak that a little bit and hold their feet to the fire, but I don’t know.”

In its May Capitol Currents, the Michigan Township Association reported its concerns center around residents losing their land-line phone services when other options are not adequate (i.e. poor cell phone coverage because of hills, trees, etc.).

In written testimony to the House Energy and Technology Committee, Brian Groom, president of the International Brotherhood of Electrical Workers, Local 1106, stated over the past decade, the Michigan Legislature has gradually removed telecommunications providers from the oversight of the MPSC, and HB 4314 would complete that process by eliminating the last vestige of regulation — the Primary Basic Local Exchange Service.

“This service, as currently mandated in state statute, requires residential service providers to offer — at the very least — a basic calling plan to customers in their service territory,” Groom stated. “In 2005, when (M)PSC regulation of larger calling plans was eliminated, proponents argued that the public would continue to be protected by the existence of a Primary Basic Local Exchange Service requirement.”

“This means telecommunication companies providing basic local exchange or toll service will be able to discontinue or deny service to any customer who has access to ‘a comparable voice service.’ Nothing in the bill ensures that such service would be affordable, reliable or of a minimum quality,” Grooms continued. “For customers living in remote areas which are of a higher cost to serve via landlines, this legislation could result in them having to depend on higher cost and less reliable forms of telecommunication services. This bill would create a telecommunications environment where large areas of the state have no access at all to traditional landline telephone service.”

“That means people like me and my friends in places like Bad Axe, Elmwood, and Minden City — communities few people outside of Michigan would have heard of, get disconnected because they are too rural to get much attention from these companies,” Nancy says.

Frontier Communications, which provides service in some areas of the state, claims monopolies don’t exist in the phone business:

In written testimony, Bob Stewart, Frontier Communications state director of governmental affairs for Michigan and Indiana, indicated the current atmosphere is no conducive toward monopolies.

“The telecommunications industry in Michigan has moved to a highly competitive environment where monopoly powers even in rural areas do not exist,” he stated. “Unneeded and outdated regulations in the Michigan Telecommunications Act are cleaned up by HB 4314. Michigan needs to celebrate the success of the MTA by declaring victory; not over regulating simply for the sake of regulation.”

But many rural Michigan residents far from cable television and strong signal cell phone service would beg to differ.

“The further inland you head on the ‘thumb,’ the worse things get,” Nancy reports.  “Much of this is farm country and they can’t even get DSL service, and cell reception might be barely adequate outside, but walk inside and your signal is gone.”

Despite consumers like Nancy getting upset when they learn the long term implications of these bills, without a public outcry it is easy for legislators to vote with AT&T.  In the House, HB 4314 passed 102-6.  The six standouts that stood up for consumers?

Reps. Vicki Barnett (D-Farmington Hills, Jeff Irwin (D-Ann Arbor), Steven Lindberg (D-Marquette), Lesia Liss (D-Warren), Edward McBroom (R-Vulcan) and Phil Potvin (R-Cadillac).

At least 41 percent of West Virginian economic development professionals responding in a new survey rate their area’s existing broadband service as “not very good,” a result that could have profound implications for high tech economic development in the state because of poor quality business broadband service.

Some of the results of the survey, conducted by Internet Service Provider Citynet:

• 77% said government involvement in steering broadband policy was “very important.”
• 78% believe modern, reasonably priced broadband Internet infrastructure is “extremely important” or “very important” in competing against other locations for jobs.
• On a 10-point scale, broadband Internet infrastructure (8.56) rates as slightly more important than road improvements (8.26) and water infrastructure (8.26).

“Seventy-eight percent of respondents say it has been their experience that businesses considering locating in their areas place high priority on access to affordable, high-speed Internet when evaluating site selections,” said Jim Martin, president and chief executive officer of Citynet. “And 66 percent say cost and capacity of broadband service are factors more than half of the time when discussing new business prospects.”

Some participants in the survey said they are losing business prospects in part due to the lack of broadband capacity, its speed or cost. Most of the professionals said they were “very familiar” or “somewhat familiar” with broadband expansion programs, such as middle-mile infrastructure, being implemented in adjoining states.

In West Virginia, most broadband expansion is being done by “last-mile” service provider Frontier Communications, which took over most of the state’s landlines from Verizon.  For most homes and businesses outside of areas where cable companies compete, Frontier provides DSL broadband service ranging from 1-3Mbps in smaller communities, perhaps 7Mbps or slightly better in larger cities.

West Virginia has proved to be one of the least impressive states for broadband owing to its terrain and large number of rural communities, providing few incentives for robust competition.  That has meant slow speed service at high prices.

Survey respondents were less than impressed:

• “I have a project pending [and] will probably lose it based on costs of broadband.”
• “The lack of high speed service in the rural areas totally extinguishes the possibility of new small business start-ups.”
• “Prospects don’t look here because of the lack of high speed, affordable, reliable broadband…. Current speeds of up to 3 mb while may be suitable for residential use are not suitable for business.”
• “Not only do too many areas still not have broadband, but too many places where people live do not have it and that affects the quality of life issue when attracting a prospect to live, work and play in WV.”
• “We were looking at a possible location of a data center and the lack of affordable, large capacity broadband was a deciding factor in them not locating in WV.”
• “We need the middle-mile and trunk-line services in West Virginia to remain competitive for many of today’s industries. What good is it if we get high-speed to every place in West Virginia, when we can only reach each other and do not have the facilities to get out of the state and into the major lines?”
• “[We] lost a company that looked at an existing building located in an area that doesn’t have high-speed access. They ended up locating in another area.”
• “You are not in the game without it.”
• “What are we waiting for?”

Citynet has a dog in this fight.  Martin has tangled with Frontier Communications in the past year over broadband stimulus funding and where taxpayer dollars are being spent in the state.  While Frontier has touted “fiber projects” in West Virginia, those are primarily directed at increasing capacity for Frontier’s middle-mile network between its telephone exchanges, in hopes of expanding DSL further out into rural areas.  The company is also trying to address congestion issues that have grown since buying out Verizon’s landline-based broadband business.

Martin has criticized state officials for supporting Frontier’s efforts because the company will end up owning and controlling the network built, in part, from taxpayer dollars.

Stop the Cap! hears regularly from ordinary consumers in the state who are dissatisfied with their broadband choices, especially when they come from just a single provider — Frontier.  Slow speeds, poor service, and repeated service outages have been documented here and by the state’s local media.  Some outages are attributable to Verizon’s poor quality infrastructure (now owned by Frontier), others to Frontier’s unwillingness to replace that infrastructure — instead choosing to repair it, even if further outages occur later.

United Arab Emirates

While North American broadband providers complain about the costs of wiring America’s rural expanse, the United Arab Emirates is on track to deliver 100 percent of its citizens with high speed broadband service by the end of next year.

The UAE made fiber optic broadband a priority, despite the fact the individual emirates that make up the federation are often separated by vast, rural salt pans, sand dunes, and mountain regions.

Sultan Bin Saeed Al Mansoori, UAE’s Minister of Economy told attendees at the Abu Dhabi Telecoms CEO Summit that despite the fact the country is already a mature market for telecommunications products, healthy competition is driving providers to temporarily reduce revenue expectations as they invest heavily to deliver better service to the UAE’s 8.3 million residents.

Broadband providers in the UAE already deliver a vastly superior experience than most customers in North America receive, and the country is currently measured as the world’s fifth fastest by Akamai.  The average broadband connection speed in the UAE exceeds 25Mbps, and that is before fiber-to-the-home service becomes available to nearly every home in the Emirates.

Al Mansoori

Providers are spending considerable sums of money to improve their networks to deliver faster, more reliable service to even the most rural communities.

”Customers definitely have gained from this diversity,” noted Al Mansoori.  “For operators, revenues have dropped in the short term but I understand this was something anticipated, and which the industry is well-equipped to eventually absorb.”

The Telecommunications Industry Association (TIA) reports 2011 may be the biggest year ever in communications spending, with the world’s fastest growing telecommunications markets being in the Middle East and Africa.

The UAE’s largest phone company, Etisalat, is now a major player in 18 markets across the Middle East and North Africa and has over 100 million customers.

Al Mansoori noted that fiber-to-the-home service was best equipped to deliver UAE world-class broadband service at an affordable rate to consumers.  He further recognized that robust competition inspired the country’s telecommunications companies to choose that technology to best compete with other players in the market — wired and wireless.

“Superior infrastructure that enables social and economic growth that keeps the UAE in the forefront of technology is an integral part of our development vision,” he declared.

Phillip Dampier

Stop the Cap! reader Angela sent us a print-out, by mail, of a recent guest editorial published by the online news site, the Lincoln Tribune.  White, who is 89 and lives in North Carolina was irritated by the piece, written by Kinston, N.C. mayor B.J. Murphy.

“B.J., who was all of 29 when he was elected in 2009, is the first Republican mayor in Kinston since Reconstruction, and after writing pro-cable company nonsense like he did in that [online] paper, he better be the last,” White wrote.  “My mother and father grew up with the same kind of monopoly these cable companies have today, only then it was the damn railroads.  How we ended up electing a mayor who wants us back in that era is beyond me.”

What caught my attention early on skimming the mayor’s views was a single passage early on in his piece:

Municipal broadband, also known as Government Owned Broadband Networks (GONs) is quickly becoming our state’s new enterprise service of choice for cities and towns.

Really?  GONs?  Now I’ve been editing Stop the Cap! since mid-2008, and we’ve covered North Carolina’s broadband landscape extensively, and this is the first time I’ve ever seen community-owned broadband referred to as “Government Owned Broadband Networks.”  A quick Google search reveals why: it’s a loaded term conjured up by corporate-funded, dollar-a-holler groups that oppose public involvement in broadband.  People don’t like “government” they surmise, so let’s relabel these networks accordingly.  Besides, bin Laden is dead and we can’t use him.

In this case, the acronym ‘GONs’ doesn’t even make sense — shouldn’t it be GOBN?  But that wouldn’t sound as demagogic as “gones,” would it?

Your cable dollars pay for consultants who cook up these silly labels, which are not even accurate.  Community-owned broadband need not be a “government-owned” enterprise it all.  Some are public-private partnerships, others are co-ops or run on a not-for-profit basis independent of government.  What they do have in common is the ability to offer better broadband than the “take it or leave it” service many cable and phone companies provide, if they deliver it at all.

After getting past the pretzel-twisted acronym, it’s clear Mayor Murphy is no fan of community broadband.

I believe we should refrain from the temptation to compete with private communications providers on services and infrastructure that we are not equipped to properly manage.

Kinston, N.C.

Who is “we” exactly?  The city of Kinston?  Mayor Murphy must not believe in the talents and abilities of his employees.  Is Mayor Murphy confessing he is in the ironic position of attacking local government while also being an integral part of it?

Most of Murphy’s editorial is a rehash of talking points already delivered by dollar-a-holler groups like the Heartland Institute or something called the Coalition for the New Economy.  The hypocrisy of both “small government” groups calling for more government regulation on certain broadband providers while exempting their corporate friends and backers is lost on them.

Murphy suggests municipal utilities are not well run, and the locals evidently complain regularly about the one serving Kinston.  Are the complaints about service in other towns about companies like Duke Energy and CP&L — private providers — any fewer in number?  Who exactly loves their local gas and electric company?

Murphy concedes “many cities and towns throughout the years have seen voids in service or infrastructure, not easily duplicated by the private sector.  Those areas of service tend to be water, sewer, and sometimes electricity.”

Our rural grandparents lived that life, waiting for electricity and telephone service that private companies refused to provide because it was simply not profitable enough for them to do so.  In fact, NC Public Power was created precisely because private companies wouldn’t deliver electric service in rural North Carolina.  Just 30 years ago, the state allowed municipal construction of generating plants because there were fears private companies lacked the resources to handle the growth in electricity demand.  The Three Musketeers: Mayor Murphy, the Heartland Institute, and the “Coalition” would prefer cities go dark waiting for private capital to show up?  And at what rate of return would they demand from a state in desperate circumstances?  Imagine the complaints rolling in over that.

And so it goes with rural broadband — a service still not reliably available throughout rural communities in Murphy’s state and 49 others.  The problem of rural North Carolina’s pervasive lack of consistent service is so bad, the Golden LEAF Foundation targeted rural broadband development in 69 North Carolina counties, most lacking more than the slowest speed DSL.  Lenoir County, which includes Kinston is not among them.  Perhaps Murphy’s myopic views apply in his local community, but they certainly don’t in large parts of the rest of the state.  Nobody is forcing the mayor to build Kinston a broadband network.  It would be nice if he didn’t advocate away that right for other less fortunate areas.

Golden LEAF Broadband Project (click to enlarge)

Golden LEAF’s initiative, which is just one of several projects in the state, has garnered more than 130 letters of support including approximately 70 from state, county and municipal officials and 12 from middle-mile and last-mile service providers interested in using the fiber network to reach consumers and small businesses.  Part of the project is being funded by federal tax dollars.  Many of the providers eager to connect to that network are private companies, who seem to have no problem hopping on board a fiber backbone paid for, in part, by taxpayer dollars.

Other projects are community fiber to the home networks, designed to support high bandwidth requirements of the digital, knowledge-based economy.  These community providers didn’t appear out of nowhere.  Communities built these networks after incumbent providers refused upgrade requests, repeatedly.  Some communities even open up their existing municipal fiber networks to residential use.

The hue and cry among those opposing community broadband usually begins when these new providers start selling service to the public.  Private providers don’t complain when public networks provide service only to schools, health care facilities, and public buildings.  But when anyone can sign up, the complaints rage from corporate-funded dollar-a-holler groups, the companies themselves, and certain politicians, some who take campaign contributions from the other two.  The talking points are remarkably similar.  Too similar.

Murphy

Mayor Murphy makes an unfortunate comparison in his editorial — to those railroads which made Angela’s hair stand on end.

“His only experience with that monopoly and the barons who ran it came from his American History class and he wasn’t paying attention,” she says.

Government better serves the people by creating the framework for private business to thrive, not by actually owning or competing with private, tax-paying businesses.  Rarely, if ever, will one see two railroad tracks side by side owned by different companies.  Yet, that is what would happen with broadband service in many communities. In many cases, GONs would essentially use taxpayer dollars to build Internet infrastructure on top of that which has already been put in place by private providers.

Uh…

Is the mayor actually promoting a monopoly for broadband?  I suggest the mayor read our earlier piece about the historical plight of Danville, Virginia — a community on the border with North Carolina.  He will learn that those one-railroad-towns desperately wanted a second or third railway serving their community, if only to escape the horrible and expensive service monopolies and duopolies provided in places without sufficient competition.  It took decades to break the railway monopolies up, and consumers and businesses overpaid millions of dollars to robber barons who fixed prices and the type of service communities would receive.  That kind of control could make or break the economy of a town or city.  So it will be with broadband.

Of course, the mayor could suggest we liberalize access to existing broadband infrastructure and allow competitors to sell services on every available network, or allow a community to build one giant fiber optic pipeline on which every provider can deliver service, but we know what his free market friends would say about that.

Boiled down, Murphy’s arguments come from a position of already having access to the broadband resources he needs, wants, and can afford.  That’s a classic example of “I have mine, too bad you don’t have yours”-politics.

That seals the fate of rural North Carolina to an indefinite future of never getting broadband service.

Meredith Attwell-Baker sure is.

The exit of Meredith Attwell Baker from her role as a Republican commissioner on the Federal Communications Commission to take a position as a top lobbyist at Comcast is raising eyebrows in Washington and anger in the rest of the country.

Comcast confirmed late today Baker will serve as their new senior vice president of government affairs, a title that can be considerably shortened to “lobbyist.”

The short span between March, when Baker was browbeating regulators over “taking too long” to review the Comcast-NBC merger she supported, and today’s announcement has surprised even some Washington insiders.

Often, those looking for a better paycheck in the private sector will start by working for a D.C. lobbying firm before directly accepting employment with a company whose multi-billion dollar merger deal they affirmed months earlier in their role as a regulator.

Tim Karr at Free Press called today’s announcement more food for the cynics:

With behavior like this it’s little wonder that American people are so nauseated by business as usual in Washington. Inside the Beltway the complete capture of government by industry barely raises any eyebrows. Outside of Washington, people of every political stripe have expressed near unanimous contempt for a system of government that favors powerful corporations at the expense of the many.

An opinion piece in the Los Angeles Times noted Baker’s move raises uncomfortable questions about how legislators and regulators make their decisions. “Are they acting in their constituents’ best interests, or are they burnishing their prospects for a high-paying job on K Street after they leave government?”

The New York Times expanded on Baker’s strong sentiment for the merger:

“The NBC/Comcast merger took too long, in my view,” Ms. Baker said on March 2 in a speech to a communications industry group. Noting that that time was similar to the length of other major merger reviews at the commission, she asked whether those reviews were preventing companies from trying to grow through acquisition.

“My concern is that you might walk away,” she told the communications executives, “and how many other consumer-enhancing and job-creating deals are not getting done today.”

Politico reported that Comcast’s gain was probably a loss for consumers:

“Sometimes the revolving door between government and private industry spins quickly and sometimes it’s on a rocket sled,” Dave Levinthal, communication’s director for the Center for Responsive Politics, told POLITICO. “This transition is as quick as it can possibly get.”

While Baker is not allowed to be an official lobbyist, Levinthal noted that she has many ways to be influential and lobby for her new company in a broader sense.

“It’s a big boon for Comcast,” he said. “They are getting somebody who has unbelievable government experience and know-how” in the communications space. Consumers, he noted, can’t afford to hire someone of a similar stature to advocate for them.

Comcast denied it approached Baker for a job until after their merger deal was approved.  That defense only strengthens suspicions Baker’s vote made her an even more attractive candidate for the cable company, but most pundits guess she would have supported Comcast even without a job offer. Judging from the comment sections of most major media stories covering today’s events, consumers are unhappy. Some called Baker an opportunist, while others used the occasion to bash Republicans for their reflexive support of big cable and phone companies paying off with jobs at the companies they strongly supported while in government positions.

Considering a few former Democratic commissioners have also made a living working for the interests of big cable and phone companies, calling today’s events an exclusively Republican travesty would be wrong.

Baker will report to Kyle McSlarrow, who recently left the National Cable and Telecommunications Association, the cable industry’s top lobbying group, for his own new career at Comcast.