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)

Americans have got it all wrong.  Their ‘faster is better’ obsession over broadband speed threatens to harm jobs and hurts those looking for work.

Those are the views of Stuart N. Brotman, a senior fellow at the Digital Policy Institute, which calls itself “a vehicle for faculty research that coalesces around the arenas of law, regulation, economics, intellectual property, and technology as these relate to public policy issues of local, state and national interests.”

Brotman argues that while broadband speeds matter, regulators should not be focused on speed as much as considering how broadband can help Americans find jobs.

The Agriculture and Commerce Depts. are tasked with administering $7.2 billion in stimulus funding for broadband by Sept. 30. As they decide where to place the bulk of those funds, which remain unawarded, government officials should show preference to grant and loan applicants that can use broadband to reach displaced workers more quickly.

There also need to be more funds made available to, and a greater focus on, public institutions, such as libraries, community centers, job training facilities, and adult education sites, where broadband spending may have the largest impact on jobs.

Greater broadband competition, which the FCC recognizes is essential to promote more infrastructure development and more varied pricing, also will be helpful. So, too, will be more efficient use of our spectrum resources, particularly those that have been controlled by colleges, schools, and other educational institutions for decades. Those airwaves can be better deployed to deliver high-speed wireless broadband services or leased to private-sector companies offering them.

Large telecommunications providers couldn’t have said it any better.  They have repeatedly argued broadband speeds are besides the point.

Brotman

AT&T last fall wrote the Federal Communications Commission, suggesting residential customers would do fine with broadband speeds that let them “exchange emails, participate in instant messaging, and engage in basic web-browsing.”  For AT&T, speed was less important than setting “a baseline definition of the capabilities needed to support the applications and services Americans must access to participate in the Internet economy—to learn, train for jobs, and work online….”

Verizon echoed AT&T, asking the Commission to retain the current minimum definition of broadband speed at 768kbps downstream and 200kbps upstream.  That allows them the chance to participate in stimulus funding projects that set the broadband speed bar low, especially in the rural areas Verizon wants to spend less on or is trying to sell-off.

“It would be disruptive and introduce confusion if the Commission were to now create a new and different definition,” Verizon said in its letter to the FCC.

Some of the smaller telecommunications companies also believe broadband speed should be de-emphasized.

Embarq, before completing a merger with CenturyTel (now CenturyLink) told the FCC 1.5Mbps broadband service has become “the most common offering.”  Embarq called that “consistent with an emphasis on economic development and jobs as many important applications, such as video conferencing are arguably possible only with 1.5 Mbps service and above. Any higher speed threshold, however, would risk defining as unserved the large number of satisfied customers of 1.5 Mbps service, which seems implausible.”

Embarq underlines the real reason providers are concerned about broadband speed — they’re not delivering it.  Once legislators or the Commission increases minimum broadband speed levels, many of these companies may find themselves below the threshold, guilty of “just enough speed to scrape by” in non-competitive markets.  That could lead to the prospect of facing federally-funded stimulus projects from others in their service areas, now deemed “unserved” or “underserved.”

Brotman further advocates that funding be focused on those that can deliver results “quickly.”

Embarq would agree with him there as well, stating “funds through grants directly to broadband providers rather than loans or other measures as this will have the greatest and quickest impact in bringing broadband to the hardest-to-serve areas.  …there is no time to wait for complete broadband maps or block grants to states for redistribution.”

Telecommunications companies would also do well by Brotman’s suggestion that federal funding for broadband projects reaching public and community service institutions should be emphasized.  As communities often request companies provide those services at a deep discount or free in return for franchise agreements or other licensing provisions, that’s money AT&T, Verizon, and others need not spend out of their own pockets.  Getting free airwaves swiped from educational institutions to deliver wireless broadband also benefits AT&T and Verizon, who are in that business as well.

When a “policy institute,” “research group,” or other seemingly unaffiliated entity starts rehashing telecommunications industry talking points, it’s time to start digging.

Buried on page five of a PDF file describing the work of the Digital Policy Institute, one comes to a section titled, “DPI Impact and Influence.”  DPI doesn’t list their financial supporters or partnerships as such.  Instead, they call them “national, collaborative relationships.”  Who does DPI collaborate with?

• AT&T
• Embarq
• National Telecommunications Cooperative Association (rural telco lobbyists)
• Verizon
• …among others.

Imagine my surprise.

But that’s not all.  Stuart N. Brotman Communications counts (or counted) among his clients AT&T, Cox Cable, National Cable and Telecommunication Association, and the New England Cable TV Association.

Perhaps Business Week would have done a better service to readers had they also disclosed that.