This influential documentary explores the rural cooperative movement for electricity in the 1930s.

In 1935, just 5-10 percent of America’s family farms were wired for electricity.  The cities: lighted.  The rest of the country: in the dark.  It was the same old story then as it is today for rural broadband:

• There are two few customers for us to make a profit by bringing you service;
• The return on investment will take too long;
• You won’t use enough service to justify the expense of providing it;
• Okay, we’ll install service, if you pay thousands of dollars to cover the cost to bring it you.

Private providers delivered electricity to big cities, but found the countryside not worthy of their time or investment.  Then, as now, rural America’s economy suffered for it.  Back in 1935, family farms coped with wood-fired stoves, school homework by kerosene lamp, discarding fresh farm products that could not be kept cool, no running water, no radio, and no appliances to make an already difficult life a bit easier to manage.  In 2012, an increasing amount of the rural economy is moving online, where raw materials and goods are bought and sold, where knowledge-based jobs require a dedicated broadband connection, and education means completing homework assignments and doing research on the Internet.

Same old problems cast in a different light to be sure, but borrowing from America’s past may put a down payment on our broadband future.

President Franklin D. Roosevelt had heard all of the excuses and seen private electric companies try to showcase their minor efforts to improve power in rural America. A series of small scale projects that looked good in the newspaper could not hide the more general attitude it was unprofitable to provide the service to family farms.  In 1935, Roosevelt signed an executive order establishing the Rural Electrification Administration (REA).  Although FDR’s contemporary critics like to consider him a socialist that interfered in the private economy, in fact Roosevelt’s REA spent the majority of its effort in areas commercial providers wouldn’t touch with a 25-foot power pole.

The idea was simple.  Rural American communities with limited or no electric service could reach out to the REA to obtain low interest loans to finance the infrastructure to construct rural electric service.  When loans were approved, a cooperative electric company was established, with each “customer” being a member and part-owner of the co-op.  Income earned from ratepayers would pay for the service and pay back the government loans.  When the federal government was paid in full, the cooperative owned the new utility company outright.

In practice, this was the only way rural Americans, especially farmers, could obtain electric service.  These cooperatives often found they could deliver the same service a private company could, and for much less money. Co-ops work for the benefit of their members, not for outside investors.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Power and the Land.flv[/flv]

In 1940, the federal government commissioned ‘Power and the Land’ through the United States Film Service.  This one film, showing life for a farm family in southeastern Ohio before and after electrification, helped drive the rural electrification movement forward in areas yet to be wired for service.  The first 17 minutes chronicles life on the powerless farm, while the second half explores the REA electrification program and the changes electricity brought to farming life. (38 minutes)

Belmont County, Ohio shows the legacy of the REA. Diagonal line-shaded sections illustrate the service areas of the original power co-op noted in the film 'Power and the Land.' The yellow shaded areas are served by Ohio Power, a subsidiary of American Electric Power, Inc., a commercial company.

The film’s impact was profound (the Village Voice called it “a little masterpiece”), and more than four million farmers were estimated to have seen it.  Eventually, more than 500 miles of electric lines were being strung by America’s co-ops every single day.  Additional documentaries about the film were made decades later, narrated by Walter Cronkite, to chronicle the cooperative electricity movement, the original film, and what happened to the family.

Private providers were, of course, horrified by the REA and other Roosevelt Administration public works projects.  Private companies railed they were being undermined by low interest government loans, government involvement, and fear new regulations would threaten their profitable business models.  Some of Roosevelt’s fiercest critics called the administration’s zeal for public-good spending anti-capitalist and anti-American.  For Roosevelt, it was often simply a matter of finding the fastest solution to a pervasive problem private companies seemed uninterested and unwilling to solve.

The legacy of the REA remains plainly visible today.  In Ohio, what started as the Belmont Power Cooperative is today part of the South Central Power Company, itself a co-op within the Touchstone Energy Cooperative.  Belmont County, Ohio’s power grid still reflects the work of the REA in the 1930s, with the county divided into regions served by the original REA co-op and Ohio Power.

While South Central Power hasn’t gotten into the broadband business, several other rural co-ops have, expanding their focus towards fiber to deliver cable TV, Internet, and phone service.

If the concept of the REA was adopted for broadband, the formula for success can remain the same.  Low interest loans to finance fiber telecommunications networks provide limitless expansion possibilities and a clear path to solving rural America’s broadband inferiority problem.  Interest rates have never been lower, and by gradually repaying the loans from income earned from subscribers, taxpayer dollars are not at risk.  The federal government’s only real involvement in guaranteeing loans and providing oversight that the money is spent appropriately.  The co-ops that result will govern themselves by and for their members.

Some will say electricity is more important than broadband, and for some families that may be as true as similar arguments were for and against REA electricity in the 1920s and 30s.  But take a week off from your broadband service.  Disconnect it, don’t read e-mail or visit websites, and then re-evaluate that statement.

More and more, broadband has become a firmly established part of our lives at work, school, and home. If private companies won’t step up, let others organize to provide it.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/North Carolina Farmers Utilizing the Internet America’s Heartland.flv[/flv]

Fast forward to December 2011, and watch how rural Rutherford County, N.C. farmers are adapting to the new digital economy with the use of broadband.  They are selling their crops online to eager restaurants, markets, and other buyers up to 70 miles away.  No broadband?  No deal.  (5 minutes)

Phillip "Break Free from 'What's In It For Me'-AT&T" Dampier

[We are reprinting this because it succinctly and persuasively proves a point we’ve been making at Stop the Cap! since 2008.  Broadband is not just a “nice thing to have.” It is as important as a phone line, electricity, and safe drinking water.  News, education, commerce, and culture increasingly utilize the Internet to share information and entertain us. Essential utility services can either be provided by a private company operating as a monopoly with oversight and regulation, or operate strictly in the public interest in the form of a customer-owned cooperative, a direct service of local government, or a quasi-public independent non-profit.

In North America, broadband was originally considered a non-essential service, and private providers in the United States lobbied heavily to maintain absolute control of their broadband networks, free to open them to share with other providers, or not.  They also won sweeping deregulation and are still fighting today for decreased oversight.  The results have been uneven service.  Large, compact cities enjoy modern and fast broadband while smaller communities are forced to live with a fraction of the speeds offered elsewhere, if they have access to the service at all.

With broadband now deemed “essential,” local governments have increasingly sought to end the same old excuses with the “don’t care”-cable company or “what’s in it for me”-AT&T and provide 21st century service themselves, especially where local commercial providers simply won’t step up to the plate at all.  Suddenly, big cable and phone companies are more possessive than your last boy/girlfriend. The companies that for years couldn’t care less about your broadband needs suddenly obsess when someone else moves in on “their territory.” They want special laws (that apply only to the competition) to make sure your broadband future lies exclusively in their hands.

Susan P. Crawford understand how this dysfunctional, controlling relationship comes at the expense of rural America.  She’s a visiting professor at the Harvard Kennedy School of Government and Harvard Law School. In 2009, she was a special assistant to President Barack Obama for science, technology and innovation policy. Her opinions were originally shared with readers of Bloomberg News.]

In cities and towns across the U.S., a familiar story is replaying itself: Powerful companies are preventing local governments from providing an essential service to their citizens. More than 100 years ago, it was electricity. Today, it is the public provision of communications services.

Susan Crawford

The Georgia legislature is currently considering a bill that would effectively make it impossible for any city in the state to provide for high-speed Internet access networks — even in areas in which the private sector cannot or will not. Nebraska, North Carolina, Louisiana, Arkansas and Tennessee already have similar laws in place. South Carolina is considering one, as is Florida.

Mayors across the U.S. are desperate to attract good jobs and provide residents with educational opportunities, access to affordable health care, and other benefits that depend on affordable, fast connectivity — something that people in other industrialized countries take for granted. But powerful incumbent providers such as AT&T Inc. and Time Warner Cable Inc. are hamstringing municipalities.

At the beginning of the 20th century, private power companies electrified only the most lucrative population centers and ignored most of America, particularly rural America. By the mid-1920s, 15 holding companies controlled 85 percent of the nation’s electricity distribution, and the Federal Trade Commission found that the power trusts routinely gouged consumers.

Costly and Dangerous

In response, and recognizing that cheap, plentiful electricity was essential to economic development and quality of life, thousands of communities formed electric utilities of their own. Predictably, the private utilities claimed that public ownership of electrical utilities was “costly and dangerous” and “always a failure,” according to the November 1906 issue of Moody’s Magazine. Now more than 2,000 communities in the U.S., including Seattle, San Antonio and Los Angeles, provide their own electricity.

Today, the Institute for Local Self-Reliance, which advocates for community broadband initiatives, is tracking more than 60 municipal governments that have built or are building successful fiber networks, just as they created electric systems during the 20th century. In Chattanooga, Tennessee, for example, the city’s publicly owned electric company provides fast, affordable and reliable fiber Internet access. Some businesses based in Knoxville — 100 miles to the northeast — are adding jobs in Chattanooga, where connectivity can cost an eighth as much.

Meanwhile, less than 8 percent of Americans currently receive fiber service to their homes, compared with more than 50 percent of households in South Korea, and almost 40 percent in Japan. Where it’s available, Americans pay five or six times as much for their fiber access as people in other countries do. Fully a third of Americans don’t subscribe to high-speed Internet access at all, and AT&T Chief Executive Officer Randall Stephenson said last month that the company was “trying to find a broadband solution that was economically viable to get out to rural America, and we’re not finding one, to be quite candid.” America is rapidly losing the global race for high-speed connectivity.

Tamping Down Enthusiasm

We've done something like this once before.

Like the power trusts of the 20th century, the enormous consolidated providers of wired Internet access want to tamp down any enthusiasm for municipal networks. Last year, telecom lobbyists spent more than $300,000 in a failed effort to block a referendum in Longmont, Colorado, to allow that city to provide Internet access. Time Warner Cable managed to get a North Carolina law enacted last year that makes launching municipal networks there extraordinarily difficult. The pending measures in Georgia and South Carolina are modeled on the North Carolina bill.

The Georgia bill is chock-full of sand traps and areas of deep statutory fog from which no local public network is likely ever to emerge. In addition to the ordinary public hearings that any municipality would hold on the subject, a town looking to build a public network would have to hold a referendum. It wouldn’t be allowed to spend any money in support of its position (there would be no such prohibition on the deep-pocketed incumbents). The community wouldn’t be allowed to support its network with local taxes or surplus revenues from any other services (although incumbents routinely and massively subsidize their networks with revenue from other businesses).

Most pernicious of all, the public operator would have to include in the costs of its service the phantom, imputed “capital costs” and “taxes” of a private provider. This is a fertile area for disputes, litigation and delay, as no one knows what precise costs and taxes are at issue, much less how to calculate these amounts. The public provider would also have to comply with all laws and “requirements” applicable to “the communications service,” if it were made available by “a private provider,” although again the law doesn’t specify which service is involved or which provider is relevant.

The end result of all this vague language will be to make it all but impossible for a city to obtain financing to build its network. Although the proponents of Georgia’s bill claim that they are merely trying to create a level playing field, these are terms and conditions that no new entrant, public or private, can meet — and that the incumbents themselves do not live by. You can almost hear the drafters laughing about how impossible the entire enterprise will be.

Globally Competitive Networks

Right now, state legislatures — where the incumbents wield great power — are keeping towns and cities in the U.S. from making their own choices about their communications networks. Meanwhile, municipalities, cooperatives and small independent companies are practically the only entities building globally competitive networks these days. Both AT&T and Verizon have ceased the expansion of next-generation fiber installations across the U.S., and the cable companies’ services greatly favor downloads over uploads.

Congress needs to intervene. One way it could help is by preempting state laws that erect barriers to the ability of local jurisdictions to provide communications services to their citizens.

Running for president in 1932, Franklin D. Roosevelt emphasized the right of communities to provide their own electricity. “I might call the right of the people to own and operate their own utility a birch rod in the cupboard,” he said, “to be taken out and used only when the child gets beyond the point where more scolding does any good.” It’s time to take out that birch rod.

Openmedia.ca's campaign against increased government surveillance

Two weeks ago, Ontario Provincial Police arrested at least 60 people in connection with one of the largest child pornography rings ever seen in the country.

Under current Canadian law, authorities obtained warrants to identify names associated with the IP addresses police say were engaged in the trade of lurid sexual imagery of minors, as well as recruiting potential new victims in online chat rooms and social networks.

Provincial police were able to identify at least five dozen suspects within the province and successfully staged a coordinated raid in Windsor, London, Toronto, Barrie, Niagara, Sudbury and Ottawa, charging them with more than 200 criminal offenses.

But some lawmakers believe existing privacy laws are inadequate and hamper police investigations, and plan to allow authorities new latitude in chasing down online crime.

An “Act to enact the Investigating and Preventing Criminal Electronic Communications Act and to amend the Criminal Code and other acts” is scheduled to be introduced in Parliament later today, and some of its supporters are attacking online privacy advocates of being “pro-child porn” if they oppose the measure.

“He can either stand with us or with the child pornographers,” Public Safety Minister Vic Toews said to one government critic of the new privacy bill.

The proposed legislation is nothing new — similar bills have come and gone through Ottawa for a few years now. Most seek to demolish the pesky and inconvenient process of obtaining a warrant to compel service providers to hand over personal information about those police are investigating. If the new legislation passes, providers will be able to track every call you make and every website you visit:

• Require ISPs to provide, on request, your name, IP address(es), device identification numbers that allow authorities to track your cell phone and/or modem, and all contact information including unlisted phone numbers;
• Require manufacturers and Internet providers to install “back door” access, allowing on-demand surveillance without a warrant;
• Allow authorities limitless access to archived data including e-mail and other communications logs providers store;
• Compel other parties to preserve and produce electronic evidence, such as received e-mail, online order histories and other financial transactions.

Together, these new police powers would allow the government to engage in real-time surveillance of your phone calls and online activity without any court supervision or oversight. If it turns out you were unlucky enough to secure an IP address that was formerly used by a subject of an investigation, authorities could begin digging into your background and potentially charge you with an unrelated crime if they happen to find something not part of their original investigation.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC Online surveillance critics accused of supporting child porn 2-13-12.flv[/flv]

CBC News outlines Canada’s latest effort to broaden online surveillance powers and the ensuing controversy. (2 minutes)

Online privacy advocates call the new legislation chilling, and are unpersuaded by supporters who think the process of obtaining a court-issued warrant is too burdensome and time consuming.

When pressed by the media, law enforcement officials have yet to identify a single criminal investigation hampered or delayed by current privacy laws, which require police to obtain sufficient evidence to convince a judge an invasion of privacy is warranted to pursue a criminal investigation. With this new legislation, authorities could launch endless “fishing expeditions” of those they suspect might be involved in a crime, but lack evidence to pursue. Even more concerning is that national security agencies could monitor political opponents, protest organizations, and other groups deemed threatening by the current government.

Proponents say such abuses are unthinkable and the bill is no more threatening than issuing an IP “phone book” for authorities, showing who is using what IP address. But Michael Geist details the legislation is much more than its backers would have you believe.

Without any proof current law is insufficient to handle criminal cases like the one noted above, it is prudent to reject this bill and avoid handing the government unchecked new powers of surveillance. That some in government are willing to play the ‘you are with us or with the child predator’-card as part of reasoned debate is as reprehensible as those in Washington who accused opponents of broad new surveillance powers after 9/11 as being “with the terrorists.”

For more information and to sign a petition opposing the measure, visit Openmedia.ca’s Stop Online Spying website.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Stop Online Spying.flv[/flv]

Openmedia.ca’s campaign against online spying includes three professionally-produced ads that put the bill in terms even technically-unaware Canadians will understand. (2 minutes)

A “disruptive market force” in France’s mobile phone market has turned an expectation of fat, easy, and fast profits on its head as companies scramble to slash prices to meet the challenge of a new player in town.

That “disruptor” is Free Mobile, owned by French broadband service provider Iliad.  In December, Iliad’s Xavier Niel delivered an early warning shot to other cell phone providers in France:

“Start cutting your prices! We are coming. Go away this weekend, rethink your marketing strategy and that way you might have a chance to continue existing.”

Evidently they were not listening, or did not believe Niel.

In January, Free Mobile arrived with prices shocking to a French market used to paying much more.

For $26.50, Free Mobile delivers a plan with unlimited calling, messaging, 3GB of mobile data and free international calls to 40 countries in North America and Europe.

The nearest comparable plan, Orange France’s “Sosh,” charges more than $66 for a similar range of features.  That’s more than double the price.

“Up until now you have been cash cows,” Niel said during a press conference introducing the service. “Now you can either call your current operator and ask for the same price or join us.”

The French people are doing both. Panicking operators that have lived happily on fat profit margins made possible by a generally uncompetitive marketplace were shocked out of their complacency and have begun lowering their own prices as customers threaten to leave for Free Mobile.

La Poste Mobile for example, which has about 550,000 customers, announced three new plans that start at prices comparable to Free Mobile, but include a subsidized phone — something Free Mobile does not offer.  Instead, Free Mobile splits any upfront equipment costs into installments which run the length of the contract, up to 24 months.

Other companies are turning to their marketing departments to solve the problem, resulting in some wild marketing claims that play fast and loose with the facts.  French consumer group UFC-Que Choisir has heavily criticized a handful of providers that claim to provide unlimited calling and texting but then limit call time to 200 hours per month in the fine print.

Free Mobile’s offer has resonated across France and at least 1,000,000 people signed up in January, overwhelming the country’s number portability system allowing customers to change providers and keep their current phone number.  The overwhelming majority of Free Mobile’s customers come from other carriers.  Sixteen per cent switched from Bouygues Telecom, 22 per cent from SFR and 30 per cent from Orange France, with most of the rest switching from resellers who lease airtime from the three largest providers in France.

Financial analysts opine that if Free Mobile is here to stay, it will have a major impact on the French mobile marketplace, first on resellers that offer service delivered over other companies’ networks.  French unions fear their workers will pay the price as providers protect investments and management perks.

CGT, SUD and the CFE-CGC suggest wage and job cuts for workers will come as companies look for savings to offset their profit losses.  One report predicted as many as 10,000 job cuts in the mobile industry in the future.

Ironically, while Iliad, a French broadband provider, has challenged the French mobile market and has brought price savings to consumers, American cable companies capitulated on competition, selling their wireless spectrum to the country’s largest wireless company, Verizon Wireless.  Additionally, American cable and phone companies have agreed to market their products together in bundle offers, potentially eliminating any serious competition between them.

Georgia's broadband map shows just a smattering of 50Mbps broadband. That is half the speed required to attract new businesses, says the IEDC.

Suffering the Great Recession blues?  As communities continue to face the loss of manufacturing, heavy industry, and textile jobs to overseas outsourcing, local economic development specialists have discovered one of the most effective ways to lure new high-tech industry into areas hard-hit with job losses is the availability of cheap, plentiful, and fast broadband.

• 42% believe that that 1Gbps is the minimum speed needed to lure new businesses.
• 35% believe the minimum must be at least 100Mbps.
• Rural economic developers appear to be well ahead their urban counterparts in the area of planning. 58% of rural respondents either have broadband strategies and tactics worked into their economic development plans or are writing plans with these elements. Only 39% of urban respondents have done the same.
• 92% see no benefit from the FCC’s minimum broadband standard of 4Mbps, defined largely to suit telephone company DSL service common in rural areas.

Why are rural economies benefiting from better broadband planning? Because in the absence of commercial providers willing to provide the service, an increasing number of small towns and cities are building their own municipal networks to get the job done themselves.  Those networks are routinely superior to the facilities provided by most cable and phone companies serving less populated areas.

Community broadband is working in Wilson and Salisbury, N.C., where a transition from a textile/tobacco-based economy into higher-tech knowledge economy jobs required state-of-the-art broadband as a foundation.  Chattanooga, Tenn.-based EPB Fiber has already attracted dot.com giants like Amazon.com, creating hundreds of millions in local investment and thousands of new jobs.  Why Chattanooga?  Gigabit broadband for just a few hundred dollars a month is just one phone call away.

Relying on commercial providers to build 21st century broadband as a platform for economic transformation has delivered uneven results, especially outside of the largest cities. Large cities traditionally get most of the provider’s time, attention, and upgrades.  Smaller, more out of the way places often see little or nothing.

That is why this year’s latest push in Georgia and South Carolina to tie the hands of communities trying to remake themselves with modern broadband is so risky. While AT&T and the cable companies may position their argument as “protecting consumers,” in fact they are only protecting their own interests, even if it means the next Amazon.com distribution facility or Google data center finds a better home somewhere else.

Updated 3:55pm ET: We added a link to the full report, with appreciation to the author.