de Blasio

New York City Mayor Bill de Blasio announced an ambitious plan this week to make the city a favored home for new high-technology jobs with a commitment to guarantee every neighborhood in the city is wired for high-speed Internet access.

de Blasio’s remarks came at the opening of the city’s “Internet Week,” an event promoting innovative uses of broadband.

“We take an energetic view of helping this sector grow,” said de Blasio. “We can’t continue to have a digital divide that holds back too many of our citizens.”

The mayor noted Harlem will be the home to the nation’s largest continuous free-access Wi-Fi network when it is completed.

“This will bring free Wi-Fi to 80,000 people between 110th Street and 138th Street,” de Blasio said during a news conference on West 18th Street in Manhattan. “And it’ll be a great model for us going forward.”

Under the former Bloomberg Administration, New York City already announced several other regional free Wi-Fi hotspots, in various stages of development:

Brooklyn:

LUS Fiber is Lafayette, La., municipal broadband provider.

During remarks at the National Cable Show in Los Angeles, FCC chairman Thomas Wheeler promised he would stimulate more broadband competition by overriding state laws that presently restrict or ban municipal broadband networks.

“One place where it may be possible is municipally owned or authorized broadband systems. I understand that the experience with community broadband is mixed, that there have been both successes and failures. But if municipal governments—the same ones that granted cable franchises—want to pursue it, they shouldn’t be inhibited by state laws. I have said before, that I believe the FCC has the power – and I intend to exercise that power – to preempt state laws that ban competition from community broadband.”

After making the remarks, a debate has emerged over the exact definition of “preempt.” With at least 20 states limiting or banning community-owned broadband networks, the FCC would have to overturn or invalidate the state laws to render them moot.

At least one judge — Laurence Silberman — believes the FCC has the authority to take “measures that promote competition in the local telecommunications market or other regulating methods that remove barriers to infrastructure investment.” In a footnote, Silberman wrote that “[a]n example of a paradigmatic barrier to infrastructure investment would be state laws that prohibit municipalities from creating their own broadband infrastructure to compete against private companies.”

A FCC spokesperson, in response to inquiries about Wheeler’s remarks, was less conclusive.

“It’s too early to say how [Wheeler] will address existing state laws,” said the spokesperson.

That leaves open the question about whether the FCC intends to cancel existing state laws or simply prohibit new ones from being enacted. That distinction could make a tremendous difference in states like North Carolina, where a fierce battle over protecting municipal broadband was lost when Republicans took control of the state government. Telecom lobbyists, often working under the auspices of the American Legislative Exchange Council (ALEC) have either directly banned municipal broadband networks from getting off the ground or placed so many restrictions on service to make projects untenable.

The Consumerist points out in Pennsylvania, municipal broadband is only allowed in communities if a telephone company does not provide any type of broadband to anyone in their service area. In Nevada, only towns with fewer than 25,000 people or counties with 50,000 can host community-owned broadband networks — numbers likely too low to sustain such a venture financially.

A 2011 state law largely written by Time Warner Cable will likely keep Charlotte, N.C. waiting for fiber broadband that nearby Salisbury has had since 2010.

North Carolina is dominated by Time Warner Cable, AT&T and CenturyLink. Google and AT&T recently expressed interest in bringing their fiber networks to the home in several cities in the state, but neither have put a shovel in the ground.

Fibrant, a community owned broadband provider in Salisbury, northeast of Charlotte, not only laid 250 miles of fiber optics, it has been open for business since November 2010. It was just in time for the publicly owned venture, joining a growing number of community providers like Wilson’s Greenlight and Mooresville, Davidson and Cornelius’ MI-Connection. Time Warner Cable’s lobbyists spent several years pushing for legislation restricting the development of these new competitors and when Republicans took control of the General Assembly in 2011, they finally succeeded. Today, launching or expanding community broadband networks in North Carolina has been made nearly impossible by the law, modeled after a bill developed by the American Legislative Exchange Council (ALEC).

With fiber fever gripping the state, Fibrant has gotten a lot of attention from Charlotte media because it provides the type of service other providers are only talking about. Fibrant offers residents cable television, phone, and broadband and competes directly with Time Warner Cable and AT&T. Although not the cheapest option in town, Fibrant is certainly the fastest and local residents are gradually taking their business to the community alternative.

Charlotte, N.C. is surrounded by community providers like Fibrant in Salisbury and MI-Connection in the Mooresville area.

“A lot faster Internet speeds, a lot clearer phone calls,” said Sidewalk Deli owner Rick Anderson-McCombs, who switched to Fibrant after 15 years with another provider. His mother, Anganetta Dover told WSOC-TV, “I think we save about $30 to $40 a month with Fibrant and the advantages of having the speed is so much better.”

Julianne Goodman cut cable’s cord, dropping Time Warner Cable TV service in favor of Netflix. To support her online streaming habit, she switched to Fibrant, which offers faster Internet speeds than the cable company.

Commercial customers are also switching, predominately away from AT&T in favor of Fibrant.

“Businesses love us because we don’t restrict them on uploads,” one Fibrant worker told WCNC-TV. “So when they want to send files, it’s practically instantaneous.”

Fibrant offers synchronous broadband speeds, which mean the download and upload speeds are the same. Cable broadband technology always favors download speeds over upload, and Time Warner Cable’s fastest upstream speed remains stuck at 5Mbps in North Carolina.

AT&T offers a mix of DSL and U-verse fiber to the neighborhood service in North Carolina. Maximum download speed for most customers is around 24Mbps. AT&T has made a vague commitment to increase those speeds, but customers report difficulty qualifying for upgrades.

Time Warner Cable is a big player in the largest city in North Carolina, evident as soon as you spot the Time Warner Cable Arena on East Trade Street in downtown Charlotte.

Taxpayer dollars are also funneled to the cable company.

Time Warner Cable’s $82 million data center won the company a $2.9 million Job Development Investment Grant. Charlotte’s News & Observer noted the nation’s second largest cable company also received $3 million in state incentives.

When communities like Salisbury approached providers about improving broadband speeds, they were shown the door.

[flv]http://www.phillipdampier.com/video/WCNC Charlotte Fibrant Already Provides Fiber 3-5-14.mp4[/flv]

WCNC-TV reports that with Google expressing an interest in providing fiber service in Charlotte, Salisbury’s Fibrant has been offering service since 2010. (2:57)

“Our citizens asked for high-speed Internet,” says Doug Paris, Salisbury’s city manager. “We met with the incumbent providers [like Time Warner and AT&T, and that did not fit within their business plans.”

Salisbury and Wilson, among others, elected to build their own networks. The decision to enter the broadband business came under immediate attack from incumbent providers and a range of conservative astroturf and sock puppet political groups often secretly funded by the phone and cable companies.

Rep. Avila, a ban proponent, meets with Marc Trathen, Time Warner Cable’s top lobbyist (right) (Photo: Bob Sepe)

Critics of Fibrant launched an attack website against the venture (it stopped updating in March, 2012), suggesting the fiber venture would bankrupt the city. One brochure even calls Stop the Cap! part of a high-priced consultant cabal of “Judas goats for big fiber” (for the record, Stop the Cap! was not/is not paid a penny to advocate for Fibrant or any other provider).

Opponents also characterize Fibrant as communism in action and have distributed editorial cartoons depicting Fibrant service technicians in Soviet military uniforms guarding Salisbury’s broadband gulag.

In January of this year, city officials were able to report positive news. Fibrant has begun to turn a profit after generating $2,223,678 in the revenue from July through December, 2013. Fibrant lost $4.1 million during the previous fiscal year. That is an improvement over earlier years when the venture borrowed more than $7 million from the city’s water and sewer capital reserve fund, repaying the loans at 1 percent interest. The city believes the $33 million broadband network will break even this year — just four years after launching.

Fibrant is certainly no Time Warner Cable or AT&T, having fewer than 3,000 customers in the Salisbury city limits. But it does have a market share of 21 percent, comparable to what AT&T U-verse has achieved in many of its markets.

Fibrant also has the highest average revenue per customer among broadband providers in the city — $129 a month vs. $121 for Time Warner Cable. Customers spend more for the faster speeds Fibrant offers.

Some residents wonder if Fibrant will be successful if or when AT&T and Google begin offering fiber service. Both companies have made a splash in Charlotte’s newspapers and television news about their fiber plans, which exist only on paper in the form of press releases. Neither provider has targeted Salisbury for upgrades and nobody can predict whether either will ultimately bring fiber service to the city of Charlotte.

Those clamoring for fiber broadband speeds under the state’s anti-community broadband law will have to move to one of a handful of grandfathered communities in North Carolina where forward-thinking leaders actually built the fiber networks private companies are still only talking about.

[flv]http://www.phillipdampier.com/video/WSOC Charlotte Charlotte could gain from fiber optic network already in place 4-22-14.flv[/flv]

WSOC-TV in Charlotte reports Salisbury customers are happy with Fibrant service and the competition it provides AT&T and Time Warner Cable. (2:12)

If you have started to confuse the Washington Post editorial page with that of the Wall Street Journal, you are not alone.

Under the stewardship of Fred Hiatt, WaPo’s editorial opinions have grown increasingly anti-consumer and pro-corporate at home and decidedly neoconservative abroad.

It’s the same newspaper that wholeheartedly supported the merger of Comcast and NBC-Universal in 2010. Let’s check whether they called that one right:

Entities that compete with NBC-owned cable channels fear that Comcast will relegate them to hard-to-find channel locations. Consumer advocates warn that Comcast will use its newfound power to raise subscription rates and stifle new voices on television and the Internet.

The same newspaper reported last week that Comcast refused to let Back9Network, a golf oriented network in direct competition with Comcast-owned Golf Channel, on its cable systems.

For years, Bloomberg TV — in direct competition with Comcast-owned CNBC — has been stuck in Channel Siberia, in some areas like Chicago dumped between Comcast’s promotional “barker” channel and “Leased Access.” CNBC enjoys Ch. 29, certain to attract more viewers than Bloomberg’s Ch. 102.

As Stop the Cap! reported yesterday, no cable company raises cable television rates more than Comcast, blaming programming rate increases that in several cases originate with Comcast-owned cable networks.

Regulators should scrutinize the proposed merger but should be skeptical of the critics’ claims. […] Advocacy groups have been poor prognosticators of the effects of large media mergers.

The Washington Post’s editorial accuracy record has more than a few blemishes, from its 2003 declaration Colin Powell’s “evidence” of Iraqi weapons of mass destruction was “irrefutable,” to suggestions that a wedding of Comcast and NBC Universal wouldn’t hurt anyone because the FCC was ready to manage any problems without pesky mandates or overbearing pre-conditions.

The FCC already requires cable operators to deal fairly with competitors. Its rules would require Comcast to give competitors access to NBC content on “reasonable” and “non-discriminatory” terms. The company would also be required to negotiate in good faith about carrying non-NBC channels. Competitors who believed that they were harmed by unfair dealing could have their complaints adjudicated by the agency. Critics of the Comcast-NBCU merger claim that these mechanisms are ineffective and slow. But the breakdown of the complaint system should not be used as an excuse to impose onerous conditions on one company. Instead, critics should push for an overhaul of the system.

The Bloomberg case, now three years old, remains unresolved. That should tell readers something about just how quickly the FCC gets around to dealing with these kinds of complaints. Comcast has been able to argue its decision to bury Bloomberg and keep Back9Network off its cable systems are examples of ‘good faith, reasonable decision-making that doesn’t discriminate.’ It sued to quash Net Neutrality, critical for online video competition, and won.

The Post editorial amusingly insists that Comcast’s merger plans should not be interrupted because of an ineffective complaint system that can’t or won’t promptly deal with Comcast’s ongoing abuse of the very non-discriminatory rules the editors declare as a reason to support the Comcast-NBCUniversal merger.

Many of the same fears of domination and manipulation were raised with the 2001 merger of AOL and TimeWarner; that megadeal crumbled after a few years. Comcast and GE, which will retain a 49 percent stake in NBCU, should be allowed to proceed, and regulators should do their jobs and watch the newly formed company carefully.

Phillip “The Post’s Naivete is Showing” Dampier

The 2001 merger of AOL and Time Warner came at the last gasp of the dot.com boom. As the New York Times noted, “In May of 2000, the dot.com bubble began to burst and online advertising began to slow, making it difficult for AOL to meet the financial forecasts on which the deal was based. The world began moving quickly to high-speed Internet access, putting AOL’s ubiquitous dial-up service in jeopardy.”

The final unraveling of AOL Time Warner came about because the combined company, highly dependent on AOL (and its stock value), could not sustain its business model when nobody could figure out how to get paid for content in the online world. AOL’s dial-up Internet access business was also rapidly in decline as the country started moving towards broadband.

“The consumer has access to everything and now it’s going to be on a handheld device, so what I call the rolling thunder of the Internet started actually to eat its own, which was AOL,” writes the Times. “AOL was the Google of its time. It was how you got to the Internet, but it was using some old media business ideas that were undone by the Internet itself, and that’s why Google came along.”

The same sad story is not true for Comcast or Time Warner Cable (which was spun off from Time Warner, Inc. as an independent company as part of a restructuring in 2009.)

Both cable companies are in a better place than AOL-Time Warner:

• AOL relied on dial-up and reseller access to some broadband providers — neither sufficiently lucrative to sustain AOL’s dot.com-days value. Comcast/TWC own their own broadband networks;
• Verizon FiOS and AT&T U-verse are the only significant multi-city broadband competitors for the cable industry. U-verse remains challenged by its technological limitations and Verizon stopped expanding FiOS. Google Fiber has a totally insignificant market share and is likely to stay that way for several years. Google Fiber provides no competition in the northeast where Comcast and Time Warner Cable dominate;
• Comcast and Time Warner Cable both oppose community-owned broadband competition and Time Warner has successfully managed to push legislation virtually banning network expansion in several states;
• Comcast will both own and control the pipes and a significant amount of the content that crosses its broadband networks. At the time of the AOL-Time Warner merger, online video competition did not exist in a meaningful way.

Larry Irving
Old Job: administrator of the National Telecommunications and Information Administration (NTIA).
New Job: Shill for Big Telecom companies

Community-owned, publicly funded broadband networks are under renewed attack in various Op-Ed and guest editorial pieces popping up in newspapers around the country, often written by those with undisclosed industry connections as part of a larger effort to ban the networks.

The Hill in Washington, D.C. was one of the latest to go to print, publishing a hit piece attacking the “growing fascination with publicly funded broadband networks” and suggesting only the “private-sector” could deliver the best telecommunications networks.

In his piece, author Larry Irving stated, “the specter of governments operating broadband networks in competition with the private sector, or of state or local governments serving as both regulators and owners of competing broadband networks, could stifle investment or reduce private-sector access to capital.”

Irving added that “with the exception of bringing or improving service to remote geographies, I don’t see many problems that government-owned or -operated broadband networks will solve.”

Here is how The Hill described Irving: “CEO of the Irving Group and served for almost seven years as assistant secretary of Commerce for Communications and Information and administrator of the National Telecommunications and Information Administration (NTIA).”

That is like describing Oscar Pistorius as a man embroiled in marital difficulties. It doesn’t begin to tell the whole story. Media Matters does:

Irving is more connected with the telecom industry than America is with fiber broadband. Irving is the founding co-chairman of the Internet Innovation Alliance (IIA), an IRS 501(c)(6) telecommunications trade association whose purpose is to “prevent the creation of burdensome regulations,” according to documents filed with the IRS. IIA reportedly receives financial support from AT&T and includes members such as Alcatel-Lucent and TechAmerica, which lobbies on behalf of technology companies. The group’s 2011 IRS tax form — the most recent one available — states it received over $18 million in revenue.

While The Hill noted that Irving heads the Irving Group, it did not disclose that the firm provides “strategic advice and assistance to international telecommunications and information technology companies.”

The Hill op-ed comes after the U.S. Government Accountability Office (GAO), the investigative arm of Congress, released a February 2014 report concluding that federally funded and municipal networks were faster and cheaper than comparable networks. Specifically, the GAO found:

• “federally funded or municipal networks offered higher top speeds than other networks in the same community and networks in nearby communities.”
• “prices charged by federally funded and municipal networks were slightly lower than the comparison networks’ prices for similar speeds.”
• “according to small business owners, the improvements to broadband service have helped the businesses improve efficiency and streamline operations. Small businesses that use the services of these networks reported a greater ability to use bandwidth-intensive applications for inventory management, videoconferencing, and teleworking, among other things.”

Most of the industry’s initiatives against community broadband come through a close association with the American Legislative Exchange Council (ALEC) — a corporate funded group that provides ghostwritten bills to mostly Republican legislators for introduction in state legislatures across the country. One such bill virtually bans community broadband.

Sponsored by corporate interests

ALEC is now under fire again for its annual “Rich States, Poor States” report, released this week. The publication, whose lead author is economist Arthur Laffer, is sold to the press as an objective, academic measure of state economic performance, but should instead be viewed more as a lobby scorecard ranking states on the adoption of extreme ALEC policies that have little or nothing to do with economic outcomes.

Internal documents obtained by The Guardian expose a close financial connection between the Koch Brothers and ALEC. It turns out the Koch family funds the production of “Rich States, Poor States,” which this year put deregulation friendly Utah at the top and ALEC-skeptical New York at the bottom. The report claims the state of Mississippi outperformed New York, a surprising and entirely false assertion. But getting ALEC model bills signed into law in Mississippi is far easier than getting them past New York’s Assembly and Senate.

Wisconsin’s Governor Scott Walker is a former ALEC member who signed 19 ALEC bills into law in his first two years in office, slashed government spending and controversially eviscerated state unions prompting mass protests in February 2011. Despite the fact Wisconsin still has one of the worst job creation records in the country, ranking 32nd nationally or 9 out of 10 in upper Midwest, ALEC has been kind to Wisconsin in its economic report, ranking the state 17th for its economic outlook.

Any state that permits publicly funded broadband networks to exist is in obvious economic peril in the eyes of ALEC (and member corporations including AT&T, Comcast, and Time Warner Cable.)

The Center for Media and Democracy’s PR Watch suggests ALEC’s agenda for Big Telecom is to make life easy for your provider and more expensive for you. ALEC has three model telecom bills it pushes on state legislatures:

The ALEC “Municipal Telecommunications Private Industry Safeguards Act” is a “model” bill for states to thwart local efforts to create public broadband access. Promoted under the guise of “fair competition” and “leveling the playing field,” this big telecom-supported bill imposes regulations on community-run broadband that they would never tolerate themselves. Iterations of this anti-municipal broadband bill passed in 19 states to stop local governments in communities like Wilson, North Carolina from wiring their communities with fiber.

The ALEC “Cable and Video Competition Act” attacks municipal cable franchises and frees cable companies from oversight. The bill creates a single state franchising authority and releases the companies from requirements to wire the entire state, and allows companies to decide when — or if — to build out cable, and through that cable, to provide adequate internet access. In North Carolina, for example, the bill passed under the name “the Video Service Competition Act” in 2006 with the promise that deregulation would result in greater investment by cable broadband providers; but instead, the state is tied for last place in terms of the number of homes with a basic broadband connection. An estimated twenty-three states have enacted statewide video franchising laws in recent years. Additionally, bills like this one harm public access television stations, since cable companies no longer negotiate with individual jurisdictions and pay the franchising fees that fund public, educational, and government access television.

The ALEC “Broadband and Telecommunications Deployment Act” would give telecommunications providers access to all public rights-of-way, and make it harder for local communities to charge franchising fees or otherwise regulate providers. Cable and internet is largely wired via publicly owned “rights of way” — like under sidewalks or along utility poles — and traditionally, telecom providers profiting from the use of these public goods would be granted access in exchange for some sort of accountability, such as paying for access or providing services on a non-discriminatory basis to all customers willing to pay. This bill would largely eliminate local control over public rights-of-way in favor of telecommunications providers.