A bizarre allegation (and theft-of-service complaint filed with local police) that a Voice Over IP service provider was “stealing” access to its fiber network has triggered the nation’s first formal Net Neutrality complaint under new Federal Communications Commission rules.

The complaint was triggered after Albany (Ga.)’s Water, Gas, and Light Commission (WG&L) filed a report with Dougherty County Police accusing L2Networks of accessing its municipal fiber network without paying.

If the FCC finds the city was correct asserting its claims of theft of service, other broadband providers could begin assessing additional fees for consumers who wish to access Google, Facebook, and Netflix, according the VoIP provider.

The case could create an “irreversible ripple effect along with the creation of various legal challenges across nearly every national content and application provider,” L2Networks CEO Kraig Beahn said in a press release. “We are deeply concerned that the alleged claim could potentially change the landscape of the national Internet marketplace as residential and commercial consumers see it today.”

Beahn's booking photo

In the view of L2Networks, the incident represents a direct and indisputable violation of the Federal Communications Commission’s Net Neutrality policies, which forbids providers from blocking service or selectively charging competitors additional fees to reach customers.

But details about the background of the complaint remain murky and a series of past disputes between Beahn and other telecommunications companies in Albany may require further exploration by federal officials investigating the complaint.

L2Networks is a small Albany-based telecommunications company that provides service to area businesses. L2Networks CEO Kraig Beahn is, however, well-known to both WG&L and local cable operator Mediacom, both of which have previously raised questions about his business practices.

L2 counters WG&L has made life increasingly difficult for the company since the two entities had a falling out in 2011.  That year, WG&L dumped L2 from its plans to deliver a competitive cable television service for Albany residents after the utility’s general manager accused Beahn of not fulfilling the promises he made with WG&L.

In January 2012, Beahn was arrested and charged with felony theft of service after Mediacom discovered an illegal tap on their cable line, which investigators learned was being used to provide Internet and phone service to L2 customer Adtran Logistics. Beahn called the charges “frivolous” and were part of an ongoing dispute with WG&L.

Mediacom vice president of legal and public affairs Tom Larsen noted the company did learn about the suspicious connection from the local utility.

“When our local team went to investigate, they discovered a Mediacom modem connected to two car batteries that was wired into our cable plant and being used [allegedly by L2] to serve a nearby business,” Larsen said.

As Stop the Cap! first reported last summer, the state of West Virginia is embroiled in a growing scandal over how the state spent more than $126 million in federal institutional broadband expansion funds it was awarded in 2010.

Sources inside two small community libraries and a regional government office collectively contacted Stop the Cap! this week warning that some of the targets for broadband funding including schools, government offices, and libraries have been handed world-class broadband networks they cannot operate without ongoing support not included in the grant.  With little chance of funding, many institutions will be unable to pay the monthly service rates and maintenance fees charged to keep the networks running.

“We are getting a Hummer network on a Kia operating budget,” one community library official tells Stop the Cap! “The network sounds great, but in our case we have to find the money to pay the bill to run it every month, and that money is hard to find in a library with five outdated public terminals.”

Another source tells us installers left more than one library with equipment nobody knew how to operate.

The Cisco 3900 router series

“They installed it over the course of a few days and just left, and nobody here knows how it works,” the librarian tells us. “We’ve quietly gone back to our old Wi-Fi system until we can figure these things out. We don’t even have their phone number.”

At a library in Hurricane, librarian Rebecca Elliot said workers who showed up to install the router didn’t leave behind instructions or a user manual either.

“I don’t know much about those kinds of things,” Elliot told the AP. “I just work here.”

While the original purpose of the grant was to “improve broadband” in the Mountain State, the funding came with significant restrictions that targeted the money exclusively for institutional broadband networks that do not serve individual residences or businesses. While West Virginians languished with some the country’s worst broadband service, state officials were green-lighting spending on grossly oversized equipment that institutional users simply don’t need and sometimes cannot afford to operate.

Martin

One critic, Jim Martin, president of business broadband provider Citynet said last summer the state gave preferential treatment to Frontier Communications to construct networks that ultimately favored them as the logical choice of service provider, but left small institutions with service bills they can never hope to pay.

“Where is the accountability,” Martin asked this week.

His fears appear to be justified. This week, a consulting firm has been hired by the state to audit how more than $126 million in taxpayer funds were spent after reports in the Charleston press brought news the state paid millions to deploy equipment to facilities that did not need any service improvements.

The Charleston Gazette reports it found 366 unused routers valued at more than $22,000 each in storage.  They have been there for two years.  In fact, at least $24 million was spent on routers designed to be used by large corporations or universities that were installed in libraries and public safety centers with just a handful of personal computers. Experts say a basic retail router priced at $50 could have provided more than acceptable service to these locations.

West Virginia’s state Commerce Secretary Keith Burdette on Monday admitted, more than two years after the state won the grant, now might be a good time to hire a consultant that does not work for a company trying to sell the state broadband equipment or services.

Despite the suggestion the state designed its network improvements based on the recommendation of equipment vendors, Burdette sought to move on and avoid “finger-pointing” and “dwelling on past decisions.”

Burdette

“I don’t want to spend a lot of time on things we cannot change,” Burdette told the Gazette. “If we made mistakes, then we need to look at how do we take lemons and make lemonade.”

“That’s the most expensive glass of lemonade in the history of West Virginia,” replies our source inside a regional government office. “Imagine what that money could have done extending broadband service to the homes and businesses that do not have it today.”

Our source says the state government is engaged in classic “butt-covering” with the announced state audit.

“Of course the report will blame people lower down in government while leaving the oversight failure for another day,” he tells us. “What’s a hundred million in taxpayer money, right?”

Burdette and other state officials might have listened to the state’s own Office of Technology, whose administrator warned that the routers — the Cisco series 3945 — “may be grossly oversized.”  Other state and library officials also questioned the purchases.  Burdette said the state should have hired a consultant before purchasing the equipment and launching the expansion project, which will not deliver a single broadband connection to any resident or business in the state.

Martin said in 2011 the entire grant process was wrong-headed from the beginning.  Martin says the state should have spent the money on a stronger middle-mile network to boost capacity for everyone in the state.

Now West Virginia is in a hurry to spend the remainder of the grant award — an undetermined amount — before the grant spending expiration date is reached. Unspent funds must be returned to the federal government.

State officials promise they will find a home for every unused router by the time the stimulus grant expires. That could leave a rural county sheriff’s office with a router designed to serve a minimum of 500 concurrent users in a facility with fewer than a dozen aging personal computers.

When broadband advocates talk about the advantages of fiber-to-the-home service, commercial providers and their friends routinely criticize us for demanding “Cadillac” networks in areas that “don’t need” fiber-fast broadband speeds. Despite the fact the United States and Canada continue to fall further and further behind in the global broadband speed race, companies that answer to stockholders simply won’t hear of upgrading networks to the technology Asia and Europe increasingly takes for granted.

There is no question fiber broadband is costly to build, especially in rural communities where the cost per home will require a long-term payback for the upfront investment required. But that doesn’t stop community-owned networks and public co-ops from advancing forward.

Dakota Central Telecommunications and Dickey Rural Networks last month celebrated the completion of the largest fiber-to-the-home network in North America… in rural North Dakota.

Both providers, operated as co-ops, deliver speedy service to every home and business within a 10,000 square mile area.  Broadband at speeds of 20Mbps starts at $39.95 a month.  Want faster speeds? For $89.95 a month, you can purchase 50Mbps service.  A triple-play package of phone, broadband, and cable TV service runs $113.75 a month.

While DSL has been available in the past, it simply could not deliver the 21st century broadband speeds businesses and consumers need.

Both providers, collectively owned by the members who subscribe to the service, spent a combined $90 million on the expansive fiber network. But instead of throwing a hissyfit over the price tag, the collective feeling was this represents an investment in North Dakota’s future. Area businesses have already taken advantage of the new speeds to improve efficiency and think about new ways they can market their products and services online.

The decision to deploy fiber to the home service made sense because of its infinite expandability, dependability, and capacity.  Commercial providers like AT&T and Verizon that embarked on fiber upgrades deploy them only in the largest cities, where the cost per subscriber is lower and where investors believe the costs to build the networks will be recouped the fastest.  Now both companies have declared those networks to be largely complete, leaving large numbers of their customers off the upgrade list, stuck indefinitely with yesterday’s DSL technology.

That isn’t happening with community-owned providers and co-ops, where the goal remains to reach every possible customer. Rapid cost recovery is not the highest priority — delivering good service in their communities is. Most are willing to wait a little longer to pay off network construction costs in return for better service for everyone today.

USDA Under Secretary Dallas Tonsager says North Dakota’s fiber network is a “great role model” for the rest of the country.

“We’re going to use you as an example over and over and over again,” he said.

The USDA administers grants for rural broadband networks to help expand broadband service in underserved/unserved rural areas.

[flv width=”475″ height=”288″]http://www.phillipdampier.com/video/WDAY Fargo South central North Dakota touts largest fiber optic broadband network in the nation 4-11-12.flv[/flv]

WDAY in Fargo traveled to the unveiling of North America’s largest fiber broadband network and talked with residents about the transformational nature of fiber broadband.  (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/North Dakota Fiber 4-12.flv[/flv]

This video shows how south-central North Dakota managed to build a fiber network that reaches every home within a 10,000 square mile area and how it is changing lives.  (7 minutes)

Can we have 90 seconds of your time, please?

Christopher Mitchell at Community Broadband Networks has put together some compelling evidence about how some of the most advanced broadband networks in the country are being built by and for the communities they ultimately serve.

You may think the best broadband around can be found in the biggest cities in America, but you’d be wrong.

“It may surprise people that these cities in Virginia, Tennessee, and Louisiana have faster and lower cost access to the Internet than anyone in San Francisco, Seattle, or any other major city,” says Christopher Mitchell, Director of ILSR’s Telecommunications as Commons Initiative. “These publicly owned networks have each created hundreds of jobs and saved millions of dollars.”

The fact is, public broadband is convincing some of the country’s biggest tech companies, including Amazon.com, to locate enormous distribution centers right in the middle of fiber-plentiful cities like Chattanooga, and that means job growth — a lot of it.

Unfortunately, too often today’s “broadband innovation” comes only from how to extract more money for less service from some of America’s top providers. Usage caps, overcrowded networks, and speed constraints conspire to help America lose the global speed race.  But some communities are fighting the good fight themselves, even as big phone and cable companies like AT&T, Time Warner Cable, Comcast, and CenturyLink are trying to smash those networks through special interest corporate welfare legislation.

Mitchell and his team have assembled the facts: BVU Authority’s OptiNet in Bristol, Virginia; EPB Fiber in Chattanooga, Tennessee; and LUS Fiber in Lafayette, Louisiana — all built by publicly-owned utilities, demonstrate the public sector can deliver effective, innovative service at prices consumers can afford.  Better yet, they’re doing it in places big telecommunications companies decided were unworthy of getting world-class service.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Community Broadband.flv[/flv]

Watch this video and learn why community broadband networks represent America’s most innovative broadband, and then learn more about how you can get involved and support better broadband in your community.  (2 minutes)

Joe Roget has one word for South Carolina’s Broadband Availability Map: “nuts.”

The 72 year old resident of a small town in South Carolina was excited to read a new statewide broadband availability map showed his street was currently getting DSL service from one of South Carolina’s largest phone companies.  But that was news to AT&T, who provides landline phone service.

“They said they had no idea what I was talking about and that whatever map data I was looking at was totally wrong,” Roget reports to Stop the Cap! “The operator was frank with me, saying it was highly unlikely I would ever receive DSL from AT&T and the company was really not expanding DSL access any longer.”

Karen, a Stop the Cap! reader near Denmark, S.C., reported a similar story.

“The broadband map Connect South Carolina has gotten a government grant to produce is total fiction in my area and is little more than cable and phone company wishful thinking,” Karen reports.

Karen says not only does her street show DSL as readily available, but cable broadband as well.  Karen and her neighbors can get neither.

“‘Never have, never will’ seems to be the attitude unless we pay $20,000 to the cable company to extend wiring down the street,” Karen says. “The phone company doesn’t have time to even consider that, but their call center is nowhere near South Carolina so those people don’t care.”

Roget wonders exactly how Connect South Carolina, a chapter of the industry-connected Connected Nation group, got their data.

The answer: it largely collects it from the data providers volunteer themselves.

“Did anyone ever bother to use some of the millions of taxpayer dollars this group got to actually verify what the cable and phone companies handed out to make sure it was real?” Roget asks.

Darryl Coffey, an engineering consultant for the group, says he spends countless hours trying to verify the data providers submit to the group.

In South Carolina, I verify each of these platforms by going out into the field with tools, test equipment and data.  We refer to this process as “provider validation.”

Provider validation involves driving hundreds of miles following telephone and cable lines, or testing wireless signals in neighborhoods as well as in remote areas.

“I have basic phone service at my home, and I don’t know how Mr. Coffey can follow a phone line to determine if it also can provide me with DSL,” Roget says. “I could tell him, or anyone else at Connected South Carolina, it most certainly does not — had they asked.”

Roget is also upset that South Carolina’s legislature is interested in preventing local communities from deploying their own broadband networks to fill in the gaps where large telecommunications companies refuse to provide service. Only he wonders exactly how legislators will know there is a broadband gap if the group drawing the maps, based on what providers tell them, shows there isn’t a problem.

“What a scam,” Roget concludes. “An industry-backed group draws maps of data volunteered by the providers themselves that legislators use to prove there is no broadband problem in South Carolina and no need for towns and cities to build their own service.”

Karen has virtually given up on South Carolina officials representing the interests of South Carolina’s citizens.

“They look out for the companies, not the people,” Karen says. “It seems if we want better broadband, we will have to move somewhere else, preferably someplace that isn’t dumb or corrupt enough to let the broadband industry control our broadband future.”