I’m a big cable or telephone company and I just caught the smell of broadband stimulus money… hundreds of millions of dollars worth of taxpayer dollars I want for myself and my investors.  Why spend their money when I can spend yours?  Stop the Cap! warned readers that parties with a vested interest in cashing in on taxpayer funds to construct broadband networks would be sniffing around the Broadband Stimulus package looking for their piece.  Broadband Reports, Public Knowledge, and The Wall Street Journal caught a big whiff of telecom trolling for your taxpayer dollars, this time to ostensibly “map” broadband penetration in the United States.

Using a group called Connected Nation, whose board is packed to the rafters with telecom employees and those serving them (including AT&T, Comcast, and Verizon), telecommunications special interests want the contract (worth $300+ million) to complete the national map.  In addition to collecting the nice tidy sum that represents, these companies have a vested interest in keeping broadband looking perky, fast, and available everywhere to forestall regulatory review, municipal broadband initiatives to serve the under served, and hide the fact broadband in the United States is not very competitive, and not very available outside of population centers.

The history of this group has demonstrated it has an interest in keeping specifics to a minimum, and inflating broadband penetration levels into the stratosphere.  As Broadband Reports wrote, a perfect example is in the state of Kentucky.  When independent mapping was completed, it exposed Kentucky had a problem — just 60% of the state had broadband available.  Those low numbers might prompt a review of why incumbent telecom companies are not spending some money to wire their less urban customers for service.  But with the magic of Connect Kentucky, a sort of regional chapter of Connected Nation, that number jumped to 95% in just five years in a study called dubious, if not outright “methodological malpractice” by Consumers Union.

Broadband Reports writes the 95% penetration rate is “hysterical” in their communications with Kentucky residents and Internet Service Providers.  But with a 95% penetration figure, why investigate if there “isn’t a problem?”  Of course, you could always pay us (AT&T, Comcast, Verizon, etc.) to improve those networks, also out of taxpayer funds.

Public Knowledge has its own bone to pick with the organization, claiming it demands to keep data general, and often proprietary:

State governments, working months before the stimulus package was conceived, are ramping up their own programs to map deployment of broadband, and are finding they are already increasingly running into conflicts over the type of data they will receive. Some states want comprehensive, granular data. However, they are finding that the telecommunications industry, often represented by Connected Nation (CN), doesn’t want to give it to them. The result is a clash of policy objectives and politics that’s taking place across the country, in states ranging from North Carolina to Alabama, Colorado and Minnesota. Connected Nation’s board of directors is dominated by representatives of large telecom carriers, as CN positions itself as the best choice for states and the Federal government to spend millions of stimulus dollars on broadband mapping.

In North Carolina, the dispute is being played out in a most public way, as Connected Nation, at the behest of a powerful state legislator, has set up a parallel mapping operation to that of the e-NC Authority, a state agency that has been working since 2001 to bring Internet connectivity to rural areas through mapping and through public-private partnerships with telephone companies. While normally Connected Nation can charge hundreds of thousands of dollars for mapping, it is doing the North Carolina map at no cost to the state after a move by the chairman of e-NC’s board to have that organization pay for part of the industry mapping cost failed.

As with all of its mapping, e-NC depends on information from incumbent providers. Through last year and this there was a struggle more prolonged than usual, and the end result was a non-disclosure agreement (NDA) that greatly restricted what the e-NC maps would be able to show.

Proprietary, non-specific data allows a group to suggest that any speed above dial-up is broadband, and as long as it passes near your neighborhood, you have broadband access (even if you don’t.)  That’s precisely the kind of access pointed to by elected officials like Sen. Sam Brownback (R-Kansas) who claim broadband is plentiful and will become more so if the government stays out of it.

To resolve broadband penetration problems, improve competition, and to prevent broadband backwaters served by companies doling out slow, heavily capped access at high prices and calling it a day, truly representative map data must be produced to allow everyone to understand what is currently available at what speeds.  Allowing a group like Connected Nation to swipe taxpayer dollars currently used by state officials for honest assessments is a travesty.  No company or organization with a vested interest in the outcome should ever be allowed to control a study of this importance.  If they do, they’ll find broadband under an anti competitive, slow, and expensive Cap ‘n Tier system is just wonderful for all of us, assuming you even have access to it.

Thanks to Thomas Hawk for the photograph of the fox and “comecloser” for the hen house photo.

Not every municipal broadband provider assures customers of a cap-free broadband experience.  Some of the smaller providers serving the municipalities that cable passed by constructed their own networks decades ago to meet the cable television needs of their citizens.  But because they lack the economy of scale, volume discounts the big boys get are simply not available to smaller independents.  Often the result is a system compelled to charge higher prices, because its wholesale costs are greater.  That’s the case in San Bruno, California — a city of 40,000 12 miles south of San Francisco.

San Bruno Municipal Cable TV has been the incumbent, municipally owned operator since its inception in 1971.  In the late 1960s, local government officials asked residents whether they preferred a private or municipal operator.  The majority wanted local government to provide the service, and so it did.  San Bruno was an early adopter of cable television, building a system at least a decade before many other communities across the country saw their first cable television truck.

San Bruno is surrounded by Comcast, which has made a conscious decision to avoid San Bruno, despite the fact it could apply for a franchise, and one would likely be granted.

The company introduced broadband service to its customers in 1999 after completing a system rebuild.  Historically, the company has always made usage limits a part of its acceptable use policy, and enforcement over the years has varied between throttling speeds once a limit was reached, to threats of overlimit fees as high as $10/GB.  But most customers report those kinds of fees were never actually charged.  The company sought to use the limits to scare people into compliance.

San Bruno, California

Today, San Bruno’s cable TV company has three tiers of broadband service defined by consumption levels – 50, 100, and 150GB per month.  The company defends these policies by indicating their wholesale costs are higher to obtain Internet connectivity.  San Bruno’s high speed provider has fewer than 5,000 broadband subscribers.  Despite those higher costs, the company’s current “overlimit” fee is $0.25/GB, which is much lower than TWC’s proposed $1-2/GB overlimit fee.

So what do customers think?  Online reviews are consistently negative about the quality of service, and we’ve received many complaints about the consumption-based tiering, particularly when nearby Comcast customers live under a simple “please don’t exceed 250GB with a residential account per month” policy.  But San Bruno residents enjoy a respectable 12Mbps/512Kbps level of service for $32.95 a month, $10 less than Comcast subscribers pay, as long as they avoid exceeding 50GB of usage per month.

What everyone agrees on is the need for additional competition.  Currently, AT&T offers 3Mbps DSL service in parts of San Bruno for around $40 a month.  That’s hardly comparable in speed or cost.  Comcast has refused to compete across San Bruno, so another cable provider is unlikely.  Ultimately, the deployment of AT&T U-verse, if it happens, would be the closest equivalent competitor, because it can match and exceed the municipal cable provider’s speeds.

Another compelling question — why does San Bruno Municipal Cable, serving fewer than 5,000 broadband customers, find that charging just a quarter per gigabyte in overlimit fees recoups their expenses, while the far larger TWC proposes charging considerably more — $1-2/GB?  Perhaps overlimit fees aren’t as much about cost recovery as they are about emotionally conditioning customers to ration their use out of fear of a shocking cable broadband bill with overlimit fees at the end of the month.

Back on April 28th, I e-mailed the Mayor of Greensboro, Yvonne Johnson, requesting that the City of Greensboro look at the resolution that Raleigh passed opposing HB1252/S1004 and pass a similar resolution.  I am quite aware of what goes on in my city, but this slipped past me.  At the  May 5th City Council meeting the following transpired:

Assistant City Manager Denise Turner reviewed the resolution of the City of Greensboro opposing SB1004/HB 1252, inaccurately captioned “The Level Playing Field Act” with Council.  Councilmember Perkins moved adoption of the resolution. The motion was seconded by Councilmember Bellamy-Small.

Assistant Manager Turner provided an explanation for the basis of the bill, the incentives of the bill, affects on the City on offering broadband usage throughout the City, the funding utilized, restrictions of the bill and stated that the bill would prevent municipalities from offering and providing broadband services as an incentive to incoming businesses. Assistant Manager Turner provided information as to Economic Stimulus funding for broadband usage and access for a municipality to provide.

The resolution was adopted on the following roll call vote: Ayes: Barber, Bellamy-Small, Groat, Johnson, Matheny, Perkins, Rakestraw, Wade and Wells. Noes: None.

133-09 RESOLUTION OF THE CITY OF GREENSBORO OPPOSING SB 1004/HB 1252, INACCURATELY CAPTIONED “THE LEVEL PLAYING FIELD ACT”

WHEREAS, Senate Bill 1004 and House Bill 1252, both captioned The Level Playing Field Act, have been introduced in the 2009 Session of the General Assembly of North Carolina, and referred to the Senate Commerce Committee and House Committee on Science and Technology, respectively; and

WHEREAS, broadband is communications infrastructure that is as important to the City of Greensboro’s economy as are the interstate and state road systems; and

WHEREAS, high-speed broadband is an indispensable part of competition both between businesses and between global, state and local jurisdictions to attract businesses; and

WHEREAS, high-speed broadband is vital to the future economic development, educational outreach, and community growth necessary to replace lost textile, tobacco, furniture and manufacturing jobs in Greensboro and in North Carolina; and

WHEREAS, cities are organized to provide public services in the local community and their governing boards generally decide what and what level of services the city will provide; and

WHEREAS, the courts in North Carolina have already determined that local governments are authorized by the General Assembly to provide the communications services addressed in the playing field bills; and

WHEREAS, if the City of Greensboro should at any time in the future decide that it needs to provide or encourage the development of broadband communications systems to meet unmet needs, these proposed bills would greatly hinder the City’s ability to provide such needed services, especially advanced high-speed broadband services; and

WHEREAS, the bills do not in actuality require a “level playing field” with regard to provision of broadband and information services but instead seek to saddle cities and towns with several onerous duties, proscriptions and mandates that do not apply to private providers and that cities have never had to meet with respect to other enterprise businesses; and

WHEREAS, there is no justification for treating public communications enterprises differently from other public enterprises that are essential for a sound economy; and

WHEREAS, government dollars were used to fund much of the current corporate telecommunications infrastructure in the United States and to develop the Internet; and

WHEREAS, private providers have made the business decision not to provide and offer broadband to residents and businesses in North Carolina at the high speeds that are readily available in competing locations such as Poland, Canada, South Korea, Japan, and Wilson, North Carolina, despite having received favorable regulatory and tax treatment from government to enable them to make upgrades and investment to broadband; and

WHEREAS, while private broadband providers declare that it is cost prohibitive to provide top quality service in the United States, Japan and other countries (many of which traditionally have been considered to be third world nations) continue to outpace our country in broadband access, cost, and growth in the number of users—Japan has lower cost internet access that is at least 500 times faster than what is defined as high-speed in the United States; and

WHEREAS, the United States Congress has provided funds in the American Recovery and Reinvestment Act (federal stimulus) to reverse our country’s broadband decline by making local and state governments, directly eligible for $4.7 billion in federal grants to provide affordable access to high capacity broadband services where needed; and

WHEREAS, because the proposed playing field bills would prohibit government from using funds other than those generated by the enterprise broadband communications systems themselves, NORTH CAROLINA AND ITS POLITICAL SUBDIVISIONS WOULD NOT BE ABLE TO USE THE BILLIONS OF FEDERAL STIMULUS GRANT FUNDS SET ASIDE FOR BROADBAND INFRASTRUCTURE IMPROVEMENTS, while cities in other states would have access to these funds and gain a competitive economic advantage over North Carolina cities—job opportunities for local residents would be negatively impacted by the funding restrictions in the proposed bills; and

WHEREAS, local businesses and suppliers will create jobs and spur the local economy with federal stimulus dollars used to build and improve broadband infrastructure, but will lose such opportunities if the legislature adopts the proposed bills depriving North Carolina of the opportunity to bring broadband stimulus dollars to our economy; and

WHEREAS, the bills are counter to the North Carolina Local Development Act of 1925 which allows local governments to aid and encourage economic development in communities throughout North Carolina.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF GREENSBORO opposes Senate Bill 1004 and House Bill 1252 and urges all members of the North Carolina General Assembly to vote “no” in committee and, if necessary, on the floor of the General Assembly.

(Signed) Robert V. Perkins

The City of Greensboro joins several other cities in NC that have passed resolutions opposing HB1252/S1004, including Chapel Hill and the state capital of Raleigh.  City staff really did their homework from the content of the resolution, pointing out places with higher speeds like Poland, Canada, Japan and South Korea.

I am proud to live in this city.  Our people won’t take the garbage that Time Warner throws at us and our council listens to it’s people on this issue.  More good news on broadband in Greensboro will be coming in the next few weeks.

Following the Money: Cable's Best Friends in North Carolina Get a Payday

In this second installment of “Follow the Money”, I will look at the sponsors and co-sponsors of HB1252 (Protect Cable Monopolies Act). The bill has a host of legislators involved here in North Carolina.

The sponsors are Rep. Ty Harrell (D-Wake Co), Rep. Marilyn Avila (R-Wake Co), Rep. Earl Jones (D-Guilford Co) and Rep. Thom Tillis (R-Mecklenburg Co).

First the good news: Not as much money was thrown around in the House as was in the Senate. Rep. Earl Jones took no money from individuals or PAC’s related to the cable/telecom industry. Rep. Marilyn Avila took $500 from Embarq and $500 from AT&T, along with $100 from an engineer for Verizon.

Rep. Thom Tillis took a total of $3500 from PAC’s ($500 from Embarq, $1000 from Time Warner, $1000 from AT&T PAC and $1000 from AT&T Mobility PAC).

Rep. Ty Harrell took a total of $2750 from PAC’s ($500 from Embarq, $750 from Time Warner, $1000 from AT&T, and $500 from Electricities PAC). He also took $4600 from industry related individuals ($250 from James K Sexton – President of Telephone Strategies Group, $250 from Anthony Copeland – former lobbyist for BTI Telecommunications and FiberSouth, $4000 from Jim Goodman – CEO of Capital Broadcasting, which owns the Raleigh area’s biggest TV and radio stations, and $100 from Lynn R Holmes, who three months after making the donation became one of the current lobbyists for the NC Cable Telecommunications Association).

For the Primary Sponsors a grand total of $7250 from PAC’s and $5600 was given from individuals related to the cable/telecom industry.

The co-sponsors and amounts are as follows:

• Rep. Larry Bell – $500 from Embarq
• Rep. Nelson Cole – $4250 from PAC’s ($2500 from Embarq, $750 from Time Warner and $1000 from AT&T NC PAC).  Cole also received $100 from Charles W Pickelsimer – VP/General Manager of Citizens Telephone Co.
• Rep. James W. Crawford Jr. – $3000 from PAC’s ($2000 from Embarq and $1000 from Time Warner).  He also took $200 from James Pratt Wilson, a retired telecommunications worker and $50 from Richard Reese, an executive from Lexcom Communications.
• Rep. William A. Current Sr – $1500 from PAC’s ($750 from AT&T and $750 from AT&T NC PAC) – Oddly he was given $250 from Embarq and then returned it the same quarter he received it.
• Rep. Nelson Dollar – $3250 from PAC’s ($1000 from Embarq, $750 from Time Warner and $1500 from AT&T)
• Rep. Beverly M. Earle – $1750 from PAC’s ($250 from Embarq and $1500 from AT&T)
• Rep. W. David Guice – took no PAC money from the cable/telecom industry. He did receive $300 from Charles Pickelsimer III- VP Citizens Phone, $1000 from CW Pickelsimer Jr- VP Citizens Phone and $1000 from Senator Tom Apadaca who took a lot of money ($12500) from the industry.
• Rep. Jim Gulley – $500 from PAC’s ($250 from Embarq and $250 from Time Warner)
• Rep. Mark Hilton – $500 from Embarq. He took nothing else.
• Rep. Hugh Holliman – $11500 from PAC’s ($1500 from Embarq, $2000 from Time Warner, $4000 from AT&T, $500 from NC Cable PAC, $2000 from ElectriCities and $1500 from the NC Assn. of Broadcasters). He also took $550 from Richard Reese who is an executive for Lexcom Communications. You should know that the amounts are generally bigger for Holliman because he is the House Majority Leader.
• Rep. Linda P. Johnson – $750 from PAC’s ($250 from Embarq and $500 from AT&T).
• Rep. Carolyn K. Justus – $500 from Embarq.
• Rep. Marvin W. Lucas – $1000 from PAC’s ($500 from Embarq and $500 from AT&T)
• Rep. Wil Neumann – $1000 from PAC’s ($500 from Embarq and $500 from AT&T)
• Rep. Efton M. Sager – $250 from Embarq
• Rep. Fred F. Steen – $3000 from PAC’s ($1000 from Embarq, $1000 from AT&T and $1000 from ElectriCities)

There is one more House Representative I wanted to bring to your attention, Rep. Harold Brubaker. Brubaker is a former Speaker of the House. He is also on both the House Public Utilities Committee and the Joint Committee for Revenue Law. Brubaker took a grand total of $16250 from industry related PAC’s ($5500 from Embarq, $2750 from Time Warner, $6000 from AT&T, $1000 from Sprint/Nextel and $1000 from the Verizon Good Government Club). He also took $300 from CW Pickelsimer – VP Citizens Telephone.

The way I see it, following the money trail, Rep. Harrell introduced HB1252 for Time Warner’s attorneys and lobbyists. Rep. Holliman can use his powerful position to help secure votes and Rep. Brubaker sits on the committee that decides the bills fate. The cable/telecom industry seems to be getting what it has paid for. They spent a grand total of $463,699 for campaign contributions to legislators in the North Carolina General Assembly in 2008. That’s nearly a half-million dollars! I assure you that if we contributed a half a million dollars collectively as a consumer rights PAC, we would have quite a bit more influence in the legislative process. We have the ability to derail this money train from buying its legislation. We have shown this before. We must remain vigilant in our approach to beating back a greedy industry and keeping our legislators honest (or tossing them to the curb come election).

Tomorrow’s House Public Utilities Meeting on S1004 in North Carolina has been canceled.  We can pat ourselves on the back again for continuing to keep the pressure on and hold our legislators accountable.

We must still keep writing our legislators and letting them know that they need to send HB1252/S1004 to the Joint Committee on Broadband, so the committee who has knowledge on broadband issues can address accessibility, affordability and capacity.

The e-mail addresses can be found in the original action alert or at the Public Utilities Committee webpage.