On the heels of today’s announcement from Google that it intends to make Austin, Tex. the next home for Google Fiber, AT&T issued a press release claiming it was suddenly interested in building a gigabit fiber network in Austin too.

Today, AT&T announced that in conjunction with its previously announced Project VIP expansion of broadband access, it is prepared to build an advanced fiber optic infrastructure in Austin, Texas, capable of delivering speeds up to 1 gigabit per second.  AT&T’s expanded fiber plans in Austin anticipate it will be granted the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives. This expanded investment is not expected to materially alter AT&T’s anticipated 2013 capital expenditures.

Currently, AT&T’s U-verse system in Austin — a fiber to the neighborhood system — cannot exceed 25Mbps as it is now configured. GigaOm’s Stacy Higginbotham reports AT&T told her it would build its own fiber to the premises system in Austin to support faster speeds.

But AT&T’s announcement does not come without plenty of wiggle room which could make today’s announcement little more than a publicity stunt:

1. AT&T claims it will build “infrastructure” capable of delivering “up to” 1Gbps. This could mean a network that supports a maximum of 1Gbps of shared Internet traffic, not 1Gbps to each home or business;
2. AT&T does not say it intends this network for residential customers, nor did it suggest a monthly price for gigabit service. Its Project VIP expansion describes planned broadband speed upgrades for residential U-verse customers of up to 75Mbps and for U-verse IPDSLAM to speeds of up to 45Mbps, not 1Gbps;
3. AT&T’s Project VIP already specifies fiber network build outs, but they are destined for cell towers, large business complexes, and multi-dwelling units that will share a fiber connection;
4. AT&T wants the same terms and conditions Google has received, including investment incentives. But AT&T could have applied for those incentives, and potentially could have already received them, if it specified plans for a gigabit network of its own. Instead, AT&T executives have always believed residential customers do not want or need gigabit broadband speeds. In fact, AT&T still doesn’t believe fiber to the home service makes economic sense, which is why it invested in a cheaper fiber to the neighborhood system that still relies on old copper wiring. AT&T also warns that, “Our potential capital investment will depend on the extent we can reach satisfactory agreements” with local officials on those incentives;
5. Wiring a city of Austin will cost tens of millions to reach every resident with service. Such an expense might be considered materially relevant to shareholders, requiring disclosure. Building a much lesser network, like a gigabit middle mile network or only offering fiber service to institutional or commercial customers would cost far less and could escape reporting requirements.

AT&T also did not miss an opportunity to promote its deregulatory agenda, which has so far not proved to be of much help to broadband speed enthusiasts stuck with DSL or U-verse.

“Most encouraging is the recognition by government officials that policies which eliminate unnecessary regulation, lower costs and speed infrastructure deployment, can be a meaningful catalyst to additional investment in advanced networks which drives employment and economic growth,” said Randall Stephenson, AT&T chairman and CEO.

AT&T’s agenda might result in a meaningful catalyst of a different kind — the end of rural landline telephone and broadband service.

AT&T Mobility will acquire 21,000 Corr Wireless subscribers and spectrum owned by the Alabama-based wireless carrier in a private transaction between Corr’s parent company C Spire Wireless and AT&T.

Corr was acquired by Mississippi-based C Spire (formerly Cellular South) in February 2010 as the carrier sought expansion into northeastern Alabama and western Georgia. But Corr’s network has never been upgraded beyond 2G service, and the Corr has traditionally positioned itself as a value priced feature phone provider. As its competitors have moved beyond 3G into 4G service and now pitch mostly smartphones, Corr has fallen behind.

Corr’s coverage area has not been a priority for larger carriers like Verizon Wireless and AT&T. The acquisition, which includes multiple PCS and 700MHz “C-Block” licenses, will bolster AT&T’s weak coverage in the region, which includes Huntsville, Oneonta, Decatur, Cullman, Hartselle, and Arab, Ala.

AT&T is expected to decommission much of Corr’s older equipment and replace it with 4G LTE service.

Customers may not have to immediately upgrade their phones. Corr Wireless, like AT&T, operates a GSM network.

While large private corporations return profits to shareholders and avoid major infrastructure upgrades, publicly owned municipal providers are moving customers to carefully planned and budgeted fiber-to-the-home networks that offer service at speeds AT&T, the state’s largest telecom company, cannot touch.

This summer, Spencer, Iowa (pop. 11,200) is getting a fiber upgrade utility officials consider an investment in the community.

“Just like Internet service has evolved from dial-up to DSL and cable modem, fiber will give customers the next level of service to continue to improve the way they live, work and play here in Spencer,” Amanda Gloyd, Spencer Municipal Utilities marketing and community relations manager told The Daily Reporter.

SMU will spend $2 million to extend fiber service this year, decommissioning copper telephone wires and coaxial cable as it brings the new network online in different sections of the community.

“This will offer a lot more capacity than the old system with less shared,” Jeff Rezabek, SMU’s telecom manager told the newspaper. The project will create much-needed work for area contractors that will install the new fiber lines.

Customers are happy to learn the upgrade will not affect their rates, because SMU has been carefully setting aside money to pay for the project without burdening customers.

“This project is all paid for with cash in the bank,” said SMU general manager Steve Pick. “This is an investment in the system.”

Outside of Spencer, rural AT&T customers still cannot get DSL or U-verse service and are now at risk of losing their landlines as AT&T ponders taking down its wired network and forcing customers to more expensive wireless service.

The upgrades in Spencer will take several years to complete, as available funding allows. SMU is a municipally owned utility providing water, electricity, telephone, cable television, and broadband at speeds up to 100/10Mbps. The utility also resells T-Mobile wireless service.

Phillip Dampier

The Wall Street Journal’s not-living-in-the-real-world editorial page strikes again.

The commentary pages have always been the weakest part of the Journal, primarily because they screech pro-corporate talking points in contrast to the more balanced reporting in the rest of the newspaper.

Mr. Holman W. Jenkins, Jr. decided to distort broadband reality (again) in yesterday’s edition with a glowing commentary on how wonderful broadband providers are in his piece, “Springtime for Broadband.” The only thing missing was a border in fine print labeled, “Sponsored by Verizon, AT&T, and your cable company.”

While your Internet bill is being hiked at the same time your provider is slapping usage limits on your connection, Jenkins dismisses consumer-fueled complaints about broadband price gouging, assaulting Net Neutrality, and overall poor customer service as part of Washington’s “broadband policy circus.”

Charges fly hourly that Google or some other company is guilty of gross insult to net neutrality (that sacred principle nobody can define). Oregon Sen. Ron Wyden has introduced legislation to regulate data caps and Internet pricing. Law professor Susan Crawford, until recently a White House technology adviser, clearly craves to be America’s next go-to talking head on broadband. Lately she’s been everywhere calling for a crackdown on the competing “monopolists” who supply Internet access.

How dare they complain, decries Jenkins in a robust defense of the 21st century version of the railway robber barons.

Comfortably playing patty cake with provider-fed talking points from the industry echo chamber, Jenkins is ready for battle, facts or not.

But wireless providers have invested big money to deploy high-speed mobile networks, and fixed and mobile are inevitably beginning to compete. The latest evidence: Australia recently predicted that up to 30% of households will go the all-wireless route and won’t be customers for its vaunted national broadband project.

Jenkins

Not exactly. The basis for this 30% figure is the National Broadband Network’s own business plan, which warns –if– the company raised prices to a maximum theoretical level, up to 30 percent of its customers would rely on wireless instead… by the year 2039. That is 26 years from now. You have nothing better to do in the meantime, right?

In fact, conservative critics of the fiber network, some defending the big wireless cell phone industry in Australia, have suggested fiber optics is a big waste of money because “wireless is the future.”

That old chestnut again.

“Now you can present a bulletin without touching a typewriter … it’s just there on the computer system, you don’t need a reel to reel tape recorder. I’ve got a touchscreen in front of me. Back then I had a big cartridge deck,” said Ray Hadley on 2GB radio. “Can you imagine the advances in technology in the next 26 years? I can’t. I can’t comprehend it. By the time they finish the NBN, it could be superseded by something we don’t even know about.”

NBN Myths, a website set up to tackle the disinformation campaign from political and industry opponents has one simple fact to convey: “Despite what you may have read from certain clueless commentators, there is not a single country or telecommunications company anywhere in the world that is attempting to replace fixed networks with wireless in urban areas, or even planning to do so in the future.”

Which would you rather have?

Even Telstra, the biggest telecom company in Australia scoffs at such a notion, noting a growing number of its customers have both wired and wireless service, and they do not depend on one over the other.

Research firm Telsyte found that 85 per cent of Australians want speeds of 50Mbps or higher, speeds impossible for wireless to offer. In fact, when the NBN fiber network became available to Australians, almost half the current users as of October last year had chosen an even-faster 100Mbps plan option. But Australians also want mobile broadband, and they are signing up for that as well.

The Australian Bureau of Statistics notes the number of mobile broadband Internet connections also grew by around 40% in Australia between 2009 and 2010. But here is the Achilles heel of wireless: it cannot deliver the same speeds or capacity, and providers charge high prices and deliver low usage caps. As a result, the wireless industry has pulled off a coup: they earn enormous revenues from networks they have successfully rationed. The total amount of data downloaded over Australia’s wireless networks actually fell on a per user basis, despite the growth in customers.

Much of Jenkins’ commentary is spoon-fed by the industry-funded Information Technology and Innovation Foundation, which produces industry-sponsored studies designed to tell America all is well in our broadband duopoly.

In the latest federal survey, the average broadband speed in America is up to 15.6 megabits per second, from 14.3 a year earlier. Nearly half of customers who six months ago made do with one megabit or less have now moved up to higher speeds. Since 2009, the U.S. has gone from 22nd fastest Internet to the eighth fastest.

The 15.6Mbps figure comes from the Federal Communications Commission. The statistics about our global speed ranking come from Akamai’s voluntary speed test program. Other studies rate America much lower. More importantly, while providers in the U.S. try to squeeze out more performance from their copper networks, other countries are laying speedier fiber networks that are destined to once again leapfrog over the United States. Most charge less for their broadband connections as well.

Jenkins also quotes the ITIF which touts 20 million miles of fiber were laid in America last year. But the ITIF, when pressed, will admit the majority of that fiber was “middle mile” connections, institutional or business network fiber you cannot access, or fiber to cell towers. Fiber to the home expansion has stalled, primarily because Verizon has suspended expansion of its FiOS network to new areas after Wall Street loudly complained about the cost.

Jenkins argues that if we leave providers alone and stop criticizing their growing prices, declining competition, and fat profits, the marketplace will suddenly decide to invest in network upgrades yet again.

“The day may come when even Verizon, which visibly soured on its $23 billion FiOS bet, rediscovers an urge to invest in fixed broadband infrastructure to meet growing consumer lust for hi-def services,” writes Jenkins.

Would Wall Street rather see providers invest in network upgrades or return profits to shareholders? Investment expansion in the broadband industry comes when a company senses if they do not spend the money, their business will be swept away by others that will. Cable broadband threatens telephone company DSL, so AT&T cherry-picked communities for investment in its half-measure U-verse fiber to the neighborhood network. Google Fiber, should it choose to expand, will be an even bigger threat to both cable and phone companies. Municipal fiber to the home networks upset the incumbent players so much, they spend millions of ratepayer dollars in efforts to legislate them out of existence.

Jenkins’ view that giving the industry carte blanche to do and charge as it pleases to stimulate a better broadband future is as fanciful as NBN critics in Australia suggesting fiber upgrades should be canceled in favor of waiting 20+ years for improved wireless to come along.

He even approves of Internet Overcharging schemes like usage caps and consumption billing, calling it proper price discrimination in a “fiercely competitive” environment to defray a network’s fixed costs.

Do you think there is fierce competition for your broadband dollar?

Broadband’s fixed costs are so low and predictable, it literally calls out consumption pricing as just the latest overreach for enhanced profits. As Suddenlink’s CEO himself admitted, the era of big expensive cable upgrades are over. Incremental upgrades are cheap, the costs to offer broadband are declining, so it is time to reap the profits.

Jenkins closes with one recommendation we can agree with: “A low-tech way to stir up broadband competition would be to relax the regulatory obstacles to the actual physical provision of broadband.”

We can start by scrapping all the state laws the industry lobbied to enact that prohibit community-owned broadband competition. If big cable and phone companies won’t provide communities with the quality of broadband service they need to compete for 21st century jobs, let those communities do it themselves.

Cable operators and publicly owned utilities in Tennessee are battling for control over the prices companies pay to use utility poles, with facts among the early casualties.

The subject of “pole attachment fees” has been of interest to cable companies for decades. In return for permission to hang cable wires on existing electric or telephone poles owned by utility companies, cable operators are asked to contribute towards their upkeep and eventual replacement. Cable operators want the fees to be as low as possible, while utility companies have sought leeway to defray rising utility pole costs and deal with ongoing wear and tear.

Little progress has been made in efforts to compromise, so this year two competing bills have been introduced by Republicans in the state legislature to define “fairness.” One is promoted by a group of municipal utilities and the other by the cable industry and several corporate-backed, conservative front groups claiming to represent the interests of state taxpayers and consumers.

Some background: Tennessee is unique in the pole attachment fee fight, because privately owned power companies bypassed a lot of the state (and much of the rest of the Tennessee Valley and Appalachian region) during the electrification movement of the early 20th century. Much of Tennessee is served by publicly owned power companies, which also own and maintain a large percentage of utility poles in the state.

Some of Tennessee’s largest telecom companies believe they can guarantee themselves low rates by pitching a case of private companies vs. big government utilities, with local municipalities accused of profiteering from artificially high pole attachment rates. Hoping to capitalize on anti-government sentiment, “small government” conservatives and telecom companies want to tie the hands of the pole owners indefinitely by taking away their right to set pole attachment rates.

The battle includes fact-warped editorials that distort the issues, misleading video ads, and an effort to conflate a utility fee with a tax. With millions at stake from pole attachment fees on tens of thousands of power poles throughout the state, the companies involved have launched a full-scale astroturf assault.

Grover Norquist’s Incendiary “Pole Tax”

Conservative Grover Norquist, president of Americans for Tax Reform wrote that the pole attachment fee legislation promoted by public utilities would represent a $20 million dollar “tax increase” from higher cable and phone bills. Even worse, Norquist says, the new tax will delay telecom companies from rushing new investments on rural broadband.

Norquist

In reality, Americans for Tax Reform should be rebranded Special Interests for Tax Reform, because the group is funded by a variety of large tobacco corporations, former clients of disgraced lobbyist Jack Abramoff, and several wealthy conservative activists with their own foundations.

Norquist’s pole “tax increase” does not exist.

The Federal Communications Commission (FCC) provides guidelines and a formula for determining pole attachment rates for privately owned utilities, but permits states to adopt their own regulations. Municipal utilities are exempted for an important reason — their rates and operations are often already well-regulated.

Stop the Cap! found that pole attachment revenue ends up in the hands of the utility companies that own and keep up the poles, not the government. Municipal utilities stand on their own — revenue earned by a utility stays with the utility. Should a municipal utility attempt to gouge other companies that hang wires on those poles, mechanisms kick in that guarantee it cannot profit from doing so.

A 2007 study by the state government in Tennessee effectively undercut the cable industry’s argument that publicly owned utilities are overcharging cable and phone companies that share space on their poles. The report found that “pole attachment revenues do not increase pole owners’ revenue in the long run.”¹

The Tennessee Valley Authority, which supplies electricity across Tennessee, regularly audits the revenues and costs of its municipal utility distributors and sets end-user rates accordingly. The goal is to guarantee that municipal distributors “break even.” Any new revenue sources, like pole attachment fees, are considered when setting wholesale electric rates. If a municipal utility overcharged for access to its poles, it will ultimately gain nothing because the TVA will set prices that take that revenue into account.

Freedom to Distort: The Cable Lobby’s Astroturf Efforts

Freedom to distort

Another “citizens group” jumping into the battle is called “Freedom to Connect,” actually run by the Tennessee Cable Telecommunications Association (TCTA). Most consumers won’t recognize TCTA as the state cable lobby. Almost all will have forgotten TCTA was the same group that filed a lawsuit to shut down EPB’s Fiber division, which today delivers 1,000Mbps broadband service across the city and competes against cable operators like Comcast and Charter Cable.

One TCTA advertisement claims that some utilities are planning “to double the fees broadband providers pay to the state’s government utilities.”

In reality, cable companies have gone incognito, hiding their identity by rebranding themselves as “broadband providers.” No utility has announced it plans to “double” pole attachment fees either.

TCTA members came under fire at a recent hearing attended by state lawmakers when Rep. Charles Curtiss (D-Sparta) spoke up about irritating robocalls directed at his constituents making similar claims.

“What was said was false,” Curtiss told the cable representatives at the hearing. “You’ve lost your integrity with me. Whoever made up your mind to do that, you’re in the wrong line of work.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/TCTA Pole Attachment Fees Ad 3-13.flv[/flv]

TCTA — Tennessee’s cable industry lobbying group, released this distorted advertisement opposing pole attachment fee increases.  (1 minute)

The Chattanooga Free-Press’ Drew Johnson: Independent Opinion Page Editor or Well-connected Activist with a Conflict of Interest?

Johnson (Times Free Press)

In its ad campaign, the TCTA gave prominent mention to an article in Chattanooga’s Times-Free Press from Feb. 27: “Bill Harms Consumers, Kills Competition.”

What the advertisement did not say is it originated in an editorial published by Drew Johnson, who serves as the paper’s conservative opinion editor. Johnson has had a bone to pick with Chattanooga’s public utility EPB since it got into the cable television and broadband business.

That may not be surprising, since Johnson is still listed as a “senior fellow” at the “Taxpayers Protection Alliance,” yet another corporate and conservative-backed astroturf group founded by former Texas congressman Dick Armey of FreedomWorks fame.

Johnson’s journalism credentials? He wrote a weekly column for the conservative online screed NewsMax, founded and funded by super-wealthy Richard Mellon Scaife and Christopher Ruddy, both frequent donors to conservative, pro-business causes.

TPA has plenty to hide — particularly the sources of their funding. When asked if private industry backs TPA’s efforts, president David Williams refused to come clean.

“It comes from private sources, and I don’t reveal who my donors are,” he told Environmental Building News in January.

Ironically, Johnson is best known for aggressively using Tennessee’s open records “Sunshine” law to get state employee e-mails and other records looking for conflicts of interest or scandal.

Newspaper readers may want to ask whether Johnson represents the newspaper, an industry-funded sock puppet group, or both.  They also deserve full disclosure if the TPA receives any funding from companies that directly compete with EPB.

The Institute from ALEC: The Institute for Policy Innovation’s Innovative Way to Funnel AT&T and Comcast Money Into the Fight

Provider-backed ALEC advocates for the corporate interests that fund its operations.

Another group fighting on the side of the cable and phone companies against municipal utilities is the Institute for Policy Innovation. Policy counsel Bartlett D. Cleland claimed the government is out to get private companies that want space on utility poles.

“The proposed new system in HB1111 and SB1222 is fervently supported by the electric cooperatives and the government-owned utilities for good reason – they are merely seeking a way to use the force of government against their private sector competitors,” Cleland said. “The proposal would allow them to radically raise their rates for pole attachments to multiples of the national average.”

The facts don’t match Cleland’s rhetoric.

In reality, the state of Tennessee found in their report on the matter in 2007 that Tennessee’s pole attachment fees are “not necessarily out of line with those in other states.”²

In fact, some of the state’s telecom companies seemed to agree:

• EMBARQ (now CenturyLink) provided data on fees received from other service providers in Tennessee, Virginia, South and North Carolina. In these data, Tennessee’s rates ($36.02 – $47.41) are similar to those in North Carolina ($23.12-$52.85) and Virginia ($28.94 – $35.77). Rates were lower in South Carolina.
• Cable operators, who have less infrastructure on poles than telephone and electric utilities, paid even less. Time Warner Cable provided mean rates per state showing Tennessee ($7.70) in the middle of the pack compared to Florida ($9.83) and North Carolina ($4.86 – $13.64).

In addition to his role as policy counsel, Cleland also happens to be co-chair of the Telecommunications and Information Technology Task Force of the American Legislative Exchange Council (ALEC). Members of that committee include Comcast and AT&T — Tennessee’s largest telecom companies, both competing with municipal telecommunications providers like EPB.

¹ Analysis of Pole Attachment Rate Issues in Tennessee, State of Tennessee. 2007. p.23

² Analysis of Pole Attachment Rate Issues in Tennessee, State of Tennessee. 2007. p.12