In the era of today’s “triple play” package of voice, data, and phone service, satellite television providers have been left at a competitive disadvantage.  Both Dish Network and DirecTV can sell you all the television signals you want, but their satellite-based distribution limits the options to include broadband and telephone service in the package.  Now Dish wants to convert some of their satellite spectrum to sell voice and data service over a network of land based wireless towers that will put the company in direct competition with AT&T and Verizon Wireless.

Dish CEO Charlie Ergen hopes to avoid making the same mistakes that threaten to kill a similar venture — LightSquared, because of interference concerns.

Dish’s spectrum is way, way up the radio dial, above 2,000MHz.  Other spectrum users in the neighborhood are primarily low-powered, line of sight communications, often satellite-based.  LightSquared’s service would have operated at around 1,500MHz, had it not obliterated reception of global positioning satellite services (GPS) in certain instances.  Whenever new spectrum users begin to move into a neighborhood, those already there feel threatened, primarily from the fear of interference problems.

Both LightSquared and Dish’s proposed services operate at considerably higher power than other incumbent users, and interference to existing services is a proven problem when sensitive reception equipment is unprepared to deal with signal overload.  The Federal Communications Commission found just cause to deny LightSquared operating permission for precisely that reason.  Ergen hopes to sell the FCC on a plan he says will avoid those interference problems.

Ergen

Ergen’s spectrum doesn’t sit immediately next door to other, existing users.  His frequencies are comparable to living the next block over, and there is a protective fence keeping the neighbors apart.

“It’s not as close to GPS, so it’s unlikely to interfere,” Matthew Desch, chief executive officer of Iridium Communications Inc., which operates more than 60 satellites, told Bloomberg News. “But the approval is going to take some time. The FCC is going to make sure they don’t have another LightSquared problem on their hands.”

Mike Marcus, director of Marcus Spectrum Solutions LLC adds Dish has some space between its frequencies — known as a guard band — and other users.  Marcus believes Dish won’t have an interference problem unless existing wireless carriers market handsets and other equipment insufficiently selective to reject interference from higher powered users nearby.

But whether Dish will ultimately spend the billions required to build a nationwide satellite and land-based broadband and phone network to accompany its existing satellite service remains unknown.

Bloomberg reports Wall Street analysts may prefer Dish sell its spectrum assets for a quick profit.  Barclays Capital estimates Dish’s spectrum could net the company about $7.3 billion.  If AT&T or Verizon Wireless were buyers, it would also protect them from new competition in the wireless market.

Regulators may be prepared to limit any such sale, however.  Industry analysts note a similar license for LightSquared required government approval before leasing capacity (or selling the network outright) to AT&T or Verizon Wireless.  The government may seek the same limits on Dish Network’s spectrum.

Ergen may have the final word however.

Vijay Jayant, an analyst at ISI Group in New York:

If the government sets rules that limit how Dish can use the spectrum, Ergen may choose to hoard it, said Jayant, which could be antithetical to the government’s mission of promoting wireless competition.

“Dish isn’t a patsy for the government,” Jayant said. “Dish’s attitude is, ‘Make the rules fair and we’ll do the right thing. Make them unfair and we’ll sit on the spectrum,’ and it will be another black eye for the government.”

Sen. Paul Hornback (R-AT&T)

A Kentucky state senate panel on Tuesday approved a bill admittedly-authored by AT&T that could allow the company to abandon providing basic telephone service in areas deemed not sufficiently profitable.

Senate Bill 12 is just the latest effort by AT&T to end “Universal Service,” the basic principal that all Americans should have equal access to basic landline telephone service.

The proposed legislation would allow the three largest phone companies in Kentucky — AT&T, Windstream, and Cincinnati Bell to abandon customers who, in one possible scenario, do not agree to a more deluxe feature package that includes long distance calling, wireless service, and/or broadband.

“This bill represents a grave threat to continued, stand-alone, basic telephone service for many Kentuckians who don’t have the luxury of access to Twitter and all the things that we in urban areas tend to take for granted,” Tom FitzGerald, director of the Kentucky Resources Council told the Lexington Herald-Leader.

AT&T says allowing it the right to terminate rural landline service would “spur innovation and create jobs.” It would also strip Kentucky of its power to investigate and force resolutions of consumer complaints.

The optics of the bill’s primary sponsor, Sen. Paul Hornback (R-Shelbyville/AT&T), sitting next to the two AT&T executives who authored the bill as he testified before the Senate Committee on Economic Development, Tourism and Labor was not lost on the bill’s opponents.

“It’s obvious who he is really working for,” said our regular Kentucky reader Paul in Louisville.

Daniel, the Stop the Cap! reader who first shared the story with us, is not happy either.

“This infuriates me,” he writes. “If AT&T gets their way, they will have less reason to invest in areas that are underserved or not served at all, and allow them to further push people to their horrific cell service.”

Daniel barely gets DSL from AT&T — 3Mbps if he’s lucky, and most of his neighbors cannot get any broadband from the company because they don’t officially service the area with broadband.  Daniel suspects once AT&T is deregulated further, they will have even fewer reasons to focus on less-populated regions of the state.

Hornback: "Nobody knows better than AT&T what the company needs the legislature to do for it."

“AT&T is my only reliable option – and if I can’t keep their Internet service then I will lose my job,” he says.

In 2006, AT&T helped push through a deregulation measure that stripped the Kentucky Public Service Commission of its ability to oversee prices for telecommunications services in the state. Customers of both AT&T and Cincinnati Bell soon saw price increases after the legislation passed with arguably no improvement in service.

Hornback argues S.12 will help “modernize telecommunications in the state of Kentucky,” without explaining exactly how abandoning customers enhances their level of service.

AT&T says they will not completely exit rural Kentucky if given the power to disconnect its landline network.  It can sell rural customers AT&T cell phone service instead. Critics say that comes at a substantially higher price and offers only limited broadband.

Hornback defended that, suggesting the company is wasting money and resources keeping its current antiquated landline facilities when it might be better spending that money on wireless services.

But customers would face charges starting at nearly $40 a month after taxes and fees for a basic AT&T wireless plan with as few as 200 calling minutes a month.

Hornback got around initial opposition to an earlier measure he introduced — SB 135, by reintroducing essentially the same measure inside another unrelated bill.  Hornback said that was an effort to give the legislation “a fresh start” in light of heated criticism from consumer groups, the AARP, and even Kentucky businesses.

The committee voted 9-1 for Hornback/AT&T’s measure and sent the bill forward to the Senate floor.  The single “no” vote came from Sen. Denise Harper Angel (D-Louisville).

Phone companies in Kentucky

AT&T’s clout in the state capital is unparalleled according to the newspaper:

It employs 31 legislative lobbyists, including a former PSC vice chairwoman and past chairs of the state Democratic and Republican parties, spending about $80,000 last year on legislative lobbying. Its political action committee has given at least $91,000 in state political donations since 2007.

Remarkably, Hornback defended AT&T’s authorship of his bill that would directly benefit the company’s interests.

Nobody knows better than AT&T what the company needs the legislature to do for it, Hornback said.

While some Internet Service Providers claim their broadband customers don’t need faster speeds, that is not what customers are telling surveyors.  A new British survey of over 800 Internet users found 71% would happily pay extra for a “superfast broadband connection” at speeds of 25Mbps or higher if only they could get it.

Over half of the respondents (55%) reported they could not get fast speeds even if they wanted them.

The survey, conducted by ISPreview, found price was only a barrier for around 16% of customers and only 6.2% of respondents claimed they were satisfied with the speeds they received from their current provider.

Prices in Britain for broadband are historically lower than what North Americans pay, averaging around $27 per month, according to UK regulator Ofcom.  Customers were willing to pay at least $8 more per month if they could get the speeds they crave.

“Ofcom’s own data appears to suggest that the UK is one of the lowest priced countries in the world for broadband,” said ISPreview.co.uk’s Founder, Mark Jackson. “As a result it’s quite encouraging that so many people, most of which will be use to paying very little for their current service, would still be willing to pay more for the next generation of superfast connectivity.”

Jackson reports the highest demand for the fastest speeds actually comes from rural areas in the United Kingdom — areas long deprived of suitable broadband.  Jackson says most operators are focused on upgrading urban areas which already receive better service than rural communities.

The government has plans in place to reach 90% of the country with superfast broadband by 2015.

Sen. Linda Runbeck, a dues-paying member of ALEC, a corporate funded pressure group that advocates for legislation advantageous to ALEC's corporate sponsors.

Rural Minnesota is facing a full frontal assault on community broadband, courtesy of a state representative so proud of her involvement in a corporate front group, she’s actually a dues-paying member.

State Sen. Linda Runbeck (R-Circle Pines) introduced HF 2695, a bill to prohibit publicly-owned broadband systems:

A bill for an act relating to telecommunications; prohibiting publicly owned broadband systems; proposing coding for new law in Minnesota Statutes, chapter 237.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. [237.201] PUBLICLY OWNED BROADBAND SYSTEM; PROHIBITION.

(a) Notwithstanding section 475.58, subdivision 1, other state law, county ordinance, or any authority granted in a home rule charter, a city or a county may not use tax revenues raised within its jurisdiction or issue debt to construct, acquire, own, or operate, in whole or in part, a system to deliver broadband service.

(b) Notwithstanding sections 123A.21, 123B.61 to 123B.63, 125B.26, and 475.58, subdivision 1, no school district or service cooperative may use state revenues, tax revenues raised within its jurisdiction, or issue debt to construct, acquire, own, or operate, in whole or in part, a system to deliver broadband service.

(c) For the purposes of this section, “broadband service” means a service that allows subscribers to access information from the Internet by means of a physical, terrestrial, non-mobile, or fixed wireless technology.

(d) This section applies to a system to deliver broadband service whose construction begins after the effective date of this section, but does not apply to:

1. the city of Minneapolis, St. Paul, or Duluth; or
2. the maintenance or repair of a system delivering broadband service whose initial construction began before the effective date of this section, provided that the geographical area in which the system delivers broadband service is not expanded as a result of the maintenance or repair.

EFFECTIVE DATE. This section is effective the day following final enactment.

The public broadband option delivers the most bang for the buck, which is why some providers want to see it banned.

Runbeck is a dues-paying member of the American Legislative Exchange Council (ALEC), a secretive corporate front group that lobbies lawmakers to introduce business-friendly legislation, often on the state level.  Runbeck told the Minnesota Independent via email that she paid $100 for a two-year membership in the organization, and says she’s never used ALEC’s “model legislation,” bills that are sometimes written by corporate members of the group and that pop up in state capitols across the country.

But Runbeck’s sudden interest in banning community broadband coincides with similar efforts in states like Georgia and South Carolina backed by big cable and phone companies.  Runbeck’s bill would directly target rural Minnesota, where broadband is the least robust, while exempting Minneapolis, St. Paul, and Duluth (and incumbent phone and cable companies) from the bill’s provisions.  Runbeck’s bill also constrains existing public broadband services from expanding, an important matter for providers still rolling out service to additional neighborhoods in their communities.

Community broadband is already hampered in Minnesota by laws that make such projects difficult to approve and build.  When projects do break ground, incumbent providers do everything possible to throw up roadblocks to delay or abort the progress being made.  In Monticello, TDS Telecom filed nuisance suits against that city’s public broadband network before finally deciding to upgrade service themselves.  Mediacom and Charter, two major Minnesota cable operators, have objected to public broadband projects that don’t even serve communities they’ve wired.

When the networks are in operation, providers like Charter work to undercut them by selling service at prices so low, they’re predatory.  But when competitors are driven out, prices rise… quickly.

 Runbeck’s $100 membership in ALEC is paying dividends, if you are a big incumbent cable or phone company. Consumers will pay much more than that if broadband competition is curtailed.

Consumers and community leaders across Georgia can now rest a little easier knowing AT&T’s plans to throw up roadblocks against community broadband have gone awry.  SB313, a custom-written corporate welfare bill designed to protect cable and phone companies from competition, has reportedly been turned into a “study bill” — a graceful way to kill bad legislation without hurting too many feelings.

It wasn’t just the fact incumbent phone and cable companies wanted to stop community broadband projects from wiring communities they’ve ignored for years.  It wasn’t even the absurdity of the bill defining Georgia’s “broadband” speeds at just 200kbps (later ‘generously’ amended and increased to 758kbps).  This bill died because of consumer and community outrage — local officials working hand in hand with woefully under-served Georgians asking their elected officials why they seemed to care more about AT&T’s interests than those of the people who elected them to office.

Specious political arguments about “government/taxpayer involvement in broadband” and a sudden blitz of campaign contributions for the bill’s backers simply couldn’t overcome the reality of broadband-challenged rural Georgia.

According to the National Broadband Map, Georgia ranks 20th in the nation for broadband access. According to the forward of a report by Rich Calhoun, Program Director of the Georgia Technology Initiative, “As I traveled through the state to talk with leaders in municipalities, counties and community anchor institutions, I found that many places throughout Georgia indicated that they did not have access to affordable or sufficient broadband services. Telecommunications firms who have made significant investments in Georgia indicated that in some areas of the state the return on investment would not qualify for further investment at the present time.”

As Stop the Cap! exposed to our readers, AT&T isn’t interested in serving the broadband needs of rural Georgia and doesn’t want anyone else serving them either.

We exposed the well-financed propaganda campaign that maligned some of Georgia’s past experiences with municipal broadband, many projects derailed not by government ‘failure’ but through political interference and the private sector.  We showed readers how to follow the money to see the connection between campaign contributions and the sudden interest in effectively banning community broadband.  We exposed the fact this is a coordinated, nationwide effort by a corporate backed lobbying group (ALEC) that pays to wine and dine lawmakers and then sell them on a catalog of bills ghost-written by some of the nation’s largest telecommunications companies.  Legislation that hamstrings competition and protects monopoly profits, while always conveniently exempting incumbent providers from the terms of the bills they effectively wrote.

But the real victory goes to readers who picked up the phone or sent e-mail letting Georgia legislators know you were watching them and paying attention to this obvious corporate welfare bill.  You made it more expensive for lawmakers to vote with AT&T, despite their campaign contributions, than to vote for -your- interests.  The next election is never too far away.

Why We Fight: These are the minimum speeds needed by some of Georgia's most important institutions. While state lawmakers have 100Mbps access in Atlanta, some are content to define 758kbps "broadband" as just fine for the rest of the state.

We also applaud the Institute for Local Self-Reliance.  Their Community Broadband Networks project was able to educate, coordinate, and rally local governments who may not have been aware their broadband future was about to be indefinitely held ransom by AT&T and Comcast.

We never underestimate AT&T’s power and money.  But they continue to underestimate us and the communities they are supposed to be serving.

Common sense prevailed in Georgia.  South Carolina may be a different story.  Their own anti-broadband measure is still alive and kicking.  We’ll be holding additional “calls to action” on this bad bill shortly.

Stay involved in the fight.  The better broadband you protect may be your own.