Phillip “Free Trade in Bad Broadband” Dampier

Sure we’ve had our cultural skirmishes in the past,  but on one thing we can all mostly agree: our largest cable, phone, and broadband providers generally suck.

Outside of hockey season, Canada’s national pastime is hating Bell, Rogers, Vidéotron, Telus, and Shaw. The chorus of complaints is unending on overbilling, bundling of dozens of channels almost nobody watches but everybody pays for, outrageous long-term contracts, and bloodsucking Internet overlimit fees. In fact, dissatisfaction is so pervasive, the Conservative government of Stephen Harper spent this past summer waving shiny keys of distraction promising Canadians telecom relief while hoping voters didn’t notice their tax dollars were being spent by the country’s national security apparatus to spy on Brazil for big energy companies.

The Montreal Gazette is now collecting horror stories about dreadful service, mysterious price hikes, and promised credits gone missing on behalf of readers fed up with Bell and Vidéotron.

Rogers Cable, always thoughtful and pleasant, punished a Ottawa man coping with multiple sclerosis and cancer with a $1,288 bill, quickly turned over to a collection agency after his home burned to the ground. It took headlines spread across Ontario newspapers to get the cable company to relent.

Things are no better in the United States where the American Customer Satisfaction Index rates telecom companies worse than the post office, health insurers airlines, and the bird flu. National Public Radio opened the floodgates when it asked listeners to rate their personal satisfaction with their Internet Service Provider — almost always the local cable or telephone company.

The phone company Canadians love to hate.

Many responded their Internet access is horribly slow, often goes out, and is hugely overpriced. In response, the cable industry’s hack-in-chief did little more than shrug his shoulders — knowing full well American broadband exists in a cozy monopoly or duopoly in most American cities.

Breann Neal of Hudson, Ill., told NPR she has one choice — DSL, which is much slower than advertised. Hudson is Frontier Communications country, and it is a comfortable area to serve because local cable competition from Mediacom, America’s worst cable company, is miles away from Neal’s home.

“There’s no incentive for them to make it better for us because we’re still paying them every month … and there’s no competition,” Neal says.

Samantha Laws, who gets her Internet through her cable provider, says she also only has one option.

“It goes out at least once a day, and it’s been getting worse the last few months,” Laws says. She works with a pet-sitting company that handles all of its scheduling through email and the company website. At times she can’t do her job because of the unreliable connection.

Chicago is in Comcast’s territory and the company is quite comfortable cashing your check while AT&T takes its sweet time launching U-verse in the Windy City. AT&T isn’t about to throw money at improving DSL while local residents wait for U-verse and Comcast doesn’t need to spend a lot in Chicago when the alternative is AT&T.

Where there is no disruptive new player in town to shake things up, there is little incentive to speed broadband service up. But there is plenty of room to keep increasing prices for a service that is becoming as important as a working telephone. Companies are using broadband profits to cover increasing losses from pay television service, investing in stock buybacks, paying dividends to shareholders, or just putting the money in a bank, often offshore.

NPR’s All Things Considered:

“[For] at least 77 percent of the country, your only choice for a high-capacity, high-speed Internet connection is your local cable monopoly,” says Susan Crawford, a visiting professor at Harvard Law School. She is also the author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.

Crawford says that today’s high-speed Internet infrastructure is equivalent to when the railroad lines were controlled by a very few moguls who divided up the country between themselves and gouged everybody on prices.

She says the U.S. has fallen behind other countries in providing broadband. At best, Crawford says, the U.S. is at the middle of the pack and is far below many countries when it comes to fiber optic penetration. Given that the Internet was developed in the U.S., she says the gap is a result of failures in policy.

“These major infrastructure businesses aren’t like other market businesses,” Crawford says. “It is very expensive to install them in the first place, and then they build up enormous barriers of entry around them. It really doesn’t make sense to try to compete with a player like Comcast or Time Warner Cable.”

So Crawford is calling for is a major public works projects to install fiber optic infrastructure — a public grid that private companies could then use to deliver Internet service.

Powell

That’s an idea met with hand-wringing and concern-trolling Revolving Door Olympian Michael Powell, who made his way from former chairman of the Federal Communications Commission during the first term of George W. Bush’s administration straight into the arms of Big Cable as president of their national trade association, the NCTA.

Powell, well compensated in his new role representing the cable industry, wants Americans to consider wireless 3G and 4G broadband (with usage caps as low as a few hundred megabytes per month) equivalent competitors to the local cable and phone company.

“I think to exclude [wireless] as a substitutable, competitive alternative is an error that leads you to believe the market is substantially more concentrated that it actually is,” Powell says.

Of course, Powell’s new career includes a paycheck large enough to afford the wireless data bills that would shock the rest of us. All that money also apparently blinds him to the reality the two largest wireless providers in America are AT&T and Verizon — the same two companies that are part of the duopoly in wired broadband. It’s even worse in Canada, where Rogers, Bell, and Telus dominate wired and wireless broadband.

Although America isn’t even close to having the fastest broadband speeds, Powell wants you to know the speeds you do get are good enough.

“I think taking a snapshot and declaring us as somehow dangerously falling behind is just not substantiated by the data,” he says. He says it is like taking a snapshot of speed skaters, where there might be a few seconds separating the leaders, but no one is “meaningfully out of the race.”

That is why we still celebrate and honor Svetlana Radkevich from Belarus who competed in the speed skating competition at the Vancouver 2010 Winter Olympics. She made it to the finish line and ranked 33rd. Ironically, South Korea ranked fastest overall that year, taking home three gold and two silver medals. In Powell’s world, that’s a distinction without much difference. You don’t need South Korean speed and gold medals when Belarus is enough. That argument always plays well in the United States, where Americans can choose between Amtrak or an airline for a long distance trip. Who needs a non-stop flight when a leisurely train ride will get you there… eventually.

There are a handful of providers uncomfortable with the mediocre broadband slow lane. Google is among them. So are community broadband providers installing fiber broadband and delivering gigabit Internet speeds. EPB in Chattanooga is among them, and it has already made a difference for that city’s digital economy neither AT&T or Comcast could deliver.

Unsurprisingly, Powell thinks community broadband is a really bad idea because private companies are already delivering broadband service — while laughing all the way to the bank.

If a community really wants gold medal broadband, Powell says, they should be able to have it. But Powell conveniently forgets to mention NCTA’s largest members, including Comcast and Time Warner Cable, spend millions lobbying federal and state governments to make publicly owned broadband illegal. After all, cable companies know what is best.

All Things Considered recently asked its fans on Facebook, “How satisfied are you with your Internet service provider?” Many responded that they didn’t like their Internet service, that it often goes out and that their connection was often “painfully slow.” Listen to the full report first aired Jan. 11, 2014. (11:30)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Phillip “Reality Check” Dampier

The city of Los Angeles believes if they ask for it, they will get it – gigabit fiber broadband, that is. It is too bad we have to run a reality check.

In December, the city plans to issue an ambitious Request for Proposals (RFP) inviting at least one private company to run fiber service to all 3.5 million residents (and businesses and public buildings) within the city limits. The idea, which won unanimous support from the City Council, does not exactly come with many risks for the city. The Council acknowledges the project is likely to cost up to $5 billion (we suspect more), and the city has made it clear it won’t be contributing a penny.

“The city is going into it and writing the agreement, basically saying, ‘we have no additional funding for this effort.’ We’re requiring the vendors that respond to pay for the city resources needed to expedite any permitting and inspection associated with laying their fiber,” Los Angeles IT Agency general manager Steve Reneker told Ars Technica. “If they’re not willing to do that, our City Council may consider a general fund transfer to reimburse those departments, but we’re going in with the assumption that the vendor is going to absorb those up-front costs to make sure they can do their buildout in a timely fashion.”

That is wishful thinking.

The winning vendor is not just on the hook for the cost of building the network. It also has to comply with a city requirement to give away basic 2-5Mbps broadband service, possibly recouping the lost revenue with advertising. Customers wanting faster access will pay for it. Although not required to offer phone or television service, Reneker anticipates the winning vendor will offer both to earn more revenue to pay off construction costs.

Greater Los Angeles is now served by a mix of AT&T, Time Warner Cable, Verizon, Cox, and Charter. Only Verizon has a history of providing a significant fiber optic broadband service, but it has suspended further expansion of its network. AT&T is the dominant landline provider, but considers its U-verse fiber-to-the-neighborhood design adequate for southern California. It seems unlikely any incumbent provider is likely to seriously contemplate such an expensive fiber project, especially because the city requires the winner to build an open access network that competitors can also use. Cable operators have also stated repeatedly that their existing infrastructure is more than adequate. The question providers are likely to ask is, “why do we need to partner with the City Council to build a fiber network we could build ourselves, on our own terms, that we ultimately own and control?”

The city can offer some incentives to attract an outsider, such as promising a lucrative contract to manage the city government’s telecom needs. It can also ease bureaucratic red tape that often stalls big city infrastructure projects. But Los Angeles is not exactly prime territory for a fiber build. Its notorious sprawling boundaries encompass 469 square miles, with many residents and businesses in free-standing buildings, not cheaper to serve multi-dwelling units.

Google avoided California for its fiber project reportedly because of environmental law and bureaucracy concerns. Even Google cherry-picks neighborhoods where it will deploy its fiber project in Austin, Provo, and Kansas City. The Los Angeles RFP will likely require universal coverage for the fiber network, although it will probably allow a lengthy amount of time for construction.

The City Council’s RFP comes close to promising Gigabit Fiber-to-the-Press Release.

Private providers govern their expansion efforts by an increasingly stiff formula to recover construction costs by measuring potential Return On Investment (ROI), which basically means when a company can expect to earn back the amount initially invested. Spending $5 billion on a fiber network that could actually cut expected Average Revenue Per User (ARPU) with a free broadband offer is going to raise eyebrows. Convincing investors to chip in on a fiber network “open to competitors” will also elicit a lot of frowning faces.

Wall Street analysts rolled their eyes when Verizon rolled out FiOS. It was “too expensive” and provided too few avenues for a quick ROI. ‘Verizon built a Lamborghini Aventador fiber network when a Honda Accord would have done just fine in the absence of fierce competition,’ analysts complained. Why spend all this money on fiber when fat profits were waiting to be harvested from high-ARPU wireless service? Verizon got the message and ceased expansion. AT&T never walked that Wall Street plank in the first place, delivering a less capable Chevrolet Spark network known as U-verse.

The city is likely to be disappointed with the proposals they receive, in much the same way local governments begging for competition from other cable companies get no positive results. The economics and expectations of today’s private broadband market makes it extremely unlikely an incumbent provider is going to rock a boat that has delivered comfortable broadband profits with a minimum of investment.

Breaking the broadband duopoly of high prices for slow service is only likely in the private sector if deep-pocketed revolutionaries like Google can self-finance game-changing projects. Los Angeles will likely have to sweeten its invitation to attract interest from players serious enough to spend $5 billion. It will likely have to invest some money of its own in a public-private partnership. Perhaps an even better idea is to take control of the city’s broadband destiny more directly with a community project administered by a qualified broadband authority with proven experience in the telecom business.

There is no reason private companies cannot be active participants in whatever project is ultimately built, but these companies are not charities and if their financial backers don’t see a pathway to profit running fiber rings around LA today, an RFP to build a fiber network with city strings-attached isn’t likely to garner serious interest tomorrow.

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

You paid for it, but you can’t access it.

Once again, taxpayers are underwriting expensive state-of-the-art fiber broadband networks that are strictly off-limits to residential and business customers living with substandard broadband on offer from the phone and cable company.

The Obama Administration’s big plans for broadband expansion have proved underwhelming for consumers and businesses clamoring for access across rural America. Local media reports deliver false promises about improved broadband access from new fiber networks under construction. But all too often, these expensive, high-capacity networks go underutilized and offer service only to a select few institutional users.

Case in point: Last week, the expensive Iowa Communications Network (ICN) went up for sale to the highest bidder.

At least $320 million taxpayer dollars have been spent on more than 8,000 miles of fiber connecting government buildings, schools, and healthcare facilities. Your tax dollars paid for this network, but unless your kids go to a school connected to ICN or you happen to work for a government agency, you are not allowed to use it.

One state legislator admitted even at the best of times, ICN never exceeded more than 10 percent of its available capacity. What an incredible waste of a precious resource!

In a recent public-relations effort, ICN has been used by military families videoconferencing with their loved ones serving overseas. But for the rest of Iowa, the network hasn’t done much of anything to improve Internet service in homes or businesses.

The Iowa Communications Network is off-limits to ordinary Iowans.

David Roederer, director of the Iowa Department of Management said the idea was never to let the state serve as an Internet provider, a fact that makes life wonderful for the state’s dominant telecommunications companies. But the decision has left rural Iowa in a broadband ditch.

“The vision was this would be something available in all 99 counties […] It would connect the schools and institutions in places that the private marketplace wasn’t,” Roederer told the Sioux City Journal. “We don’t buy satellite or cable television for everybody.”

But that is like arguing the state should only build roads and bridges for a select handful of government-owned or institutional vehicles, not those driven by the ordinary taxpayers who paid for it.

Too many politicians remain completely out-of-touch with what broadband really represents: critical infrastructure for the 21st century digital economy.

The city of Bettendorf only did marginally better, eventually allowing businesses on their fiber network while keeping local residents away. Capacity is hardly a problem: Bettendorf’s fiber network did little more than help the city manage traffic signals before they admitted a few business customers.

Butch Rebman, president and chief operating officer of Central Scott Telephone told The Quad City Times consumers don’t need fiber broadband speeds.

Apparently someone does. Bettendorf’s fiber network is now being upgraded to provide up to 10Gbps service, but it remains off-limits to local residents, raising questions about the commercial vendor that only sells to area businesses.

City administrator Decker Ploehn claims businesses use more broadband than residential homes (a ‘fact’ not in evidence), and that there were already companies specifically targeting the residential market. Those providers have performed so well that local citizens petitioned to access to the city network instead.

Think about that for a moment. A significant number of Bettendorf residents in red state Iowa preferred buying broadband service from the government, not America’s worst-rated cable operator Mediacom. So much for proclaiming private companies always do it better.

Meanwhile in Illinois, local officials are hurrying to spend $15.6 million in federal taxpayer funds on the Central Illinois Regional Broadband Network — another institutional network designed for the exclusive use of schools, local governments, and hospitals.

…but not people and businesses.

Scott Genung, director of telecommunications and networking at Illinois State University says the network’s leaders never planned to compete or undersell what other broadband servers are providing. Instead, their plan is to deliver high-capacity, high-speed broadband to rural Illinois. But taxpayers who are paying for the network are being bypassed, even when the fiber cable supplying the service hangs on utility poles in their front yards. Apparently, for the rural consumer, DSL from the phone company is plenty good enough.

In the community of Normal local officials admit they, like everyone else, are currently stuck with very slow DSL service. But Normal city manager Mark Peterson is celebrating CIRBN’s potential benefit to 52,000 local residents — which include connecting local fire stations, municipal swimming pools and the local water plant.

While those uses may be beneficial,  none of them are likely to boost the digital economy of Normal. There will be no entrepreneurial development of new online businesses that require a higher speed network than the local phone company will provide. Only the most limited at-home tele-learning courses will be available, and no improvements in broadband are forthcoming for home-based businesses and telecommuters. Local residents will continue to drift along at whatever snail-speed service is on offer from private companies that see more profit investing in larger communities.

Although these networks provide measurable benefits to the institutional users they serve, the fact remains they can be obscenely expensive on a per-user basis. Since our tax dollars fund these networks at a time of budget-busting deficits, would it not make better financial sense to open these networks up for public use? If a local community decides they want to provide better service than the local phone and cable company utilizing these networks, why not let them? If a community does not want to spend the money but a neighborhood agrees to pay for connectivity and wiring, why not allow them?

Restricted-use institutional fiber broadband has too often resulted in vastly oversized networks that go underutilized. It is time taxpayers have the right to use networks that they paid to build, particularly in rural areas where the only alternatives are stonewalling phone and cable operators who charge top dollar for bottom-rated service, if they provide service at all.

A big 40oz can of Hype from the Washington Post.

Conservative bloggers are calling it socialized “Obama-Wi-Fi,” broadband advocates claim it represents salvation from high-priced wireless service plans, and the media echo chamber is amplifying reports that the federal government in on the verge of launching a nationwide free Wi-Fi network.

Sorry folks, it is not to be.

An article in Sunday’s Washington Post originally titled, “FCC Proposes Large Public WiFi Networks” got the ball rolling, and almost 3,000 reader comments later, a full-scale debate about the merits of government-supplied Wi-Fi Internet access is underway.

Cecilia Kang and her headline writer mislead readers with statements like these:

The federal government wants to create super WiFi networks across the nation, so powerful and broad in reach that consumers could use them to make calls or surf the Internet without paying a cellphone bill every month.

[…] If all goes as planned, free access to the Web would be available in just about every metropolitan area and in many rural areas.

There is nothing new about the FCC’s effort to set aside unlicensed spectrum for so-called “white space” Wi-Fi. As the spectrum wars continue, wireless companies like Verizon and AT&T are pushing proposals to further shrink the number of channels on the UHF television band and repurpose them for expanded cellular data networks. That newly available spectrum would be secured through an FCC auction. FCC chairman Julius Genachowski wants to set aside some of that available spectrum for unlicensed use, including the next generation of Wi-Fi, which will greatly extend its range and speed.

There is no proposal on the table for the government to fund or create a free, national Wi-Fi network as an alternative to paid commercial services. At issue is simply how 120MHz of newly-available television spectrum would be made available to new users. Republicans and large wireless companies like Verizon and AT&T are demanding the vast majority of that spectrum be auctioned off. AT&T and Verizon would like to expand their spectrum holdings, and a straight “highest bidder wins” auction guarantees the vast majority of it will be divided by those two companies. Many Democrats and broadband advocates want a portion of that spectrum set aside to sell to AT&T and Verizon’s competitors — current and future — to promote competition. They also support set-asides that make frequencies available for unlicensed uses like Wi-Fi.

Genachowski’s proposal could potentially spur private companies or communities to build community-wide Wi-Fi networks operated on unlicensed frequencies. With more robust signals, such high speed wireless networks could be less costly to construct and serve a much wider geographic area.

The potential for competition from the public or private sector is what bothers companies like AT&T and Verizon. Both argue that since they had to pay for their spectrum, allowing other users access to free spectrum would be unfair, both to themselves and to the government’s effort to earn as much as possible from the auction. AT&T has been the more aggressive of the two companies, repeatedly attempting to insert language into legislation curtailing the FCC’s ability to set aside a significant amount of spectrum for unlicensed use. While AT&T’s lobbyists do not go as far as to advocate banning such networks, the technical conditions they demand would make them untenable. AT&T and others also demand the FCC must close down unlicensed networks if they create “harmful interference,” which is open to interpretation.

Helping the wireless companies in the campaign against the next generation of Wi-Fi are hardware manufacturers like Cisco, which has been trying to deep six the proposal for at least two years. Why? Because Cisco’s vision of wireless networking, and the products it has manufactured to date, are not in sync with the kind of longer distance Wi-Fi networks the FCC envisions. Cisco faces overhauling products that were designed under the premise Wi-Fi would remain a limited-range, mostly indoor service for consumers and businesses.

The threat to incumbent Internet Service Providers is clear enough. If a new version of Wi-Fi launched that could blanket entire neighborhoods, communities, non-profits, or even loosely-knit groups of altruistic individuals could launch free Wi-Fi services sharing their Internet connection with others. If the technology allowed users to seamlessly hand off wireless connections from one free Wi-Fi hotspot to another, much like cell sites do today, customers might downgrade their wireless data plans with big telecom companies. Machine-to-machine networking could also rely on Wi-Fi instead of commercial wireless data plans. It could threaten billions in potential revenue.

Stopping these networks is a priority for corporate interests with profits at stake. But one thing they do not have to worry about, at least for now, is the federal government getting into the wireless Internet business.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Washington Post FCC offers path to free Internet access 2-4-13.flv[/flv]

After the original story ran in the Post, Cecilia Kang participated in this interview which clarified what the FCC is actually proposing. This video explains what spectrum allocation and unlicensed spectrum is all about. Kang clarifies her article, explaining private companies and/or communities will have to decide what to do with the unlicensed spectrum. The federal government is only facilitating the space and has no plans to run a national network itself. (5 minutes)

https://www.washingtonpost.com/business/technology/tech-telecom-giants-take-sides-as-fcc-proposes-large-public-wifi-networks/2013/02/03/eb27d3e0-698b-11e2-ada3-d86a4806d5ee_story.html