Sarasota County's current fiber networks are depicted on this map produced by the Sarasota Herald-Tribune

In many communities across America, there is more fiber optic cable on telephone poles and buried in underground conduit than you may realize.  But as a consumer, you’ll never get to benefit from it because of a broadband duopoly that works hard to keep municipal fiber networks away from your home and out of your reach.

Take Sarasota County, Florida.  The county is making preparations to build a 96-strand fiber network across the county, capable of delivering 100Gbps service over each strand, and early plans suggest they’ll use it for… controlling traffic signals and viewing traffic cameras.  Taxpayers are ultimately paying the costs to construct the $1,000-per-mile fiber network, but current plans won’t allow any of them to access it.

Why?  Because companies like Comcast and Verizon want it that way.

It’s nothing new and it’s not limited to Sarasota.  In cities across the country, enormous capacity networks are devised and constructed to deliver high speed data connections to local hospitals, schools, and public safety institutions.  Many states’ transportation departments have enormous excess fiber capacity, installed from federal and state grant money to develop intelligent traffic systems.  But almost all of these networks are strictly off-limits to the general public and small business entrepreneurs who are stuck with the far slower broadband service the phone and cable companies deliver at ridiculously high prices.

Sarasota has had ultra-fast connections for years, delivering a dedicated 10Gbps connection to one area hospital and insanely fast connections to police departments and other government buildings.  It’s managed by Comcast and was built for $3 million, paid for directly by Comcast subscribers.  Comcast built the county I-Net network with the understanding that commercial use of the network was strictly prohibited.

The result is blazing fast speeds for institutions that can’t possibly utilize all of the capacity they have, and a broadband cartel delivering less service than local residents and businesses need.

The Sarasota Herald-Tribune considered the county’s fiber future so important, it dedicated a week of coverage to municipal fiber, and the providers and politics that get in the way.

The newspaper reports that the existing broadband duopoly under-delivers access to digital entrepreneurs that need those speeds the most.

The co-called creative class — bandwidth entrepreneurs on a budget — struggle to get by on mediocre connections that are largely repackaged retail offerings.

Over and over, businesses surveyed by the Herald-Tribune pointed to the tell-tale distinction between business-class service and retail.

“Businesses upload stuff, while consumers download,” said Rich Swier Jr., who works from a Central Avenue office where the only service comes from Comcast. Swier, the only entrepreneur on the Sarasota Broadband Task Force, is not happy with what he gets from Comcast. “They are repackaging a consumer grade service as a business service and charging three times more.”

Swier is paying about $200 per month for what is supposed to be 50 megabits per second download and 5 megabits up. But in reality, it operates at half those speeds, he said.

Thaxton

The newspaper’s conclusion: Fiber access is to modern business what train stations and interstate connections used to be.

Sarasota’s fiber project has grown considerably since its original proposition — 24 strands of fiber installed for $11 a foot. Then the county received an estimate that said they could have triple the amount of fiber for just 20 cents more per mile.  Broadband enthusiasts urged the county to upgrade the network to 96 strands and they agreed.

Commissioner Jon Thaxton told the newspaper he views the planned fiber network as an insurance policy as Internet speed becomes more and more important.

“It does, at a minimum, put us in a position of not being wholly dependent on some other service provider,” Thaxton said.

The newspaper notes the economic implications of superior broadband are enormous.

Google sparked the issue when it announced plans earlier this year to hot-wire a city or cities somewhere in the United States, creating what could be a prototype for a community with the broadband speeds to more than command its economic future.

Our political leaders clearly saw the import of this. Heck, City Commissioner Dick Clapp even jumped into a shark tank to show Google the community’s spirit (yeah, they were pretty small sharks, but I wouldn’t do it, fiber or no fiber).

Businesses of the 21st century are hungry for fast speeds, and this region has been fortunate to land some with voracious appetites.

[…]Who would have pegged Lafayette, La., as a place where Hollywood would set up a first-rate special-effects studio? (Can you say the Walt Disney Co. as a customer?) But the fiber was there, and the big dogs came.

South of us, in Naples, it is private enterprise driving high-octane broadband, the work of a technology-savvy entrepreneur and a like-minded group of millionaires who want what many of us raising families in Southwest Florida are after: an economy that would allow our kids to remain here with good jobs.

In the Information Age, connectivity is going to be critical in attracting the kind of companies we want, and the well-heeled folks in Collier County know that. (They also clearly know how to make a lot of money, so don’t read their efforts too much as altruism).

Then you have one of the new 800-pound gorillas of the fiber effort, Allied Fiber, a New York-based company in the midst of creating a trans-continental broadband push akin to what the railroad barons of the 1800s accomplished.

Southwest Florida has a good chance of tapping into their $500 million (or more) play.

Competition from Municipal Providers Drives Prices Down and Speeds Up (New Rules Project)

The county established a Broadband Task Force, but made the same mistake so many other municipalities make when they create these panels: consumers are not represented at all and small business representation is limited to a single participant. Consumers will ultimately be a major source of revenue from municipal broadband projects and their needs and interests must be represented.  Since incumbent commercial providers will seek to impede municipal competition by organizing consumer opposition to such projects, getting trusted consumer advocates and broadband evangelists on your side at the outset can make the difference between enthusiastic support for additional broadband choice or a mind-numbing, incumbent provider-driven sideshow about a “socialist government takeover of the Internet.”

The rest of the panel is made up of public officials from the school district, county and city government and the local hospital.

The newspaper hints these are exactly the wrong people to invite onto a Broadband Task Force.  Virtually all already enjoy the generous bandwidth already provided by Comcast’s I-Net, few are likely to be well informed on broadband technology issues, and apart from the lone businessman on the panel, the group is unlikely to grasp the commercial implications of better broadband for the local digital economy.

Since these individuals all earn a paycheck protecting their own institutional interests, the larger vision of community broadband can easily get lost in turf wars and political disputes, or interference from incumbent providers.

Providers can cut the bottom out of such task forces with rewarding side deals for friends — enhanced services at fire sale prices. For institutional opponents — intransigence and crippling rate increases.

On Florida’s East Coast, Martin County’s public service institutions learned first hand what kind of pricing Comcast is capable of bringing to the table when an existing contract expired.  Comcast demanded a whopper of a rate hike.

“We decided for the kind of money these people are asking us, we would be better off doing this on our own,” Kevin Kryzda, the county’s chief information officer, told the Sarasota paper. “That is different from anybody else. And then we said we would like to do a loose association to provide broadband to the community while we are spending the money to build this network anyway. That was unique, too.”

The last straw for county officials was the loss of a lucrative deal with California-based Digital Domain to build a Florida branch campus.  The company chose St. Lucie County instead.  John Textor, Digital Domain’s co-chairman, told the Herald-Tribune that having a local all-fiber network connection and being able to set up an all-fiber direct connection to remote servers in Miami was a key advantage of the site in Port St. Lucie.

After that, Martin County commissioners voted unanimously to obtain bids for their own network.

Martin County’s fiber network will combine a publicly-constructed institutional network and a tiny rural phone company paying part of the costs to resell excess capacity to commercial users. The downside is that consumers will not be offered service.

In Florida’s Lee and Collier Counties, U.S. Metro network has proved fiber’s ability to transform entire regions economically.

“If you build it, they will come” is a common rallying cry for fiber proponents.  In both counties, they came.  The latest arrival?  Jackson Laboratory of Bar Harbor, Maine, now being showered with more than $200 million in government grants to build a genetic research campus in Collier County.  A large portion of that money will end up staying in Collier County, stimulating the local economy and creating jobs.

Why all the clamor?  Because U.S. Metro runs a network that puts incumbent phone and cable companies to shame.  When a business requests service, owner Frank Mambuca doesn’t tell them what speeds they’ll have to live with.  Instead, he asks, “how many gigabits do you want?”

Unfortunately, U.S. Metro also only sells service to businesses, but they have some wholesale customers that do serve consumers.  Marco Island Cable and a sister company, NuVu are cable overbuilders that offer access to U.S. Metro’s broadband network at speeds and prices Comcast and CenturyLink can’t touch.

Marco Cable, a tiny independent provider, delivers faster speeds at lower prices.

Marco Cable is preparing to deliver fiber-based 75Mbps service for $99 a month, along with several other access plans that save at least $12.95 per month over Comcast’s prices, and undercuts CenturyLink’s DSL plans as well.  The company also does something Comcast won’t — it promises unlimited Internet access and email accounts.

If someone wants even faster speeds, say 100Mbps, they can call Marco Cable and request it.

The highest download speed that Verizon offers [locally] at present is 50 megabits per second for $149.99 a month, according to spokesman Bob Elek.

NuVu is currently installing competing service in condos on the mainland.  For the father and son team that run both Marco Cable and NuVu, their philosophy is radically different from most cable and phone companies — delivering as much broadband speed as customers can use at prices they can afford.

For existing providers, who have “marked up” prices for years, the competition’s lower prices threaten profits from delivering “good enough for you” speeds at the highest possible price.

For some, simply lowering prices and enhancing service to compete isn’t the answer — putting a stop to municipal competition at all costs is.

In 18 states, high priced lobbying campaigns financed by giant phone and cable operators have succeeded in restricting or banning competing providers.  AT&T has been the most aggressive, successfully impeding competition in states like Texas, Wisconsin, Missouri, Arkansas, Michigan, Tennessee, and others.  Comcast helped stop competition in its home state of Pennsylvania.

Click image to view interactive map

Year after year, Time Warner Cable and AT&T continue efforts to try and do the same in North Carolina, a potential hotbed of locally run, community-owned providers.

For some towns and cities who have spent years begging for improved service, the clock has run out.  The Sarasota Herald-Tribune used Wilson, N.C., as an excellent example.  The city of 50,000 east of Raleigh decided it was through asking Time Warner Cable to provide a platform for a digital economic revival.

Brian Bowman, public affairs manager for the city, told the newspaper the city faced economic disaster from twin blows — the loss of the textile industry and America’s waning interest in tobacco products. Giving the keys to the local cable company to drive Wilson’s nascent digital economy into Lake Wilson was simply not an option.  The town would build its own digital highway — a municipal fiber to the home system for consumers and businesses.

For both, Wilson’s Greenlight system provides up to 100 megabits per second in both directions.  Time Warner Cable residential customers, in comparison, max out at 15/2 Mbps service.

“The way we see it, you’re going to have haves and have-nots in the next generation broadband world,” Bowman said. “The fact is we wanted to invest in our own future; that’s why we did this.”

Cable and phone giants always are going to say that current speeds are adequate and that there is no need for cities to build expensive networks themselves, Bowman said.

“I have heard that here from some of the incumbents, that you don’t need to go that fast. I’m sure the folks in Florida were doing OK without I-4,” Bowman said, noting the state never would have gotten Disney World if not for that interstate access.

People in Sarasota County are about to hear all of the usual arguments against municipal service:

• “Taxpayers will pay for it.” — Not with revenue bonds they won’t.  These bonds deliver returns to investors from revenue earned by the municipal provider, not from taxpayer dollars.
• “We want a level playing field.” — This cable industry opposed providing one when satellite and phone company IPTV showed up, as they tried to withhold programming and lobbied against both.
• “The government should stay out of the private sector.” — Christopher Mitchell, writing for the New Rules Project, tore apart that argument:

Governments “compete” with the private sector in many ways on a daily basis. Libraries compete with book stores, schools with private schools, public transit with taxis, police with security firms, even lumber yards, liquor stores, municipal golf courses and swimming pools with privately owned counterparts. Without public competition in the form of the Rural Electrification Authority, much of the country would still not be wired for electricity or phones.

The focus on whether local governments, who have a wholly different motivation than private companies, are “competing” with the private sector is a red herring to distract the public from incumbent providers’ failures to build modern networks. On matters of infrastructure, a community should always have the option to build the network it needs, just as it can build roads, bridges, water systems, and other modern necessities.

Ultimately, Sarasota County residents have two choices:

1. Obtain the best traffic control and monitoring system America has ever seen, capable of delivering crisp, clear 1080p HD feeds of traffic tieups on Route 301.
2. Deliver Sarasota County 21st century broadband that will power the digital economy and bring hundreds of millions in investment dollars, create thousands of new, high-paying jobs, and save local consumers and businesses a lot of money from broadband competition.

Stevens

Sen. Ted Stevens death last week in a plane crash has shined a light on increasingly cozy relationships between Alaska’s most powerful politicians and the special interests that court their support.  Winning favor with a politician that can control and direct financial resources from Washington can secure your company millions in taxpayer dollars and legislative favors in America’s most rural state.

When he died, the former Alaskan senator was on his way, as an invited guest, to an isolated lodge owned and maintained for the use of executives at Alaska’s largest broadband provider — GCI.  Time alone in the Alaskan wilderness delivered the ultimate captive audience for those the company sought to influence and Stevens was always a company favorite.

Accompanying Stevens on the doomed flight were GCI’s senior lobbyist Dana Tindall and William D. Phillips Sr., a lawyer, lobbyist and former chief of staff for Mr. Stevens.  Both also perished in the crash.

Even after Stevens was voted out of office after being initially found guilty in a federal corruption trial, special interests like GCI continued to court Stevens, who all-too-willingly mixed business and pleasure — including the ill-fated fishing trip sponsored by the Alaskan telecom company.

Stevens didn’t go quietly out of politics after losing to Democrat Mark Begich in 2008.  The New York Times noted he split his time between Washington and Alaska, providing “consulting” services and worked on resource issues.

His close connections to beltway politics kept him in favor among Alaska’s corporate interests, many of whom had supported Stevens financially and rhetorically for decades.

Tindall’s close relationship to Stevens paid GCI dividends in favors and support — both of which they returned in the form of generous campaign contributions, as the Times reports:

Ms. Tindall, 48, did not work for Mr. Stevens, but several people said they had a strong mutual respect and a warm rapport. She is credited with helping the company she worked for, GCI, grow rapidly in Alaska at the same time that Mr. Stevens was influential in telecommunications issues in Congress. He frequently brought members of the Federal Communications Commission to Alaska and helped steer money toward improving communications in rural areas. Another of his former chiefs of staff, Greg Chapados, is a vice president at GCI.

Tindall

“Senator Stevens was instrumental in helping get a satellite project started so that people in Alaska could watch same-day television and live events,” said Mike Porcaro, a radio personality and advertising executive whose clients include GCI. Mr. Porcaro recalled not being able to watch live network television in Alaska as late as the 1970s. “We went from the 1800s to the 20th century in one day, mostly because of him,” Mr. Porcaro said.

Executives at GCI were generous campaign contributors to Mr. Stevens. Since 1994, Ms. Tindall was the most generous, donating $7,100 to his campaigns, records show. But in 2007 and 2008, as the corruption case surrounded Mr. Stevens, Ms. Tindall and other GCI executives gave less. Ms. Tindall initially gave $1,000 that year, though she later reduced the amount to $400.

Roberta Graham, a public relations executive and a close friend of Ms. Tindall’s, said Ms. Tindall and Mr. Stevens were “kindred spirits,” similarly tenacious and dedicated to their work.

GCI can afford to wine and dine Alaska’s politicians from the rate hikes they will visit on their broadband customers with a proposed Internet Overcharging scheme that will limit customers to how much Internet access they can enjoy.

That abusive pricing is something Senator Stevens would have undoubtedly supported, even if he lacked an understanding of its implications.

The late senator embarrassed himself in 2006 when he sought to defend his friends in the telecommunications industry against Net Neutrality.  At one point, Stevens reduced the Internet down to a “series of tubes.”

But then companies like GCI didn’t contribute generously to his campaign for his broadband knowledge — they just wanted to make sure he was a safe vote in their column.

Senator Hoyle's legislation lays the foundation for cable and phone companies to spend hundreds of thousands of subscriber dollars to mail smear campaign pieces like this one from Comcast.

(This piece is written by Jay Ovittore and Phillip Dampier.)

The good news is that all the pushback on an all-out-moratorium on municipal broadband was successful and Senator David Hoyle (D-Gaston) withdrew the idea.  The bad news is he had an even worse idea to replace it.

Hoyle Wednesday unveiled a new draft bill that hopelessly ties up municipal broadband projects into knots of red tape that, if passed into law, will bury municipal broadband projects in North Carolina indefinitely.

Hoyle sprung his telecom-industry-friendly legislation on the public after getting plenty of input and encouragement from the state’s cable and phone companies who already knew what was in it because they helped craft it.

For a retiring state senator who doesn’t have to worry about the next election, what better parting gift can you give to your friends in the cable and phone industry than a bill that preserves the comfortable duopoly they’ve  enjoyed for years.

Hoyle and those supporting the legislation will argue their bill doesn’t ban municipal broadband — it simply places conditions on such projects before they can go forward.  But what are those conditions?

Section One of the draft bill requires local governments to get funding for “external communications services” (ie. municipal broadband) by way of a General Obligation Bond (a GO Bond).  In North Carolina, that requires a taxpayer-funded referendum to be held for public input at the next election.

On the surface, getting public approval for municipal broadband isn’t a bad idea — no local government official expecting to win re-election would ever proceed on such projects without voter support.  But this requirement also gives plenty of advance notice to incumbent providers that a new player could be invading their turf.

We know what that means.  A well-funded opposition campaign to demagogue the project.  Local cable companies can insert an unlimited number of free ads during every advertising break to slam the proposal.  Phone companies can release a blizzard of opposition mailers to convince consumers it’s as scary as Halloween — all tricks and no treats.

How can a local city or county government respond to the misinformation barrage?  They can’t.  Public officials can’t spend taxpayer dollars to promote such projects or refute industry propaganda.  They can’t even financially assist a citizen-run campaign.

That’s a fight with ground rules only Don King could love.

In the end, that leaves ordinary citizens of North Carolina facing down a multi-billion dollar statewide consortium of telecommunications interests hellbent on preserving and protecting the status qu0.

The earlier-discussed moratorium was a brick wall against municipal broadband.  Hoyle’s bill is the Great Wall of China with the logos of AT&T, Time Warner Cable, and CenturyLink plastered all over it.

But wait, there’s more.  To deal with municipal broadband projects that got an initial green light to dare to interfere with the phone and cable industries’ grand business plans, another provision provides a near endless supply additional referendums to get rid of the projects.  Hoyle’s bill actually demands more votes should existing systems need:

• refinancing to reduce the interest rate or restructure existing debt;
• to make repairs to the system’s “fixtures;” and/or
• to upgrade the system to meet subscribers’ needs.

Ponder the insanity:

• The legislation could be interpreted to demand a public referendum if your service goes out.  Can you wait until the next election to get back your cable service?
• If a municipal broadband fiber cable falls in your backyard, does it make a sound?  It won’t, but you will when you learn that cable might not be reattached to the pole until the whole town holds a referendum about it;
• Would you be upset if your local municipal provider could refinance its debt at a much lower interest rate, letting them cut their prices, but they can’t before the next election?
• While cable and phone companies refuse to upgrade their service to levels that would have made such municipal alternatives unnecessary, they also want to make certain the one provider that did meet your needs can’t upgrade… without a public vote.

These systems are not constructed with public tax dollars, but Senator Hoyle wants every citizen in a community, subscriber or not, to ponder the future of a local municipal broadband provider.  It’s like giving AT&T veto power over Time Warner Cable’s channel lineup.  Guess who has to pay for these constant referendums?  Taxpayers.  So while Senator Hoyle complains municipal broadband costs the state tax revenue, his legislation guarantees increased government spending on pointless referendums.  That’s logic only a politician working for the interests of big cable can appreciate.

For the cable and phone companies, and their good friends in the North Carolina legislature, this is their idea of a level playing field.  In reality it’s about as level as a downhill ski run.

Let’s extend that “fairness” out to incumbent cable and phone companies and consider whether you got a vote on:

• Whether or not the cable and phone companies got to put their wires on phone poles plunked down in front of your house;
• Whether or not you wanted either company to dig up your yard to bury their wiring;
• Whether you wanted that giant metal refrigerator-sized metal box installed on your street, in your yard, or on the phone pole you see from your window every day;
• Whether or not you want the cable company to repair Mrs. Jenkins’ problems with HBO up the street whenever it rains or replace the cable the squirrels chewed up;
• What channels and services you want to pay for, which ones you do not, and at what price you need to pay your local phone or cable company.
• What cable or phone company gets to provide service in your community.

Apparently the fairness concept only applies to potential new competitors, not the existing providers.

Let’s also consider the cable television industry didn’t just magically bloom into a multi-billion dollar business without government help.  In the early days of cable television, investors were assured that they were financing a monopoly provider, guaranteed through a franchise agreement process that gave newly built cable companies exclusivity to help repay construction costs.  Franchise wars broke out between 1978 and 1984 as competing companies promised the moon with state-of-the-art two-way cable systems with the capacity to offer 70 or more channels.  The players then included Time’s American Television and Communications Corporation, Warner’s Amex, and Telecommunications, Inc. (TCI).  ATC and Amex would later evolve into Time Warner Cable and TCI became AT&T Cable before being sold to Comcast.  Communities seeking cable television for their residents would later learn a lot of these promises made were promises broken – reneged on by large cable companies with few, if any consequences.

During the Reagan Administration, then-FCC Chairman Mark Fowler bestowed additional deregulation benefits on the cable industry.  The Museum of Broadcast Communications explains:

The Cable Communications Policy Act of 1984 addressed the two issues that still hindered cable television’s growth and profitability: rate regulation and the relative uncertainty surrounding franchise renewals. Largely the result of extensive negotiation and compromise between the cable industry’s national organization, the National Cable Television Association, and the League of Cities representing municipalities franchising cable systems, the act provided substantial comfort to the cable industry’s future.

Its major provisions created a standard procedure for renewing franchises that gave operators relatively certain renewal, and it deregulated rates so that operators could charge what they wanted for different service tiers as long as there was “effective competition” to the service. This was defined as the presence of three or more over-the-air signals, a very easy standard that over 90% of all cable markets could meet. The act also allowed cities to receive up to 5% of the operator’s revenues in an annual franchise fee and made some minor concessions in mandating “leased access” channels to be available to groups desiring to “speak” via cable television.

Additional reforms guaranteed pole attachment rights to the cable industry so they could wire and service their network unencumbered by utility company interference or high pole attachment fees.  Cable consolidation allowed formerly mom and pop cable systems to become part of a cable industry where just a handful of cable companies provide service to the majority of cable households.  Countless millions are spent each year by the industry to lobby state and federal governments to keep the party going without regulatory interference, suggesting competiti0n alone is the only regulation required.

Except when a new competitor enters the market, of course.  Fearing competition from municipal providers who will force cable and phone companies to charge reasonable rates and upgrade service, the best possible solution is to find a way to ban such projects.

Forcing regular referendums and the complexities and expenses associated with them guarantees no community in North Carolina would ever bother with the onerous requirements to launch municipal broadband projects.

That’s not just Jay and I saying that.  What Hoyle has proposed hardly breaks new ground.  It’s the same dog and pony show the industry has brought to other states to stop competition and keep prices high and service slow.

So let’s learn from the painful experiences of others:

First lobbying for legislation requiring referendums and then winning it, SBC (later AT&T) and Comcast used the opportunity to spend more than $300,000 of their subscribers’ money to launch a major misinformation campaign with misleading and inaccurate mailers that successfully fought off a proposition to deliver better and cheaper service through a municipal broadband project in Batavia, Geneva, and St. Charles, Illinois.  Fiber for Our Future documented the whole sordid affair from start to finish as a lesson to others confronting industry-backed referendum requirements.

[flv]http://www.phillipdampier.com/video/unproven.flv[/flv]

Want a preview of the distortion and misinformation-campaign cable and phone providers will bring to stop municipal broadband?  Watch this SBC (today AT&T) executive tell city officials in Illinois that fiber is “unproven,” that the phone company’s DSL speeds are comparable to Comcast Cable, and that consumers don’t need the 3Mbps speed the company was delivering back in 2004 when this video was taken.  “What are you going to do with 20 megabits.  I mean, it’s like having an Indy race car and you don’t have the race track to drive it on.”  (3 minutes)

Longmont, Colorado spent years suffering with bad broadband service from Comcast and Qwest and sought a better alternative with a municipally-run provider.  But then the cable and phone giants spent $200,000 to put a stop to that.  While local subscribers may have preferred that $200,000 be used to reduce their rates, for Comcast and Qwest it was an investment in maintaining future pricing only duopolies can achieve, all while delivering “good enough for you” broadband service to Longmont residents.  In 2006, the Baller Herbst Law Firm collected information on industry-backed barriers to municipal broadband, and the list went on for nine pages.  Many of them sound eerily familiar to what Hoyle proposes (after cable and phone companies whispered time tested, industry proven ideas into his ear).

The city of North St. Paul, Minnesota has advice for states like North Carolina after their own experience with a coordinated industry-backed smear campaign against municipal broadband enabled by legislation similar to what Hoyle proposes:

What should be of interest to all communities was the organized opposition.  It appears that the incumbent providers, industry associations and politically conservative think tanks teamed up to promote negative news stories, do polling and opposition phone calls, provide transportation for identified “no” voters and create web sites.

While we heard some advocates lamenting this high priced anti-municipal fiber effort, this response is something that community leaders must expect and be prepared for.  A strong community education and mobilization effort must be a part of any municipal telecommunications initiative.  A coalition of business owners and residents must be created and maintained that can counter the expected efforts of the incumbent providers.  The benefits of the community-owned network should be documented and promoted so that an overwhelming majority of voters will choose to vote yes.  We hope that, one way or the other, North St. Paul gets the “More, Better Broadband” that the MN Broadband Coalition supports.

Of course, when local communities are banned from spending a nickel on advocacy for their projects, it effectively hands a restraining order to broadband advocates who can’t even get on the playing field, level or otherwise.

Outraged yet?

It will only get worse if Hoyle’s bill ever becomes law.  Residents in communities like Salisbury endured a sampling of the kind of negative campaign this industry will launch wherever municipal broadband competition threatens to appear.  In 2009, residents were hassled with push-polling phone calls from industry-backed astroturf groups claiming to represent ordinary citizens, but were actually little more than sock puppets for big telecom.  Your mailbox will be filled with blizzards of misleading mailers that current cable and phone customers pay for.  If they need more money, they can always raise your rates to cover the difference.  In the end, with the help of elected officials who don’t care about North Carolina consumers, existing municipal projects can bleed themselves dry (later to be used by the industry as “failed examples” to claim such projects are too risky to try) and proposed ones will never see a spade plunged into the soil to bury the first strand of fiber optic cable.

But it’s not all bad news.  It doesn’t have to happen this way.  You can tell your state representative you are watching them like a hawk on this issue.  Any “yes” vote for legislation like that proposed by Senator Hoyle is a no vote for them at the next election.  Let them know you are well aware of the game plan here — it has been tried in other states with similar legislation that is little more than protectionism for big telecom. Tell your elected officials you already have the power to choose whether or not you want these projects simply by voting for or against the elected officials that propose them.  While the concept of a referendum sounds fair on the surface, it’s not when you consider the past experiences of other communities who faced well-funded opposition campaigns, helpless to correct the record or fairly argue their position on the matter.  Providers know that, which is why they advocate this type of legislation in the first place.  It effectively stops competition, stops better service, and stops North Carolina residents from enjoying lower priced cable, phone, and broadband service.

There are a few stand-up representatives of the people of North Carolina who do deserve our gratitude and thanks today.

Rep. Paul Luebke, (D-Durham County) (who co-chairs the Revenue Law Study Committee) [email protected] 919-733-7663 College Teacher

Rep. Jennifer Weiss, (D-Wake County) [email protected] 919-715-3010 Lawyer-Mom

They both will likely face fierce opposition from the incumbent providers and their fellow legislators. Please take the time to thank them for standing with consumers today and for trying to protect the future of North Carolina and its economy.

Stop the Cap! will have video of today’s remarks by both legislators soon.  We hope to follow with a complete video record of today’s events surrounding the anti-competition legislation proposed by Senator Hoyle.  It will serve as a testament to just how much work we have to do to remove legislators who have stopped representing the public interest, and renew our support for those who stand with consumers.

Meanwhile, check out these two delightful pieces paid for by the cable and phone industry, sent to homes where municipal broadband projects faced a referendum in 2003 and 2004.  More than a dozen different mailers were sent to every home in the communities of Batavia, Geneva, and St. Charles, Illinois from phone and cable companies.  Now imagine the repercussions when not one of those communities could respond with their own mailers correcting the record and giving their side of the argument.  There is a reason why special interests spend enormous sums of money to protect their turf, and the battle is over before it even begins when those interests demand the other side not have the opportunity to respond in kind.

What smears do providers in North Carolina have in store for you?

… Continue Reading

Phillip Dampier

In a remarkable statement to the Federal Communications Commission in Washington, AT&T has joined Verizon in predicting the imminent demise of Ma Bell’s classic telephone network.

AT&T writes in its 30 page comment, “That transition is underway already: with each passing day, more and more communications services migrate to broadband and Internet Protocol (IP)-based services, leaving the public switched telephone network (“PSTN”) and plain-old telephone service (“POTS”) as relics of a by-gone era.”

AT&T claims abandoning the old legacy phone network would help the company devote its full resources into staying relevant by constructing a broadband, IP-based network that would deliver voice, data, and video to consumers, presumably over its U-verse platform.  That, according to AT&T, could help the company achieve universal broadband coverage in its service areas, but only if investment-friendly regulations are supported by Washington policymakers.

The Commission has been charged by Congress with formulating a National Broadband Plan that will result in broadband availability for 100% of the United States. That auspicious goal is within reach, but […] will not be met in a timely or efficient manner if providers are forced to continue to invest in and to maintain two networks. Broadband is dramatically changing the way Americans live, work, obtain health care, and interact with the government. Congress and the Commission have rightly made universal broadband access a core national priority. But achieving this goal will take an enormous investment of capital. Private investment from network operators has brought broadband access to over 90% of Americans, and these operators will continue to play a pivotal role in bringing broadband to the remaining 8-10% of citizens who do not currently have broadband access. It is accordingly crucial that the Commission pursue forward-looking regulatory policies that remove disincentives to private investment and encourage operators to extend broadband to unserved areas.

While broadband usage – and the importance of broadband to Americans’ lives – is growing every day, the business model for legacy phone services is in a death spiral. Revenues from POTS are plummeting as customers cut their landlines in favor of the convenience and advanced features of wireless and VoIP services. At the same time, due to the high fixed costs of providing POTS, every customer who abandons this service raises the average cost-per-line to serve the remaining customers. With an outdated product, falling revenues, and rising costs, the POTS business is unsustainable for the long run.

AT&T cites a growing number of Americans cutting their wired phone line service — 22% according to the National Center for Health Statistics.  Craig Moffett from Bernstein Research pegs it closer to 25%, with an additional 700,000 phone lines being disconnected every month.  With a shrinking customer base, the viability of companies providing only wired phone service has come into question.  Verizon and AT&T, the nation’s largest phone companies, have made the judgment it’s a dying business.  Conversely, Frontier Communications and a few other independent phone companies remain believers in rural copper wire phone networks, and are willing to buy the discarded, mostly rural regions their bigger counterparts can’t wait to exit.

But AT&T’s advocacy for an end to “plain old telephone service” is just a tad self-serving when one explores their “To-Do” list for Washington regulatory agencies and lawmakers.  AT&T suggests their future plan benefits all Americans.  Critics would contend it mostly benefits AT&T and its shareholders, especially in light of AT&T’s future revenues being directly impacted by customers disconnecting their AT&T phone lines.  AT&T themselves note collective industry revenue for basic phone service fell from $178.6 billion in 2000 to $130.8 billion in 2007, a 27% decrease.

AT&T’s Action Plan to Avoid Obsolescence Explored

At the heart of AT&T’s proposal for 21st century telephone service is an end to analog telephone service, designed more than 100 years ago to carry voice calls, and the launch of broadband-based service to every home in their service area.  From this new platform, AT&T can deliver telephone, television, and Internet service over a single network.  In fact, they already do in several cities where AT&T’s U-verse has launched. Instead of getting one revenue stream from basic phone service, AT&T can now earn from any number of services a broadband platform can support.

AT&T compares their plan with the transition from analog to digital television, except you won’t have to trade in your existing phones or attach converter boxes to every telephone in the house.  Just like the switch to digital television, AT&T wants a date certain to pull the plug on Ma Bell’s old phone network, the sooner the better.

But AT&T’s plan has plenty of strings attached.

First, the company believes the only path to private investment and a successful transition is a near-complete deregulation of the telephone industry.  It wants the federal government, specifically the FCC, to take control of oversight of phone companies across America, if only to end a patchwork of state regulations and service requirements.  Remember, the Ma Bell most Americans grew up with was a regulated monopoly.  In return for guaranteed profits, phone companies agreed to meet service obligations, provide service to any home or business that wanted it, serve the disabled, and provide discounted phone service to the economically disadvantaged.  Rural customers were assured they would have access to phone service and at reasonable prices, and if something stopped working, government oversight ensured problems would be repaired to the customer’s satisfaction.

In AT&T’s view, such requirements are quaint and outdated, and it wants to bear few of those burdens going forward.  Indeed, in a too-cute-by-half aside, the company argues that since it will design the network to operate under the same protocol the unregulated Internet uses, it should be unregulated as well.

Such deregulation could impact a myriad of policies governing phone service that most Americans take for granted — minimum service standards, requirements that telephone companies complete calls between one another – even if competitors, and reasonably priced basic phone service even in the most remote locations.  But AT&T is asking for even more – a comprehensive review and possible elimination of any regulation that could be interpreted as interfering with the transition to an all-broadband telephone network.  AT&T includes everything but the kitchen sink in this category, ranging from service quality requirements, reporting, recordkeeping, data collection, accounting, and depreciation and amortization rules governing how quickly the company can write off obsolete equipment.

Ma Bell's network is due for a retirement, advocates AT&T

Ironically, AT&T wants deregulation -and- access to public taxpayer dollars to construct their new network.  The company advocates government-funded award programs to promote universal broadband access.  One would provide money for wired broadband service, perfect for companies like AT&T that want to build those networks, and another for wireless mobile projects to expand service into unserved or underserved areas, also perfect for AT&T Mobility — the same wireless carrier slammed by Verizon Wireless for largely ignoring rural America with 3G wireless data upgrades.

While there is some justification for a review of federal and state rules that may no longer realistically apply to today’s telecommunications marketplace, AT&T goes out of its way to be self-serving in its recommendations.  It dangles the bright and shiny object of a 21st century broadband-based telephone network, but only if they get to run it essentially “no questions asked,” with little oversight and an infusion of public taxpayer dollars to compliment private investment.

AT&T may be correct that the days for Ma Bell’s “plain old telephone service” are indeed numbered.  But for a company that earns billions in profits and answers to shareholders demanding maximum return, shouldn’t their long term well-being first be a question between AT&T management and shareholders?  Are they incapable of a private course correction that makes their future relevance more secure?  AT&T’s U-verse did not require public tax dollars to be successful, and the company spent generously on lobbyists and astroturf campaigns to smooth the way forward with “statewide franchising,” bypassing local government oversight.

The real question on the table is how far does the Obama Administration and the FCC want to go to achieve universal broadband?  AT&T suggests that only massive deregulation will entice private investors to step up and make the investments required to help achieve whatever definition of “universal broadband” the Commission comes up with.  But that price is way too high to pay.  AT&T answers first and always to its shareholders.  If they want public tax dollars funding, even in part, their transition to an all-broadband future, they must also answer to the other “stockholders,” namely the American people helping to foot the bill.

Washington County, New York

Washington County, one of New York’s many rural counties, sits on the eastern border of the state adjacent to Vermont.  Its 62,000 citizens have access to dial-up, some areas have been wired by Time Warner Cable, and some others have access to Verizon DSL service.  But vast swaths of the county have no choice for broadband at all.  The Washington County Board of Supervisors wants to do something about that and will vote this week on a proposal to spend $40,000 to study how Washington, in cooperation with Warren and Hamilton counties, could benefit from a wireless broadband network being proposed by Plattsburgh (N.Y.)-based CBN Connect.

CBN Connect is a non profit corporation that constructs broadband platforms and networks it resells to commercial providers who will not construct such networks themselves.  CBN Connect’s website states “providers like Time Warner (Cable), Primelink, Westelcom, and others [can use their networks] to reach new customers.”

CBN Connect has plans to develop both fiber optic and wireless networks across New York’s “North Country” in eastern upstate areas.

No details about the type of wireless network under consideration were available.

Readers of The Post Star, which serves the county, had some problems with the country spending $40,000 of taxpayer dollars on the study:

“We are actually thinking of spending $40,000 to fund a private company’s “study?” If CBN wants to sell their services, which I am guessing they will profit on, let them fund whether it is feasable or not. This money can be better spent in other areas of the county, or better yet, don’t spend it at all.” — Whall01

“If there’s a demand (home or business) then the providers (Time Warner Cable, Verizon, CBN Connect) will do their own study (and fund it) to see if it makes sense to them. If they don’t, then they won’t be in business long. Washington county supervisors need to figure out how to cut expenses and overhead, not add to them.” — HFRES

“What a waste — $40,000 for a study to bring broadband to the community? FiOS is the technology that we should be looking into.  Why are our counties always a day late and a dollar short of keeping up with the rest of the world? These counties should be joining together to get Verizon here and bring us FiOS.” — Enoughalready