We will mail it to you on floppy disks because your internet connection is too slow to download it.

While FCC Chairman Ajit Pai and Sen. Ron Johnson (R-Wisc.) decry government regulation as responsible for destroying capital and incentives to invest, the state of Kansas this week ended its all-out experiment with deregulation and trickle-down economics on steroids, with a Republican-dominated state legislature calling it a giant flop.

In charge of the Grand Experiment in Trickle-Down, Doubled-Down is Gov. Sam Brownback, who has systematically hobbled the state’s social spending and investment programs since becoming governor in 2011. He adopted his ‘vision thing’ from Reaganomics proponent Art Laffer, who apparently forgot the Reagan Administration’s penchant for all things deregulation was not all sweetness and light and had to be tempered by President George H.W. Bush after he was elected in 1988.

But what if history could have a second chance? What if a state kept its pledge of no new taxes and slashed regulation and oversight to the bone. Would it result in a free market paradise where government got out of the way for the public good? Would lower taxes result in more tax revenue as Kansas businesses boomed? Would infrastructure take care of itself?

To find out, Brownback slashed the state’s income tax, eliminated the top income tax bracket and delivered a disproportionate share of the tax cut benefits to the economic motivators (also known as Kansas’ richest families) who would supposedly use the surplus to invest in businesses and jobs. At the urging of the powerful small business lobby, backed by the Koch Brothers and their octopus of astroturf anti-tax groups demanding reform, Brownback zeroed out taxes on “pass-thru” income, which effectively allowed anyone running a LLC or small business to evade taxes.

There were moderate Republicans in Kansas that warned about the prospects of Brownback’s questionable assertion that low taxes and low funding of the state government would bring a new era of growth and prosperity. But dark money and Koch’s political machine saw to it those politicians were “de-elected” and replaced with Brownback’s army of minions.

In addition to creating budgetary ruin with tax revenue cratering, essential digital infrastructure crashed and burned. Deregulation and a mediocre state broadband expansion effort didn’t make internet service in Kansas better. In fact it got worse, along with the finger-pointing over who was responsible.

Last fall, Kansas Sen. Pat Roberts brought then FCC commissioner Ajit Pai to the community of Allen to meet with executives working for a dozen small telephone companies who were having trouble upgrading their networks across the great expanse of rural Kansas.

Brownback

Roberts wasn’t ready to claim federal government regulation was responsible for the mess. But Pai’s reflexive claims that deregulation incentivizes for-profit companies to invest in better broadband simply wasn’t working in Kansas either. The only solution for The Free Marketeers in rural Kansas turns out to be handing out government money to expand rural broadband, except in Kansas, there was very little money to be had after Brownback took an ax to the state budget.

The Wichita Eagle unintentionally drew a contrast between the thinking of providers that want to blame everyone else for the problem and plain reality for Brian Thomas, who works for the Blue Valley Tele-Communications Company.

“It really all comes down to a quality of life perspective,” Thomas told the newspaper. “I think we all live that. That’s our jobs, to provide that.”

The newspaper noted that without government money, the only way private companies could afford to pay to replace thousands of miles of ancient copper phone wiring in favor of fiber would be to make internet service so expensive that only businesses and the ultra-wealthy would be able to afford it.

So while Brownback’s great social experiment carried on, internet expansion and upgrades stalled in many communities across Kansas. In Allen, where Pai met to extol the virtues of private investment, the town librarian at Allen’s public library got some help from the Manhattan (Kansas) library system to install an inexpensive Wi-Fi hotspot that, once switched on, almost immediately filled its parking lot day and night with what the newspaper called “internet-starved townspeople.”

Allen County, Kan.

“There are several people who will watch movies outside” after hours, town librarian Nikki Plankington said. “The kids use it for the Pokemon Go thing. I don’t know what that’s all about, but the kids use it.”

While the public library did its part, Kansas’ for-profit private internet providers are going in a different direction – complaining a lot and asking for handouts with no strings attached.

The Eagle reported Pai’s meeting with rural telecom executives turned into a ‘whine and cheese’ reception. The phone companies had a laundry list of dislikes they wanted the deregulation-minded Pai to fix for them while they pondered upgrades:

• The Universal Service Fund/Connect America Fund, financed by ratepayers through surcharges on their phone bills, was “obsolete” and didn’t provide enough money.
• The federal government didn’t allow ISPs to chase after the deepest pockets to pay for their upgrades — popular online websites like Netflix and Amazon.com.
• The FCC’s definition of broadband as 25Mbps ignored the fact Kansas phone companies wanted to deliver considerably lower speed service, claiming customers don’t want more than 10Mbps.

If the government could be lobbied to lower standards, eliminate regulation, and deliver or at least compel a cash welfare infusion from content providers and ratepayers, there was no need to ask rich Kansans to stop counting their money long enough to invest some of it in better broadband.

Catherine Moyer from Pioneer Communications claimed it was unfair to ask companies and customers to pay for upgrades when those internet titans like Netflix, Amazon, and Google make countless billions in profits using Pioneer’s network with absolutely no compensation for doing so.

“My customers and the customers here in Allen and all the customers in Wichita for that matter that have voice service pay a proportion of their bill,” she said. But, “there’s a whole group of people and companies utilizing the network that don’t pay into the fund in any meaningful way … so they haven’t helped build out this network.”

When the newspaper suggested she was effectively asking for higher taxes and paid lanes for internet content companies like Netflix that Moyer claimed was consuming 35% of Pioneer’s available bandwidth, she didn’t seem to have any objections.

“It’s not necessarily what people want to see, but in the same light, if you want these networks and you want these speeds, you have to somehow fund that. And who should fund it?” Moyer asked.

The next issue that doesn’t work for Kansas telecom companies is the FCC’s standard that broadband service be at least 25Mbps, and if a phone or cable company wants public dollars to build out their networks, they better choose a technology capable of delivering that kind of speed.

“One thing that kind of concerns me a little bit is having the FCC dictate, or Washington dictate, the level of speed I’m required to have in order to maintain a certain level of funding,” said Archie Macias of Wheat State Telephone, which serves rural communities in Butler, Cowley, Chase and Lyon counties. Macias is upset because his system uses fiber optics that can easily handle 25Mbps, but his customers only want to pay for 10Mbps.

“I’m not going to build a network that’s like having 500 channels on a TV that you’re going to watch 12 or 13,” he told the newspaper.

Wheat State currently offers four broadband plans in areas where fiber service is available:

• $39.99 Pro (10/2Mbps)
• $49.99 Multi-Pro (15/3Mbps)
• $69.99 Power-Pro (25/5Mbps)
• $79.99 Mega-Pro (50/20Mbps)
• $10 discount when bundled with other services

What customers choose for broadband service is often an issue of pricing, not speed.

In more populated parts of Kansas, customers are still trying to cope with DSL service that has not seen significant upgrades for a decade. Since Brownback isn’t doing much to help, and tax cuts and deregulation have failed to inspire the kind of robust broadband expansion “light touch” regulation is supposed to provoke, a lot of Kansans are leaving the state for good.

An abandoned farm.

One of those threatening to flee is Christianne Parks, who lives in Allen and endures not-even-close-to-being-broadband.

“Eventually, I probably would get bored out of my mind and leave,” 19-year old Parks told the newspaper when asked what she would do if her broadband situation did not change.

Last fall, the newspaper pinpointed some of the real problems afflicting the state’s economy and missing from the list were taxes and regulation. Deregulation-inspired consolidation in the state’s critical agribusiness sector decimated rural farms and the local economies that depended on them. When the farmers leave, Main Street businesses soon follow. The 1970s and 1980s was the era of the Rust Belt in the northeast and midwest. Now parts of the midwest including Kansas risk being labeled a Wheat Belt of economic deterioration.

Since 2000, 81 of Kansas’ 105 counties have lost population, according to the U.S. Census Bureau. The consensus is that trend will get worse, according to the newspaper – especially among young people – until and unless someone can find a way to get better internet service to the outlands. Brownback’s hands-off policies favoring providers are in contrast to New York’s more aggressive rural broadband funding program that seeks to achieve near 100% penetration of broadband service in the state over the next few years. New York regulators also compel companies doing business in the state to share some of their wealth from mergers and acquisitions, most recently requiring Charter Communications and Altice to expand their broadband networks to improve service and reach customers they don’t serve today.

The free-market-solves-everything concept celebrated by Pai and the Koch Brothers has now been tested and failed in Kansas. Among the few bright spots for broadband in Kansas are civic-minded telephone or cable providers that look beyond return on investment formulas in their community, and more commonly community-owned broadband networks or co-ops with a motive beyond profit — delivering decent broadband to maintain, sustain, and grow their local economies.

Recovery from the “free market miracle” train wreck started last fall, when a wave of moderate Democrats and Republicans were elected with a pledge to do everything possible to kill Brownback’s vision of paradise. This week, the Republican-dominated legislature had enough of living in Brownback’s PretendLand and overrode his veto of their plan to raise income taxes across the board and kill his legalized tax evasion scheme for business owners to bring in an additional $1.2 billion over the next two years to invest in Kansas.

The improved broadband that could result may give something for the state’s wealthiest citizens to do in their free time besides count their money.

An Illinois Senate committee approved a bill in March effectively ghostwritten by AT&T that will end the phone company’s legal obligation to provide wired services. AT&T claims 90% of consumers have already dropped landlines in Illinois, switching to cell phone or Voice over IP services. But the company would not say how many consumers still get wired broadband service from AT&T.

AT&T is laying the groundwork to eventually mothball its copper wire networks. Customers in urban areas would likely be serviced by AT&T’s fiber-copper U-verse network while rural areas would be served entirely by AT&T’s wireless cellular network. The company has already received approval to drop landline service in 19 of the 21 states where it provides landline service. AT&T Illinois president Paul La Schiazza said the company won’t approach the FCC about switching the network off for good until it gets approval in all 21 states.

If AT&T wins the right to pull the plug, it need only provide customers with 60 days notice. The bill also currently qualifies only one company in Illinois to discontinue service almost immediately — AT&T. Despite that, the bill has won support from independent phone companies in the state including Frontier Communications.

La Schiazza complains the government has treated AT&T unfairly by requiring it to provide service while other companies can cherry-pick service areas.

“What we’re left with in Illinois is we’re not guaranteed any customers, we’re not guaranteed any return … yet we still are required to provide an old-style, voice-only telephone line to every customer in our service territory,” he told the Chicago Tribune. “No competitor is required to do that. They can pick and choose whatever customers they want to serve and they can use whatever available technology that they want to.”

Emery

It’s 2017 and a lot of Missouri residents are still tortured by the lack of access to basic broadband service, and if a community broadband ban bill becomes state law it will remain that way for years to come.

SB 186 is essentially a copy of last year’s community broadband ban that eventually died in the legislature. Just like last year, many of the sponsors and promoters of the latest attempt to impose a municipal broadband ban have close ties to the American Legislative Exchange Council (ALEC) and receive copious amounts of money from Missouri’s largest telecom companies. Some even win awards from the state’s biggest telecom lobbyists.

State Sen. Ed Emery (R-Lamar) loves the headlines he attracts from throwing ideological bombs into the public debate (he called homosexuality a mental illness, compared public education to slavery and a pathway to prison, and questioned whether former president Barack Obama was actually an American citizen). But he is not in touch with the rural residents in his state who have had their pleas for broadband service ignored by AT&T and other telecom companies for years.

Emery is a big fan of ALEC and serves as a Missouri state chairman. In 2015 he told an audience at an ALEC event he found the group’s efforts inspiring and helpful. ALEC acts as a giant clearinghouse for corporate-inspired legislation that ends up in the hands of friendly state legislators. ALEC’s model bills, including one banning municipal broadband, win passage in part because state legislatures do not get the kind of media attention and public scrutiny seen in Washington. SB 186, its predecessor, and other similar bills introduced in other states are frequently ghostwritten by telecom company lawyers and lobbyists and are designed to stop municipal broadband networks before they can get started.

Emery’s current bill is designed to apply a “scorched earth” response to communities trying to find ways to get rural broadband service up and running after a decade of being ignored by private telecom companies. It’s corporate protectionism and welfare at its finest, with a thicket of language that would force public providers into price and speed regulation. Emery’s bill would interfere with the types of loan agreements communities could contemplate to provide the service, and the language required for a mandatory referendum is heavily slanted to suggest such service is redundant and unnecessary. Emery’s bill also offers assurances his business friends could get gigabit speeds from community-owned providers, but not necessarily consumers.

Like the failed broadband hit bill introduced in Virginia, SB 186 is an ironic piece of legislation, heavy-handed with regulation and micromanagement and anchored with bureaucratic requirements designed to guarantee disappointment and costly failure. Emery’s career in public life has been spent railing against costly and unnecessary overregulation, yet his bill exemplifies both in action.

SB 186 also protects the status quo for broadband in Missouri, which is dreadful outside of major cities. It would assure incumbent telecom companies won’t face any service-improving competition and keep municipalities off their turf. For example, Columbia Water and Light has a “dark fiber” institutional fiber network at its disposal that is woefully underutilized. In addition to helping provide some connectivity for local government functions, the city-owned network also leases connections to hospitals and other public buildings, as well as some businesses. But the utility does not sell internet service itself.

The city believes much of the fiber network’s capacity is sitting un-utilized and could prove a valuable asset to the local connectivity economy. With the fiber already in place, expanding the network could be a cost-effective/common sense way to reach city residents that want better internet service than what incumbents are offering, and the city is more than willing to open the network up to those incumbents as well. SB 186 could eliminate that option in Missouri, just to protect the same private companies that have delivered underwhelming service for years.

In cities like Centralia, now exploring enhanced smart grid technology to improve the area’s electricity infrastructure, SB 186 would make the upgrade much more costly. Smart grid technology relies on fiber optic technology, often laid deep into neighborhoods and office parks. Only a tiny portion of that capacity is used to monitor utility infrastructure. The rest of the bandwidth on the fiber optic cable — already in place, could easily offer gigabit broadband service to every resident and business, especially if the city wires fiber to or near individual utility meters. That wouldn’t be allowed under SB 186 either, so communities like Centralia could not recoup some of the cost of the fiber optic technology by selling broadband service. That’s great news for companies like AT&T, CenturyLink, and Charter Communications. It’s also a relief for the phone companies who need not invest in their networks to offer something better than 20th century DSL.

Rural America: not a broadband-a-plenty

Emery offers two contradictory defenses for his bill:

1. It is necessary to protect taxpayers from municipal broadband which Emery calls “unsuccessful, leaving ratepayers to cover debt costs.” But when asked by local media for any examples of a Missouri public broadband project that has failed, he could not.
2. “We need more private-sector opportunities and not drive them out or hinder offerings coming into a community.”

In other words, Emery believes all public broadband networks are failures -and- they represent a major threat to private telecom companies that will be discouraged from investing in broadband expansion because a publicly owned competitor could be ready to “drive them out.”

Of course, neither is true. In rural Missouri there is no line of eager telecom companies seeking to expand broadband service into unprofitable rural communities and where only one broadband provider exists, there is no pressure to improve service quality or speed. In the first instance, there is no investment by private companies to discourage and in the second, the presence of a new provider encourages upgrades and investment. It’s a concept called “competition.” Sen. Emery would have a difficult time providing the name(s) of telecom companies that exited a community because of the presence of a municipal broadband alternative.

Rural farms are among the least likely places to get adequate internet service.

Sen. Emery’s family has a feed and grain business background, and those businesses (as well as Missouri’s farmers) are among the hardest hit economically by the lack of suitable broadband. But Emery is now far away from the business his father and grandfather ran. These days, he harvests big dollar contributions from some of the country’s largest corporations and much of his last campaign was financed by just two families — one with a vendetta against unions and the other — Rex Sinquefield — bucking to be Missouri’s own version of the Koch Brothers, who has his own private agenda he’d like enacted into law. Sinquefield has close ties to the Grow Missouri PAC, that also has close ties to the Club for Growth, ALEC, and the Koch Brothers’ backed Americans for Prosperity. Birds of a feather flock together.

Missouri’s biggest telecom companies are also generous contributors to Sen. Emery, which isn’t a surprise considering his bill and voting record directly benefits their businesses in the state. That may explain why the Missouri Cable Telecommunications Association — the state’s top cable lobbying group — gave Emery its Legislator of the Year award. Not to be outdone, the phone companies’ Missouri Telecommunications Industry Association gave Emery its own Leadership Award. Anyone who can introduce a bill that eliminates the best prospect of competition in suburban and rural Missouri for years is probably worthy of both.

In return for favors like that, some familiar names appear at the top of Emery’s list of campaign contributors:

• AT&T ($6,000)
• Comcast ($4,000)
• Verizon Communications ($4,000)
• CenturyLink ($3,500)
• Charter ($2,000)
• Time Warner Cable ($1,500)
• Charter Communications ($1,325)
• Sprint ($1,000)

Emery clearly listens to their interests more than average Missouri consumers still searching for broadband service.

The St. Louis Post-Dispatch reported last summer that there are significant gaps in broadband coverage even in St. Louis County, where one million residents live. “Fringe suburban spots” too costly to meet Return On Investment requirements guarantee no service, indefinitely. In St. Clair County, 5,000 homes are without broadband for the same reason. In large parts of the state, what constitutes broadband no longer meets that definition — 25Mbps, as established by the FCC. Every telephone ratepayer pays a “universal service fee” on their phone bill, in part to extend broadband into rural areas. But that extension has been spotty because not every phone company accepts the money and the conditions that come with it to broaden their reach. That leaves many rural Missourians with <1Mbps DSL service. That’s the case in Wildwood, where streaming media is out of the question because internet speeds are too low.

The Broadband Berlin Wall: Wildwood, Mo. — Broadband service is easily available to the east of Highway 109. But to the west, service is spotty to non-existent.

Wildwood — in western St. Louis County, is living in “Third World conditions,” even though “we’re not in rural Timbuktu,” according to resident Marilyn Gilbert. It’s also comparable to Cold War-era Berlin, except in reverse. Eastern Wildwood offers residents broadband options from both Charter and AT&T. But the Broadband Berlin Wall dividing the community — Highway 109, separates the broadband haves’ from the have-nots’. The larger part of Wildwood to the west, now growing with new housing and businesses, is a broadband swamp with few, if any choices for local residents.

Gilbert “enjoys” AT&T DSL and speeds that never come close to 1Mbps. It is her only option.

“I tried to download my Windows update and it timed out,” she said. “The amount of time you waste waiting for things to open up or download!”

Remember, this is in St. Louis County, the old home for the headquarters of Charter Communications, which dominates the city of St. Louis.

Despite earning billions every year from the broadband business, Charter has refused to extend its lines of service into the western half of Wildwood, despite efforts to attract the company that date back six years. Residents report broadband availability is among their top concerns taken to local officials, who have in turn sought help from Charter, AT&T, and the state legislature.

The city of Wildwood’s efforts were met with a demand by Charter to pay the cable company $3 million in taxpayer funds to extend service. The city said no.

“The comment we hear constantly is that kids need high-speed (internet) in order to access their school work,” said Wildwood councilman Larry McGowen. “These days, internet is just like another utility. It has become every bit as important in people’s lives as electricity.”

But it apparently is not important enough to allow Wildwood and other communities the option of constructing their own local broadband solutions for residents if Emery’s bill becomes law.

Ironically, the same companies that refuse to extend their service into rural Missouri are also vehemently opposed to letting local governments do it in their absence.

The stalemate has caused some residents to sell their homes and move, just to get internet access. David Norell left town because he couldn’t survive with satellite internet service, which costs $80 a month and offers spotty service with a low data allowance.

That makes Emery’s bill, and others like it, a travesty. Banning local communities from doing the job large for-profit companies won’t seems nothing short of corporate protectionism. After all, as critics of Emery’s bill charge, how can a local government unfairly compete with a company that doesn’t compete at all? Also of concern is the fact those residents that do get token DSL service from AT&T may be trapped using it forever if Emery’s bill keeps better and faster service from co-ops and other public broadband options off the table.

If it seems like Sen. Emery is putting the interests of big telecom companies – many dues-paying members of ALEC – above those of his constituents, perhaps he is. Consider the fact Emery is a state chairman at ALEC, an organization that included this loyalty pledge in its draft state chair agreement:

I will act with care and loyalty and put the interests of the organization (ALEC) first.

Emery has taken heat for his ongoing love affair with ALEC before, including an ethics complaint about a $3,000 meal at the Dallas Chop House where Emery ate. ALEC’s corporate members picked up the tab. That kind of unethical conflict of interest, along with the aforementioned loyalty pledge, infuriated the St. Louis Post-Dispatch:

Mr. Emery and his ilk can believe what they want, but they should play no part in allowing corporations to hide their agendas, and their lobbying expenses, by pretending to be something they are not. The proof is in ALEC’s actions, which as Washington Post columnist Dana Milbank outlined, hid itself behind closed doors in a meeting last week in the nation’s capital, pushing reporters away while claiming they had nothing to hide.

No, ALEC exists solely to hide. To hide money. To hide agendas. To hide its hijacking of democracy.

Lawmakers who care about the constitution and their commitment to voters should be fleeing faster than the corporations who realize ALEC is simply a bad investment.

Emery at a 2015 ALEC event.

It was not an isolated incident. Ed and his wife Rebecca Emery also enjoyed a $141.10 meal paid for by the Missouri Telecommunications Association. It’s safe to assume nobody had just a small salad. Other meals and drinks were courtesy of AT&T and CenturyLink. (Peabody Energy footed the bill for the Emerys’ taxi rides back and forth.)

When the wining and dining ended, the lobbyists were back with campaign contribution checks in hand.

These kinds of municipal broadband bans are toxic to economic development for rural communities that already face built-in economic and infrastructure disadvantages. The 21st century digital knowledge economy has the potential to make rural America equally competitive, assuming there is adequate infrastructure in place to participate.

Relying on private investment alone can work in urban areas where broadband profits are easy because the essential infrastructure to provide the service was constructed and paid for decades ago, originally to deliver telephone and television service. Rural areas suffer from deteriorated wireline infrastructure some phone companies want to abandon altogether and no cable broadband service at all.

Charter and AT&T first answer to shareholders. Local governments answer to their residents. Legislators are supposed to do the same. For Mr. Emery, loyalty to the interests of ALEC and the state’s telecommunications companies seems clear. It’s too bad his bill suggests a lot less loyalty to the voters in his district that need internet access or better broadband are will assuredly not get it if this bill ever becomes state law.

New York State taxpayers will contribute $212 million to expand broadband to reach 89,514 homes and institutions in mostly in rural upstate communities that either lack internet access or have to endure very slow speed DSL service from the phone company. All recipients have agreed, as a condition of receiving the money, not to impose data caps on their customers.

This week, New York Governor Andrew M. Cuomo announced the latest winning projects that will receive grants from a second round of funding from the New NY Broadband Program, part of the governor’s effort to achieve 100% broadband penetration in the Empire State.

Gov. Cuomo

Twenty six cable and phone companies, mostly for-profit businesses, will share awards ranging from $226,184 for Cable Communications of Willsboro to reach 558 homes in the Essex County communities of Willsboro and Essex, on the border of Lake Champlain and the state of Vermont to $47,770,970 for Armstrong Telecommunications to reach 16,545 homes in Allegany, Cattaraugus, Erie, Livingston, Steuben, and Wyoming counties in the Finger Lakes Region and Southern Tier.

“Broadband is today what electricity was nearly a century ago – essential to creating economic opportunity, driving innovation and an absolute necessity for our way of life,” Governor Cuomo said. “These awards will provide homes and businesses with access to the high-speed internet required to participate and succeed in the modern economy, and are a major step toward broadband for all in New York.”

Grant recipients provided $56,253,037 in private matching funds, with New York taxpayers picking up the remaining 75% of the total expansion cost — about $2,366 per home or business.

A separate agreement with the New York State Public Service Commission obligates Charter Communications (formerly Time Warner Cable) to embark on its own company-funded expansion program to expand service to approximately 145,000 unserved and underserved premises. Charter has identified Columbia, Erie, Jefferson, Onondaga, Oswego, and Sullivan as “Year One Priority Counties” where most upgrades will be taking place in 2017, including expansion to reach 100Mbps speeds during the first six months of this year.

The winning providers had to guarantee they would upgrade speeds to at least 100Mbps except in the “most remote areas” where 25Mbps is acceptable. Although the state targeted 50% private sector co-investment, providers ultimately came closer to the absolute minimum of 20% in matching funds. They must also guarantee that broadband service will be available to customers for no more than $60 a month to qualify for the grant. Cable Communications of Willsboro, for example, now offers 8/1Mbps for $59.95 a month. Presumably it will have to boost speeds as part of its grant award.

The grant program was also designed to favor applicants offering fiber-to-the-home or hybrid fiber/cable (HFC) technology currently favored by cable operators. DSL and fixed wireless applicants had to give evidence the governor’s need for speed would be delivered using those technologies. All applicants must also agree not to impose data caps of any kind for New York residents.

New York is a rare exception to rural broadband expansion in states that mostly rely on politicians begging and pleading with providers to expand their service areas. At best, this has delivered modest results without access to supplemental funding to achieve Return On Investment requirements private companies demand.

As New York progresses through multiple rounds of bidding, each new round becomes more challenging because of the increasing expense to reach each remaining unwired rural home, business, and farm. In the current round, the costs to wire a single home are at least four times more than what Verizon spent to extend its FiOS service to a new home or business in downstate New York.

To meet 100% penetration, some properties will require a $20,000 or more investment to extend service. Gov. Cuomo has decided that broadband should be treated as a necessary utility, not a convenience. In effect, New York wants universal service standards to be applied to broadband, regardless of cost.

All projects must be finished by the end of 2018. The Broadband Program Office is currently finalizing a Request for Proposals for the Program’s upcoming Round III, which will launch within 30 days. This round will seek to complete the goal of bringing high-speed internet access to New York’s remaining unserved and underserved communities. Round III will be paid for by the $170 million in Connect America Funds Verizon forfeit because of their lack of interest in expanding rural broadband service. New York officials successfully petitioned the Federal Communications Commission to reallocate those funds to the state to disburse to reach the remaining rural areas still without suitable internet access.

Phase 2 Awardees

Pai

Like President Donald Trump, Ajit Pai is a busy man. He’s spent his first month as FCC chairman gutting his predecessor’s legacy, reversing pro-consumer policies, ending forays into set-top box competition, fair pricing for inmate phone calls, cheap internet access for the poor, ending reviews of data caps and zero rating practices, and threatening to terminate Net Neutrality with extreme prejudice.

No wonder Bob Quinn, AT&T senior executive vice president of external & legislative affairs applauded President Trump’s appointment of Pai, proclaiming he will “quickly and decisively put back in place the commonsense regulatory framework necessary to support the President’s agenda for job creation, innovation and investment. We look forward to working with him and his team and the FCC to support President Trump’s growth agenda.”

AT&T’s only growth agenda is sending customers ever-increasing bills, and with Mr. Pai at the helm of the FCC, they are sure to get their wish.

Over their terms at the FCC under the Obama Administration, Republican Commissioners Ajit Pai and Michael O’Rielly frequently complained their minority voices on the Commission were ignored and newly proposed regulations or policies would come before the FCC so quickly, there was inadequate time for public review. But since Pai teamed up with O’Rielly to abolish many of the most important achievements of his predecessor, Chairman Thomas Wheeler, they have reportedly all but ignored the sole remaining Democrat currently serving on the Commission — Mignon Clyburn.

Last Friday, Clyburn accused Pai of hypocrisy for complaining about policies being rushed for a vote without explanation before doing the same thing himself late last week.

Clyburn

“Today is apparently ‘take out the trash day.’ In an eponymous episode of the West Wing, White House Chief of Staff Josh Lyman stated: ‘Any stories we have to give the press that we’re not wild about, we give all in a lump on Friday . . . Because no one reads the paper on Saturday,'” Clyburn said in a statement. “Today multiple Bureaus retract—without a shred of explanation—several items released under the previous administration that focus on competition, consumer protection, cybersecurity and other issues core to the FCC’s mission. In the past, then-Commissioner Pai was critical of the agency majority for not providing sufficient reasoning behind its decisions.”

Clyburn’s office asked for more than the allotted two days to review a dozen items that suddenly appeared on the FCC’s agenda.

“We were rebuffed,” Clyburn wrote.

Clyburn then accused Pai of violating the Administrative Procedure Act, which requires adequate public notice and a comment period for public input. When she asked the chairman to comply with the “reasoned decision-making requirements of the APA,” she was told ‘No deal.’

Mr. Pai’s regulatory rollback agenda has moved with breathtaking speed, according to some FCC observers. Consumer group Free Press today called Pai’s progress “Orwellian.” Over less than a month, Pai — with the help of Commissioner O’Rielly — has:

• Announced the formation of a Broadband Deployment Advisory Committee that is expected to be stacked with industry stakeholders that will recommend reform the FCC’s pole attachment rules, identify “unreasonable” regulatory barriers to broadband deployment, encourage local governments to adopt “deployment-friendly” policies, and develop a “model code” for local franchising, zoning, permitting, and rights-of-way regulations for telecom infrastructure like cell towers. Few expect the eventual “model code” to stray far from Big Telecom companies’ wish lists;
• Near-unilaterally loosened rules allowing AM radio stations to continue making their presence felt on the overcrowded FM band through the use of low-power FM “translator” stations that rebroadcast the AM station’s programming;
• Changed FCC policies to give broader notice of upcoming agenda items and policy proposals, ostensibly to improve public access to FCC rulemaking procedures. But observers suggest the change will primarily benefit industry lobbyists who will have advance detailed notice about the FCC’s upcoming agenda items, allowing them time to lobby for or against the proposals, or suggest changes;
• Rescinded “Improving the Nation’s Digital Infrastructure,” a policy paper promoting rural broadband deployment and other broadband improvements released just prior to the inauguration of President Trump. On Feb. 3, the FCC set “aside and rescinds the Digital Infrastructure Paper, and any and all guidance, determinations, recommendations, and conclusions contained therein. The Digital Infrastructure Paper will have no legal or other effect or meaning going forward.”
• Rescinded “in its entirety and effective immediately, earlier guidance provided in a March 12, 2014, public notice, DA 14-330, “Processing of Broadcast Television Applications Proposing Sharing Arrangements and Contingent Interests,” which attempted to limit ongoing media consolidation controversies including allowing one TV station to effectively operate and provide content for so-called ‘competing’ stations in a local area.
• Closed the FCC’s investigation into wireless carriers’ zero-rating policies, which allow subscribers free access to “preferred provider content” without it counting against their data plan. Critics call zero rating an end run around Net Neutrality, because providers treat their own content as “preferred.” AT&T charges other content providers to participate in its zero rating program.
• Instructed the FCC’s legal team to stop defending court challenges to its authority to ensure fair and reasonable telephone rates for incarcerated prisoners held captive to using a single carrier to make phone calls at prices much higher than what the public pays. Those rates were as high as $5.70 for a 15-minute in-state collect call placed from an incarceration facility in Kentucky. In that state alone, consumers effectively paid $2.79 million in kickbacks to state prison systems or a county jail. In contrast, a similar 15-minute call placed from a West Virginia jail or prison would cost $0.48. As a result of Pai’s actions, companies like Global Tel*Link, Securus, and Telmate “can continue the practice of price gouging prisoners and their families,” according to Prison Phone Justice;
• Ended former FCC Chairman Wheeler’s attempt to force competition in the cable set-top box marketplace, allowing consumers to take a bite out of the $20 billion cable companies make in rental fees annually. At least 99% of subscribers now pay an average of $231 a year to lease the boxes, even after the company has fully recouped their original cost. Customers in Canada can buy their own set-top boxes and DVRs.
• Killed an expansion of the FCC’s Lifeline program to offer discounted internet access to the poor. Pai reversed approvals made to nine providers — none accused of waste, fraud, or abuse — including Kajeet, Spot On, Boomerang Wireless, KonaTel, FreedomPop, Applied Research Designs, Liberty Cablevision of Puerto Rico, Northland Cable Television and Wabash Independent Networks. Pai later defended the move claiming his predecessor rushed through approval of the providers and he was rescinding those “midnight rules” as current chairman. Many Republicans are seeking a complete elimination of the Lifeline program.
• Rescinded the latest progress report on modernizing the Universal Service Fund’s E-Rate program, which is designed to subsidize telecom services for schools and libraries. It could be the first step in eliminating or dramatically reforming the Fund;
• Gave two violators of the FCC’s rules on properly collecting and reporting information about the source of political advertising aired on stations air a free pass.
• Threw out a white paper from the FCC’s own Homeland Security Bureau advising the agency on cybersecurity issues. Pai doesn’t think the FCC should be involved in cybersecurity, so anything contrary to his agenda of reducing the role of the FCC is likely destined for the nearest wastepaper basket.

FCC letter to AT&T’s Bob Quinn letting him know the company is off the hook with the FCC on zero rating.

“Ajit Pai has been on the wrong side of just about every major issue that has come before the FCC during his tenure,” said Craig Aaron, president of Free Press. “He’s never met a mega-merger he didn’t like or a public safeguard he didn’t try to undermine. He’s been an inveterate opponent of Net Neutrality, expanded broadband access for low-income families, broadband privacy, prison-phone justice, media diversity and more. If Trump really wanted an FCC chairman who’d stand up against the runaway media consolidation that he himself decried in the AT&T/Time Warner deal, Pai would have been his last choice — though corporate lobbyists across the capital are probably thrilled.”