A cartoonist turns his attention to AT&T and its allies in the Wisconsin Legislature, which is currently slated to kill a telecommunications network essential for schools, libraries, and local government. Why? So AT&T and its allies can provide the service instead, shifting local tax dollars from school teachers and libraries to AT&T. As long as AT&T can dominate state legislatures with its campaign contributions and lobbyists, we will see scenes like this: Please share.

There are many places to find information about AT&T's war on WiscNet, a great credit to those who recognize the importance of WiscNet to schools, libraries, and local governments around the state. The best article on the subject may be from Wisconsin Tech News (WTN), with "UW faces return of $37M for broadband expansion in 11th hour bill." This post builds on that as a primer for those interested in the controversy. Update: Read a Fact Check Memo [pdf] from the University of Wisconsin Extension Service with responses to false allegations from AT&T and its allies.

Synopsis

AT&T and its allies have long made false claims against WiscNet, setting the stage for their lobbyists to push this legislation to kill it. AT&T and some other incumbents want to provide the services WiscNet provides in order to boost their profits. WiscNet not only offers superior services, it offers services the private providers will not provide (including specialized education services). For instance, from the WTN article:

One of features that differentiates WiscNet from a private broadband provider is allowing for “bursting,” so that during isolated periods when researchers send huge data sets, they greatly exceed the average data cap. UW-Madison currently uses seven gigabits on average, and would have to procure 14 gigabits under the new legislation, even though most of the extra seven gigabits would seldom be in use, Meachen [UW CIO] said. “We'd be paying for the fact that researchers have to send these huge data sets, and not have it take hours and hours to get to where it's going,” Meachen said. “You can't afford to pay for that extra 7 gigabits from the private sector because it's too costly. They increase your charges based on that.” A private network would not have the necessary capacity for scientists on the UW-Madison campus, who are some of the leading researchers on next generation Internet.

This is the first in a series of posts by Rita Stull -- her bio is available here. The short version is that Rita has a unique perspective shaped by decades of experience in this space. Her first post introduces readers to the often misunderstood concept of the Right-of-way, an asset owned by the citizens and managed mostly by local governments.

In the process of knitting a baby blanket, a whole ball of yarn became tangled into this mess. . . .

. . . reminding me of the time, in the early eighties, when I was the second cable administrator appointed in the U.S., and found myself peering into a hole in the street filled with a similar looking mess—only made of copper wires, instead of yarn.

Why talk about yarn and copper wire in the same breath on a site dedicated to community broadband networks? Because it was the intersection of ‘art and cable’ that got me started in the ‘telecommunications policy’ arena, the same kind of thinking that continues today in our tangled telecom discussions: Is it content or conduit, competitive, entertainment, essential, wireless, landline, gigahertz, gigabits?

I transferred from the Recreation Department to launch the city’s cable office as an experienced government supervisor with a Masters in Theater. My employer and I thought cable TV was the ‘entertainment’ business and I had the requisite mix of experience and skills to manage one of the first franchises awarded in 1981.

Yikes. Imagine my surprise on discovering that cable was a WIRE LINE UTILITY using PUBLIC LAND, which each citizen pays TAXES to buy, upgrade and maintain! And, our three-binders-thick, cable franchise was a ‘legal contract’ containing the payment terms for use of our public rights-of-way, as well as protection of local free speech rights. I was thirty years old, a property owner who had never thought about who owned roads, sidewalks and utility corridors.

Rights-of-way are every street plus about 10 feet of land on each side. That land belongs to everyone in the community. Rights-of-way are a shared public asset—sometimes called part of our common wealth.

As we continue to report on depressing campaigns to deny people fast, affordable, and reliable access to the Internet (as Time Warner Cable is doing in North Carolina), we are also making an attempt to highlight good legislation (as we recently did in Washington state). In that spirit, we turn to HB 2076 / SB 1847 in Tennessee From the bill summary:

This bill urges all municipalities to endeavor to utilize advanced broadband systems in their operations and to encourage the construction of advanced broadband systems.

The full bill is available here [pdf] but the most interesting part is what was not included. As reported by Andy Sher of the Times Free Press, the bill was intended to go much further.

The bill would have let the municipal utilities extend service up to 30 miles outside their service areas.

Unfortunately, the powerful incumbent lobbying machine (including AT&T, Comcast, and others who already hate having to compete with technologically superior networks in several Tennessee communities) killed the bill, a blow to the future of economic development in the state. Neighbors of Chattanooga, including Bradley County, desperately want access to the impressive 1Gbps network Chattanooga built -- the most advanced citywide network in the country. Harold DePriest recognized the power of AT&T and Comcast in the Legislature, but vowed not to give up.

“Well, we would like to see the bill pass, but I think Gerald was dealing with the reality of the difficulty of moving the bill through the committee at this point in time,” he said Friday. “We will be back.

Five years ago, Michigan decided to deregulate cable companies, preempting local authority to negotiate with cable companies in favor of a more relaxed statewide franchise. Many states have gone down this path in hopes of spurring competition and lowering the prices for service. All have seen very minimal gains (mostly from AT&T U-Verse and Verizon FiOS, deployments that have gone forward as well in states that did not preempt local authority). None have seen real decreases in prices. Michigan also created greater hurdles for the public sector (click on Michigan on our Community Broadband Preemption Map for an explanation of the legislation). In short, Michigan made a big bet that the private sector would build the networks they need to remain competitive. The results are in.

"No matter how you look at it, 70 percent of Michigan's communities still have only one cable provider four years after deregulation," said Deborah Guthrie, President of MI-NATOA, in a statement. "Even in the places where two providers offer service, if serious competition existed, prices wouldn't run up several times faster than inflation and customer service wouldn't be so poor."

Michigan's National Association of Telecommunications Officers and Administrators joined with the Michigan Alliance for Community Media (neither of which seems to have much a web presence) to note that Comcast's prices for lifeline basic have gone up 18% with other services increasing 3x the rate of inflation. Most communities remain stuck with Comcast or Charter solely, two of the most hated corporations in America. As we educate legislators around the country, we need to keep the lessons from Michigan in mind. Legislators often know very little about telecom issues and are bombarded by lobbyist talking points - but examples like Michigan clearly show what happen when the telco and cableco lobbyists make policy. And so long as we are discussing Michigan, it is worth noting that the City of Detroit is pushing to have Michigan's statewide franchise law invalidated.

South Carolina has been quietly debating a bill to further erode the right of communities to decide locally whether they want to build broadband networks. South Carolina already restricts the rights of communities to build these networks but HB 3508 / SB 483 will effectively make any local government ownership of telecommunications facilities impossible. Unsurprisingly, this bill is opposed by the South Carolina Association of Counties and the Municipal Association of South Carolina. But the lead opposition to it has come from Bill Clark, an Administrator from rural Orangeburg County. On the other side is AT&T, the nation's 10th largest company. The bill is blatantly protectionist for AT&T interests, throwing South Carolina's communities under the bus. But as usual, these decisions about a "level playing field" are made by legislators solely "educated" by big telco lobbyists and who are dependent on companies like AT&T for campaign funds. Even if AT&T's campaign cash were not involved, their lobbyists talk to these legislators every day whereas local communities and advocates for broadband subscribers simply cannot match that influence. We see the same unlevel playing field, tilted toward massive companies like AT&T, in legislatures as we do locally when communities compete against big incumbents with their own networks. Despite having almost all the advantages, they use their tremendous power and create even more by pushing laws to effectively strip communities of the sole tool they possess to ensure the digital economy does not pass them by. South Carolina's access to broadband is quite poor -- 8th worst in the nation in access to the the kinds of connections that allow one to take advantage of the full Internet according to a recent FCC report [pdf].

As we predicted, Time Warner Cable is pushing a new bill in North Carolina to limit competition and local authority to build broadband networks (Save NC Broadband is alive again). H129 purports to be An Act to Protect Jobs and Investment By Regulating Local Government Competition with Private Business - [download a PDF of the bill as introduced]. This bill is another example of state legislators refusing to allow communities to make their own decisions -- imposing a one-size-fits-all policy on communities ranging from the metro area of Charlotte to small communities on the coast and in the mountains. Many of the provisions in this bill apply tough constraints on the public sector that are not applied to incumbent providers, but this analysis focuses only on a few. Let's start with the title:

An Act to Protect Jobs and Investment by Regulating Local Government Competition with Private Business

There is no support anywhere in this bill to explain what the impact of community networks is on jobs. Nothing whatsoever. There is a claim that "the communications industry is an industry of economic growth and job creation," but ignores the modern reality that that the communications industry goes far beyond the private sector. In fact, the recent history of massive telecommunications providers is one of consolidation and layoffs. It is the small community owned networks that create jobs; larger firms are more likely to offshore or simply cut jobs. Certainly all businesses depend on communications to succeed. Unfortunately, they are often limited to very few choices because the of the problem of natural monopoly.

Durham's Herald Sun published our op-ed about community broadband networks in North Carolina. Reposted here:

Who should decide the future of broadband access in towns across North Carolina? Citizens and businesses in towns across the state, or a handful of large cable and phone companies? The new General Assembly will almost certainly be asked to address that question.

Fed up with poor customer service, overpriced plans and unreliable broadband access, Wilson and Salisbury decided to build their own next-generation networks. Faced with the prospect of real competition in the telecom sector, phone and cable companies have aggressively lobbied the General Assembly to abolish the right of other cities to follow in Wilson and Salisbury's pioneering footsteps.

The decision by Wilson and Salisbury to build their own networks is reminiscent of the decision by many communities 100 years ago to build their own electrical grids when private electric companies refused to provide them inexpensive, reliable service.

An analysis by the Institute for Local Self-Reliance (http://tiny.cc/MuniNetworks) compares the speed and price of broadband from incumbent providers in North Carolina to that offered by municipally owned Greenlight in Wilson and Fibrant in Salisbury.

Wilson and Salisbury offer much faster connections at similar price points, delivering more value for the dollar while keeping those dollars in the community. For instance, the introductory broadband tiers from Wilson (10 downstream/10 upstream Mbps) and Salisbury (15/15 Mbps) beat the fastest advertised tiers in Raleigh of AT&T (6/.5 Mbps) and TWC (10/.768 Mbps). And by building state-of-the-art fiber-optic networks, subscribers actually receive the speeds promised in advertisements. DSL and cable connections, for a variety of reasons, rarely achieve the speeds promised.

Curbing innovation

A local news story from WCNC in North Carolina has caught national attention among some tech news sites. As reported by WCNC, Fibrant will start beta testing its community fiber network next month (which answers a question we have been wondering -- just what is happening down there?). We have covered Salisbury previously here. The video: This video is no longer available. Senator Hoyle still relies on his two mutually exclusive talking points: "cities should not do this because they are terrible at it" and "it is not fair for cities to do this because they will crush private providers who are unable to compete." Of course, if cities really did fail at this with any sort of regularity, they would not pose a threat to private providers. But that is not what caught the interest of Ars Technica, Tech Dirt, and DSL Reports. This is:

When the I-Team asked him if the cable industry drew up the bill, Senator Hoyle responded, "Yes, along with my help." When asked about criticism that he was "carrying water" for the cable companies, Hoyle replied, "I've carried more water than Gunga Din for the business community - the people who pay the taxes."

Big companies like Time Warner employ a lot of smart accountants to avoid paying even their fair share of taxes -- perhaps Senator Hoyle should not confuse them with the many small businesses that do pay their share. From Ars Technica's "Who writes pro-cable Internet legislation? Cable does":

Yikes. In Hoyle's defense, this sort of practice is not uncommon—legislators often work with interest groups on particular pieces of legislation or on letters that go out under their name.

A recent article discussing testimony from the President of the industry trade group, National Cable & Telecommunications Association (NCTA) reminded me once again that Congress and the FCC have utterly given up on true broadband competition for millions of of Americans.

As with the broadband stimulus funds being handed out by the Commerce Department, NCTA is concerned that the USF money not go to overbuild its members. "It would be a poor use of scarce government resources to subsidize a broadband competitor in communities--including many small, rural communities -where cable operators have invested risk capital to deploy broadband services," McSlarrow says.

This seems like a common sense argument. Why would we want to subsidize broadband for those who already have a single option (underserved) when others have no choice at all (unserved)? Unfortunately, building networks to solve the problem of the unserved is all but impossible without simultaneously serving some who are underserved. This is because the unserved are often in areas so remote and expensive to serve, there is no sustainable business model to serve only them. So the idea that we could somehow only target the unserved with networks is extremely suspect. Unless we want to endlessly subsidize networks in these areas (which companies like Qwest emphatically want because they would likely collect those subsides endlessly), we need to encourage sustainable networks that reach across those already served, underserved, and unserved.

He added that it also might discourage the incumbent from continuing to risk that capital. "Government subsidies for one competitor in markets already served by broadband also might discourage the existing provider from making continued investments in its network facilities.

I certainly respect this argument up to a point. But when it comes to essential infrastructure, we know that most existing providers (particularly absentee-owned massive companies) are delaying investments in network facilities anyway because the lack of true competition allows them to delay making the investments more common in our international peers (where true competition exists, often as a result of smarter government policies than we can muster here).