Ars Technica - January 25,2017

Google and Netflix join fight against municipal broadband restrictions

Written by Jon Brodkin

Google and Netflix joined a handful of advocacy groups and other companies lobbying against a proposed Virginia state law that would make it far more difficult for municipalities to offer Internet service.

As we previously reported, the "Virginia Broadband Deployment Act" would prohibit municipal broadband deployments except in very limited circumstances. For example, localities wouldn't be allowed to offer Internet service to residents if an existing network already provides 10Mbps download and 1Mbps upload speeds to 90 percent of potential customers. Even if that condition is met, municipalities would have to jump through several legal hoops before being allowed to build a network.

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"A number of local governments have already passed resolutions condemning the legislative attack on their right to make local telecommunications decisions and we expect to see more," the Institute for Local Self-Reliance's Community Networks project wrote Monday. The 10Mbps/1Mbps speeds specified in the legislation are "reminiscent of antiquated DSL," the group said.

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Read the full story here.

Private sector companies, trade organizations, and local authority advocacy groups went on record last week in opposition to HB 2108, a Virginia bill that would severely restrict local communities’ options to improve connectivity. They joined together in a letter to the Chairman of the Virginia House Commerce and Labor Committee, there the bill is now waiting for hearing, Republican Terry J. Kilgore.

Joining Local Communities To Oppose

A number of local governments have already passed resolutions condemning the legislative attack on their right to make local telecommunications decisions and we expect to see more. Del. Kathy Byron, a legislative darling of big cable and DSL providers in Virginia, introduce the bill earlier this month. Local and national media outlets immediately caught the story, and constituents have contacted Byron's office to express their concern. 

This letter from leaders in the industry underscored their concern that potential partners feel the bill is a death knell for public-private partnerships:

It would interfere with the ability of private companies to make timely sales of equipment and services to public broadband providers. It would deny private companies timely access to advanced networks over which they could offer business and residential customers an endless array of modern products and services. It would also impair economic and educational opportunities that contribute to a skilled workforce from which businesses across the state will benefit. 

The authors of the letter find the slow speeds required in the bill especially troubling for rural communities. The bill sets the standards at 10 Megabits per second (Mbps) download and 1 Mbps upload - speeds reminiscent of antiquated DSL:

The imminent arrival of Google Fiber and two other Internet Service Providers offering Gigabit speeds (1,000 Megabits per second) to Huntsville, Alabama is expected to be a boon to subscribers, reports Alabama Tech. 

The tech publication predicts the three ISPs - Google Fiber, AT&T  and WOW! - will spur competition that will lower prices for residential and business subscribers. A newly-released report from Analysis Group and funded by the Fiber to the Home Council shows that direct competition in a designated market results in overall price drops for connectivity service of all speeds. 

“Research shows a 'Gig City' lowers the monthly standard price on plans with at least 100 Mbps down 25 percent, or $27 per month. When it directly compares markets with one Gigabit provider compared to two, the price of Gigabit services decreases approximately 34 to 37 percent, or $57 to $62 per month.”

The tech publication also stated a domino effect occurs when an ISP says it will offer Gigabit services:  

“The likelihood of other providers offering similar services increases in an effort to keep pace with its competition. This trend applies to Huntsville. WOW! and AT&T announced it had launched Gigabit-speed services for Huntsville customers in October 2016, which was less than a year after Google Fiber announced it would offer services to some Huntsville customers beginning in 2017.

From Alabama Tech:

“When Google Fiber enters the market, it will likely help lower prices in Huntsville...WOW! will likely offer gigabit speeds at $160 per month for customers after the conclusion of its $70 per month promotion, while AT&T Fiber is currently offering Huntsville customers a non-promotional rate of $90 per month for gigabit services. Google Fiber is expected to offer $70 per month services when it enters the market. AT&T Alabama president Fred McCallum wouldn't rule out price adjustments to compete with other providers.”

Next Century Cities, a nonprofit advocate of high-speed Internet accessibility for all communities, and Internet Service Provider (ISP) Google Fiber are joining forces to support the second annual Digital Inclusion Leadership awards. 

The competition recognizes city governments that are spearheading or investing in community-based organizations that are tackling barriers to high-speed Internet service adoption, or what is commonly known as the “digital divide.” Next Century Cities is comprised of more than 150 mayors and city leaders dedicated to ensuring that all communities get access to fast, affordable, and reliable broadband Internet service.  

The 2017 Digital Inclusion Leadership awards will feature two categories: Leader in Digital Inclusion Best Practices and Most Promising New Plan. There will be two winners in each category. All contest submissions are due February 10, 2017 and winners will be announced in spring, 2017.  

In a news release, Next Century Cities Executive Director Deb Socia said: 

“Approximately 50 million Americans don’t have internet in their homes. Families affected by the digital divide, many of whom are from lower-income neighborhoods, are at a disadvantage when it comes to doing homework, applying for jobs or staying in touch with loved ones. Whether cities are leading or partnering on programs, city governments have a major role to play in getting residents the digital access and resources they need, and we look forward to celebrating their innovations with the 2017 Digital Inclusion Awards.”

Winning projects from the inaugural 2015 Digital Inclusion Awards include:

Google Fiber has finally announced its plans for the future after weeks of dramatic speculation that it will lay off half its workforce and give up on fiber-optics entirely. Google has now confirmed our expectations: they are pausing new Google Fiber cities, continuing to expand within those where they have a presence, and focusing on approaches that will offer a better return on investment in the short term.

Nothing Worth Doing Is Easy

In short, Google has found it more difficult than they anticipated to deploy rapidly and at low cost. And in discussions with various people, we think it can be summed up in this way: building fiber-optic networks is challenging and incumbents have an arsenal of dirty tricks to make it even more so, especially by slowing down access to poles.

That said, Google is not abandoning its efforts to drive better Internet access across the country. In the short term, people living in modern apartment buildings and condos will be the greatest beneficiary as Google takes the Webpass model and expands it to more cities. But those that hoped (or feared) Google would rapidly build Fiber-to-the-Home (FTTH) across the country are likely disappointed (or slightly relieved, if they happen to be big incumbent providers). 

This is a good moment to talk about the lessons learned from Google Fiber and what we think communities should be thinking about. 

Let's start by noting something we have often said: Google Fiber and its larger "access" approach have been incredibly beneficial for everyone except the big monopolists. Its investments led to far more media coverage of Internet access issues and made local leaders better understand what would be possible after we dismantle the cable broadband monopoly. 

Benoit Felton, a sharp international telecommunications analyst wrote a very good summary of Google Fiber titled Salvaging Google Fiber's Achievements. Some of my thoughts below overlap his - but his piece touches on matters I won’t address, so please check out his analysis.

I want to focus on a few key points.

Residents of Salt Lake City’s Lorna Doone Properties will be enjoying Internet speeds of up to one gigabit for no cost, thanks to a partnership between Google Fiber and the Utah Nonprofit Housing Corporation (UNHC). In July 2015, the company announced that the Google Fiber Gigabit Communities program would bring free access to select low-income housing locations throughout cities within their service areas, and the residents of Lorna Doone are newest to this list. 

Google will supply Internet access and UNHC has a computer rental program, which is in part supplied by the local business community. In addition, the City of Salt Lake has helped to fund mobile computer labs to bring more low-income households online.

Internet access is vital not only for entertainment, but more importantly for completing homework, keeping up with the news, and participating in the digital economy. "We do not have cable television or anything, so it's a way that we stay connected,” Kelli Nicholas, a Lorna Doone resident said during Google Fiber’s launch event. "I read about our current events online, my son and I do homework things… [Google Fiber will] allow people who weren’t able to connect, to connect with one another.”

Aside from providing Internet access in the Lorna Doone apartments, Google has partnered with the Department of Housing and Urban Development’s ConnectHome program to provide gigabit service to public housing projects. A Google Fiber blog post announced the partnership:

“The web is where we go to connect with people, learn new subjects, and find opportunities for personal and economic growth. But not everyone benefits from all the web has to offer. As many as 26% of households earning less than $30,000 per year don’t access the Internet, compared to just 3% of adults with annual incomes over $75,000. Google Fiber is working to change that.”

Check out local video coverage of the launch event:

AT&T lawyers filed suit against Nashville just two days after Mayor Megan Barry signed the new One Touch Make Ready (OTMR) ordinance into law. The Metro Council passed the proposal for the final time, and sent it on to the Mayor, on September 20th.

Seeking Out Streamlining

OTMR was proposed by Google Fiber, which wants to enter the Nashville market by deploying an aerial fiber network. In order to do that, they need to attach fiber-optic cables to utility poles around town, but the current process is cumbersome and will significantly delay the rollout. OTMR streamlines the procedure but would allow some one other than AT&T to manage the rearrangement of wires on all poles in the Nashville rights-of-way. The telecom giant owns about 20 percent of the poles in Nashville; the city’s electric utility, NES, owns the rest.

Three Arguments

AT&T seeks a permanent injunction to stop the city from enforcing the new ordinance. They argue the city does not have the authority to enforce the ordinance - that role is within federal jurisdiction through the FCC.

They go on to state that the Metro Council does not have the authority to pass the ordinance because, according to the city charter, only the Electric Power Board the has the right to pass regulations that deal with issues related to equipment, such as poles and the cable on them. 

AT&T also asks that the court grant a permanent injunction on the basis that they already have a contract with the city relating to AT&T’s wires that are on NES poles. The contract allows the company to handle its own wires and enforcing the ordinance would basically nullify that component of the contract.

What This Is Really About

On September 6th, the Nashville Metro Council approved a proposed One Touch Make Ready (OTMR) ordinance by a wide margin of 32-7 on a roll call vote (computers were down). This was the second vote to advance the ordinance, designed to streamline deployment of fiber-optic networks in a city looking for better connectivity. Elected officials responded to Nashville residents who flooded their council members’ offices with emails.

The Nashville Metro Council will take up the ordinance one last time; passage could speed up competition in the country music capital. Google Fiber has been pushing for a OTMR, while incumbents AT&T and Comcast look for a non-legislative solution to the problem of the poles while protecting their positions as dominant Internet Service Players (ISPs).

Caught Between A Rock And A Hard Stick

The city of Nashville sits on limestone, a rock that cannot support the trenching and underground work of fiber deployment. The only other option is to use the utility poles. Eighty percent of the poles are owned by the public utility Nashville Electric Service (NES), but incumbent provider AT&T owns the other 20 percent. Google Fiber says it needs to attach fiber to 88,000 poles in Nashville to build its network and about half of those (44,000) need to be prepared to host their wires. 

Pole attachments are highly regulated, but there are still gray areas. Susan Crawford provides an overview of the policies and regulations on BackChannel; she accurately describes how poles can be weapons that guard monopoly position. Currently, each company that has equipment on the poles must send out a separate crew to move only their own equipment. This process can drag on for months. The OTMR ordinance is a deceptively simple solution to this delay. 

Deceptively Simple, But Regulated

In 2015, Nashville welcomed Google Fiber with open arms, anticipating all the possibilities gigabit connectivity could mean for businesses and residents. The deployment is moving slowly, however, in part because of time consuming make ready work on utility poles. In order to speed up the process and establish better policy for the city in general, Nashville has just introduced a one touch make ready ordinance.

Too Many Wires

A recent Nashville Scene article described the situation, common in a number of communities where utility poles already carry a number of wires:

The thousands of poles that stand around the city, most of which are owned by Nashville Electric Service, are arranged with power on top and communications equipment in a line below that. In Nashville, this means NES equipment pushes electricity up top, while broadly speaking, gear from Comcast and AT&T — whether for home phone, cable or internet service — operates below. 

Enter Google Fiber. Because Nashville largely sits on a massive bed of limestone rock, running cable underground is, for the most part, not a viable option. That means Google has to join its new friends in the industry on the poles, through a process known as Make Ready. In a typical scenario, that involves Google — or any other new company trying to enter the market or get on a particular pole — notifying NES, which will then notify each telecom company that it needs to send a crew to the pole — one after another — to move their equipment and accommodate the new party. The process can take months, even if contractually mandated time frames are followed. Google Fiber officials and operatives working on their behalf suggest that’s not always the case. 

One-Stop Approach