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Seniors, Low-Income, Disabled Communities Pay the Price in St. Paul

For seniors, low-income residents, and the disabled in Saint Paul, Minnesota, a Comcast discount within the city's franchise agreement is not all it was cracked up to be. The Pioneer Press recently reported that, as eligible subscribers seek the ten percent discount guaranteed by the agreement, they are finding the devil is in the details - or lack of them.

This is a warning to those who attempt to negotiate with Comcast for better service. Comcast may make deals that it knows are unenforceable. 

"No Discount For You!"

For years, Comcast held the only franchise agreement with the city of St. Paul. In 2015, the city entered into a new agreement with the cable provider and, as in the past, the provider agreed to offer discounts for low-income and senior subscribers. Such concessions are common because a franchise agreement gives a provider easy access to a pool of subscribers.

It seems like a fair deal, but where there is a way to squirm out of a commitment, Comcast will wriggle its way out. 

Comcast is refusing to provide the discount when subscribers bundle services, which are typically offered at reduced prices. Because the contract is silent on the issue of combining discounts, the city of approximately 298,000 has decided it will not challenge Comcast's interpretation:

The company notes that the ten percent senior discount applies only to the cable portion of a customer's bill. Comcast has maintained that it is under no legal obligation to combine discounts or promotions, and that bundled services provide a steeper discount anyway.

Subscribers who want to take advantage of the discounts will have to prove their senior status and/or their low-income status. In order to do so, Comcast representatives have been requesting a copy of a driver's license or state issued i.d. 

CenturyLink Picks Up the Baton

In November, the city approved an additional franchise agreement with competitor CenturyLink. That agreement also provides that seniors, low-income households, and disabled residents are eligible to receive a ten percent discount. CenturyLink can, in the alternative, offer a discount of $5 off a subscriber's cable bill if a subscriber applies for the low-income discount. In order to receive this discount, the subscriber must prove they are enrolled in a public assistance program. CenturyLink is not compelled to provide both the $5 reduction and the ten percent discount under the terms of the agreement.

The CenturyLink contract states that bundling discounts will not forfeit the $5 discount but does not say the same for the alternative ten percent discount.

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Seniors on the Chopping Block

Discounts for low-income seniors are at risk in the CenturyLink contract reports the Pioneer Press. The contract offers the company an "out" by allowing it to exchange a senior discount to residents for free gigabit per second (Gbps) service at centralized locations. Rather than offering a ten percent discount to senior subscribers at their homes, CenturyLink can provide the high-speed connectivity to two St. Paul senior centers or to one senior center and a community center and present two training session per year on using the Internet.

My own parents, who are elderly and leave the house less frequently than they have in the past, depend on their Internet connection to stay in touch with their kids. A number of elderly folks are lower-income. Ten percent, a modest sum to a profit machine like Comcast, could be the tipping point for whether or not elderly people living on fixed incomes subscribe.

Would I rather have Mom trudging through the St. Paul snow to wait in line at the senior center to Skype in a noisy room filled with other seniors? No. Will Mom go to the senior center? Probably not. This trade-off is not equitable.

When You're All Lawyered Up, It's Easy to Break Promises

As franchise agreements expire across the country, communities like St. Paul will be negotiating new contracts or considering other options. Companies like Comcast and CenturyLink, backed by armies of lawyers, have turned backhanded negotiating into an art form. Cities like St. Paul employ smart, capable attorneys, but telecommunications is highly specialized; few communities have legal staff experienced in this field.

Lose The Big Companies, Gain Control

Contrary to the typical behavior of Comcast and CenturyLink, publicly owned networks have a history of lowering prices or increasing speeds for free. When we ask why, decision makers usually tell us they make the change because it's good for the community. Subscribers are the shareholders when a network is publicly owned.

Communities that invest in municipal networks shake off dependence on big providers like Comcast and CenturyLink. By investing in their own infrastructure, they spur economic development, save public dollars, and become more self-reliant. 

Op-ed: Next-Generation Networks Needed

The Knoxville News Sentinel published this op-ed about Tennessee's restrictive broadband law on January 9, 2016.

Christopher Mitchell: Next-Generation Networks Needed

Four words in Tennessee law are denying an important element of Tennessee's proud heritage and restricting choices for Internet access across the state.

When private firms would not electrify Tennessee, public power came to the rescue. In the same spirit, some local governments have built their own next-generation Internet access networks because companies like AT&T refused to invest in modern technology. These municipal networks have created competition, dramatic consumer savings and a better business climate in each of their communities.

The four words at issue prevent municipal electric utilities from expanding their successful fiber optic Internet networks to their neighbors, a rejection of the public investment that built the modern economy Tennessee relies upon.

Current law allows a municipal utility to offer telephone service anywhere in the state, but Internet access is available only "within its service area." This limit on local authority protects big firms like AT&T and Comcast from needed competition, and they have long lobbied to protect their de facto monopolies. To thrive, Tennessee should encourage both public and private investment in needed infrastructure.

These municipal systems have already shown they can bring the highest-quality Internet services to their communities. Chattanooga's utility agency, EPB, built one of the best Internet networks in the nation. Municipal fiber networks in Tullahoma, Morristown and more have delivered benefits far in excess of their costs while giving residents and local businesses a real choice in providers.

Many of these networks are willing to connect their neighbors — people and businesses living just outside the electric utility boundary. If Chattanooga wants to expand its incredible EPB Fiber into Bradley County with the consent of all parties, why should the state get in the way?

Consider that Tennessee metro areas almost always have at least one high-speed Internet option. Those with municipal networks have a real choice in providers. Nashville is slated for Google Fiber. But there is no such hope on the horizon in rural areas, despite the billions of dollars that have been spent on subsidies to providers like AT&T.

While AT&T's lobbyists scheme to prevent competition, the federal government subsidizes AT&T operations with more than $500,000 per month in Tennessee alone. So much for the "private" sector.

When it comes to municipal networks, taxpayer dollars are rarely used. Private investors often finance municipal networks by purchasing long-term bonds and are repaid by the revenues from the network. The Tennessee Valley Authority strictly oversees municipal utilities to ensure they are not cross-subsidizing telecom services with electrical ratepayer revenues.

To the extent municipal networks affect taxpayers, the taxpayers benefit. EPB just announced that in 2015 alone, its payments in lieu of taxes exceeded $19 million to the 17 jurisdictions in which it operates.

When local businesses connect to municipal fiber, more of their money stays in the community. Compare that to how much communities without a real choice send to AT&T and Comcast headquarters in distant states. And thanks to the competition, residents and businesses pay less. Morristown estimates a $3.4 million annual aggregate savings from lower bills.

The state should encourage communities to be more self-reliant and to build resilient regions rather than taking the side of distantly-owned monopolies. The state should be focused on how to encourage investment in next-generation Internet networks, not limit it.

 

Christopher Mitchell is the director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance. He is on Twitter: @CommunityNets.

Small City Fights Comcast Over Institutional Network

Reports have recently surfaced from The Detroit News and Patch.com that a town in Michigan is now fighting Comcast over who owns their network.

The Backstory

Fifteen years ago, West Bloomfield, Michigan, population about 65,000, wanted an Institutional Network (I-Net) to connect all the important services, like emergency response, police, fire, and water, with a dedicated high-speed network. The town entered into a franchise agreement in order to share the construction costs with the incumbent cable company, which at the time was MediaOne. According to the township, MediaOne offered to contribute $400,000 to the cost of construction as part of that agreement.

The agreement was transferred to Comcast in 2000; Comcast acquired MediaOne in 2002. MediaOne and successor Comcast have provided "free high-speed bandwidth transport as well as interconnectivity" during the life of the network claims Comcast in a letter submitted to the court. The cable giant also describes the practice as a "benefit not provided by Comcast's competitors" and wants it to stop. The franchise agreement expired on October 1 but was renewed until 2025.

To The Courts

Comcast and the town are now fighting over ownership of the infrastructure. With Comcast demanding new fees, the town is bringing a lawsuit. Comcast, however, maintains that it owns the I-Net that the town uses for all its important communications. The Detroit News reports that the township is coming out swinging:

The township said it is illegal to use public funds for private commercial purposes and insists there was never any reference to a cable company ever retaining ownership of the I-Net and said it has paid all other costs including upgrades and maintenance of the system which is “imperative to public safety operations of the township and will impact the township’s budget which is currently being prepared for 2016.”

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The township not only seeks a preliminary and permanent injunction against Comcast, it wants the company’s act declared a “wrongful conversion of township property” and to be awarded three times the actual damages plus costs and attorney fees.

In the past, these agreements made sense to small towns that needed economical internal communications. All across the U.S., towns signed onto franchise agreements with large providers that offered to build I-Nets and supply connectivity.

As original franchise agreements expire, ownership issues and rate changes are popping up. After years of dependency on big corporate providers in an environment where there is little or no competition, communities like West Bloomfield often find themselves at the mercy of companies like Comcast.

What Can Cities Do? Take Control

There’s another way though. Many towns have built their own I-Nets - often with better connectivity and more savings than franchise agreements offer. The infrastructure can be expanded for other public policy programs too, like economic development or residential Internet access. The “Institutional Networks” page is full of stories about communities that have built their own I-Nets. Rather than trusting big corporate providers, towns control their own infrastructure and are better able to predict connectivity costs.

Franchise agreements are expiring across the country. Big corporate providers like Comcast and Time Warner Cable use this strategy to squeeze more dollars from institutional customers. Martin County, Florida, overcame a similar situation when Time Warner Cable tried to extract exorbitant fees as their franchise agreement expired. Rather than pay an increased rate of more than 800 percent, they chose to invest in a publicly owned fiber I-Net. The community is now able to control their costs with fast, affordable, reliable infrastructure that the community can expand. Read more about Martin County in our 2012 Report, Florida Fiber: Martin County Saves Big with Gigabit Network.

Other towns can expect to find themselves in the same situation as West Bloomfield, Michigan. Raising rates and demanding new fees, large providers put profit before the best interests of the community. With these franchise agreements expiring, there’s a chance for cities and towns to take back local control by building their own networks.

The time to act is now. To learn more about what to do at the local level, check out our Community Connectivity Toolkit.

Chattanooga Crushes It - Marketing, Technology, and Nearby Communities - Community Broadband Bits Podcast 175

Chattanooga returns to the Community Broadband Bits podcast this week in episode 175 to talk about their 10 Gbps upgrade, the fibervention campaign, TN4Fiber, and having surpassed 75,000 subscribers.

For so much content, we have three guests joining us from Chattanooga's Electric Power Board (the EPB in EPB Fiber): Danna Bailey is the VP of Corporate Communications, Beth Johnson is the Marketing Manager, and Colman Keane is the Director of Fiber Technology.

Danna gives some background on what they are doing in Chattanooga and how excited people in nearby communities are for Chattanooga to bring local Internet choice to SE Tennessee if the state would stop protecting the AT&T, Comcast, and Charter monopolies from competition.

Beth tells us about the Fibervention campaign and how excited people are once they experience the full fiber optic experience powered by a locally-based provider.

And finally, Colman talks tech with us regarding the 10 Gbps platform, branded NextNet. We tried to get a bit more technical for the folks that are very curious about these cutting edge technologies on a passive optical network.

Read the transcript from episode 175 here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 25 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to other episodes here or view all episodes in our index. You can can downlhttp://muninetworks.org/sites/www.muninetworks.org/files/audio/comm-bb-bits-podcast175-danna-bailey-colman-keane-beth-johnson-epb.mp3oad this Mp3 file directly from here.

Thanks to Arne Huseby for the music, licensed using Creative Commons. The song is "Warm Duck Shuffle."

Happy Halloweek from MuniNetworks!

This time of year, goblins and ghouls are in plentiful supply. There is, however, a much scarier prospect than kids in rubber masks and bad Halloween candy: the reality of our monopolistic internet service providers. Enjoy the following images designed for Halloween and feel free to distribute widely.

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Santa Cruz Fiber Project with Cruzio

Santa Cruz, California, and its 62,000 people with poor Internet connectivity near Silicon Valley, could be one of the larger municipalities to develop a citywide fiber network. The Santa Cruz Fiber project, which was announced on June 24, 2015, would be an open-access public private partnership (PPP) with the city constructing the network and a private company, Cruzio, serving as network operator. The plans are preliminary, but the announcement highlighted the project’s emphasis on local ownership: 

“A locally-owned, next-generation broadband network operated openly and independently and built for Santa Cruz, [the Santa Cruz Fiber Project] is uniquely tailored to fit the diverse needs of the Santa Cruz community.” 

Cruzio is one of the oldest and largest Internet service providers in California. Completely locally-owned and staffed, Cruzio is rooted in Santa Cruz County. The company’s name perfectly describes it. Cruz- from Santa Cruz and -io from I/O (Input/Output, communication between an information processing system and the rest of the world).  Our Christopher Mitchell is gushing over the name and says: “I seriously love it.”

Fiber is not a new commodity in Santa Cruz. Since 2011, Cruzio has installed fiber in several of its projects, and the fiber has wooed some 30 entrepreneurs and solo practitioners to stay in the downtown area at the Cruzio Works, a co-working space. Last November, Central Coast Broadband Consortium commissioned a study of the fiber networks in Santa Cruz (paid for with a grant from the California Public Utilities commission). They discovered more fiber under the city of Santa Cruz than in any other city in the counties of Santa Cruz, Monterey, and San Benito. Unfortunately much of it belonged to incumbent providers like Comcast and AT&T who are loath to lease dark fiber or make affordable fiber connections available to local businesses and residents. 

Then, just this past June, Comcast announced the planned rollout of Gigabit Pro near Silicon Valley, but not Santa Cruz. Even if Comcast changes its mind, the city has already found a local private partner in Cruzio. This local public-private partnership will almost certainly result in far more benefits to the community than Comcast’s Gigabit Pro. This network will be under local control and responsive to community needs.  

The intention of the partnership is to pursue an open access model. At first, the network will be solely a public-private partnership where the City of Santa Cruz will own the network and Cruzio will construct and operate it. During the initial stages, Cruzio will provide the expertise in network management that the city of Santa Cruz does not necessarily have. After a number of years, the network will open up to more service providers in order to promote competition, which is how Westminster has arranged its partnership with Ting in Maryland. 

The goal of the FTTH project proposal according to Cruzio is to connect 6,000 households and businesses by the end of the third year. Currently, the construction costs are estimated at $52 million. The City staff will present a report to city council by the end of this September on the potential Fiber Project’s feasibility. Early project estimates suggest the network would be mostly completed by late 2018. If the take-rate is feasible, the city intends to back the network with municipal revenue bonds. Revenue bonds are repaid through the sale of networking services, not through taxes. This ensures that those who use the network will pay for the network. Cruzio is now surveying residents to determine interest and creating an engineering report. 

AT&T, Comcast, Lies Hurt Homeowners

As of this January, the FCC defines broadband as 25 Mbps downstream and 3 Mbps upstream, but in some rural areas in the United States, people are still struggling to access DSL speeds of 768 kbps. In a few extreme cases, individuals who rely on the Internet for their jobs and livelihoods have been denied access completely. 

The sad state of affairs for many Americans who subscribe to the major Internet service providers like AT&T and CenturyLink was recently chronicled in an article on Ars Technica that examined AT&T’s stunning combination of poor customer service, insufficient infrastructure, and empty promises to subscribers. It tells the unfortunately common story of the little guy being systematically overlooked by a massive corporation focused solely on short-term profit maximization. 

Mark Lewis of Winterville, Georgia, and Matthew Abernathy of Smyrna, Tennessee, are two examples of AT&T subscribers who, upon moving into new homes, found that not only were they unable to access basic DSL speeds, but that they had no Internet access whatsoever. Alternatively citing a lack of DSL ports and insufficient bandwidth, AT&T failed to provide Lewis Internet access over the course of nearly two years. As for Abernathy, the corporation strung him along for 9 months without providing DSL, forcing him and his wife to rely on a much more expensive Verizon cellular network to go online. 

The struggle that Lewis and Abernathy, as well as others cited in the article, face speaks to the larger problem of individuals relying on large, absentee corporations for their Internet access. Though AT&T has claimed that it intends to expand broadband access to rural and underserved communities, it hasn’t lived up to that promise. Ars Technica estimates that even if AT&T’s merger with DirecTV is approved, which the company says would facilitate the construction of new copper lines in underserved regions, 17 million subscribers would be stuck with slow DSL connections or no Internet at all. 

This isn’t the first time that a company like AT&T has been called out for promising broadband service and failing to deliver it. Ars Technica reported on a similar story in April of this year. And tales of Comcast’s incompetence are also easy to find. 

For residents of rural communities who rely on the Internet for work, the paucity of broadband options can even be a legitimate reason for individuals to sell their houses and move, which — spoiler alert — is what Lewis eventually did:  

With no wireline Internet available, Lewis and his wife have relied on Verizon Wireless service. This has limited Lewis’ ability to work at home. Luckily, they won’t be there much longer — Lewis, his wife, and their kids are putting their house on the market and moving to Massachusetts, where he’s secured a new job at a technology company. 

The new job is "the main reason we're moving," he said. "But in the back of my mind this whole time, I'm saying we can't continue to live here."

And while things turned out OK for Lewis and his family, limited broadband access in rural communities remains an obstacle for many. Individuals and communities should continue to demand accountability from their ISPs, who have for too long reneged on their not-so-ambitious broadband promises.

Longmont Gig Finds Many Takers - Community Broadband Bits Episode 161

The community reaction to Longmont's NextLight gigabit municipal fiber network in Colorado has been dramatic. They are seeing major take rates in the initial neighborhoods, driven in part by the opportunity for a $50/month gigabit connection if you take service within three months of it becoming available in the neighborhood.

This week, Longmont Power & Communications General Manager Tom Roiniotis joins us to tell us more about their approach and how the community has responded, including a block party celebrating freedom from a well-known monopoly.

We discuss how they have connect the schools, the history of the network, and how incumbent providers are reacting. Along the way, I make a case for why what Longmont is doing is substantially different from the upgrades that CenturyLink and Comcast are making in some areas. See our other stories about Longmont here.

Read the transcript from this discussion here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 24 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to other episodes here or view all episodes in our index. You can can download this Mp3 file directly from here.

Thanks to bkfm-b-side for the music, licensed using Creative Commons. The song is "Raise Your Hands."

New Report on Bandwidth Caps From Open Technology Institute

The Open Technology Institute (OTI) at the New America Foundation recently released its report on bandwidth caps. "Artificial Scarcity: How Data Caps Harm Consumers and Innovation" is the latest warning about an issue with grave implications. The PDF is now available to download

Last November, the Government Accounting Office (GAO) released a report [PDF] with serious comments on how ISPs might abuse their power through bandwidth caps. In that report, the GAO strongly suggested the FCC take action.

This report by Danielle Kehl and Patrick Lucey further examines how this profit grabbing technique from the big ISPs impacts consumer decisions and usage. 

From the OTI press release:

In this paper, we examine the growth and impact of usage-based pricing and data caps on wired and mobile broadband services in the United States. We analyze the financial incentive that Internet service providers (ISPs) have to implement these usage limits and discuss research that demonstrates how these policies affect consumer behavior. In particular, we explain how data caps can make it harder for consumers to make informed choices; decrease the adoption and use of existing and new online services; and undermine online security.

It is also increasingly clear that data caps have a disproportionate impact on low-income and minority populations as well as groups like telecommuters and students. In the conclusion, we urge the Federal Communications Commission (FCC), particularly as the new Open Internet Order goes into effect, to open up a serious inquiry into whether data caps are an acceptable business practice.  

In addition to their own data and conclusions, Kehl and Lucey provide information to many other resources that tackle the implications of bandwidth caps. As consumers' need for bandwidth increases with their changing Internet habits, this topic will only become more pressing.