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Community Broadband Media Roundup - Week of August 22

As we move closer to a FCC decision to restore local authority, more lawmakers are coming out to back Wheeler’s comments on using Section 706 authority. This week Senator Markey and Representative Mike Doyle of Pennsylvania issued a statement calling on Wheeler to take action. 

Wheeler will need that kind of support to remove state laws that restrict competition, as John Brodkin writes in his Ars Technica article. Matthew Berry, the chief of staff to FCC Commissioner Ajit Pai, spoke at the National Conference of State Legislatures, an organization that already announced it would sue if Wheeler allowed the FCC to step in and overturn state laws:

“In short, under our constitutional framework, states are free to grant or take away powers from municipalities as they see fit. So the basic concept is this: city governments are appendages of state government, but state governments most definitely are not appendages of the national government."

Multichannel’s John Eggerton also warned that those opposed to preemption think the FCC is overstepping its authority: 

“Section 706 does not come close to containing the necessary clear statement that Congress intended to authorize the FCC to preempt state restrictions on municipal broadband projects." 

But others (thankfully) disagree.

Kate Cox at The Consumerist summed up the preemption letter call-and-response between lawmakers and Wheeler:

"In his letter, the chairman agreed that, the state laws against municipal broadband “have the effect of limiting competition in those areas, contrary to almost two decades of bipartisan federal communications policy that is focused on encouraging competition.”

 Motherboard’s Sam Gustin followed the most recent letter as well:

He [Wheeler] also reiterated his earlier stance on pre-emption, saying, “I respect the important role of state governments in our federal system, but I know that state laws that directly conflict with critical federal laws and policy may be subject to preemption in appropriate circumstances,” though he diplomatically added, “I recognize that federal preemption is not a step to be taken lightly without a careful consideration of all relevant legal and policy issues.”

Revisiting the Blackburn Amendment Debates

REMINDER - Today is the last day to file comments in the opening round of the FCC petitions of Wilson and Chattanooga. Information on how to file here.

Last month, we covered the progress of U.S. Representative Marsha Blackburn’s amendment to strip the FCC of its authority to restore local decision-making as its budget wormed its way through committee and into a larger appropriations bill. Her quest to keep state bans and restrictions on community networks in place (including in her home state of Tennessee, where Chattanooga EPB has filed a petition to start serving neighbors in need) is impressive for its boldness, if not its logical consistency. Impervious to many observers and commenters who noted her extensive financial support from incumbent telcos, she succeeded in passing the amendment on the House floor by a vote of 223-200.

The points raised by Representative Blackburn on the House floor in support of her amendment deserve some attention, as does the rebuttal offered by Representative Jose Serrano of New York’s 15 district, who rose against the amendment and in defense of the right of local communities to decide for themselves how to meet their broadband needs. Few of Blackburn’s arguments will surprise regular observers of the telco incumbent playbook, but there are some highlights that deserve special focus.

Rep. Blackburn based nearly her entire argument against FCC preemption on the idea that states are closer to the people than Washington, and that the FCC shouldn’t tell the local folks what to do:

“[Chairman Wheeler] wrongly assumes that Washington knows best, and forgets that the right answer doesn’t always come from the top down.”

“...Twenty states across this country have held public debates and enacted laws that limit municipal broadband to varying degrees. These state legislatures and governors have not only listened but have responded to the voices of their constituents. They are closer to the people than the Chairman of the FCC.  They are accountable to their voters.”

“...State governments across the country understand, and are more attentive to the needs of the American people than unelected federal bureaucrats in Washington.”

We could not agree more, Rep. Blackburn: the right answer does not always come from the top down. Which is exactly why state legislators and incumbent lobbyists should get out of the way and allow local communities to find their own answer for affordable broadband access. In his time on the floor, Rep. Serrano raised this point as well:

"Whatever happened to localism or local control? This amendment means the Federal Government will tell every local citizen, mayor, and county council member that they may not act in their own best interests. 

[Blackburn’s] amendment is an attack on the rights of individual citizens speaking through their local leader to determine if their broadband needs are being met."

Representative Blackburn also raised the specter of the “failed” UTOPIA network, and charged that the FCC would somehow force all states to do something similar:

“For example, look at the failed UTOPIA project, that has created massive disruption and is challenging taxpayers… That doesn't sound like a model the federal government needs to force against the wishes of state elected officials” 

No one is “forcing” any kind of municipal broadband model on any community; under preemption each community would simply be free to choose for itself. The unfortunate state legislators who may potentially see the federal government go “against their wishes” are in fact forcing a cable and telecom monopoly model on local communities. 

Rep. Serrano noted the example of Chattanooga EPB, where gigabit connections can be had by anyone for $70 per month from the municipal utility and potential customers are clamoring for service but are blocked by state law. He also rooted out the red herring of “forcing” a given model on anyone: 

“Preemption will not force anyone to do anything that the municipalities alone don’t want to do. This is not about forcing states to do anything, but instead stopping states from choking grassroots competition and stopping states from blocking faster networks or new networks where none exist.

“Broadband is something that we need to expand... It should be available everywhere, and it should be available in every possible place - rural, suburban, inner city, in homes, in schools. 

We have to build the infrastructure to make that happen.” 

Rep. Serrano also submitted several letters into the Congressional Record in support of FCC preemption, including those submittted by the U.S. Conference of Mayors and the Coalition for Local Internet Choice.

As important as it is to name and shame the politicians (such as Rep. Blackburn) who act on behalf of their corporate sponsors to undermine local communities, it is equally important to give credit where it is due. In this case, a pat on the back is due to Rep. Serrano, who took time on the House floor to point out some of the more ludicrous straw man arguments used by the anti-community network crowd. 

The full Congressional record of their exchange can be seen here (the relevant debate starts on page 6280). Youtube also has an edited video of Rep. Blackburn’s full floor statements from her own channel, where Rep. Serrano’s well-reasoned rebuttal is conspicuously absent.

Denver Post Editorial Takes Aim at Colorado Law Limiting Investment

SB 152, the telecom incumbent-supported Colorado law that restricts municipalities from building broadband networks or even partnering with other entities to do the same, is increasingly coming under fire. The City of Longmont passed a referendum to restore its local authority in 2011 and has started construction on a project that will make it Colorado's first gig city.

Centennial and Montrose voters have chosen to restore their authority as well. Boulder plans to put a similar measure to the test in elections this fall. So far, every community in Colorado that has put restoring local authority on the ballot has gotten it done - despite heavy incumbent spending and astroturf activism.

Now, an editorial in the Denver Post has called even more attention to the issue of SB 152 and the anti-competitive, undemocratic environment it has created in the State of Colorado: 

The statute created by SB 152 needs to go away. While civic and business leaders tout ambitious projects to connect the state with the rest of the world, Colorado is falling behind because of artificial constraints to broadband expansion.

Longmont pioneers saw past all of that and pushed through, even in the face of well-financed opposition. A few other communities are starting to see the advantage of bucking SB 152.

Longmont's Roiniotis says the question he hears almost constantly is, "When am I going to get my gig?"

It is a question the entire state should ask.

We couldn't have said it better ourselves. 

ILSR Submits Comments to FCC on Protecting and Promoting the Open Internet

The Institute for Local Self-Reliance recently submitted comments to the FCC as part of its Protecting and Promoting the Open Internet proceeding. ILSR focused on the issue of paid prioritization, reclassification, and regulation of content. We also provided some examples of municipal networks that provide fast, reliable, affordable service and do not rely on paid prioritization to serve customers.

From the ILSR comments:

The FCC should be extremely wary of any arguments that claim paid prioritization or other discriminatory practices are necessary to increase investment in next-generation networks. These networks are already being built and paying for themselves in both public and private approaches (as well as partnerships mixing the two). ILSR sees no reason to believe any additional revenues gained by discriminatory pricing would be reinvested in improving DSL and cable networks as the largest firms operating these networks generally face little competitive pressure to upgrade. That is the problem, not a lack of revenue in the current model.

Our reading of the various court decisions suggest the only option for the FCC to preserve the open Internet and prevent big cable and telephone companies from tinkering with the established principle of non-discriminatory carriage is reclassification and urge the FCC to take this step. However, we also urge the FCC to take actions to prevent any regulation of content. The FCC should concern itself with the transmission of information, regardless of what that information is, consistent with long-held Internet principles.

The Open Internet proceeding has inspired an estimated 1 million+ comments. The outpouring strained the FCC's system and as a result, the FCC extended the comment period to July 18th.

The full document is available below for download and available on the FCC's electronic filing system.

The FCC Is Our Best Shot to Restore Local Authority

For the first time in many years, we have an opportunity to repeal some particularly destructive state laws limiting investment in community networks. To be clear, this is our best shot. I've already covered the background and offered a blanket encouragement for you to post comments.

Chairman Wheeler has been looking for an opportunity to expand local authority by removing state laws that limit investment in Internet networks. The cable and telephone companies are marshalling their considerable forces to stop him. But we can, and must help.

We have spent years analyzing these state barriers for ways to restore local authority. The FCC, using its Section 706 power, is our best shot. The carriers have far too much power in the state capitals, which means that even when we have public opinion squarely on our side, the carriers easily kill state bills to restore local authority.

Anyone who thinks we have a better shot at rolling back state barriers individually in the states rather than with this FCC is wrong. Really wrong. Between Art Pope and Time Warner Cable lobbyists, there is no hope for any legislation that would threaten cable monopolies in North Carolina.

These petitions on municipal networks are not some FCC smokescreen related to the network neutrality proceeding. In fact, we at ILSR remain publicly frustrated with the FCC's failure to act more strongly in protecting the open Internet. But Chairman Wheeler, for reasons that seem somewhat personal to him, is particularly motivated to remove the anti-competitive laws passed by big cable and telephone company lobbyists. It strikes a chord with him and I, for one, am glad to see him taking action on it.

Anyone who claims action on municipal networks is some sort of trade for giving up on network neutrality is, once again, really wrong. For one thing, a trade requires two parties and I have yet to identify a single entity that would trade meaningful open Internet protections for rolling back a few barriers to municipal networks. Haven't found one. Not even us.

Further, restoring local authority on municipal networks is not a trade for the FCC later preempting local authority over the rights-of-way because once again, no one is ready to take that deal. Advocates of local decision-making authority tend to oppose preemption as a matter of course.

In the case of the current FCC proceedings, it must be noted that the FCC is actually being asked to preempt preemption, which is to say the principle remains that local authority should be respected. The FCC will remove state restrictions on local authority; no community will be required to take action it prefers not to.

This is a key opportunity. The FCC's Section 706 Authority allows it to remove barriers investment. No one is talking about creating new regulations.

For those still skeptical about these petitions, let me suggest this: If this is all some elaborate game of 3D chess masterminded by FCC Chairman Tom Wheeler, let's call him on it. Let's assemble a great record of how local governments can increase investment in next-generation services and states should not revoke their authority to decide for themselves how to invest or partner to improve and expand Internet access. In the worst case scenario, we will have compiled a great case for our position.

The Coalition for Local Internet Choice has posted instructions on how to file. File anytime between now and August 29. We are still working on a resource with recommendations and such for MuniNetworks.org and will publish them soon.

Oklahoma's Sallisaw Passes Resolution to Support FCC As It Considers Preemption

Sallisaw, home of DiamondNet, is the latest community to publicly express its desire to put telecommunications authority in the hands of the locals. On July 14, the Sallisaw Board of City Commissioners approved Resolution 2014-17 in support of the FCC's intention to preempt state anti-muni laws.

A Resolution Supporting Telecommunications Infrastructure For Local Governments

WHEREAS, local governments, being closest to the people are the most accountable level of government and will be held responsible for any decisions they make; and

WHEREAS, community/municipal broadband networks provide opportunities to improve and encourage innovation, education, health care, economic development, and affordable Internet access; and

WHEREAS, historically, the City of Sallisaw has ensured access to essential services by providing those services that were not offered by the private sector at a reasonable and competitive cost; and

WHEREAS, in 2004 the City of Sallisaw took steps to construct its own Fiber to the Premise telecommunications system and now provides the community with quality state-of-the-art broadband services including video, High Speed Internet and telephones services, that otherwise would not be available today; and 

WHEREAS, local government leaders recognize that their economic health and survival depend on connecting their communities, and they understand that it takes both private and public investment to achieve this goal; and

WHEREAS, the DC Circuit Court has determined that Section 706 of the Federal Telecommunications Act of 1996 unambiguously grants authority to the Federal Communications Commission (FCC) to remove barriers that deter network infrastructure investment;

NOW, THEREFORE, BE IT RESOLVED that the Board of City Commissioners of the City of Sallisaw, Oklahoma, supports FCC efforts to ensure local governments are able to invest in essential telecommunications infrastructure, if they so choose, without state-imposed barriers to discourage such an approach.

ADOPTED by the Governing Body on 14th day of July, 2014.

When City staff began researching the possibility of a municipal network in 2002, they discovered that dial-up was the only option for residents; businesses had the option of T1 connectivity. At the time, a coaxial or hybrid coax/fiber system were considered, but Sallisaw went with fiber to future-proof the network.

In an undated interview with the Oklahoma State University Cooperative Extension Service, network staff commented on the benefits for the community:

The key benefit of the City owning this system is that the revenue stays in the community. Our current annualized revenue is more than $1.5 million before expenses. As our customer base and revenue grows we will begin to see more net revenue after expenses, and that net will go to other non proprietary city services.

From DiamondNet FAQs:

The community of Sallisaw owns the FTTH system and its employees are residents of the community. In the past, the cable television provider in the community experienced numerous ownership and name changes, averaging about one every four years. DiamondNet will have one name and one owner for the life of the system. As your neighbors, we strive to provide you with excellent service. When you need help, just pick up the phone or come see us on the main floor at City Hall on Choctaw Street. We are here to serve you. 

Rural Indiana Looks to Tax Increment Financing to Build Fiber Networks

Wabash County, Indiana wants to expand its access to high speed internet through a fiber optic network build out, and is planning to use a distinctive financial tool to do so. The Wabash County Redevelopment Commission has begun the process of assigning a special Economic Development Area designation for the purpose of helping to finance new fiber deployment through parts of the mostly rural county of 33,000 people.

Tax Increment Financing (TIF) is method of public financing that uses future gains in property or sales taxes within a defined area to subsidize a redevelopment or infrastructure project. A local jurisdiction can borrow money up front, build the project, and then use the increased tax receipts it generates to pay off the debt over a period of years. The concept is actually pretty simple: capture the value that something will have in the future to build it now.

TIF  has been a popular approach among local politicians around the country for decades as a way to work around tight budgets and finance improvements in blighted areas, often in the form of public infrastructure. It has sometimes drawn criticism, especially in cities like Chicago where it is very heavily used. One downside is that it effectively takes properties off the general tax rolls. 

More important for our purposes, however, is that the use of TIF for next generation fiber optic networks is a fairly new phenomenon. While municipal networks around the country have used a wide range of financing approaches to cover upfront costs, most have revolved in some way around bonds that are repaid from network revenue. Using TIF to capture the increased property value that a fiber optic network would create is an interesting approach.

In the case of Wabash County, it’s not yet clear exactly how the funds would be used. There is a local private incumbent provider, Metronet, which received $100,000 last year to match its own $1 million investment to bring fiber to a town on the north edge of the county. The county also has a cooperative utility (Wabash County REMC) that provides power and telephone services in rural areas and has expressed interest in using TIF to build out a fiber network. Whichever entity ultimately receives TIF money, it does not appear that the county is interested in owning the network itself. 

Wabash County is not alone it its pursuit of TIF-backed fiber networks. Other counties and municipalities in rural Indiana have been moving along the same lines, from Chesterton in the north to Dubois County in the south. The Indiana  Association of Cities and Towns, meanwhile, recently helped defeat an attempt by telecom industry lobbyists (ahem, AT&T) in Indianapolis to pass legislation eliminating the authority of local governments to use TIF - but only for fiber optics and other telecommunications equipment.  

Whether or not TIF eventually proves to be a good tool for building high speed fiber optic networks in rural areas and small towns remains to be seen. Taking a broader view of the value of a the public and private value a municipal network creates, beyond a simple glance at network revenues, is a step in the right direction. In any case, the right of local communities to make their own choices about how best to finance, plan for, and pursue their shared needs is paramount.

North Carolina Town Saves Public Dollars With Its Own Network

On June 18 Holly Springs, home to approximately 25,000 people, started saving money with its new fiber I-Net. Last summer, the Town Council voted to invest in fiber infrastructure as a way to take control of telecommunications costs. Just one year later, the 13-mile network is serving community anchor institutions.

After exploring options with CTC Technology and Energy, Holly Springs determined that deploying their own $1.5 million network was more cost effective than paying Time Warner Cable for data services. Annual fees were $159,000; over time those costs certainly would have escalated. According to the Cary News, Holly Springs anticipates a future need for more bandwidth:

“And we wouldn’t have been able to actually afford as much (data) as we need,” [Holly Springs IT Director Jeff Wilson] said. “Our costs were going to be getting out of control over the next couple of years.”

Because state law precludes the town from offering services to homes or businesses, Holly Springs plans to use the new infrastructure in other ways. State law allows the community to offer free Wi-Fi; the town will also lease dark fiber to third-party providers. According to the News article, the town has already entered into a 20-year contract with DukeNet, recently acquired by Time Warner Cable. DukeNet may expand the fiber to the Holly Springs Business Park for commercial clients.

The community's free Wi-Fi in public facilities is approximately 20 times faster than it was before the deployment, reports the News:

When the town activated the network on June 18, “People told us they could tell the difference immediately,” said Jeff Wilson, Holly Springs’ IT director.

According to the News, the fiber network allows the city to expand free Wi-Fi to more green spaces. Cameras at baseball fields now stream live video of games; parents and grandparents can watch activities online if they cannot attend games in person.

For more on the community and the project, check out Chris' conversation with Jeff Wilson in episode #107 of the Community Broadband Bits podcast.

Chattanooga and Wilson Petition FCC to Remove Anti-Competitive Restrictions

Chattanooga and Wilson, North Carolina, are two of the most successful municipal fiber networks by a variety of metrics, including jobs created, aggregate community savings, and more. This has led to significant demand from surrounding communities for Wilson and Chattanooga to expand. We have profiled both of them in case studies: Wilson and Chattanooga.

Expecting this outcome, the big cable and telephone companies had pressured the states to limit where municipal networks can offer service, unlike the private companies that can invest anywhere. Wilson cannot expand beyond county limits. Chattanooga already serves its entire electrical footprint, which stretches into northern Georgia and includes a few other towns but cannot serve anyone beyond that.

FCC Chairman Wheeler has been quite clear that he intends to remove barriers to competition that limit local authority to build community networks.

Today, Wilson and North Carolina have filed petitions with the FCC to remove restrictions on their ability to expand and offer services to nearby communities. These barriers were created after major lobbying campaigns by Comcast, AT&T, and Time Warner Cable, one of which we chronicled in The Empire Lobbies Back. We have also explained how the FCC can take this action and interviewed Harold Feld on the matter.

Read press statements from Chattanooga EPB and Wilson, North Carolina [pdf]. Also, Wilson's Full Petition and Exhibits [pdf], Chattanooga's Petition [pdf], and Chattanooga's Exhibits [pdf]. Jim Baller worked with them on the filing, so you know the facts are straight.

We issued a press release this afternoon,

“The move today cuts right to the heart of local authority,” says Christopher Mitchell, director of Community Broadband Networks with The Institute for Local Self-Reliance (ILSR). “The ultimate question is who decides what investments are right for each community — that community or officials far removed from it..”

If the FCC agrees with the petitions, the big cable companies will almost certainly appeal it to the DC Circuit Court, where a recent Verizon v. FCC opinion specifically noted that this type of action is well within its authority.

CLIC Logo

On behalf of the Coalition for Local Internet Choice, CEO Joanne Hovis wrote,

The net effect is to stifle competition, harm public and private sector economic development, and extinguish associated quality of life improvements in education, health care, energy use and public safety. Nearby communities that desperately want services from these networks are prevented from receiving it. Wilson and Chattanooga have asked the FCC to step in using its authority to promote advanced telecommunications capability to all Americans and preempt these state laws; to let local choice prevail.

Because the power of incumbent providers is so great in each state legislature, there is little hope for a remedy at the state level. These petitions are part of a larger discussion at the national level, whether the promise of modern Internet access will be for ALL Americans, or only for some.

And both Sam Gustin and Karl Bode were quick to post on the matter as well. Sam wrote on Motherboard at Vice:

In states throughout the country, major cable and telecom companies have battled attempts to create community broadband networks, which they claim put them at a competitive disadvantage.

Last week, Rep. Marsha Blackburn, the Tennessee Republican who has received tens of thousands of dollars in campaign contributions from the cable and telecommunications industry, introduced an amendment to a key appropriations bill that would prevent the FCC from preempting such state laws. The amendment passed in the House of Representatives by a vote of 233-200, but is unlikely to make it through the Senate.

And Karl Bode called it "Put Up or Shut Up Time for FCC on Community Broadband:"

Comcast and AT&T have quickly moved to stop the FCC's potential assault on their protectionist laws via both lawsuit threats via proxy groups, and via politicians like Martha Blackburn, who, after receiving campaign contributions from PACs tied to both companies -- has passed a bill in the House threatening to strip FCC funding if the agency dares to act. It's not a fight that would be easy, but it's a fight the FCC should win -- and it's a long-overdue fight that must be had if we're to finally start taking broadband competition problems seriously.

As with consumer advocate requests that ISPs be reclassified as utilities as a solution to neutrality concerns, this is another area where Wheeler can prove he's either thrown aside his long-history of industry lobbying and is ready to fight for consumers, or is just another in a very long line of FCC bosses too timid to meaningfully challenge deep-pocketed campaign contributors and the status quo.

And finally, we have seen an outpouring of grassroots support for this effort.

The Past and Future of Muni Fiber in Boulder - Community Broadband Bits Episode 108

Boulder is the latest Colorado community to recognize the benefits of using city-owned fiber to spur job growth and improve quality of life. Boulder Director of Information Technology Don Ingle joins us for episode 108 of the Community Broadband Bits podcast.

We discuss the many ways in which Boulder has benefited from community owned fiber over the past 15 years and the smart policies they have used to expand conduit throughout the community.

We finish with a discussion about the upcoming referendum that Boulder will likely place on the November ballot to regain local authority to use and expand its fiber assets to encourage job growth and increase residential options.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 17 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 previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Waylon Thornton for the music, licensed using Creative Commons. The song is "Bronco Romp."