TechDirt - May 4, 2017

Maine The Latest State To Try And Let Giant Broadband Providers Write Shitty, Protectionist State Law

Written by Karl Bode

One of (several) reasons why American broadband is so uncompetitive is the fact that we continue to let giant broadband mono/duopolies quite literally write awful state telecom law. As we've long noted, more than twenty different states have passed laws making it difficult to impossible for towns and cities to improve their local broadband networks -- even in instances when the entrenched duopoly refuses to. Many of these laws even ban towns and cities from entering into public/private partnerships with the likes of Google Fiber. It's pure protectionism.

Maine is the 49th ranked state in broadband speed and coverage -- in large part due to rural markets. Despite countless years of subsidies, broadband providers consistently refuse to seriously upgrade these areas at any scale due to costs. And yet they refuse to let the towns do it themselves, either. State Representative Nate Wadsworth has introduced HP1040, aka "An Act To Encourage Broadband Development through Private Investment." Except like so many of these bills, the proposed law's name is a stark 180 from what the legislative measure actually does.

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And laws banning municipal broadband -- and especially public/private partnerships -- accomplish the exact opposite of that. And while large ISPs (and their ocean of paid think tankers, economists, and other doller-per-holler professionals) have tried to make this a partisan issue -- the vast majority of municipal networks are built in Conservative areas with broad, bipartisan support. That's because there's one thing we can all agree on: nobody likes the local cable and broadband monopoly.

Today in the Maine Legislature, the Committee on Energy, Utilities and Technology voted unanimously to stop LD 1516, a bill that would restrict local telecommunications authority. After Tuesday's compelling testimony, when it was time for a Wednesday vote, LD 1516’s sponsor moved the bill be shelved.

Engaging Testimony

On Tuesday, May 2nd, the Committee of Senators and Representatives met to listen to testimony on the bill. We’ve provided audio of the public hearing.

South Portland, Islesboro, the Sanford Regional Economic Growth Council, and Rockport all sent experts with knowledge about developing public projects to testify in opposition to the bill. Representatives from GWI (the ISP working with several local communities that have invested in their own Internet infrastructure), the Maine Municipal Association, and the Mayors’ Coalition also testified against LD 1516.

Communities where publicly owned fiber is already improving local connectivity provided stories of how they tried unsuccessfully to work with incumbents. Page Classon from Islesboro described how incumbent proposals could be described as, “You pay for it, we own it, we charge you what we charge everyone else.” LD 1516 requires local referendums for such investments and Classon balked at taking such a proposal to the voters.

In South Portland, the city paid for construction of its open access fiber-optic network with general fund reserves. The language in LD 1516 restricts communities to funding through revenue bonds but South Portland uses its network to offer free Wi-Fi and to improve connectivity for municipal facilities. Under LD 1516, they would not have been able to make the investment.

Rick Bates from Rockport testified that the bill would force municipalities to contend with restrictions that legacy providers will never face and how those restrictions will not solve the problem of connecting rural Maine. Bates also took the opportunity to point out that organizations such as the Taxpayer Protection Alliance relies on misinformation and incorrect data, such as their erroneous assertion that Rockport has debt for its FTTH project.

This is the transcript for episode 250 of the Community Broadband Bits podcast. Gary Reback, author of Free the Market: Why Only Government Can Keep the Marketplace Competitive, joins the show to discuss antitrust law. Listen to this episode here.

Christopher Mitchell: I think we have some consensus that maybe the lack of antitrust enforcement has been going on too long and we're beginning to have some problems that need to be addressed.

Lisa Gonzalez: This is episode 250 of the Community Broadband Bits Podcast. From the Institute for Local Self-Reliance, I'm Lisa Gonzalez. In this week's episode, Christoper talks with Gary Reback, attorney and author. Gary's been called the protector of the marketplace and the antitrust champion for his work representing some of Silicon Valley's best-known companies. Gary and Christopher talk about antitrust, concentration of power and the different ways shifts in antitrust enforcement negatively impact both consumers and the market as a whole. Let's get to it.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm speaking with Gary Reback, a well-known Silicon Valley lawyer. Welcome to the show, Gary.

Gary Reback: Thank you.

Christopher Mitchell: I'm excited to have you on the show. You're well-known for being very involved in getting the government to sue Microsoft and for writing a book that actually came to me at a really good time about seven years ago called Free

the Market!: Why Only Government Can Keep the Marketplace Competitive. I really enjoyed that book, highly recommend it. For our audience's sake, we're not going to talk much about broadband in this conversation. But I think that many of these principles around competition in markets apply very strongly but it's something that will be sort of in the sideline. Gary, I'm curious if we can just start with a brief description of what you might describe as a working market before we spend the rest of our time talking about the markets that aren't working as well.

A recent edition of State Scoop published Christopher's thoughts on the state of competition in the broadband market in the United States. In the piece, Christopher argues how incumbent Internet Service Providers translate their economic power into political power, as seen in the recent vote to strike down consumer privacy protections. He also more widely distributes our recent infographic, "The Market Has Spoken. The Market Is Broken." We've reproduced the op-ed here:

Paths for repairing a broken broadband market

Infographic & commentary: Christopher Mitchell of the Institute for Local Self-Reliance says the new anti-privacy legislation passing through Congress offers further evidence that America's broadband market is broken, but not beyond repair.

To be charitable, one of the reasons that Republicans in Congress moved so quickly to eviscerate privacy protections for internet access subscribers was an overriding belief that the market provides better protection than regulators. To be less charitable, it is possible all the lobbyist contributions to their campaigns had an impact.

But the market is not providing a check to AT&T or Comcast power. They are effectively monopolies — and as we just saw — can translate their market power into political power to wipe out regulations they find annoying.

At the Institute for Local Self-Reliance, where we work to support local economies, this broken market is a major problem. Cable monopolies are bad for local businesses, which become less competitive from paying too much for unreliable Internet access. Communities cannot thrive without high quality Internet access today. 

So we created the infographic below, which offers evidence for our claim that the market is broken. The Federal Communications Commission has documented that most households don’t have a choice in broadband providers, let alone a meaningful choice (where you actually like one of the companies you have to choose between).

This is the transcript for Community Broadband Bits Episode 247. Ken Demlow of Newcom Technologies chats with Christopher Mitchell about what happened in Nashville and why poles are important for fiber. Listen to this episode here.

Ken Demlow: There's all that kind of communication that not only can improve what happens in electric and what happens in water, but also just such better communication with your customer, and it's all good stuff.

Lisa Gonzalez: This is episode 247 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Ken Demlow, Sales Director of Newcom Technologies joins Christopher this week to talk about several topics. In addition to discussing engineering and design and how it relates to telecommunications networks, Ken shares how Newcom is taking advantage of new technology to offer communities the best results. Christopher and Ken also get into the details of smart-grid and some benefits and uses that you might not necessarily think of right away. The guys spend some time on what happened in Nashville when Ken worked on the Google Fiber project. He shares his inside perspective. You can learn more about Newcom at nucomtech.com. Now, here's Christopher with Ken Demlow from Newcom Technologies talking about engineering and design, smart-grids, and pole drama in Nashville.

Christopher Mitchell: Welcome to another edition of The Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm speaking with Ken Demlow, the sales director of Newcom Technologies. Welcome to the show.

Ken Demlow: Thank you. Good to be here.

Christopher Mitchell: Ken you're one of my favorite people at these trade shows. We're here at the Iowa Association of Municipal Utilities, and as you know, I contrived an excuse to have you on because I think you're a fun person to talk to.

Ken Demlow: Thank you. That's better than I deserve, but thank you.

Christopher Mitchell: I think we're going to start with just a brief explanation of what Newcom Technologies does.

“Monopoly” may be a fun family night activity, but if you live in a place where you have little or no choice for Internet access, it’s not fun and it’s not a game.

According to FCC data, most families don’t have a choice in Internet access providers, especially providers they like. Nevertheless, the biggest companies keep reporting increasing revenues every year. People aren’t happy with the service they’re receiving, but companies like AT&T and Comcast continue to thrive. What’s going on?

In a recent State Scoop piece, Christopher wrote: 

[T]he market is not providing a check to AT&T or Comcast power. They are effectively monopolies — and as we just saw — can translate their market power into political power to wipe out regulations they find annoying.

At the Institute for Local Self-Reliance, where we work to support local economies, this broken market is a major problem. Cable monopolies are bad for local businesses, which become less competitive from paying too much for unreliable Internet access. Communities cannot thrive without high quality Internet access today. 

We created this infographic to present the evidence showing that the market is broken. This resource also discusses why creating more competition in the current market is such a challenge. An effective way to overcome this broken market, however, is to consider what hundreds of local communities are already doing - investing in publicly owned Internet infrastructure. Our infographic offers a few examples of different models, each chosen to suit the communities they serve.

Get a larger version of the infographic here. 

Get a larger version of the infographic here.

Kudos to intern Kate Svitavsky who created the infographic.

Stay up to date on community networks with our newsletter.

Take a minute to learn just a few of the reasons why local communities invest in publicly owned networks. Our short 2012 video is a great way to share information about community networks - there can be other options beyond big cable and DSL providers.

On March 24th, Christopher was on episode 232 of the web show "This Week in Enterprise Tech." Christopher discussed the future of community broadband networks in the Trump era as well as shared information about the models of successful networks across the country.

Christopher begins his discussion of these issues at 29:45 with host Friar Robert Ballecer and guest co-hosts Lou Maresca and Brian Chee. Throughout the show, the group covers the beginning of the FCC Chairmanship of Ajit Pai, how the Senate is legislating against Internet privacy regulations, and how community networks are pushing ahead to achieve better connectivity for local businesses and residents.

The folks at TWiT.tv share excerpts from our video on Ammon, Idaho, and the guys get into a deeper discussion about the possibilities of local empowerment from community networks.

You can stream the episode at TWiT.tv, or watch here: