Fast, affordable Internet access for all.
Campaigns to Keep Monopolies We Don't Love - Episode 514 of the Community Broadband Bits Podcast
This week on the podcast, Christopher is joined by Sean Gonsalves, Senior Reporter and Editor at the Institute for Local Self-Reliance. During the conversation, they talk about the value and concrete results of going small and stacking up targeted wins as a path for cities facing less of an appetite for big, bold projects, before digging into recent astroturf campaigns by monopoly Internet Service Providers (ISPs).
Led by the Alliance for Quality Broadband (AQB) (really a lobbying group including providers like Charter Spectrum and others), municipal broadband efforts have seen recent setbacks in places like Southport, Maine. It's a campaign being waged both in print flyers and online facebook ads, with AQB driving misinformation efforts and attempting to scare citizens away from upcoming votes on projects to improve local connectivity after years of underinvestment by incumbents (like Charter Spectrum).
Christopher and Sean fact check the Alliance for Quality Broadband's bogus claims about the failure of muncipal efforts across the country in places like Pennsylvania, Minnesota, California, Florida, and Vermont, and unpack the deep-seated fear of competition driving such efforts.
Listen to Christopher's in-depth interview with Harold Depriest about Chattanooga, referenced in the episode.
Watch the most recent episode of the Connect This! Show to see Christopher and Travis Carter (USI Fiber) talk with Peggy Schaffer (Director, ConnectME), Andrew Butcher (President, Maine Connectivity Authority), and Christa Thorpe (Community Development Officer, Island Institute) about anti-municipal broadband efforts in Maine.
This show is 38 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed.
We want your feedback and suggestions for the show-please e-mail us or leave a comment below.
Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.
Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Sean Gonsalves (00:07):
You see that on Twitter sometimes where somebody says, what's your source? And somebody says, the sources. Trust me, bro. Kind of feel like that's what this is, is
Christopher Mitchell (00:15):
Welcome to another episode of the Community Broadband Bids podcast. A little different than than normal, but hey, I'm on vacation, so I do what I want. it's great to be here with you, Mr. Sean Gonsalves, how you doing?
Sean Gonsalves (00:29):
I am great. I am great. It's good to be here.
Christopher Mitchell (00:32):
And I know you have like three different titles, but you're like a communications guy. You're a writer guy, you're a research guy, you're a communi, I think I already say communications guy. Yeah, I'm the forgetful guy.
Sean Gonsalves (00:42):
Yeah, <laugh>. Yeah. That's one that's on your, that's on your card.
Christopher Mitchell (00:46):
So back in the day, many years ago, we did a, a show, a series of shows that we called Crazy Talk. And I feel like this is an episode along those lines where we're primarily going to respond to claims that people make often people who are drawing their paychecks either directly or indirectly from major cable and telephone companies that might sound credible. and, and you know, they have a slick website and they have a lot of claims. but the question is whether or not it's actually rooted in reality or not. So I'm excited to have you join us for your first, first episode of Crazy Talk, and I think this might be like volume five or six.
Sean Gonsalves (01:27):
All right. I'm honored. Somehow I feel like I'm well suited for a discussion on Crazy Talk
Christopher Mitchell (01:32):
<laugh>. So this comes like linearly for us, but not for the listener. the day after we did the Connect this episode with folks from Maine, Andrew Butcher Peggy Schaffer we're recording this on her last day, but by the time people hear it, she will have retired. and
Sean Gonsalves (01:53):
Christopher Mitchell (01:54):
Thorne and Krista Thorpe from the Island Institute. Yes. And we talked a bit about what was happening in Maine with this group, the Alliance for Quality Broadband, where they've been really disruptive, but you have heard from others across the nation as well, who are hearing some of these complaints and, and have questions about claims that, that this group has made. so we're gonna, we're gonna talk about that a bit.
Sean Gonsalves (02:18):
So Cambridge is one of those communities where you've got a, you know a group of, of, of, of citizens who've committed to exploring community broadband and are, are pushing for municipal broadband network in, in, in that city where all the smart people live. Harvard and MIT, the home of Harvard and MIT. and they're tired of the, you know, the monopoly service that's, that's there and the, and, and, and to say nothing of the fact that there's, even in a community like Cambridge, there's a number of folks who are on the wrong side of the digital divide. So recently the, the city has moved forward with a getting serious a feasibility study, which, you know,
Christopher Mitchell (03:02):
Wait a minute, I just wanna pause to give Travis a second to catch his breath, because he's gonna be laughing at the idea of getting serious about a feasibility study when he hears this. Right. Well,
Sean Gonsalves (03:10):
Getting, getting, I should say that, I should have said that. The city now seems to be, which included a town manager or a city manager, had been kind of dragging his feet on this. He's about to retire and is now on board with really moving forward and studying this in a serious way and not just, you know, to check a box.
Christopher Mitchell (03:27):
Let's pause there for a second, cuz That's right. And one of the things we saw was the city council was pretty united, that Cambridge is a wealthy city. A lot of folks have pretty decent access from Comcast. fair number of them would like something better, they'd like something more affordable. But they also have low income folks that have poorly served and, and they have been trying to address this. And I felt like the city manager was just stuck with this idea of like, oh, well, like, I don't want to build a massive broadband network and, and like, just be clear, some of the folks in the community would like to see a municipal fiber network that touches everyone. My answer was always, and don't build a giant fricking network if you're nervous about it. Build something targeted to solve a specific problem. You have the money in Cambridge, you, you, you could do it. And, and I just, I'm, I'm really frustrated where we get caught in this like, go big or go home because that is not the way to approach municipal broadband. I think, you know, some places can go big you know, we got Knoxville going big. Fort Collins, you know, is going big right now. they're, they're doing well it seems. but like a lot of places it makes more sense to start off. you know, especially places without a municipal electric department just chill, do something targeted and focused and, and learn.
Sean Gonsalves (04:39):
Well, and, and, and, and also my understanding as well is that Cambridge has a very hefty cash reserve that could probably, that could more than build a citywide fiber network and, and still have money left over.
Christopher Mitchell (04:52):
Yeah. If people wanna do that, which, you know, city council seems like they wanna at least explore that, then that should be an option. but I I I'll just say that like I, I feel like I would love to see Cambridge do something that, that meets its needs. but I just wanna be be clear that I feel like do do something that works. You know, don't, just, don't just dream big for the sake of dreaming big.
Sean Gonsalves (05:12):
It's a good point. You know, when I think about this, like what's going on in Maine and Cambridge and, and for sure all over the country in communities that are contemplating building a municipal fiber network or, or a municipal broadband network of any kind. I, I keep thinking about how rarely, if ever, are there debates about like the financial risk of building roads or schools or water systems, all of which are far more expensive capital projects that, that cities and communities build. So, and it's rare, it, it is rare to hear someone talk about like the finance financial boondoggles or leaving the taxpayers on the, on the hook for those kind of projects, except maybe for the big dig. But even when you're talking about the big dig and the cost overruns, no one uses the big dig as as, as an argument for why there should never be highway road projects ever
Christopher Mitchell (06:00):
Again. Right. Get the government outta roads.
Sean Gonsalves (06:02):
Yeah. Get, go get the government out of roads. And so, so for me, the question is why do we have these debates when it comes to building broadband infrastructure?
Christopher Mitchell (06:11):
Well, let's answer that by looking at the sponsors of the Alliance for Quality Broadband. they have the logos up on their website, which is quality broadband.org. I highly recommend that none of our listeners go there cuz it's <laugh> it's full of misinformation. But, you know, you got, you got Charter Spectrum there is pretty prominent. And then if you know, you know where to look, you see, oh, the John Locke Foundation, which is long been controlled by Charter and AT&T or at least like, clearly in their pocket. And, and as you look at these logos all of these entities you've got the Taxpayer Protection Alliance, you know, which is a group that has never ever had a problem with taxpayers dropping billions of dollars on at and t or Charter Spectrum. You know, you don't see 'em out there talking about like how Charter is like wasting government dollars with the Roff auction. Right? Right. Like, no, they're talking about how like, oh, like, you know, if you're using a local government to like, provide needed investment in a community for broadband that is wasteful and duplicative and taxpayers shouldn't be involved with it. You know, if charter's gonna double your prices over a period of four or five years, that's pretty cool cuz it's the private sector doing it and that's magic. So. Right,
Sean Gonsalves (07:19):
Christopher Mitchell (07:20):
<laugh>, I mean, like, you know, the answer to their question is, you know, some of these groups are against public schools, some of these groups are against public roads. That's true. Like these are pretty fringe groups
Sean Gonsalves (07:29):
<laugh>, that, that that's true. And there, and there's always gonna be, you know, sort of a core sort of like hardcore economic libertarians who, you know, make the case that, you know, the government shouldn't be in any involved in any of this stuff. Everything should be privatized. but, you know, you said something really good, I think during the Connect This! show yesterday, which was you called it Campaign to keep monopolies that we don't love
Christopher Mitchell (07:50):
<laugh>. Right. <laugh>,
Sean Gonsalves (07:53):
You know, we say, oh, you know, anti municipal broadband campaigns, but really these are campaigns to keep monopolies,
Christopher Mitchell (07:59):
Save our monopolies. Yes.
Sean Gonsalves (08:01):
Yeah. Campaign to save our monopolies.
Christopher Mitchell (08:03):
yeah, no, and and I, I didn't say this earlier, but for people who aren't familiar connect this show.com is where they could find past episodes. they're on YouTube and things like that. You can also find, like, usually we rip the audio down and put that up in a, in a feed on a podcast catcher. one of our guests actually listens to that while he runs. but you know, I think the video is where you get to see our funny expressions and stuff like that. So
Sean Gonsalves (08:25):
It, it was actually, it was a great conversation. It seems that this, you know, campaign to protect monopolies that we don't love rely on people not knowing just how many municipal broadband networks exist. Right. Because they keep, you know, which is why they, like, they tried out the same sort of like three examples every time these campaigns pop up. Right? It's like that campaign really relies on people not knowing a lot of stuff that folks like us that, you know, that follow this stuff take for granted sometimes.
Christopher Mitchell (08:52):
All right, let's, let's dive into this for a second, right? Like, so the Alliance for Quality Broadband has a database of what they call GON Failures. GON is a acronym G O N, which is only used by the cable and telephone industry folks to describe government owned networks. And that's because they want to deliberately lump in municipal and local community networks with ideas about state and national networks.
Sean Gonsalves (09:21):
And it also, from a machiavellian standpoint of view, it's smart to call it, to call it government owned networks because there's, you know, in Amer in the American Mind, there's sort of this built-in advantage where, you know, it's like, you know, private sector is better than than than the public sector. They do things better. They, they, they build things better, they do it quicker, they do it cheaper and all, and all of that. So, so it's pretty smart to use that, I guess, you know, if you're gonna campaign against community networks to u to to use the term government owned network.
Christopher Mitchell (09:49):
Yeah. And I mean, people say that, and I feel like, you know, there's always that question then of like, who are you talking about here? Because like, there's different kinds of governments and there's different kinds of companies. And I'll tell you that like, you know, we went through a multi-month process that we documented the inability of CenturyLink to send us a brick to plug in a phone over a period of multiple months and many customer interactions, right? Like <laugh> a level of incompetence that that is truly astounding. you know, a local business is not gonna have that problem, right? <laugh>. And so like lumping these things together, we need to be, we need to be careful about that. whether we're talking about the government side or the, the private sector side.
Sean Gonsalves (10:28):
Well, and, and the other thing too about these government own the, the whole sort of government owned network rubric and, and framework and, and this in this, in this completely lumping everything together is public-private partnerships get thrown under the bus as well when you mm-hmm. <affirmative> in, in, in the space, right?
Christopher Mitchell (10:44):
So, so one of the things that I'll say is that I am not in favor of the United States government owning a broadband network. I'm not even, I think there's an argument you can make that as constitutional. but the, the federal government does have limited rights. And I don't think that the federal government should build an, operate a network. you know, I'm nervous about states getting too involved with actually connecting residents and businesses. And some of the people who largely agree with us, they might disagree with me on that. but I'll say that like, when you look around the world at the history of government owned when I say government, I mean federal national government owned telecom network works that were monopolies. You know, it's not super pretty I don't think this's as bad as privately owned one monopolies, but like publicly owned monopolies at the national level are not a good idea at the local level. they're not my favorite <laugh>. Like, I mean, I've been pretty candid about this. And again, like, I think people, you know, you might even disagree with me on that to some level, but like, I would like to see infrastructure level competition at the local level. Even if we have a publicly owned network, I think it's better for everyone. I
Sean Gonsalves (11:45):
Suppose if I had a magic wand and I could build an open access fiber networks across the country that passes every premise in the country that then allow for private internet service providers to use, to use those networks, I, that would be tempting.
Christopher Mitchell (12:00):
Yeah. And I wouldn't say that that would be a bad thing to do necessarily. I mean, I, I think that I would do it in a way that would have more local accountability than if, you know, you had the, the FCC do it, for instance, would not be my first choice <laugh>. but, but I also would make sure that you, we weren't outlawing the ability of others to build wireless or, or fiber optic networks next to those, you know, when they say government owned networks, they're doing that for a reason and it's not entirely wrong. but that's why we talk about local community owned networks. We believe in accountability, quality broadband folks, the alliance for Quality broadband, which is charter, charter Spectrum <laugh>, just to be clear, like they've got a bunch of allies and stuff. You know, it's amazing cuz like if we had a billion dollars, Sean, like we could help create a bunch of different organizations and then pay those organizations to help a third organization that we created that would do a bunch of mean things. And then we'd be like, oh no, we don't do those mean things. Like it's these other independent organizations that we bankroll that happen to be doing that thing, but we can't tell them what to do even though we're telling them what to do. That's how this all works behind the scenes, as best I can tell.
Sean Gonsalves (13:04):
Yeah. Well, I, I, I did buy my Mega Millions tickets, so we, who knows, maybe in the next day or two we will have a billion, we'll
Christopher Mitchell (13:10):
Have to talk about whether we want to do that, that, that payout right away or the, you know, the check every month. <laugh>, <laugh>. so anyway, they have a database here about their gone failures. And I wanted to address that particularly because I feel like people are deeply worried about this. there's two things we, we can go about this. I think one is, I, we'll talk about some of these states here. I'll just click on some of the different states and we'll talk about some of the networks. But Sean one of the other things that we've been doing to, to prelude some research that you're working on is collecting the, the the, the credit of of municipal governments Yeah. The bond ratings of these local governments that have built networks. And I know you're not done with it yet, but you've done enough to do it to have a cross section. is what you're seeing, like just that like city's financial risk or rate ratings are cratering as soon as they go out and build a network?
Sean Gonsalves (14:01):
No, I mean, absolutely not. And so what, there's what about 70 cities that have built municipal networks? Yeah.
Christopher Mitchell (14:09):
About, yeah, about 70 fiber to the home networks that are citywide where like of networks and those networks serve on the order of 180 communities, I think.
Sean Gonsalves (14:19):
Right. And I'm probably, I don't know, 18, 20 deep and not one of them so far. And I've, I've been kind of doing it from the northeast coast across, and so I'm, I'm, although I, I, I did take a look at three cities in Colorado, Longmont, Fort Collins, and Loveland, but I have yet to find one who's rating with either Fitch or Moody's is, and they both have slightly different ways of mm-hmm. <affirmative> of, of doing bond ratings in terms of what they call like the aaa, you know, the AA plus or AA or lowercase A three, a lowercase A two, those are moody
Christopher Mitchell (14:52):
Right. They have like divisions and then they have subdivisions. But like, the point is none of these are anywhere close to junk status. But,
Sean Gonsalves (14:58):
But, but, but the point is, is that all of the ones that I've looked at so far are in that a category meaning, you know, in the upper tier of bond ratings in all of these cities that, that have financed the building of fiber networks in those cities. So even th that sort of glimpse so far indicates and undermines the, you know, this idea that these projects bring cities to financial ruin and, and jeopardize municipalities financial positions and ability to, to borrow money to, to do capital projects in, in, in their communities.
Christopher Mitchell (15:29):
Yeah. And I think the kind of arc we saw in Chattanooga is not super rare, where when the utility moved forward with the fiber network, they took out, you know, a few hundred million of debt in order to do that. And they had a slight decrease in their bond rating small enough that it probably wouldn't have really even changed their borrowing costs. and the rating agency said that they were taking on a new project that they hadn't, hadn't yet demonstrated competence in. And and that there was some reason for investors to be cautious which I think is, is totally reasonable. And at the time, the person who run that Harold Deree, and by the way, I did a really long interview with Harold Deree about Chattanooga, and I feel like a lot of people, I think they know Chattanooga should listen to that interview back in then.
It's probably seven years old now. but but we went in depth on a bunch of this stuff and he was like, yeah, like we were doing something that was different. You know, we were going outside our core competency. We thought the wor the risk was worth the reward. And then after a few years when they showed how positive it was, they actually had an increase to their, their rating because the bond rating folks looked at Chattanooga and said, because of the strength of this fiber network, you actually have a stronger community. You have more economic development. And so it actually increased the ability of Chattanooga to borrow because it was viewed as having a stronger local economy with a stronger property base, which is what a bond rating is ultimately based on. Right.
Sean Gonsalves (16:56):
And, and, you know, and Chattanooga was, was was one of the early ones and kind
Christopher Mitchell (17:00):
Of, I think of it as a middle one. I always chafe at that, the early ones
Sean Gonsalves (17:02):
That that's true, but point, point, point taken, I guess my point early for
Christopher Mitchell (17:06):
You, some of us are old man <laugh>. Right,
Sean Gonsalves (17:08):
Right. <laugh>, right. I guess my point is, is that there's, there's now more of a history of, of, of a multitude of cities now. So it's, it's, it's not quite the case anymore. To your point earlier that, you know, this is, this is something that you don't have a core competency in. Of course, if in a particular city who, who hasn't had one prior, it's, it's a new area. But I'm saying broadly speaking, you know, municipal broadband networks are no longer new mm-hmm. <affirmative> or it's no longer a new concept. Yeah. In fact, a as we move forward in history, the, the anti muni folks are gonna have to, you know, and I'm sure they will alter their argument somewhat because and, and become a little bit more sophisticated once it becomes much more apparent to folks that, that there's actually a multitude of existing networks and have done something similar that, that arc that you were talking about with Chattan oo, in terms of the return on investment and, and and, and so forth.
Christopher Mitchell (17:59):
Yeah. So one of the places people can go to learn more about this is on muni networks.org, we have on the left menu you can find a page correcting community fallacies or correcting community fiber fallacies or community broadband fallacies. If you put some variant of that into a search engine, you should be able to find it. We try to keep our names unique enough that they're easy to, to search. and you'll find a number of responses to this, including an a response to ridiculous claims that I think this database draws upon from the taxpayer Protection Alliance, which is just, I mean, it's bad work. I mean, I, I feel like the, the, the folks that are really anti-government should should have higher standards for who they give their money to, to promote their lives because it's embarrassingly bad.
And they should be, you could do better work lying. you know, I guess I shouldn't say that cuz I like that they're, they're this lazy, but if you click on this map you've got 21 states on the Alliance for Quality broadband database that supposedly have failures. And so the first one I'm always curious about is California, right? So California at 2007, San Francisco contemplate a municipal wifi approach. a they didn't do it. and so like, it's viewed as a failure, although I, I don't think they actually did it. I mean, I remember they had debates about it and this and that, and I think it actually kind of feels, it was actually at that time, mayor Newsom <laugh>, who was involved with it and frankly we're on the other side of Mayor Newsom because he wanted to have Google running it.
And we thought it was a bad idea. This is a little predates me at I ilsr. but they didn't do it. Now what's interesting is that over the years, they did actually roll out free wifi in a number of places in San Francisco, but these folks don't even know about that, right? And so mm-hmm. <affirmative>, but there's, there's one thing to draw. First of all, a lot of these claims of failure are municipal wifi systems. And we've talked about this in the past, including I think good discussions with Jim Baller way back in the archives of, of the community broadband bits, which we have a single page with an archive of all of the episodes that you can check out on muny networks.org for people that want to go back and find these specific episodes. But municipal wifi was its own thing.
Like there was this excitement in the mid aughts that wifi was gonna provide the third pipe. And the technology wasn't there yet. And so local governments that tried to do it often failed many times they chose not to do it before they got into it. Some that invested in it failed. But so did the private sector. Like everyone that tried municipal wifi, public private, public private partnership, like they didn't all fail, but like most of them did because the technology wasn't ready for primetime to deliver a high quality signal inside the home that could ultimately deliver Netflix streaming you know, at a reasonable price. So mm-hmm. <affirmative>. So when you see this claims about wifi failures, just, it's, it's, it's, it's apples and oranges, right? Like the business models are different from the the business models of the, the wireless folks.
Sean Gonsalves (20:53):
I also, I'm looking at it and it's the way they have it set up, location, year type of type of gone <laugh>. Yeah. Municipal wifi, total cost not available status failed. Like, there's, there's no context, there's no, there's no nothing. It's just you know, yep, this failed. You see that on Twitter sometimes where somebody says, what's your source? And somebody says, the source, trust me, bro.
Christopher Mitchell (21:15):
Sean Gonsalves (21:16):
And I feel like that's, that's what this
Christopher Mitchell (21:18):
Is the source says, doesn't that feel right? <laugh>,
Sean Gonsalves (21:21):
Christopher Mitchell (21:23):
so if you click on Florida, then, right? Like this is, this is one that has an interesting mix. You've got some of those municipal wifi that are bogus middle mile, you've got, you've got Middle Mile and like, this is another thing that they'll often do is be like, well, this Middle Mile network failed. Well, okay, like, let's be clear, some of these Middle Mile networks actually succeeded on different terms. Like they had different goals. And this is an important consideration for all failures of public sector for some of them. You know, if you build a network, and, and I always use the example of Wyndham in Minnesota for this, if you build a network and then you end up coming tens of thousands of dollars short of breaking even financially when your business plan said you were supposed to, but along the way you helped a local employer you know, stay in town, who is going to leave town in this case Fortune Trucking gonna leave town, take tens of jobs away.
You go to any local leader in any town across America, and you say, if I paid you $30,000, would you, you know, get rid of 12 private sector jobs in your community? No one's gonna take that deal, right? Like, and so like, is wind of a failure? No. Like they did what they had to do to like make sure the community did well. And this is complicated right now, if it was 3 million to save 12 jobs, eh, probably not a good deal, right? <laugh>, like, but that's not the scale we're talking about in most of these,
Sean Gonsalves (22:40):
Right? And in fact, you know, that that's something that we hear time and time again as we're covering, you know, various communities that get serious about mean building their own municipal networks. I mean, fair line's a great example, but there's, I mean, there's tons of other communities where it literally was, it was folks in the business community coming to city leaders saying, listen, we're moving because the internet here sucks.
Christopher Mitchell (23:04):
Sean Gonsalves (23:05):
Right? That is sometimes a huge spur for cities or communities to get into this. is, is, is is that very fear that you're going to, you're gonna hamper economic development or, or even worse, you know, go backwards.
Christopher Mitchell (23:20):
So, so let me, let me say that they got one right in Florida. Nell Danella is my nightmare scenario. Candidly, like Nell is a smaller town, and they were like, Hey guys, this isn't so hard. Let's just do it. We don't need to hire a consultant. We'll just take this other feasibility study and, and they're engineering and we'll make some assumptions that we'll have a certain number of customers at the end of the first year and, and we'll do it. And, and they started it and they didn't get any real expert advice. They did not take it seriously. They didn't do their homework and it was bad. Like they, they lost money on it. And it was a really bad investment. So like, you know, we're not out here being like, they're wrong about everything. Like LAN is my nightmare of a community that didn't take it seriously. But
Sean Gonsalves (24:01):
But also with any kind of public works projects of, of any sort, you know, we are flawed human beings. I mean, there's going to be failures, right? I mean, that's all the more reason why, why, you know, careful planning, et cetera, is in oversight and accountability is important.
Christopher Mitchell (24:18):
Transparency Totally. Which goes along with those things you're saying. Yeah, yeah, yeah. And this is what happened in Burlington, right? There example for Vermont. you know, Burlington was doing all right. they had, and, and this is my view of things, some people disagree. I did some serious research in it, talked to a lot of folks, tried to really understand what happened up there. they had a network that was doing well. They had a new administration that came in, decided to run it in a political manner, ran out. The guy who built it, that guy went on to build EC fiber, which is one of the most improbable success stories. That's a network in, in Vermont, which has changed the entire state's approach. I mean, it's on the, it's on the, the central part of Vermont, it's East central, which is super convenient for being called EC fiber.
but anyway, like Tim knew what he was doing, and, and then like, these guys come in to Burlington and they're like, cool, we're just gonna, we're gonna change everything around because we don't like Tim. And and they, they didn't do them great marketing, and they stopped growing, and then they started hiding the losses when that happened. And they hit it for years while they compounded. And, and the network ended up having to be privatized. And the city took some kind of loss, although many of us actually think they kind of cooked the books and, and actually, and, and, and claimed that they spent millions of dollars in Burlington Telecom, but they actually spent it in other parts of the city you know, in order to like make the city look stronger. you know, and, and there was investigations. And I read the audits, and I'll tell you that those audits suggested them.
That was my learning experience that, that you can find auditors who have no idea what they're doing, right? Like <laugh>, like audits should probably have experienced the telecom business model before they start auditing one. Like, you know, like, and, and the audit that I saw in, in, in Burlington did not give me any faith in it. So, so anyway, there was a number of things that went wrong, but in Burlington, like it was a lack of transparency that really doomed it, I think, and didn't allow them to fix fixable errors. Every network's gonna struggle. you're gonna have errors. And the question is how you adapt, not whether or not you hide the fact that these things are hard to run. so so I think that's important. but like, you know, another one they have here in Pennsylvania, they talk about Philadelphia.
This this Philadelphia was gonna do a municipal wifi network and then decided that they would have a private company do it. That private company fails. And then everyone's like, well, Philadelphia's dumb, you know, Philadelphia can't do wifi. And it's like, Phil didn't really try to do wifi. They had a private company do it. And now it's used, it's viewed over and over again as being a, a public failure, which is, I mean, it just kills me that you like the situation where like, you literally have people being like, don't have the government do it. I'm like, all right, we won't have the government do it. And then the private company fails and people are like, why'd the government screw that up so much? <laugh>.
Sean Gonsalves (26:52):
Right? Right, right, right.
Christopher Mitchell (26:53):
And these are often the same people who are like, who are like, you know, we need a smaller federal government, and why hasn't Biden fixed these 10 markets yet? Like,
Okay, well, so in Philadelphia you also have Pit Karen, which I looked into cuz it's not on our list. And and I wasn't that familiar with it. And Pit Karen was like an ancient cable system that was like, I mean, they literally were like in the fifties of like, or even maybe even before 1950, like doing cable television cuz no one else would do it in a town that very few people have heard of. And the idea that it's a failure because it never made money. You know, I don't think they ran it for decades expecting it to make money. I think they wanted to have cable services and ultimately some slow broadband. And, and that's where like this idea that like, oh, they should have had nothing. You know, like they, they, they would've been better off having nothing rather than subsidizing a cable system. Well, that's their decision. Like, that's what they get to make at their mind about.
Sean Gonsalves (27:46):
And, and something that you just said this, this, this notion of it making money, do we expect other infrastructure in our cities to make money? No.
Christopher Mitchell (27:54):
Cities, I mean, schools, the streets lose so much money. Oh man, schools terrible, terrible business proposition. The police force, I mean, utter, utter loss of money. Fire department, you know, like, like they don't charge people to put out fire. I mean, they kind of do like we all pay the taxes and whatnot. But you, you, you got the point, like yeah, like right, the library fricking gives books away for free. Like, I could fix that. I could bail, help the library make some money, you know, like just start charging people. No big deal. <laugh>,
Sean Gonsalves (28:18):
Christopher Mitchell (28:19):
So, and I, I mean, at the same time, I will say these networks generate enough revenue they can pay for themselves or they can pay mostly for themselves. And I think that's good, you know, if, if we can save money and put more money into the library, I hope. And and in essential city services
Sean Gonsalves (28:34):
And in certain instances these networks generate extra revenue.
Christopher Mitchell (28:38):
Yeah. Right? Not always. although often, and the reason that people build them though is for those indirect benefits of making sure that like every child that goes home from the school district should be able to have internet access to do their homework and to get ahead. Right? so yeah. Yeah. It's interesting cuz like, this is the thing that kills me about some of these places. Like if you look, if you check on Tennessee, right? They actually list like several networks as ongoing, but like, they list six networks out of like maybe 12 or 13. And like, like Memphis for instance, is one that, that was a middle mile kind of approach that failed more than 20 years ago. I think that's a correct labeling of it, but like
Sean Gonsalves (29:17):
Right, they, I see, I see they have Morristown on, on, on as
Christopher Mitchell (29:20):
Ongoing, right? It's not a failure, but like
Sean Gonsalves (29:22):
There's as ongoing, right? And they don't have have
Christopher Mitchell (29:24):
Bristol, they don't have Chattanooga. Like what, what are they doing?
Sean Gonsalves (29:26):
They, they also failed to mention about Morristown that morristown's credit rating with Moody's is AA three,
Christopher Mitchell (29:32):
Right? Yeah. They, they did forget to mention that <laugh>, and this is, this is the thing that, that, when I look at this and you look at this, we're like, well, this is incredible. These people don't even know what they're doing. Right? And that's what I say when I see Chris Yu study comes up from the University of Pennsylvania. This is a guy who has no credibility among anyone that pays attention to this stuff, right?
Sean Gonsalves (29:50):
Oh, this stuff is easy to find. I mean, you, you Google about this stuff and it's like all over the place. Yeah.
Christopher Mitchell (29:55):
I mean, if Charter and AT&T gave me millions of dollars, I'm sure I could promote my stuff too. Or I mean, they're not giving it to Chris necessarily. I think he gets more, his center I'm sure gets money from Philadelphia, from Comcast and Philadelphia one way or another. but but like, there's a whole campaign to promote his work, which like, he doesn't even know what a municipal fiber network system is. Like. He did a study of 20 of them, and it turned out several of them weren't municipal citywide fiber networks like you thought they were. And then on top of it, he got the bond structure wrong for three of them, just totally. And we called him on it within days. He issued a press release saying, yep, yep. You know what, you're right. I got it wrong. And and and this one little, you know, this one little thing doesn't change our analysis of, of everything else, but like, if you download that paper from the University of Pennsylvania right now, he never fixed it.
Right? Like, at least when I checked, like last check six months ago still, which is like five years after he published it, when we just, when we get something wrong, Sean, you've seen this. I get like, I don't get angry with the person that did it, but like, like I sweat, I get frustrated, we go out, we fix it. Mm-hmm. We, we once had a minor error in a story. I mean, I, I shouldn't say minor, but a reporter put it at the top of, of her story when she ran it and in her title. And I called her and I profusely apologized, and I was like, look, we're fixing this. We're making sure it's not gonna happen again. Right? This is a guy who's an academic at the University of Pennsylvania. He makes major mistakes and he doesn't bother fixing him. They're still in the report. Like, what kind of academic integrity is that? Like, it's, it's, it's awful. And that's, that's what we see here. Like, there's opposition that is hard to take seriously, because they don't take themselves seriously. They're doing this for a paycheck and they don't take it seriously.
Sean Gonsalves (31:31):
You know, I I'm also looking over here at Colorado, and I noticed when you go to Colorado, it just says statewide, middle mile, <laugh>.
Christopher Mitchell (31:39):
Yeah. So that's EagleNet. They're talking about EagleNet there, which was a, which was a legitimate, what was a legitimate failure, although not I mean, it was a, it was a state government in some ways. it was not a good project, but like yeah, like, I mean, they don't even, they don't know what they're talking about. I know what they're talking about, but they don't even know they,
Sean Gonsalves (31:56):
But they, and they also conveniently overlooked Fort Collins. Longmont. Lovelin,
Christopher Mitchell (32:01):
Yeah. Oh, yeah. Cortez. I mean, lots of 'em. I mean, that's why we track hundreds of these things and they're like, oh, no, like we found, we found like 50 networks like on a list somewhere, and we're gonna categorize them based on like some intern, you know, spent three minutes Googling to figure out if they're a failure or not. I mean, they say, they say Utopia is a failure utopia, which is borrowed money for 10 years without any backing. Like, like in private investors are throwing money at Utopia here, take my money, build broadband. Right? I trust you. Like we're, we're gonna get the money back, right? Like Utopia had some struggles, but if people are throwing money at you, it's often a sign that you've worked those out.
Sean Gonsalves (32:35):
Right. And I just, you know, this Colorado one is just sort of a prime example. And, and it goes back to what I was saying earlier is that for people that don't, that, that, that don't have a sense of, you know, the, you know, the vast number of, of successful networks, you know, you look at something like this in Colorado and you might think, well, there, there was one quote unquote government owned network project in all of Colorado, and it failed, right? And, and I don't mean that to, to demean people. I mean, people are, you know, nobody, nobody's born knowing these things and people are, you know, trying to keep up with a million different things. But, but certainly this whole argument really is, is, is a is a classic example of cherry picking <laugh> in, in, and relying on people not knowing any, any counter examples whatsoever.
Christopher Mitchell (33:20):
Yeah. That's what we see. And I think the danger is when local governments you know, get scared off by this, it's, it's horrifying because they should be doing more research into this. And, and I, and I guess, you know, I've served on some subcommittees for local governments and people are stretched in, they're doing different things. So, you know, people who are listening to this show I, I think part of your job is to, is to figure out how to make it easier for local governments to understand this, right? Like, package up some of the materials we've put together or some of the honest academics have put together and and try to make that available to your local leaders because they are hearing from like, you know, the charter spectrum, the Comcast, the at and t lobbyists that these are all failures and they're getting slick materials that look right and have the imprimatur of the University of Pennsylvania on them.
you know I have to say that in 15 years I have really gone from holding the Ivy Leagues in a bit of awe to just really being kind of sick when I, when I hear about the amount of corruption that is in some of the departments across Ivy League schools you know, whether it's like you know, on, on health issues, on economics, on number of things. There's a number of these people that have side hustles that they're just cashing in on the fact they're connected with a school that has a hundred that has hundreds of years of, of, of academic history, that that gives it a good name. And, and it's sick. And I wish the schools would do something about it, but like yeah, I guess like I said before, though, this isn't new and we have to deal with it.
Sean Gonsalves (34:49):
That's right. And all this speaks to whether you're talking about Maine or Massachusetts or, or, or communities where we're seeing these kind of campaigns to protect the monopolies we don't love is these companies, these monopoly, these monopoly incumbents. They have deep pockets and, and, and resources to spend on these campaigns and make these beautiful, appealing websites and that, you know, that look really sophisticated and, and, and smart and, and slick and, and, and, and clear. and a lot of local communities, you know, first of all, even states don't have those kind of resources, and in some instances don't even really think about it until, you know, the campaign is upon 'em. And by then, you know, sometimes it's a bit too late. But, but it's certainly, you know, communities that are organizing, you know, have to spend a considerable amount of time thinking about and preparing for these kind of campaigns and, and, and, and having a really robust public ed education campaign.
Christopher Mitchell (35:46):
Yeah. I mean, when you say that they have big profits, I mean, their profits, like at and t's profits are 26.8 billion, I think last year. that might have even just been in the fourth quarter. I don't know if that was No, that's full year. A full year, you know, 26. It's, it's such an amount. Like, I, I can't even imagine what that is, right? I mean, to give you a sense, like, like all of the money that, like big cities pay for, like all of their police, their health and everything else. Like not all big cities, but like a lot of like good size cities are less than that, right? Like <laugh>, like every last dollar, I mean, I, it is hard to even explain what 26.8 billion of profits is, you know, for them. Yeah. For them to put you know tens of millions of dollars into campaigns to discredit our work and, and, and fund academics that are gonna do deeply flawed studies to, to justify their monopoly. Is, is smart. I mean, like, if anything, they're probably negligent for not putting more into the propaganda
Sean Gonsalves (36:42):
<laugh>. Don't give them any ideas.
Christopher Mitchell (36:43):
No, I was just, I said that out, you know, <laugh>, like, I don't know. it's, I think it's important to note though, I mean, like, you know, they, they have money to spend on this. Let's assume that they're stuck with this because they cannot find good, hardworking people that actually wanna do their work. They just end up paying grifters who do the bare minimum and and put up crap. And unfortunately it still sways people. Yeah. Sean, thank you so much for, for coming on and, and working through this with me. you know, I think neither one of us swore and and we're not angry. So, I mean, I guess that's, we're not shouting is what I'm saying. We're both, we're both pretty angry, right? We're joined as furious, optimists,
Sean Gonsalves (37:21):
Furious, optimist. There it is.
Christopher Mitchell (37:22):
Thanks, Sean. It's been great talking to you.
Sean Gonsalves (37:24):
Thank you. We
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