Transcript: Community Broadband Bits Episode 50

Thanks to Jeff Hoel for providing the transcript for the episode 50 of the Community Broadband Bits podcast, in which Christopher and Lisa respond to arguments against municipal networks. Listen to this episode here.

 

00:22:

Chris Mitchell:  We have a special edition of the Community Broadband Bits Podcast this week.  We're going to be responding to common arguments that we hear from the other side, typically from the cable and telephone guys.  And so, Lisa, you and I are going to be listening to a few of these arguments that they make, and we're going to offering our thoughts on them.

00:41:

Lisa Gonzalez:  So, Christopher goes to all sorts of conferences and different panel discussions all over the country.  And he gets the opportunity to talk to a lot of different people and hear a lot of different interesting conversations.  So, this first statement that we wanted to talk about deals with the amount of coverage that ....

01:04:

Chris:  Right.

01:04:

Lisa:  ... in broadband.  Right Chris?

01:05:

Chris:  And last year, I was in Wisconsin, for the WiscNet conference.  And I heard a claim that I've heard just about everywhere I've gone.  And so, we'll lead off with one of the big lobbyists in Wisconsin for the telephone companies.

01:22:

Lisa:  OK.

01:24:

Audio clip:  Um.  I'm Bill Esbeck.  I'm the Executive Director of the Wisconsin State Telecommunications Association.  Almost all of our member companies have 100 percent broadband availability in their local service territories.  And, statewide, there's, you know, somewhere between 5 and 10 percent of the most difficult customers to serve that may not have a broadband connection from the local phone company.

01:53:

Lisa:  So, is that right, Chris?  Would you say that there's about 100 percent of people in Wisconsin who have access to broadband?

01:57:

Chris:  Well, he said, of his member companies, of the trade association that he represents.

02:03:

Lisa:  Ah, yes.  Very important distinction.

02:05:

Chris:  Right.  And so, this is something we often hear.  And the first question tends to be, what is broadband?  And what you often find is, when people are claiming 100 percent coverage is, they're using a definition of broadband which is generally very slow.  Which is to say, NOT the definition from the Federal Communications Commission of 4 megabits down and 1 megabit up.  But, rather, some other definition.  Which means, a connection that is always on, and is somewhat faster than dial-up.  Although it may only be four or five times faster.  So, we hear this a lot.  We've heard it in Minnesota.  In particular, at a public meeting, which I was NOT at, dealing with the Sibley network, in Sibley County.  And Frontier had claimed that, oh, we offer broadband in all of our exchanges.  And a woman stood up and said, well, I'm a Frontier customer, and I was just told I can't get DSL in my exchange.  And the Frontier person, without batting an eye, says, we offer broadband at 95 percent of our exchanges.

03:02:

Lisa:  [laughs]

03:04:

Chris:  And so, I mean, this is -- the frustrating thing is that we don't know, really, what the number is.  We know that we constantly run into people who say that they cannot get access.  They call their telephone company and find that they cannot get access.  And many of the states have no real mapping.  The federal mapping has been really poor, in the sense of, it's relied entirely on the maps provided by the carriers themselves, who have a real tendency to overstate state coverage, because it makes it look like they're doing a better job.

So, it's -- that's -- and so that's one thing, I think, which is the broadband definition, which is, what is broadband?  Which is important to knowing whether it's really there or not.  But then, the other thing we often hear, along with this, is -- commonly from CenturyLink -- is, oh, you want a gig, we'll get you a gig.  No problem.  You know, we're happy to deliver a gig to anyone who wants it.  And the issue with that is, always, at what cost?  And this is another issue -- is that almost no maps have cost as a layer on them.  Which incredibly important.  Because if you're trying to sell a person a very slow connection, at a high cost -- let's just say $60 a month in rural Minnesota for a slow DSL connection -- well, of course, people there are not going to take that offer.  It's overpriced and it's underdelivered.  And so, policymakers often look at these maps and say, well, the company says broadband's available there, so what's wrong with these people, that they're not taking that offer?  And the real problem is that it's not a good deal, that it's slow and often unreliable.

It's important to recognize that availability has multiple pieces to it, right?  I mean, if I came to you and said, sure, I'll give you a gig, Lisa, all you have to do is pay me $10,000 a month and a $50,000 connect fee.  You know, that's not available.  And that's not what we're talking about when we're talking about next-generation networks.

04:59:

Lisa:  So, but they -- you know, they need to charge a lot, to -- in order to justify paying for all this "innovation," right?

05:07:

Chris:  Well,  ...

05:07:

Lisa:  I mean, that's what it comes down to, is ...

05:10:

Chris:  That's what they say, I think, a lot of times -- is that they have to charge a lot, because it's a high-cost industry, ...

05:15:

Lisa:  Uh huh.

05:15:

Chris:  ... but we regularly see people doing better networks at lower cost -- both private companies and public sector networks have build networks that are more effective.

05:26:

Lisa:  And I think that we have another statement that we wanted to talk about, that deals with innovation and the private sector and the public sector.  So let's listen to that.

05:27:

Audio clip:  Think about the cell phone that you had in your pocket 2, 5, 10 years ago.  Think about the cell phone that you have in your pocket today.  It wasn't the public sector that made that happen.  It's the private sector.

05:49:

Chris:  This is something we've heard multiple times.  Right?  Which is, a person holds up their cell phone and -- some variation on the theme of, this thing is changing too quickly.  In this case, he was crediting the private sector with the rise of cell phones.  There's a number of ways in which one can look back at the important contributions that the public sector has made to cell phone technology.  I don't want to get into that here, so much, as -- this idea that cell phones are changing so rapidly, therefore it does not make sense for a local government to build a fiber optic network.  Right?  The common belief is often -- next is, to say, wireless is the future.  Why would we invest all this money in wires?  Because it's all going to be obsolete in 5 years.  Look at my cell phone.  It's a fallacy.

You know, you look at the copper wire that's delivering telephone service, still, to most Americans.  That was put in the ground 100 years ago.  And it's still being used.  Fiber optics are being put in the year now.  It's a 100-year technology.  If fiber optics were going to be too old, and be replaced soon by a new technology -- if that was going to happen, let's just say seven years from now -- it would already be in our universities.  That replacement technology would be being developed by academics.  It would then be commercialized over a period of many years.  And then it would be rolled out slowly over a period of many more years.  And so, even if there was something on the horizon that was going take over for fiber optics, it's pretty far down the line before that would happen.  And so, you have to recognize that there are things that move quickly, and there's things that move slowly, in terms of infrastructure and these services.  And, now, the services, they may be changing quickly.  But your poles, your conduit, your fiber-optic cables -- those things change very slowly.

07:34:

Lisa:  And we're going to be putting out a wireless fact sheet pretty soon, about wireless connections.  And they need fiber optic connections in order to just even function.

07:43:

Chris:  Absolutely.  That's one of the -- another common claim, I think, is that the world's going to wireless, therefore we don't need wires.  And, as I've just said, I don't think that's accurate.  But, to build on that, the more wireless that we will have, for it to work well, we need much better fiber optic networks.  And that's something Dewayne Hendricks has come on our show multiple times to explain.  And so, anyone who wants to learn more about that can dig into the archives.

08:10:

Lisa:  And then, at that same event, Chris heard this argument.

08:13:

Audio clip:  That's what is at stake here, is the fundamental need for private-sector investment, that is going to be absent in Wisconsin if private-sector telecommunications providers are facing public-sector competition.

08:35:

Chris:  This is a threat, right?  This isn't the scaring anymore.   Now, we're into the threatening.  Which is to say, if you DARE to build networks that compete with us, we will take our ball and go home.

08:47:

Lisa:  [laughs]  yeah.

08:47:

Chris:  We leave the playground.  Right?  And this is one of the classic ones.  I mean, the fancy economists that get paid a lot of money by the cable companies, they call this the "crowding-out" argument, right?  Which is to say, if a municipal government or a community-owned network is built, that it will crowd out private-sector investment.  Now, I want to start by noting that our position has long been that we need both private- and public-sector investment in broadband networks.  We -- there's plenty of -- there's a role for everyone.  Um, for more than 100 years, we've had electricity delivered by municipalities.  It's been delivered by rural coops.  And it's been delivered by private companies.  And so, this is not an argument that we can do without one or the other.  I think we fundamentally need an "all-hands-on-deck" approach.

But, in particular, the empirical evidence on this could not be more clear.  When a municipal government builds a network, you see MORE investment in the private sector than you had previously.  And that's because, without a municipal network, you may have DSL that is inadequate.  It's slow.  It's unreliable.  And there's no incentive to improve it, because people don't have a better option.  Or you may have a cable network, which is the high-speed option.  And there's no reason to make it go faster, because people are already locked into that cable network, basically.  When you give them a choice, the cable company has to decide whether or not it wants to just leave town, which is what Mr. Esbeck seems to think would happen, or it can compete.  And the economics are pretty clear that you can support a few providers -- let's just say, up to three, in many communities.  And so, the idea that they would somehow leave town because they're so offended at the idea of a community building its own network -- it's not supported by any empirical evidence.  It's not supported by theory, which suggests that competition should only lead to more investment.  It's, in fact, CRAZY TALK, that's just trying to scare communities out of building their net- -- out of building networks.

10:50:

Lisa:  Crazy Talk!

10:51:

Chris:  Absolutely.  We hear a lot of crazy talk.  And I don't often get to label it crazy talk.

10:56:

Lisa:  [laughs]

10:56:

Chris:  But, in this situation, I'm willing to go out -- come out on a limb and say that, absolutely, it's crazy!  We find there's maybe two or three examples, of the hundreds of communities that have invested in networks, where we've seen the private sector decide that it was no longer interested in investing there.  It's incredibly rare.

We'd like to know how people react to this.  Because I think it can be useful to respond to these talking points.  If people want to send in talking points that we should address, they should feel free to do so.  And if they want to join us to do this sort of thing, I think we should invite them on to share their best way of rebutting a talking point.

11:33:

Lisa:  Absolutely.  That would be great.  It would be nice to ...

11:35:

Chris: To send in an MP3.

11:36:

Lisa:  Yeah.

11:36:

Chris:  Try and keep it to, let's just say, three minutes or less.

11:39:

Lisa:  Um hum.

11:39:

Chris:  And let's hear how you want to respond to some of the talking points you hear.

11:43:

Lisa:  Sounds great!

Thanks for listening, as Chris and I delved a little deeper into some common talking points about private and public networks.  If you encounter other "crazy talk" that you'd like us to address in a future podcast, please let us know.  We plan on doing at least one more show addressing these common misconceptions and false claims.  E-mail us at podcast@muninetworks.org .  You can also follow us on Twitter; @communitynets is our handle.  This show was released on June 4th, 2013.  Thank you again to the group Eat at Joe's for their self-titled song, licensed using Creative Commons.

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