Thanks to Jeff Hoel for providing the transcript for the Episode 62 of the Community Broadband Bits podcast on volume three of "Crazy Talk" series. Listen to this episode here.
Lisa Gonzalez: Hi, and welcome again to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. This is the third volume of our "Crazy Talk" series. Chris and I encounter fallacies and downright lies about telecommunications on a regular basis. In this series, we address those statements that are designed to confuse the people who encounter them. Many of the lies come from well-paid corporate lobbyists and are carefully planted in various media outlets.
Recently, we encountered an opinion piece from an eastern senator that reiterated many of the same tired arguments against municipal broadband networks. As modern technology has made media more readily available than ever, there are also more instances of twisted facts and figures. The powerful players in the telecom industry depend on those inaccuracies to cloud the true benefits of publicly-owned networks. We encourage you to think critically about statements you hear in the media, and as you talk to people in your everyday lives.
Hey, Christopher! How's it going?
Chris Mitchell: Um, it's going pretty well today, Lisa.
Lisa: Christopher has on an orange tie today.
Chris: It is a bright orange tie. It is the tie I got married in.
Chris: Yes. I had a big meeting today. This isn't just for the benefit of our listeners. But I hope they'll be able to hear my extra confidence today.
Lisa: I already hear it. Um, so let's talk a little bit about Chattanooga. I think one of our listeners asked us to talk about Chattanooga. What did they say, and what did they want us to discuss?
Chris: Well, Chattanooga's come up a number of times in situations where people are trying to say municipal broadband networks are always a failure. Look at Chattanooga. Boy! Boy, did they make a huge mistake! I think you should probably read the most recent accusation, claiming that they're a failure. This is from a senator in Maryland, who represents Baltimore, and who herself shows no knowledge whatsoever about this subject. She hasn't done any legislation on it. She hasn't ever spoken about it before. I think what it came down to is that a Verizon executive basically said, here, we wrote this awesome opinion piece, and we can get it published. All ya gotta do is sign your name. And she said, heck, I'll do that.
Lisa: And that was Senator Catherine Pugh, right?
Chris: Yeah. We're not sure how to pronounce her name. But it's P-u-g-h. And I think that's as good a guess as any.
Lisa: I have some of that right in front of me. Do you want me to read what she wrote, or would you rather just ....
Chris: No, please do.
Lisa: OK. She said, in her letter to -- I think it was published in the Wall Street Journal -- "Chattanooga, Tenn., asked taxpayers to float a $220 million bond to build a fiber optic broadband network. But the experiment was a golden fleece, signing up just 34 customers (eight residential!) to its $350 per month 1 Gbps offering. Chattanooga residents saw little use for a 1 Gbps connection, particularly at such a premium cost."
Chris: Well, Lisa, I know that you listened to my recent conversation with Danna Bailey from Chattanooga's Electric Power Board, because you edited it.
Lisa: It was a great conversation, yes.
Chris: And we addressed some of this. Our conversation took place before this article came out. And I guess I will start by saying that Chattanooga's network is indeed "golden," but it's no "fleece." The number that she cites is interesting. She seems to want to suggest that only 34 people signed up in this metropolitan area of 170,000 people. 170,000 households, actually. But, in fact, over 50,000 people have signed up for it in just the first few years. So, here she is, lying about the number of subscribers, by just talking about the number of people who are subscribing to the gig service, as though that were somehow representative.
Lisa: But isn't it? I mean, you know, only 34 people want this thing that they're bragging about. I mean, what's worth bragging about if only 34 people want it?
Chris: Well, I'd say 34 customers -- and apparently those are -- include 26 businesses -- are getting an incredible service that they can get in very few other places. You know, here in Minneapolis or St. Paul, if you wanted a gigabit, first of all, when the technicians stopped laughing at you -- or when the customer service representative stopped laughing at you when you asked them for that -- if you asked Comcast or CenturyLink -- they would tell you that, sure, they would get you that connection. It will probably cost about $10,000 just to build it, and then, on top of that, you'll have to pay another $10,000 each month or so to keep it going. So, $350 a month, it sure seems like a lot, compared to what we pay for our connections at home. However, it's quite reasonable when you're thinking about the fact that it's a GIGABIT.
Lisa: It was a great interview with Danna Bailey. And I would encourage everybody who's listening now to go ahead and listen to that interview, too. She talks a lot about some of the challenges they faced, and the different ways they're using the network, in addition to just offering gigabit service.
Chris: She also talks about the tens of millions of dollars the network has saved, and the 6,000 jobs it's created. When President Obama gave an address about jobs, in Chattanooga, the day he went out there, the local paper -- the Chattanooga Times Free Press -- ran a rather curious op-ed that started with, take your jobs plan and shove it, Mister President.
Lisa: Oh, yeah.
Chris: That was the headline.
Lisa: I remember that.
Chris: In that article, he wrote and indictment of the Chattanooga network also, in which he claimed that it did not succeed, that it's this major boondoggle. He writes that it has not helped the electrical grid to be more effective. Which is laughable, because that metric is tracked. In fact, they know that it's working better, because they've had far fewer minutes of outage than they had had before. I mean, not just -- they measure it in terms of minutes, but it actually adds up to days and years -- days and months -- of fewer outages, ...
Lisa: Um hum.
Chris: ... when you aggregate across all the different people who are impacted. He also claims that it hasn't created a high-tech Mecca -- even as one out of three new jobs created in Tennessee are in Chattanooga. I don't know what he thinks -- where he thinks those jobs are coming from. But it seems to me that when you're the fourth largest city in the state and you're generating a far higher number of jobs than any of the other areas of the state, you might want to look at where you're fairly unique. And that fiber network is pretty frickin' unique, when it comes down to being the first one in the entire country that offers a gig to everybody.
Lisa: And it's sort of the standard. Everybody talks about "like Chattanooga." They want to be "like Chattanooga."
Chris: Yes. It's one of those things that we see time and time again -- is, people who are going out of their way to try and attack community-owned networks have some form of agenda, time and time again.
Lisa: Yeah. Credibility is certainly a big question. You know -- and I think probably a lot of our readers already know -- that Susan Crawford -- her book, "Captive Audience," has been for sale on Amazon for some time, and recently, there have been people going onto Amazon who are more than just very likely working for the telecommunications industry, the large providers, and totally trashing her book. There's definitely an astroturf campaign happening online against her book. There have been all these negative ratings.
Chris: Right. And we've seen multiple op-eds, in the New York Times, and all kinds of other papers, in which we're told constantly that we're living in an incredible time, Lisa. We have more choices. We pay less. We have the best services that are available in the whole world. You know, I think there's actually -- there should be something put in the most recent edition of the DSM, that diagnoses mental disorders, that describes most Americans. Because the cable companies are some of the most hated companies in the country. But clearly, that's wrong, and we all have something wrong with us, for not loving them for everything they've done for us.
Lisa: They do so much for us. OK. Um ...
Chris: Or to us.
Lisa: Or to us. Yes, we love the telecommunications company. Senator Pugh, in her letter, also brought up the fact that it is a very competitive market, and it's really hard to be a telecommunications provider. This is what she wrote: "Broadband is an extremely competitive market — more so than it ever has been."
Chris: Can I just stop you there?
Chris: "More so than it has ever been"? This is a market that was characterized by being a REGULATED MONOPOLY for most of its history. And so, the fact that we now have two choices instead of one, does in fact mean that it is more competitive now that it ever has been.
Lisa: Twice as many choices as you used to have!
Chris: I'm not impressed.
Lisa: She goes on to say, "Over 80 percent of the public can get super-high speeds of over 100 Mbps, and nearly all Americans can (or will soon) get four different wireless 4G technologies with speeds up to 20 Mbps. Prices per megabit are dropping quickly."
Chris: So let's just deal with this thing. We've seen this many times. The former Chairman of the FCC, Genachowski -- what a disaster he was! But he was the master of this. And he loved shouting this cable talking point from the heavens. You know, over 80 percent of the public can get these speeds -- over 100 megabits per second. What he means is, actually, over 80 percent of the public could subscribe to a service that is labeled as providing more than 100 megabits per second, which is over a cable system -- a shared infrastructure. If even a fraction of us started to subscribe to that, none of us would get it, because it's a shared infrastructure. So, this is entirely out of the handbook of "Statistics Can Prove Anything." I mean, it's like saying, sure, we could all drive on the interstate at 95 miles an hour. Well, you know, try doing that at 9:00 am. And we'll see how that goes for you.
Then there's this talking point that always comes -- and, I mean, this is how you know that the senator did not write this letter. Because it's the same arguments -- almost in the same order, even -- as the lobbyists themselves write. Um, it says, oh, we have this choice of wireless. Well, Lisa, if you used 50 gigabytes of data each month, which is something that, I think, the average household does at this point, according to numerous surveys, ...
Lisa: We would at my house. There's me using it for my work. And then I have two kids that are streaming two different things at the same time.
Chris: Right. Well, my wife and I, we just use Netflix -- there's just the two of us now. I'm a pretty big geek.
Lisa: Um hum.
Chris: We actually use nearly 200 gigabytes each month, reliably. So -- So, yeah, the average household, about 50. If you wanted to do that on a 4G LTE network -- say, from AT&T, where you get 5 gigabytes, or sometimes only 2 or less gigabytes of transfer per month -- you'd have to start paying overage fees. And so, she's right, in that you could say, you know what, I'm going to choose. I have so many choices in the market, I'm going to cut my cable cord, and I'm going to go to 4G LTE. But, rather than paying $60 a month, I could pay $500 a month -- for the worst service. That's -- that's not competition. But, of course, they write these things, knowing that people are going to read it and they're going to be confused. Their goal is to stop things from happening. It's to preserve the status quo. And to do that, you don't have to make rational arguments. You just have to confuse everyone enough that they are uncertain and they don't move forward with anything that would threaten your business model.
Lisa: There's also the old saying that if you lie often enough and soon enough, you get your way.
Chris: Well, you know, I just wrote that article about the New York Times, where they stated, in the first paragraph, without sourcing it anywhere, that 98 percent of Americans have access to high-speed broadband networks. It's a stat that's pretty argued over. And so it's fascinating that at New York Times, the lead telecom writer, could just make this statement. And he doesn't explain what he means by high-speed broadband. And it doesn't, quite frankly, make sense, because 26 million Americans lack access to high-speed broadband. And so, it suggests to me that the United States is considerably larger than we thought, if 26 million Americans are only 2 percent of the population. But I think what he's talking about is that 98 percent of America has access to something that's not dial-up, ...
Lisa: Um hum.
Chris: ... which is to say, it might be satellite. It might be one of these 4G LTE plans, where you can use it, and if you only use it for e-mail, it will work out all right. It will still be more expensive than your DSL or cable connection -- which probably is not available to you. But there's something that's available. Now, there's so many problems with that. Because satellite is not broadband. It comes with a lag. There's numerous other problems. It actually has worse usage caps, in most cases, than your typical wireless service does. So the 98 percent number is totally manufactured. Totally bogus. And yet, it's an accepted fact, apparently. You don't even need to source it in the New York Times.
Lisa: So -- OK, so, you know, there's so many communities that have invested in broadband networks, but don't they always flop?
Chris: Well, it's interesting. Because with over 400 communities having built their own networks, you would think that when you read this op-ed, there would always be a different city they are citing as failing, right? I mean, it's like if you have so many cities who have just failed and are in misery, and hate the fact that they put this money into providing telecommunications services, you have to wonder why they keep coming back to the same handful of examples, time and time again.
Now, I suspect it's because the other ones are doing quite well. But, you know, Provo has been coming up time and time again.
Lisa: That's right. In fact, the senator talked about Provo in that letter, too. Let me see. "Taxpayers in Provo, Utah, for instance, spent $40 million to build a relatively small and modest network only to sell it for $1 a few years later because they underestimated the massive costs of operating, upgrading and maintaining it." So, isn't that a failure?
Chris: Well, no one's saying that Provo was a success. I think it's fair to say that Provo failed. The question is, why. And the thing that's left out here is that the problem wasn't that they underestimated the cost or the difficulty. The problem was that Comcast and US West at the time -- which later became Qwest, which later became CenturyLink, -- those two firms lobbied heavily in the Utah state legislature, saying, it's just so unfair, because this city is going to be so powerful, it's going to run us out of business, so you have to tie one of its arms behind its back, and put its other arm on like a bungee tether behind its back. So they limited the business model that Provo could use. Provo wanted to go and sell services to the private sector directly. Now, Provo was forced by state law to adopt the business model that UTOPIA used. And it's fair to say that UTOPIA chose that business model, where they were a wholesaler -- where they built a network and independent service providers would provide service. They were -- Provo wanted to offer the services for itself, in a direct retail relationship. And the city [state?] wouldn't let it. Well, you fast forward ten years -- not a few years, ten years -- and the network struggled, because it was using a business model which basically has been shown, time and time again, will not work. Bonding for building a citywide network, and then offering those services, you know, via other entities, in this open access arrangement, the debt is just -- it piles up too quickly. You don't generate enough revenue fast enough to come out from under it. And so, the problem with Provo is that the competitors to Provo were able to kneecap it. They basically ran out there like Tonya Harding's ...
Chris: ... boyfriend and kneecapped Nancy Kerrigan. And then you're saying, look, we told you, Nancy, that you shouldn't skate. It's never going to go anywhere for you. You know.
Chris: Now, let's just step back for a second here and think, how many communities would willingly -- would be thrilled to pay millions of dollars to have Google deliver a gigabit to them?
Lisa: I would say, lots and lots of them.
Chris: I think a lot of people would be pretty thrilled to be where Provo is.
Lisa: Um hum.
Chris: You know that we have a complicated relationship with the whole idea of Google owning and operating networks. [They're] certainly better than Comcast or CenturyLink or AT&T. But we don't want to see Google owning these networks, because we don't know what Google's going to be doing in 5 years, or 10 years, or 30 years. But, nonetheless, I think that to suggest that Provo is a total loss, I think, is totally foolish. You know, I think one of the things that just kills me, time and time again, is that these people get away with writing things like --
Like this clown from Chattanooga, who wrote, "Building a smart grid to get into a telecom sector already well-served by private companies was a bad idea from the start." Well, first of all, he hasn't demonstrated that it's a bad idea at all. In fact, the things that he said are empirically false, as has been demonstrated numerous times. But then, there's this idea, time and time again, that the telecom sector has plenty of choices. And that just totally rings false. It's fascinating to me that they keep using this sound bite, because we all know that it's false. If you walked up to them on the street and said, hey, you know, do you wish that you had more choices for cable and telephone, do you think you have enough choices, do you think there's a competitive market giving you everything that you want, people are going to laugh at you. People understand that their needs are not being met, that they're being screwed. Now, they may not know the exact facts and figures as to how badly they're being screwed, but they have a sense that they're being screwed.
Lisa: Yeah, absolutely. And, you know, I mean, every time they get their bill, you know, their rates go up just a little bit.
Lisa: With all of the little fees, and taxes, and no description of what it is or what it means. Then they might call and ask, what is it, and they'll tell them, well, that's what that is.
Lisa: You know, that will be the explanation. So, yeah.
Chris: Yup. So I think, fundamentally, it helps to have more and more people getting a better sense of what their options are, so we actually can have the choices that we need. We can set up, where, if people aren't going to be able to choose from ten service providers, at least they should have a choice of one that's rooted in the community, that's accountable to the community, and that is going to continue to put community needs first. Now, I think they should have a choice. I don't think we should ever have a situation where people are stuck with only one option. But one of those options should be rooted in the community and putting the community need first.
Lisa: We're enjoying our Crazy Talk series. And if you have more arguments you've heard and you'd like us to address those, then please send us a note. E-mail us. Chris, I'm sending you off with your orange tie.
Chris: Yes. We're going to turn the fans back on in here, and try and cool the place down a little bit.
Lisa: Sounds good. Feel free to e-mail us at email@example.com . If you have an argument you want us to address, please contact us. If you have other ideas for the Broadband Bits Podcast, we encourage you to send them our way. We're always looking for new and interesting material related to telecom. You can follow us on Twitter, where our handle is @communitynets . This show was released on September 3rd, 2013. Thank you to the group, Break the Bans, for their song, "Escape," licensed using Creative Commons.