When state legislators in Tennessee recently passed the Broadband Accessibility Act of 2017, tech writers quoted our Christopher Mitchell, who pointed out that the proposal has some serious pitfalls.

Christopher's statement appeared in several articles:

"Tennessee taxpayers may subsidize AT&T to build DSL service to Chattanooga's [rural] neighbors rather than letting the Gig City [Chattanooga] expand its fiber at no cost to taxpayers. Tennessee will literally be paying AT&T to provide a service 1,000 times slower than what Chattanooga could provide without subsidies."

Motherboard

Motherboard noted that the Tennessee legislature had the opportunity to pass a bill, sponsored by Senator Janice Bowling, to grant municipal electric utilities the ability to expand and serve nearby communities. Nope. Legislators in Tennessee would rather pander to the incumbent providers that come through year after year with generous campaign contributions:

To be clear: EPB wanted to build out its gigabit fiber network to many of these same communities using money it has on hand or private loans at no cost to taxpayers. It would then charge individual residents for Internet service. Instead, Tennessee taxpayers will give $45 million in tax breaks and grants to giant companies just to get basic infrastructure built. They will then get the opportunity to pay these companies more money for worse Internet than they would have gotten under EPB's proposal.

The Motherboard reporter quoted Bowling from a prior article (because, like the movie "Groundhog Day," she keeps finding herself in the same situation year after year):

"What we have right now is not the free market, it's regulations protecting giant corporations, which is the exact definition of crony capitalism," she said.

TechDirt Gets Personal

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A new article from the Berkman Klein Center for Internet and Society takes a look at the pay in and pay off from Chattanooga’s investment into its fiber-optic network. The article, Smart Grid Paybacks: The Chattanooga Example, was written by Davd A. Talbot and Maria Paz-Canales.

From the Abstract:

After building a fiber optic network throughout its service territory, the city-owned electric utility in Chattanooga, Tennessee, became the first U.S. company to offer Internet access speeds of 1 gigabit per second to customers. The fiber also serves as the backbone for a sophisticated smart grid.

Data show that the savings produced by the smart grid, plus revenue from access fees paid by the utility’s Internet access business, more than cover the capital and operating costs of the smart grid. What’s more, we estimate this would still be true even if the utility hadn’t received a $111.6 million federal stimulus grant, and instead borrowed the extra amount. We reach this conclusion after counting direct savings in the utility’s operating costs (such as labor, truck maintenance, and fuel), avoided purchases of expensive wholesale power at peak times, and avoided power losses.

The region is also experiencing second-order benefits including economic development and savings to local businesses thanks to fewer and shorter power outages. The data on the following two pages were provided by the utility (known as the Electric Power Board of Chattanooga, or EPB), and include data on second-order benefits originally published by Bento Lobo at the University of Tennessee at Chattanooga.

The authors detail direct and indirect paybacks to the community from the smart grid investment. The grand total? $67.1 million.

Check out the full article here.

This is the transcript for episode 242 of the Community Broadband Bits podcast. Our Christopher Mitchell invites Professor Susan Crawford to reflect on her recent travels through North Carolina and Tennessee. Both states have restricted communities from building new municipal networks. Listen to this episode here.

Susan Crawford: It's much more about a very bipartisan, quite progressive group of people thinking about how to make life better in their communities, and that's terrific. That's truly American.

Lisa Gonzalez: This is episode 242 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. We're pleased to have Susan Crawford back on the show this week. She's a Professor of Law at Harvard Law School, but she's also served as Special Assistant to President Obama for science, technology and innovation policy. Susan's CV is too long for us to go through point by point. She's authored several publications, including The Responsive City: Engaging Communities Through Data-Smart Governance, and The Telecom Industry and Monopoly power in the New Gilded Age. She's been on the show before to talk with Christopher about access to high-quality connectivity, and it's always a pleasure to have her back. As it turns out, Susan has been on a walkabout of sorts, visiting local communities as she works on her current book, and in this discussion she shares her impressions with Christopher. She's got some ideas on how she feels are the most effective ways to bring better connectivity to the most people, especially in rural areas, and she and Christopher hash through her findings.

Christopher Mitchell: Hey, folks. This is Chris Mitchell, the host of Community Broadband Bits, and I just wanted to ask you if you could do us a real big favor to help us spread this show around. And that's to jump on iTunes or Stitch or wherever you found this show and to give us a rating. Give us a little review. Particularly if you like it. If you don't like it so much then maybe don't do that, but if you're...

I have been a Google Fiber supporter, believing that Google's investments and policy goals would move the United States forward, away from the monopolies of entrenched incumbents. When others claimed that Google was abandoning fiber, I argued that Google had not yet decided... it was arguing internally about the right path. 

But now I think it is pretty clear that Google is done with significant fiber investment, particularly for single family residential homes. I have strong doubts that Google will continue with the Huntsville-type approaches of leasing dark fiber, but I hope that will continue.

Google's decision to pursue other, likely more lucrative investments like AI and autonomous driving may be more profitable, but it is certainly disappointing for those of us working to ensure everyone has high quality Internet access.

It is important to note that companies like US Internet, Ting, and Sonic, among others have establishing strong businesses competing against the biggest telephone and cable companies. Google's exit is not evidence that ISPs cannot do well. It is evidence that Google has other opportunities and that its large scale focus on building its own fiber had too slow of a return for its Silicon Valley expectations.

This brings me to something I wrote 5 years ago, not actually expecting that Google would give up after only 5 years. 

If I were moving south of Minnesota in the near future, it would be to Chattanooga or Lafayette, not Kansas City. Who knows what Google will be doing in 5 years? We know exactly what EPB and LUS will be doing.

Wow. I think Kansas City is definitely better off for having worked with Google to enable that network. But there is no doubt in my mind that local investments are a better bet than hoping some distant company will save your community. I think this article understates Google's impact in KC significantly, but we are once again reminded that there is much more to benefiting from a network than simply laying fiber.

There is a lot of work that must be done to take full advantage of a modern network to benefit an entire community. This is why at the Institute for Local Self-Reliance, we put a greater focus on local investments with...