The following stories have been tagged fcc ← Back to All Tags

Transcript: Community Broadband Bits Episode 224

This is episode 224 of the Community Broadband Bits Podcast. ILSR research associate and writer, H.R. Trostle, joins the show to discuss the recent report on North Carolina's connectivity and the importance of cooperatives. Listen to this episode here.

H.R. Trostle: The telephone cooperative are very used to serving these very sparsely populated rural areas in North Carolina. That's what they were designed to do. That's why they were made.

Lisa Gonzalez: This is episode 224 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance, I'm Lisa Gonzalez. Recently, we released a report focusing on the availability of high-quality Internet access in North Carolina. H.R. Trostle, a research associate at the Institute and one of our authors on, analyzed data from several different sources and she's talking to Chris this week to discuss her conclusions. She and Chris, who co-authored the report with her, discovered that municipal networks and cooperatives have an important role to play in North Carolina. Take a few minutes to check out the report and check out the detailed maps that show the results of their analysis. The report is titled North Carolina Connectivity: The Good, The Bad, and The Ugly. It's available at and Now here are Chris and H.R. Trostle, from the Institute for Local Self-Reliance, discussing in detail their recent report and their findings on Internet access in North Carolina.

Christopher Mitchell: Welcome to another edition of the Community Broad Bits Podcast. Coming to you live today from the Institute for Local Self-Reliance offices in Minneapolis, with H.R. Trostle, the co-author of our new report on North Carolina. Welcome to the show.

H.R. Trostle: Thanks Chris, it's great to be here.

Christopher Mitchell: Hannah.

H.R. Trostle: Hi.

Christopher Mitchell: I thought we would start with a broad overview of what did the report cover.

H.R. Trostle: The report covered everything from electric coops to municipalities and included telephone coops. It involved a lot of digging through a lot of FCC data.

Christopher Mitchell: What kind of data? What were we looking for?

H.R. Trostle: I looked at the FCC form 477, which is deployment data. It also includes maximum advertised upload speeds and download speeds, but it doesn't include things like pricing information.

Christopher Mitchell: Right. This has been long one of the issues that we have found infuriating is that the carriers can just say what they're offering. Maybe that's true, maybe it's not. To some extent, it's very difficult for CenturyLink to know what it can offer in rural areas, because the DSL is so poor. It varies from house to house, but they never have to disclose what they're charging for it, which really makes it difficult to make good policy around this.

H.R. Trostle: Yeah, they also don't differentiate between different tiers, so it literally only tells me the maximum advertised. They may advertise that they offer 15-20 megabits a second, when in actuality you get maybe two.

Christopher Mitchell: Right. We know that that situation in Pinetops, just outside of Wilson, which we'll cover here in a few minutes, but I think one of the things that I found most interesting was that basic broadband access, which is overstated. You know, actually, why don't you just give us the numbers and facts that we're going to use from 477 data, from the FCC. Is that super accurate?

H.R. Trostle: It's not the greatest amount of accuracy. I could wish for more.

Christopher Mitchell: Is it randomly inaccurate, or is consistently inaccurate in one direction?

H.R. Trostle: It's mostly inaccurate in rural areas, because the census blocks are so large. The way the FCC's 477 is set up is each provider notes what they offer by census block. Rural areas tend to have very giant census blocks, with very few people.

Christopher Mitchell: That means that if a few people have access, maybe it's like the census block in which you have the edge of a town and you have a few people who have access, but the rest of the census block has no access. The form 477 data would suggest that everyone has access on that block.

H.R. Trostle: Exactly, even if two people have access, all twenty some people in the census block are considered as having access.

Christopher Mitchell: Let's imagine one other thing, which is to say that you have a census block in which, in the North side you have one provider's that's offering a service. In the South side, you have a different provider that's offering a service. In the middle, nobody can get anything, but we can't tell. As far as we know, I think about how that data is often interpreted. People might think there is competition in universal service in that block.

H.R. Trostle: It's actually pretty great. The FCC's form 477 specifically says that you should not try to use it to generate competition data, but everyone tries to use it to generate competition data for exactly that problem.

Christopher Mitchell: Right, but we can have a sense of at least -- The report, and the numbers in the report are a best case scenario.

H.R. Trostle: Yeah, absolute best case.

Christopher Mitchell: I find it interesting, I actually thought that North Carolina has better basic broadband access than I expected. What's basic broadband access and who has access to it there?

H.R. Trostle: Basic broadband access is the FCC definition of 25 megabytes per second download and 3 megabytes per second upload speed.

Christopher Mitchell: Advertised.

H.R. Trostle: Just advertised, obviously. You might not actually get that. In fact, some areas, you can get 20 megabytes per second as a normal, affordable speed tier. Then they also offer 100 megabytes per second at some absurd price. You can't actually get broadband.

Christopher Mitchell: Because even though you could get a decent connection, maybe from a coop, I think that's what you're talking about here. You have the coop that has a plan. It's one of the rare cases in which we have an understatement of who has decent access.

H.R. Trostle: Exactly.

Christopher Mitchell: In general, 4 out of 5 people in rural North Carolina, approximately -- There's a little bit of an overstatement there, but still most people seem to have basic broadband access from one provider.

H.R. Trostle: 4 out of 5 rural residents for sure, do. Supposedly according to the data, 93% of all of North Carolina has basic broadband access.

Christopher Mitchell: One of the things that I found interesting was that I think, when you look at the state's reaction, the state of North Carolina did their own report a few months ago. We were not really impressed with it. I think their conclusion was, "Wow, we're doing really well. Sure, we got to figure out some way of doing better, but we're doing really well." Our conclusion was that North Carolina's really not doing that well. In fact, I found interesting that when you look at their access to higher quality Internet access, you often find it's utterly lacking. You have that basic broadband tier as the maximum in a number of these rural regions, but there's nothing above that level.

H.R. Trostle: Yeah, it's very, very frustrating. Especially looking at where fiber is actually available. It tends to be available in urban areas or from coops.

Christopher Mitchell: Right, so there's not a lot of what we would call private sector or private company investment in fiber in rural North Carolina.

H.R. Trostle: Not at all.

Christopher Mitchell: Which I find very interesting, because their urban areas seem to be getting more investment, on average. None of those big companies are building out to everyone, but parts of their triangle, parts of Charlotte, parts of the suburbs around there, are getting fiber optic access from Google, from AT&T, from CenturyLink. At the very least they've announced it and made it available in a few partner buildings, but there's been a lot of announcements.

H.R. Trostle: There have been a lot of announcements but there's, from what I can tell, very little actually been done.

Christopher Mitchell: Well, they might just be on their way to doing it. It might be a charitable way of reading. In part, it does seem to me, and you and I both follow these things closely. It seems to me that there is some more investment in fiber optics in urban North Carolina areas than in your average metro regions around the United States.

H.R. Trostle: For sure, I've been looking at Minnesota and Tennessee as well. Doing something similar. There is so little actual private investment in those urban areas of Tennessee and Minnesota.

Christopher Mitchell: Okay. Let's move on to talking about some of the subsidies, because what I'm confused about is AT&T and CenturyLink seem to be getting a king's ransom from the Connect America fund, and yet they're not investing significantly in these areas, from what I can tell. How much are they getting?

H.R. Trostle: From the Connect America fund, AT&T's accepted about three and a half million dollars each year, to serve about 13,000 people by 2020 with not a broadband connection, but a connection of 10 megabytes per second, download speed.

Christopher Mitchell: Let's unpack this for a second, all right. Three million dollars per year for four years. Twelve million dollars?

H.R. Trostle: Just about.

Christopher Mitchell: To connect how many homes?

H.R. Trostle: To connect 13,000 in rural and under-served areas.

Christopher Mitchell: Specific areas where they do not have, according to the map, broadband access. By 2020, they will deliver a connection that's 10 megabytes down and 1 megabyte up, at a minimum.

H.R. Trostle: Yes.

Christopher Mitchell: Now, in some areas, and we'll talk about CenturyLink's numbers in a second. In some areas, I think we'll see them exceed that. I think CenturyLink will only provide that basic connection to some of their homes, but some of their homes will probably get a 40 by 5 connection or, occasionally, maybe, a gigabyte. I really doubt that, frankly, but they'll probably -- Homes that are close to the DSLAM, which, I always call it the magical device that turns your copper phone lines into an Internet provisioning system. People that are close enough will get higher speeds than 10 by 1, but AT&T seems to be really going for that minimum speed. They're just doing this wireless only product. This news really came out after our report was put to rest, but it's worth noting that AT&T seems to be really taking it seriously that they do not have to out-perform 10 by 1.

H.R. Trostle: That's what they want to do. CenturyLink, meanwhile, is getting about 10 million per year. They're going to serve 36,000 people with that same baseline.

Christopher Mitchell: I can only imagine what these coops in North Carolina could be doing with 40 million dollars a year. I find it infuriating that Uncle Sam is throwing away here, in just two companies, 52 million dollars to provide connection that would have been obsolete last year. It's really, really frustrating. Let's move on to what the coops are doing. What did you find in terms of, let's talk about the telephone cooperatives first. What are they doing in North Carolina?

H.R. Trostle: Yeah, so there are eight telephone cooperatives in North Carolina. All of them are deploying some sort of fiber for Internet service. Six have committed to serving their entire service areas, several have actually completed those projects. The map is looking so much nicer.

Christopher Mitchell: Yeah, it's remarkable when you see the map that you've prepared, of where fiber exists in rural North Carolina. You see these areas in the central northern part of the state, you have this big block. In the northeastern part of the state, you have this big block where it seems that every last person has access because they're served by a telephone cooperative.

H.R. Trostle: Yes, and the telephone cooperatives are very used to serving these very sparsely populated rural areas in North Carolina. That's what they were designed to do. That's why they were made.

Christopher Mitchell: I was actually talking with a reporter and I made that exact point. The reporter was saying, "Is it surprising to you that the private sector is not getting this job done in rural North Carolina?" I was thinking, "No, it is not surprising." These are people who are served by co-ops because, for 100 years, we understand that the private sector does not do a good job providing the essential infrastructure for rural communities. The business model does not work for the way that they want it to. We have telephone coops and we have electric coops. It shouldn't be surprising that these approaches are the ones that are best serving North Carolina's rural communities.

H.R. Trostle: Yeah, and North Carolina has 26 electric coops. Several have already taken steps to providing Fiber-to-the-Home or Fiber-to-the-Business. Lumbee River, Blue Ridge Mountain, they are in possibly even more sparsely populated areas than the telephone cooperatives.

Christopher Mitchell: Yeah, and that's not very surprising, frankly. The electric coops serve so much of the state that, on average, I can imagine -- Not even average. The electric coops serve such a large part of the state that there's just so many more opportunities for them to be serving the least dense areas. The areas that are the hardest to reach, but these electric coops have, historically, I feel like, resisted getting involved. Are you seeing that changing in your conversations with North Carolina's electric coops or, as they call them, EMCs?

H.R. Trostle: Yeah. EMCs is electric membership corporation. That conversation is really changing and part of that is the electric cooperatives are deploying fiber to communicate with their substations. They already had that as a growing part of their electrical infrastructure. Now they can actually use that for telecommunications. Previously, their infrastructure that would have been good for broadband access would have been just the poles.

Christopher Mitchell: Yeah, when you say communicate with the substations, I always imagine them, "Hello substation, how are you doing today?"

H.R. Trostle: "Hello world."

Christopher Mitchell: I have to think, if I'm the state of North Carolina, I should be really excited about these coops investing and trying to promote that and doing everything I can to say, "Hey, how can we make this happen more quickly?" How is North Carolina reacting? You read the report. I skimmed it, I read some sections in-depth, but the state of North Carolina's report, did they really actually recognize the way that the coops are already doing this?

H.R. Trostle: They did not recognize the growing role of coops. Not at all. The state of North Carolina didn't even really address one of the barriers to electric cooperatives. Getting involved in telecommunications. There are some restrictions how an electric cooperative can access capital from the Rural Utility Service funds and from the USDA. It's rather discouraging to investment.

Christopher Mitchell: Yeah, so the state of North Carolina says, if you're an EMC. If you're a rural electric coop, you can not get telecom loans or grants from the Rural Utility Service to distribute those. You also can't form a subsidiary. Now there may be other ways for these EMCs to find of accessing capital and to be able to build these networks, but I just find it stunning that the state wants to say, "We're going to officially discourage you from accessing the USDA," which is the main system that has built our cooperative infrastructure system around the country. All of the electrical coops, the telephone coops, they've all depended on our rural utility service funding. North Carolina says, "Hey, you know what? You guys are investing in rural communities, but we're going to make it harder on you." It's the exact opposite of what you'd want.

H.R. Trostle: It is the complete opposite of what you want. That's not all -- Other states also discourage electric cooperative's investment. Tennessee, New Mexico, but there are work-arounds.

Christopher Mitchell: Where there's a will, there's a way, right?

H.R. Trostle: Pretty much.

Christopher Mitchell: That may not be true with some forms of municipal broadband investment, though. We've saved the biggest hot button issue for us last, which is HB129, or just H.129, depending on the system that you use in referencing it, but this is a law from 2011. We've talked about it so many times. The FCC repealed it, it came back through the 6th circuit, reinstated it, but basically North Carolina tells local governments, "You can not build broadband networks."

H.R. Trostle: North Carolina does not support municipalities building their own networks. H129 is sort of a zombie law in that it came back and has now ruined things for Highlands and Pine Tops and a few family farms that really were depending on that connectivity.

Christopher Mitchell: Yeah, let's talk about that. The City of Wilson, incredibly successful municipal fiber network. We've talked about them many times because they were, with Chattanooga, the two of them went to the FCC to roll back these laws. Wilson, during that period when the law was not in effect, built out to some of its neighbors that desperately needed access but did not have broadband access. This family farm in Nash County, they could not even basically run their IT systems, they couldn't be a modern packing facility because they didn't have the Internet access they needed. Wilson comes along, provides it to them, the state of North Carolina challenges the law, goes to the 6th circuit. The 6th circuit says, "The FCC does not have the authority to change that law, so the law's reinstated." Wilson's going to have to disconnect its fiber optics networks from the small community and the nearby family farms.

H.R. Trostle: Yeah, Wilson had to vote to do that. They could have tried to continue service, but it would have just led to an even greater mess.

Christopher Mitchell: They would have had to shut down their entire system, ultimately. Wilson City has universal access. Wilson County has significant access, but it all would have been at risk if they tried to continue under their current laws. As this goes to air, there will be one week left, basically, of service that Wilson will be providing nearby. Then it will have to turn them off. Now, this is the part that kills me, though. The fiber optics cables, the optical network terminal devices will be on the side of the house still. I find it incredibly frustrating that people are going to have all of the things that they need to have world class Internet service in their home, but the state will say, "You can't use it for that." Wilson can use it to monitor the electrical system, to say, "Hey, how you doing?" To the substations, to communicate with the substations. It's there, but they won't be able to deliver Internet service.

H.R. Trostle: I would say it's a quirk of the law, but it's actually the entire point.

Christopher Mitchell: Right, exactly. Here's a question then, as we head toward the end and I'm done ranting about the injustice in Wilson and Pine Tops and altitude in Highlands. What is the next step? What can North Carolina do if it actually has leadership that cares about promoting rural connectivity, rather than just lining the pockets of powerful CenturyLink and AT&T, their lobbyists and their interests?

H.R. Trostle: Well, it would be really simple to repeal H129, but I don't know if that's actually ever going to happen.

Christopher Mitchell: Well, let's go a step further and say, let's assume that that got rid of it. You have some towns that move forward, more importantly, perhaps, you have the existing networks able to expand and serve their neighbors. You still have a lot of areas, I mean what do you see in terms of the electrical -- Is it feasible to think that electric coops could solve most of North Carolina's problem? A way that partnerships with the telephone coops expanding outside of their areas? I mean, is this a pipe dream or is this something that could happen?

H.R. Trostle: No, this is entirely possible. The electric coops can work with the telephone coops to provide better connectivity. They don't have to actually worry about providing the telecommunication services themselves, they can simply partner with someone who already has experience in doing that.

Christopher Mitchell: One of the things that we're starting to get a sense, from some of the reaction to the report, is that this is starting to happen. There is hope, I think.

H.R. Trostle: There is. It would be a little bit nicer if they could get rid of some of the restrictions on the electrical cooperatives access to capital.

Christopher Mitchell: Right, and I also think, as you have the electric coops and the telephone coops doing this expansion. It must be incredibly frustrating. Let's imagine that you're just outside of the Wilkes cooperative area and the Riverfront Networks.

H.R. Trostle: RiverStreet.

Christopher Mitchell: RiverStreet Networks. You are right outside of there and you're not getting service from them. They're working with a couple of other areas nearby, but they can't build everywhere at once. North Carolina says, "Too bad, you can't get do it yourself. You have to wait until they come to you." Or something like that. I just, I think that the H129 restrictions are such a slap in the face to communities. To say, "Yeah, you're losing property value, you're losing businesses, people don't want to move in there, but you can't solve the problem yourself. You have to just hope that someone else is going to come along and solve it for you."

H.R. Trostle: Yep, even if you have the technical expertise, you're just not allowed to.

Christopher Mitchell: It runs totally contrary to everything that we believe in at the Institute for Local Self-Reliance and what people and communities should be empowered to do.

H.R. Trostle: Exactly.

Christopher Mitchell: I hope that people have a chance to check out this report. I think we're going to be seeing more maps, more exciting stuff coming from Hannah, from the work that you're doing. You already prove it a little bit, Tennessee and Minnesota are in the works. I hope people stay tuned to your work.

H.R. Trostle: I hope so too.

Lisa Gonzalez: That was Chris talking with H.R. Trostle, our colleague and one of the authors of our recent report on connectivity in North Carolina. You can download the report at and to learn about the urban/rural digital divide and how coops and muni networks are finding ways to close the gap. Remember, we have transcripts for this and other Community Broadband Bits podcasts available at Email us at with your ideas for the show. Follow Chris on Twitter. His handle is @CommunityNets. You can also follow stories on Twitter, where the handle is @MuniNetworks. Subscribe to this podcast and all of the podcasts in the ILSR podcast family on iTunes, Stitcher, or wherever else you get your podcasts. Never miss out on our original research by also subscribing to our monthly newsletter at Thank you to the group Mojo Monkeys for their song, "Bodacious", licensed through Creative Commons. Thanks for listening to episode 224 of the Community Broadband Bits Podcast.

Wilson To Offer Greenlight To Pinetops At No Charge

The town of Pinetops, North Carolina, has a six-month reprieve.

On October 20, the Wilson City Council voted to continue to provide telephone and Internet access to customers outside of Wilson County, which includes Pinetops, for an additional six months at no charge. As we reported earlier, the City Council had been backed into a corner by state law, which would force them to discontinue Wilson’s municipal Greenlight service, or risk losing their exemption entirely.

In August, the Sixth Circuit for the U.S. Court of Appeals reversed the FCC decision to preempt North Carolina’s state law that prevented Greenlight from serving nearby Pinetops. When Hurricane Matthew struck Pinetops, however, the Wilson community could not fathom piling yet another burden - lack of high-quality Internet access - on the struggling rural community.

"We Cannot Imagine..."

After examining the law and reaching out to state leaders, Wilson’s elected officials chose to provide services at no charge while state legislators work to change the current harmful state law. Once again, a community that offers publicly owned connectivity proves that there is more to the venture than profit. From a Wilson press release:

"Our broadband utility has always been about bringing critical infrastructure to people, improving lives and communities,” said Grant Goings, Wilson City Manager. “We cannot imagine being forced to disconnect people and businesses that need our services. We are thankful that, in partnership with our phone service provider, we have identified a way to keep folks connected while Rep. Martin and Sen. Brown work to fix this broken State law."

For more on the situation in Pinetops, read about how high-quality Internet has improved economic development and how the Vick Family Farm, a large local employer, depends on Greenlight for operations. You can also hear from Suzanne Coker Craig, a local elected official and business owner, who described for us how the community quickly came to depend the service and how the state’s draconian law is sending them back in time.

More Time To Make A Change

The situation is not permanent, say Wilson's leaders, but it will give the community of Pinetops a chance to recover from Hurricane Matthew. It will also give Pinetops and Wilson the opportunity to organize local residents and businesses and to work with Sen. Brown and Rep. Martin who will pursue legislative changes in Raleigh.

The community has already started to get organized with a Facebook page and an online petition you can sign to show your support.

Read the rest of the Wilson Press release on the City Council decision here.

Midwest Energy Cooperative Connects Rural Michigan - Community Broadband Bits Podcast 225

Telephone and electric cooperatives are making strides in bringing high-quality connectivity to rural areas while national providers stay in the city. This week we speak with two gentlemen from rural southwest Michigan’s Midwest Energy Cooperative: President and CEO Bob Hance and Vice President of Regulatory Compliance Dave Allen.

The electric cooperative has embarked on a project to bring fiber-optic connectivity to its members within its electric distribution grid. The multi-year project will bring better functionality to electric services and high-speed Internet access to areas of the state struggling with yesterday’s technologies. Bob and Dave describe the cooperative’s commitment to it’s members and discuss the deep roots of the cooperative in the region. They also touch on how the project is already improving lives in the areas that are being served.

Bob, Dave, and Chris, also spend some time discussing the difficulties that face rural cooperatives, especially regarding federal funding and its distribution. Serving sparsely populated areas is a challenge. Federal funding is often distributed more favorably to big corporate providers that promise to deliver much slower speeds than cooperatives like Midwest Energy. Co-ops are delivering better services, and building better networks with less federal funding; they also face higher hurdles to obtain that funding.

Why do they do it? Because they are invested in the future of their communities.

Read more about the project at the Midwest Connections Team Fiber website.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 28 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to mojo monkeys for the music, licensed using Creative Commons. The song is "Bodacious."

Chatham County, NC: Share Your Connectivity Perspective In This Survey

With the release of our North Carolina report, it is important to remember that reports and maps are only as good as the underlying data. Although federal and state governments have collected information on deployment and access for several years, the accuracy and quality of that data is up for debate. Chatham County, North Carolina, wants to show the actual situation that local residents face.  

Chatham County is encouraging every household or business to complete a survey this next month. The survey will enable community leaders to move forward.

“It is up to us…”

Chatham County is home to just shy of 70,000 people. This rural county's population is spread throughout a rural area with 85 people per square mile. Darlene Yudell, the Director of Management and Information Systems for the county, explained the potential impact of the survey:

“It is up to us to show areas that are unserved or underserved. We also have to deal with the fact that several state regulations and laws restrict what counties can do to promote more broadband options in those areas.”

The federal data is based around Form 477. Internet service providers (ISPs) submit to the Federal Communications Commission what their maximum advertised download and upload speeds are for each census block. This form, however, does not include information around pricing. 

Although a census block may have high-speed Internet access, it may be unaffordable and it may only be available to one or two houses in that census block. According to the North Carolina Broadband Infrastructure Office, only 16 percent of North Carolina's population subscribe to broadband speeds, defined by the FCC as 25 Megabits per second (Mbps) download and 3 Mbps upload, despite 93 percent of the state ostensibly having access to such speeds.

How accurate is North Carolina's assessment of the data, however? Listen to our discussion about form 477 and the real situation in the state in episode 224 of the Community Broadband Bits podcast.

Chatham County hopes residents will provide a more accurate picture of what is available by sharing their real world situation rather than depending on ISPs for data.

The Survey

If you live in Chatham County, North Carolina, we encourage you to take part in this survey.

The survey is available online at:

For a paper copy: email or send a request by mail to Chatham County MIS, 158 West St., Pittsboro, NC 27312.

Gigi Sohn Speaks: A New Battlefield

A few of us from the Community Broadband Networks Initiative recently attended the BBC Community Toolkit Program & Economic Development conference in downtown Minneapolis. On the first day, Gigi Sohn, Special Counselor for External Affairs for Chairman Wheeler at the FCC received the award from the Coalition for Local Internet Choice for the Local Internet Choice National Champion. The Obama administration’s FCC, under the guidance of Chairman Wheeler and the sage advice of Gigi, has become enlightened to the positive potential of community networks. 

Pressing On

To their credit, the agency has dealt with a number of issues, including network neutrality and a number of other consumer centric matters. We have reported on some of them, but the most central to our work has been the issue of state laws that restrict the deployment and expansion of municipal Internet networks. Gigi, as one of Chairman Wheeler’s top advisors on this matter, played a pivotal role in helping the agency pursue municipal networks as a critical aid to local control, competition, and the ultimate national goal of ubiquitous Internet access.

Gigi reflected on the court battle that reversed the FCC ruling from 2015 preempting state barriers that prevent North Carolina and Tennessee municipal utility Internet networks from serving nearby communities. She noted that advocates shared truths about community networks with data about economic development, competition, and quality of life. The benefits of local authority became clear but, unfortunately, the courts showed us that this is not a battle to be fought on the federal level. The court may have agreed with the fact that municipal networks are beneficial, but they did not believe the FCC had the authority to preempt state laws, even if they are counter-productive.

In other words, in order to obtain local Internet choice, the fight has to also be local:

The battlefield is no longer the FCC and the courts, but state legislatures. And the battle plan is no longer to file convincing petitions and briefs. It is for advocates for local Internet choice to bring every local mayor, city council, business, school, college, library, chamber of commerce and citizen together to convince state officials that for the future of those cities and towns and by extension, the state itself, localities must have the ability to determine their own broadband futures. 

Without a doubt, this new battlefield is much larger and the battle will be much harder, longer and more costly. But victory will be sweeter and less vulnerable to legal challenge if local stakeholders make their voices heard. 

Sohn restated what Chairman Wheeler told us in August:

As he said on the day of the 6th Circuit decision: “Should states seek to repeal their anti-competitive broadband statutes, I will be happy to testify on behalf of better broadband and consumer choice. Should states seek to limit the right of people to act for better broadband, I will be happy to testify on behalf of consumer choice.” Trust me, you’ll never get a more passionate and persuasive advocate than Chairman Tom Wheeler. 

Considering The Future

Looking ahead, Sohn’s words also turned to the practical matters of the physical infrastructure of Internet networks. She urged communities to address the issue of pole attachments as quickly as possible. In addition to obtaining access to poles under the control of incumbents or utility providers, municipalities need to consider the make-ready process. “This ‘make-ready’ process is ripe for gaming by those who disfavor competition,” she observed. Certainly, the games have already commenced, as AT&T has already filed suit to delay Google Fiber deployments in Nashville and in Louisville by preventing make-ready streamlining in those cities.

Even though she spoke of both positive and negative outcomes, Sohn expressed a hopeful excitement for dark fiber. She mentioned the projects in Westminster, Maryland, and Huntsville, Alabama, and spoke positively of a similar open access model.

What Doesn't Kill Us Makes Us Stronger

Sohn left us with the message that, even though we have been through a setback in obtaining local authority, we have profited from the experience as we move the challenge to the state level. She also drew from the promise of opportunity that she sees ahead:

In closing, I’ll paraphrase just about every State of the Union address – “the state of local Internet choice is strong.” This is true despite the setback dealt by the 6th Circuit. Many challenges lay ahead, but so do many opportunities. If the past three years serve as precedent, I know that the passionate, knowledgeable and resilient advocates of this movement will overcome the challenges and take advantage of the opportunities. Let’s keep working together until every community can determine its own broadband needs without barriers. Thanks again for this wonderful honor and for all the support you have given Chairman Wheeler, the FCC and me for the past three years.

Watch the video of Gigi Sohn's speech, courtesy of Ann Treacy at the Blandin Foundation and check out their blog, Blandin on Broadband:

The text of the speech is also available online.

"We Just Can't Go Back In Time": Pinetops Calls For Repeal Of State Law

In a September 22nd press release, the community of Pinetops, North Carolina, called out their Governor as they lose access to high-quality Internet access. Read the full statement here:

A state law is forcing the termination of Gigabit Internet service to the small rural town of Pinetops, NC. Last week, members of the Wilson, NC City Council expressed their deep regrets as they voted to approve the city attorney’s recommendation to disconnect Wilson Greenlight services in Pinetops under the North Carolina law commonly known as H129 (S.L. 2011-84).

Wilson was able to bring fiber-to-the-home Gigabit service to our town in April 2016, after the FCC preempted H129 on the grounds that it is anti-competitive and creates barriers to the deployment of advanced telecommunications capacity. Under Governor Pat McCrory, North Carolina challenged that ruling in May, 2015 in the United States Court of Appeals for the Sixth Circuit and won a reversal last August.

Members of the Pinetops community are particularly distressed because the Gigabit service Wilson was delivering enabled Pinetops to compete with urban areas of North Carolina that get such Gigabit services from Google Fiber, AT&T, and Frontier. In Pinetops, in contrast, other sources of Internet service don’t meet the federal definition of broadband and are insufficient to support small business, home-based telework needs, and homework for students. The Gigabit network enabled the Town to begin developing new economic development plans to attract knowledge workers from nearby Greenville and Rocky Mount. That strategy is now impossible in light of the imminent disconnection of Gigabit services.

Town Commissioner Suzanne Coker-Craig operates a small screen printing business that depends on Wilson Greenlight’s hyper-fast upload speeds.  Commissioner Coker-Craig, with her colleagues in Pinetops government, passed a resolution in early September detailing the devastating economic impact this disconnection will have on their rural community. “H129 is now only hurting North Carolina’s rural communities.” the Commissioner stated. “Our urban areas are getting their Gigabit from the likes of Google. This is not a positive move forward for Eastern North Carolina in any fashion and we must lay the blame and the resolution at the feet of our Governor and state legislators” who are responsible for the anti-Gigabit law.

Pinetops Mayor Burress met last week with Governor McCrory’s staff, and handed them the Town’s letter and a Town resolution asking for repeal of the law that is forcing the Wilson City Council to cease service to Pinetops.  

Commissioner Coker-Craig reported that she has set up a Facebook page ​called “NC Small Towns Need Internet Access,” that directs residents on how to call their legislators and candidates who are running against them. “We are holding the Governor and our state legislature responsible for keeping this law in place, by challenging the FCC and knowing this would be the effect of a win. This law is not about protecting taxpayers, it’s about preventing competitive choice, and now it’s only hurting our rural areas where those monopoly companies could care less about bringing us 21st Century Internet.”

“We just can’t go back in time,” said Coker-Craig. “That does not represent sound social or economic policy,” the Mayor’s letter states.

​The Wilson Times reports that the Town's fiber network will be disconnected by Halloween.​

Local Authority "A-Number One" Priority For Congress, Says Wheeler

“A-number one importance.”

On September 15th, the Senate Commerce, Science and Transportation Committee gathered to discuss FCC oversight and telecommunications issues. Among those issues, the Committee discussed municipal networks.

Senator Cory Booker (D - NJ) asked FCC Chairman Tom Wheeler to provide his thoughts on how important it is that Congress takes action. The matter he put before Wheeler was the prospect that Congress act to allow local communities to have local authority on issues relating to Internet infrastructure and advanced telecommunications capabilities. How important is it?

Wheeler’s answer: “A-number one importance.”

Wilson, Pinetops, And A Harmful State Law

Booker, who introduced a bill in 2015 to restore local authority, brought up the subject of Wilson, North Carolina, and nearby Pinetops. When the FCC rolled back restrictive state laws in 2015, Wilson’s electric utility finally had the legal authority to help their neighbors so began offering high-quality Internet access through it’s municipal Internet service, Greenlight. Earlier this summer, the Court of Appeals found in favor of the state, which challenged the FCC decision. As a result, Wilson must cut off service to Pinetops or risk losing the legal ability to serve anyone. The FCC has announced that it will not pursue further review of the decision and will focus its resources on other areas. 

Booker described the situation in Pinetops as “disturbing,” but went on to praise Wilson for investing to solve the need in the region and pointing out how local businesses, including those in Pinetops, came to depend on those investments. He went on to say he was “disappointed, if not angered” by the Court of Appeal’s decision.  

Watch a clip of the hearing:

For Pinetops and other rural communities where big cable and DSL companies refuse to bring the connections they need, the North Carolina General Assembly has betrayed them. Rather than give local communities the tool they need to move into the 21st century, the men and women of the state Capitol would rather bank on heavy campaign donations from the industry heavy hitters. These are the same entities that pushed to pass state laws that prevent local communities from investing in their own futures. 

An Enlightened FCC

Wheeler has advocated for local authority for some time now, a significant shift from past FCC Chairmen, who continued to push the antiquated notion that large private sector providers would be our saviors. In his August 10th statement on the Court of Appeals Order reversing the FCC decision, Wheeler stood with Pinetops and other rural communities who want their state legislators to stand down:

“Should states seek to repeal their anti-competitive broadband statutes, I will be happy to testify on behalf of better broadband and consumer choice. Should states seek to limit the right of people to act for better broadband, I will be happy to testify on behalf of consumer choice.”

Tom Wheeler, Cory Booker, and an increasing number of elected officials are now seeing the benefits of publicly owned Internet networks, thanks to a growing momentum of local community leaders, business owners, and advocates.

AT&T Gets Snagged In Giant Loophole Attempting To Avoid Merger Responsibility

They're at it again. Recently, they have been called out for taking advantage of E-rate; now they are taking advantage of their own lack of infrastructure investment to worm their way out of obligations to serve low-income residents. Fortunately, a nonprofit group caught up with AT&T's shenanigans and held their feet to the fire.

"Nah, We Don't Have To Do That..."

As part of FCC-mandated conditions under which AT&T was allowed to acquire DirecTV in 2015, the telecommunications conglomerate created the "Access from AT&T" program, offering discount Internet access to low-income households. The program consists of tiered services - download speeds of 10 Megabits per second (Mbps) for $10 per month, 5 Mbps for $10 per month, and 3 Mbps for $5 per month.

The company is required to enroll households in the fastest speeds available, but a significant amount of low-income families don't qualify because the fastest speed AT&T offered to their home is 1.5 Mbps download. The problem, created by AT&T's own lack of infrastructure investment in certain neighborhoods, allowed AT&T to dodge their responsibility under the terms of the DirecTV acquisition by simply denying enrollment to households with speeds less than 3 Mbps. Trouble is, some one noticed.

NDIA In Cleveland, Detroit

The National Digital Inclusion Alliance (NDIA) realized the scope of the problem when they attempted to help families in low-income neighborhoods in Detroit and Cleveland sign up for Access from AT&T. In addition to discovering that residents could only obtain 1.5 Mbps download speeds, NDIA found that AT&T denied these households enrollment because their speeds were too slow. The only other option for ineligible households was AT&T’s normal rate for 1.5 Mbps service, which is six times the cost of the Access program.

Loopholes: All Lawyered Up And Nowhere To Go

By diving through a cavernous loophole, AT&T cleverly manipulated the terms of the merger order and single handedly squelched the intended purpose of the program. According to the directive, AT&T “shall offer wireline Broadband Internet Access Service at speeds of at least 3 Mbps, where technically available, to qualifying households in the Company’s wireline footprint for no more than $5 per month.”

AT&T’s repeated unwillingness to invest in infrastructure in low-income neighborhoods precluded residents from living in neighborhoods where 3 Mbps download was technically possible. Yet, the corporate giant used lack of speed availability to justify denying Internet access discounts for those who need it the most. It's amazing Randall Stephenson doesn't get dizzy from all that circular reasoning.

Unfortunately, this technicality didn’t just affect a few households on the fringe of AT&T’s service area: according to data from the FCC, 21 percent of census blocks in Detroit and in Cleveland have Internet speeds of 1.5 Mbps or less. Unsurprisingly, these blocks include mostly low-income households in inner-city neighborhoods.

Don't Mistake Us For Philanthropists

Because these households can't partake in the program, NDIA asked AT&T to extend their $5 per month offer to households with 1.5 Mbps speeds. While 1.5 Mbps is considerably slower than the program’s slowest speed, and far from the FCC’s broadband goal of 25 Mbps, AT&T would not budge. It took the corporate giant a month to reply:

“AT&T is not prepared to expand the low income offer to additional speed tiers beyond those established as a condition of the merger approval.”


NDIA Director Angela Siefer detailed the exchange in a post, writing

“AT&T's response is very unfortunate for tens of thousands of households in the company's 21-state service territory who may need affordable Internet access the most, but who happen to live in places – both city neighborhoods and rural communities – where AT&T has failed to upgrade its residential service to provide reasonable speeds.”

Bad Press Has A Purpose Sometimes

After a significant amount of bad press, AT&T reversed its original stance. AT&T spokesman Brett Levecchio was quoted in CNN Money:

"We're currently working to expand the eligibility process of Access from AT&T to the 2 percent of our home Internet customers unable to receive Internet speed tiers of 3 Mbps and above."

Siefer replied by pointing out that 2 percent of all AT&T customers still equates to 250,000 people, typically concentrated in low-income neighborhoods where the only Internet access available is the same slow technology found in Cleveland and Detroit. She wrote in a follow-up post:

“Some are already paying AT&T full price for their slow connections, while many others can’t afford Internet at all—and still won’t be able to, unless the Access speed threshold is lowered. Both groups will benefit from AT&T’s change of heart...We look forward to learning more about AT&T’s plans to extend Access from AT&T to these households, and to working with our local affiliates to maximize the program’s contribution to digital inclusion in their communities.”

Feld Breaks Down 6th Circuit FCC Reversal

In our last Community Broadband Bits podcast, Christopher and I discussed the August 10th U.S. Court of Appeals for the Sixth Circuit decision to reverse the FCC’s February 2015 ruling against state barriers. We mentioned Harold Feld’s article about the ruling posted on his website. In keeping with most matters of importance in the municipal Internet network field, Harold expertly sums up the history of the case, the arguments, and what the outcome could mean for the future.

Feld gets down into the crux of the argument that won over the three judges in the Sixth Circuit - the need to establish if it is states or federal agencies that make the decisions regarding whether or not local governments can provide telecommunications.

Determining the answer was a multi-step process and Feld explains how the FCC came to the conclusion that they had the authority to preempt the laws and the states' arguments against it. This was, after all, a test case and Feld describes why the FCC chose Chattanooga and Wilson.

Read more on Feld’s Tales of the Sausage Factory, where he speculates on how the big incumbent providers will react to their win and what is next for municipal network advocates. From Harold:

As with most things worth doing in policy land, it’s disheartening that it’s an uphill fight to get to rational policy. The idea that states should tell local people in local communities that they can’t invest in their own local infrastructure runs against traditional Republican ideas about small government and local control as it does against traditional Democratic ideas about the responsibility of government to provide basic services and promote competition. But that’s how things work in public policy sometimes. We can either give up and take what we get, or keep pushing until we change things for the better.

Feds Are Fed Up With AT&T's Lame Excuse For Abusing E-rate

In late July, the FCC released a Notice of Apparent Liability (NAL) in which it found the telecommunications giant AT&T Southeast liable for a $106,425 forfeiture. The agency also ordered the company to return $63,760 of E-rate funds it described as “improperly disbursed.” AT&T overcharged two school districts in Florida and, in a response released last week, are trying to justify their pilfer by blaming the E-rate rules and the schools themselves, much as a criminal blames victims for being such easy targets.

Funded By Phone Users

E-rate funds are collected as a surcharge on telephone bills; the funds go to schools to help pay for telecommunications costs at schools, including telephone, Internet access, and infrastructure costs like fiber network construction. The amount a school district receives depends on the number of students in the district that qualify for free and reduced lunches; schools with higher numbers of low-income students are reimbursed at a higher rate. Given that many of our schools are funded through property tax rolls, this means that schools in poorer neighborhoods that are more likely to need help with their budgets receive the higher reimbursement rates.

According to the program rules, phone companies and Internet Service Providers (ISPs) that participate are required to offer the “lowest corresponding price” to schools. Providers aren’t permitted to charge rates that exceed the “lowest corresponding price” or bid higher than that price on contracts to serve similarly situated entities if those entities are eligible to receive E-rate funds. School districts do not carry the burden of getting the lowest corresponding price - telephone and Internet access providers are responsible to ensure that they offer the lowest price in exchange for the opportunity to participate in the program. Between July 2012 and June 2015 alone, AT&T received $1.23 billion in E-rate funding nationwide.

Filching In Florida

In Orange County and Dixie County, AT&T charged the districts prices that were 400 percent higher than other phone rates in Florida, claims the FCC. Their investigation focused only on two types of telephone services. The FCC noted that when Florida deregulated phone services in 2011, AT&T “dramatically increase[d] its pricing.” According to the the NAL, the company repeated the pattern between 2012 and 2015. Each year AT&T would file paperwork, falsely claiming they had followed the rules regarding price.

The NAL describes AT&T’s substantial rate increases after 2011 for the two types of phone service. Increases occurred every year and “both Districts paid among the highest rates of all non-residential customers” which contradicts the purpose of the E-rate program. When pressed as to why they increased rates so dramatically:

Indeed, AT&T has not offered any justification for its pricing at all despite requests from the Enforcement Bureau (Bureau). We are left to conclude that AT&T sought to maximize profits at the expense of the Districts and at the expense of the publicly-funded E-rate program. 

This isn’t the first time big telephone providers have been known to push the limits of the rule. Verizon and others have been criticized for similar behavior but this is the first enforcement action for violating the lowest price requirement. Back in 2012, AT&T was caught overcharging schools for telephone service by 325 percent. In 2010, a Detroit Public Schools audit recommended $3 million be recovered from AT&T, in part because the telecom had not provided the lowest corresponding price. There are other reported instances and probably numerous unreported ones.

AT&T's luck appears to have run out, however, because the FCC seems to have had enough of the bad behavior. In calculating the amount of the fine, the FCC focused only on the instances of false reporting and limited the number of years they included. Considering the large sum of money AT&T has taken from the program, and their pattern of misbehavior, the fine could be much higher. For more on how it was calculated, check out the Common Law Monitor


AT&T Responds

On August 26th, AT&T filed its response to the NAL and posted a blog the same day. The company argued that they charged the school districts higher rates because they chose to receive services on a month-to-month basis rather than via one-year contracts. The FCC disputes that conclusion, determining that the districts inherently requested one-year service as a matter of course.

Charging more for month-to-month contracts is the way telecom businesses typically operate, which gave AT&T an excuse to increase telephone rates by 400 percent. How convenient that school administrators did not feel the need to shout, "We want an annual contract!" at every turn - their mistake.

The FCC also found that AT&T should not have charged such exorbitant rates because of the presence of the state's E-rate Consortium. The Consortium allows schools to band together and negotiate for lower rates. The schools did not belong to the group but, because it reduced possible rates for similarly situated entities that qualify for E-rate, AT&T was not permitted to charge rates higher than those available to those in the consortium. The company argues, again, that the schools wanted month-to-month service, rather than the yearly contracts that are negotiated for consortium members, so the rates did not apply.

AT&T claims that the "lowest corresponding price" rule is not well-defined and blames their decision to apply a price 400 percent higher than acceptable on that ambiguity. 

Solid Track Record

AT&T has proven to be a virtuoso of swindle over the years, typically in the form of shifty rate practices. David Cay Johnston has written about AT&T's stylistic theivery perfectly described by an incident involving his friend Bruce Kushnick:

When he cross-checked his aunt’s telephone bills over the years, he could hardly believe the numbers. His aunt paid $9.51 for her local phone service in 1984. By 2003 her bill had swollen fourfold to $38.90. In the two decades since the breakup of the AT&T monopoly, even after adjusting for inflation, his aunt’s telephone cost $2.30 for each dollar paid in 1984. And that was without any charges for long-distance calls.

Taking advantage of elderly ladies, school budgets, and taxpayers are all in a day's work at AT&T.