Tag: "legislation"

Statewide Video Franchising: Bad for Communities

Posted August 27, 2009 by christopher

Folks who are mostly interested in broadband are probably unfamiliar with video franchising laws. Many people still apparently believe that cable companies are able to get exclusive franchises from the city (granting them a monopoly on providing cable television). However, that is not true and has not been true for many years.

Most cable companies still have a de facto monopoly because it is extremely difficult to overbuild an existing cable company - the incumbent has most of the advantages and building a citywide network is extremely expensive. This is not a naturally competitive market; it is actually a natural monopoly.

However, most people want a choice in providers (something that goes beyond a single cable company and a satellite option or two depending on whether you rent/own and your geographic location. In talking with many local officials and the National Association of Telecommunications Officers and Advisers (NATOA), it seems that almost every local government wants more competition in its community too.

This is where telephone and cable company lobbyists have stepped in - more successfully at the state level than at the federal level. They have convinced legislators that the barrier to more competition is local authority over the franchise (the rules a company agrees to in return for the right to use the community's Right-of-Way in deploying their network). These rules include red-line prohibition (you cannot refuse to serve poor neighborhoods), an affordable "basic" tier of service, local public access channels, broadband connections at public buildings, etc.

Some states have listened to the lobbyists and enacted statewide franchising - where local communities are stripped of the authority to manage their Right-of-Way and companies can offer video services anywhere in the state by getting a state franchise from the state government. Every year, we gather more data that this practice has hurt communities, raised prices, and barely spurred any competition. Most of the competition it is credited with spurring came from Verizon's FiOS deployments, which would have occurred regardless of state-wide franchise enactment.

This touches directly on broadband because the statewide franchises often give greater power to companies like Verizon to cherry-pick who gets next generation broadband. Wealthier neighborhoods will increasingly get access to faster...

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What Can States do?

Posted August 12, 2009 by christopher

What can states do?

Many states want to improve broadband access for their citizens. Some states genuinely want to act and others are content to give some money to industry-front group Connected Nation and form a Task Force in order to give the appearance that they are doing something rather than actually taking action.

However, the problem is difficult because in a time of severe budget crunches, states may not have the funds to invest directly in infrastructure or help communities do so themselves. There are some options - and I recently highlighted one: Virginia's Broadband Infrastructure Loan Fund.

The Virginia Resources Authority (VRA) now has a revolving loan fund to help communities build the broadband infrastructure they need. Unfortunately, the fund has started empty but they are in search of grants to get started until the state can seed it.

Even without the revolving loan fund, which keeps a very low interest rate for loans, the VRA is available to help communities that want to approach the capital markets for infrastructure funds. Communities may not have sufficient experience in this arena or may just benefit by having the VRA combine multiple small needs into a larger package at a better rate.

Elsewhere, the Vermont Telecommunications Authority was supposed to serve a similar function but seemed to be immediately captured by Fairpoint and turned into a tool for private companies.

One of the most basic things a state should do is ensure it has not created barriers to public investments in broadband networks. It may be a few years old, but the American Public Power Association created a list of laws blocking or retarding community broadband networks. These should be repealed. Those arguing that the public sector has too many advantages should read our discussion about the level playing field.

Capitol photo by Rob Pongsajapan

New Network Neutrality Bill

Posted August 4, 2009 by christopher

Representatives Markey and Eshoo have introduced a House bill to preserve network neutrality on the Internet - a means to ensure users are able to choose what sites they visit rather than allowing gatekeepers like AT&T or Comcast to influence the decisions by speeding up or slowing down some sites.

Imagine if AT&T subscribers could access Google twice as fast as Yahoo (or another start up search engine) because Google cut deals with AT&T for preferential treatment. The Internet as we know it would change substantially and innovation would slow because those who could afford to cut deals with major service providers would attract most viewers.

It is important to note that public ownership largely solves the problems that make this bill necessary. Companies that maximize profits above all else are willing to degrade the Internet in order to pad profits whereas networks that put the good of the community above profits tend not to interfere with user freedom. However, we find that for an issue this important, having it reinforced both federally and locally is a good idea.

The bill currently has no additional listed cosponsors. To my knowledge, bills like this tend to do well in the House but die in the Senate. Video from Save The Internet:

I have included the text of the bill below for convenience, but did not include the formatting. You can see it nicely formatted via THOMAS or check out the Free Press' Seven Reasons Why We Need Net Neutrality Now.

A BILL

To amend the Communications Act of 1934 to establish a national broadband policy, safeguard consumer rights, spur investment and innovation, and for related purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION...

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North Carolina - Netroots activism blocks effort to ban municipal Internet services

Posted July 22, 2009 by christopher

This article wraps up the 2009 efforts of private companies to pass what some have termed the Incumbent Protection Act - an effort by private companies to use the State Legislature to prevent communities from building the fast broadband networks in which the private companies themselves refuse to invest.

N.C. House Bill 1252 and Senate Bill 1004 would have placed a number of financial restrictions on local governments that seek to offer Internet and other telecom services, in the name of "leveling the playing field" between governments, which can borrow money more cheaply than private companies can, and private cable and telephone companies that offer similar services. The bill would have required municipal services to tack on to customer fees equal to the difference in the amount it would cost a private company to provide the service, and prohibited governments from "cross-subsidizing" the launch or operation of a system, a practice common in private industry.

Critics say municipal services already face rigorous financial scrutiny and that towns and cities go into the broadband business only when private industry chooses not to upgrade or build out infrastructure to increase the availability and quality of service. The bill could have effectively made North Carolina's local governments ineligible for federal stimulus money designated to stimulate the construction of broadband networks.

Oppose HB1252 Sticker

Fortunately, the fight is likely over for this year.

When the bill went before the House Public Utilities Committee May 6, more than 100 citizens, lobbyists, elected officials and members of the press attended. Supporters of the bill, rallied by the Americans for Prosperity, sponsors of the tax day "tea parties," wore red shirts to show their support. Opponents wore yellow stickers that said "Save NC Broadband."
Rep. Ty Harrell, D-Wake, and Rep. Thom Tillis, R-Mecklenberg, addressed the mounting controversy by moving to send the bill to committee for further study.

Study committees are often where bills go to die. Harrell says he does not intend to let the measure die wants it to have "a thorough chewing-on."

Unfortunately, the private companies will almost certainly press the issue at every opportunity in the future as they...

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