Tag: "taxes"

Posted July 23, 2013 by christopher

Last week, we discussed how Shafter's plans in California for a community fiber network changed with the Great Recession. Today we have an interview with Shafter Assistant City Manager Scott Hurlbert with an expanded discussion of how the community adjusted and what its next steps will be.

Shafter transitioned from leased T1 lines to a city owned fiber network with gigabit connections between municipal facilities. As the network expands, it will do so with independent ISPs offering services as the local government prefers to focus in providing the physical infrastructure rather than delivering services directly.

Unlike the majority of communities that have invested in their own networks, Shafter does not have a municipal electric utility. Nonetheless, local leaders see a fiber network in much the same light as the water system. They expect the fiber network to break even but do not expect large revenues from it - the point is for the infrastructure to enable economic development and a high quality of life that improves the entire community.

Read the transcript from our conversation here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

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Thanks to Break the Bans for the music, licensed using Creative Commons.

Posted July 18, 2013 by christopher

Rant Warning...

Every state has at least one organization, often calling itself a think tank, that is funded by large corporations to advance their narrow interests, often at the expense of local businesses and the larger public.

Many call these "coin operated" think tanks because they take whatever positions their funders want them to take. Or, a more charitable explanation is that some massive corporations are simply channeling money to those few people who honestly believe that we would all be better off if BP or Comcast or Goldman Sachs had no regulations to worry about.

In Minnesota, one of these is called the "Freedom Foundation" of Minnesota. I tend to ignore them for a variety of reasons.

  1. There just isn't enough time.
  2. They are really, really ignorant. Their papers and posts are so filled with errors in basic fact, it would take a LOT of time to correct them - which brings me back to point 1. (Nonetheless, they are influential because the lobbyists of the companies that fund them distribute their propaganda throughout the capitol that they appear to actually live in.)
  3. Mentioning them can legitimize them.

So here I am, mentioning this group because I just noted a curious example of their utter lack of integrity.

For a few years, the "Freedom Foundation" has worked on telecommunications issues, mostly writing nasty, slanted articles twisting the words of public officials to discredit projects. Given the problems faced by Monticello (as we have covered), they have had a field day there - even tracking down a bondholder that is losing part of his investment.

The fallout from Monticello FiberNet will cost bondholders something like $19 million or about 65 percent of their investment. And the City will likely spend millions in public dollars on the network when it was originally to be paid for entirely by the revenue bonds. This is certainly disappointing. But in Monticello, FiberNet is not the only difficulty - Monticello happens to host one of Xcel Energy's nuclear power plants.

Cost overruns there are taking a $320 million project and turning it into a $640 million project, which will be paid for by ratepayers across Minnesota, including myself.

Yikes, right? I mean if the "Freedom Foundation" is incensed at how unjust it is for...

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Posted July 10, 2013 by lgonzalez

Winchester, Massachusetts, recently offered voters the chance to create a special fund earmarked for school and government technology infrastructure. The question came during the special election to fill an empty Senate seat vacated by Secretary of State John Kerry. The technology fund proposal, to be funded by taxpayers, did not pass but offers an interesting approach for communities seeking to ensure community anchor institutions have the connections they need.

Wicked Local Winchester reported on the "technology stabilization fund:"

Under the proposal, the fund would receive $350,000 from taxpayers in fiscal year 2014. That figure would increase by 2.5 percent each year. Each Winchester household would pay approximately $50 in taxes into the fund in the fiscal year that begins July 1, according to the proposal.

The fund cannot be used for any end-user devices, including computers, laptops or classroom technology like smartboards. Instead, the fund will cover upgrading and maintaining the town and school computer network.

Opposed community members criticized a lack of detailed plans for the fund and challenged whether it would save public dollars. In the days before the vote, some council members publicly questioned the need for technology improvements.

The proposal failed 54 percent to 46 percent on June 25th. Wicked Local Winchester noted that several voters they met at the polls did not know about the proposal before the election. Support seemed strong from those voting yes:

“I think if we’re going to have an excellent school system, we need the technology to support it,” resident Anne Poskitt said after voting at the Jenks Center.

Resident Patricia Shea expressed similar sentiments after voting at the Lynch School, saying that she feels strongly about the importance of technology because she has three children who attended Winchester schools.

“If this is what we have to do to [improve technology], I support it,” she said.

Also from Wicked Local:

Selectman Jim Johnson, who proposed the technology stabilization fund, was...

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Posted April 2, 2013 by lgonzalez

Municipal broadband networks have been gaining traction across the country. It's easy to see why: In many rural and low-income communities, privately offered broadband services are nonexistent. In its 2012 Broadband Progress Report the Federal Communications Commission counted nearly 20 million Americans (the vast majority living in rural areas) beyond the reach of broadband.

The Free Press' Timothy Karr's words are supported by the growing number of pins on our Community Network Map. We connect with places nearly every day where municipal networks fill the cavernous gaps left by the massive corporations. Large cable and telecom providers do not hide their aversion to servicing rural areas, yet year after year their lobbying dollars persuade state politicians to introduce bills to stop the development of municipal networks. Karr reviewed recent efforts to use state laws to stifle community owned networks in a Huffington Post article.

As readers will recall, this year's front lines were in Atlanta, where HB 282 failed. We hope that loss may indicate a turning point in advancing municipal network barriers because the bill lost on a 94-70 vote with bipartisan opposition. If it had succeeded, Georgia would have been number 20 on a list of states that, thanks to ALEC and big corporate sponsors like AT&T, Comcast, Verizon, and Time Warner Cable, have decided to leave their citizenry begging for the private market to come their way.

Time and again, the supporting argument goes like this:

"A vote 'yes' for this bill means that you support free markets and free enterprise," [Rep Hamilton, the Chief Author of HB 282] said [on the House Floor].

A 'no' vote means that you want more federal dollars to prop up cities, Hamilton said.

But Karr points out that some policy makers are starting to question that argument, with good reason. From his article:

"They talk about [the companies] as if they are totally free market and free enterprise, but doesn't AT&T get some tax breaks?" [Rep. Debbie Buckner...

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Posted March 14, 2013 by lgonzalez

Leverett, Massachusetts' broadband initiative has moved to the next phase in bringing fiber to residents. The town selectboard recently decided on a bidder to build the community owned network. G4S designed the network and also works with the Massachusetts Broadband Institute (MBI) as it brings a middle mile fiber network to towns across the western half of the state [PDF of service area].

An article in The Recorder alerted us to the development. Readers will recall that Leverett townspeople voted to ok a modest property tax increase as a way to help finance the ftth build out. From the article:

Indeed, after years of trying to convince private business to develop and offer high-speed telecommunication service in rural western Massachusetts, Leverett’s first-of-its kind network is being built with the help of a $40 million state bond, $47 million in federal stimulus funding and the town’s willingness to borrow to build infrastructure to attract service.

D’Errico said the cost of the project should be lower than $300 a year per median $278,000 property owner over 20 years.

...

...D’Errico said the $300 annual tax addition for the median value property is likely far lower than what residents are paying for their telephone, satellite dishes and cable service connections, and that having the town own the infrastructure likely means that the service contracts should also be a fraction of what they would cost otherwise.

Before construction can start, utility poles will need to be made ready for placement of the fiber optic cable. While this stage of the prep work is expected to take up to six months, hanging the cable would only take about three months.

MBI Logo

Leverett is inspiring other Massachusetts communities, who also want to own the infrastructure that will allow them to...

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Posted March 6, 2013 by christopher

We finally see television news outlets asking the tough questions of bill pushed by powerful cable and telephone companies to prevent giving residents a real choice in cable and Internet service providers. We been covering this Georgia bill closely, and were glad to see this segment:

This video is no longer available.

The segment makes an error in suggesting that tax dollars are commonly used by local governments in building networks. They are not. Most municipal networks are built using revenue bonds, where the community does not pledge its full faith and credit. Instead, they sell bonds to private investors who are then repaid by the revenues generated by the network.

But this mistake is more than outweighed with the reveal at end of the video, that the municipal network in Thomasville allowed the city to drop its local property entirely. Yet another community benefiting tremendously from owning its own network.

Posted January 19, 2013 by ejames

Even as the Internet is changing every aspect of our lives and communities, most Americans are intimidated by confusing jargon and misconceptions about Internet policy. We are developing a series of fact sheets that make these issues understandable to everyone.

We presently have fact sheets, covering broadband, financing networks, wireless Internet, economic development benefits from community owned networks, and the public savings from community owned networks.

If you want to stay up to date with these fact sheets and other developments in community owned networks, subscribe to our one-email-per-week list. Once a week, we send out an update with new stories and resources.

A Pocket Guide to 5G Hype

It’s difficult to separate 5G fantasy from reality as reported in traditional news sources. Misunderstandings surrounding the demands and capabilities of 5G has snowballed, creating an incorrect assumption that the technology will solve America’s many connectivity problems. It’s true that 5G is an improvement, but it has limitations. This fact sheet addresses the most repeated errors surrounding 5G and explains why the technology should be considered another tool, not an exclusive remedy.

A Pocket Guide to 5G Hype

Broadband is Affordable Infrastructure

Local governments spend billions on all sorts of infrastructure every year to advance the public good for their communities. Roads and bridges keep day-to-day activity moving. Investments such as water and sewer infrastructure keep cities clean and livable. Fiber infrastructure is used for a wide range of...

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Posted December 20, 2012 by lgonzalez

This past spring, we introduced you to the small town of Leverett, in rural western Massachusetts. Having been largely ignored by the cable companies and left behind by Verizon's DSL service, the community overwhelmingly approved a town-owned network initiative in a May vote. They decided to finance the FTTH network with a 20-year bond measure.

The debt will be serviced by both the revenues from selling services on the network and a modest increase in property taxes estimated at 6%. Local leaders calculate the increase in property taxes will amount to less than the savings created by lowering existing DSL and telephone services. 

Peter d'Errico, of the Leverett Broadband Committee gave us an update via email:

We issued a Request for Information (RFI) in September. Thirteen respondents gave us a wealth of information about the state of the industry and their readiness to engage with our project. Based on this information, together with our already-completed network design, we are now crafting an Invitation for Bids (IFB) for the network build and one year's maintenance. We expect to issue the IFB early January, with a return date in February, which will allow us to select a contractor shortly thereafter.

As soon as we issue the IFB, we will draft a Request for Proposals (RFP) for network operator / service provider. This will also be based on the information gathered from the RFI and our design.

We have initiated the 'make-ready' process with the local utility and phone company.

A November Gazette.Net article [requires login] on the project described some temporary setbacks due to Hurricane Sandy and an October storm that came through the area. In order to keep the project momentum going, the committee is  gathering the pieces needed now and in the future. Early prep work will make launching the network that much easier. From the article:

Leverett homeowners already received an easement request in...

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Posted December 13, 2012 by lgonzalez

In August, we reported on the results of a report on UTOPIA by the Office of the State Auditor General of Utah. As you will recall, the results were less than favorable and presented more fodder for those opposed to municipal telecommunications infrastructure investment.

The same old arguments often rest on the financial investment in municipal networks - they are considered failures if they don't break even or make money. Pete Ashdown, founder of ISP XMission in Utah, addressed those arguments in the Salt Lake Tribune:

UTOPIA provides broadband service in 11 Utah cities. Today, communication infrastructure is no less critical than transportation, sanitation and clean water. Government is not a business, but the infrastructure it provides contributes to a robust business environment.

Consider how private businesses rely on government funded infrastructure. Why don’t entrepreneurs clamor to build the next generation of roads? Why don’t airline companies get off the public dole and build their own facilities? Why are sewer facilities so rarely handled by anyone else but the state?

Does effective infrastructure cost? Considerably. Does it make a profit? No.

For decades now, public service entities have contended with the argument that if they are "run it like a business" they will be more efficient, productive and even profitable. While lessons from the private sector may contribute to increased efficiency at times, government is NOT a business. Applying business tenets should be done sparingly and not in the case of critical infrastructure like electricity, roads, and yes, access to the Internet.

Gary D. Brown, who lives in Orem, shared a guest opinion through the Daily Herald and drew a similar parallel between UTOPIA's status and the business world:

When UTOPIA was first proposed, I was all for getting a fiber optic connection to every home and business in the at-that-time 17 cities. In my opinion, the original business model was sound; install fiber to each home/business and offer data,...

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Posted September 29, 2012 by lgonzalez

A  recent book by David Cay Johnston, The Fine Print, examines specifically how big companies have found ways to take advantage of the tax and regulatory systems to their benefit and to the detriment of consumers. The sad part - we don't even realize it.

Johnston discusses how big companies and their leaders exploit tax rules to re-distribute wealth upwards. Johnston also examines how this exploitation is almost never covered in the media, encouraging big companies to stoop to new lows in ripping off consumers. Telecommunications is one of the industries he covers in the new book.

In the first chapter (read the first chapter via Democracy Now!), Johnston describes how friend and journalist, Bruce Kushnick, came across twenty years' worth of telephone bills in his elderly aunt's possessions. Kushnick tracked the changes in her bills, systematically reviewing and comparing every charge. Kushnick found an array of confusing and cryptic "fees," "charges," and "taxes." The end result:

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.

Johnston notes the method used by telecoms to increase prices over time:

Bit by bit, the line items grew, and others were added. It was easy to miss the escalating prices because they came...

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