Tag: "taxes"

Posted June 4, 2012 by lgonzalez

We brought you news of Leverett, Massachusetts and their decision this spring to pursue a municipal fiber optic network. In April, voters approved a measure to develop the initiative, and this past weekend took the last step toward building the network. The town of 1,851, voted to raise their taxes to pay for a fiber-to-the-home network. The result was a resounding 462 for and 90 against.

The GazetteNET.com covered the story:

"We're expecting everyone in Leverett to have access to this network by 2014," said Peter d'Errico, a member of the town's Select Board and a leading supporter of the municipal fiber-optic system."

"This was clearly a mandate to proceed," said d'Errico. "There was vigorous discussion at every stage of the process and it's a sign that community is ready to take charge of its own services."

The Proposition 2 1/2 debt exclusion override ended in an 83.5% vote to support the project. The result satisfies the 2/3 majority requirement for a planned tax increase, as required by state law.

A little more than 39% of the town's eligible voters cast ballots. According to the assistant town clerk, D'Ann Kelty who monitors voter activity, the turn out was large for a single issue election.

The funding strategy is a 20-year bond measure and is expected to increase property taxes by 6%. Supporters note that a 6% hike in property taxes is less than what households will save in telephone and internet bills. They will be paying less for something far better than they now receive. According to residents, telephone service has been spotty for years, due to old copper wires that have not been replaced by providers. In a recent GazetteNET article before the vote:

"Beginning in 2009 or so, high speed providers decided that they weren't going to upgrade their landline cables in rural areas," said Richard Nathhorst, a member of the Broadband Committee and one of the drafters of the proposal. Though the state issued a court order last year to Verizon Telecommunications, the owner of the current lines, to improve service to rural areas, dissatisfaction remained high in...

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Posted June 1, 2012 by christopher

Jesse Harris has posted an interesting update on the present UTOPIA situation, where a number of cities are heaping perhaps too much blame on UTOPIA for rising local taxes.

A lot of cities have been talking property tax hikes lately, and the most certain thing about all of the proposals is that elected officials are going to look for someone or something to blame. In UTOPIA member cities, blaming the fiber network has become the easy go-to solution, especially since so many mayors and city council members weren’t involved in the original decision. The problem, however, is that this blame is completely paving over a deeper problem of city tax structure that’s boring, doesn’t fit the anti-UTOPIA narrative, and is a much larger problem for city budgets. Let’s take the examples of West Valley City, Orem, and Taylorsville, the latter of which is not a UTOPIA member city. In all three cases, they’ve called for large (as a percentage) property tax increases to make up for lagging sales tax revenues. So if UTOPIA is the cause of property tax increases, why would a non-member city need to more-or-less do the same thing?

The discussion in the comments offer some additional news about UTOPIA's efforts to expand its subscriber-base by giving residents the option of "leasing" a last mile connection if they cannot afford to pay for it outright in areas where UTOPIA is presently not able to extend its network all the way to the home.

Communities seeking alternative ways of financing networks that simply issuing lots of debt upfront should examine the different approaches UTOPIA has pioneered.

Posted May 15, 2012 by lgonzalez

Recently, we let you know about the situation in Siloam Springs, Arkansas, population 15,039. The town is now investigating the possibility of building their own fiber network. They have had several community meetings and a "vote of the people" is set for May 22, 2012.

Pamela Hill is investigating the twists and turrns in a series of articles about the vote. In one of her articles, Hill looked into another Arkansas community, Paragould, home of the annual "Loose Caboose" Festival.  This community, located in the northeast corner of the state, has successfully operated their own cable network since 1991. Unlike Siloam Springs, the people of Paragould weren't focused first on generating new revenue for the local government, they just wanted to be able to watch tv for a reasonable price.

Back in 1986, Cablevision was the only provider in Paragould. Hill spoke with Rhonda Davis, CFO of Paragould Light, Water & Cable:

"The public wasn’t happy with Cablevision’s service or rates,” Davis said. “We took it to a public vote and did it.”

Prior to Paragould's decision to build their own network, the City had a nonexclusive franchise agreement with Cablevision. The town was dissatisfied by the service they received and, in 1986, Paragould voters approved an ordinance authorizing the Paragould Light and Water to construct and operate a municipal cable system. Three years later, there was a referendum that authorized the city to issue a little over $3 million in municipal bonds to finance the system.

That same month, Cablevision filed suit alleging antitrust violations, breach of contract, and infringement of first and fourteenth amendment rights. The district court dismissed the antitrust and constitutional claims and Cablevision appealed unsuccessfully. The case attracted attention from lawyers and business scholars across the country.

By 1998, the City had purchased Cablevision's remaining service and began offering Internet service. The City has continually upgraded their investment, which now consists of fiber lines that run to nodes throughout the city. Coaxial cable delivers signal and data...

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Posted May 2, 2012 by lgonzalez

Not long ago, we told you about Leverett, Massachusetts, the small town of 1,851, that has been discussing the possibility of building a community network. Residents and businesses currently use a combination of satellite, dial-up, DSL, and wireless, and about 6% of the population has no Internet access at all. People are tired of lost opportunities in a town strategically situated near several colleges. The town just approved the proposal to invest in a municipal network.

Last Saturday, April 28th, the measure to build the network was approved at Leverett's Annual Town Meeting. The needed two-thirds vote came easily, with 306-33 in favor, at the packed meeting at the Leverett Elementary School auditorium. Enthusiasm and expectations are high. From a Fran Ryan article in the Gazettenet.com:

For many, the lack of adequate Internet access has created problems with work, school and even the ability to sell their homes.

"Right now we have hopeless telephone service, useless cellphone service, and no internet service," said resident Raymond Bradley. "This will completely change our lives,"

The current plan is to borrow $3.6 million to create a fiber-optic network that will connect every home and provide triple play services across town. As you may recall from our earlier article, Internet access is only part of the problem - Leverett has had longstanding difficulties with telephone service due to decaying infrastructure. The situation is so bad, the State Department of Communications ordered Verizon to make repairs in over 100 towns in western Massachusetts. With this vote, however, Leverett has decided to take control of its own fate.

Leverett received a $40,000.00 planning grant from the Massachussetts Broadband Institute and benefited from the expertise and efforts of the Wired West group. Leverett's last mile project will connect with MBI's middle mile project.

According to the Leverett Broadband Committee, the investment will pay off rather quickly. This from an April 18th Ben Storrow GazetteNet.com article:

Savings on monthly phone and Internet...

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Posted April 12, 2012 by lgonzalez

Leverett, Massachusetts, is one step closer to a community owned FTTH network. The town of 2,000 will have weekly public information meetings until the Annual Town Meeting scheduled for April 28, 2012. If the required $3.6 million funding is approved at the meeting, the city will issue a Request For Proposals to build the network.

The 1 gig network is slated to be an aerial build, except where existing utilities are underground, in which instances, fiber cable will also be placed underground. Leverett plans to use a $40,0000 planning grant, obtained from the Massachusetts Broadband Institute, to hire G4S Technology to design the last mile fiber-optic network to connect to MBI's stimulus-funded middle mile. The middle mile project is scheduled to be completed in June, 2013, and Leverett plans to be ready to connect soon after. The goal is to have every home connected with fiber by 2014.

Whereas most communities explicitly choose not to use tax revenue to pay for a community network, Leverett's present plan is for a slight increase in local taxes to assist in the financing. The town will borrow the amount necessary to build the network and pay it back over 20 years using a combination of tax revenue and revenues from the new broadband service. Peter d'Errico, Chair of the MBI Grant Broadband Committee observes that homeowners' net spending figures will decline once the system is in place. From the article:

A town survey concluded a municipal network could offer better Internet and phone service at far cheaper rates than private providers, he said.

"It will be a little more on their tax bill and a lot less on their Internet bill, so overall they will be pay less," d'Errico said.

Leverett Map

According to the Broadband Committee, approximately 37% of households in Leverett use slow, sketchy satellite, 23% use dial-up, 20% are on DSL, 14% use wireless, and 6% of households have no internet access. Some households, although theoretically accessible via satellite, never get a connection because of trees and the picturesque,...

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Posted August 22, 2011 by christopher

Lafayette Doing OK, Doubles Capacity for Promotion

John at Lafayette Pro Fiber recently updated us all on LUS Fiber's financials. According to John, LUS Fiber is doing OK, not great, in its FTTH offering (probably the best deal in the nation for fast, affordable, and reliable connections). In reading deeper, it is clear that the impact of the community network on the public is GREAT, not just ok.

From John's writeup:

LUS estimates that the citizens of the community have saved 5.7 million dollars—in part direct saving from LUS' cheaper phone, video, and internet services and in part as a consequence of Cox lowering its prices and giving out special rates. Those special rates were discussed in the meeting with Huval pointing out that Cox had petitioned for and received permission to treat Lafayette as a "competitive" area. That meant that Cox could offer special deals to Lafayette users and, as we all know, has offered cuts to anyone who tries to leave. Those "deals." as Huval pointed out to Patin don't include the rural areas of the parish where Cox has no competition.

But it doesn't end there. LUS Fiber, due to anti-competitive laws pushed through the state's legislature to handicap public providers, is actually subsidizing the City -- providing more benefits to everyone, even those who do not subscribe to the network.

Again it all goes back to the (un)Fair Competion Act. One of the things in that act a concession that LUS Fiber would be able to borrow from LUS' other utilities just like any other corporation could set up internal borrowing arrangements. This is not a subsidy, it's a loan—with real interest. One of the efforts to raise an issue by Messrs Patin and Theriot centered around "imputed" taxes. Those are extra costs that Cox and ATT got the state to require that LUS include in order to force LUS to raise their price to customers (you!) above the actual cost. (Yes, really. See...

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Posted July 7, 2011 by christopher

A friend once told me about his battle with the local government over whether it would charge him a fee for inspecting the house he wanted to begin renting out (he had bought another house but didn't want to sell the first in a down market). His house was well maintained and he said he would be happy to schedule the inspection whenever convenient for the City but absolutely would not pay a fee so they could inspect his house.

Consider this from a different perspective. The local government should make sure that rental properties meet certain standards (building and fire codes if nothing else). This means inspections. Who should pay for the inspections? It boils down to two choices: the property owner or the tax-base at large. It seems more fair to charge property owners at least a portion of the cost as they benefit the most from being able to rent out their property.

I make this point to lead into another discussion about managing the Right-of-Way (ROW), the city-owned property used for utilities. An article in TribLive about a town near Pittsburgh fighting to keep its cable fees offers insight into a national discussion about fees for using the ROW.

Hempfield charges utilities $750 for a right-of-way permit, $500 for a renewal, and $250 for a construction permit, according to a township ordinance.

Ferguson said without the fees, the township would not be able to monitor the work.

"We use the monies, those permit fees, to pay staff to make sure they repair roads as they're supposed to," Ferguson said. "Part of the fee is ... for our inspectors to go out and make sure they (utilities) complete the job right."

Ferguson said utility companies sometimes dig up new roads to install or repair lines and leave the road in shambles afterward.

"Taxpayers should not be required to pay the staff to make sure utility companies do the right thing," he said.

FCC Logo

Telecommunications providers have long claimed that local government fees are unreasonable and getting the necessary permits is too difficult. But when asked to document such claims, they rarely do. The FCC is currently examining whether it believes the fees charged by local governments are fair...

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Posted June 9, 2011 by christopher

There are many places to find information about AT&T's war on WiscNet, a great credit to those who recognize the importance of WiscNet to schools, libraries, and local governments around the state. The best article on the subject may be from Wisconsin Tech News (WTN), with "UW faces return of $37M for broadband expansion in 11th hour bill." This post builds on that as a primer for those interested in the controversy.

Update: Read a Fact Check Memo [pdf] from the University of Wisconsin Extension Service with responses to false allegations from AT&T and its allies.

Synopsis

AT&T and its allies have long made false claims against WiscNet, setting the stage for their lobbyists to push this legislation to kill it. AT&T and some other incumbents want to provide the services WiscNet provides in order to boost their profits. WiscNet not only offers superior services, it offers services the private providers will not provide (including specialized education services). For instance, from the WTN article:

One of features that differentiates WiscNet from a private broadband provider is allowing for “bursting,” so that during isolated periods when researchers send huge data sets, they greatly exceed the average data cap. UW-Madison currently uses seven gigabits on average, and would have to procure 14 gigabits under the new legislation, even though most of the extra seven gigabits would seldom be in use, Meachen [UW CIO] said.

“We'd be paying for the fact that researchers have to send these huge data sets, and not have it take hours and hours to get to where it's going,” Meachen said. “You can't afford to pay for that extra 7 gigabits from the private sector because it's too costly. They increase your charges based on that.”

A private network would not have the necessary capacity for scientists on the UW-Madison campus, who are some of the leading researchers on next generation Internet. A previous recommendation to combine BadgerNet and WiscNet was deemed infeasible, as AT&T would own the network and would not be able to provide sufficient bandwidth at an affordable cost, Meachen said.

badger.png

WiscNet is a buying cooperative,...

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Posted October 27, 2010 by christopher

The University of Wisconsin System is involved in a broadband stimulus project to expand fast and affordable broadband access to key community institutions. Just as they have in similar projects around the country, massive companies like AT&T are trying to derail any potential competition to their services.

From the Cap Times, "Surf and turf: Telecom industry protests UW-Extension broadband plan:"

The angst is over nearly $30 million that was awarded to build more than 600 miles of fiber optic cable that will bring high-capacity broadband connections to a range of key public entities and health care providers in the four communities, each of which has indicated a desire for more reliable broadband service and, not coincidentally, has a UW campus. This project’s budget is nearly $43 million when one adds in funds contributed from groups that will benefit from the infrastructure upgrade in each community.

[T]hose backing the undertaking argue it will bring faster and more reliable Internet service to public safety agencies, health care providers, schools and community organizations in Platteville, Superior, Wausau and the Chippewa Valley (Eau Claire) area.

Private telecom companies (led by AT&T) are protesting the project with a rejoinder we commonly hear in these issues:

Bill Esbeck, the executive director of the Wisconsin State Telecommunications Association, argues the project will duplicate an existing network and take revenues out of the pockets of local Internet providers. The group is asking for a state review of the plan and is considering legal action, says Esbeck.

Interestingly, both sides are mostly right. The public safety, health care, and educational institutions will see faster, more reliable, and less expensive broadband. Private existing providers (mostly AT&T), will lose some revenues.

Of course, those lost revenues would have come from the tax base in the form of local governments having to greatly overpay for telecom services.

The fiscally responsible path for local governments is to build and own (perhaps operate if they wish) their own broadband networks rather than leasing overpriced services from carriers like AT&T. Not only does this cut...

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Posted June 30, 2010 by christopher

Bruce Kushnick, a telecom analyst, has long pushed for telcos to live up to the bargains they struck with individual states and federal agencies over the years as part of deregulation policies. They were deregulated and (surprisingly enough) failed to make good on their promises. For the most part, governments have refused to punish them or even learn the lesson that companies like AT&T and Qwest simply cannot be trusted.

If you have ever stared at an incomprehensible telephone bill and wondered just how badly you were getting ripped off, you will be interested in this article discussing the many ways we are ripped off by these companies. Small wonder these companies are so profitable and can afford their legions of lobbyists.

But that is that, and what's done is done, right? Well, Kushnick has another article about the Obama Administration's FCC and approach to expanding broadband.

Long story short, the proposed changes will increase the costs most of those with the least ability to pay and the least likely to benefit from the spending. This approach of expanding broadband is awful - more subsidies to terrible telephone companies that have poor service in rural areas because they are structurally incapable of meeting the infrastructure needs of communities. Massive companies like AT&T and even smaller big companies like Qwest are strangling rural communities while they lobby for bills to prevent those communities from solving their own problems.

Expanding broadband access and availability has costs and some taxes may need to be raised. But those funds should be used responsibly by expanding broadband coverage from entities that are dedicated to serving the community (munis, coops, nonprofits) rather than simply padding the corporate profits of companies that provide terrible service to communities and upgrade far too slowly.

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