Despite a coordinated campaign by cable incumbent Charter that offered little honest debate or accurate claims, the citizens of Opelika voted yes on their referendum to allow the city to build a broadband network. The City's public power utility will use the network for smart-grid services and a private company will likely contract to deliver triple-play services. Opelika's Mayor had this reaction: This video is no longer available. Mayor Fuller also said:

It’s a great day for Opelika. It’s a great day for our future. It’s a terrible day for Charter,”

One gets the sense that the Mayor took some umbrage at Charter's tactics to prevent the community from building its own network. The day before the election, Stop the Cap! ran a fantastic article about Charter's manufactured opposition to the community network. Phillip Dampier investigated the background and claims of prominent opponents, including Jack Mazzola, who might as well have written some of the articles in the local paper about the Smart-Grid project for how often he was quoted by the reporter (who often failed to offer a countering view from anyone in support of the network).

Jack Mazzola claims to be a member of Concerned Citizens of Opelika and has become a de facto spokesman in the local press.  He claims he is “30 years old and have been a resident of Opelika for almost two years.” During that time, he evidently forgot to update his active Facebook page, which lists his current city of residence as Atlanta, Georgia.  Suspicious readers of the local newspaper did some research of their own and claim Mr. Mazzola has no history of real estate or motor vehicle taxes paid to Lee County, which includes Opelika.

Any community considering a referendum on this issue should read this Stop the Cap! post and learn from it because massive cable companies like Charter all use the same tactics in community after community.

A recent article discussing testimony from the President of the industry trade group, National Cable & Telecommunications Association (NCTA) reminded me once again that Congress and the FCC have utterly given up on true broadband competition for millions of of Americans.

As with the broadband stimulus funds being handed out by the Commerce Department, NCTA is concerned that the USF money not go to overbuild its members. "It would be a poor use of scarce government resources to subsidize a broadband competitor in communities--including many small, rural communities -where cable operators have invested risk capital to deploy broadband services," McSlarrow says.

This seems like a common sense argument. Why would we want to subsidize broadband for those who already have a single option (underserved) when others have no choice at all (unserved)? Unfortunately, building networks to solve the problem of the unserved is all but impossible without simultaneously serving some who are underserved. This is because the unserved are often in areas so remote and expensive to serve, there is no sustainable business model to serve only them. So the idea that we could somehow only target the unserved with networks is extremely suspect. Unless we want to endlessly subsidize networks in these areas (which companies like Qwest emphatically want because they would likely collect those subsides endlessly), we need to encourage sustainable networks that reach across those already served, underserved, and unserved.

He added that it also might discourage the incumbent from continuing to risk that capital. "Government subsidies for one competitor in markets already served by broadband also might discourage the existing provider from making continued investments in its network facilities.

I certainly respect this argument up to a point. But when it comes to essential infrastructure, we know that most existing providers (particularly absentee-owned massive companies) are delaying investments in network facilities anyway because the lack of true competition allows them to delay making the investments more common in our international peers (where true competition exists, often as a result of smarter government policies than we can muster here).

This is a great inside look at how one community built a globally competitive broadband network (probably the best citywide network in the US) and the barriers they faced from incumbent providers Cox and BellSouth. Terry Huval, the Director of Lafayette Utilities System in Louisiana, spoke to the U.S. Senate Committee on Small Businesses Entrepreneurship on April 27, 2010, on the topic of: "Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access." Huval's full testimony is available here. Huval's presentation told the back story of LUS Fiber, focusing on the barriers to publicly owned networks in Louisiana.

The FCC National Broadband Plan, on page 153, includes Louisiana as one of 18 states that “have passed laws to restrict or explicitly prohibit municipalities from offering broadband services.” While the Louisiana law did not prohibit Lafayette from providing broadband services, its mere presence provided, and continues to provide, a fertile playground for BellSouth (and its successor AT&T), Cox and their allies to create mischief, resulting in discouraging local governments from stepping in to provide these services even when the private telecom companies refuse to do so.

Louisiana, as with many other states including North Carolina, has powerful incumbents that claim there is an "unlevel playing field" and that local governments have too many advantages in building broadband networks (incomprehensibly, they simultaneously claim that local governments are incompetent and publicly owned networks always fail).

Time Warner, AT&T, and other incumbents have radically changed their strategy to prevent broadband competition in North Carolina via new restrictions that are being debated in the Legislature currently. This switch in strategy offers more proof that they stand on no principle aside from protecting their monopoly. The famous HB 1252 in North Carolina is back... but different. In the past, the telcos and cablecos have argued that municipal broadband networks are unfair to them because the city could use tax dollars in some way to build the network (ignoring that most publicly owned networks do not use any tax dollars). Now, these companies are pushing a bill to require financing backed by taxpayer dollars. Seems like an odd switcheroo. As one might expect from companies like AT&T and Time Warner, who have no respect for the public process, the bill was kept top secret until debated in committee, giving only the side filled with monied interests and lawyers an opportunity to prepare. The bill (that we have made available here as there is no official version yet) would not just place significant restrictions on new publicly owned networks, but would also handcuff existing networks like Salisbury and Greenlight in Wilson. To reiterate, this bill will damage the most advanced broadband networks available in North Carolina today. Sounds like North Carolina wants to take up Mayor Joey Durel in Lafayette on his offer to welcome the businesses moving from North Carolina to Lafayette with a big pot of gumbo. Fascinating that after an FCC Commissioner noted that the US Broadband Plan recognizes the right for communities to build their own broadband infrastructure, North Carolina is deciding it prefers to preclude any broadband competition, sticking with its last-century DSL and cable. Just fascinating. The Salisbury Post has been watching and recently published a scathing editorial against the bill. This is one paragraph, but the whole editorial is well worth reading.

Yet, if the HB 1252's intent becomes reality, such areas will be severely hobbled in their near-term ability to tap into the broadband revolution.

I was briefly checking out the Open Internet Workshop when I got into a short tweet-argument with someone I did not know. Bear with me as I recount the discussion then explain why I think it worth delving into for a post. This person caught my attention by tweeting, "Which means the Net is already open, right?" I responded, "Yes Internet is open. Trying to keep it that way. Idea that net neutrality is 'new' is absurd." Shortly thereafter, I got a response that fits a standard script: "Then how about proving actual harm first? Burden of proof to hand Net to govt is on you guys." I responded, "Comcast, RCN, Cox block applications ... why must we wait for you to break the Net further to fix it?" The final response was that the market forces will solve the problem and my "examples are outdated." I later discovered that I was wasting time responding to someone from an astroturf think tank. Odds are that this person was simultaneously tweeting that cigarette smoking is not correlated with cancer and that burning coal actually cleans the air. But this is a common argument from those who want to allow companies like Comcast and AT&T to tell users what sites they can visit and what applications they can use. Some "free market" advocate (who is actually defending firms with serious market power, the antithesis of a free market) says that no private network owner would violate network neutrality. Then, when presented with companies that have violated network neutrality, the response is invariably that those are "old" examples" or somehow not relevant. To sum up:

Person A: No company would violate network neutrality. Person B: What about Comcast, Cox, RCN, and the famous Madison River Communication? Person A: Those don't count.

Aside from the absurdity, the larger problem is that we do not always know when companies are violating network neutrality. Comcast was violating network neutrality for at least a year before tech journalists successfully outed the practice. Over the course of that year, many subscribers called Comcast and asked why they were having problems with certain applications. Comcast lied to them and said the company was not interfering with them. When finally backed into a corner with incontrovertible evidence, it admitted it was.

Susan Crawford recently posted "The Gentlemen's Agreement," noting that major cable companies have divided the national market and tend not to compete with each other (they actually help each other in some circumstances). Though bad for everyone not named Comcast or Time Warner, this division is actually a historic accomplishment:

Even J.P. Morgan couldn’t get independently-owned railroads to agree not to compete with one another in the late 19th century. Not that he didn’t try. In 1890 one of Morgan’s associates was excited by the prospect of a Western Traffic Association that would include a director from each railroad and set uniform rates: “Think of it - all the competing traffic of the roads west of Chicago and Saint Louis placed in the control of about 30 men!” But the effort fell apart because some of the independents insisted on cutting rates and invading each other’s territories.

Cable and fiber-optic networks, as with railroads, have natural barriers to entry because the costs of building a network are very high; entrenched incumbents have nearly all the advantages should any competitor have the resources to surmount the barrier of sky-high upfront capital costs. In short, the market cannot self-regulate. We have a number of choices:

1. Do nothing, let Comcast, et al. do as they please.
2. Regulate: Hope the FCC or other Federal Agencies can stand up to the corporate lobbyists and regulate in the public interest.
3. Provide a Public Option

We prefer the public option route - communities can build their own networks and remain independent of corporate control of infrastructure. However, many communities have chosen to do nothing -- some in hopes the federal government will get its act together and reign in the power of these companies as the U.S. falls behind international peers in broadband metrics. Verizon's FiOS has brought fiber to the home in some cities (with many cities courting the company), but some quickly found FiOS comes with significant trade-offs. Karl Bode details some of these - like Boston being shunned because it wanted Verizon to pay property taxes.

Time Warner continues to fight for monopoly protections in North Carolina with legislation to hamstring municipalities, preventing them from building the essential broadband infrastructure they need. While I was in Lafayette at FiberFete, the North Carolina Legislature was considering a bill to preempt local authority, essentially shutting down the prospect for any cable and broadband competition in the state. Jay Ovittore has covered this legislation in depth.

Salisbury small businessman Brad Walser, owner of Walser Technology Group testified that North Carolina community’s new municipal broadband network Fibrant would meet his company’s needs for broadband capacity not available from commercial providers. Walser noted Salisbury is suffering from an unemployment rate exceeding 14 percent. Advanced broadband, he believes, could help the city attract new businesses that will help create new, high paying jobs. Fibrant is expected to launch later this year.

Folks from Chattanooga also testified about the benefits of publicly owned networks. The public outcry on the issue has been helpful:

All of your e-mails and calls have been getting through to the legislators. This kind of attention makes them nervous and I ask you to continue. I can assure you that we here at Stop the Cap!, along with Communities United for Broadband, Broadband for Everyone NC, and Save North Carolina Broadband are going to ratchet up attention on this issue.

If you live in North Carolina, definitely read the bottom of the post on how to help. Unfortunately, the state legislature seems to have more nitwits than anyone who knows anything about networks: one State Senator suggested wireless will be replacing fiber soon - one wonders how the wireless tower will connect to the Internet...

David Pogue, a NY Times Tech columnist, recently wrote about a partnership between cable companies to share Wi-Fi access points:

I, a Cablevision customer, can now use all of Time Warner’s and Comcast’s hot spots in these three states. If you have Time Warner’s Road Runner service at home, you’re now welcome to hop onto Cablevision’s Optimum hot spots wherever you find them, or Comcast’s Xfinity hot spots. And so on. It’s as though all three companies have merged for the purpose of accommodating your Wi-Fi gadget, hugely multiplying the number of hot spots that are available to you. The companies call this kind of partnership “the first of many.” Now, I think this development is fantastic. It hits me where I live. It’s free. It’s fast and reliable. I love it.

He goes on to ask, what's in it for them? Apparently, David Pogue has little understanding of how dominant firms work together to cement their power and limit competition. He then put up a post with an answer from an insider:

“David, widely available WiFi makes our service better, and more useful and valuable,” he wrote. “And we don’t compete directly with TWC or Comcast for high-speed Internet customers; we compete with phone companies that offer a wide array of services, including data plans over increasingly over-burdened and sluggish cellular networks for an extra $60 per month."

Bingo. Big cable companies do not compete with each other - one suspects these companies have tacitly divided the national cable market with an understanding that they will not overbuild each other. The barriers to entering the cable/broadband market are already substantial: any new network requires a massive upfront capital expenditure. This Wi-Fi partnership with cable incumbents makes that barrier even larger. Let's imagine that a city wants to build a publicly owned network that will compete with one of these companies. Customers of the private incumbent have Wi-Fi access all over the place, across three states - and probably more to come. The incumbent gets the benefit of investments from other cable cos in the partnership. Any guesses on whether the publicly owned network will be invited to join that partnership?

Stop the Cap! sounded the alarm that North Carolina is once again considering a bill to prevent competition by effectively banning communities from building their own networks. The Communities United for Broadband Facebook page notes:

The cable industry will be pushing a bill to stop communities from investing in fiber optic infrastructure on April 21st at 9:30am in Raleigh before the Revenue Laws Committee in room 544 of the Legislative Office Building found at 46 W. Lane St, Raleigh, NC.

This bill is being pushed by the private cable and telephone companies that are threatened by the publicly owned FTTH networks already in Wilson and Salisbury. North Carolina has a number of communities that have been inspired by the Gigabit promise of Google and are considering how they can build their own network if Google does not choose them. This bill will prevent communities from building the infrastructure they need to succeed in the future. I should note that Craig Settles is working with the Communities United for Broadband folks. They have a great slogan: Picking up Where Google Leaves Off.

From an article in the local paper about Lancaster, Pennsylvania's Google Gigabit Application:

Brogan said that if Lancaster is selected, it would not run afoul of the state Telecommunications Act. That law prohibits cities from establishing municipal broadband networks except if existing providers indicate they have no immediate plans to offer similar services. She said the city already has a letter from Verizon clearing the way for the Google application.

Oh good, glad the city secured permission from one private company to ask a different private company to build infrastructure. In the words of Yakov Smirnoff, "What a Country!"