Last year we noted that a bill to expand local authority to invest in publicly owned broadband networks would return in 2012. HB 1711 is in Committee and causing a bit of a stir. "A bit of a stir" is good -- such a reaction means it has a chance at passing and giving Washington's residents a greater opportunity to have fast, affordable, and reliable access to the Internet. Washington's law presently allows Public Utility Districts to build fiber-optic networks but they cannot offer retail services. They are limited to providing wholesale services only -- working with independent service providers to bring telecom services to the public. Unfortunately, this approach can be financially debilitating, particularly in rural areas. Building next generation networks in very low density areas is hard enough without being forced to split the revenues with third parties. Last year, House Bill 2601 created a study to examine telecommunications reform, including the possibilty of municipality and public utility district provisioning. The University of Washington School of Law examined the issues and released a report [pdf] that recognizes the important role public sector investments can play:

Broadband infrastructure is this century’s interstate highway system: a public investment in an infrastructure that will rapidly connect Washington’s citizens statewide, nationally, and internationally; fuelling growth, competition, and innovation. Like highway access, the path to universal broadband access varies with the needs of the local community. Our primary goal is to expand broadband access. We believe allowing municipalities and PUDs to provide broadband services addresses the most significant hurdles to broadband expansion: the high cost of infrastructure. In conjunction with a state USF, PUDs and municipalities are well placed to address the needs of their consumers. A secondary goal is to promote a competitive marketplace.

Provo built a city owned FTTH network after its public power utility started connecting its substations with fiber-optic cables in the early 2000's. iProvo ultimately developed along similar open access lines as UTOPIA, but unlike UTOPIA, Provo did not actually want to operate on a purely wholesale model. iProvo was forced into the wholesale-only model, where the publicly owned network offered wholesale services to independent ISPs that then resold service to residents and businesses. Comcast and Qwest (now CenturyLink) recognized the threat posed by municipalities building next generation networks -- particularly in communities that did not even have full DSL and cable coverage from the giant providers that long delayed upgrades, knowing that subscribers had no other options. Comcast and Qwest went to the state legislature and did what they do best -- bought influence and pushed through laws to essentially prohibit publicly owned networks from offering direct retail services, knowing that the wholesale-only approach had proved a very difficult model to work financially. UTOPIA had long had a vision of making the open access, wholesale-only model work (that proceeded to largely fail, for a variety of reasons -- only to start turning around in recent years) but Provo, with its public power utility, was denied its preferred model of offering services directly. iProvo was built at a cost of $40 million and has operated in the red since, though a number of postive externalities from the network was not included in those calculations. For instance, City Departments had access to much higher capacity connections than were available previously and were not charged for them (a poor practice in our estimation). For more details on iProvo, I recommend a video of a discussion in 2011. At any rate, iProvo was then sortof sold off to a private provider (sort of because the city is still on the hook for the debt) in large part because private providers are not as crippled by state law. Unfortunately, the network has already developed a bad reputation for many (thanks to the state law preventing Provo from being able to ensure a good subscriber experience).

Smithsonian magazine provides some background on Samuel Morse, inventor of Morse Code and credited with inventing the telegraph. It is interesting background, but not particularly relevant for community broadband until a paragraph toward the end:

Four years later, in July of 1844, news reached Paris and the rest of Europe that Professor Morse had opened a telegraph line, built with Congressional appropriation, between Washington and Baltimore, and that the telegraph was in full operation between the two cities, a distance of 34 miles.

From the beginning of telecommunications, the government played an essential role.

A deep thank you to Public Knowledge for their throwing back the curtain on AT&T's lobbying operation in the attempted takeover of T-Mobile. Whenever the discussion of public v. private arises, the focus is inevitably on the advantages that the public sector supposedly has over the private providers. We have documented these "level playing field" claims and refuted them. When I recently visited Lafayette, the head of the public utility told me that in fighting the Local Government "Fair" Competition Act in 2005 (meant to prohibit competition against incumbent cable and phone companies) Lafayette hired one lobbyists and the incumbents hired all the rest. In Tennessee, Chattanooga hires one lobbyist to defend itself from many lobbyists -- in October I learned that AT&T has already registered 26 lobbyists for the 2012 session in Tennessee. Not only do major national companies like AT&T already have most of the advantages in the marketplace, they spend mightily on lobbyists and campaign contributions to make sure it stays that way. One of the reasons I am an enthusiastic supporters of Larry Lessig's Rootstrikers campaign is because the power of big telephone and cable companies likes in their ability to influence policy and elections, not in the quality of their services in the marketplace. Back to Public Knowledge -- they researched AT&T's push for th T-Mobile merger and found AT&T hired three former US Senators, four former House members, dozens of staffers from both parties, and spent over $40 million in advertising to push its bid to reduce competition in the wireless market.

“This information gives us a more complete picture of the vast lobbying and advertising resources AT&T has dedicated to trying to ram through this takeover,” said Harold Feld, legal director of Public Knowledge. “It is even more impressive that while many members of Congress have ignored the facts and are backing this takeover, the Justice Department and the Federal Communications Commission have not. It is clear that the data the DoJ and FCC have compiled on this deal will negate all of the money AT&T has spent to mislead policymakers and the public.”

Learning the lessons of Longmont's recent cable referendum.

Download a larger PDF version here.

Rob Cox, a writer for Reuters, has delved into the disappointing response of some investor-owned utilities in Connecticut following the recent blizzard, noting the better performance of muni power companies. Hurricane Irene recently revealed the similar superiority of muni electrics compared to the investor-owned in Massachusetts, prompting us to note the parallels with Wired West's initiative in Western Massachusetts. They have created an electric light coop to build a next-generation fiber-optic network out to everyone in the area. And on the same day that Longmont embraced locally owned broadband in Colorado, nearby Boulder started the process of kicking Xcel out in favor of an electric grid that is accountable to the public. So let's see what the New York Times has to say about municipal ownership of infrastructure. They begin by noting the many ways Connecticut Light and Power (the subsidiary of Northeast, an investor owned utility presently consolidating with another large IOU) has cut its maintenance spending over the last few years -- leaving many more power lines vulnerable to the tree-bending blizzard.

There’s even a near-perfect model of how Connecticut Light and Power could have done the job better. Norwich, Conn., a city of 40,000, has owned its own electric utility, as well as those for sewage, gas and water, for 107 years. Norwich Public Utilities’ customers pay, on average, a bit less than Connecticut Light and Power’s. Yet after this past weekend’s snow dump, power was out for only about 450 of its 22,000 customers — and for no more than an hour. As of Thursday morning, nearly half a million Connecticut Light and Power customers were still waiting for the lights to go on. That’s not luck, either. After Irene hit, just 13 percent of the city’s customers lost their power for more than a day. Within three days, the whole of Norwich had been restored. It took more than a week for Connecticut Light and Power to fully restore power.

To reiterate, the publicly owned system is cheaper, more reliable, and responds more quickly in emergencies.

Below, you'll find a commentary I just posted on the Huffington Post. Longmont, Colorado has become ground zero for the battle over the future of access to the Internet. Because big cable and telephone companies have stopped us from having a real choice in Internet Service Providers and failed to invest in adequate networks, a number of communities have built their own networks. Chattanooga boasts the nation's best citywide broadband network, offering the fastest speeds available in the nation -- and the community owns it. That means much more of the money spent by subscribers stays in town, supporting local jobs. Longmont, a town near Boulder with 80,000 people, offers a glimpse at how difficult it can be for communities to make any level of broadband investment -- the big cable and phone companies hate any potential competition, no matter how limited. Longmont's elected officials all agree they need better broadband options to spur economic development. That's why they put a referendum on the ballot that will allow the city to use its existing assets to improve local broadband access. Not only are the mayor and city council unanimous in support of the referendum (2A) necessary for this, their opponents in the city election overwhelmingly agree also! And the local paper just editorialized in favor of it as well. Who then, is spending hundreds of thousands of dollars to derail it? Comcast and its allies, of course. And this isn't the first time. Back in the 1990s, the municipality-owned electric utility built a fiber ring to modernize its electrical grid. They took the opportunity to lay more fiber-optic cables than they would need, knowing that they could later be used by the city or partners to expand broadband access for all businesses and resident.

Rachel Maddow reminds us that many areas of America still do not have broadband in her coverage of the broadband stimulus funds prior to an interview with USDA Secretary Vilsack on October 5 (transcript). While introducing Secretary Vilsack, Rachel had a terrific explanation of why public investments into broadband are essential:

The idea here behind spreading broadband to America`s rural areas is the same one behind the rural electrification program from the 1930s. The idea that even if it`s not profitable for private industry to extend the basics of modern economic life, electric light then and the Internet now, even if it`s never going to be profitable to some private company to extend those things to every last home down every long dirt road in America, it is worth it to America, worth it to us, that everybody has access to those things. That we`re all plugged in. It is the right kind of jobs investment for the country to put people to work laying those lines and connecting those Americans to the grid and it is the right things to do for the rural parts of the country so that people and businesses in every part of the country can compete economically.

Extremely glad to see Rachel devoting time to this important issue.

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As we previously noted, the city of Longmont, Colorado, is preparing for a referendum to allow the City to offer telecommunications services to local businesses and residents using a fiber ring it built long ago. This is due to a 2005 law (the "Qwest" law) that was pushed through the Colorado Legislature by incumbents seeking to prevent competition. That law has succeeded -- most Colorado communities can only choose between slow DSL from the incumbent telephone company and comparatively faster services from the incumbent cable company. And when Longmont last attempted to pass a referendum to share its fiber infrastructure with local businesses, Comcast and Qwest swamped the town with unprecedented sums to confuse residents -- leading to the referendum failure with 44% voting yes. But after the referendum passed and people had time to better understand the issue, many who voted against it realized they had been duped. We have seen the same dynamic elsewhere -- in Windom, MN, for example, where the second referendum succeeded. WindomNet has since saved a number of jobs and is expanding to eight other underserved rural communities around it. Longmont built its fiber ring in the late 90's but it still has a lot of unused capacity that could be used to attract economic development if the publicly owned power utility were authorized to offer services to businesses. Without this authority, the community has a valuable asset that they are forced to leave unused -- even as local businesses could benefit greatly from it. The Longmont Times-Call outlined the situation in July:

Without that vote, the city can't let homes or businesses use that fiber without a vote, thanks to a 2005 state law. It's a fight the city's lost once before in 2009, when opponents -- including the Colorado Cable Telecommunications Association -- spent $245,513 to urge the measure's defeat. This time out, there's a different tack. The city has been underlining in discussions that the measure would "restore its rights" to provide telecommunications service.

An interesting article earlier this week on Boston.com says a number of Massachusetts towns are studying muni electric plants after the privately owned electrical company took too long restoring power in the aftermath of Hurricane Irene.

“We are at the very beginning. We want to see if municipal control is even possible,’’ said Norwell Town Administrator James Boudreau. “We want a faster response. This was a tropical storm. What if it was a category 2 hurricane? What if it was the winter?’’ he said, noting the efficient restoration of power in towns with electric utilities under municipal control, such as Hingham, Hull, and Braintree.

Braintree's municiple utility also runs a broadband network for the community. If these communities are looking at am uni utility, they should ceratinly consider improving their broadband access at the same time. As we have covered previously, Wired West (on the other side of the state) is a collection of many communities that recently formed municipal "light plants" (in the parlance of Massachuesetts) as a legal structure for building a community fiber network. As we have observed time and time again, local control tends to improve the quality and response time of customer service. And in those cases where it doesn't, at least they have no one to blame but themselves. It is well within their power to fix it. Curiously, National Grid was formed by combining privatized former muni electric utilities -- a warning to communities that may look to privatize their community broadband networks over time due to the mistaken notion that community ownership was only necessary to establish the network rather than ensure it continues operating for the benefit of the community. Community broadband is about far more than technology, it is about ownership by an entity with the right incentives to operate essential infrastructure. The company's response to this movement is fascinating:

National Grid offers a different opinion. Communities are “best served by a company with established practices, resources, and programs that can serve them in an evolving, challenging energy environment,’’ said Deborah Drew, a spokeswoman for the utility.

Say what?