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AT&T Makes Good On Threats, Sues In Nashville

AT&T lawyers filed suit against Nashville just two days after Mayor Megan Barry signed the new One Touch Make Ready (OTMR) ordinance into law. The Metro Council passed the proposal for the final time, and sent it on to the Mayor, on September 20th.

Seeking Out Streamlining

OTMR was proposed by Google Fiber, which wants to enter the Nashville market by deploying an aerial fiber network. In order to do that, they need to attach fiber-optic cables to utility poles around town, but the current process is cumbersome and will significantly delay the rollout. OTMR streamlines the procedure but would allow some one other than AT&T to manage the rearrangement of wires on all poles in the Nashville rights-of-way. The telecom giant owns about 20 percent of the poles in Nashville; the city’s electric utility, NES, owns the rest.

Three Arguments

AT&T seeks a permanent injunction to stop the city from enforcing the new ordinance. They argue the city does not have the authority to enforce the ordinance - that role is within federal jurisdiction through the FCC.

They go on to state that the Metro Council does not have the authority to pass the ordinance because, according to the city charter, only the Electric Power Board the has the right to pass regulations that deal with issues related to equipment, such as poles and the cable on them. 

AT&T also asks that the court grant a permanent injunction on the basis that they already have a contract with the city relating to AT&T’s wires that are on NES poles. The contract allows the company to handle its own wires and enforcing the ordinance would basically nullify that component of the contract.

What This Is Really About

AT&T filed a similar suit in Louisville earlier this year when the Metro Council there passed OTMR; that suit is still ongoing. Google Fiber wants to serve both communities and, in typical AT&T fashion, the telecom giant is attempting to use the courts to put a block on them. Even before the final Metro Council vote, AT&T threatened to sue if the measure passed. “The short answer is the One Touch Make Ready proposal Google has offered is a proposal that we expect would result in litigation,” said Joelle Phillips, President of AT&T Tennessee. Mayor Barry had asked that the ISPs and NES all work together to come up with an agreement but AT&T was determined to slow Google Fiber’s deployment, hindering its success.

Lawyers On Loan

Google Fiber has offered assistance to Nashville in the form of its legal team. Before the final vote, Google’s parent company Alphabet had already committed to helping out:

“Google Fiber is disappointed that AT&T has threatened to go to court in an effort to block Nashville’s efforts to increase broadband competition should the OTMR ordinance pass,” Fleur Knowlsey, senior counsel of Alphabet’s Access group, which manages Google Fiber, wrote in an email to the council on Monday.

“We believe the city's commonsense initiative will be upheld in the face of any litigation. We know, however, that litigation can be challenging and expensive. In the event of OTMR litigation, Google Fiber will therefore be glad to share the capabilities of its in-house and outside attorneys, including some of the most experienced and accomplished regulatory attorneys in the industry.”

Read the complaint here.

Cool & Connected in "Little Gig City"

Few communities in Tennessee have next-generation, high-speed connectivity, but the city of Erwin built its own network despite Tennessee’s restrictions. Now through a collaboration of federal and regional agencies, this “Little Gig City” will get assistance showing off their fiber network.

The planning assistance program, called Cool & Connected, will provide direct assistance to Erwin to develop a marketing plan for the fiber network. Cool & Connected looks to promote the Appalachian communities by using connectivity to revitalize small-town neighborhoods and encourage vibrant main streets with economic development.

Federal and Regional Collaboration

U.S. Environmental Protection Agency Administrator Gina McCarthy explained the program in The Chattanoogan

“Cool & Connected will help create vibrant, thriving places to live, work, and play. We’re excited to be working with these local leaders and use broadband service as a creative strategy to improve the environment and public health in Appalachian communities.”  

Three governmental agencies have brought together the Cool & Connected program to provide planning assistance to ten chosen communities in six states near the Appalachian Mountains. Agencies partnering on the initiative are the U.S. Environmental Protection Agency’s Office of Sustainable Communities, the U.S. Department of Agriculture’s Rural Utilities Services, and the Appalachian Regional Commission through the Partnership for Opportunity and Workforce and Economic Revitalization (POWER) initiative.

The “Little Gig City” That Could

Although Erwin is a small community of 6,000 people, it expertly navigated Tennessee’s restrictive municipal networks law. The city built the network incrementally starting in 2014. By leasing out Erwin's excess electrical capacity, officials have been able to build each section without taking on any new debt. The network started serving customers in early 2015.

The scenic community is right on the eastern edge of the state, nestled into the Appalachian Mountains. It may not be the first place that comes to mind for high-speed connectivity, but the Cool & Connected program will encourage young professionals, investors, and visitors to recognize the potential of the "Little Gig City." 

Nashville: One Touch Make Ready Moves Forward

On September 6th, the Nashville Metro Council approved a proposed One Touch Make Ready (OTMR) ordinance by a wide margin of 32-7 on a roll call vote (computers were down). This was the second vote to advance the ordinance, designed to streamline deployment of fiber-optic networks in a city looking for better connectivity. Elected officials responded to Nashville residents who flooded their council members’ offices with emails.

The Nashville Metro Council will take up the ordinance one last time; passage could speed up competition in the country music capital. Google Fiber has been pushing for a OTMR, while incumbents AT&T and Comcast look for a non-legislative solution to the problem of the poles while protecting their positions as dominant Internet Service Players (ISPs).

Caught Between A Rock And A Hard Stick

The city of Nashville sits on limestone, a rock that cannot support the trenching and underground work of fiber deployment. The only other option is to use the utility poles. Eighty percent of the poles are owned by the public utility Nashville Electric Service (NES), but incumbent provider AT&T owns the other 20 percent. Google Fiber says it needs to attach fiber to 88,000 poles in Nashville to build its network and about half of those (44,000) need to be prepared to host their wires. 

Pole attachments are highly regulated, but there are still gray areas. Susan Crawford provides an overview of the policies and regulations on BackChannel; she accurately describes how poles can be weapons that guard monopoly position. Currently, each company that has equipment on the poles must send out a separate crew to move only their own equipment. This process can drag on for months. The OTMR ordinance is a deceptively simple solution to this delay. 

Deceptively Simple, But Regulated

At its simplest, OTMR means that one crew moves everything; the ordinance under debate in Nashville is actually more complicated than that. (Read the Nashville OTMR ordinance here.)

If Company A wants to add equipment to the poles, it still has to go through an attachment application process. Once approved, the owner of the pole (let's call them, PoleCo) can then require Company A to use specific contractors. 

If Company A rearranges or alters equipment that belongs to PoleCo or some other company that may have equipment on the pole, then they have to notify the owner of the equipment within 30 days. The company whose equipment has been altered, has another 30 days to conduct a field inspection with PoleCo.  

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If the pole requires complex work, then every company already on the pole gets 30 days notice to move their equipment. If those companies do not comply after 30 days, then Company A can perform the complex make-ready work. If there are any errors or problems from Company A's make-ready work, the companies already on the pole can recoup expenses. 

NES explained the basics of the current process and the idea behind OTMR in their newsletter. The public utility did not take a positive or negative position on the ordinance, choosing instead to focus on the final result:

"NES is dedicated and cooperative towards finding a resolution that will accommodate the efficient and effective deployment of broadband services that promote customer choice and competition and improve the lives of the citizens of Nashville."

The Incumbent Providers: Comcast and AT&T

Nashville Mayor Megan Barry has remained neutral on the policy, but has encouraged NES and the tech giants to reach a mutually beneficial solution for the good of the community. If the councilmembers approve the ordinance a final time, it will go to her desk for a signature.

AT&T may be preparing for a lawsuit against Nashville if this is the case. They already have an ongoing legal fight in Louisville, Kentucky, over OTMR. AT&T argues that the ordinance change would conflict with their contracts with NES and the union. The Nashville Metro Council Attorney Mike Jameson analyzed the ordinance for the Council and determined that Nashville clearly has the power to regulate the NES’s utility poles, but perhaps not the privately owned utility poles. 

Comcast, meanwhile, has claimed that the NES’s attachment application process is a source of delay (i.e. that Google Fiber is blaming the wrong process). Comcast is experiencing 90-100 days of processing for their applications to NES. The contractual obligation between Comcast and NES is 45 days to process applications, but Comcast has also “exponentially” exceeded the number of poles that they can apply for in a month under that contract, according to NES official Nick Thompson in the Tennessean.

Meanwhile, Councilmember Anthony Davis, a cosponsor of the OTMR ordinance also told The Tennessean that Google Fiber is not experiencing the permitting delays because it has already worked out a contract with NES. 

The Final Vote

In two weeks, the bill returns for a final vote on September 20, 2016. Councilmember Jeremy Elrod, one of the bill’s cosponsors, described the last vote on September 6, 2016 in The Tennessean:

"This is an extremely big step forward, an extremely big net positive for Nashville, for internet competition. … It increases competition, increases telecom and Internet investment for [us] as a city and our citizens as a whole."

Photo of utility workers courtesy of FEMA through a Creative Commons license.

Unanimous Dissent Radio On Munis, The FCC Decision, And State Barriers

Last week, Christopher was a guest on the Unanimous Dissent Radio Show. Sam Sacks and Sam Knight asked him to share information about the details on state barriers around the country.

The guys get into the nitty gritty on state level lobbying and anti-muni legislation. They also discuss how a growing number of communities are interested in the local accountability, better services, and improved quality of life that follows publicly owned Internet infrastructure.

The show is now posted on SoundCloud and available for review. Christopher’s interview starts around 17:00 and runs for about 15 minutes. Check it out:

 

Feld Breaks Down 6th Circuit FCC Reversal

In our last Community Broadband Bits podcast, Christopher and I discussed the August 10th U.S. Court of Appeals for the Sixth Circuit decision to reverse the FCC’s February 2015 ruling against state barriers. We mentioned Harold Feld’s article about the ruling posted on his website. In keeping with most matters of importance in the municipal Internet network field, Harold expertly sums up the history of the case, the arguments, and what the outcome could mean for the future.

Feld gets down into the crux of the argument that won over the three judges in the Sixth Circuit - the need to establish if it is states or federal agencies that make the decisions regarding whether or not local governments can provide telecommunications.

Determining the answer was a multi-step process and Feld explains how the FCC came to the conclusion that they had the authority to preempt the laws and the states' arguments against it. This was, after all, a test case and Feld describes why the FCC chose Chattanooga and Wilson.

Read more on Feld’s Tales of the Sausage Factory, where he speculates on how the big incumbent providers will react to their win and what is next for municipal network advocates. From Harold:

As with most things worth doing in policy land, it’s disheartening that it’s an uphill fight to get to rational policy. The idea that states should tell local people in local communities that they can’t invest in their own local infrastructure runs against traditional Republican ideas about small government and local control as it does against traditional Democratic ideas about the responsibility of government to provide basic services and promote competition. But that’s how things work in public policy sometimes. We can either give up and take what we get, or keep pushing until we change things for the better.

North Carolina and Tennessee Lose in 6th Circuit - Community Broadband Bits Podcast 217

It has been several weeks, but Lisa and I wanted to answer any lingering questions people may have about the results of the Sixth Circuit case reviewing the FCC's action to remove state-created barriers to municipal networks. We devoted Community Broadband Bits episode 217 to the case and aftermath.

The Sixth Circuit ruled against the FCC narrowly - finding that while it had no dispute with the FCC's characterization of municipal networks as beneficial, Congress had not given the FCC the power to overrule state management of its subdivisions (cities). As we have often said, restricting local authority in this manner may be stupid, but states are allowed to do stupid things (especially when powerful companies like AT&T and Comcast urge them to).

Lisa and I explore the decision and explain why we are nonetheless glad that FCC Chairman Tom Wheeler and Commissioners Rosenworcel and Clyburn moved on the petitions from Chattanooga and Wilson to remove state barriers to next-generation network investment. We also reference this blog post from Harold Feld, which is a well-done summary of the situation.

Read the transcript of this episode here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 20 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Roller Genoa for the music, licensed using Creative Commons. The song is "Safe and Warm in Hunter's Arms."

NYTimes Examines Sixth Circuit Reversal: Potatoes And Pinetops

The Sixth Circuit Court of Appeals issued their order on August 10th supporting the states of Tennessee and North Carolina in their challenge from an FCC decision from February 2015. Both states objected to the FCC’s decision to preempt state laws preventing municipalities from providing fast, affordable, reliable connectivity via municipal Internet networks. The Appellate Court Judges reviewed the legal arguments, the precedent, and the interplay between federal authority and state sovereignty. 

The impact of their ruling will affect more than a few pages in a law school text book. Access to high-quality Internet access positively impacts real people and businesses and, as Cecila Kang captures in her recent article in the New York Times, the people who depend on it fear the outcome if their state legislators take it away.

Family Farm Fear

Kang profiles Vick Family Farms, a family potato farm in Wilson, North Carolina.  The Vick family chose to invest in a processing plant when they learned that Wilson’s Greenlight would provide the necessary connectivity. Greenlight allowed them to increase sales overseas. Now, they may lose that connection:

“We’re very worried because there is no way we could run this equipment on the internet service we used to have, and we can’t imagine the loss we’ll have to the business,” said Charlotte Vick, head of sales for the farm.

As Kang notes in her article, the FCC has no plans to appeal the decision, so battles will resume at the state level. Advocates will need to be twice as vigilant because incumbents - the only ones that come out ahead from this decision - may try to push state legislators for even tougher anti-competitive state barriers.

Pinetops: Poster Child For Good Connectivity

Kang checks in on the small town where Wilson’s Greenlight began offering Fiber-to-the-Home (FTTH) Gigabit service about 14 months ago. Pinetops, a nearby community of about 1,300 people, sought help from Wilson in the hopes that Greenlight would spark economic activity in their struggling community. Centurylink, the incumbent only offered DSL, grossly inadequate for local businesses. 

When Greenlight expanded to Pinetops, the town saw the beginning of a rebirth of sorts. Now the community waits in limbo, wondering what will happen next.

Kang introduces readers to Tina Gomez:

Tina Gomez, a Pinetops resident, quickly saw Greenlight’s benefits. She recently got a telework job with General Electric, which requires reliable high-speed internet service to run a customer service software program. Ms. Gomez, 37, also started online courses in medical billing and coding. Before subscribing to Greenlight, finding telework was a challenge because the existing home internet service was too slow, she said.

Now the political squabble over broadband may hurt her livelihood. Mark Gomez, Ms. Gomez’s husband, said they would move from Pinetops to Wilson when their broadband service was disconnected.

“We can’t stay if the basic services we need aren’t here,” Ms. Gomez said.

Beyond The Courtroom

Executive Director of Next Century Cities Deb Socia summed it up when she told Kang:

“This is about more than North Carolina and Tennessee...We had all looked to the F.C.C. and its attempt to pre-empt those state laws as a way to get affordable and higher-quality broadband to places across the nation that are fighting to serve residents and solve the digital divide.”

Chattanooga's EPB Ranked Tops By J.D. Powers, Consumer Reports

EPB customers love the fast, affordable, reliable Internet access they get from their muni and they appreciate the way its smart-grid helps them save money on their electric bill. According to a new J.D. Power report, their municipal utility is also the highest rated mid-size utility in the South for customer service and reliability.

Double Honors

Just a month ago, Consumer Reports magazine rated EPB the best TV and Internet access utility in the county for customer satisfaction, as chosen by a reader survey. The J.D. Power report went on to rank EPB number two in the country in the category of municipal or investor-owned electric utility.

The Times Free Press reports that in 2015 EPB Fiber Optics earned a net income of $23.5 million while the electric division earned $3.5 million. EPB President David Wade said that the smart-grid has reduced power outages by 60 percent and contributed to customer satisfaction by enhancing reliability of the system.

"The lesson that utilities can learn from other high-performing service providers is that to excel you need a culture that puts customers and employees first," said John Hazen, senior director of the utility practice at J.D. Power. "And because customer expectations continue to increase, you need to have a mindset of continuous improvement to keep up."

It looks like EPB has that lesson committed to memory. From the Time Free press article:

EPB Chairman Joe Ferguson said the favorable grades from EPB customers reflect the utility's local ownership, public service and management focus on serving the customer.

Major Media Outlets Cover 6th Circuit Decision Limiting Local Authority

Various Sources, August 10-11, 2016

A circuit court decision this week means the digital divide in Tennessee and North Carolina will be allowed to continue. This week, the 6th Circuit Court of appeals decided to dismiss the FCC's decision to encourage Internet investment by restricting local authority to build competitive Internet networks. In February, ILSR and Next Century Cities filed an Amicus Brief in support of the FCC's position. Here is a selection of media stories which cite ILSR.

MEDIA COVERAGE - "Court of Appeals Overrules FCC Decision"

Cities looking to compete with large Internet providers just suffered a big defeat by Brian Fung: The Washington Post, August 10

There are signs, however, that municipal broadband proponents were anticipating Wednesday's outcome — and are already moving to adapt. One approach? Focus on improving cities' abilities to lay fiber optic cables that then any Internet provider can lease; so far, only one state, Nebraska, has banned this so-called "dark fiber" plan, said Christopher Mitchell, who directs the Institute for Local Self-Reliance's Community Broadband Networks Initiative.

"We're pursuing strategies that are harder for the cable and telephone companies to defeat," said Mitchell.

Circuit court nixes FCC’s effort to overturn North Carolina, Tennessee anti-municipal broadband laws by Sean Buckley: Fierce Telecom, August 10, 2016

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However, pro-municipal broadband groups like the Institute for Local Self-Reliance, which filed an amicus brief in support of the FCC's position, said they are "disappointed that the FCC's efforts to ensure local Internet choice have been struck down.”

Court Deals FCC a Big Blow in Municipal Broadband Ruling by Alex Byers: PoliticoPro August 10, 2016 (subscription needed)

For now, proponents of the FCC’s order said they would work state-by-state to change laws restricting municipal broadband networks. Christopher Mitchell, director of the Institute For Local Self-Reliance’s Community Broadband Networks program, said the FCC order highlighted the issue and inspired other communities. “The FCC may have lost the case but they’ve still done a service for America,” Mitchell said. “In making the decision that was later overturned, they certainly elevated the issue.”

Analysis: The government just lost a big court battle over public Internet service by Brian Fung: Chicago Tribune, August 11, 2016

Congress Should Support Community Broadband Networks, Advocates Say by Sam Gustin: Motherboard Vice, August 11, 2016

“I would love to see renewed enthusiasm around this bill, and I would love to see it pass,” Christopher Mitchell, Director of Community Broadband Networks at the Institute for Local Self-Reliance, told Motherboard. But with Republicans currently in control of both the House and the Senate, Booker’s bill has virtually no chance of becoming law, especially given the tremendous amount of political influence wielded by the likes of Comcast and AT&T, Mitchell said. He warned that even if the legislation moved forward, industry-friendly lawmakers could try to weaken the bill or insert anti-community broadband provisions... “With the GOP in control, Marsha Blackburn would crush this legislation,” Mitchell said. “That’s why she gets more money from the cable and telecom industry than anyone else. She would make sure it doesn’t go anywhere.”

U.S. court rules FCC lacks authority to upend state bans on community-run broadband by Aaron Sankin: Daily Dot, August 11, 2016

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Last year, the FCC made a bold push to let cities and counties around the county make significant investments in their high-speed internet infrastructure. On Wednesday, a trio of federal judges dealt that effort a major setback... “We thank the FCC for working so hard to fight for local authority and we hope that states themselves will recognize the folly of defending big cable and telephone monopolies and remove these barriers to local investment,” Mitchell said in a statement. “Communities desperately need these connections and must be able to decide for themselves how to ensure residents and businesses have high quality Internet access.”

Federal court blocks FCC efforts to protect municipal broadband expansion by Alex Koma: StateScoop, August 11, 2016

Indeed, Chris Mitchell — director of the community broadband initiative for the Institute for Local Self-Reliance — argues that “states have gotten away with pulling a fast one in terms of lying about their intentions,” claiming that the matter isn’t so easily dismissed as a question of federalism. “The challenge is understanding whether these states are regulating their cities or regulating interstate commerce, as the FCC argued, and I think that these states are clearly trying to regulate internet access, as opposed to just what these cities could do,” Mitchell said. “I don’t think the court really got that.”

Next Steps Pondered After Muni Cable Ruling by Gary Arlen: Broadcasting and Cable, August 11, 2016

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"Once there's light shined on those laws, enough state legislators will decide it's time to stand up to the incumbents," said Mark C. Del Bianco, an attorney who represented Next Century Cities and the Institute for Local Self-Reliance, two advocacy groups that supported the efforts of Chattanooga, Tenn., and Wilson, N.C., to build competitive high-speed networks for their citizens."

Court Says FCC Can't Stop States from Blocking City Broadband Efforts by Shirley Siluk: NewsFactor Network August 11, 2016

"We're in a better place now that we had been [before] the FCC order," Mitchell told us today. "More communities have been inspired. We've seen a remarkable increase in the number of municipalities promoting access."

Mitchell said FCC commissioners who supported the order deserve a lot of credit for such developments. Mitchell said that outside of efforts in Tennessee and North Carolina, his organization's work to promote local broadband development will continue uninterrupted.

Photo of the newspaper stack courtesy of Globalimmigrantnews through Wikimedia Commons. 

Press Release: The 6th Circuit Court of Appeals decided to dismiss the FCC's decision to encourage Internet investment in Tennessee and North Carolina

The 6th Circuit Court of Appeals decided to dismiss the FCC's decision to encourage Internet investment in Tennessee and North Carolina

Minneapolis, MN - The 6th Circuit Court of Appeals decided today to dismiss the FCC's February 2015 decision to encourage Internet investment in Tennessee and North Carolina. Tennessee and North Carolina had both restricted local authority to build competitive networks.

"We're disappointed that the FCC's efforts to ensure local Internet choice have been struck down," says Christopher Mitchell with the Institute for Local Self-Reliance. "We thank the FCC for working so hard to fight for local authority and we hope that states themselves will recognize the folly of defending big cable and telephone monopolies and remove these barriers to local investment. Communities desperately need these connections and must be able to decide for themselves how to ensure residents and businesses have high quality Internet access."

ILSR and Next Century Cities filed an Amicus brief in support of the FCC's position. View the Court's Opinion here.

Contact:

Rebecca Toews

rtoews@ILSR.org

612-808-0689