This is the transcript for episode 258 of the Community Broadband Bits Podcast. Researchers from the Roosevelt Institute join our host Christopher Mitchell to discuss antitrust policy and Internet access. Listen to this episode here.

Marshall Steinbaum: This is us choosing a set of policies that is the worst of both worlds, that is both deregulatory and anti-competitive. Instead you can do both.

Lisa Gonzalez: This is episode 258 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. This week Christopher visits with two other policy folk from the Roosevelt Institute, Marshall Steinbaum and Rakeen Mabud. Earlier this year the Roosevelt Institute released a report that examines how antitrust enforcement has changed and how those changes have impacted the telecommunications industry. Christopher, Marshall and Rakeen consider how that approach has affected people who may or may not subscribe to Internet access services. You can download the report and learn more about the organization at rooseveltinstitute.org. Now here are Christopher with Marshall Steinbaum and Rakeen Mabud.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell and today I'm speaking with two folks from the Roosevelt Institute. Marshall Steinbaum, the senior economist and fellow at the Roosevelt Institute. Welcome to the show.

Marshall Steinbaum: Thank you. It's great to be here.

Christopher Mitchell: We also have Rakeen Mabud, the program director at Roosevelt Institute. Welcome to the show.

Rakeen Mabud: Thanks, nice to be here.

Christopher Mitchell: I first was aware of you guys several years ago because of some work that Susan Crawford was doing with you I believe. I saw what really great work you were doing and then I read the Crossed Lines report, why the AT&T/Time Warner merger demands a new approach to antitrust. I thought it was terrific. I'm excited to talk about these kind of issues today but I thought that we'd start maybe by asking and reminding people that it's been 21 years since the Telecommunications Act of 1996 had promised...

One of the very many treats at Mountain Connect this year was a keynote from Chattanooga EPB's Director of Fiber Technology, Colman Keane. (Watch it here.) After discussing their remarkable successes, we snagged an interview with him (he was last on the show for episode 175).

We discuss whether or not Chattanooga is an appropriate role model for other cities considering a municipal fiber investment and the general viability of citywide approaches in the current market.

We also get an update on Chattanooga's financials, their enthusiasm on connecting well over 90,000 subscribers, and how the smart grid deployment is creating tremendous value for both the utility and the wider community.

For more about Chattanooga, take a look at our ongoing coverage. We've been following the network and the community since 2009.

Read the transcript of the show.

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

This show is 23 minutes long and can be played on this page or via iTunes or 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 Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.

For the second week in row, our staff has felt compelled to address a misleading report about municipal networks. In order to correct the errors and incorrect assumptions in yet another anti-muni publication, we’ve worked with Next Century Cities to publish Correcting Community Fiber Fallacies: Yoo Discredits U Penn, Not Municipal Networks.

Skewed Data = Skewed Results

Professor Christopher S. Yoo and Timothy Pfenninger from the Center for Technology, Innovation and Competition (CTIC) at the University of Pennsylvania Law School recently released "Municipal Fiber in the United States: An Empirical Assessment of Financial Performance." The report attempts to analyze the financial future of several citywide Fiber-to-the-Home (FTTH) municipal networks in the U.S. by applying a Net Present Value (NPV) calculation approach. They applied their method to some well-known networks, including Chattanooga's EPB Fiber Optics; Greenlight in Wilson, North Carolina; and Lafayette, Louisiana's LUS Fiber. Unfortunately, their initial data was flawed and incomplete, which yielded a report fraught with credibility issues.

So Many Problems 

In addition to compromising data validity, the authors of the study didn’t consider the wider context of municipal networks, which goes beyond the purpose of NPV, which is determining the promise of a financial investment.

Some of the more expansive problems with this report (from our Executive Summary):

• They erred in claiming Wilson, Lafayette, and Chattanooga have balloon payments at the end of the term. They have corrected that error in a press release. Other errors, such as confusing the technologies used by at least two networks, are less important but decrease the study’s credibility.
• Several of the cities dispute the accuracy of the numbers used in the calculations for their communities.
• The Net Present Value calculation is inappropriate in this context for...

S&P Global Market Intelligence - May 26, 2017

Hard Data on Municipal Broadband Networks

Written by Sarah Barry James

There is a dearth of good data around municipal broadband networks, and the data that is available raises some tough questions.

A new study from University of Pennsylvania Law School Professor Christopher Yoo and co-author Timothy Pfenninger, a law student, identified 88 municipal fiber projects across the country, 20 of which report the financial results of their broadband operations separately from the results of their electric power operations. Municipal broadband networks are owned and operated by localities, often in connection with the local utility.

...

Yet Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, argued that Yoo's study did not present an entirely accurate or up-to-date picture of U.S. municipal networks.

"When I looked at the 20 communities that he studied — and his methodology for picking those is totally reasonable and he did not cherry pick them — I was not surprised at his results because many of those networks are either in very small communities … and the others were often in the early years of a buildout during a period of deep recession," Mitchell said.

As an example, Mitchell pointed to Electric Power Board's municipal broadband network in Chattanooga, Tenn. — one of the five networks Yoo identified as having positive cash flow but at such a low level that it would take more than 100 years to recover project costs.

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In fact, without the revenue generated by the fiber-optics business, EPB estimated it would have had to raise electric rates by 7% this year.

According to Mitchell, Yoo's study captured the Chattanooga network when it was still "small and growing," but misses "what's going to happen for the rest of the life of the network, which I think is the more important part."

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Read the...