In the wake of a bill in Georgia to revoke local authority and substitute it with state say-so over whether a community can build a broadband network, multiple outlets have covered the situation. As usual, Stop the Cap! was quick on the ball, offering original in-depth commentary. Phil digs into the campaign cash history to find the real motivations behind this bill:

Rogers’ legislation is exceptionally friendly to the state’s incumbent phone and cable companies, and they have returned the favor with a sudden interest in financing Rogers’ 2012 re-election bid. In the last quarter alone, Georgia’s largest cable and phone companies have sent some big thank-you checks to the senator’s campaign:

• Cable Television Association of Georgia ($500)
• Verizon ($500)
• Charter Communications ($500)
• Comcast ($1,000)
• AT&T ($1,500)

A review of the senator’s earlier campaign contributions showed no interest among large telecommunications companies operating in Georgia. That all changed, however, when the senator announced he was getting into the community broadband over-regulation business.

Phil also refutes the supposed failures cited by those pushing the bill. Not only do such stories misrepresent what really happened, some actually cite EPB's incredible 1Gbps service as demonstrating that munis are out of touch. What else would you expect from the Heartland Institute, which made its name fighting against the radical claim that cigarettes are linked to cancer? Government Technology's Brian Heaton also covered the story in "Georgia Community Broaband in Legislative Crosshairs."

In addition, Mitchell [me] said that SB 313’s requirement of the public entity paying the same taxes or the same cost of capital as the private sector is another red herring.

It's a new year, but most of us are still stuck with the same old DSL and cable monopolies. Though many communities have built their own networks to create competition and numerous other benefits, nearly half of the 50 states have enacted legislation to make it harder for communities to build their own networks. Fortunately, this practice has increasingly come under scrutiny. Unfortunately, we expect to see massive cable and telephone corporations use their unrivaled lobbying power to pass more laws in 2012 like the North Carolina law pushed by Time Warner Cable to essentially stop new community broadband networks. The FCC's National Broadband Plan calls for all local governments to be free of state barriers (created by big cable and phone companies trying to limit competition). Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks. But modern day railroad barons like Time Warner Cable, AT&T, etc., have a stranglehold on a Congress that depends on their campaign contributions and a national capital built on the lobbying largesse of dominant industries that want to throttle any threats to their businesses. (Hat tip to the Rootstrikers that are trying to fix that mess.) We occasionally put together a list of notable achievements of these few companies that dominate access to the Internet across the United States. The last one is available here. As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations.

Whenever the discussion of Network Neutrality comes up, we like to remind everyone that when the network is locally owned and accountable to the community, anti-subscriber discrimination is not a problem. That said, we are strong supporters of proper safeguards to ensure massive companies like AT&T cannot abuse their market power and discourage innovation. As the FCC prepares to discuss a half measure to preserve parts of the open Internet, a number of us have been frustrated that while we cannot read the proposal, AT&T appears to be helping write it. Karl Bode's take:

[T]he question shouldn't be whether or not consumers can now view a neutrality proposal after it was hashed out in private meetings (predominately with only the largest, wealthiest carriers), it should be: why weren't consumers absolutely integral in crafting it? AT&T has met with the FCC half a dozen times in the course of three weeks and likely knows precisely what's in this plan -- do you?

We've written to FCC Commissioners to make it clear that they must not compromise on the future of the open Internet. You should too. Photo used under Creative Commons license from AdamWillis.

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.

Last year, when the Berkman Study (pdf) by Harvard (commissioned by the FCC) revealed the secret behind impressive broadband gains in nearly every country over the past decade, we hoped the FCC would learn something from it. Maybe it did, and maybe it didn't -- what is clear is that it did not have the courage to embrace pro-competition policies. Canada's telecom regulator, the Canadian Radio-television and Telecommunications Commission (CRTC) has shown more courage in confronting powerful interests that want to monopolize the future of communications. They have decided to require the big telecom carriers share their network with independent ISPs in an open access type arrangement.

Until this decision, the established telecom companies could "throttle" third-party services, by slowing them down or limiting downloads.

In Canada, these huge companies also claim that such regulations will decrease their investment in next-generation networks, likely a hollow threat. Regardless, it is a strong argument for public ownership of essential infrastructure. How many communities should be denied next-generation communications because some massively profitable global company is having a snit with the regulator? Far better for communities to be self-determined, by building their own networks. When networks are run as infrastructure, they are open to independent service providers, just as the roads are open to shipping companies on equal terms. Canada's regulator has made a difficult decision - but as Karl Bode reminds us, let's wait to see if they actually enforce it.

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.

From what we have seen of the upcoming broadband plan, it looks to solve very little. Karl Bode explains why the National Broadband Plan will deliver everything but what it is supposed to. Basically, it comes down to an Administration that is unwilling to challenge very powerful private sector interests. The main question we need to ask when the plan comes out is how the plan will increase the power of communities to succeed in the 21st century. For more than a decade, private companies have decided when communities will receive the utility of the 21st century: broadband Internet access. They have decided, without any oversight from the community, what speeds are available and at what prices. Towns regularly lose businesses because incumbent providers offer only overpriced, slow connections. In several states, communities are greatly limited in what telecom services they can provide -- legislation that protects the incumbents that refuse to invest in next generation networks. The National Broadband Plan should call for ending all state barriers on publicly owned networks. The FCC has been quick to note that there are few federal funds to put into expanding broadband access. Great - all the more reason to stop subsidizing the private profits of incumbents with Universal Service programs that reward slow, overpriced connections to schools and rural residents. The Universal Service Fund must be reformed from a program that throws away money with inefficient, ongoing subsidies to private companies so they will run networks in rural areas. These areas should be served by cooperatives and other networks that operate in the public interest. If they require ongoing subsidization, the networks should operate in the public interest, not pad private profits. We have one opportunity to transition from copper to fiber - if we waste this opportunity by cementing the power of the very companies that have refused to build the infrastructure we need, it will be our fault and our fault alone. The pathetic U.S.

I hesitate to say, "know your enemy," because the carriers should not be our enemy. There are many ways these carriers can continue profiting even without damaging America's standing in international broadband rankings. However, they are instead attacking our efforts to regain parity with peer nations by forming astroturf groups to argue that only they can save us from the problems their lack of investment have created - and then only by reducing regulations on them. How convenient for them... Thanks to Karl Bode for discussing how they operate:

This claim that their membership list is stocked with "consumer groups" turns out to be as bogus as their stated goals, given there's not a single viable consumer advocacy firm among the group's 100 members. BfA [Broadband for America] does, however, include dozens of "co-opted" minority, disability and other industry-funded groups. Said groups are used by lobbyists to pretend the interests and opinions presented to lawmakers have broad public support, and aren't just the monotonal whining of a handful of corporations interested solely in protecting revenues. For example, a group that needs funding for a new events center will agree to parrot Verizon policy positions in public press releases. The National Association of the Deaf [NAD] did as much for the baby bells when Verizon and AT&T were trying to eviscerate existing TV laws, even though the law the group was busy cheerfully supporting resulted in cherry-picked next-generation broadband deployment for NAD's constituents.

Photo used under Creative Commons license - thanks to flickr's limonada.

Folks who are mostly interested in broadband are probably unfamiliar with video franchising laws. Many people still apparently believe that cable companies are able to get exclusive franchises from the city (granting them a monopoly on providing cable television). However, that is not true and has not been true for many years. Most cable companies still have a de facto monopoly because it is extremely difficult to overbuild an existing cable company - the incumbent has most of the advantages and building a citywide network is extremely expensive. This is not a naturally competitive market; it is actually a natural monopoly. However, most people want a choice in providers (something that goes beyond a single cable company and a satellite option or two depending on whether you rent/own and your geographic location. In talking with many local officials and the National Association of Telecommunications Officers and Advisers (NATOA), it seems that almost every local government wants more competition in its community too. This is where telephone and cable company lobbyists have stepped in - more successfully at the state level than at the federal level. They have convinced legislators that the barrier to more competition is local authority over the franchise (the rules a company agrees to in return for the right to use the community's Right-of-Way in deploying their network). These rules include red-line prohibition (you cannot refuse to serve poor neighborhoods), an affordable "basic" tier of service, local public access channels, broadband connections at public buildings, etc. Some states have listened to the lobbyists and enacted statewide franchising - where local communities are stripped of the authority to manage their Right-of-Way and companies can offer video services anywhere in the state by getting a state franchise from the state government. Every year, we gather more data that this practice has hurt communities, raised prices, and barely spurred any competition. Most of the competition it is credited with spurring came from Verizon's FiOS deployments, which would have occurred regardless of state-wide franchise enactment. This touches directly on broadband because the statewide franchises often give greater power to companies like Verizon to cherry-pick who gets next generation broadband.

When it comes to the National Broadband Plan that the FCC is tasked with developing, we at muninetworks.org have a red line. No matter what the federal policy, all communities must reserve the right to invest in and own their own networks. These networks are essential infrastructure; no community must be left incapable of securing its future prosperity. FDR recognized this important community right:

I therefore lay down the following principle: That where a community--a city or county or a district--is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up, after a fair referendum to its voters has been had, its own governmentally owned and operated service. That right has been recognized in a good many of the States of the Union. Its general recognition by every State will hasten the day of better service and lower rates. It is perfectly clear to me, and to every thinking citizen, that no community which is sure that it is now being served well, and at reasonable rates by a private utility company, will seek to build or operate its own plant. But on the other hand the very fact that a community can, by vote of the electorate, create a yardstick of its own, will, in most cases, guarantee good service and low rates to its population. I might call the right of the people to own and operate their own utility something like this: a "birch rod" in the cupboard to be taken out and used only when the "child" gets beyond the point where a mere scolding does no good.

We believe a national broadband policy could go much farther to strengthen communities by spurring fast networks everywhere, but we also recognize a political reality: incumbents providers have little to gain from a national broadband plan (especially one that goes so far as to encourage actual competition) and while their networks fall behind the times, they are able to pump all kinds of money into DC (and state legislatures around the country). Therefore, we stand by our red line. We will hope for more, but early signs are not good. Karl Bode offers 5 signs the broadband plan is already in trouble.