Last week, South Carolina's General Assembly passed H3508, the ALEC and AT&T bill we previously warned you about. AT&T, ALEC, and cable companies pushed this bill to limit broadband competition and revoke local authority to decide if public investments in broadband infrastructure are wise.

H3508 is one of the worst pieces of legislation we have seen. States usually incorporate language that "grandfathers in" existing projects as a way to avoid legal challenge and federal scrutiny of their anti-competition legislation. In South Carolina, however, crafty drafting puts one county BTOP project in the cross hairs while permitting two other projects to continue.

Below is a roundup of media coverage of the bill. We will soon release our analysis of the supposed "exemptions" to this bill but in the meantime, this coverage explains several of the problems with South Carolina's latest Monopoly Protection Act.

Ars Technica's Cyrus Farivar contacted Jim Baller, a preeminent telecom attorney and expert in broadband issues:

"States have different ways to achieve the same end—discourage, delay, or derail public broadband initiatives," wrote Jim Baller, a telecom lawyer based in Washington, DC, in an e-mail to Ars on Thursday. He noted that similar bills were introduced in Minnesota and Georgia this year, the former of which has led to a "study bill," while the latter did not make it out of committee.

"In some ways, the South Carolina bill is worst of all because it does not grandfather existing projects and would retroactively undermine federal stimulus grants that Orangeburg and Oconee Counties have received,"  he added.

Farivar also looked into the chief author and found:

In most states, telephone companies are required to serve everyone and when there are problems with the service, the state can mandate that the company fix them. But AT&T and ALEC are leading the charge to let these massive companies decide for themselves who should have access to a telephone, taking state regulators out of the loop. These big companies use several arguments we are well familiar with - that mobile wireless is already available (in many rural areas, it actually is not available) and there is plenty of competition. If only that were the case. I was thrilled to see David Cay Johnston cover this in a column on Reuters:

AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as "provider of last resort." They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services. The new rules AT&T and Verizon drafted would enhance profits by letting them serve only the customers they want. Their focus, and that of smaller phone companies that have the same universal service obligation, is on well-populated areas where people can afford profitable packages that combine telephone, Internet and cable television.

What happens when the states hand over authority to these companies? David has an answer:

AT&T and Verizon also want to end state authority to resolve customer complaints, saying the market will punish bad behavior. Tell that to Stefanie Brand. Brand is New Jersey's ratepayer advocate whose experience trying to get another kind of service - FiOS - demonstrates what happens when market forces are left to punish behavior, she said. Residents of her apartment building wanted to get wired for the fiber optic service (FiOS) in 2008. Residents said, "We want to see your plans before you start drilling holes, and Verizon said, 'We will drill where we want or else, so we're walking,' and they did," Brand told me. Verizon confirmed that because of the disagreement Brand's building is not wired. And there's nothing Brand can do about it. Verizon reminded me the state Board of Public Utilities no longer has authority to resolve complaints over FiOS.

Better broadband is not just about technology.

Less than a year after North Carolina became the 19th state to create barriers to community networks, effectively outlawing them, the non-partisan organization Follow the Money has crunched the numbers and found that private telecommunications interests donated quite heavily to lawmakers that pushed their bill through the Legislature:

According to a report by the National Institute on Money in State Politics, Dialing Up the Dollars: Telecommunication Interests Donated Heavily to NC Lawmakers, Republican lawmakers and those who held key leadership positions, sponsored the bill, and/or who voted in favor of the bill received considerably more campaign contributions from the telecommunication donors than did their colleagues. For example, lawmakers who voted in favor of HB 129 received on average 76 percent more than the average received by those who voted against the bill. The four primary sponsors of the bill received an average of $9,438 each, more than double the $3,658 given on average to lawmakers who did not sponsor the bill.

Recall that Time Warner Cable pushed this bill for years with some help from AT&T, CenturyLink, and others that stood to benefit by limiting broadband competition. But the Legislature wisely refused to enact it... until 2011. Now we have a better sense of what may have shifted the balance. Consider this:

Thom Tillis, who became speaker of the house in 2011, received $37,000 in 2010–2011 (despite running unopposed in 2010), which is more than any other lawmaker and significantly more than the $4,250 he received 2006–2008 combined. AT&T, Time Warner Cable, and Verizon each gave Tillis $1,000 in early-mid January, just before he was sworn in as speaker on January 26. Tillis voted for the bill, and was in a key position to ensure it moved along the legislative pipeline.

Running unopposed for office, he collected more money from the cable and phone companies than any other Representative and almost 10 times as much as in the previous two cycle combined. As Speaker, he set the agenda and decided priorities.

We are hearing that SB 313 in Georgia, AT&T's bill to overrule local authority, will be turned into a study bill. Despite the strong support of the Senate Majority Leader, the bill lost support after we and others exposed the frank admission of AT&T's CEO that they had no plans to expand broadband in rural areas. Given the strength of AT&T's lobbying and the support of the Senate Majority Leader, this is a tremendous victory. Congratulations to the communities in Georgia that successfully organized and defended their authority to decide locally if a network is a wise choice for them. We do not consider these issues resolved until the ink is dried, but it does look like AT&T lost this round -- which means thousands of local businesses and millions of people won. They can still hope for next-generation networks and a real choice in providers. Note: the South Carolina bill remains in play and will be discussed on Wednesday by a Senate Judiciary Subcommittee. We have been collecting some of the news coverage of this broadband debate in Georgia, but have neglected posting until now.

For tourists and residents alike, much of Colorado is one amazing vista after the next. I nearly circumnavigated it on a recent trip and was re-blown away at how incrediblely beautiful it is (recommendation: stop by Great Sand Dunes National Park). But those incredible mountains are a two-way street. The same ridges that make it great ski country make it awful wireless country. All those mountains make it hard to provide ubiquitous wireless access - leave the interstate or urban areas behind and you are lucky to see the old "1x" show up on your smartphone. When I go on vacation, I like to remain connected to find weather reports, directions to my next destination, local cafes, etc. And like just about everyone, I really like to be connected where I live. The private telecom sector gets a failing grade for serving both residents and vacationers. Don't forget that Colorado is one of the nineteen states that have barriers to publicly owned networks despite the refusal of cable and DSL companies to build next-generation networks. We've frequently written about Longmont's efforts to improve its broadband access despite that legislation. Senate Bill 12-129 aims to identify areas of the state lacking sufficient acess to the Internet and seeking solutions.

The absurdity of AT&T's push to define broadband as 200kbps is so great, it boggles the imagination. We developed the graphic below to highlight just how slow 200kbps connections are. Feel free to spread it around. Higher quality pdf below.

Many complain about gridlock in Washington, DC, but I sometimes subscribe to the cynical counter-reaction that gridlock is great. It is when the Democrats and Republicans agree that Americans should beware. Though this may or may not be true about politics, it is certainly true when applied to two of the most hated industries in America: cable television companies and DSL companies like AT&T. When they come to agreement, you can bet that prices are going up for the rest of us. In our coverage of AT&T's bid to limit broadband competition in South Carolina by revoking local authority to build networks for economic development, we have thus far ignored the position of the cable companies. We took a tour through the newsletters of the South Carolina Cable Television Association over the course of 2011, which is when AT&T introduced its H.3508 bill. Unsurprisingly, the cable companies are thrilled at the prospect of limiting competition in communities by cutting off the ability of a community to build a network when the private sector is failing to meet their needs. From the 1st Quarter newsletter [pdf]:

The SCCTA has been actively following the AT&T-backed legislation that would amend the Government-Owned Telecommunications Service Providers Act. House Bill 3508 would impose the same requirements on government-owned broadband operations that are currently imposed on telecommunications operations.

Of course, H.3508 goes far beyond applying the "same requirements." It enacts a host of requirements that only apply to public providers, which are already disadvantaged by being much smaller than companies like Time Warner Cable and AT&T. We have long ago debunked the myth of public sector advantages over the private sector. The second quarter newsletter [pdf] identifies this bill as the highest priority of the cable association:

H3508, the AT&T backed legislation, has been our dominate piece of legislation in 2011.

Lobbyists for major cable and DSL companies (Comcast, Frontier, and others) already earned their pay in Washington state this year by killing a bill that would have allowed some public utility districts to offer retail services on broadband networks in rural areas that were unserved. Unfortunately, the powerful incumbent cable and DSL companies have been able to kill bills like this in committee year after year even as they refuse to build the necessary networks throughout the state. Comcast is not about to start offering broadband in these low-density areas, but it also does not want to allow public utilities to embarrass them by offering faster connections at lower prices than Comcast offers in Seattle (where it faces no real competition). Public Utility Districts can currently only offer wholesale services -- meaning that they can only offer services by using private service providers in an open access arrangements. We are strong supporters of this approach where it works. However, in high-cost rural areas, the "middle man" kills the economics. There is not enough revenue to pay for the network. Some of the public utility districts want the authority to offer retail services in order to bring high-speed connections to these rural areas and encourage economic development. Big companies like Frontier and CenturyLink serve some of the people in some of these areas -- often with significant state and federal subsidies. We could phase out such subsidies by encouraging approaches that are not as massively inefficient as Frontier and CenturyLink -- two of the worst DSL providers in the nation. Unfortunately, what they lack in capacity to invest in modern broadband, they make up for in lobbying prowess. An article in the Omak-Okanogan County Chronicle offers some more background:

Erik Poulsen, government relations director at Washington Public Utility District Association, said PUDs have used the wholesale authority they were granted in 2000, building 4,500 miles of fiber-optic cable, investing $300 million in infrastructure and joining with 150 retail providers.

AT&T lobbyists in Georgia and South Carolina are arguing that local governments should not be allowed to build the networks that communities need, suggesting that the private sector is primed to make the necessary connections. But AT&T's CEO had a different message for investors a few weeks ago, in an earnings call on January 26:

The other is rural access lines; we have been apprehensive on moving, doing anything on rural access lines because the issue here is, do you have a broadband product for rural America? We’ve all been trying to find a broadband solution that was economically viable to get out to rural America, and we’re not finding one to be quite candid. The best opportunity we have is LTE.

Whoa! LTE is what you more commonly hear called 4G in mobile phone commercials. The best they can do is eventually build a wireless network that allows a user to transfer just 2GB/month. That is fine for hand-held devices but it does nothing to encourage economic development or allow residents to take advantage of remote education opportunities. But even the CEO admits they are not bullish on LTE as the solution:

[W]e’re looking at rural America and asking, what’s the broadband solution? We don’t have one right now.

Some may be wondering about "U-Verse" -- AT&T's super DSL that competes with cable in the wealthy neighborhoods of bigger cities. U-Verse cannot match the capacity or quality of modern cable networks but is better than older DSL technologies. But U-Verse is not coming to a rural community near you. For those who missed the fanfare last year, AT&T's U-Verse build is done. AT&T's lobbyists have probably forgotten to tell Georgia and South Carolina Legislators that the over 20 million AT&T customers without access to U-Verse are not going to get it.

A group of rural residents living east of Madison, Wisconsin, gathered near Portage of Columbia County to discuss their lack of affordable high speed access to the Internet. These are people for whom slow, overpriced DSL would be an improvement. Lack of access to the Internet is a drain on rural economies -- their real estate market suffer and they are unable to telecommute, when they would benefit more from it than most who do have the option. They lack access to long-distance education opportunities in a time when the cost of gas makes driving to school prohibitively expensive. Andy Lewis, who has been working with the Building Community Capacity through Broadband Project with U-W Extension, was on hand to discuss some of the lessons learned through their work, which is largely funded by a broadband stimulus award. The incumbent providers encouraged residents without access to aggregate their demand and create petitions to demonstrate the available demand. Of course they did. And if CenturyLink decides it can get a sufficient return on its slow and unreliable DSL, they will build it out to some of those unserved areas. This is a "damned if you do, damned if you don't" scenario for rural residents. DSL was starting to be obsolete years ago. The better solution is finding nearby cooperatives and munis that will extend next-generation networks that can provide fast, affordable, and reliable access to the Internet. Getting a DSL to a town will do very little to attract residents and nothing to attract businesses. It is a 20th century technology in a rapidly evolving 21st century world. The Beaver Dam Daily Citizen covered the meeting, which eventually turned away from how to beg for broadband to how they can build it themselves:

But several attendees asked why the government can't play a role in making high-speed service available everywhere, in the same way that the government helped bring about rural electrification and telephone service.

This is a very good question. They may decide not to follow that path, but given the importance of access to the Internet, they should look at options for building a network that puts community needs first.