What New York State Got Right and No Answers on States Rights Question – Episode 501 of the Community Broadband Bits Podcast

This week on the podcast, Christopher is joined by three colleagues from the Community Broadband Networks Initiative at ILSR including Sean Gonsalves (Communications Team Lead), Ry Marcattilio-McCracken (Research Team Lead) and DeAnne Cuellar (Outreach Team Lead). During the conversation, the four talk about Sean’s writing that highlights improvements to New York’s new budget bill, and how it sets the table for municipal broadband in the Empire State. The group also discusses Ry’s work detailing Comcast’s recent expansion of its stock buyback program. DeAnne joins the conversation to talk through problems with the federal government’s decision to tax broadband grant money.

They close out the show with reflections on the role of state’s rights with regard to broadband, and by weighing the cost of federal inaction against the potential for states to perpetuate digital discrimination.

This show is 22 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed

Transcript below. 

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

Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.

Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.


Christopher Mitchell (00:07):

Welcome to another episode of the Community Broadband Bits podcast. I'm Christopher Mitchell at the Institute for Local Self-Reliance in St. Paul, Minnesota. And we're recording on a Friday. So I feel a little, I don't know, a little, little ambitious, no, no, that's not the word I was looking for. Rambunctious. rambunctious. Rambunctious is the word I was looking for. That laugh you heard was Sean. welcome back, Sean.

Sean Gonsalves (00:35):

All right, good to be back.

Christopher Mitchell (00:36):

Sean, Gonsalves the most mispronounced name at the Institute for Local, or, that's true. Our communications team lead. we also have Rye who keeps himself muted when he is laughing. Ry Marcattilio-McCracken, our research team lead. Welcome to the show,


Ry: I've never been happier to be here.


Chris: <laugh>. All right. Rye has new pharmaceuticals, <laugh>. So we're talking about a kind of a grab bag of interesting things that are going on. And Sean, you're gonna kick us off, I think with some exciting news you wrote about in the state of the big city.

Sean Gonsalves (01:10):

Yeah, the big apple, the, the, the state of the big apple. so they passed their budget bill for 2023 and a couple of weeks ago we were a little concerned because there was language in the bill that seemed to indicate that the big telecom lobby had gotten to a lot of lawmakers. And there was language in there that appeared as if they were trying to squeeze out municipal broadband proposals and projects from, as, as this cascade of money is coming from the federal government in the, in the states. But the budget, thankfully, was amended. And the bill looks pretty good.

Christopher Mitchell (01:50):

Yes. Yeah. I mean, it looks pretty darn good.

Sean Gonsalves (01:53):

Yeah. it's 220 billion which is not all for broadband,


Not all for BroadB, right, exactly. Not all for broadband, but a billion of it is for broadband, which is a, a significant amount in, you know, in comparison to some, some other states for sure.

Christopher Mitchell (02:09):

Right. Governor Hoel Advanced, the Connect All initiative, which I know we've talked about in other context. I don't remember if we've talked about it on the old broadband bits, but it includes several different proposals that are pretty cool, but the one that we're most excited about is

Sean Gonsalves (02:24):

A few things, but the municipal grant program was established. Yeah,

Christopher Mitchell (02:27):

That's the one. I mean, there's other stuff that's cool, but like that's

Sean Gonsalves (02:29):

The Right, right, right, right. That, that's the big one. So so there's a municipal grant program that they've established with this bill. Not all $1 billion that's going to the Connect All initiative will go to that, I'm sure, but the amount that will be in the municipal municipal grant program hasn't yet been determined. But certainly the big takeaway is that there's that provision and a few other provisions in the bill that create this municipal broadband ecosystem really in, in, in the state of New York, which is a major victory for community broadband.

Christopher Mitchell (03:01):

Tell me more about this ecosystem.

Sean Gonsalves (03:05):

Without going too far into what paragraph and what part and all that, that can get a little bit confusing, especially the way they name it. They have like part M M M and part JJ and F F F and all of this kind of stuff. But one of the things that the bill does is not only does it establish a municipal grant program, but it also gives permanent authority to the New York Power Authority to enter into lease agreements with municipalities and nonprofits, et cetera, to use their excess fiber capacity to build out fiber infrastructure. So that is very cool, especially since they've got 1400 miles of transmission lines with fiber of running along most of those pathways. And what it really does, when you think about it, practically speaking, talking to folks on the ground over there, is you've got the the Dank, which is, I I I like that.

Christopher Mitchell (03:55):

you had to say it <laugh>. Yeah. The Dank, the Dank,

Sean Gonsalves (03:58):

The Development Authority of North County. And then there's also the Southern Tier Network, which are nonprofit backhaul providers. But what this provision in the state budget allows for is for those two backhaul providers to interconnect and essentially create this just about a statewide middle mile network, which of course, if you're a municipality anywhere close to that region, it means lots of savings in terms of building last mile fiber networks.

Christopher Mitchell (04:24):

Yeah. And that's important for a number of reasons. But one is the ability of cities others that would like to make investments to move quickly, cuz that fiber's out there and now they're making it available. And that's pretty cool. You know, we've talked less about some of the things that that have also been done. but if people want, they can check out your story. It's on muni networks.org. They can just check out you know, what the title of it is offhand? New York

Sean Gonsalves (04:50):

State Budget Bill sets Table for Municipal Broadband. Man, how, there you go. That's a great title, isn't it?

Christopher Mitchell (04:55):

Oh yeah. It's so good. You, you remembered it, <laugh>. So we are, we are moving a little bit quickly today through a couple of different topics. but I just, I mean, like, that makes New York one of the coolest states, right? I mean, like, you know, Vermont has almost entirely embraced municipal broadband as like its soul strategy, which is really cool. New York has like this cachet, it's, it's New York. And for them to be putting so much money in municipal broadband enabling these different business models removing an unnecessary fee this is gonna be a positive podcast. We're not gonna talk about the states that aren't getting it right. <laugh>. Now I wanna, I wanna highlight a story that Rye had done. this is one that I thought was, was really great rye. why do you hate the for-profit companies? <laugh>

Ry Marcattilio-McCracken (05:41):

that's a great question, Chris. I don't have a good answer for you there. So I threw up a story this week about the announcement by Comcast in January that it was going to expand its stock buyback program for 2022 to 10 billion. And we kind of use it as a, a time to remind you know, people working in local government and doing this kind of community driven broadband infrastructure work, especially over the next few years that like Comcast, these monopoly ISPs, they're built in design to return profits to shareholders and increase their market value and expand their stake in the marketplace, and not necessarily to build the most cost efficient networks all around the country. So it's a good reminder when we're talking about all this public money that's floating out there and what people should do with it.

Christopher Mitchell (06:28):

Yeah. And I, you know, I think it's worth noting. I sort of, I, I've specifically set it up in a way that I feel like I'm always annoyed when people set it up talking to me. I'm one of a problem with for-profit companies, we work with a lot of for-profit companies. I have mad respect for a lot of local companies that are, that are fighting it out and doing a good job of delivering a service. in most years, making a profit maybe some years not, I mean, it's, it's stressful running those businesses. but these big companies, I mean, I just, when you look at it, I mean, at and t's do you remember offhand what they were? Because like <laugh>, I was like, has this been fact checked? Like, is that right?

Ry Marcattilio-McCracken (07:03):

A hundred billion dollars? Right. And almost a

Christopher Mitchell (07:06):

My, yeah. And I assume that's, I mean, cuz at and t is now multiple business lines, so that's not like, that's not like they're broadband profits, but like, nonetheless, like it's just a hundred billion dollars in profits. And the part that, like, the reason that we wanted to write this is not to be like you know, hey, let's grab our pitchforks and torches. But to say how, how absurd is it that like we are showering these companies with with taxpayer dollars now, right? Like at and t as received billions of taxpayer or in that case U s F funds is what I'm referring to, which is public money, we could say rather than taxpayer dollars. Cuz it's a fee in that case. But nonetheless, like I think it's really, you know, it's worth considering if we have a totally broken system, if we're writing like what is that seven figure no, that's 10 figure checks to companies who are then writing 10 figure and 11 figure checks to the stock market like <laugh>. It's, it's remarkable.

Ry Marcattilio-McCracken (08:01):

Do we have ILSR branded pitchforks and torches? Is that something we get when we get hired?

Christopher Mitchell (08:06):

Onry just invented our next fundraiser. you know, and so let me just say, if you think that we should do branded pitchforks, you should donate an odd amount of money to ilsr.org/donate and include in the note that we should do branded pitchforks and torches and see how our development people react to that. Cause I think they'd be pretty entertained, but make sure it's like some weird amount, like, you know, like $27 and 68 cents or something. So <laugh>. anyway I, I think it's really important. And then that was followed by a story that I think we should connect that I haven't taken the time to, which is the compensation of like, of Frontier executives, Charter Spectrum executives the cable and telephone monopoly executives tend to be among the most highly compensated among CEOs in of the co of the Fortune 500 companies in the us And that's pretty remarkable, I think, cuz you are also some of the most hated companies by their customers. Again, a sign that the market is broken.

Ry Marcattilio-McCracken (09:04):

Yeah, definitely a especially in comparison to the, you know, the average wage of their average worker. Right? And, and that's only been going up and up and up and up over the last 15 years.

Christopher Mitchell (09:13):

Yeah, and I'll say this, I mean, I, I always like to have a little bit of balance. <laugh>, this should be my, my new slogan Chris Mitchell, a little bit of balance. <laugh> the you know, Comcast seems like a, it's a pretty good place to work. It didn't used to be for people on the lower end. And I think the customer service representative still may not you know, appreciate like me saying that Comcast is a good place to work. But like, I feel like a lot of people that I know say that Comcast has really improved. and that's true up and down the line, more or less charter Spectrum, much less so <laugh>. So just throw that out there. I wanted to run something by all of you. We've now been joined by DeAnne Cuellar, thank you for joining Deanne, our our outreach team lead.


And I wanted to run this by you cuz I really think that you and I are pretty simpatico in thinking about this. And, and I know that you're not afraid to tell me when I'm wrong. I just wish it wasn't every time I opened my mouth. People are noticing that the federal government is taxing the grants that it is giving to the and the broadband subsidies to for-profit companies. And also some of the cooperatives are liable in certain business arrangements that they have for taxing. And so if the federal government's giving you a hundred dollars to build broadband and then saying, gimme $20 of that back, I think that's pretty dumb. you know, folks from American Enterprise Institute for instance, and others say this is a preference for municipal broadband and for cooperatives. And I'm sort of like, yeah, they're right. Like, am I wrong to think that we should fight against this?

DeAnne Cuellar (10:43):

No, I don't think you're wrong. I I think that one of the questions that we often get is, what should I be doing to work on this issue? And we say, you got to talk to the decision makers. You have to get to them. And if people are paying attention, which they are right now because they're calling it a waterfall, a watershed of federal resources, then this now needs to be added to your top line messages that this, this is a challenge. This is, this is gonna be a huge challenge. And so there is, I I hope that what we solve with mayors joining together to reach the national level of policy makers, I think we're gonna see something similar to that

Christopher Mitchell (11:21):

On this topic. Then I, I'm curious and I'll, I wanna open up to Ryan Sean too. cause I think this is something worth, you know, strategically talking about. Like, is it, is it strategic to say like, the federal government is like prioritizing municipal and cooperative networks? Like let's just let it go. or should we, I mean, I, I think I'm a little bit oc d on some of this stuff. Like I want government to be make sense. And so rather than just fighting for what gives us an edge, I kind of want policy to be rational and work, but I'm, I might be undermining our effort. Yeah.

Sean Gonsalves (11:51):

Well expl explain because I, I'm with you. I

Christopher Mitchell (11:53):

Mean, here we are complaining that at and t and Comcast make too much money. The federal government's like, well, that's cool, we'll just tax them on all the money we're giving them. You know, is is that a bad thing? Like it's a terrible thing when it's a local company? Well,

DeAnne Cuellar (12:04):

I, I think that the, the taxing is one issue, but I think there's a second issue that is unfolding that could come out into the center in the mainstream soon is now that more people know how the federal government has given the decision to the states to make a lot of these smaller decisions at the local level. I think local communities are gonna realize how little power they have to advocate for their work and their funding. And one way you're, we're happy that the federal government is loosening rules or making rules where we need them. But then like when it gets down to the state level, it's kind of like we lose that power

Christopher Mitchell (12:45):

Because we're still getting overruled by the states.

DeAnne Cuellar (12:47):

Right? So it's, it's like, it's like, thank you and no thank you.

Christopher Mitchell (12:53):

Yeah, no, I, I'm curious, Sean, do you have any more of a reaction to the, this, this quandary about the

Sean Gonsalves (12:59):

Tax? No. Kinda kind of taking it all in. It kind of reminds me of, you know, don't, don't like people that get unemployment benefits get tax for that. I

Christopher Mitchell (13:06):

Think they can, I suspect it has to do with like what their income is over the course of the year. Like, if they have very little income, I'm guessing that it, it doesn't, but if they're, you know, if I got laid off and then I got a compensation for that, then I suspect I would've earned enough that I would be paying taxes back on it. I guess, you know, would one of the, we should probably talk to someone knows who they're talking about, but like, this is the podcast. So I think we're statutorily prohibited from doing that. Well,

DeAnne Cuellar (13:30):

I also wondering if the taxing the tax decision was made because they, they saw how like some municipalities were taking the federal resources and putting them into savings and maybe that's not what they planned on.

Christopher Mitchell (13:43):

One of the reasons I'm so hot and bothered, and I really think that the federal government should get rid of this tax is because it comes from 2017. And for people who are interested in from Keller and Heckman's beyond Telecom blog, I forget what it's, I mean, if you're, people don't know who's Keller and Heckman are, you're doing something wrong and you're listening to this show cuz they're, their their news digests multiple times a week is, is just killer. But Casey Lide, wrote about it, and it was 2017 Republicans passed this tax bill. I remember watching it closely and I was horrified because it was it was one of these things that both parties have been doing lately, which is rather than vetting legislation, what if we just like don't do anything for months and then we all get together and like, and like a few people that are handpicked by leadership talk to lobbyists and a few stakeholders, and then they come up with a bill and nobody gets to read it and we vote on it.


Wouldn't that be a good idea? <laugh>? And like, and they started taxing co-ops. they, and there's all kinds of things that they did that were screwed up. And one of the things that they did was a Republicans made it that broadband was taxable. Broadband grants were taxable. So this is something that congress changed about i r s regulations. and so it wasn't really related to broadband at that time and it was before these broadband bills, but now we're in a situation where, because, you know, Congress doesn't take its job seriously. we're now 20 cents on the dollar has to go back to the treasury for the broadband grants to, to for-profit companies and again, to some co-op structures and their partnerships. So I don't know, like it, I just, I feel like it's worth talking about. I thought it'd be an interesting kind of weird little conversation.


There's another thing that I'm curious about cuz all, all four of us think about our work with a racial equity lens and how to improve it. and I don't know how many people have seen my back and forth with Larry Irving the other night on Twitter. Larry Irving I think is a, is a constantly a strong reminder that when I talk about how we should be giving money to the states and that we need local, more local power, he's like, Hey, that's pretty cool. That's how we got segregation. That's how we got Jim Crow. Like it's, you know, there's a whole lot of problems with the idea of like states' rights and I, you know, it, I never like being criticized or disagreed with. So like it's always hard, but he is right. I mean like, he makes a good point and, and I think it's something that that we need to reflect on.


but I'm curious about that because I also feel like there is no progress at the federal level on broadband that I can tell in part cuz of the FCC history. And I say that I don't wanna upset people at N C I A who are doing a good job and have resources finally. But like historically, the federal government hasn't been doing a whole lot to help out the, the poor low income communities that are predominantly black families you know Latino families tribal families. So I feel like we should go to the local level and I don't know if any of you have a reaction to that. I

Ry Marcattilio-McCracken (16:27):

Mean, it's just a reminder. And with, you know, with the, with the tax on the broadband grants, it's a, it's a especially a good reminder that it kind of, it kind of mixes two different things that are going together here. Right? And I'm not a a a tax expert here, but you're taking what is essentially a, a policy decision. You're saying here's how much it will cost to solve the broadband problem, and we're willing to expend tens of billions of public dollars towards that end. and then you're turning around and you're mixing it with this idea that we should tax these projects because they create a value that needs to be returned to the public good in some way. But we've already made the decision at the top that we get all these benefits from building these broadband networks and they, you know, the return on investment there is not only monetarily, you know, more than one to one, but we get all sorts of other benefits from improving our internet infrastructure. And so you're kind of mixing apples and oranges here.

Christopher Mitchell (17:16):

Anyone else wanna tell me about fruit

Sean Gonsalves (17:18):

<laugh>? No, I'm just taking it all in.

Christopher Mitchell (17:20):

Worst podcast guest ever.

Sean Gonsalves (17:22):

<laugh>. I know, right? Yeah, I'm taking it. I'm I'm supposed to have some hot tape immediately. but just thinking about state's rights and, and kind of the, the sorted history associated with that, with that term and, and you know, some of the policies that have been put forward under that banner. You know, this is one of these things where I'm kind of getting lost in the nuances of, of, of, of bans. Well, Sean,

Christopher Mitchell (17:40):

Lemme, lemme, lemme put it to you directly then, right? Like, a lot of us feel like the states have for my lifetime have been like more or less irrelevant, right? Everyone goes to the federal level to make policy. The state's kind of enacted a bit, it's kind of left over. our work, you know, has been to say the federal government screwed this up so many times. We need to trust the states and we need the states to like learn how to walk. We need the states to like get active. and that's betting on the idea that like, we won't have states that are gonna go out there and like screw over half their population or a quarter of their population or something. But I think we're gonna see that. The question is, is like, is that better than seeing the federal government do nothing? When we see some states rocketing forward in some states going backwards, you

Sean Gonsalves (18:20):

Know, there were things, there were things that they could, that they could have done at the federal level, like get rid of the, you know, the state pre-entry and stuff, which, which would've prevented a lot of that kind of stuff. But I, you know, I think you have to kind of look at it as what, you know, as as what were the actual alternatives? It was like, are we gonna do another art off or is the money gonna get closer, at least to the localities that really understand where the connectivity challenges are. So in that sense, handing it over to the states by and large, I think is probably better than what we saw with Art Ardo and some of the other reverse auctions that the federal government has done. But it isn't ideal in the sense that it would've been better actually if they had just sort of, you know, established these grant programs that, that municipalities could directly apply for to the federal government. That would've been better.

DeAnne Cuellar (19:03):

I agree. Yeah, because the, when we're talking about black and brown communities and like very poor communities that really could benefit from this once in a lifetime opportunity for community infrastructure, there are just too many states that are not going to center equity. They're not going to, and I'm not gonna name a state, but I could name a very big state that's already proving that

Christopher Mitchell (19:28):

It's all around you. I mean this, it's around me. That's the question, right? When, when like you have an indifferent federal, when you have an indifferent state, more or less, or even an, even a, a negatively inclined state perhaps for certain populations, and you have a federal government that's ineffective, like, which is more likely to trickle resources out to the populations that need it. Well

DeAnne Cuellar (19:44):

Also there's this other, you know, nuance or this other fruit, right? So <laugh>, if we're talking about apples and oranges is the, the digital discrimination work that has been kicked off right? Fast forward. I think that they were like, well, we'll, we'll we'll codify discrimination, that's great, but even if we codify discrimination tomorrow, and that gets down to the state level one, it's like you have to prove that discrimination exists. And like, I'm sure Ry has like insight into the academia of this, but that's still kicking the can so far down the road that really the impact is gonna be very little. And I'm a pro, I'm someone that's four dig, you know, codifying digital discrimination. I'm just not sure like how much of an impact that's gonna have on local communities down the road.

Christopher Mitchell (20:27):

Yeah. Well these are the sorts of things we're wrestling with. If anyone came here for answers we'll just give you some more questions maybe and we're gonna cut it off there cuz I have to go talk to one of the lovely people that is making it possible for us to have tribal broadband boot camps and talk with them about our plans. And so I don't want to be late for that. thank you each for coming on and and chatting on an impromptu basis.

Ry Marcattilio-McCracken (20:54):

We have transcripts for this and other podcasts available at muni networks.org/broadbandbits. Email us@podcastmuninetworks.org with your ideas for the show. Follow Chris on Twitter, his handles at Community Nets. Follow muni networks.org stories on Twitter, the handles at muni networks. Subscribe to this another podcasts from I L S R, including Building Local Power Local Energy Rules, and the Composting for Community Podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives if you subscribe to our monthly newsletter@ilsr.org. While you're there, please take a moment to donate your support in any amount. Keeps us going. Thank you to Arne Hughes B for the song, warm Duck Shuffle, licensed through Creative Commons. This was the Community Broadband Bits podcast. Thanks for listening.