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.

With AT&T continuing to push H.3508, a bill to further erode local authority over broadband and ensure AT&T faces no competition in areas of the state, a number of corporations have signed a letter asking the South Carolina Legislature not to chase jobs out of the state. Though the bill has not yet had a hearing this year, we have seen hearings scheduled and know that the bill is being actively considered behind the scenes. Dear Senator McConnell and Members of the Senate Judiciary Committee: We, the private-sector companies and trade associations listed below, urge you to oppose H.3508 because these bills, on top of South Carolina’s existing barrier to public communications initiatives, codified in SC Code §§ 58-9-2600 et seq., will harm both the public and private sectors, stifle economic growth, prevent the creation or retention of thousands of jobs, hamper work force development and diminish the quality of life in South Carolina. In particular, these bills will hurt the private sector in several ways: by curtailing public-private partnerships, stifling private companies that sell equipment and services to public broadband providers, and impairing educational and occupational opportunities that contribute to a skilled workforce from which businesses across the state will benefit. The United States continues to suffer through difficult economic times. The private sector alone cannot lift the United States out of this crisis. As a result, federal and state efforts are taking place across the Nation to deploy both private and public broadband infrastructure to stimulate and support economic development and jobs, especially in economically distressed areas. For example, in South Carolina, Orangeburg and Oconee Countieshave received broadband stimulus awards to bring much-needed broadband services and capabilities to communities that the private sector has chosen not to serve adequately.

As Georgia's Senate considers revoking local authority over whether or not to build a community network, the National Association of Telecommunications Officers and Advisers has written to the Committee, opposing SB 313 [pdf]: Dear Senator Rogers: The National Association of Telecommunications Officers and Advisors (NATOA) joins the growing chorus of business, consumer, and government groups and associations, such as the Georgia Municipal Association, in opposing the Broadband Investment Equity Act (S. 313). This bill will harm the state’s economic growth and do little if anything to promote competition or to bring advanced communications services to the citizens of Georgia. NATOA has long supported community broadband networks because they offer the promise of increased economic development and jobs, enhanced market competition, and accelerated and affordable Internet access for all. Communities across America are ready and eager to bring the economic and social benefits of broadband access to their citizens. But private providers alone will not bring these advanced services to all parts of our country, especially to those communities that do not fit into the companies’ business plans. As a result, hundreds of cities have launched community broadband initiatives, either with private partners or on their own, and many more are now in the planning stages. Communities should be encouraged to step forward to do their part to ensure the rapid deployment of broadband to all Americans, and they should have the freedom to choose what makes the most sense for their citizens. S. 313 will do nothing to encourage robust competition in the communications marketplace in Georgia. Rather, S. 313 will tie the hands of local governments and hinder the deployment of advanced services to un- and underserved parts of the state, denying those communities the economic and social benefits that broadband services can provide. Rather than encouraging economic growth, S.

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.

With AT&T again pushing a bill in South Carolina to revoke local authority to build community broadband networks, the National Association of Telecommunications Officers and Advisers has sent a letter to the Chair of the Senate Judiciary Committee [pdf] opposing H3508. The bill will be considered by that committee on Thursday, January 26. South Carolina already restricts local authority to build networks but this bill would essentially close off any possibility of doing so. Dear Senator Rankin: The National Association of Telecommunications Officers and Advisors (NATOA) joins the growing chorus of business, consumer, and government groups and associations in opposing H. 3508 (Government Owned Communications Service Providers). This bill will harm your state’s economic growth and do little if anything to promote competition or to bring advanced communications services to the citizens of South Carolina. Hamstringing local government efforts to provide fiber networks will simply result in the further flow of millions of investment dollars to neighboring states such as Tennessee. NATOA has long supported community broadband networks because they offer the promise of increased economic development and jobs, enhanced market competition, improved delivery of e-government services, and accelerated and affordable Internet access for all. Communities across America are ready and eager to bring the economic and social benefits of broadband access to their citizens. But private providers alone will not bring these advanced services to all parts of our country, especially to those communities that do not fit into the companies’ business plans. As a result, hundreds of cities have launched community broadband initiatives, either with private partners or on their own, and many more are now in the planning stages. Communities should be encouraged to step forward to do their part to ensure the rapid deployment of broadband to all Americans, and they should have the freedom to choose what makes the most sense for their citizens. H.

The Georgia Senate is considering SB 313, a bill that would overrule local decision-making authority in matters of broadband. Even as connections to the Internet have become essential for communities, the Georgia Legislature is poised to make it harder for communities to get the networks they need. We saw very similar language in North Carolina pass last year after many years of lobbying by Time Warner Cable and CenturyLink. These massive companies use their lobbying clout to stop any form of competition they could face, and they are presently threatened by the examples of many communities that have built incredible next-generation networks. For instance, see the thousands of new jobs in Chattanooga that are credited to its community fiber network. Community networks spur competition -- it is why Chattanooga got Comcast's xfinity service before Atlanta, despite Atlanta having long been prioritized over Chattanooga previously. It is why Cox Cable, which is headquartered in Atlanta, launched its upgrades in Lafayette, Louisiana -- they felt the competition pressure from a community fiber network. Bill supporters are already claiming that this is just an attempt to level the playing field:

"The private sector is handling this exceptionally well," Rogers said. "What they don't need is for a governmental entity to come in and compete with them where these types of services already exist.

AT&T, one of the few dominant Internet access providers in South Carolina, is again pushing a bill in the state legislature that will gut the self-determiniation of local communities in the digital age. The market power of AT&T and Time Warner Cable has already driven most private sector competition from the market -- now they want to use their lobbying clout to ensure that the communities themselves cannot build the networks they need to attract economic development and maintain a high quality of life. Last year, we were deeply concerned about House Bill 3508 but it was orphaned in committee after AT&T lost its credibilty by encouraging the state adopt a broadband definition lower than even the much-maligned 200kbps previously used by the FCC. The bill is back this year and would have been taken up by the Senate Judiciary Committee today but that meeting now appears to be cancelled. Nonetheless, AT&T will undoubtedly find a way to bring it back this year and we shouldn't count on AT&T's stupidity to save us again from its massive lobbying clout. Phil Dampier has issued a call to action at Stop the Cap!, calling AT&T's bill the Profit Protection Act. He has a list of the Senate Judiciary Committee members so people in South Carolina can contact them. It is crucial that Senators and Representatives hear from constituents on these matters. Issues of telecommunications policy rarely generate phone calls, so even a few calls can make a different and will serve notice to elected officials that they are being monitored on this issue. There is no need for additional barriers in South Carolina for rural communities to build the networks they need. As we show on our community broadband preemption map, South Carolina has already enacted additional regulatory barriers that public sector entities must surpass in order to build this essential infrastructure in their community. South Carolina's communities have very poor access to the Internet compared to regional and international peers.

Last year we noted that a bill to expand local authority to invest in publicly owned broadband networks would return in 2012. HB 1711 is in Committee and causing a bit of a stir. "A bit of a stir" is good -- such a reaction means it has a chance at passing and giving Washington's residents a greater opportunity to have fast, affordable, and reliable access to the Internet. Washington's law presently allows Public Utility Districts to build fiber-optic networks but they cannot offer retail services. They are limited to providing wholesale services only -- working with independent service providers to bring telecom services to the public. Unfortunately, this approach can be financially debilitating, particularly in rural areas. Building next generation networks in very low density areas is hard enough without being forced to split the revenues with third parties. Last year, House Bill 2601 created a study to examine telecommunications reform, including the possibilty of municipality and public utility district provisioning. The University of Washington School of Law examined the issues and released a report [pdf] that recognizes the important role public sector investments can play:

Broadband infrastructure is this century’s interstate highway system: a public investment in an infrastructure that will rapidly connect Washington’s citizens statewide, nationally, and internationally; fuelling growth, competition, and innovation. Like highway access, the path to universal broadband access varies with the needs of the local community. Our primary goal is to expand broadband access. We believe allowing municipalities and PUDs to provide broadband services addresses the most significant hurdles to broadband expansion: the high cost of infrastructure. In conjunction with a state USF, PUDs and municipalities are well placed to address the needs of their consumers. A secondary goal is to promote a competitive marketplace.