Tag: "taxes"

Posted January 19, 2013 by

Even as the Internet is changing every aspect of our lives and communities, most Americans are intimidated by confusing jargon and misconceptions about Internet policy. We are developing a series of fact sheets that make these issues understandable to everyone.

We presently have fact sheets from the Institute for Local Self-Reliance and other organizations that cover broadband, financing networks, wireless Internet, economic development benefits from community owned networks, and the public savings from community owned networks.

Stay up to date with these fact sheets and other developments in community owned networks, subscribe to our one-email-per-week list. Once a week, we send out an update with new stories and resources.

Exploring Digital Equity

Expanding Internet access to everyone who wants it isn’t an infrastructure problem alone. Achieving equity for everyone in a community is a many-sided endeavor, and requires engaging and activating an array of stakeholders. Created with support from AARP, ILSR’s Exploring Digital Equity Fact Sheet Series unpacks the issues, challenges, and opportunities today.

What is Broadband? [pdf]

Broadband Access Challenges [pdf]

Broadband Affordability Challenges [pdf]

Broadband Availability Challenges [pdf]

Key Digital Skills for Broadband [pdf]

...

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Posted December 20, 2012 by Lisa Gonzalez

This past spring, we introduced you to the small town of Leverett, in rural western Massachusetts. Having been largely ignored by the cable companies and left behind by Verizon's DSL service, the community overwhelmingly approved a town-owned network initiative in a May vote. They decided to finance the FTTH network with a 20-year bond measure.

The debt will be serviced by both the revenues from selling services on the network and a modest increase in property taxes estimated at 6%. Local leaders calculate the increase in property taxes will amount to less than the savings created by lowering existing DSL and telephone services. 

Peter d'Errico, of the Leverett Broadband Committee gave us an update via email:

We issued a Request for Information (RFI) in September. Thirteen respondents gave us a wealth of information about the state of the industry and their readiness to engage with our project. Based on this information, together with our already-completed network design, we are now crafting an Invitation for Bids (IFB) for the network build and one year's maintenance. We expect to issue the IFB early January, with a return date in February, which will allow us to select a contractor shortly thereafter.

As soon as we issue the IFB, we will draft a Request for Proposals (RFP) for network operator / service provider. This will also be based on the information gathered from the RFI and our design.

We have initiated the 'make-ready' process with the local utility and phone company.

A November Gazette.Net article [requires login] on the project described some temporary setbacks due to Hurricane Sandy and an October storm that came through the area. In order to keep the project momentum going, the committee is  gathering the pieces needed now and in the future. Early prep work will make launching the network that much easier. From the article:

Leverett homeowners already received an easement request in...

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Posted December 13, 2012 by Lisa Gonzalez

In August, we reported on the results of a report on UTOPIA by the Office of the State Auditor General of Utah. As you will recall, the results were less than favorable and presented more fodder for those opposed to municipal telecommunications infrastructure investment.

The same old arguments often rest on the financial investment in municipal networks - they are considered failures if they don't break even or make money. Pete Ashdown, founder of ISP XMission in Utah, addressed those arguments in the Salt Lake Tribune:

UTOPIA provides broadband service in 11 Utah cities. Today, communication infrastructure is no less critical than transportation, sanitation and clean water. Government is not a business, but the infrastructure it provides contributes to a robust business environment.

Consider how private businesses rely on government funded infrastructure. Why don’t entrepreneurs clamor to build the next generation of roads? Why don’t airline companies get off the public dole and build their own facilities? Why are sewer facilities so rarely handled by anyone else but the state?

Does effective infrastructure cost? Considerably. Does it make a profit? No.

For decades now, public service entities have contended with the argument that if they are "run it like a business" they will be more efficient, productive and even profitable. While lessons from the private sector may contribute to increased efficiency at times, government is NOT a business. Applying business tenets should be done sparingly and not in the case of critical infrastructure like electricity, roads, and yes, access to the Internet.

Gary D. Brown, who lives in Orem, shared a guest opinion through the Daily Herald and drew a similar parallel between UTOPIA's status and the business world:

When UTOPIA was first proposed, I was all for getting a fiber optic connection to every home and business in the at-that-time 17 cities. In my opinion, the original business model was sound; install fiber to each home/business and offer data,...

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Posted September 29, 2012 by Lisa Gonzalez

A  recent book by David Cay Johnston, The Fine Print, examines specifically how big companies have found ways to take advantage of the tax and regulatory systems to their benefit and to the detriment of consumers. The sad part - we don't even realize it.

Johnston discusses how big companies and their leaders exploit tax rules to re-distribute wealth upwards. Johnston also examines how this exploitation is almost never covered in the media, encouraging big companies to stoop to new lows in ripping off consumers. Telecommunications is one of the industries he covers in the new book.

In the first chapter (read the first chapter via Democracy Now!), Johnston describes how friend and journalist, Bruce Kushnick, came across twenty years' worth of telephone bills in his elderly aunt's possessions. Kushnick tracked the changes in her bills, systematically reviewing and comparing every charge. Kushnick found an array of confusing and cryptic "fees," "charges," and "taxes." The end result:

When he cross-checked his aunt’s telephone bills over the years, he could hardly believe the numbers. His aunt paid $9.51 for her local phone service in 1984. By 2003 her bill had swollen fourfold to $38.90. In the two decades since the breakup of the AT&T monopoly, even after adjusting for inflation, his aunt’s telephone cost $2.30 for each dollar paid in 1984. And that was without any charges for long-distance calls.

Johnston notes the method used by telecoms to increase prices over time:

Bit by bit, the line items grew, and others were added. It was easy to miss the escalating prices because they came...

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Posted June 4, 2012 by Lisa Gonzalez

We brought you news of Leverett, Massachusetts and their decision this spring to pursue a municipal fiber optic network. In April, voters approved a measure to develop the initiative, and this past weekend took the last step toward building the network. The town of 1,851, voted to raise their taxes to pay for a fiber-to-the-home network. The result was a resounding 462 for and 90 against.

The GazetteNET.com covered the story:

"We're expecting everyone in Leverett to have access to this network by 2014," said Peter d'Errico, a member of the town's Select Board and a leading supporter of the municipal fiber-optic system."

"This was clearly a mandate to proceed," said d'Errico. "There was vigorous discussion at every stage of the process and it's a sign that community is ready to take charge of its own services."

The Proposition 2 1/2 debt exclusion override ended in an 83.5% vote to support the project. The result satisfies the 2/3 majority requirement for a planned tax increase, as required by state law.

A little more than 39% of the town's eligible voters cast ballots. According to the assistant town clerk, D'Ann Kelty who monitors voter activity, the turn out was large for a single issue election.

The funding strategy is a 20-year bond measure and is expected to increase property taxes by 6%. Supporters note that a 6% hike in property taxes is less than what households will save in telephone and internet bills. They will be paying less for something far better than they now receive. According to residents, telephone service has been spotty for years, due to old copper wires that have not been replaced by providers. In a recent GazetteNET article before the vote:

"Beginning in 2009 or so, high speed providers decided that they weren't going to upgrade their landline cables in rural areas," said Richard Nathhorst, a member of the Broadband Committee and one of the drafters of the proposal. Though the state issued a court order last year to Verizon Telecommunications, the owner of the current lines, to improve service to rural areas, dissatisfaction remained high in...

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Posted June 1, 2012 by Christopher Mitchell

Jesse Harris has posted an interesting update on the present UTOPIA situation, where a number of cities are heaping perhaps too much blame on UTOPIA for rising local taxes.

A lot of cities have been talking property tax hikes lately, and the most certain thing about all of the proposals is that elected officials are going to look for someone or something to blame. In UTOPIA member cities, blaming the fiber network has become the easy go-to solution, especially since so many mayors and city council members weren’t involved in the original decision. The problem, however, is that this blame is completely paving over a deeper problem of city tax structure that’s boring, doesn’t fit the anti-UTOPIA narrative, and is a much larger problem for city budgets. Let’s take the examples of West Valley City, Orem, and Taylorsville, the latter of which is not a UTOPIA member city. In all three cases, they’ve called for large (as a percentage) property tax increases to make up for lagging sales tax revenues. So if UTOPIA is the cause of property tax increases, why would a non-member city need to more-or-less do the same thing?

The discussion in the comments offer some additional news about UTOPIA's efforts to expand its subscriber-base by giving residents the option of "leasing" a last mile connection if they cannot afford to pay for it outright in areas where UTOPIA is presently not able to extend its network all the way to the home.

Communities seeking alternative ways of financing networks that simply issuing lots of debt upfront should examine the different approaches UTOPIA has pioneered.

Posted May 15, 2012 by Lisa Gonzalez

Recently, we let you know about the situation in Siloam Springs, Arkansas, population 15,039. The town is now investigating the possibility of building their own fiber network. They have had several community meetings and a "vote of the people" is set for May 22, 2012.

Pamela Hill is investigating the twists and turrns in a series of articles about the vote. In one of her articles, Hill looked into another Arkansas community, Paragould, home of the annual "Loose Caboose" Festival.  This community, located in the northeast corner of the state, has successfully operated their own cable network since 1991. Unlike Siloam Springs, the people of Paragould weren't focused first on generating new revenue for the local government, they just wanted to be able to watch tv for a reasonable price.

Back in 1986, Cablevision was the only provider in Paragould. Hill spoke with Rhonda Davis, CFO of Paragould Light, Water & Cable:

"The public wasn’t happy with Cablevision’s service or rates,” Davis said. “We took it to a public vote and did it.”

Prior to Paragould's decision to build their own network, the City had a nonexclusive franchise agreement with Cablevision. The town was dissatisfied by the service they received and, in 1986, Paragould voters approved an ordinance authorizing the Paragould Light and Water to construct and operate a municipal cable system. Three years later, there was a referendum that authorized the city to issue a little over $3 million in municipal bonds to finance the system.

That same month, Cablevision filed suit alleging antitrust violations, breach of contract, and infringement of first and fourteenth amendment rights. The district court dismissed the antitrust and constitutional claims and Cablevision appealed unsuccessfully. The case attracted attention from lawyers and business scholars across the country.

By 1998, the City had purchased Cablevision's remaining service and began offering Internet service. The City has continually upgraded their investment, which now consists of fiber lines that run to nodes throughout the city. Coaxial cable delivers signal and data...

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Posted May 2, 2012 by Lisa Gonzalez

Not long ago, we told you about Leverett, Massachusetts, the small town of 1,851, that has been discussing the possibility of building a community network. Residents and businesses currently use a combination of satellite, dial-up, DSL, and wireless, and about 6% of the population has no Internet access at all. People are tired of lost opportunities in a town strategically situated near several colleges. The town just approved the proposal to invest in a municipal network.

Last Saturday, April 28th, the measure to build the network was approved at Leverett's Annual Town Meeting. The needed two-thirds vote came easily, with 306-33 in favor, at the packed meeting at the Leverett Elementary School auditorium. Enthusiasm and expectations are high. From a Fran Ryan article in the Gazettenet.com:

For many, the lack of adequate Internet access has created problems with work, school and even the ability to sell their homes.

"Right now we have hopeless telephone service, useless cellphone service, and no internet service," said resident Raymond Bradley. "This will completely change our lives,"

The current plan is to borrow $3.6 million to create a fiber-optic network that will connect every home and provide triple play services across town. As you may recall from our earlier article, Internet access is only part of the problem - Leverett has had longstanding difficulties with telephone service due to decaying infrastructure. The situation is so bad, the State Department of Communications ordered Verizon to make repairs in over 100 towns in western Massachusetts. With this vote, however, Leverett has decided to take control of its own fate.

Leverett received a $40,000.00 planning grant from the Massachussetts Broadband Institute and benefited from the expertise and efforts of the Wired West group. Leverett's last mile project will connect with MBI's middle mile project.

According to the Leverett Broadband Committee, the investment will pay off rather quickly. This from an April 18th Ben Storrow GazetteNet.com article:

Savings on monthly phone and Internet...

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Posted April 12, 2012 by Lisa Gonzalez

Leverett, Massachusetts, is one step closer to a community owned FTTH network. The town of 2,000 will have weekly public information meetings until the Annual Town Meeting scheduled for April 28, 2012. If the required $3.6 million funding is approved at the meeting, the city will issue a Request For Proposals to build the network.

The 1 gig network is slated to be an aerial build, except where existing utilities are underground, in which instances, fiber cable will also be placed underground. Leverett plans to use a $40,0000 planning grant, obtained from the Massachusetts Broadband Institute, to hire G4S Technology to design the last mile fiber-optic network to connect to MBI's stimulus-funded middle mile. The middle mile project is scheduled to be completed in June, 2013, and Leverett plans to be ready to connect soon after. The goal is to have every home connected with fiber by 2014.

Whereas most communities explicitly choose not to use tax revenue to pay for a community network, Leverett's present plan is for a slight increase in local taxes to assist in the financing. The town will borrow the amount necessary to build the network and pay it back over 20 years using a combination of tax revenue and revenues from the new broadband service. Peter d'Errico, Chair of the MBI Grant Broadband Committee observes that homeowners' net spending figures will decline once the system is in place. From the article:

A town survey concluded a municipal network could offer better Internet and phone service at far cheaper rates than private providers, he said.

"It will be a little more on their tax bill and a lot less on their Internet bill, so overall they will be pay less," d'Errico said.

Leverett Map

According to the Broadband Committee, approximately 37% of households in Leverett use slow, sketchy satellite, 23% use dial-up, 20% are on DSL, 14% use wireless, and 6% of households have no internet access. Some households, although theoretically accessible via satellite, never get a connection because of trees and the picturesque,...

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Posted August 22, 2011 by Christopher Mitchell

Lafayette Doing OK, Doubles Capacity for Promotion

John at Lafayette Pro Fiber recently updated us all on LUS Fiber's financials. According to John, LUS Fiber is doing OK, not great, in its FTTH offering (probably the best deal in the nation for fast, affordable, and reliable connections). In reading deeper, it is clear that the impact of the community network on the public is GREAT, not just ok.

From John's writeup:

LUS estimates that the citizens of the community have saved 5.7 million dollars—in part direct saving from LUS' cheaper phone, video, and internet services and in part as a consequence of Cox lowering its prices and giving out special rates. Those special rates were discussed in the meeting with Huval pointing out that Cox had petitioned for and received permission to treat Lafayette as a "competitive" area. That meant that Cox could offer special deals to Lafayette users and, as we all know, has offered cuts to anyone who tries to leave. Those "deals." as Huval pointed out to Patin don't include the rural areas of the parish where Cox has no competition.

But it doesn't end there. LUS Fiber, due to anti-competitive laws pushed through the state's legislature to handicap public providers, is actually subsidizing the City -- providing more benefits to everyone, even those who do not subscribe to the network.

Again it all goes back to the (un)Fair Competion Act. One of the things in that act a concession that LUS Fiber would be able to borrow from LUS' other utilities just like any other corporation could set up internal borrowing arrangements. This is not a subsidy, it's a loan—with real interest. One of the efforts to raise an issue by Messrs Patin and Theriot centered around "imputed" taxes. Those are extra costs that Cox and ATT got the state to require that LUS include in order to force LUS to raise their price to customers (you!) above the actual cost. (Yes, really. See...

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