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Breaking the Broadband Monopoly

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The Institute for Local Self-Reliance is pleased to release this comprehensive report on the practices and philosophy of publicly owned networks. Breaking the Broadband Monopoly explains how public ownership of networks differs from private, evaluates existing publicly owned networks, details the obstacles to public ownership, offers lesson learned, and wrestles with the appeal and difficulty of the open access approach.

Download Breaking the Broadband Monopoly [pdf]

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Lessig Presentation on America's Broadband Policy

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Paul Venezia is one of the few who noted a recent Lessig presentation that discusses broadband policy. Larry Lessig's presentation offers an excellent short history of broadband and telecom history - from the beginning of AT&T to the National Broadband Plan. The video runs an hour, but should be essential viewing for anyone who wants to understand why the U.S. continues to fall behind international peers in broadband. Lessig's answer is that we have lost our independence. Large corporate interests dominate the federal government as well as the state legislatures, resulting in a government that too often bends to their will. Lessig's presentation covers the essential role of government in forcing AT&T to open the phone network (paving the way for fax machines, Sports Illustrated football phones, and eventually dial-up modems). Key takeaway: the owner of a network makes the rules and determines who is allowed to use it and under what circumstances. Among other issues, he offers the most accessible explanation of what happened with the FCC/Comcast court ruling that has (temporarily - we hope) rendered the FCC unable to stop carriers from telling users what sites they can visit or adjusting the speeds to some sites based on the carriers' business model. He notes his disappointment with the National Broadband Plan - where the Obama "reality-based" Administration chose to ignore reality and take the easy road of not challenging powerful incumbent telecom interests. Toward the end, he raises the chilling prospect of the federal government instituting a form of the PATRIOT ACT on the Internet in the future. Watching this reminded me that we believe government has an essential role in building and owning infrastructure but we strongly support Constitutional checks against the government getting too involved in policing content. This is an excellent presentation - particularly for those who are not as familiar with the history of the AT&T, the FCC, Carterphone, and the competition we briefly had among service providers in the days of dial-up.

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OneCommunity: An Important Model for America’s Broadband Revival

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The Baller Herbst Law Group filed an extensive report with the FCC detailing important information about OneCommunity - a fascinating nonprofit organization connecting many communities with fiber and wireless connectivity in Ohio. OneCommunity works with a variety of public and private sector partners to expand access to last mile and middle mile connectivity. Because they fall within our broad definition of putting public needs first, I wanted to highlight this report.

OneCommunity’s roots go back to 2001. At the time, Case Western Reserve University (Case) had a robust fiber-optic communications system and considerable networking expertise, but the rest of Cleveland lacked advanced communications capability. Case’s president, Edward Hundert, and its chief information officer, Lev Gonick, believed that broadband connections to the Internet promised to be a major factor in the local economy’s long-term health; that broadband could transform Northern Ohio from a manufacturing-based to an information-based economy; and that Case could play a profoundly beneficial role in enhancing Cleveland’s broadband future. As a result, Hundert and Gonick reached out to several of Cleveland’s leading government, educational, cultural, philanthropic, and other non-profit organizations and persuaded them to join Case in founding a new entity called “OneCleveland” that would provide gigabit connectivity to participating organizations and pave the way for widespread and free wireless service.

OneCleveland expanded far outside the City and changed its name to OneCommunity. It has already tallied an impressive list of achievements:

In the Northern Ohio region, OneCommunity facilitated public and private arrangements for the deployment of a gigabit-capacity fiber-optic community network, soon spanning 22 counties and now serving over 200 subscriber entities and 1,500 schools, hospitals, clinics, government, and public safety locations. Over one million citizens are affected by the organizations that OneCommunity serves through the network.

The network is open and carrier neutral, but so much more. Read the paper -- and appendixes -- for more information. PS : I should note that I disagree with the conclusion:

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Highlights of Reactions to National Broadband Plan

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Just a few short snippets, no real commentary from me today... Tracy Rosenberg wrote Single Payer Broadband at the Huffington Post, noting:
Cities and states all over the country have been looking at the possibility of public networks. The FCC admits this may be a last resort for difficult-to-cover areas the market has no profitable solution for. Why a last resort? Why have 18 states passed laws banning municipalities from offering any wholesale or retail broadband services? Is it because they might do it better? More competition should never be considered a last resort.
An article in the Economist pulls no punches:
A YEAR ago, Congress asked for a plan that would provide affordable broadband service to all America’s citizens. On March 16th, the Federal Communications Commission responded with a non sequitur: a national wireless plan which is good in its way, but which largely fails to tackle the problem it was asked to solve.
Great op-ed in the NY Times - "Ending the Internet’s Trench Warfare" by Yochai Benkler, someone who knows quite a bit about networks.
In Japan and many European countries, regulators fought hard to bring existing providers around to open access. They won, and today these countries have more competition, lower prices and higher speeds. Such political will is glaringly absent in the commission’s plan. The 1996 Telecommunications Act did, in fact, point the United States in the direction of open access. But after eight years of intense litigation and lobbying from telephone companies, the Federal Communications Commission gave in, deciding that competition between one telephone incumbent and one cable incumbent was enough — in essence, it rejected open access as a way to create competition.
Others have also written quite well on this, but time is short this week.
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Free UTOPIA Podcast - Discussion with Provider Brigham.Net

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Jesse Harris continues his monthly podcast show with an interview of Ken Sutton from Brigham.Net - a service provider from Brigham City that recently started offering services on the UTOPIA network. Brigham.Net has developed a very loyal customer base -- an impressive feat as it was dependent on leasing loops from Qwest, its biggest competitor. In that part of Utah, Qwest still has to share its lines with third parties but Qwest still goes out of its way to make life difficult for those third parties. Qwest poached customers from Brigham.Net - a common practice if one talks to any ISP that has leased lines from Qwest to resell. By getting on the open access network, Brigham.Net has expanded its customer base - it is on track to double the customer base in Brigham City when the UTOPIA network is fully available to residents. The discussion is interesting and shows why unbundling requirements are inferior to a publicly owned network operating on an open access basis.
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Stimulus Denies Excellent Projects in Idaho

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Though I did not spend a lot of time following stimulus proposals, two excellent proposals did catch my eye from Idaho and I hoped that at least one of them would be funded. Alas, neither was funded by NTIA or RUS. These are exactly the networks we need throughout the country, and Idaho is exactly the state that could benefit greatly from federal assistance. I hope these projects have better luck in the second round or in securing future funding from RUS outside the stimulus project. (This is not to suggest I disapprove of the Coeur d'Alene Reservation Fiber-to-the-Home (FTTH) Project that received funding - I am not as familiar with it and therefore have no comment on it.) The town of Ammon, some 13,000 people near Idaho Falls in eastern Idaho, developed a proposal for an a type of next-generation open access network in that it would offer greater flexibility to subscribers and service providers than many current open access networks. The other project, to serve the Northern Panhandle area, was designed with Ernie Bray, who previously consulted on the Powellink network in Wyoming. The Boise Weekly briefly discussed these projects a few weeks ago, noting their open access approach that would serve residents, businesses, and key institutional anchors with fiber-optics:
"Every entity we need to work with is already a stakeholder; we're ready to go," he said. "And we will use revenues for expansion and build out. We're trying to expand the concept of a service provider and services beyond just the triple play, voice-video-data," he said. "Telemedicine is a service, hospitals are service providers. We want to take fiber to every home and every business, then connect them to libraries, schools and job services so they can take advantage of programs to help lift them up."
Local jobs are at stake and incumbent providers are doing little to help:
Quest [Aircraft], who builds the Kodiak airplane, they've gotta exchange large engineering files in real time; 250 jobs are at stake.
Verizon is busy trying to offload all of its rural territories on Frontier (a company famous for slow and poor service) so it isn't about to upgrade facilities in Idaho.
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Thoughts on the Google Fiber Initiative

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Readers undoubtedly know that Google has proposed a limited fiber-to-the-home open access network rollout that will offer gigabit speeds. Communities are applying to be considered -- all we know at this point is that Google envisions ultimately serving some 50,000 - 500,000 subscribers. Parts of this announcement are very exciting for those of us working to create better networks that serve community interests. I think the long term impact of it being open access may well dwarf the impact of having gigabit speeds available to some at "competitive" rates (though one wonders how rates can be competitive when the service is unlike any other?). The idea of open access -- where the network is an infrastructure that supports independent service providers, creating a true market for broadband services -- is a game changer. Unfortunately, the number of people served by open access networks in the U.S. has been too small to prove the model (as I discussed here). If Google connects half a million people with an open access network, it could change the landscape of broadband networks, pushing us toward a non monopolistic world... but probably not in the first year or two. These changes take time. Beyond that, the gigabit test bed will be very interesting. Lafayette's LUS Fiber has been experimenting with the 100Mbps network and now Google will be upping the ante. Given the number of people who are excited and the number of communities announcing their application, it is clear that the telecom carriers are not meeting community needs. Though I think the experiment interesting, I hope it is limited. My fear, which I do believe is premature but has poked its head up nonetheless, is that Google may launch another round of Earthlink Wi-Fi free-lunch hopes from local governments. Those who once pinned their hopes on an outside company building the network they wanted have now recognized the folly. Even though Heinlein's TANSTAAFL warning came half a century ago, few seem to have internalized the lesson. There Ain't No Such Thing As A Free Lunch. 10 years ago, Google was a different company. In 10 years, we have no idea what Google's interest will be but we can be sure that communities will need connectivity that puts local citizens and businesses before profits. Will Google's network serve community interests then? Maybe.
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Open Access: The Third Way

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Andrew Cohill of Design Nine has released a report about Open Access networks: "Broadband for America: The Third Way." I wanted to highlight this report because open access is an important idea that should be promoted and discussed. I believe open access is the most promising way to create the world most people want to live in - fast and affordable networks offering many choices in services and service providers to all Americans. However, though I hold Andrew in high regard, I have some disagreements with the paper that are noted below. This paper comes at an important time. For more than a decade, we have ended each year with less broadband competition than we started with. Politicians and regulators have abandoned policies aimed at promoting competition despite their continued lip service in favor of it. Incumbents have more and more power over both subscribers and entire communities. If we want competition in broadband and cable (and I certainly do!), open access is the only feasible approach. The cost of building the networks is fantastically high whereas the cost of offering services to an additional user are tiny. The result is a network with strong natural monopoly characteristics. Without a network that shares infrastructure (wires, poles, CPE, etc.), the market will trend toward monopoly or duopoly. Wireless complements wired broadband but cannot provide the high speeds and reliability of fiber-optic networks. Even if some metro areas can support multiple networks, most rural areas can barely support one network. Without open access, significant parts of the country cannot have a choice in service providers. Further, when the infrastructure is publicly owned and encourages competition, difficult problems like network neutrality quickly fade. Network neutrality legislation is needed because of profit-maximizing companies who are emboldened by too little competition. Publicly owned infrastructure requires less federal regulation because its incentives are to be responsive to community needs, not to maximize profits. I recommend reading his paper before reading the issues I raise below.

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Telephony Podcast Interviews Jackson Energy Authority

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Carol Wilson speaks with Jackson's Michael Johnston about JEA's triple-play network in Tennessee. As far as I can tell, this interview took place in September, 2009. Johnston reports that the publicly owned network passes 30,000 residences and about 5,000 businesses. Of those taking cable services locally, 60% subscribe to JEA and half of them are taking multiple services. Jackson started as a purely open access network but has transitioned to offering retail services. At that point, they were starting to use the network to create a smart-grid for the electrical side of the utility.
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