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South Carolina Faces AT&T Legislation to Preempt Local Competition

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South Carolina has been quietly debating a bill to further erode the right of communities to decide locally whether they want to build broadband networks. South Carolina already restricts the rights of communities to build these networks but HB 3508 / SB 483 will effectively make any local government ownership of telecommunications facilities impossible. Unsurprisingly, this bill is opposed by the South Carolina Association of Counties and the Municipal Association of South Carolina. But the lead opposition to it has come from Bill Clark, an Administrator from rural Orangeburg County. On the other side is AT&T, the nation's 10th largest company. The bill is blatantly protectionist for AT&T interests, throwing South Carolina's communities under the bus. But as usual, these decisions about a "level playing field" are made by legislators solely "educated" by big telco lobbyists and who are dependent on companies like AT&T for campaign funds. Even if AT&T's campaign cash were not involved, their lobbyists talk to these legislators every day whereas local communities and advocates for broadband subscribers simply cannot match that influence. We see the same unlevel playing field, tilted toward massive companies like AT&T, in legislatures as we do locally when communities compete against big incumbents with their own networks. Despite having almost all the advantages, they use their tremendous power and create even more by pushing laws to effectively strip communities of the sole tool they possess to ensure the digital economy does not pass them by. South Carolina's access to broadband is quite poor -- 8th worst in the nation in access to the the kinds of connections that allow one to take advantage of the full Internet according to a recent FCC report [pdf].
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With New Hope, North Carolina Broadband Struggle Continues

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On Wednesday morning, March 22, the House Finance Committee will again consider H 129, a bill from Time Warner Cable to make it all but impossible for communities to build their own broadband networks. But now, as noted by Craig Settles, the momentum is shifting. Last week, advocates had a big victory when Representatives Faison and Warren successfully amended the bill (each with his own amendment) to make it less deleterious to communities. Unlike the sham voice vote in the Public Utility Committee, Chairman Setzer of the Finance Committee had a recorded vote, allowing citizens to hold their representatives accountable. After these amendments passed, the TWC lobbyist signaled for an aide. Shortly thereafter, the committee decided to table the matter until this week -- when TWC will undoubtedly try to remove or nullify those amendments. In the meantime, AT&T has announced bandwidth caps, yet another reason the state is foolish to pin its broadband future on cable and DSL companies. Compare AT&T's movement to less-broadband with Wilson Greenlight's recent dramatic price decreases in its ridiculously fast broadband network, causing at least one couple to move there! Greenlight is owned and operated by the public power company owned by the city.
Greenlight has signed up its first residential customers with the highest Internet speed available in Wilson. Vince and Linda Worthington, former Johnston County residents, moved to Wilson after finding out that they could have access to 40 Megabits per second Internet speeds at a lower cost than what they were previously paying. "We always wanted the 100Mbps service," she said.
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Wisconsin Returns Stimulus Funds to NTIA, Award Was Going to AT&T Anyway

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The story about Wisconsin becoming the first state to return broadband stimulus funds has circulated quite quickly over recent days. The state, which is one of several to have recently swung far more conservative than it traditionally is, has returned other stimulus funds unrelated to broadband as well. In this case, they were apparently surprised at the previously well-publicized terms of the award for which they applied:

State officials are returning $23 million to the federal government, saying there were too many strings attached to stimulus money that was supposed to be for expanding high-speed Internet service in schools, libraries and government agencies.

We previously noted efforts by a few legislators to meddle in a different project to preserve AT&T's monopoly on providing over-priced services to schools and community institutions in part of the state. This is different, but related as Wisconsin has made it very difficult for the network used by the University of Wisconsin to be owned by the University, a gift to AT&T that just keeps on giving. Because the stimulus funds would have been given to AT&T to expand the network, the University would have to continue using that network for the 22 year period required under the conditions of the award. But the contract with AT&T is only for 5 years -- so Wisconsin complained about "strings" attached to the award. Stop the Cap! has published an excellent research piece covering various facets of this story.

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Digging into H129: Another Bill in NC to Limit Local Authority and Broadband Competition

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As we predicted, Time Warner Cable is pushing a new bill in North Carolina to limit competition and local authority to build broadband networks (Save NC Broadband is alive again). H129 purports to be An Act to Protect Jobs and Investment By Regulating Local Government Competition with Private Business - [download a PDF of the bill as introduced]. This bill is another example of state legislators refusing to allow communities to make their own decisions -- imposing a one-size-fits-all policy on communities ranging from the metro area of Charlotte to small communities on the coast and in the mountains. Many of the provisions in this bill apply tough constraints on the public sector that are not applied to incumbent providers, but this analysis focuses only on a few. Let's start with the title:
An Act to Protect Jobs and Investment by Regulating Local Government Competition with Private Business
There is no support anywhere in this bill to explain what the impact of community networks is on jobs. Nothing whatsoever. There is a claim that "the communications industry is an industry of economic growth and job creation," but ignores the modern reality that that the communications industry goes far beyond the private sector. In fact, the recent history of massive telecommunications providers is one of consolidation and layoffs. It is the small community owned networks that create jobs; larger firms are more likely to offshore or simply cut jobs. Certainly all businesses depend on communications to succeed. Unfortunately, they are often limited to very few choices because the of the problem of natural monopoly.
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AT&T Pushes to Prevent Potential Broadband Competition in South Carolina

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In South Carolina (the state TWC Forgot), AT&T is pushing harsher restrictions on any publicly owned broadband system in an attempt to derail one or more broadband stimulus projects. South Carolina already greatly restricts community broadband networks, likely one of the reasons no incumbent there bothers to upgrade in a similar time frame as the rest of the country. This should be seen a significant overreach -- AT&T is trying to shut down County efforts to improve middle mile access -- whereas most preemption tends to heavily restrict community last-mile networks. This is a whole new world of anti-competitive policy to favor AT&T (not dissimilar from what AT&T wants to do in Wisconsin and Fairpoint did in Maine).
The bills would force Oconee County to follow guidelines as a broadband service provider that would likely cripple the county’s current three-year project to construct 245 miles of broadband cable, county administrator Scott Moulder said. ... Oconee County’s goal is to be a so-called “middle mile” provider, Moulder said, essentially providing a network that would allow private broadband providers to extend their service into areas they aren’t serving. In most cases, those are areas where the private providers have found it is not financially feasible to install their own infrastructure. AT&T, Moulder said, has been asked to be a partner in the project as a retailer, but the company’s current actions are a rebuff.
The Oconee project is meant to attract additional independent service providers to invest in projects, not the County itself. But that hardly matters to AT&T, which wants to preserve the present lack of competition in order to maximize their gains at the public expense. The Bill, S 483 is viewable here and contains the same old tired arguments claiming the public sector has all the advantages.
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Another Example of Regulatory Capture

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As you observe (or hopefully, participate in), the debates around network neutrality or universal service fund reform, remember that many of the loudest voices in support of industry positions are likely to be astroturf front groups.  Between extremely well-financed astroturf organizations and industry-captured regulatory agencies, creating good policy that benefits the public is hard work.  It helps to study how industry has gamed the FCC in the past -- as documented by David Rosen and Bruce Kushnick in a recent Alternet article.

At the risk of being sarcastic, we can thank the FCC for working with the industry to make our phone bills to easy to read - an example is available here.

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Defending Public Access on the Television Channels

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The trend of more people subscribing to broadband as well as cable incumbents (also AT&T with U-Verse) wage war on local public access television stations, some have been questioning whether we even need PEG channels on the television anymore. We do. If anything, the increase in capacity of networks should translate into greater opportunities for local shows to find a local audience. Rob McCausland, a champion for community media, recently wrote about the the vast majority of communities that cablecast one or more public meetings - a trend that must be expanded.
Of the 254 largest cities cablecasting their government meetings, 197 of them (78%) do so on channels that they themselves manage. Nonprofit organizations manage those channels in 20 of those cities, while the cable companies manage them in 28.
These channels provide a crucial public service -- allowing the public to oversee their local government. If anything, we should not be considering decreasing access to this content, we should be finding ways to deliver it on-demand on the television. Ultimately, this programming should be available on all devices -- mobile, computer, television, and should be available as streaming and downloadable podcasts.
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The Short Memory of Network Neutrality Sell-Outs

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Today, the FCC is poised to pass a half-ass attempt to preserve the open Internet against the interests of massive gatekeepers like AT&T and Comcast. Tim Karr rightly calls it Obama's "Mission Accomplished" moment. Fortunately, the likely result will be a couple of years in the courts before the rule is thrown out because the FCC has not properly ground its half-ass actions in any authority it has received from Congress. Perhaps when the FCC next has to deal with this, we'll have an FCC Chairperson with a backbone and a stronger interest in what is best for hundreds of millions of Americans than what is best for AT&T and a few other corporations. The FCC and supporters of this let's-keep-the-Internet-partly-open "compromise" will lump all critics as being extremist looneys. (Okay, the Republicans who oppose this might fit that description as they are literally making things up or totally confused about what is being decided). But let's look at the crazy looney rhetoric of FCC Chair Genachowski last year:
Genachowski proposed that the FCC formalize its four principles of network openness. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled:
  • to access the lawful Internet content of their choice.
  • to run applications and use services of their choice, subject to the needs of law enforcement.
  • to connect their choice of legal devices that do not harm the network.
  • to competition among network providers, application and service providers, and content providers.
To these, Genachowski proposed adding two more: The first would prevent Internet access providers from discriminating against particular Internet content or applications, while allowing for reasonable network management.
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FCC on Net Neutrality: More Bush than Obama

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Whenever the discussion of Network Neutrality comes up, we like to remind everyone that when the network is locally owned and accountable to the community, anti-subscriber discrimination is not a problem. That said, we are strong supporters of proper safeguards to ensure massive companies like AT&T cannot abuse their market power and discourage innovation. As the FCC prepares to discuss a half measure to preserve parts of the open Internet, a number of us have been frustrated that while we cannot read the proposal, AT&T appears to be helping write it. Karl Bode's take:
[T]he question shouldn't be whether or not consumers can now view a neutrality proposal after it was hashed out in private meetings (predominately with only the largest, wealthiest carriers), it should be: why weren't consumers absolutely integral in crafting it? AT&T has met with the FCC half a dozen times in the course of three weeks and likely knows precisely what's in this plan -- do you?
We've written to FCC Commissioners to make it clear that they must not compromise on the future of the open Internet. You should too. Photo used under Creative Commons license from AdamWillis.
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The Internet That Might Have Been

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The abstract immediately captured my attention:
Policymakers often tell us that the Internet succeeded because of a lack of government regulation. For instance, FCC Commissioner Robert McDowell recently noted that the “evolution away from government intervention has been the most important ingredient in the Internet’s success.” These views, while widely shared, happen to be inaccurate. In reality, a diverse range of federal regulations, subsidies, and nondiscrimination protections sustained the Internet’s historic growth. But what if, as many inaccurately assume, these regulations had never existed? What would today’s Internet look like in such a world? In this essay, I provide a fictional alternate history - in form of a satirical book review - to illustrate how differently the Internet might have developed in a truly privatized world. Although the essay below (beginning after this abstract) is fictional, it draws heavily upon both the regulatory history of the Internet and the policy arguments at issue in today’s leading regulatory proceedings.
This article covers decisions like Carterfone, the FCC's Computer Inquires, giving control over TCP/IP to the National Science Foundation rather than AT&T, and the intentions of the 1996 Telecommunications Act. It also includes a reminder of the difference between open systems and closed systems:
One important way that open policies achieve this goal is by reducing various types of transaction costs. In open networks, new market entrants can completely avoid negotiating with companies who have “gateway control” over the network. The aspiring entrants do not have to pay—nor seek permission from—the network owners for access. Accordingly, these policies encourage vastly more experimentation and amateur “tinkering.” Closed networks, by contrast, produce relatively less innovation because they rely on centralized network owners to introduce—or at least approve—innovation before it becomes available.
This is a fantastic read (really riveting telecom reading -- how often do you get that?) and a good history lesson for people who were not there to see it firsthand over the years.
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