I caught an interesting article asking whether Dubuque, Iowa, should build a publicly owned broadband network. Iowa already has a number of publicly owned networks, mostly cable HFC networks, that serve communities. The article starts with some history, noting that the small community of Hawarden, Iowa, was the first to build a public cable system in the state and had to defend its rights to do so in court.

The northwest Iowa community of about 2,500 people more than a decade ago built a $4 million cable system, only to be temporarily shut down by an Iowa Supreme Court injunction. Hawarden survived the court's order prohibiting municipalities from being in the telecommunications business, and in many respects blazed the trail for publicly run cable, Internet and phone service in Iowa.

More communities may be considering building their own networks (though they will build now with fiber rather than HFC) following Iowa's statewide franchising rules that preempt local authority, giving greater power to private cable companies. The way it was written, existing franchise agreements may be nullified if a competitor announces plans to serve the community. Fortunately, many Iowa communities voted to formed telecommunications utilities back in 2005, though few have yet exercised that authority. Unfortunately, the article's author was clearly misled by either Qwest or Mediacom's public relations flacks because he wrote about UTOPIA, as though the problems of a purely open access model under a different regulatory environment poses important lessons for communities in Iowa that may build their own networks. The successes and failures of UTOPIA teach us very little about how Iowa communities should move forward. Smaller Iowa communities do have a serious disadvantage - building modern networks is very difficult the smaller they get. Below 5,000 subscribers, it can be difficult to make the network pay for itself (though exceptions exist) - suggesting to me that joint efforts combining communities could be a good option. Unfortunately, though the technology has no problems crossing political boundaries, the politics are much more difficult.

While I try to keep postings on this site to the subject of publicly owned networks, I think it important to discuss the ways in which some major carriers routinely flout the public interest. Thus, a little history on how Comcast has acted against the public interest. Most of the readers of this blog are probably aware that Comcast has been dinged by the FCC following its practice of interfering with subscribers legal content (and undoubtedly illegal content as well) by blocking and disrupting the BitTorrent traffic. BitTorrent is frequently used to transfer large media files because it efficiently breaks large files into many little pieces, allowing the user to download from a variety of sources concurrently - the file is then reassembled. When Comcast detected BitTorrent connections, it would effectively hang up on them, regardless of the congestion level on the network at the time. The FCC (the Bush Administration's FCC) said it couldn't do that and Comcast is currently in the courts trying to tell the FCC that it can't tell Comcast what it can't do on its network. Prior to a journalistic investigation that proved Comcast was doing this, net geeks had repeated asked Comcast if it were blocking the BitTorrent protocol. Comcast never admitted to anything, often claiming it did not "block" anything... as time would go on, Comcast would refuse to admit it was blocking anything - as if permanently delaying traffic was anything other than a blockage. "I'm not blocking you, try back in 20 million years." Around this time, Comcast quietly changed its policy regarding the maximum amount of bandwidth subscribers could consume in a month. At the time, I thought it was a result of the FCC cracking down on the arbitrary policies frequently used by cable companies, but it turns out we can thank the State of Florida for forcing Comcast to enact a transparent cap on monthly usage. Prior to the official cap, there was an unofficial cap. Every month, some number of people would be notified they were kicked off Comcast's service for using too much bandwidth - but no one knew how much was too much and, perhaps more importantly, how to keep track of how much bandwidth they were using. Discussions on geek-hangout Slashdot suggested a monthly cap of between 100 Gigabytes and 300 Gigabytes depending on the neighborhood.

The Minnesota Independent took Pawlenty's Administration to task last week for its decision to give more money to the telecom company front group Connected Nation. To be clear, this is not the money for infrastructure (yet - time will tell how the state encourages the feds to allocate the grants). This was the mapping money. Peter Fleck, of PF Hyper blog, put it well:

“My understanding is that we have allowed the companies that have not provided the needed broadband coverage in our state to steer the broadband mapping process itself because of a stated need for confidentiality. That need is questionable,” said Fleck. “And it puts the state in a position where if the maps show there is no problem with broadband coverage, then we won’t need legislation, regulation, or any other policies and it creates the risk that the telecom industry can continue to provide inadequate coverage to underserved areas — usually areas of low-density and low-income. And because of the inadequacy of these maps, eventually we will have to undertake broadband mapping again at taxpayer expense. To me, this is an irresponsible use of public money.”

The story also quotes me and links back to our story on Connected Nation in Minnesota. I want to note that states and federal agencies can demand more in terms of better maps and data transparency. It is somewhat disingenuous to lay the blame solely at the doorstep of this telecom-front organization when elected officials refuse to demand more from an industry that has long retained legions of lobbyists. Make no mistake, Connected Nation's conflict of interest is a serious problem, but we need our elected officials to stand up to the telecommunications companies and demand better mapping data. We had higher hopes from the NTIA, but clearly that was misplaced. More recently, Sharon Schmickle of MinnPost wrote about plans for a publicly owned network in Cook County, Minnesota. It touches on the major issues that many communities face when deciding whether to build their own network.

In a quick followup, the Minnesota Supreme Court has affirmed the obvious by refusing to review the Appeals Court decision in the TDS (acting as "Bridgewater") v. Monticello case. This means the Appeals Court decision stands; Minnesota cities have the authority to bond for broadband networks. Read our previous coverage of this case here. When TDS originally sued Monticello, the City had to place the investor money (raised via non-recourse revenue bonds) into escrow for the duration of the case. If the case were not resolved by June 19, 2009, Monticello would have had to return the funds to the investors, leaving it unable to finance the project. Bonding again would have almost definitely resulted in less favorable terms than those achieved before the economic meltdown. Following the Appeals Court decision, on June 2, 2009, TDS could have had up to 30 days to request review from the Supreme Court. John Baker, an attorney from Greene Espel who represented the City throughout the process, asked the Supreme Court to expedite the review in order to prevent TDS from merely using its thirty days to run out the clock (thus winning the war while having lost every single battle). Today, the Supreme Court sided with the Appeals Court and an obvious reading of Minnesota law: Minnesota cities are well within their authority to bond for and build broadband networks. Monticello will immediately start work on the city's publicly owned fiber-to-the-home network. TDS has argued that such a network would now be redundant as they built a fiber network while abusing the courts to stall for time. However, it remains to be seen if TDS is truly connecting all homes with fiber, or is still using copper for that final connection (much like AT&T does in its U-Verse). The top TDS advertised speeds are 25 down and 10 up, which can be achieved with VDSL. If TDS has truly built a fiber-to-the-home network, Monticello will be the first place in the U.S. with competing full fiber networks. However, I'm not sure that TDS will be able to compete with FiberNet Monticello on some fronts as TDS offers it television via a partnership with a satellite company. Monticello will undoubtedly have more local content and probably better customer service. Lest you think the court battle is over, Monticello is entitled to recover some of its costs due to the lawsuit.

Chattanooga, Tennessee is predicting it will offer FTTH in its entire service area by next year. The public power company has used fiber-optics in the past to manage its electrical operations and has been planning to offer a full FTTH network for awhile.

"There are two primary components to building this system. One component is taking longer than we thought and the other is happening much faster than we anticipated", said Harold DePriest, President and CEO. "The end result is that services will be available to the entire cities of Chattanooga, East Ridge and Red Bank by summer of 2010." DePriest says once in place, EPB's fiber optic network will be the largest of its kind in the country.

However, Chattanooga has suffered the same problem that has plagued other publicly owned broadband projects around the country: incumbent telco and cableco lawyers. Comcast has sued Chattanooga in multiple courts in an attempt to limit competition (see here, here, here, and here for a few examples). As with these cases across the country (from Monticello, MN to Bristol, VA, to Lafayette, LA), the incumbents have lost the cases but successfully slowed the build-out, which hurts the community while padding company profits for an extra couple of years. The network will offer symmetrical speeds of 10-50Mbps while keeping costs lower than the standard prices in the market.

Monticello, a small town in Minnesota just outside the metro area, once again prevailed in court against frivolous charges from TDS Telecom, the incumbent telephone provider (doing business as Bridgewater in the court case). Monticello, after learning that neither TDS nor Charter were interested in building a modern broadband network in the community, spent years studying the issue and eventually opted to build their own network. After the city secured revenue bonds to pay for the project in spring 2008, TDS began a campaign to delay the network -- a tactic commonly used against community broadband networks across the country. They filed a lawsuit they could not win, but it prevented Monticello from starting the network. While they waited on the court date, Monticello lost the construction season and investor money sat in escrow. Despite winning court victory after court victory, the citizens of Monticello are unable to build the network they voted for with a stunning 74% yes on the referendum. When the lawsuit was dismissed from district court, TDS waited as long as possible before appealing the decision in fall 2008. Due to the overburdened and under-staffed courts, the Court of Appeals took another half year to rule. Today, the Court handed down the judgment, finding in favor of Monticello:

Therefore, based on a plain and obvious interpretation of the term "public convenience" and the general intent of the legislature to promote telecommunications, the district court did not err in dismissing the action for failure to state a claim. Regardless, even if this court were to accept Bridgewater‘s reading of the statute, the Fiber Project arguably qualifies as a utility or utility-like project. A Minnesota statute generally restricting the ability of Minnesota municipalities to issue bonds for projects outside of their jurisdiction provides an exception for bonds issued to finance property for "municipal public utilities." Minn. Stat. § 471.656 (2008). That same statute defines "municipal public utilities" as "the provision by a municipality of electricity, natural gas, water, wastewater removal and treatment, telecommunications, district heating, or cable television and related services."

The main question that remains is this: will TDS find it more profitable to appeal again and delay the inevitable competition?