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The State of State Preemption: Stalled – But Moving In More Competitive Direction
As the federal government makes unprecedented investments to expand high-speed access to the Internet, unbeknownst to most outside the broadband industry is that nearly a third of the states in the U.S. have preemption laws in place that either prevent or restrict local municipalities from building and operating publicly-owned, locally-controlled networks.
Currently, there are 16 states across the U.S. (listed below) with these monopoly-protecting, anti-competition preemption laws in place.
These states maintain these laws, despite the fact that wherever municipal broadband networks or other forms of community-owned networks operate, the service they deliver residents and businesses almost always offers faster connection speeds, more reliable service, and lower prices.
In numerous cases, municipal broadband networks are able to provide low-cost or free service to low-income households even in the absence of the now expired federal Affordable Connectivity Program (ACP). And for several years in a row now, municipal networks consistently rank higher in terms of consumer satisfaction and performance in comparison to the big monopoly Internet service providers, as PCMag and Consumer Reports have documented time and time again.
Nevertheless, these preemption laws remain in 16 states, enacted at the behest of Big Cable and Telecom lobbyists, many of whom have ghost written the statutes, in an effort to protect ISP monopolies from competition.
The Infrastructure Law Was Supposed to Move the Preemption Needle But …
Lancaster, PA Shutters ‘Free’ Muni-Network In Pivot To Shentel Fiber Partnership
Lancaster, Pennsylvania is in the final steps of shutting down the city’s fledgling municipal broadband network as it pivots to a new public private fiber deployment partnership with Shenandoah Telecommunications Company (Shentel).
Late last year city officials announced they’d selected Shentel with an eye on ensuring uniform broadband availability to the city of 57,000. The city has been in conversations with various Internet service providers (ISPs) since 2015, when the city struck a deal with Reading-based MAW Communications to build a $1.7 million fiber backbone financed by the city's water fund bond.
MAW helped the city build and launch LanCity Connect, a city-owned municipal broadband network that began signing up customers in the Spring of 2017. But a legal dispute between MAW and PPL Electric Utilities over MAW’s use of PPL utility poles brought progress on the network to a halt, with only roughly 160 subscribers signed up for service.
In 2021 the city took control of the network from MAW, but there’s been little in the way of progress since.
Back in February, the city emailed the network’s subscribers to inform them the service would be shutting down in April.
"With the Shentel agreement now in place, the city will be discontinuing LanCity Connect," Lancaster Mayor Danene Sorace wrote.
"It is no small feat creating a municipal broadband option and this process has certainly been bumpy. We appreciate the opportunity to provide LanCity Connect services and I look forward to expanding municipal broadband citywide."
Pennsylvania Snubs Community Broadband, Small ISPs In Latest Broadband Grant Round
Telecom monopolies have hoovered up the lion’s share of $214 million recently doled out by the Pennsylvania state Broadband Infrastructure Program (BIP), with cooperatives, smaller ISPs, and community-owned networks left largely out in the cold.
It’s not a surprising move for a state long considered politically hostile to community-owned and operated broadband networks, though industry experts say this latest round of awards was particularly egregious when it comes to dodgy politics and its total lack of any real transparency.
According to an announcement by the Pennsylvania Broadband Development Authority (PBDA), this $204 million in Broadband Infrastructure Program (BIP) grant awards will help fund 53 projects in 42 counties across Pennsylvania, connecting 40,000 homes and businesses, bringing high-speed Internet to over 100,000 Pennsylvanians.
The awards were funded with the state’s Capital Projects Fund allocation. After matching funds by winning bidders are included, the total broadband investment is expected to exceed $407 million. A complete breakdown of all grant award winners can be found here.
Verizon was the biggest grant award winner, nabbing $78.3 million. Other big grant award winners were Comcast ($61.7 million), Windstream ($12 million) Frontier ($3.5 million) and Brightspeed ($782,000). A few small private ISPs also won awards including Adams Cable ($387,969) Upward Broadband ($1,476,288) and Alleghenies Broadband ($1,809,524).
Windstream and Colquitt Electric Cooperative Partner On $33 Million Georgia Fiber Deployment
Windstream Communications and local nonprofit electrical cooperative Colquitt Electric Membership Corp are partnering on a $32.5 million fiber deployment that will bring fiber optic broadband to 17,000 homes and businesses in Colquitt County, Georgia.
Once completed sometime next year, the partnership should help deliver last-mile fiber access to roughly 70% of Colquitt County residents, many of which either have no current broadband access, or have long been stuck on sluggish, expensive, and dated digital subscriber line (DSL).
Windstream will maintain ownership of the finished network and provide residential service under its Kinetic brand, while Colquitt EMC will utilize the network to help maintain and support the company’s existing electrical grid.
Kinetic will use $21.4 million in American Rescue Plan Act (ARPA) grants to fund the network build, while providing $11.1 million of its own funds to cover any cost overruns. The company says it has already laid 180 miles of cable of an expected 440 miles total county wide.
“Colquitt EMC has been an instrumental part in the delivery of fiber in its service area,” Kinetic Georgia operations President Michael Foor said in a prepared statement. “We are grateful for its willingness to support these efforts.”
As ILSR has long noted, PPPs can be a decidedly mixed bag. They can be good for municipalities unable or unwilling to handle the logistics or cost of a major deployment alone. At the same time, locals don’t have much or any control over the trajectory of the finished network, including pricing that can quickly creep out of the range of affordability.
Scranton, PA Issues RFQ For Citywide Gigabit Fiber Network
The city of Scranton, Pennsylvania has issued a request for qualifications (RFQ) for vendors that may be tasked with constructing an affordable citywide fiber network. City leaders say the RFQ is the opening chapter in a bid to bring affordable broadband access to city residents long neglected by dominant regional monopolies.
According to the full RFQ, officials are looking for partner companies capable of building a citywide network capable of providing 1 Gbps (gigabit per second) download and upload speeds to all premises in the City of Scranton, as well as expanded fiber access for city municipal services and key anchor institutions.
“The City does not require municipal ownership of the fiber or a City operational role,” the RFQ states. “However, the City does request connectivity to certain City sites, a 40-year indefeasible right of use (IRU) for 12 strands of fiber for municipal noncommercial purposes throughout the network, and an access and maintenance agreement governing these strands.”
As with so many U.S. markets, broadband competition in Scranton is hard to come by. The market is largely dominated by either Comcast Xfinity or Verizon, the latter of which has been heavily criticized by unions and consumer groups for failing to uniformly upgrade its aging DSL network to fiber, and failing to repair aging lines on a timely basis.
This lack of meaningful competition results in slow broadband speeds, spotty coverage, substandard customer service, and significantly higher prices. Even then, the city hasn’t been without signs of life in the marketplace.
Lancaster PA Revives Public Private Partnership Plans With Shentel’s Glo Fiber
Lancaster, Pennsylvania has revitalized the city’s long percolating plan for a municipal broadband network, this time via a public-private partnership (PPP) with Shenandoah Telecommunications Company (Shentel). The city’s quest for more affordable, reliable broadband is a quest that’s taken the better part of a decade to finally come to fruition.
Lancaster city officials recently announced that they’d selected Shentel with an eye on ensuring uniform broadband availability to the city of 57,000.
“In 2022, the City issued an RFP for a partner to achieve stated goals, which received five responses, and led to the selection of Shentel,” the city said. “The contract will result in Shentel installing fiber at its sole cost to provide service to 100% of the city’s residents. Shentel plans to commence design and construction immediately upon execution of the final agreement.”
According to Lancaster officials, the city hired CTC Technology & Energy Engineering & Business Consulting to evaluate the city’s needs. The determination to proceed with a PPP with Shental was driven, in part, by the historic broadband grant opportunities being created thanks to the 2021 Infrastructure Investment and Jobs Act (IIJA), and the American Rescue Plan Act, the latter of which provided $39.5 million to the city.
State BEAD Plans and “Chilling Effect” of Municipal Broadband Restrictions
As the National Telecommunications and Information Administration (NTIA) continues to move forward in administering the single biggest federal investment to expand high-speed Internet access in U.S. history, each state and U.S. territory is wrestling with how to best spend the windfall as they lay out their Five Year Action Plans and Initial Proposals necessary to claim their portion of the $42.5 billion BEAD program.
One major barrier to providing universal access to fast, reliable and affordable Internet service–long recognized by ILSR, telecom experts, and a growing number of ordinary citizens–are the monopoly-friendly preemption laws that either outright ban or erect insurmountable barriers to building publicly-owned, locally-controlled broadband networks, aka municipal broadband.
Preemption in the BEAD Era
Currently, 17 states have such preemption laws, most of which have filed their Five Year Action Plans and/or their Initial Proposals. In each of those states, at the behest of Big Cable and Telecom incumbents, state lawmakers have erected legislative barriers to municipal broadband to protect the monopoly players from competition, which is at the very heart of why the digital divide exists in the first place and why tens of millions of Americans suffer from the slower speeds and higher costs that go hand in hand with monopoly service.
A Stately Tour of BEAD Plans - Episode 568 of the Community Broadband Bits Podcast
This week on the show, Christopher is joined once again by Sean Gonsalves, Associate Director for Communications for the Community Broadband Networks initiative at the Institute for Local Self-Reliance. After a short stop to talk about the establishment of a new municipal network in Timnath, Colorado, Christopher and Sean get down to talking about the BEAD 5-Year Plans that states are filing with NTIA to get their hands on the first tranche of what will be an historic pot of federal funds for new broadband investment.
Some states, like Maine and Vermont, Sean shares, are doing lots right: setting high bars for new infrastructure, listening to communities about their needs, folding in digital equity initiatives, and thinking about how to reach the last households that BEAD will fall short of. Others, like Pennsylvania, seem written with the intent to waste public money and leaves tens of thousands of households stranded with poor or no service - in other words, exactly what the monopoly cable and telephone companies want.
This show is 37 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed.
Transcript below.
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Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.
Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Treasury Doles Out $740 Million In ARPA Funds To California, Pennsylvania
The U.S. Treasury Department recently awarded more than $740 million in new American Recovery Plan Act (ARPA) funding to the states of California and Pennsylvania, providing a major boon to both states’ efforts to expand access to affordable broadband.
The Treasury awarded $540.2 million for high-speed Internet expansion projects in California under the American Rescue Plan’s Capital Projects Fund (CPF). According to the announcement, the funds will be used to connect 127,000 homes and businesses across California as part of the state’s ongoing “California Comeback Plan.”
As part of that effort, California leaders say they’ll spend $7 billion on expanding broadband access over the next three years, with $4 billion of that to be used for constructing a statewide middle-mile, open access fiber network the state hopes will boost broadband competition and drive down broadband access costs statewide.
To manage federal grant funds, California created its Last Mile Broadband Expansion grant program, which was designed to provide Internet access to areas of the state currently lacking access to reliable, affordable broadband at the FCC’s increasingly dated definition of 25 megabits per second (Mbps) downstream, 3 Mbps upstream.
“The pandemic upended life as we knew it and exposed the stark inequity in access to affordable and reliable high-speed internet in communities across the country, including rural, Tribal, and other underrepresented communities,” said Deputy Secretary of the Treasury Wally Adeyemo.
“This funding is a key piece of the Biden-Harris Administration’s historic investments to increase access to high-speed internet for millions of Americans and provide more opportunities to fully participate and compete in the 21st century economy,” Adeyemo added.
Pennsylvania Bill to Ease Municipal Broadband Restrictions; Experts Say It Doesn’t Go Far Enough
A bipartisan coalition of Pennsylvania lawmakers have introduced legislation that attempts to reverse some of the state’s most-stringent provisions hamstringing municipal broadband builds.
But experts suggest that while the bill may be well-intentioned, a cleaner approach would be to eliminate the state’s harmful and dated restrictions on municipal broadband entirely.
As it currently stands, Pennsylvania law prohibits municipalities from providing broadband to state residents for money, unless existing telecom providers don’t currently provide broadband access at the address, and those providers claim they’re willing to do so sometime within 14 months of being asked.
Under the state law, the only metric used to determine whether an ISP is adequately “serving” an “underserved” area is advertised speed. No additional metrics, including price or quality of service, are used to make such a determination.
Such restrictions not only hamstring creative, local municipal broadband solutions, it gives telecom industry giants the ability to effectively veto or delay any new promising builds simply by promising that they might someday extend advertised speeds to under-served territories.
New Bill Takes Aim at State Preemption Law
Enter SB1363, a new bill introduced in November to the Pennsylvania legislature that attempts to scale back at least some aspects of the state’s problematic restrictions on municipal broadband.
The bill, sponsored by Pennsylvania State Senator John I. Kane (D), starts by adopting a more modern standard definition of broadband of 100 Megabits per second (Mbps) in both directions, a dramatic boost from the FCC’s current definition of broadband: a paltry 25 Mbps downstream, 3 Mbps upstream.