Tales of the Sausage Factory

Will Minnesota Senate Screw Duluth's Chances of Getting Google Gigabit Project?

As reported by Christopher Mitchel from the Institute for Local Self-Reliance, Qwest has scored quite the little victory in its efforts to keep itself the world safe from real competition socialism. A state Senator and a state Rep introduced a bill that would have made it easier to for local governments to build municipal networks. Right now, it takes a local referendum vote with 65% to authorize a locality to build a network that offers commercial telephone service (and therefore any “triple play” broadband access service — or so they read it in MN). A State Senator and State Rep offered a bill to reduce the threshold on the referendum to a simply majority. By the time the relevant jurisdictional committee was finished, the revised bill included one of the favorite incumbent roadblocks to localities: a mandatory “feasibility study” designed to be so onerous and expensive to conduct that few local governments will want to even try.

Meanwhile, the good folks of Duluth are so desperate for real broadband that they made this joke video to get citizens to show support for bringing Google Gigabit Fiber project to town.

Question for the good Senators and Representatives of Minnesota: when you’ve got folks clamoring for real broadband, do you really want to be “protecting” your underperforming incumbent? By “clarifying” that your referendum law applies to any indirect provision of telecom service, and imposing a five year plan on municipalities, you are making it very hard for your local governments to — in the words of Duluth’s mock Public Service Announcement — “suck up even harder” than the competition. While I am hardly privy to Google’s secrets and innermost workings, I am willing to bet real money that when they weigh where to set up their pilot project, they will consider any possible legal landmines. Would you want to set up shop in a city where Qwest or some other provider might sue to block your use of city assets under the amended state law? Even if Google were to ultimately prevail, it would tie up the deployment in litigation. Who wants that, when the number of communities begging for Google to come and work its fiber magic keeps growing?

Mind you, there’s a good argument that even this version of the bill is better than the current law. Dropping the referendum requirement from 65% to a simple majority will do a lot of good even with the feasibility study requirement. But should that really be the choice? Don’t the people of MN deserve the better bill, without throwing (yet another) bone to Qwest to reward its failure to provide what people want and need?

So folks in Duluth, and other communities in MN trying to get Google Fiber, you might want to ask Qwest’s buddies in the legislature to cut y’all some slack and pass the original bill without the study requirement. that would send a signal that MN is serious about bringing broadband to its citizens and would welcome the sort of public/private partnership that Google appears to be offering. Or perhaps the MN legislature is just rooting for the people of TopekaGoogle,” KS instead of the folks in Duluth.

Stay tuned . . . .

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Tales of the Sausage Factory

Potentially Much More At Stake In Michigan Than PEG — NAB, PBS and Folks Worried About Bundling of Services Better Wake Up And Pay Attention!

Compared to the primary battles in Michigan, the fight between Comcast and local governments about Comcast’s decision to migrate Public Educational and Government (PEG) channels to digital seems like small potatoes. But potentially, the lawsuit filed by the cities of Dearborn and Meridian in local federal court could have huge impact on how cable operators carry broadcast television and even how they bundle video services with their voice and broadband offerings.

For those just tuning in: Comcast has decided take advantage of Michigan’s franchise reform law and forcibly migrate PEG channels to digital tier, which will require anyone who wants to see PEG channels to get a digital box and will put the PEG channels waaaay up the dial where channel surfers rarely tread. This has prompted angry protests by city officials, and even a reprimand from House Commerce Chair Rep. John Dingell (D-MI). While other cable operators have used such tactics in the past, Comcast appears to be the first operator to do this for an entire state at once.

As a result, Dearborn and Meridian challenged Comcast’s right to move the PEG channels without consent by the localities in federal court. But while this focus remains on PEG, it goes much further. In 1992, Congress mandated that cable operators must offer subscribers a “basic tier” that consists of the broadcast channels and PEG channels. Congress also prevented cable operators from bundling this “basic tier” with any other service or “buy through.”

For reasons having to do with the Telecommunications Act of 1996, cable operators may no longer need to offer a “basic tier.” But if that’s true, what does that mean for broadcasters? Can cable operators forcibly migrate broadcast channels in the same way they claim they can forcibly migrate PEG? And — looking ahead — does that mean that cable operators will have the freedom to change how they bundle packages? Right now, cable operators generally offer their basic video product and then offer all manner of additional services. But what happens if the “basic tier” requirement is really dead? Will we see cable operators get more aggressive, forcing customers to take additional services if they want video programming?

From where I sit (which is really just looking at the plain language of the statutes), it’s a real muddle. I’m glad I’m not litigating. But if I were the NAB and PBS, I’d start paying real close attention here. Otherwise, they may wake up and discover that they are also going on a forced march migration to digital, even if they can keep their channel position and not end up in the 900s.

Analysis below . . . .

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Tales of the Sausage Factory

Muniwifi and the Minneapolis Bridge Disaster

While the telco/cable lobbying war to make muniwifi illegal has died out (as demonstrated by the most recent defeat for the telco/cable lobbyists in North Carolina), the debate on the actual merits of munibroadband lives on. And it’s a good debate to have. States, cities and local governments should consider their projects carefully. What works in St. Cloud, Florida or Philadelphia will not necessarily work elsewhere. And, with all the possible goals of a muni system (service to residents, service to muicipalities, public safety, digital inclusion, enhance local media, economic stimulus), it is a sound idea to have figured out your benchmarks for success in advance.

Unsurprisingly, those generally opposed to government providing services (particularly where such services are available or could be available from private companies) have spent much time and effort arguing that municipal broadband projects usually end as costly failures. These analysis generally use the standard economic criteria of a for-profit business. i.e., Does the network pay for itself over expected time?

That’s an important question, particularly if a government has made this a goal of buiding the network or if you are a private business looking at a public/private partnership. But governments often make investments in infrastructure or provide services on a residential or subscription basis for other reasons. Here in DC, for example, no one pretends that the City will directly make back the hundreds of millions of dollars spent to attract a professional baseball team. This cost gets justified on the grounds that it will revitalize the Anacostia waterfront area, serve as a source of civic pride, and offer additional benefits that justify the cost.

Which brings us to the performance of Minneapolis muniwifi network in the recent bridge collapse diaster. The presence of the network proved an enormous boon to public safety and the citizens of Minneapolis. Because the city had deployed the network for residential service, it was there when they needed it for public safety. That’s difficult to capture in a balance sheet, but there’s no doubt you’re damn glad to have it when you need it.

Of course, local governments can always build public safety muni networks. And many do. But multiple use networks (like the Minneapolis one) are a good way to fund such networks, make sure they get fully deployed, and make sure they stay upgraded and operational. A town reluctant to spend money on public safety communications (and many are) may feel better if the public safety network will also provide low-cost connectivity to poorer neighborhoods. Alternatively, a town might feel better about providing residential services at a possible financial loss if they look on the network as also providing critical infrastructure for emergencies.

At the end of the day, every local or state government looking at municipal broadband needs to do a careful evaluation and figure out what it wants and how it will pay for it. The business case is an important piece of that, especially if local governments promise their citizens the network will end up paying for itself with subscriber fees. But the tragedy in Minneapolis provides an important reminder that local governments have other measures of success besides turning a profit.

Stay tuned . . . .

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Tales of the Sausage Factory

Not Only Will the Lion Lie Down With the Lamb, He Will Make Big Bucks Opening a Feed Store (While Still Running a Butcher Shop on the Side)

Y’all remember how AT&T (under its old name SBC) launched over a hundred lobbyists into the Texas legislature to kill muni broadband in TX? How it tried to kill muni broadband in Indiana? Not just once, but twice?

Guess what? AT&T has now cut a deal to build a muni wifi system in Springfield, Il. The article quotes an AT&T spokescritter as saying that AT&T expects to close many more such deals, and will seek them out where it makes economic sense.

Whoa! What happened to all of that rhetoric about the brave incumbent telco capitalist captain of industry going eyeball to eyeball with the evil Socialist menace of a publically financed internet? Answer: increasingly, the incumbents have realized this is a losing issue for them and have decided to figure out how to make money out of it.

While I take this as the latest and most potent sign that the move to outright kill muni broadband has run out of steam, I think a note of caution is advisable as well. Some victory snark and reflections on the future challenges for both muni broadband and other forms of community-based broadband below.

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Tales of the Sausage Factory

Stevens Bill III– The Bad Stuff (Munibroadband)

The Stevens Bill contains a section called “Municipal Broadband” (Title V) and calls itself the “Community Broadband Act of 2006.” Given that that McCain and Lautenberg introduced a pro-munibroadband bill in 2005 called “The Community Boradband Act of 2005,” and that the House overwhelmingly adopted language identical to the McCain-Lautenberg language in COPE, you might think that I would put Title V in the “Good Parts” section.

GOTCHA! That clever Senator Stevens, who apparently has confused the definition of “competition” and “cartel” (Hey, they both begin with “C”! He’s old! Give the man a break!), has tricked you! Like predators in nature that camoflage themselves to look like pretty flowers before they SPRING UPON THEIR HELPLESS PREY AND DEVOUR THEM, The Stevens “Community Broadband Act” will allow local governments to give gobs of money to private companies, but will not allow local governments to do something as outrageous as compete with private companies.

Impressed? Amazed? Astounded? Well see below . . . .

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Tales of the Sausage Factory

ALERT ON Tomorrow's Mark Up of Internet Bill (COPE)

Most folks reading this will have heard about the Communications Opportunity and Enhancements Act of 2006, aka COPE. I shall blog more thoroughly on this presently. For now, I want to focus on a narrow issue that may get lost in the shuffle: the efforts of Rep. Steve Buyer (R-IN) to accomplish for his telco masters what AT&T could not accomplish in his home state — killing muni broadband.

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Tales of the Sausage Factory

Down to the wire in Indiana

The press has not generally covered the fight in Indiana over their telecom dereg bill, known in the Indiana Senate as SB 245. What coverage there has been has primarily focused on deregulating phone rates or elimination of local franchising of video offerings (i.e., the new telco video products will not need local franchsies). Few stories have observed that Chapter 35 of SB 245, as drafted, would hamstring the ability of local governments to either provide broadband services directly or do so through partnerships with others.

The version of SB 245 that passed the Senate included minor modifications to Chapter 35. In the Indiana House of Representatives, the House eliminated both Chapter 35 and the state franchising provisions. The bill has now gone back to the Senate.

I want to urge folks in Indiana, and elsewhere if you do business in Indiana or otherwise have a connection to the state, to make your views known to the Senate. In I hope people and organizations will tell the Indiana State senators that anything that impedes the flexibility of localities to create effective broadband strategies, such as Chapter 35, cannot be good for the people of Indiana.

I have included a draft letter below. Please feel free to print out or in any other way use it to help stop Chapter 35 of SB 245.

This is also a good time for me to stress that, as usual, I speak only on behalf of myself and not my employer or Wetmachine.

Stay tuned . . . .

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Tales of the Sausage Factory

Here They Come Again! Anti-Muni Bill in Indiana.

Nothing like a fresh new year! State legislators return to their respective capitals to once again do the work of the people. Or, in the case of Indiana State Senator Brandt Hershman, the work of AT&T (formerly SBC). The eager Mr. Hershman has already introduced a bill, SB 245, that deregulates the phone industry, eliminates local franchising, etc., etc.

And tucked away on page 97 of this 107 page bill is an anti-muni broadband provision remarkably similar to one that went down in flames last year.

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Tales of the Sausage Factory

Election Day Results for Muni Broadband

As part of the off year elections, 32 communities in Iowa voted on referenda on whether to explore having a muni broadband system. 17 of the 32 voted to go forward, with 15 voting not to explore the option. Given that Mediacom and Qwest, the incumbent cable and telco companies spent about $1.4 million to defeat the measures, while proponents of the measure spent only a few thousand dollars, that’s pretty good.

Meanwhile, developments in Michigan and Pennsylvania below.

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Tales of the Sausage Factory

I hope USA Today got it wrong on Kevin Martin and local franchising of telco video.

After a brief vacation from the 21st Century, I am back on the job and as puzzled as ever by this USA Today story.

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