Policy and regulation

Say good-bye to cable franchise fees

Submitted by acohill on Mon, 08/22/2005 - 10:15

Communities that rely on cable franchise fees to finance local government initiatives like a public access TV channel may have to find other ways to pay for those services.

As the FCC continues to level the playing field for telecom services, cable franchise fee revenues will likely disappear.

Communities will have to reposition this as a right of way fee, instead of a tax on the cable franchise but not on other right of way users. It can't just be regarded as easy money from a single company.

They also have to do a better job of tying the fees to the actual cost of managing right of way. Communities have to catalogue and track what is in public right of ways, and then begin to track how much public works and planning money is spent on managing private uses of public right of way--otherwise there is no way to justify a right of way fee. The old way of just pulling a number out of the air ("We'd like $50K to support our public access station") is not going to work anymore.

It's more a land use issue than a technology issue. And they aren't making more right of way, so it is perfectly appropriate for communities to have an active right of way management program--that's one key role of government--management of scarce resources on behalf of the entire community.

What happens to public access TV? One option is to go all digital and deliver the content via IP TV, rather than the old-fashioned cable system. It could end up costing less, and the public would benefit since the public access "channel" would no longer have any restrictions on the amount of content available. Communities would just put all the programming on a server, and it would be available all the time.

For communities that already have some form of broadband, this is quite doable today. For communities that do not have affordable broadband, it is one more reason to start doing something about the problem.

Public roads, private roads

Submitted by acohill on Fri, 08/19/2005 - 08:39

Imagine if there were no public roads. We would have to pay a private company to drive to and from work, probably in the form of tolls and/or a monthly fee. We might not be able to get certain kinds of goods and services delivered to our homes and businesses because the toll fees made uneconomical for a company to provide delivery services in some areas. In many rural areas, there would be no paved roads, only dirt lanes, as no private road company could make enough money to cover the cost of paving.

What's worse, some essential public services would be limited or unavailable. Residents in rural areas would be without public safety or fire protection whenever the dirt lanes were blocked by snow or muddy from spring rains--no private company could afford to plow the snow or put gravel down.

Intel champions community networks

Submitted by acohill on Fri, 08/05/2005 - 09:12

Intel, the big chipmaker, has jumped on the muni broadband train and is helping communities take the issue to state legislatures.

In one sense, this is good news, because like it or not, legislators are more likely to listen to an Intel lobbyist (who can make campaign donations) than they are to the citizens that elected them (for the most part). Intel and other tech companies can provide a counterbalance to the enormous influence of the telephone and cable companies.

But has Intel just suddenly decided that they should do this for the good of communities everywhere. No. Instead, they are angry that the wireline broadband providers are busy arranging de facto service monopolies that are locking out wireless systems, which are the current darling of a lot of vendors out to make a quick buck by selling huge wireless systems to unsuspecting community leaders.

FTC fines X-rated spammers

Submitted by acohill on Mon, 07/25/2005 - 10:03

The FTC is finally using the CAN-SPAM law to crack down on spammers sending out X-rated email without appropriate warnings. The large fines should make some of these outfits think twice--one penalty was $650,000.

Cisco aids Chinese "Public Security"

Submitted by acohill on Fri, 07/22/2005 - 08:54

Cisco is beginning to draw attention on the 'net for its practice of selling network equipment to the Chinese Bureau of Public Security. This is the organization that beats up peaceful protesters, routinely engages in brutal physical torture, and is turning China's node of the Internet into a highly controlled state network, where typing a word like "freedom" on your personal Web site might get you a visit from the Bureau of Public Security.

Cisco is claiming they have not broken any laws, and that if they don't sell the equipment, someone else will.

VoIP providers don't know what to do

Submitted by acohill on Thu, 07/21/2005 - 13:46

Voice over IP phone providers are trying to get their customers to acknowledge that they know their VoIP service may not work with 911. This is in response to an FCC ruling that requires all VoIP service providers to have 911 service working by July 29th or notify every customer that it does not.

The problem? It's darned hard to get some customers to acknowledge stuff like this. The FCC has not told VoIP companies what to do if a customer refuses to acknowledge they have received a notice, and some companies are being advised that they will have to cut off service.

Apparently the FCC has refused to provide any clarification, instead insisting that the companies have to make repeated efforts to notify, and must have documentation (like an acknowledgement email) that a customer knows 911 may not work.

Linesharing and the Brand X decision

Submitted by acohill on Fri, 07/15/2005 - 10:12

The Supreme Court decision late last month (called Brand X) that cable companies do not have to share their lines continues to get debated across the Internet. I'm a contrarian here. While it's true that the cable companies enjoyed a monopoly position the marketplace for a long time, we changed the rules in 1996. They now have to compete, and I don't see the logic of expecting them to share their systems with their competitors. It's like demanding that UPS allow FedEx to use UPS trucks to deliver FedEx packages. In any context other than telecom, it would not receive even a minute of serious consideration.

Most of what has been written about the Brand X decision takes an adversarial, two position approach to this problem. Either we allow the cable companies to enjoy a de facto monopoly OR we force them to share their lines with their competitors.

But that's not the only two options. Both continue to perpetuate the worst aspects of the monopoly-based system we thought wasn't working in 1996. They still aren't working.

Another alternative is to build out community-owned and managed infrastructure and allow ALL service providers to share it, just as business competitors like UPS and FedEx share community roads. Last time I checked, this community-managed road sharing system has been working just fine for decades.

We need to stop letting the legacy providers define the debate, and insist on evaulating and discussing a wider range of alternatives.

National video franchises are wrongheaded

Submitted by acohill on Wed, 07/06/2005 - 10:51

Marsha Blackburn (R-Tenn) is talking about proposing a House bill that would allow for national video franchises. This is partly in response to the somewhat justified whining by the telcos that it is too much trouble for them to go to every town in America and ask permission to deliver TV programming over phone lines.

There are so many dumbheaded things here that it is hard to know where to start.

First of all, the telcos are trying to rewrite the rules in their favor after their main competitors, the cable companies, have already invested a lot of time and money in negotiating local franchises. So the cable companies might reasonably ask why the phone companies get to skip the hard part.

Communities will be furious because national franchises will likely cut them out of the sometimes lucrative franchise fee income. Most local franchise fees don't make sense because they are not tied to the cost of right of way management, the way they should be. Instead, it's an easy way to force a private business to collect taxes from taxpayers.

From another angle, franchise fees don't make much sense because satellite TV providers have avoided them completely, so you have a competitor that has neither local nor national franchise fees. So why create a national franchise fee?

The Federal government will probably love the idea, because by definition, a national franchise will involve a big fee, most of which will stay with the Federal government. The FCC will like it, because it helps justify the FCC, which is really obsolete.

Franchise fees ought to be tied to the cost of providing community property (right of way) to private companies, and nothing more. It should not be tied to the kind of content. Franchise fees should not be managed as a hidden tax initiative--it only creates local disincentives for private companies to offer service. Communities cannot simultaneously complain they don't have enough broadband options then turn around and insist that telecom providers become a local tax collector, which just raises the cost of service.

Communities could get out of the franchise fee business entirely by investing in a community broadband infrastructure and make it available to private companies for a fee based on some sensible metric (like number of customer served, or a small percentage of revenue). This creates a self-funding mechanism to support the broadband infrastructure, and does not inhibit small companies with innovative services from entering the marketplace.

The only winners in the franchise agreement game are lawyers, whose huge fees on both sides simply raise the cost of telecom for everyone, including local government. It's crazy for the Federal government to be trying to make this even more complicated, and in the process usurping more control from local authorities.

Are phone companies wrecking America?

Submitted by acohill on Thu, 06/23/2005 - 10:54

Are the phone companies wrecking the U.S. economy by spending hundreds of millions of dollars to buy legislation that prevents America's businesses from competing in the global marketplace?

James Carlini, writing in ePrairie, says yes. He wonders why the phone companies are putting millions into the pockets of lobbyists while simultaneously claiming they can't afford to upgrade their networks. He also points out that is not just the phone companies. The cable companies have also been pouring millions into the pockets of politicians to try to get laws passed that force businesses and communities to use only the old, copper-based telephone and cable systems, while the rest of the world is going straight to fiber.

Carlini says there is something wrong when twice as many South Koreans have broadband than U.S. citizens. Worse yet, Americans are paying, on average, about twice as much as South Koreans, and getting inferior connections that are slower. So we pay more and get less.

Michigan legislators wants to ban wireless

Submitted by acohill on Wed, 06/15/2005 - 09:06

The Detroit News has a report on a Michigan legislator who has introduced a bill to ban local governments in the state from getting involved in wireless efforts. The article does not shed any light on what the motivation behind the bill is, but the wireless project in Oakland County which is described in the article is worth reviewing.

The article cites "experts" who all agreed that it would cost $50 to $100 million to provide wireless throughout Oakland county. There are several things wrong here. First, it is very hard for me to take seriously the estimate of an "expert" whose figures may be off by 100% or $50 million. That does not sound like an expert to me. If the county, which is considering the wireless initiative, can't get better numbers than that, it hurts their efforts by publicizing such vague estimates.

I have a hard time with "big bang" projects, where the whole county just wakes up one day and has broadband wireless (hence the big bang). Typically, a public sector or private sector project ought to start with a modest investment and expand incrementally as demand builds, using revenue to finance expansion. We have very few examples (if any) of wide area wireless networks and the expected take rate (how many people sign up for the service and how fast). Spending even the low figure of $50 million in advance of understanding the market is risky. Wireless, much more than fiber, ought to grow in response to market demand.

Using this kind of vague estimating, most communities would never have been able to get public water, sewer, or good roads. Someone would have said, "It will cost $100 million to run water to every home in the county, and there's no way we can afford that." Of course not, but no county in the country ever tried to run water to every home in a year or two.

Oakland County should get some deserved credit for thinking about addressing broadband needs systematically, but a go-slow approach may yield more benefits with less risk and private sector investment. There are a lot of good community projects in Michigan, and places like Grand Rapids and the work of visionaries like Ray Hoag and Dirk Koenig have been leading the way for years. This anit-muni bill should die a quick death, or the communities of Michigan will lose, as will the state, as businesses head elsewhere.

Wake up call for elected leaders

Submitted by acohill on Thu, 06/09/2005 - 07:28

James Carlini, who writes in ePrairie, an Midwestern online business and technology magazine, has a terrific article taking Illinois leaders to task for shirking their responsibilities to the the public at large and to businesses and communities in the state.

It's hard to improve on Carlini's thoughts, so I'll include just one item from the article. You can read the entire piece here.

" The big breakthrough that some people are touting is getting DSL for $14.95 a month. I no longer consider that as broadband capability. If DSL was at $14.95 five years ago, I would have said that was something. This is now a fire sale that’s five years too late.

While this is to keep interest in antiquated copper-based services, it’s not giving real bandwidth to the average consumer. Compare it with what’s being offered in other countries. We should be getting one gigabit for $14.95. Now that would be something.

Gigabit technology is based off fiber-optic infrastructure. No incumbent telephone company wants to install that to the house when they can keep milking copper, which has been paid for many times over across the decades.

Until the leaders of states get more up to speed with what’s really viable for securing their state’s global economic position, we will be stuck with half measures and the equivalent of eight-track tapes in an age of MP3 players."

FCC Chairman will consider fewer rules for TV

Submitted by acohill on Wed, 06/08/2005 - 11:53

Here is an article [link no longer available] (registration required, unfortunately) that shows just how far off base both the FCC and the telcos are in their thinking.

Kevin Martin, the new FCC Chairman, says he will consider "fewer rules" for television regulation. Basically, the telcos want to deliver TV but don't want to do what the cable companies are required to do, which is to negotiate a franchise agreement with every town in America.

Both the FCC and the telcos are on the caboose, looking out the back window of the technology train. Here's what the FCC Chairman should be saying. "We don't regulate TV delivered over the Internet, and we encourage the telcos to use the Internet to deliver great TV shows." Here's what the telcos should be saying. "We think analog TV is dead, and we are not going to invest in outdated delivery systems. We're going to provide the best TV shows in the worlds, delivered in HD format for a crisp clear picture that far exceeds anything you can watch on your TV today, and we'll do it all over the Internet."

But the FCC wants to keep its finger in the regulatory pie instead of just throwing the pie out the window, so it wants to fiddle with outdated rules that justify the existence of the FCC, and the telcos are, well, just not very smart. It's an ugly picture.

Overview of anti-muni broadband legislation

Submitted by acohill on Wed, 06/08/2005 - 11:21

Here is an excellent and relatively optimistic summary of what's happening at the state and Federal level with respect to anti-muni broadband, or as my old friend Gene Crick would say, "...the best laws money can buy."

The telcos and cable companies are simultaneously claiming that communities can't cope with the complexity of broadband (which in fact is a heck of a lot easier to install and maintain than sewer systems or electric systems) while screaming loudly that they need protection from unfair competition.

As Bill Gurley, the author of the article points out, which is it? Are communities a bunch of incompetent, bumbling zealots who are going to waste tax dollars (meaning they can't be much in the way of competition), or if they are serious competition, then it's pretty hard to claim they are incompetent.

FCC Chairman Martin says, "Broadband is top priority"

Submitted by acohill on Tue, 05/31/2005 - 13:20

Kevin Martin, Michael Powell's replacement as the Chairman of the FCC, said in an interview that broadband is a top priority for the agency. This article [link no longer available] has some of Martin's comments, but it does not shed much light on where the FCC is likely to take the broadband issue in the future.

The FCC has been awkwardly trying to straddle the fence on broadband issues, trying to placate the incumbent providers while also trying to encourage new services. But the pushme-pullyou approach ends up with some very odd situations. The 911 requirement for VoIP phones that the agency announced last week (that the VoIP providers have 120 days to get their systems working with 911) seems particularly odd when you consider that the cellphone providers have been trying to get cellphones to work with 911 for TEN YEARS.

So one has to wonder what the point of the regulations are--is it political grandstanding to show the public that the FCC is on their side? Or are they trying to simply kill the entire VoIP industry by making impossible demands on these mostly small firms? The real headscratcher is that the FCC has said that the incumbent phone companies must provide access to existing 911 systems but the FCC has provided no rules, which sets the stage for the telcos to charge enormous fees for connections--fees so high that the VoIP competitors go out of business.

Are cities at war over broadband?

Submitted by acohill on Mon, 05/02/2005 - 14:58

CNet has an article that provides a good summary of some of the current issues surrounding community-financed broadband. On one side, you have the cable companies and telcos, determined to prevent communities from controlling their own destiny. On the other side, you have communities getting limited or no access to broadband services, with those towns and cities at a serious disadvantage in the global economy as 15 other countries have better broadband than the United States.

If the incumbents had their way fifty to seventy-five years ago, we'd have no paved roads, no clean water, no sewer services, no libraries, no sidewalks, no streetlights, and no plowed streets in winter. All of those services could be provided by the private sector. But we decided that for the common good, it was better to have local government provide those.

Nebraska update

Submitted by acohill on Tue, 04/26/2005 - 11:16

Anne Byers, of the Nebraska Information Technology Commission, and one of the most knowledgeable people in the country on rural technology issues, has written an excellent article that not only summarizes some of the anti-muni legislation pending in that state, but also provides some very useful analysis of other projects around the country.

Among Anne's cogent analysis is the point that whether a community broadband project has "failed" or "succeeded" depends on who you talk to, with some projects being ranked by different organizations as both a success and a failure.

I've read, for example, that opponents of the Bristol, Virginia fiber effort have promoted it as a failure because it is in the red after two years. But if you actually talk to the Bristol Utilities, they are on track to go into the black in year three, EXACTLY AS THEY PLANNED!

There is a lot of conflicting information out there, and Anne Byer's article illustrates why education of community officials is so critical--you want your elected leaders to have accurate and reliable information.

The future of television

Submitted by acohill on Mon, 04/11/2005 - 10:43

USA Today has an excellent article that summarizes the current debate moving through the courts about the future of cable television and the future of video programming generally. As usual, the FCC has muddied the waters here, with statements and policy decisions that seem to favor both sides of the argument.

Loudoun County creates Manager of Broadband Services

Submitted by acohill on Fri, 04/08/2005 - 08:45

Loudoun County, which is located in northern Virginia, has created what may be a first--the county now has a paid position called Manager of Broadband Services. Funded from telecom use fees paid to the county, the new employee, Scott Bashore, will have the responsibility to advise the county on broadband strategies, set a vision for the county on the future use of technology, and will work closely with businesses to ensure the county has the right broadband infrastructure in place to support economic development.

This may be the first person with this kind of job, but it won't be the last. Too many community broadband efforts have been led by informal coalitions without much support from local government, and while some great work has been done, it's hard work without institutionalized support from local government.

Here is the reality: like it or not, communities need to fund and support a digital transport system just like they fund roads, and for the same reasons--it helps create jobs and enhances economic development. And that means local government has to get involved and stay involved. Loudoun County is to be commended for what they have done.

FBI raises the cost of VoIP

Submitted by acohill on Mon, 03/28/2005 - 10:04

The FBI wants to increase the cost of Voice over IP. The VoIP news article has a set of excellent questions that someone ought to be asking the FBI as they seek to extend existing wiretap requirements to VoIP companies. Not only will it increase the cost of commercial VoIP software by requiring those firms to install wiretap backdoors in their systems, the whole exercise is absurd. Here's why.

So what's really going on? Occam's Razor may be useful here (the simplest explanation is probably the correct one). Recall that this is the same FBI that just spend $170 million of our tax dollars on a "Virtual Case File" system that does not work. In other words, the FBI has neither good in-house technology advice nor do they seem capable of buying it. Like many other Federal government agencies, when the FBI wants technology, they run to the beltway bandits--the big consulting firms that inhabit the D.C. area, who have a built in conflict of interest when asked by those same agencies to both design and build systems.

West Virginia jumps to the head of the nation

Submitted by acohill on Fri, 03/25/2005 - 11:49

West Virginia, just a few miles away from Blacksburg, has jumped to first in the nation with respect to intelligent, pro-community thinking about broadband.

The state legislature, unlike more than a dozen other states trying to cripple the ability of communities to promote economic development and to support existing businesses, is saying, "We don't want to do that."

Not only that, the state seems ready to give communities the tools they need to chart their own future. This article [link no longer available] has the details.

Here is evidence of West Virginia's sophisticated thinking:

David Levine, director of technology and transformation with the West Virginia Development Office, said creating a cohesive fiber optic network could create a competitive advantage and could help keep technologically inclined West Virginians from leaving the state to find work. "People will be able to work where they live," he said."

The bill would explicitly give communities the right to issue bonds to pay for telecommunications infrastructure--just as communities have done safely and securely for decades for other improvements like water, sewer, and schools. It would also explicitly give communities the right to act as a service provider.

A Verizon representative expressed skepticism over the bill. What a surprise--a phone company opposes competition. It's almost funny to see Verizon on the short end of the stick. I don't think they have expressed dismay in other states when last minute bills popped up that opposed community telecom projects. This second article notes that Ireland went from 18% unemployment to 3% unemployment because of an intense focus on telecom investments to support communities and open access networks. Ireland, which is about the size of West Virginia, has constructed a fiber ring connecting 123 towns and cities. Any service provider can use the network to deliver services.

Here's another quote that shows West Virginia legislators "get it."

Committee Chairman John Unger, D-Berkeley, said he and others did consult with Verizon, Adelphia and other companies, but he made no apologies for not releasing the bill to them before it came out of his committee.

"The special interest groups think they ought to see the legislation before the legislators see it," he said. "That's where everybody's got it backwards around here. They've got it backwards, because they think that the special interest group ought to draft the legislation and then show it to the Legislature, and that's not the way it should be."

The bigger question is why are so many legislators in other states falling for the contorted and misleading information being provided by the telcos and cable companies? And if Ireland has been successful in promoting economic development by building open access networks, why are our legislators seemingly dead set against it (except in West Virginia)?

So here's a slogan for you: "Our state--almost as good as Ireland and West Virginia."

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