Keep North Carolina’s broadband market free

While arguments over network neutrality have steadily misdirected attention toward Washington, phone and cable companies have quietly lobbied one state after another to throttle back or forbid cities, towns and small commercial and non-commercial entities from building out broadband facilities. This Community Broadband Preemption Map, from Community Broadband Networks, tells you how successful they’ve been so far: Broadband Preemption Map Now they’re the verge of succeeding in North Carolina too.

This issue isn’t just close to home for me. I lived in North Carolina for nearly two decades, and I have more blood relatives there than in any other state. (Not to mention countless friends.) Not one of them tells me how great their broadband is. More than a few complain about it. And I can guarantee that the complaints won’t stop once the Governor signs the misleadingly-named “Level Playing Field/Local Gov’t Competition act” (H129), which the cable industry has already been lobbied through the assembly.

The “free market” the phone and cable companies claim to operate in, and which they mostly occupy as a duopoly, is in fact a regulatory zoo where the biggest animals run the place. Neither half of the phone/cable duopoly has ever experienced anything close to a truly free market; but they sure know how to thrive in the highly regulated one they have — at the federal, state and local levels. Here’s Ars on the matter:

Let’s be even clearer about what is at stake in this fight. Muni networks are providing locally based broadband infrastructures that leave cable and telco ISPs in the dust. Nearby Chattanooga, Tennessee’scity owned EPB Fiber Optics service now advertises 1,000Mbps. Wilson, North Carolina is home to the Greenlight Community Network, which offers pay TV, phone service, and as much as 100Mbps Internet to subscribers (the more typical package goes at 20Mbps). Several other North Carolina cities have followed suit, launching their own networks. In comparison, Time Warner’s Road Runner plan advertises “blazing speeds” of 15Mbps max to Wilson area consumers. When asked why the cable company didn’t offer more competitive throughput rates, its spokesperson told a technology newsletter back in 2009 that TWC didn’t think anyone around there wanted faster service. When it comes to price per megabyte, GigaOm recently crunched some numbers and found out that North Carolina cities hold an amazing 7 of 10 spots on the “most expensive broadband in the US” list.

And here’s what Wally Bowen and Tim Karr say in the News & Observer:

North Carolina has a long tradition of self-help and self-reliance, from founding the nation’s first public university to building Research Triangle Park. Befitting the state’s rural heritage, North Carolinians routinely take self-help measures to foster economic growth and provide essential local services such as drinking water and electric power. Statesville built the state’s first municipal power system in 1889, and over the years 50 North Carolina cities and towns followed suit. In 1936, the state’s first rural electric cooperative was launched in Tarboro to serve Edgecombe and Martin counties. Today, 26 nonprofit electric networks serve more than 2.5 million North Carolinians in 93 counties. Strangely, this self-help tradition is under attack. The General Assembly just passed a bill to restrict municipalities from building and operating broadband Internet systems to attract industry and create local jobs. Although pushed by the cable and telephone lobby, similar bills were defeated in previous legislative sessions. But the influx of freshmen legislators and new leadership in both houses created an opening for the dubiously titled “Level Playing Field” bill (HB 129).

No one disputes the importance of broadband access for economic growth and job creation. That’s why five cities – Wilson, Salisbury, Morganton, Davidson and Mooresville – invoked their self-help traditions to build and operate broadband systems after years of neglect from for-profit providers, which focus their investments in more affluent and densely populated areas. Not coincidentally, all five cities own and operate their own power systems or have ties to nonprofit electric cooperatives. (While the bill does not outlaw these five municipal networks, it restricts their expansion and requires them to make annual tax payments to the state as if they were for-profit companies.) How does a state that values independence, self-reliance and economic prosperity allow absentee-owned corporations to pass a law essentially granting two industries – cable and telephone – the power to dictate North Carolina’s broadband future? This question will be moot if Gov. Beverly Perdue exercises her veto power and sends this bill where it belongs: to the dustbin of history.

We don’t need more laws restricting anything around Internet infrastructure build-outs in the U.S. That’s the simple argument here.

We need the phone and cable companies to improve what they can, and we need to encourage and thank them for their good work. (As I sometimes do with Verizon FiOS, over which I am connected here in Massachusetts.)

We also need to recognize that the Internet is a utility and not just the third act (after phone and TV) in the “triple play” that phone and cable companies sell. The Net is more like roads, water, electricity and gas than like TV or telephony (both of which it subsumes). It’s not just about “content” delivered from Hollywood to “consumers,” or about a better way to do metered calls on the old Ma Bell model. It’s about everything you can possibly do with a connection to the rest of the world. The fatter that connection, the more you can do, and the more business can do.

Cities and regions blessed with fat pipes to the Internet are ports on the ocean of bits that now comprise the networked world. If citizens can’t get phone and cable companies to build out those ports, it’s perfectly legitimate for those citizens to do it themselves. That’s what municipal broadband build out is about, pure and simple. Would it be better to privatize those utilities eventually? Maybe. But in the meantime let’s not hamstring the only outlet for enterprise these citizens have found.

Here’s a simple fact for Governor Perdue to ponder: In the U.S. today, the leading innovators in Internet build-out are cities, not phone and cable companies. Look at Chatanooga and Lafayette — two red state cities that are doing an outstanding job of building infrastructure that attracts and supports new businesses of all kinds. Both are doing what no phone or cable companies seems able or willing to do. And both are succeeding in spite of massive opposition by those same incumbent duopolists.

The Internet is a rising tide that lifts all economic boats. At this stage in U.S. history, this fact seems to be fully motivating to enterprises mostly at the local level, and mostly in small cities. (Hi, Brett.) Their customers here are citizens who have direct and personal relationships with their cities and with actual or potential providers there, including the cities themselves. They want and need a level of Internet capacity that phone and cable companies (for whatever reason) are not yet giving them. These small cities provide good examples of The Market at work.

It isn’t government that’s competing with cable and phone companies here. Its people. Citizens.

No, these new build-outs are not perfect. None are, or can be. Often they’re messy. But nothing about them requires intervention by the state. Especially so early in whatever game this will end up being.

I urge friends, relatives and readers in North Carolina to Call Governor Perdue at (800) 662-7952, and to send her emails at  governor.office at nc.gov. Tell her to veto this bill, and to keep North Carolina from turning pink or red on the map above. Tell her to keep the market for broadband as free as it’s been from the beginning.

Bonus link.

[Later, as the last hour approaches...]

Larry Lesig has published an open letter to Governor Perdue, Here is most of it:

Dear Governor Perdue:

On your desk is a bill passed by the overwhelmingly Republican North Carolina legislature to ban local communities from building or supporting community broadband networks. (H.129). By midnight tonight, you must decide whether to veto that bill, and force the legislature to take a second look.

North Carolina is an overwhelmingly rural state. Relative to the communities it competes with around the globe, it has among the slowest and most expensive Internet service. No economy will thrive in the 21st century without fast, cheap broadband, linking citizens, and enabling businesses to compete. And thus many communities throughout your state have contracted with private businesses to build their own community broadband networks.

These networks have been extraordinarily effective. The prices they offer North Carolinians is a fraction of the comparable cost of commercial network providers. The speed they offer is also much much faster.

This single picture, prepared by the Institute for Local Self Reliance, says it all: The yellow and green dots represent the download (x-axis) and upload (y-axis) speeds provided by two community networks in North Carolina. Their size represents their price. As you can see, community networks provide faster, cheaper service than their commercial competitors. And they provide much faster service overall.

2011-05-20-broadbandgraph.png

 

Local competition in broadband service benefits the citizens who have demanded it. For that reason, community after community in North Carolina have passed resolutions asking you to give them the chance to provide the Internet service that the national quasi-monopolies have not. It is why businesses from across the nation have opposed the bill, and business leaders from your state, including Red Hat VP Michael Tiemann, have called upon you to veto the bill.

Commercial broadband providers are not happy with this new competition, however. After spending millions in lobbying and campaign contributions in North Carolina, they convinced your legislature to override the will of local North Carolina communities, and ban these faster, cheaper broadband networks. Rather than compete with better service, and better prices, they secured a government-granted protection against competition. And now, unless you veto H. 129, that protection against competition will become law.

Opponents of community broadband argue that it is “unfair” for broadband companies to have to compete against community-supported networks. But the same might be said of companies that would like to provide private roads. Or private fire protection. Or private police protection. Or private street lights. These companies too would face real competition from communities that choose to provide these services themselves. But no one would say that we should close down public fire departments just to be “fair” to potential private first-responders.

The reason is obvious to economists and scholars of telecommunications policy. As, for example, Professor Brett Frischmann argues, the Internet is essential infrastructure for the 21st century. And communities that rely solely upon private companies to provide public infrastructure will always have second-rate, or inferior, service.

In other nations around the world, strong rules forcing networks to compete guarantee faster, cheaper Internet than the private market alone would. Yet our FCC has abdicated its responsibility to create the conditions under which true private broadband competition might flourish in the United States. Instead, the United States has become a broadband backwater, out-competed not only by nations such as Japan and Korea, but also Britain, Germany and even France. According to a study by the Harvard Berkman Center completed last year, we rank 19th among OECD countries in combined prices for next generation Internet, and 19th for average advertised speeds. Overall, we rank below every major democratic competitor — including Spain — and just above Italy.

In a world in which FCC commissioners retire from the commission and take jobs with the companies they regulate (as Commissioner Baker has announced that she will do, by joining Comcast as a lobbyist, and as former FCC Chairman Powell has done, becoming a cable industry lobbyist), it is perhaps not surprising that these networks are protected from real competition.

But whether surprising or not, the real heroes in this story are the local communities that have chosen not to wait for federal regulators to wake up, and who have decided to create competition of their own. No community bans private networks. No community is unfairly subsidizing public service. Instead, local North Carolina communities are simply contracting to build 21st-century technology, so that citizens throughout the state can have 21st-century broadband at a price they can afford.

As an academic who has studied this question for more than a decade, I join many in believing that H.129 is terrible public policy…

Be a different kind of Democrat, Governor Perdue. I know you’ve received thousands of comments from citizens of North Carolina asking you to veto H.129. I know that given the size of the Republican majority in the legislature, it would be hard for your veto to be sustained.

But if you took this position of principle, regardless of whether or not you will ultimately prevail, you would inspire hundreds of thousands to join with you in a fight that is critical to the economic future of not just North Carolina, but the nation. And you would have shown Republicans and Democrats alike that it is possible for a leader to stand up against endless corporate campaign cash.

There is no defeat in standing for what you believe in. So stand with the majority of North Carolina’s citizens, and affirm the right of communities to provide not just the infrastructure of yesterday — schools, roads, public lighting, public police forces, and fire departments — but also the infrastructure of tomorrow — by driving competition to provide the 21st century’s information superhighway.

With respect,

Lawrence Lessig

To contact the governor, you can email her. If you’re from North Carolina, this link will take you to a tool to call the governor’s office. You can follow this fight on Twitter at @communitynets
You can follow similar fights on Twitter by searching #rootstrikers.

Well put, as usual. Hope it works.

33 comments

  1. Mark Turner’s avatar

    As Woz said in his January op-ed about Network Neutrality:

    Every time and in every way that the telecommunications careers have had power or control, we the people wind up getting screwed

    Well, the folks in North Carolina are about to get screwed unless Governor Perdue does the right thing and vetoes this. After four years of fighting this, though, I have a sinking feeling that this time the bastards will win.

    Thanks for the ink, Doc. If nothing else, it helps to lessen the pain.

    Cheers,
    Mark

  2. Dave Williams’s avatar

    It looks like this passed both chambers with over 70% … unless there were abstainers?

    I wrote my governor.
    Not sure if it will do anything.

    I wonder if this law covers community based, non-government, internet co-ops?

    Dave

  3. Doc Searls’s avatar

    Thanks, Mark and Dave.

    Here’s a slightly edited email I just sent to two of my cousins there. (A bit of context: one is a democrat, one a republican.)

    Here’s the bill, fwiw:

    http://www.ncga.state.nc.us/Sessions/2011/Bills/Senate/PDF/S87v1.pdf

    It’s sometimes hard to tell what combination of lobbying, connections, campaign contributions, PR and simple ignorance one might find behind a vote like this. If the Assembly understood technology or economics, they would never have voted for this bill.

    The phone and cable companies have been very smooth and smart in the way they’ve played this thing out. The language plays both sides of the political divide. “Level playing field” works on the left (where they care about “fairness” and “opportunity”) while the “regulate government competition with business” plays on the right. What it masked was the slanted playing field the carriers wanted to preserve, and the fact that local governments were where citizens turned when the monopolists refused to provide better service.

    So, what we get is a preserved monopoly, with easement to do the least they can, which is mostly what they’ve done all along.

    At least the bill didn’t outlaw local government build-out entirely. That’s what they have in Texas and a few other states. Heck, one reason I’m here in Boston is that we have 25Mb symmetrical Internet service, via fiber to the home. We don’t in Santa Barbara, and it’s less pleasant to be on the Net there. The town we live in here encouraged competition by telling private providers (phone and cable companies) that they’d let them burden the poles with all the wires they wanted. So we have real competition here. The poles are ugly, but nobody cares.

    I just hope one legislator stood up and said, “Why don’t we wait until we see real harm here!” But no. There is no harm. The phone and cable companies just ran the table in one more state, and they now own it for themselves. The few cities that were brave enough to build something out will have to suffer with what they have. I doubt any more cities will want to take the same risks. Not on a table that’s owned by the duopoly, in a state that’s owned as well.

  4. Dave Williams’s avatar

    Perhaps the citizens (as I alluded to before) need to take it a step further … and find ways to build out and/or share internet connections without involving the local government …

    The last mile ( heck .. the last foot ) is still the place where alot of inequality can exist on the internet … I’ve seen people on dialup 2 blocks down from me, where I have crap internet connection by civilised standards, even if BellSouth^h^h^h^h^h^h^h^h^hAT & T considers it “Extreme DSL” or whatever they call it these days …

    Communities could band together, put in a T1 line, and share .. the way some have with other resources (electricity/etc..) and alternative energy farms …

    Dave

  5. Tara’s avatar

    Until North Carolina creates a climate where REAL tech companies can see the state as a viable place to locate an office, we’ll have to settle for sub par deals, such as the Facebook data center in Forest City. Facebook will be receiving substantial subsidies and tax breaks in return for less than 50 permanent jobs in a county with a 13.9% unemployment rate, and in 2008, 16.8% of the population living below the poverty level. They will be developing a previously undeveloped tract of land, in a county strewn with abandoned industrial and commercial properties, while placing strain on the region’s already overtaxed water and power utilities. http://www.pcmag.com/article2/0,2817,2372572,00.asp

    What a shame, particularly in a region that has so much to offer, and will be getting so little in return! Forest City is located only 60 miles or so from Charlotte. Bills such as HB 129 only further hamper counties such as Rutherford County from making the transition from former manufacturing hubs to potentially viable technology centers.

  6. Skip Malette’s avatar

    This is actually directed to Dave Williams. You’ve made some good points. Would like to share some thoughts. Contact me: skipm21@gmail.com

  7. Mark Turner’s avatar

    Thanks for keeping this alive, Doc! I hope Gov. Perdue gets the message!

  8. Mark Turner’s avatar

    I found from Twitter that Gov. Perdue’s office has so far received over 2,000 calls today opposing this bill. I hope it makes an impression!

  9. Dave Williams’s avatar

    Did that account for emails, or just phone calls?

  10. Mark Turner’s avatar

    Perdue just announced she will not veto the bill. The bastards win after all.

  11. Mark Turner’s avatar

    Perdue’s press release on H.129. The phrasing seems to show she bought into the industry’s POV. The bone she threw in at the end about “high quality and better broadband” is touching but meaningless.

    Some fellow geeks and I are thinking a DIY network might be our next move. Feel free to send pointers/ideas our way.

  12. jocuri fotbal’s avatar

    Forest City is located only 60 miles or so from Charlotte. Bills such as HB 129 only further hamper counties such as Rutherford.

  13. Doc Searls’s avatar

    Mark, et. ya’all.,

    I see a possible silver lining in H.129. What it says, basically, is one thing: don’t compete with the Cable TV cash cow. And don’t do that “unfairly” by subsidizing build-out of a cable business with other city funding sources.

    I also think now is finally the time to do what approximately none of the other muni broadband projects have done, which is a pure-IP build-out and service offering. All of them have looked toward cable TV as a way to pay for it.

    Now that Netflix, et. al. are succeeding at “over the top” offerings (bypassing cable with offerings that used to be only on cable), and more and more traffic is video, solid 25+Mbps symmetrical offerings are much more attractive.

    In any case, I think the time is right for the munis to stop competing with cable in any case. Hell, if the cable companies are going to burn that bridge, cool. Let them have old-fashioned TV. Do them one better by offering the Net as a pure-IP utility.

    Thoughts?

    [Later...] The WISPs are already on this case. Not sure they can handle the video, though. Wonder if they could do some kind of deal, as a group, with the satellite companies…

  14. Seth Finkelstein’s avatar

    > Let them have old-fashioned TV. Do them one better by offering the Net as a pure-IP utility.

    Doc, this isn’t my area of expertise. But I believe you just said roughly, offering the most bandwidth-intensive and difficult to maintain service (Internet video) with no product cross-subsidy. Well, there’s a problem there.

    Note, these days, generous taxpayer subsidies to ordinary citizens are not exactly easy to do politically, to put it mildly.

  15. Doc Searls’s avatar

    I agree, Seth. I also think offering Net as a simple utility is in the category of an interesting challenge. Communities should be looking for “because effects” here. These are ways of making money because of the Net rather than just with it. Google’s fancy way of describing this is “looking for second and third order effects.” It’s why they’re putting up that gigabit network in Kansas City. They want to demonstrate to other cities what can happen economically and culturally when high network capacities are available to everybody. In this sense the Net as a utility has the same appeal as roads, water, waste treatment and other graces of civilization.

    The hard thing to face here, for everybody, regardless of what sides they take in arguments, is that what we still call television is moving piecemeal to the Net. The content horses are flying out of cable’s barn. Yet the paths they’re taking are also owned by cable and phone companies. As this plays out, do we want to see the Internet turned into a bigger cable system, with the distribution players capturing “over the top” distribution? Or do we want to make sure the Net remains understood as a utility that favors no particular form of content, especially at a time in history when there is a mass migration from an older distribution system to a new IP-based one? We know where Google and some pioneering munis stand on this. Most of the rest of us either don’t give a shit, or buy the bullshit that Time-Warner sold NC’s state legislators.

    The jury on this has hardly convened yet.

    My guess is that we’ll get a mess of very different build-outs. Some will expand what we already have. Some will be brand new and unexpected.

    In the long run, however, I expect the pure-IP approach to win. We’ll move from the Internet as “connectivity plus video” just as electric companies moved on from “power and light.”

  16. Seth Finkelstein’s avatar

    The key is what you say in this part – “The hard thing to face here, for everybody, regardless of what sides they take in arguments, is that what we still call television is moving piecemeal to the Net.”. I don’t think it’s hard to *face* as much as to *solve*. That is, it’s well-known to the big players that it’s happening. This is what’s driving Net Neutrality in a nutshell. But who is going to put up the money and take the risk of investment failure is part of the fight. Saying that the government (or “communities”) should do it, while I suppose valid in a strictly logical way, is a political and financial problem.

  17. Doc Searls’s avatar

    I agree, Seth. It’s also a big country. There are a lot of communities. And there was a big hole left, on purpose, in H129, for areas not served by cable. Tim McNulty, who has a success record in fiber to the home (when he ran Burlington Telecom), and is a telecom veteran of long standing (and a Ph.D. whose many jobs included serving as an economist to the Senate Commerce Committee), is bringing fiber to homes in rural Vermont. He says he can make it work. I hope he does.

  18. Michael Stern’s avatar

    While I agree that communities should be allowed to provide competing infrastructure, I suspect that typically it’s not going to be best if they do — it forces those who don’t want high throughput broadband to subsidize those who do, via tax payments, and I can’t see any economic or moral justification for that. Further, while there may be counterexamples, I expect that this is the sort of business that governments will over time be bad at. I would expect their maintenance and support and customer service to decay to substandard levels, if it’s not there from the start.

    That said, there is something that legislatures can be doing to improve the woeful state of broadband connectivity in the United States — mandate that all competitors have access to the underground channels through which fiber optic lines can be run, and that multi-unit houses must allow all competitors access to the premises for the installation of switches. This will allow new entrants into overly expensive and underserved markets. In Hong Kong, where most people live in multifamily housing, and free competitive access is allowed, 85% of the population can get 100 Mbps service for the equivalent of US$26 per month, or 1Gbps service for not much more.

    Compare to my neighborhood in New York, where Verizon sells “up to” 6Mbps (which in practice means 2 – 3.5 Mbps) for $40 per month and no competition is going to arrive any time soon.

  19. Doc Searls’s avatar

    Hi, Michael. Great to have you weigh in here.

    I agree that gaining easements is critical. So is updating rules for “undergrounding” service. In one case I know, the city mandates installing a linear concrete grave, 6′ deep by 2′ wide, to separate cable TV, copper telephone and electrical service by 2′ apiece vertically. With fiber optic cabling replacing telco and cableco copper, that makes no sense. But the standard there is 20 years behind the times, with no sign of change. Which supports your points about a typical city’s ability to run next-gen fiber plant.

    On the other hand, here is a thought from a high-powered telecom guy on a list I participate in…

    How about if a town builds out home-run fiber from a hub facility where any ISPs, cable companies, whatever, can connect any house or business over the installed connections, at no charge. This is the roads model. Economic benefits abound.

    I think it will only work if the city owns transit to the backbone, wherever it may be. For lack of that, you get Lusk, Wyoming: http://www.salon.com/may97/21st/lusk970508.html .

  20. Dave Williams’s avatar

    To michael:

    I agree that it would be better if industry would do the buildout — I think the community idea (local government, or other) might make them see the market that they are ignoring in certain cases …

    Doc:
    I think the xanadu-like “palace in the desert” referenced in the article is a definite cautionary tale. Where would that put “high speed coops” in the mix, in your mind?

  21. Doc Searls’s avatar

    Dave, the first problem for Lusk was that was missed essential technical pieces required to succeed. Plumbing, you might say, without pumps. The second was that the only way it could get transit to the Net’s backbone was through QWest, which refused to play ball. Without the backhaul, the system just sat there. From what I gather the Wyoming PUC is controlled by Qwest and other big players, so no help was coming from there. If it had been, the demand certainly would have followed. With technology, invention is the mother of necessity. Lusk’s invention was not equipped to mother anything, alas.

    As for capacious co-ops like the one I mentioned, it’s an interesting idea. The good thing about fiber is that a well-designed system is capable of carrying enormous traffic for little cost, once installed and then competently maintained. The problem there is that there are too few examples of anybody in the U.S. doing either. There are many dozens of these in more advanced countries, such as Denmark. Here is an article for Linux Journal that I wrote in 2007, about one such case: Indienet.dk, now fiberby. Note that this is a private company serving a city and a country that cares about and welcomes lots of enterprise and competition, but also makes sure it happens in horizontal markets such as Internet build-out, by forcing structural separation of old verticals such as the phone, cable and power companies.

    So, while in the U.S. we encourage verticalization, such as by approving Comcast’s purchase of NBC (so it can turn the Internet into an end-to-end content distribution pipe for Hollywood), countries like Denmark eat us for lunch with competitive markets for raw bandwidth that can carry any kind of content in any direction.

    I do find hope in what the WISPs are doing. Check it out.

  22. Jocuri fotbal’s avatar

    Communities could band together, put in a T1 line, and share .. the way some have with other resources (electricity/etc..) and alternative energy farms …

    I think this could be one of the best solution but it’s hard to rally people together.

  23. Andrew’s avatar

    We should push for every state to be free of this. People are the answer to the problems. We are just too lazy to speak our minds about things. We think other people will do it for us.

  24. e sağlık’s avatar

    Thanks Communities could band together, put in a T1 line, and share .. the way some have with other resources (electricity/etc..) and alternative energy farms …

    I think this could be one of the best solution but it’s hard to rally people together.

  25. Jocuri’s avatar

    I read on Facebook about 3000 – 4000 telephone calls as opposed to this bill. What can I say more, I hope that they get the message!

  26. Jocuri’s avatar

    I’ve just read your article and it convinced me to write the governor. Thank you. Very good point.

  27. Brett Glass’s avatar

    Doc, it is really really sad to see you supporting unfair, incompetent, inefficient, job-killing government competition with private enterprise. Think twice; the next company or the next job the government uses taxpayer money to kill could well be your own.

  28. Doc Searls’s avatar

    Brett, we’re just going to have to disagree on this one.

Comments are now closed.