Tuesday, January 13, 2015

President promises action on munibroadband. Preemption in the works?

In big news for the munibroadband movement President Obama announced today that he was going
to take "executive action" to foster municipal efforts across the country.

In a folksy little video shot in the oval office Obama used an iPad to illustrate how poorly US cities were faring in download speeds against international competition. The bit featured Cedar Falls, Iowa as the surprisingly small town that stacked up well internationally when cities like San Francisco and Chicago did not. The President attributed that to the decision by "citizens to make the investment and bring competition in and make sure that internet speeds were just as fast there as anywhere else." That's a sentiment we can agree with here in Lafayette.

While Iowa got lead billing in the video (and long-time readers and fiber fighters will recall that Lafayette Coming Together's breakfast back during the fiber fight featured Cedar Falls' success story) Lafayette gets her due in the white paper, "COMMUNITY-BASED BROADBAND SOLUTIONS" that accompanied the announcement. Lafayette got her own section in the paper:
The residents of Lafayette have a long history of supporting local infrastructure initiatives. Recognizing the need to modernize its broadband infrastructure in the early 2000’s, the community voted in 2005 to approve construction of a fiber-to-the-home (FTTH) network. After overcoming serious opposition from local broadband service providers, the publicly-owned Lafayette Utilities System (LUS) started connecting homes and businesses to its LUS Fiber network in 2009. The network seeks to provide equitable access to all of Lafayette’s citizens, and the system was rolled out across high- income and low-income neighborhoods equally. LUS Fiber now offers 100 Mbps (sic: LUS provides a 1000 meg option; that's seriously old info) speed for all subscribers. 
The rest of the text touts lower prices—from Cox and LUS, new high tech businesses, and high speed internet provided to anchor institutions like the public school system and the library network. It could have praised the 100 megs of internal bandwidth to all and availability to each and every address in the city, something private providers of high speed internet simply don't even attempt to accomplish.

But how will the President. aid municipalities? Here are the bullet points (underlined) provided in the white paper and a little interpretation:

Calling to End Laws that Harm Broadband Service Competition
The president is filing a letter urging the FCC to address "barriers inhibiting local communities from responding to the broadband needs of their citizens." That appears to be Washington-speak for asking the FCC to use its powers under the telecomm act to preempt—override—state laws that forbid or seriously inhibit the rise of competitive municipal broadband utilities. This would not be unprecedented; the federal government has long since preempted state laws that inhibit competition under a number of different principles, including the interstate commerce clause of the constitution. Rumor has it that the FCC in particular will be asked to use unexercised power granted it in the telecomm act to preempt state laws inhibiting competition by local communities.

If the FCC acts in this way it could be truly huge, freeing enormous numbers of cities to do as they desire and, more importantly, eliminating the uncertainty that any municipality must feel when the contemplate the possibility that powerful corporations will rely on their kept state legislators to eliminate them as competition by making the conditions under which they labor practically impossible or by simply outlawing their enterprise.

This is an issue in Louisiana where the Louisiana (un)Fair Competition Act imposes unfair conditions on LUS that no private corporation would tolerate—or would be asked to tolerate. Any other company could use the resources of its successful business arms to establish the new unit. LUS cannot and had to completely fund its startup from market-level loans and was forbidden from mixing even billing and truck rolls substantially raising its costs to no good end. Similarly, and most odiously, LUS has a floor put under it prices by law...the public utilities commission regulates the maximum price of all other utilities but only LUS is forbidden to lower its price beneath that which its competitors can convince the commission is a "fair" price. Freed of such limits LUS Fiber could be of much more benefit to its citizen-owners.

Expanding the National Movement of Local Leaders for Better Broadband:
The White House plans to sponsor a Community Broadband Summit of mayors and county commissioners from around the nation based on the current Next Century Cities Coalition. Lafayette is already a member.

Announcing a New Initiative to Support Community Broadband Projects:  
The Department of Commerce is launching a new initiative, BroadbandUSA, to promote broadband deployment and adoption. Building on the Recovery Act, BroadbandUSA will offer online and in-person technical assistance to communities; host a series of regional workshops around the country; and publish guides and tools that provide communities with proven solutions to address problems in broadband infrastructure planning, financing, construction, and operations across many types of business models.

Unveiling New Grant and Loan Opportunities for Rural Providers
The Department of Agriculture will accept applications to its Community Connect broadband grant program and will reopen a revamped broadband loan program which offers financing to eligible rural carriers. In rural areas cheap money is the largest single impediment to a very capital-intensive set of projects; in many case no provider finds it profitable to provide service without such support.

Removing Regulatory Barriers and Improving Investment Incentives
The President is calling for the Federal Government to remove all unnecessary regulatory and policy barriers to broadband build-out and competition, and is establishing a new Broadband Opportunity Council of over a dozen government agencies with the singular goal of speeding up broadband deployment and promoting adoptions for our citizens. This sort of "collaborative" endeavor is fraught with turf and political issues. 

This is a very ambitious set of initiatives and advocates of municipal ownership must certainly wish that this would have been started much earlier in the President's tenure. But it is, nonetheless, a big deal. And preemption alone would do enormous amounts to free up local communities.

Lagniappe: Readers of the White Paper who follow munibroadband closely may think that some of the wording sounds very familiar. They'd be right. The White House has clearly drawn extensively on the work of Christopher Mitchell from muninetworks.org. Chris has reported extensively on Lafayette and visited here more than once. He's been invited to Cedar Falls where the president is expected to elaborate on his plans in advance of the state of the union address. Raise your glass for Christopher Mitchell!

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