Broadband Cable Association of Pennsylvania

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November 7, 2013

In 2009, Vince Jordan was one of a handful of Coloradans hoping to flip the switch on a next-generation fiber optic network in his area. Longmont's 17-mile loop of fiber would have been capable of connecting Jordan to the Web at speeds 100 times faster than the national average. The city owned the cables already. All it needed was approval from the city's voters.

But Jordan, the broadband manager for Longmont's public electric utility, failed to anticipate one thing: The cable companies. "We got creamed," he says. "We lost by 12 [percentage points] in that vote."

On that election night four years ago, they were caught flat-footed. The cable industry had poured hundreds of thousands of dollars into thwarting its prospective government-owned challenger at the polls. It dwarfed the advocates' expenditures, which that year amounted to all of $95. That history made last night's election results particularly sweet for the city's municipal fiber advocates. Longmont residents approved a $45.3 million bond issuance that will go toward funding a city-wide fiber network. But recent political fights haven't always had a happy ending for advocates of municipal broadband projects.

Cable incumbents have been fighting to defeat municipal fiber proposals all over the country. We recently reported that cable groups invested money to defeat Seattle mayor Mike McGinn, a municipal fiber supporter. (For the record, Sena Fitzmaurice, a Comcast spokesperson, denied Tuesday that the company's political contributions had any connection with McGinn's broadband policies. She says Comcast has contributed consistently to the Seattle Broadband Communications Coalition of Washington over the past five years.) In early returns Tuesday, McGinn was trailing challenger Ed Murray, 56-44. But the battle of Seattle is far from the only time advocates of new broadband initiatives have crossed swords with incumbent cable companies. Across the United States, cable lobbyists have helped erect legal barriers to stifle competition from public utilities. Industry groups have repeatedly filed lawsuits to block city attempts to roll out fiber service. And they have also opposed public referendums to allow cities to build their own networks.

Longmont, Colo., was merely one such battleground. In North St. Paul, Minn., a 2009 ballot measure to let muni fiber move forward was defeated by a resounding 34-point margin. Opposition to the fledgling network, PolarNet, was led by the Minnesota Cable Communications Association. In the weeks leading up to the vote, it and other opposition groups spent some $40,000 campaigning against the measure. MCCA alone contributed more than $15,000 to the effort over the same period. Part of the organization's message was that despite consumer confusion about the options for commercial Internet, the local market for broadband was actually very competitive - people just didn't know it. "So many things have happened since then," says Michael Martin, MCCA's treasurer. "The state has developed a mapping system that shows all the providers in an area so people can go to an objective source and identify the competitors that are available to them. That wasn't available at the time. A lot of what people knew about what was available came mainly through word of mouth. It was anecdotal."

Whatever workarounds may have been built since the push for PolarNet, the fiber optic cables it was supposed to light up with traffic remain dark today. Paul Ammerman, North St. Paul's economic development director, seemed resigned to the cable industry's will. "We're trying to figure out if it's worth the effort," he says. "Certainly we've got a lot of capacity that's not being used. On the horizon there's always the next breakthrough that might do it. Some say maybe the last mile is not fiber; maybe it's wireless. But that gets beyond the current technology."

In Chattanooga, one of the few places where municipal fiber has managed to gain traction, the state cable association filed a lawsuit in 2007 alleging that the local public utility, EPB, would be breaking the law if it allowed its electricity division to cross-subsidize its fiber optic service. When a judge threw out the case the following year, Comcast filed its own suit. That too was dismissed - and once more on appeal in 2009. Still, Longmont may offer the most vivid example of cable industry groups trying to hobble a public broadband provider. Colorado is one of more than a dozen states that have passed laws prohibiting or hindering municipal broadband deployments. (Tennessee and Minnesota made it onto the Federal Communications Commission's initial list in 2004; Colorado proposed its law one year later.) Under the restriction, known as SB 152, cities that want to use their fiber optic cables to provide Internet service must get the approval of its residents before doing so. The rule effectively forbids local governments from managing their own property.

Lobbyists played an obscure but important role in pushing the bill through. According to the National Institute on Money in State Politics, the Colorado Telecommunications Association, a group representing 25 rural phone companies, hired two different teams of lobbyists in 2005 to promote the idea. One, Axiom Strategies, Inc., received $6,000 in contributions from CTA in 2005, a review of state records shows. Lobbyist Patrick Boyle, received $20,616.60 from the industry over the same period. This chain of events is what ultimately led to Longmont's failed 2009 referendum on muni fiber; under the newly-passed law, the city couldn't move forward unless a majority of residents gave their consent. The state's cable group - the Colorado Cable Telecommunications Association - intervened, donating nearly $225,000 to an opposition committee named No Blank Check. Armed with these funds, the group took out full-page newspaper ads assigning nefarious motives to foreign investors who might have played a role in the project.

But not long after the cable industry's victory, Google started floating the idea of installing gigabit fiber in various sites around the country. Some in Longmont suggested petitioning the tech giant to make the city one of its testbeds. "That really helped us educate the community to the value of what we already have here," says Longmont's Vince Jordan. "So we went again [with another referendum] in 2011." This time, CCTA went all-in on fighting the initiative. It upped its contribution to anti-fiber groups, giving $385,000 to a committee called Look Before We Leap. This, in a battle that saw total opposition expenditures top $419,000. In other words, 92 percent of the messaging war against Question 2A was funded by the cable industry.

Yet the increased industry spending hardly seemed to make a difference. By a 61-39 percent vote, city residents agreed that Longmont should be able to do with its fiber optic cables what it wished. How much did pro-fiber groups spend in that encounter? Around $3,700, says Jordan. There are 27,000 households in Longmont. Even if the city were to connect all of the eligible homes to its existing fiber network overnight, it would still reach only 1,100 residences. Cable companies therefore spent over half a million dollars trying to prevent four percent of city households from gaining access to municipal fiber on any reasonable timescale. That's around $600 a home, or six months' worth of Xfinity Triple Play.

Perhaps that's why the cable industry has mostly given up fighting Longmont - it's not worth it anymore. On Tuesday night, voters overwhelmingly approved of the city's third fiber ballot measure since SB 152, Question 2B. Question 2B asks whether the local government should be allowed to issue $45.3 million in bonds to pay for a city-wide deployment of fiber, one that would finally connect all 27,000 homes, and every private business, to public fiber within the next three years. Proponents estimated that without the funding, it would take a half-century to complete the roll-out. Voters gave it the green light, by a 68-32 percent split. No group came forward to contest the measure. The cable companies had picked up their ball and gone home.

This doesn't mean they're going to start backing down everywhere. Critics of municipal networks continue to point to the financial risks taxpayers assume when cities decide to embark on such ambitious projects. "We've been supportive of public-private partnerships where tax dollars aren't competing against private investment capital," says Comcast's Sena Fitzmaurice. "In general, cities have extensive infrastructure needs like roads, bridges and schools, and we think especially in times of fiscal tradeoffs that taxpayer money should be focused on those needs rather than competing with the private sector."

There are certainly more than a handful of municipalities whose fiber projects have failed. Provo, Utah famously sold its public network to Google for a single dollar this year (though the tech company will also assume the burden for Provo's construction loans, which is not insignificant, either). Still, the fact that some local governments have struggled to monetize their fiber, even as others have succeeded, is not an argument for preventing cities from experimenting. Longmont's plan explicitly bars the use of tax money to pay off the bonds. Instead, it will rely solely on revenues from broadband customers. Whether that'll actually work out is hardly clear. But what Longmont's experience does show is how large the gulf is between an incumbent industry that can spend money on a massive scale to promote its interests and advocates of municipal fiber that often lack deep-pocketed allies. Those odds made the triumph of Longmont's municipal fiber backers all the more remarkable. Washington Post

Un-named Republican sources who claim Gov. Tom Corbett has been urged to not run for re-election lack veracity, Pennsylvania party Chairman Rob Gleason said Tuesday. Gleason was speaking about a handful of high-level party consultants, strategists, and operatives quoted anonymously in a Monday Patriot-News/Pennlive report. The article reported that party bosses suggested to Corbett informally that he not seek a second term, and that they also urged some members of the GOP congressional delegation to consider running instead.

"These people don't have the [guts] to put their names out there," an angry Gleason told The Patriot-News Tuesday morning. "I'm shocked that they wouldn't put their names out there. That means he's not a party boss, or a party person." "There's just no credibility in anything that anybody does without attributing their names," he added. "I don't think you made it up, but I wish they would use their names." The sources in the article were granted anonymity because of their fear of reprisals. Corbett, who has suffered mightily in the polls for most of his three years in office, is scheduled to launch his bid for a second term Wednesday near Pittsburgh. Harrisburg Patriot-News

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