All posts by CLIC

Why CLIC-NC? Because NC Hearts Gigabit

There was a buzz at the Broadband Communities’ recent Atlanta conference earlier this month, and part of that circled around a new grassroots group whose founders were present and speaking about their new educational project, NC Hearts Gigabit.  Formed as a project of CLIC-NC, the North Carolina chapter of CLIC, NC Hearts Gigabit will serve as a story-telling platform about North Carolina’s need for everyone in the state, from rural and urban communities, to have access to 21st century, high capacity broadband.  And yet the project goes beyond that. It seeks to uncover how North Carolina communities are rebuilding their local economies by utilizing this critical infrastructure so they can stay competitive in the global economy; how they are growing inclusive small businesses and re-skilling their workforce.  The ultimate objective of the group is to reinvigorate North Carolina’s long history as a technology leader and re-establish its vanguard role  in this space.

Enjoy this podcast interview by Chris Mitchell, the Director of the Community Broadband Networks Initiative with the Institute for Local Self-Reliance, of three of the project’s founders: Christa Wagner Vinson, Deborah Watts and Alan Fitzpatrick while they were all in Atlanta. For more about NC Hearts Gigabit CLIC-NC here.

Our Way Forward

What Is Local Internet Choice?

The traditional model of broadband deployment, where private-sector investment flows to the areas that produce the highest returns, has worked in some parts of the country, but it has also left many communities without competitive options for broadband services and in some cases without any option at all.  This “connectivity gap” is most acute in America’s low-income and rural communities.

The Coalition for Local Internet Choice (CLIC) seeks to build understanding and consensus on the need for local broadband decision-making.  CLIC focuses on positive, non-partisan themes—the benefits of advanced communications capabilities; the value of cooperation between the public and private sectors; critical importance of preparing for the future of work.  CLIC backs up its advocacy with the best available research and a wealth of case histories.

At CLIC, we believe that communities should be free to seek a range of options for obtaining the best broadband infrastructure they deem necessary—by working with willing incumbents, by entering into public private-partnerships of various kinds, by deploying broadband themselves, or by developing other creative alternatives.  This is Local Internet Choice

What Does CLIC Do?

State Legislative Battles

More than 20 states currently have industry-promoted barriers to community broadband initiatives and public-private broadband partnerships, and several other state legislatures consider such legislation every year.  These anticompetitive laws are bad for the communities involved, bad for the private sector, particularly the high tech industry, and bad for America’s global competitiveness.  CLIC assists localities in opposing new and existing barriers by organizing opposition from a growing number of prominent companies and national associations, including Google, Neflix, Indeed, and others.  CLIC also assists our local allies with analyzing proposed legislation, drafting alternatives, developing strategies, identifying and preparing witnesses, preparing talking points, etc.

Thought Leadership

CLIC has developed several key papers that have helped to shape the conversation around community-led broadband initiatives as a matter of economic importance that cannot be defined by a single model or community.  In addition, CLIC responds to campaigns that seek to mischaracterize community broadband efforts as wasteful, inefficient, or anti-competitive.   In our blog and newsletters, CLIC also publishes articles from prominent thought-leaders in our field.  In addition, CLIC hosts a webinar series, a bi-annual day-long conference, and frequently advises our allies on broadband matters. 

State Chapters

CLIC’s state chapters arose organically from the desire of our members to organize under the CLIC banner at the state level.  The state chapters host regular lunches with community leaders, have built their own web presence, and next spring, our first state chapter, CLIC-NC, will host a statewide conference.

How You Can Help?

CLIC’s leadership has set three major goals for the next twelve months: Defeat all new proposed state barriers, roll back as many existing state barriers as possible, and continue building a national consensus on the need for and benefits of local Internet choice.  We need your help.  Please call or write to us to discuss ways that we can work together to achieve these goals.

See you at #CLIC-Atlanta tomorrow-1pm!

We look forward to seeing everyone tomorrow, November 7th at 1p.m. in Atlanta at the Renaissance Concourse Atlanta Airport hotel for our pre-conference event, #CLIC-Atlanta,  “ An Action Plan for Local Internet Choice for 2017 and Beyond.”

During this intense half day, we will focus on how to overcome barriers that impede the development of advanced communications networks. We will examine this year’s state legislative sessions and hear about numerous victories which pushed back anti-municipal broadband legislation, as well as about new attempts to create more local broadband decision-making authority.  We’ll hear about the amazing grass-roots effort carried out in Virginia and how to use social media to pull together and to communicate your message to both your local officials and to state legislators alike. A panel comprised of officials from successful municipal broadband communities will “debunk the bunk” that these networks fall under their own weight. And finally, Gary Bolles, our keynote speaker, will help us answer the question of what all this is about – future economic development — and how to utilize our Gigabit networks to train a workforce that can respond and participate in this global economy now dependent on rapid information flow.

To receive the CLIC member discount to both CLIC Day and BBC’s “Fiber for a New Economy,” use CLIC’s code CLIC-ATL17, for a conference rate of $150. If you are not already a member of CLIC, you can join here.  (It’s free).

See you @CLIC Day in Atlanta, Nov 7th!

We look forward to seeing everyone Tuesday, November 7th at 1p.m. in Atlanta at the Renaissance Concourse Atlanta Airport hotel for our pre-conference event, “ An Action Plan for Local Internet Choice for 2017 and Beyond.”

During this intense half day, we will focus on how to overcome barriers that impede the development of advanced communications networks. We will examine this year’s state legislative sessions and hear about numerous victories which pushed back anti-municipal broadband legislation, as well as about new attempts to create more local broadband decision-making authority.  We’ll hear about the amazing grass-roots effort carried out in Virginia and how to use social media to pull together and to communicate your message to both your local officials and to state legislators alike. A panel comprised of officials from successful municipal broadband communities will “debunk the bunk” that these networks fall under their own weight. And finally, Gary Bolles, our keynote speaker, will help us answer the question of what all this is about – future economic development — and how to utilize our Gigabit networks to train a workforce that can respond and participate in this global economy now dependent on rapid information flow.

You can still register as a CLIC member here.  To receive the CLIC member discount to both CLIC Day and BBC’s “Fiber for a New Economy,” use CLIC’s code CLIC-ATL17, for a conference rate of $150. If you are not already a member of CLIC, you can join here.  (It’s free).

Future of Work Expert, Gary Bolles, will keynote CLIC’s Day @BBC Atlanta on Nov 7

Advanced broadband networks have long been drivers and platforms of local economic development. Now, communities are increasingly asking how such networks can help them meet the challenge of providing residents fulfilling and well-paying work opportunities in the face of rapidly accelerating automation, artificial intelligence, robotics, and globalization.  CLIC has the honor of featuring international future-of-work expert Gary Bolles as the keynote speaker for our CLIC Day strategy session in Atlanta on November 7.   A member of CLIC’s board of advisors, Gary is the director the Future of Work program at Singularity University as well as founding partner of eParachute and Charrette.  Many of you may also know Gary from his work with his father Richard Bolles, author of What Color Is Your Parachute?

Come join us in Atlanta, as Gary helps us leap forward and make this “Age of Acceleration” work for us.  Here is one of Gary’s recent blogs on the topic.

Unbundling Work: Learning to Thrive in Disruptive Times

by Gary A. Bolles, Partner, Charrette LLC; Co-founder, eParachute.com

Listed below are the major insights from the full version of Unbundling Work, where more complete statistics and graphs are included.

-Automation & globalization are unbundling work — but our greatest challenge is the pace of change.

-As detailed in Unbundling Higher Ed and in Unbundling the Middle Class, the arc of our lives — defined in the industrial era — includes “three boxes”: A glut of learning, then a glut of work, then a glut of leisure (in what I call “the period formerly known as retirement”). Millions of Americans have followed those Old Rules of Work, which included learning a trade or getting a degree; doing that work for most of their careers; buying a house, having a family, and educating their kids so they’d have a better life. But following those rules no longer results in widespread economic benefit.

-Even though, as of this writing, unemployment sits at an 18-year low, nearly half of all workers report they are under-employed, and about two-thirds are not engaged with their work. Unemployment increasingly is concentrated in rural areas, and is likely to increase there, as more and more young people move to urban areas.

-Work is becoming unbundled — but what is work? Work is four things: Skills, applied to Tasks, to solve Problems, and generate Results. (We are paid for work because we’re problem-solvers and results-generators. But we are often rated by how we perform Tasks.)

Automation doesn’t kill jobs: It performs Tasks. It’s an employer’s decision if enough Tasks are automated to justify killing a job.

-Most studies reported in the popular press focus on what Tasks are automate-able —Tasks that could be automated by software & robots — but can’t accurately predict what employers will choose to actually automate, nor what decisions employers will make about how many jobs to retain or destroy. And they can’t predict what the net impact on compensated work is likely to be, because we can’t effectively envision what new work will be created.

-We do know that automation has the potential to disrupt an increasing number of work categories. Automation creates a lot of jobs. Automation will change a lot of jobs. The potential for displacement is dramatic. And the pace of change isn’t likely to ever slow down.

-We don’t know what the net impact on compensated work will be, nor exactly what the arc of impact on many job categories (such as truckers and self-driving trucks). We also don’t know what the impact of “gig economy” two-sided work market platforms will be — though we do know that many of the existing platforms have a downward impact on wages.

-Hi-tech theorists often assume the net impact of automation will eventually be that robots and software will eat most jobs, and that we need to consider a “universal basic income” to insulate workers from disruption. That’s essentially hi-tech “dancing in the end-zone,” assuming that technology “wins” and humans lose. And it’s a failure of imagination, because those same pundits can’t envision what work will be created by automation.

The most important question we can ask ourselves is: In 20 years, what will we wish we had done — today? What we need is a set of processes to help us continually to adapt as exponential changes continue to occur.

-There are numerous strategies that we need to pursue simultaneously, including converting our schools to teach 21st-century skills like collaborative problem-solving, converting our colleges to lifelong learning platforms, creating numerous short-cycle “nano-degrees” offering targeted knowledge linked to available work, expanding trusted reputation systems like badging, and training to help workers and managers to become continually adaptive and entrepreneurial as they change work situations much more rapidly.

-Silicon Valley needs to turn its considerable innovation engine toward using technology to enhance workers’ skills, to increase their access to compensated work.

-Employers have numerous opportunities, including adopting more inclusive hiring practices, increasing market signals so workers can know better what opportunity is available, instituting apprenticeships and mentorships, “rural-sourcing” work, and expanding their corporate stakeholders beyond shareholders to include workers, customers, partners, communities, and the planet — and therefore changing the calculus for retaining workers.

-We need to rethink “the period formerly known as retirement,” dramatically increasing the perceived value of the experience of older workers.

-We need to create new policies for an exponentially-changing world, including changing the way we report on employment, revising certificate requirements for many jobs, creating individual learning accounts, and create portable benefits.

Thanks to Dick Bolles, John Hagel, Vint Cerf, Peter Sims, David Nordfors, Parag Khanna, and Heidi Kleinmaus for their contributions to the thinking here.

CLIC Congratulates NATOA Community Broadband Award Winners

Every year NATOA holds a nationwide competition for those local communities who are showing exceptional leadership by building programs that champion community interests in broadband deployment and adoption. Each of these award winners demonstrates how local communities across the nation are actively engaging their resources to ensure full community access to this critical modern infrastructure.

CLIC congratulates the following five 2017 award winners:

  • Community Broadband Hero of the Year: Danna MacKenzie, Executive Director, State of Minnesota Office of Broadband Development;
  • Community Broadband Project of the Year: Longmont Power & Communications, Longmont, CO;
  • Community Broadband Strategic Plan of the Year: Seattle, WA “Strategic Plan for Facilitating Equitable Access to Wireless Broadband”;
  • Community Broadband Digital Equity Project of the Year: Seattle, WA “Technology Matching Fund”;
  • Community Broadband Innovative Partnership of the Year: Garrett County, MD & Declaration Networks Group, Inc.

More on these award winners can be found here.

From CLIC-NC: Mozilla Brings Together Gigabit Lovers in Charlotte, NC

by Christa Wagner Vinson and Alan Fitzpatrick

Mozilla, probably best known for its adorable vulpine mascot from the Firefox web browser, came to Charlotte last month to talk about the virtues of high-speed gigabit Internet connectivity and what can be done with it. Mozilla’s foundation has recently been connecting tech enthusiasts, digital literacy advocates, and other leaders through its Hive Learning Networks and gigabit city-based programs in Chattanooga, Tenn.; Austin, Texas; Lafayette, La.; Eugene, Ore. and Kansas City, Mo.

The Hive’s neighborly outreach, plus the recent arrival of gigabit broadband Internet service to Charlotte, is what brought Mozilla our way. Google Fiber Charlotte and NC Hearts Gigabit, (a project of CLIC-NC and an outgrowth of Charlotte Hearts Gigabit) , were pleased to host a small gathering for the half-day workshop.

Kicking things off in the Google Fiber event space in uptown, the workshop got an appropriately techie start by first defining gigabit. So, what is that, exactly? Well, giga is derived from the Greek word for giant, and, yes, it’s pretty big.  A gigabit is a thousand megabits, which is a thousand kilobits, which is a thousand bits. 1,000 x 1,000 x 1,000 equals a gigabit, one billion bits per second. (Bit, by the way, is a basic unit of information that generally refers to speed of upload or download.  Byte, meanwhile, generally refers to storage capacity – the quantity of data.)

Mozilla’s facilitators helped the group visualize the possibilities of a world at Gigabit speed. They asked the group to rate their awareness of various gigabit-related topics like 4K video and the Internet of Things. They dazzled by showcasing gigabit-enabled success stories from Chattanooga and Kansas City, where next-generation applications being built there are making possible everything from scientific research to artistic collaboration. The conversation then turned pragmatic: sorting out what is working in the Charlotte region when it comes to using technology to meet community needs – and what isn’t. The event participants, ranging from digital inclusion and workforce developments advocates to smart city wonks and civic techies, each had a stake in the conversation.

Yet the workshop also offered a welcome opportunity to challenge pre-conceived expectations.  Namely, that while the digital revolution has long promised straightforwardly positive advancements in economic development– new jobs created from technological innovation, the decentralization of work to anywhere with an Internet connection – the reality is, it’s been a bit more complicated in the execution.  The upshot, fortunately, is that there are ways to get there – at least when Mozilla is your tour guide.

As Charlotte powers forward with its own gigabit networks, we hope the region will continue to work hard to find solutions for the complexities the Internet Age throws at us. This will mean helping people get jobs wherever they are, and with the skills they already have, using digital platforms; innovating the new financial products that can support broadband expansion, as well as mobile financial services that meet the needs of underserved groups; helping small business deploy technology strategies that make them more productive and competitive; and helping our region win the race for the jobs produced by Industry 4.0 so that we’re talking about up-skilling rather than job killing.

In the end, for community and economic developers and those we serve, the real opportunity is discovering what we actually want out of technology — after all, it is merely a tool — and how to get it. From application development to community development, and everything in between, we have a lot of work to do.

And, hey, if you’re reading this blog, you are an agent in that change. Charlotte Hearts Gigabit, and NC Hearts Gigabit look forward to continuing the buzz around the enormous opportunity of the gigabit.  You can follow us on twitter at @NCHeartsGb

Who knows, we got the Hornets back, maybe we can be a Mozilla Hive City one day, too.

Wilson Greenlight to Continue Gigabit Fiber Service in Rural Pinetops and Vick Family Farms — with conditions

Late last night, the North Carolina General Assembly passed legislation, HB 396, allowing Wilson’s Greenlight to continue providing broadband service to Pinetops and Vick Family Farms. The bill sets additional conditions and also authorizes Greenlight to resume charging those customers for service.

This action somewhat resolves a series of legislative and regulatory decisions that required Greenlight to cease charging for service in these recently expanded areas, beginning last October. Under the new law, Pinetops customers and Vick Family Farms can continue to receive Greenlight service until another provider builds a similar fiber to the home network in the area. At that time, Greenlight would have 30 days to cease service, with customers transitioning to the new provider. In that event, Pinetops would be in the unique position of having two fiber to the home systems to serve a small, rural community. (Pinetops has about 600 households, and a per capita income of $15,763. About 20% of the population live below the poverty line, with about 60% of the residents being African American and 40% Caucasian).

“We appreciate our delegation’s efforts, led by Representative Martin, to eliminate restrictions on Greenlight’s ability to serve customers who requested and desperately need our service,” said Wilson Mayor Bruce Rose. “While this is not the bill we had hoped for, it is a step in the right direction. We hope that in the future our General Assembly will be allowed to focus on expanding rural broadband instead of restricting it.”

House Bill 396: Municipal Broadband Service Area was introduced first in the House, by Representative Susan Martin (R-Wilson) and Representative Jean Farmer-Butterfield (D-Wilson). It was presented on the Senate floor last night by Senator Harry Brown (R-Onslow, Jones), Senate Majority Leader, who represents many rural communities in his district.

Pinetops residents were left with much uncertainty in the past few months about future access to broadband service. Suzanne Coker-Craig and Brent Wooten, both Pinetops Town Commissioners, have worked diligently toward a solution to preserve reliable broadband in the community.

“Although not the solution we expected, we are pleased this bill allows us to continue to leverage Greenlight’s next generation infrastructure as we focus on growing our community,” said Coker-Craig. “Hopefully, no other provider will exercise the option to build redundant infrastructure that our community neither wants nor needs. Pinetops has made it clear that we want the quality and speed of service that only Greenlight can provide.”

Greenlight currently serves more than 200 residential and commercial customers in Pinetops, as well as providing broadband access to community and anchor institutions.

“We are pleased to learn that we will be allowed to continue serving Pinetops and Vick Farms with the best broadband service in our State,” said Greenlight General Manager Will Aycock. “Our focus moving forward is to determine how best to serve these areas under the new legislation.”

The legislation will become effective once Governor Cooper signs it into law, expected early next week.

Background

Under legislation adopted the North Carolina General Assembly’s 2011 session, municipalities like Wilson are barred from offering broadband services except in very limited circumstances. Wilson’s Greenlight system was already built and serving customers when the legislation passed, after years of unsuccessful attempts to partner with a telecom partner to offer broadband in the city. The legislation (heavily lobbied for by the state’s incumbent providers) limits Wilson to operate Greenlight only within Wilson County.

In 2015, the Federal Communications Commission ruled that a federal law encouraging the extension of broadband into underserved areas preempted North Carolina’s law.  The FCC ruling allowed Wilson to provide broadband to customers within its electric service area, a five-county region.

Wilson then extended Greenlight to Pinetops in Edgecombe County and Vick Farms, a large family farm that employs nearly 300 people just over the Wilson County line in Nash County, pursuant to the FCC ruling, in early 2016. (The critical nature of Wilson’s Greenlight’s next generation internet service to the sustainability of Vicks family farm sweet potato production was featured by the New York Times last year.)

On August 10, 2016, the United States Sixth Circuit Court of Appeals ruled that the FCC had exceeded its authority in preempting the North Carolina statutes. That ruling put the 2011 NC law back in place.  The NC law required Wilson to cease selling Greenlight services to Pinetops and Vick Family Farm by October 2016 or risk having to shut down all of Greenlight.

The Wilson City Council voted in September 2016 to provide limited Greenlight service to customers outside of Wilson County at no charge for up to six months, a measure that prevented disconnection of customers in the town of Pinetops and Vick Family Farms. Without this action, these customers would have been disconnected. The Council made that decision based on a commitment by Rep. Martin and North Carolina Senator Harry Brown to draft and support legislation to change the current law in the 2017 session of the North Carolina General Assembly.

Wilson Greenlight was there for Vick Family Farms in the heart of the sweet potato harvesting season; and it continued to be there for Pinetops even during Hurricane Matthew.

Why You Should Join CLIC’s Newest Chapter in Colorado

I am Todd Barnes. I was president of the Colorado Communications and Utility Alliance (CCUA) for 6 years and just stepped down in January. As such, I wanted to introduce you to CLIC’s newest chapter, CLIC-Colorado. A little over six months ago, CCUA voted to become an official chapter of CLIC. This alliance between the CCUA and CLIC was a natural fit because both CLIC and CCUA believe that the internet is an essential element of every community’s infrastructure and that each local community is best at determining if its broadband services are sufficient to meet current and future needs.

This natural partnership will weave CLIC’s network further into our state-wide efforts. For many years, CLIC has worked in unison with CCUA to support its legislative agenda both at the state and federal levels. Along with our legal counsel, Ken Fellman, and the other members of CCUA’s Executive Committee, we have  partnered with the Colorado Municipal League to educate Colorado elected officials about the intricate issues associated with broadband deployment and the challenges the industry has presented to local decision-making. Our partnership was most valuable during the last two legislative sessions in Colorado, when our organizations battled together to overcome a state law that prevents local governments from providing broadband services. While we have not yet repealed the law, our effort will likely continue because it is the natural outgrowth of  a popular movement in Colorado communities to gain local internet choice. Over the last few years, more than 95 Colorado communities have voted in referendum to exempt themselves from the state law that prohibits them from providing broadband networks, with vote margins being far from close.  An average of more than 75% of the voters declared that they wanted their community to have the right to choose.

In addition to broadband, CCUA, and now CLIC-Colorado, are big supporters of PEG operations and programming. I actually started my work with CCUA as a member of the video production committee. We started producing our own video program for members to use on their PEG channels. Today, CCUA produces its own video program called Connected Colorado. This commercial-quality production lets our communities showcase events, programs and people from their communities.

Please feel free to visit the CCUA’s website for more information at www.coloradocua.org or become a Colorado member of CLIC by clicking here, and your name will pass through to our chapter.

Professor Yoo’s Flawed Study Flunks Test on Municipal Broadband

By Jim Baller and Joanne Hovis

On May 24, 2017, University of Pennsylvania Law School professor Christopher Yoo and  student Timothy Pfenninger released a paper entitled “Municipal Fiber in the United States: An Empirical Assessment of Financial Performance”. Applying a Net Present Value analysis to data on 20 municipal broadband projects for the years 2010 to 2014, the paper concluded that 11 projects generated negative cash flow and that only two projects generated sufficient cash flow to pay off the debt incurred during the networks’ estimated useful life.

As with many past industry-supported attacks on municipal broadband, it will take some time for interested readers to dig into the details of the Yoo study and fully understand its strengths and weaknesses.[1] That will occur in due course. There are, however, a number of serious problems with this study that leap out at once.

For one thing, almost immediately after releasing their report, the authors issued a press release acknowledging that they had “erroneously stated that the bonds used to finance the projects in Chattanooga, TN; Lafayette, LA; and Wilson, NC; call for balloon payments toward the end of their bond terms.”[2] They say that they made this error because they were reading summary tables on page 2 of the relevant sources rather than “[t]he more detailed discussions contained inside the Official Statements.”[3]

While the authors claim that this error did not affect their financial analysis, one wonders how many other serious errors exist in the study—and how many other times the authors took shortcuts instead of reviewing the full available data. Perhaps if they had contacted the cities at issue to verify the data, they could have caught this mistake in advance. Apparently, they skipped that step as well.

A particularly important shortcoming of the study is that the choice of 2010 through 2014 as the study period introduced significant selection bias. This occurred for at least two reasons. First, at least three of the key projects studied—Chattanooga, Lafayette, and Wilson—all began service in 2009. Because city-wide projects take years to build (as do all substantial communications networks), none of these projects was fully operational throughout the 2010 to 2014 study period.  This may also have been true of several of the other projects included in the study.[4]

Second, amplifying this problem, during the 2010-2014 study period, the U.S. was slowly recovering from the 2008–2009 collapse of the global economy. This undoubtedly dampened demand for communications services relative to what it would have been in more normal times. Yet, the authors chose to base their projections on these unrepresentative data.

That using 2010-2014 as the study period was inappropriate becomes all the more apparent when one examines Chattanooga’s, Lafayette’s, and Wilson’s actual post-2014 experience.  For example, the Yoo study predicted that it would take Chattanooga 412 years to “turn positive.” In fact, Chattanooga’s post-2014 sales have soared, its fiber utility has already paid off its debt, and its net revenues from sales of fiber-based communications services are helping to keep Chattanooga’s electric rates down.[5]  At the same time, according to studies by Dr. Bento Lobo, professor of finance at the University of Tennessee (Chattanooga), Chattanooga’s fiber network has contributed to the creation of between 2,800 and 5,200 jobs—and to economic and social benefits to the community ranging in value from $865 million to $1.321 billion.[6]

Lafayette and Wilson have also had strong post-2014 experiences. Wilson has reduced electric rates by 22 percent, a clear sign of the strength of its utility,  LUS Fiber has already paid $600,000 to the City’s General Fund, and by 2020, it will be paying about $1 million annually, which support Lafayette’s fire and police forces.  LUS Fiber has also helped to create nearly 1,000 high tech jobs in Lafayette.

Indeed, all three cities have merited strong bond ratings from Wall Street.[7] So, one must ask, who has more credibility in assessing the strength of these municipal fiber projects, a law professor and his student—or professional bond rating firms such as Moody’s Investment Service, Fitch Ratings, and Standard & Poor’s Ratings?

Another problem with the Yoo study is that the boldness of its conclusions is undermined by the many caveats and qualifications set forth at various points in the study. For example, at one point, the report states, “[t]he high-level analysis presented in this study may overlook key details that can help explain the results in particular cases. In addition, the financial performance of these projects may improve in the future.”[8]

At another point, the study notes that the authors did not have certain data for seven of the 20 projects being studied, so they made projections based on data that they had for the remaining 13 projects.[9] This effectively made a small sample of projects even smaller.

Likewise, in the course of discussing their linear model for calculating discounted cash flows from 2010 to 2014, the authors candidly caution, “[c]are should be placed on attributing too much weight to the results of these models. The relatively small number of observations and the simplicity of the model prevent them from achieving statistical significance.”[10]

Nevertheless, despite these and other similar qualifications, the authors did not hesitate to draw broad conclusion and opine that “the overall results provide a useful snapshot of the nature and size of the challenges that municipal fiber projects face.”[11] Unfortunately, in reporting on this study, several media outlets have focused on the authors’ sensational conclusions and have missed the significance of these caveats.

The study also insultingly suggests that city officials are shortsighted in seeking to secure for their constituents affordable access to gigabit broadband: “[a]lthough some day people may need the download speeds that FTTH makes possible, the evidence suggests little need for such speeds today.”[12]

This breezy dismissal of the need for fast broadband demonstrates that the authors lack understanding of the goals of the local officials they seek to warn away from municipal fiber projects. Like electric utilities in the last century, fiber networks are multi-purpose platforms and drivers of simultaneous progress in just about everything that matters to communities. This includes economic development, education, public safety, healthcare, transportation, environmental protection, energy, government service, democratic discourse, digital equity, entertainment, and much more.

These critical community goals are why local government officials are eager to obtain the benefits of advanced communications networks—by working with willing incumbents, partnering with new entrants, building their own networks when necessary, or developing other innovative arrangements that work for them.

In any event, local governments are not alone in seeking broadband at gigabit speeds. Google Fiber, AT&T, Comcast, and many other entities have made the case for such robust networks—and have invested in building them in select areas, notwithstanding Mr. Yoo’s skepticism about the need for such networks.

Furthermore, throughout their report, the authors condescendingly treat municipal leaders as ignorant hayseeds.  Municipal leaders, the authors say, “should carefully consider all of the relevant costs and risks before moving forward with a municipal fiber program.”[13] Cities considering whether to initiate a municipal fiber project “should carefully evaluate the performance of prior efforts and assess whether differences exist that would likely lead to a better outcome.”[14]  In our experience, local government officials are well aware that capital-intensive infrastructure projects are costly and risky and actively seek  to learn from the experiences of other communities. They do not need a lecture on common sense from a law professor and a law student.

When a locality considers the possibility of developing a municipal fiber network, months—even years—of intensive discussion typically occurs at the local level, during which every fact, every assumption, and every technological, legal, financial, social, and other relevant issue is examined from multiple angles. Incumbent service providers invariably participate actively in this process, as do local entrepreneurs and competitive providers. In the end, this process ensures that only those projects that meet a significant unmet need and have a high probability of success will go forward.

Finally, as former Pennsylvania Governor Ed Rendell noted at the event where this problematic report was released, localities undertake broadband initiatives not for purposes of profit, but for public purposes such as education, economic development, healthcare, and civic engagement. These purposes are fundamental to the missions and obligations of local governments, and the value delivered by fiber networks in these areas goes far beyond income on a financial statement. As with so much else about municipal broadband, Mr. Yoo and his student fail to accurately understand that.

Jim Baller is the President, and Joanne Hovis is the Chief Executive Officer, of the Coalition for Local Internet Choice

[1]               The Yoo study was published under the auspices of Penn Law and its Center for Technology, Innovation and Competition. Among the Center’s supporters are AT&T, Comcast-NBC Universal, CTIA, NCTA, Time Warner Cable, and Verizon. https://goo.gl/oY1Ouv.

[2]               Steven Barnes, “Correction,” Press Release, University of Pennsylvania Law School, May 26, 2017, https://goo.gl/7XFWJ2.

[3]               Id.

[4]               Table V includes a column entitled “Age of Project as of 2010,” but the numbers listed in the column are unreliable.  For example, Chattanooga and Wilson are listed as two years old, and Lafayette is listed as three years old, even though the study elsewhere acknowledges that each began service in 2009.  According to Table V, at least five other projects were two or three years old as of 2010.

[5]               Colin Wood, “Report discredits municipal fiber financials — but experts balk,” Statescoop, May 30, 2017, https://goo.gl/cU6P1x.

[6]               Bento J. Lobo, The Realized Value of Fiber Infrastructure in Hamilton County, TN (May 2, 2017), https://goo.gl/g4vDDJ.

[7]               Dave Flessner, “EPB Readies $250 million bond issue with upgraded rating,” Times Free Press, https://goo.gl/Ait7w8, July 9, 2015 (Fitch and Standard & Poor’s upgrade EPB’s bond rating from AA to AA-plus); “Standard & Poor’s Upgrades LUS Fiber’s Bond Rating to A+”, https://goo.gl/YjASlL (April 2015); City of Wilson, NC, “Fitch Ratings upgrades City of Wilson bond rating,” https://goo.gl/CZbyxh December 30, 2016 (“The City of Wilson’s bond rating was recently upgraded by Fitch Ratings to AA+, a significant endorsement of the financial health of the city.”)

[8]               Yoo study, at 1. See also id., at 3.

[9]               Id., at 1.

[10]             Id., at 24.

[11]             Id., at 1.

[12]             Id.

[13]             Id., at 1.

[14]             Id.