calendar for October 30-31, 2019, in our nation’s capital and come join CLIC and
Broadband Communities for two days of
intense discussion devoted to broadband policies and practices that are impacting
our local economies.
Wednesday morning starts with “The Big Picture: Washington Experts Tackle the Critical Broadband Issues” moderated by Washington, D.C. broadband policy expert Jim Baller, and featuring Joseph Wender, Senior Policy Advisor to Senator Ed Markey, Nicole Turner-Lee, Brookings Institute Fellow at the Center for Technology Innovation, Douglas Kinkoph, Acting Administrator of the National Telecommunications and Information Administration, the U.S. Department of Commerce, and a senior representative of the Federal Communications Commission.
days of workshops will then cover broadband and economic development from
multiple angles, including, funding, technology, community broadband,
public-private partnerships, the future of work, strategies on how to bring
modern internet infrastructure to those without access and much more.
Thursday afternoon closes with CLIC’s seminal event: A Conversation about Local Internet Choice in the 2020s, featuring two extraordinary visionaries in the field. Here, Joanne Hovis, CLIC’s CEO, will engage Vint Cerf, an Internet Pioneer and currently VP and Chief Internet Evangelist for Google, and Jon Sallet, former FCC general counsel and author of the Benton Foundation’s publication, “A Vision for the 2020s: Access to Broadband in the Next Decade” in a penetrating exploration of our broadband future. Through this extensive conversation among Joanne, Vint, Jon, and the audience, we will explore the optimal policies and best practices for local broadband decision-making and how these might inform policy making for the coming decade at all levels of government.
CLIC members qualify for the discount rate of $150, by using the code CLIC-DC19. Register now and register here. (This rate includes both conference days and meals.) Or become a CLIC member by signing up here. It’s free.
WASHINGTON, DC – The Coalition for Local Internet Choice (CLIC) today at 2 P.M. will announce the recipients of CLIC’s 2019 Local Internet Choice Awards. CLIC established its national awards to honor individuals and organizations for their extraordinary contributions to the preservation and protection of local decision-making in critical broadband infrastructure matters. These awardees will be honored during CLIC’s opening ceremony on April 8, 2019 in Austin, Texas to kick off our program, Action Plan for Local Internet Choice for 2019 and Beyond.
The 2019 Local Internet Choice Award recipients are:
• Local Internet Choice Federal Policy Champion Blair Levin,Gig.U – For his timely, thoughtful, persuasive, and amusing speeches and writings in support of federal policies that would preserve, protect, and, where necessary, restore local internet choice.
• Local Project of the Year Roanoke Valley Broadband Authority – For operating a financially sound, fully transparent, and state-of-the-art open-access fiber system that has been a driver and platform for robust economic development; that has caused commercial internet and data transport service prices in the region to drop by as much as 30 percent; that has attracted many new providers serving public, private and residential customers; and that has enabled businesses across all four of its member communities to report more service options than ever, allowing them to grow, thrive and compete locally, nationally and internationally.
• Local Internet Choice Local Courage Award Jeff Wilson, IT Director, Holly Springs – For his visionary and exemplary leadership and courage in guiding his Town on how develop a fiber to the home network after his community was bypassed by fiber movements in the region. Jeff recommended and advocated for the community to build its own fiber backbone to serve their public institutions, and this ultimately led to a private company (TING) utilizing that fiber and bringing Gigabit fast, fiber to home service to Holly Spring residents and businesses, and far earlier than the same services were offered to neighboring Research Triangle communities.
• Public Partner of the Year Westfield Gas & Electric – For developing a state-of-the-art fiber network in its home town and then putting the knowledge and experience it gained to good use as the public partner in fiber projects in 20 other rural communities in Western Massachusetts. WG&E not only played a leading role in obtaining financial assistance from the state government, but it is also designing, constructing, and operating the systems. In the words of Massachusetts Governor Charlie Baker, “This is big.”
• Private Partner of the Year Ting Internet – For its continuing excellence as the private partner in a growing number of public-private fiber-to-the-premises partnerships in Colorado, Maryland, North Carolina, and Virginia. Ting is proving that all concerned can benefit from a visionary and well-executed business strategies that focus on helping communities meet ambitious goals driven and supported by advanced communications capabilities, that emphasizes excellent customer relations and careful cost management, and that targets reasonable profits and long-term growth.
• Local Internet Choice Vanguard Innovator Award The City of Wilson – For the City’s extraordinary, ongoing leadership in bringing advanced communications services and capabilities to the businesses, institutions, and residents of its community and for being at the vanguard of the development of creative, highly valuable uses of fiber networks. Among many other things, Wilson has spurred its region’s emergence as an innovation economy, featuring advanced skills workforce development and the area’s first Innovation Hub, called the GigEast Exchange.
Join us April 8th in Austin for CLIC’s half day strategy session that includes an in-depth discussion on how partisanship seems to disappear at the local level when building broadband infrastructure.
During our half day focus detailing An Action Plan for Local Internet Choice in 2019 and Beyond, we will first widen the lens to federal and state policy levels, where partisanship seems stark, as we uncover legislation and regulations that could help or hurt local broadband choice. We will hear from Netflix on why local internet choice matters to their disruptive company, and the day then finishes by narrowing the lens to the local level.
From 4:30-5:30 p.m., “In a Partisan Era, Local Broadband Transcends Partisanship” will feature community broadband experts including Will Aycock, General Manager for Wilson Greenlight; Bill Vallee, State Broadband Policy Coordinator for Connecticut; Nathan Watkins, City Manager and Dwight Thomas, Director of IT and Broadband, Mont Belvieu, Texas, who will tell us their stories on what it took to build this critical infrastructure in their communities. Hear the refreshing stories on how local businesses and residents came together with a common cause. Hear the challenges they faced; but how they overcame them.
Join us on April 8 in Austin as CLIC hosts a half day session on An Action Plan for Local Internet Choice in 2019 and Beyond. CLIC panel discussions will include strategic policy discussions at the federal and state levels, featuring national experts, Angelina Panettieri, Principal Associate, Technology and Communications, for the National League of Cities; Nancy Werner, General Counsel of the National Association of Telecommunications Officers and Advisors; and Deb Socia, Executive Director, Next Century Cities.
Panettieri, Werner, and Socia will join CLIC officers Jim Baller & Joanne Hovis for a focused discussion on Washington 2019: Challenges & Opportunities for the Local Broadband Future. Recent conversations emerging from Washington reaffirm what the CLIC community has always known: the opportunities and challenges of local broadband exceed geographic boundaries. We’ll review the impact of a new Congress and the Trump administration placing local broadband under the national spotlight, whether new local network options are available as the USDA rolls out its new $600 million in rural broadband funds, and whether the FCC will continue to intrude upon traditional local powers. Our state and local panel speakers can be found here.
CLIC is delighted to announce that Dr. Robert Wack, a renowned pioneer in community broadband, has joined the CLIC Board of Advisors.
Robert currently directs a regional strategy to leverage technology and broadband in the delivery of health care services. He serves as medical director of the continuum of care at Frederick Memorial Hospital in Maryland and previously served the hospital as director of the pediatric unit.
Robert is president of the Westminster, MD Common Council, where he championed and led development of the renowned Westminster fiber network. He also serves as board chair of MAGIC, the Mid-Atlantic Gigabit Innovation Collaboratory, an economic development non-profit with the mission of realizing the transformative potential of the community-wide gigabit fiber network.
Robert Wack earned his MD from Georgetown University and completed his pediatric internship and residency at Tripler Army Medical Center as an officer of the United States army.
CLIC welcomes Robert to our board of advisors and thanks him for his many years of effort on behalf of local internet choice and better broadband.
CLIC is proud to announce that Peter Cohen, Partner Engagement Manager at Netflix, will be a featured speaker during our CLIC half day event on April 8 in Austin. Peter will be speaking on “Why Disruptive and Innovative Companies Support Local Internet Choice” at 4pm, following two sessions which will address the challenges and opportunities for local internet choice presented by a new Congress and varied state legislative dynamics.
Background: Twenty-one Arkansas Women Republican State Senators and Representatives wanted it to be clear that Arkansas’ lack of rural broadband was in a state of emergency. As part of their DREAM “B.I.G.” agenda, the Arkansas Republican Women Legislative Caucus sponsored rural broadband legislation on January 23rd, that sought to unleash their rural municipalities to apply for over $1 billion in USDA grants.
As originally written, SB150 would have removed most restrictions on municipalities that do not operate their own electric utilities by putting them on par with municipalities that do operate electric utilities. (Municipal electric utilities in Arkansas already have the right to provide communications services other than traditional local exchange services.) After SB150 moved from the Senate Insurance and Commerce Committee to the Senate floor, the broadband municipal broadband restrictions were re-imposed on those communities that do not operate electric utilities , and a new provision was added giving them the right, alone or with a private partner, to apply for loans or grants to serve unserved areas and to provide services in such unserved areas pursuant to grants or loans received.
On February 15, CLIC wrote a letter of commendation and support to the Arkansas Republican Women Legislative Caucus, complimenting their bold and important step to ensure universal broadband availability in Arkansas.
February 15, 2019
Republican Women Legislative Caucus
Senator Breanne Davis, Senator Cecile Bledsoe,
Senator Jane English, Senator Missy Irvin; Rep. Deanne Vaught, Rep. Sonia
Barker, Rep. Mary. Bentley, Rep. Karilyn Brown, Rep. Sarah Capp, Rep. Frances
Cavenaugh, Rep. Carol Dalby, Rep. Charlene Fite, Rep. Robin Lunstrum, Rep.
Rebecca Petty, Rep. Nelda Speakes, Rep. Michelle Gray, Rep. Cindy Crawford,
Rep. Jana Della Rosa, Rep. Julie Mayberry, Rep. Gayla Hendren McKenzie, and
Rep. Laurie Rushing
Subject: CLIC support for Rural Broadband
Dear Members of the Arkansas Republican Women
We write to thank you and your colleagues for your
work to promote local internet and broadband choice and opportunity.
We write in our capacities as women leaders of the
Coalition for Local Internet Choice (CLIC), a nonpartisan entity that
represents a wide range of public and private interests who support the
authority of local communities to make broadband internet choices that are
essential for economic competitiveness, democratic discourse, and quality of
life in the 21st Century.
CLIC believes that our national interest requires
that local communities have the authority to engage in broadband projects
through whatever means best suits the local community, as is determined by
their elected officials. Such means can include a wide range of options,
including partnerships with private entities, public networking, and
facilitation of private ISP investment.
We were delighted to see that your Caucus’s “Dream B.I.G.” legislative agenda included SB150: An Act to Amend the Telecommunications Regulatory Reform Act of 2013; to Provide Additional Access to FCC-Defined Broadband Service; to Declare an Emergency. The original version of SB150 would have removed the state’s legal barriers that currently prevent municipalities from doing their part to help deploy broadband in their communities. When that version of SB150 passed the Senate Insurance and Commerce Committee, it sparked hope for a better future for the businesses, institutions, and residents of Arkansas. Unfortunately, the far more restrictive version that passed the full Senate represents a step backward, as it ties the hands of local communities to determine their broadband destinies.
We stand with you in this bold
important step to ensure that no child or family is denied access to
educational, healthcare, public safety and economic opportunities unleashed by
access to broadband because of where they live. We hope to have the opportunity
to support your efforts.
Please let us know who we should contact in the near future to work together.
During our half day CLIC session, national legislative experts and local champions will address the challenges and opportunities for our local broadband future created by a new Congress in Washington and the FCC. We will examine issues ranging from broadband infrastructure funding, to yet more FCC regulatory initiatives that could intrude on traditional local powers. We will then delve into the 2019 state legislative year and discuss how new state proposals have hampered or helped local broadband deployments. Our afternoon will close with bi-partisan success stories from various local communities who will share their strategies on how to manage the politics of local broadband initiatives. See our diverse range of speakers here.
CLIC Members can attend our April 8 event and all three days of the BBC conference at a deeply discounted rate, by registering here and using the code CLIC410. Or become a CLIC member. It’s free.
CLIC President, Jim Baller, last week delivered the keynote address at the BoCo Summit in Botetourt County, Virginia. In his address, Jim spoke of the proud history of local Internet and broadband innovation emanating from rural Virginia and then offered some big picture suggestions to aid in that continuing success.
Jim Baller, Keynote Address, The Rural Broadband Technology Solutions Summit, Botetourt, VA – September 26, 2018
Thank you that generous introduction, Arleen [Boyd]. I am delighted to be here, especially because this is one of the best local government listening-and-learning sessions that I’ve ever seen. You have brought together an amazingly talented and experienced array of broadband experts. You’ve reminded me of President John F. Kennedy’s quip at a dinner he hosted for a large group of Nobel Prize winners, “I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered together at the White House, with the possible exception of when Thomas Jefferson dined alone.”
I applaud Board of Supervisors and the Broadband Planning Committee for your vision, your energy, your pro-activism, and your open-mindedness. As Abraham Lincoln once said, “Give me six hours to cut down a tree, and I will spend the first four sharpening my axe.” That, in essence is what the Board and the committee are doing, and I’m sure that you will be well rewarded for this.
I consider myself to be the most fortunate attorney in America, and events like this contribute mightily to that feeling. I feel so lucky and fulfilled to be able to work every day with progressive, adaptive communities around the country, helping them to help themselves to a better future through advanced communications capabilities. I have the opportunity to work on both policy issues and site-specific individual projects, with highly creative and courageous clients and colleagues. I particularly enjoy working on bipartisan public-private partnerships that focus on economic development and benefit of all concerned. For all this, I have much to thank this region, where my career in telecom really took off.
About twenty-five years ago, I began to serve as outside telecom counsel to the American Public Power Association, the national association representing the interests of America’s 2,000 publicly-owned electric utilities. Most of these utilities emerged during America’s push for electrification between the 1880s and 1930s, in communities that were being left behind by private power companies. The communities that did this generally survived and thrived, while many other communities that waited for the private sector to get around to them stagnated or even became “Ghost Towns.”
In the early 1990s, APPA and many of its members grew increasingly concerned that the history of the power industry was going to repeat itself in the telecom area, with private phone and cable companies focusing on lucrative urban markets and leaving rural communities behind in the emerging era of advanced communications. My job was to help ensure that public power communities would have the authority and ability to take matters into their own hands again, if necessary, as they had done so successfully in the electric power arena.
One of my early assignments was to help APPA and its members participate successfully in the debates that led up to Congress’s major overhaul of the federal telecom laws in the Telecommunications Act of 1996. To support APPA’s efforts on Capitol Hill, I wrote a white paper that compared this period in telecommunications with the comparable period in the electric power industry. The comparison was jaw-dropping in 1994, and it is still striking today.
Like electric utility systems, advanced communications networks are all-purpose platforms, drivers, and enablers of simultaneous progress in just about everything that matters to communities.This includes economic development and global competitiveness, lifetime educational and occupational opportunity, public safety, access to affordable modern health care, environmental protection, energy efficiency and security, high-quality government services, urban revitalization, digital equity, democratic engagement, entertainment, and much more.
Not surprisingly, more communities across America than ever before are now seeking to obtain affordable access to advanced communications networks. They are working with willing incumbents, partnering with new entrants, building their own networks if they believe that’s their best option, or developing other creative engagement models. The public is solidly behind these local efforts. A recent poll by Pew Research showed that 70 percent of Americans, including both Democrats and Republicans, believe that local governments should have the right to develop their own broadband networks if they feel that doing so is necessary.
Among the earliest of America’s localities to understand the potential of advanced communications capabilities was the City of Lynchburg, just 55 miles from here. In the mid-1990s, the Lynchburg city government and school system jointly built a 42-mile fiber network for $3.5 million to connect the city’s public facilities and schools. After reading the white paper that I mentioned a few minutes ago, the City’s public works director, Ray Booth, and his deputy, David St. John, sought out and engaged our firm to help them figure out what else the City could do with its fiber network.
As soon as word of our engagement became public, Verizon’s predecessor, Bell Atlantic, pushed a bill through the Virginia legislature that not only prohibited localities from selling telecommunications services directly to the public, but also barred localities from making telecom infrastructure available to companies that could compete with Bell Atlantic.
There were only two exceptions. One exception was for all localities located adjacent to Exit 17 off Interstate 81. Can anyone guess what that applied to? This particular shoe fit only Abingdon, the home of Rick Boucher, who was then a major force in telecom in the US Congress. The other exception was that localities could sell their networks to the private sector without offering them to Bell Atlantic.
In response to the new law, the City launched what we called the Strategic Partner Development Process, a nationwide search for a strategic partner. We started with about 40 candidates, and we ultimately came down to CFW Telecom, a 100-year old communications company based in Waynesboro, VA. In case some of you are wondering, “CFW” stood for Clifton Forge/Waynesboro. CFW later became nTelos, and nTelos, in turn, was acquired by Lumos Networks. In what may have been the first public-private partnership in America involving a fiber broadband network, we ended up with a deal that worked well for both parties, for different but complementary reasons.
The City sold its network to CFW for $1 dollar. This complied with the Virginia law in question and gave CFW a state-of-the-art fiber backbone, a substantial potential market, a beachhead from which to expand throughout the region, and a very happy city that was eager to promote its partnership. In return the City got
the right to continue to use the fibers it was currently using without charge for the next 30 years;
the right to use 8 fibers on all new CFW builds in the city, again without charge for 30 years;
CFW’s commitment to make broadband Internet access available to 95 percent of the addresses in the City within 4 years, with minimum buildout requirements specified for each year;
CFW’s commitment to provide the City the best telephone rates in Virginia for the next 10 years;
CFW engineering consulting services worth up to $200,000;
Use of CFW’s purchasing discounts of up to $500,000.
Not a bad deal for a City whose fiber network had already paid for itself within 18 months. Before I move on from Lynchburg, I’d like to share a war story with you. I was reminded of this as I was talking to your economic development specialist, Ken McFayden, last night. Our talk brought home to me how far economic development professionals have come over the last few years.
When Lynchburg’s Strategic Partnership Development process got down to a short list of 6 candidates, we invited each company to come to Lynchburg to make its case. On our side of the table, we’d typically have representatives of Lynchburg’s city government, the school system, local businesses and colleges, and the local and regional economic development organizations. We’d kick off a discussion about what the Lynchburg community could do with an advanced broadband network, others would pick up the theme and build on it, and before long, the energy around the room would rise to such a level that we could levitated the conference table.
In the middle of one of these sessions, the representative of a company from California watched the discussion accelerating around the room and, after a while, leapt up from her chair and yelled, “I’ve got it, I’ve got it! I know just what Lynchburg needs – a chips factory!” “Oh no,” the regional economic development expert responded, “Lynchburg already has a chips factory – its Frito Lay potato chips plant.”
Happily, as you’re seeing in this Summit, economic development professionals now understand that advanced communications capabilities will increasingly becoming essential, but not alone sufficient, features of successful communities in the years and decades ahead, as electricity was in the last century. As a result, economic development professionals are now critical members of a community’s broadband team.
Let me know turn to a few “big picture” suggestions that I hope will contribute to the County’s success in this Summit and beyond.
First, keep on doing what you’ve already started. You’ve defined your goals, created an open process, invited stakeholders and potential contributors of all kinds to participate, and kept an open mind. Bravo to you. You’re on exactly the right path.
Second, these are uncertain times, with many unknowns and unknowables. As you consider the advice that you’ll be receiving, try to distinguish between facts and opinions, and be wary of taking anyone’s arguments at face value. That includes assertions by the Federal Communications Commission, the communications industry, and the media. In particular, don’t trust lawyers like me when we’re spouting off on technological, business, marketing, and other matters that are beyond our legal expertise. Instead, seek advice from experts who have had years of first-hand experience with successful broadband initiatives in circumstances comparable to yours. If you’d like, I can help you identify the best of these experts.
Let me give you some examples of claims that deserve great caution. We hear every day from some quarters that fifth-generation – that is, “5G” – wireless networks will cure all that ails America, that winning the global race to 5G will create trillions of dollars of gross national product and millions of new jobs, and that 5G networks will eliminate the digital divide between rural and urban areas. Wouldn’t it be great if all this were true? Unfortunately, some of it may not be, at least not in the next few years for rural markets, including some areas of Botetourt County.
There’s a healthy and spirited debate going on around America today about what 5G is, about whether 5G can be successful even in major cities in the United States, and about whether 5G will ever work in rural areas that cannot economically justify the construction of the fiber backhaul necessary for 5G wireless to work.
Without giving these key foundational issues the attention they deserve, the Federal Communications Commission has decided to make rapid 5G deployment one of its top priorities. Unfortunately, in doing so, it has tried to portray state and local governments as impediments to such deployments. In fact, the Commission is voting today on new rules that would severely restrict local authority to manage public rights of way and facilities and to obtain fair compensation for doing so. The FCC’s new rules are likely to result in endless litigation, not just over the FCC’s authority to impose such overbearing rules on state and local governments, but also about how localities should apply the rules on a case-by-case basis. This sadly reminds me of former Colorado governor Richard Lamm’s trenchant observation that “No nation ever sued its way to greatness.” I applaud the Botetourt County Board of Supervisors for its recent letter to the Federal Communications Commission applauding its goals but taking strong issue with the Commission’s approach to achieving them.
I’m not going to get into these issues in greater depth now, as they are on the agenda for discussion later today. I suggest to you, however, that there are few bigger issues affecting local governments today, including Botetourt County, than this one.
Third, the world of communications today is a Tower of Babel. It’s “5G,” “Smart Cities,” “Dig Once,” “One Touch Make Ready,” “Internet of Things,” “The Future of Work,” buzz-word after buzz-word. How can a community make sense of all this and avoid either being frozen in place or being led astray by all the hype? The key, I suggest, is to view your community holistically, to distill from the buzz-words the core principles that make sense for your community, and to take full advantage of the maximum amount of flexibility that evolving federal and state law allows you to exercise. Every community is unique, and its accountable elected officials are in the best position to determine what the community wants its future to be, what it has, what it needs, and what it is willing and able to do to achieve its goals. That, at bottom, is what’s so wrong with the Federal Communications Commission’s one-size-fits-all approach.
Fourth, during a recent visit to London’s remarkable city transportation museum, I came across two thought-provoking quotations from Antoine de Saint-Exupéry, a French philosopher and writer who lived from 1900 to 1944. Saint-Exupéry’s first quotation was:
“A rock pile ceases to be a rock pile the moment that a single man contemplates it, bearing within him the image of a cathedral.”
His second was:
“[Our] task is not to foresee the future but to enable it.”
In my experience, there are two things that are present in just about every successful broadband project. One is local visionaries and champions who see cathedrals in rock piles, who are willing to bet big on the future, and who will work 24/7 to meet every challenge necessary to make the project a success. But that’s not enough. There’s an equally strong need for clear-eyed realists who will cross-examine every fact, figure, and assumption that the visionaries and champions may make and will ensure that the project remains grounded in reality. So, by all means, think cathedrals, but base your decisions on conservative estimates that overstate costs, understate revenues, and leave plenty of headroom to cope with the inevitable unforeseen or unforeseeable circumstances.
Last, I’d like to leave you with a quotation from a great hero of mine, Senator John McCain. In the mid-2000s, he and Senator Frank Lautenberg (D-NJ) co-sponsored a bill called the “Community Broadband Act” that would have banned state barriers to local broadband initiatives, while protecting private carriers from discriminatory local regulation. The bill drew broad bipartisan support in both houses of Congress, and came close to becoming law in 2006.
Senator McCain’s core philosophy was succinctly summarized in this sentence from his statement on the Senate floor when he introduced his bill. “As a country, we cannot afford to cut off any successful strategy if we want to remain internationally competitive.” No single approach is going to meet all of our Nation’s broadband challenges. We’ve got to be open to all options, especially community-driven options, that might work well in the circumstances at hand.
All of us, in our own ways, have the interest, the ability, and the opportunity to help make our communities, our states, and our country a better place. Let’s get on with it.
Earlier this week, CLIC advisor Blair Levin sent CLIC and NATOA leadership a letter detailing his concerns with the FCC’s draft small cell order, an order that preempts local authority while purporting to advance broadband deployment. Blair’s letter describes why the draft order will have the opposite impact and is likely to exacerbate the digital divide while tying the hands of local governments to build collaboration with the private sector. Excerpts of Blair’s analysis are below, and the full letter is here.
Blair Levin :
This is in response to your request for my view of the FCC’s pending order, proposing to cap the fees that state and local governments may charge for small cell attachments. According to the FCC’s draft order, these price-caps will save the industry $2B in costs to operate in metropolitan areas—which will translate into $2.5B in new wireless investment, primarily in rural areas. This letter summarizes my thoughts on aspects of the draft order.
[On Wall Street and in Washington, DC], I’ve interacted with numerous investors, carriers, and localities, and that experience leads to my concerns with the FCC’s argument:
First, focusing on state and local government fees and process is a distraction from the real obstacles to accelerated and ubiquitous deployment of next generation mobile services, which are that broadband deployment economics are very challenging and have to be addressed at all levels of government and through creative collaboration with the private sector. Fees for access to public property represent only one of many, many costs of doing business a carrier will encounter. A focus on reducing or eliminating one (relatively marginal) cost of doing business does not solve the challenging economics of broadband deployment and serves only to obscure the true challenges….
Second, local governments have a strong recent track record of endeavoring to enable and facilitate broadband deployment,as the Google Fiber experience conclusively demonstrated. Vilifying them based on fees for use of public property is not only a distraction, but also unfair. Indeed, rather than acknowledging that carriers have a proven ability to negotiate advantageous fees with localities, the FCC’s draft order infantilizes carriers by preempting state and local government, presumably on the theory that carriers cannot protect themselves in negotiations with states and localities. This is absurd….. Tying the hands of localities and states is self-defeating – it stops them from using creative partnering strategies (as they have successfully done in cities like San Jose, CA and Lincoln, NE) to find ways to improve broadband outcomes…. Thus, despite the FCC’s rhetoric, the proposal will likely exacerbate, rather than alleviate, the digital divide.
Third, the FCC’s draft order is based on a fallacy that no credible investor would adopt and no credible economist endorse:that reducing or eliminating costs for small cell mounting on public property in lucrative areas of the country (thus reducing carriers’ operating costs), will lead to increased capital expenditures in less lucrative areas– thus supposedly making investment more attractive in rural areas.
That simply is not how investment decisions are made…. My experience on Wall Street is that neither analysts nor investors regard this FCC action as likely to lead to increased deployment in non-economically attractive areas, which most on Wall Street would consider an irrational act… In short, while the FCC may ignore reality, the carriers and Wall Street understand that increasing profitability in Market A will not make Market B more attractive for investment. Market B will still be an area that is unprofitable or otherwise unattractive for investment, and the new requirement that Market A subsidize carriers by reducing fees will not benefit Market B under these circumstances….
Finally, let me note something I discuss at length in the attached speeches: the draft order presents a framework in which industry gets all the benefits (reduced fees to access state and local property) with no obligations to reinvest the resulting profits in rural broadband—even though the purported rationale for the reduced fees is that they will lead to new investment. At the same time, states and localities will be forced by federal mandate to bear all the costs and receive no guaranteed benefits.
In short, my response to your request is that I am deeply troubled by the FCC’s draft order, the options it ignored, and the fallacious logic on which it rests. And I’m particularly concerned about the prospect of unelected federal officials in Washington DC mandating how, and at what price, state and local elected officials can manage their own property—all for the benefit of a select group of companies that are under no obligations to reinvest these mandated public subsidies in new deployment.