Connections Blog

Blair Levin on Cities, the FCC and Gigabit Networks

On June 26, 2018, Blair Levin, Executive Director of Gig.U, and Nonresident  Senior Fellow of the Brookings Institute’s Metropolitan Policy Project, provided keynote remarks at the Kansas City Gigabit Summit.  As he did in Austin, Mr. Levin again took the FCC’s BDAC process to task, and suggested better ways for cities and carriers to advance 5G networks — such as through smart local negotiations, among other options. We provide an excerpt of his prepared remarks below, with the full text linked at the end.

Cities, the FCC and Gigabit Networks

Blair Levin,  Brookings Institute, Metropolitan Policy Project

It is pleasure to be with you today.

I open many speeches that way but here I really mean it.

The reason?

This summit symbolizes the enormous vision, and a great achievement, of cities.

When I first spoke here, at the first gigabit summit in 2013, it was shortly after over 1000 communities had expressed an interest in having gigabit broadband networks.

By contrast, only one carrier was interested in offering gigabit internet service—Google. All the other carriers dismissed gigabit networks as a PR stunt; something done for bragging rights but irrelevant to creating consumer value.

Now, five years later, hundreds of cities have gigabit offerings and all the carriers are upgrading their fixed and mobile networks to offer such speeds as fast as they can. Charter has even declared this season “Gigabit Summer.”

Further, the federal government is saying that getting gigabit speeds on our mobile networks is a national imperative and failure to do so threatens our economy and national security.

This is a big and welcome change. The federal government is recognizing what cities and those of us here in 2013 already knew: that our policies should ensure that bandwidth never constrains economic growth or social progress.

Unfortunately, one thing hasn’t changed; the federal government’s view of its own role in helping achieve that goal.  It is:

1.  Make cities do all the hard work, pay all the government costs and accept all the blame for whatever happens; and

2. Let the federal government pay none of the costs, do none of the hard work, and take all the credit.

The first speech by an FCC Chair about Gigabit networks was in 2013.  He was concerned that Google Fiber and a project I was doing, Gig.U, were proceeding without his involvement so gave a speech to get the FCC in the game of gigs.

His policy prescription?

He challenged the audience to build a gigabit network in every state.

Wow.

He provided no analysis of why they don’t exist, no insight into barriers that can be removed, and no policy to improve their prospects. He simply offered the moral equivalent of the ‘hearts and prayers’ kind of leadership that does nothing but make the speaker feel better.

called that speech the “most amateurish speech ever given by an FCC Chair” that “bordered on the absurd.”

I can be very bi-partisan in my criticism.

But at least that speech did not set us backward.

Unfortunately, the current FCC is on a path, to do exactly that.

…the FCC has curiously interpreted its statutory mandate to dramatically reduce its regulatory powers over broadcasters, ISPs, telephone companies, cable companies, and wireless companies, while simultaneously asserting new authority to regulate and micromanage…local governments.

As I detailed in a speech a few weeks ago in Austin—one I will summarize rather than repeat–the current Federal Communications Commission (FCC) has curiously interpreted its statutory mandate to dramatically reduce its regulatory powers over broadcastersISPstelephone companiescable companies, and wireless companies, while simultaneously asserting new authority to regulate prices and micromanage over one set of enterprises: local governments.

A major tactic in the FCC’s effort to regulate cities is through its Broadband Deployment Advisory Committee (BDAC) process. The stated, and worthy, goals of the BDAC are to accelerate and broaden deployment of next-generation broadband networks and reduce the digital divide.

However, the BDAC suffers from significant failures of design and execution. The failures are threefold.

First, the BDAC did not have a balanced membership that could have lead to a real consensus between stakeholders.

The BDAC should have been designed to generate ideas that optimize outcomes for all stakeholders and build a political consensus that makes it more likely that those ideas will be adopted and implemented successfully.

Unfortunately, the FCC overwhelmingly filled the BDAC with industry representatives and therefore undercut its potential to build political capital for a balanced and optimal set of solutions.

Rather, the FCC has spent its political capital reinforcing a false narrative about how cities are the cause of delays in 5G deployments while ignoring the real, market-driven causes of delay.

Second, the BDAC started from the false assumption that industry does not have the leverage to negotiate the deals it needs to make investments in new networks.

The carriers themselves recognize they have the necessary leverage.

Google Fiber changed the traditional negotiating leverage by saying that it would build, but only in places where city government adjusted their policies to make it economically feasible.

And that framework applied to all carriers.

Consider what AT&T said about the impact of the Google Fiber process. Noting that municipalities had made it “’easy’ for Google Fiber, AT&T, in a pleading to the Broadband Opportunity Council, wrote that Google has “also essentially established a template for lowering existing regulatory barriers in other jurisdictions. That template, in turn, has allowed other providers to accelerate and broaden their plans for deploying the infrastructure necessary to provide high-speed Internet service.  That has certainly been true for AT&T.”

Consider what Verizon’s CEO Lowell McAdam recently noted, “Cities are embracing us to come in and provide this broadband service for the citizens… .” He further said Verizon would walk away from cities that want too many concessions, adding, “there’s no market that’s not on the table.”

The pièce de résistance demonstrating the ability of carriers to work things out with cities without federal interference involves the carriers and San Jose. They were antagonists in the BDAC process, with the carriers supportive and the Mayor of San Jose, one of two big city representatives, resigning and blasting the process. He observed, “At the 11th hour, we saw industry rewrites that pushed aside everything that had been negotiated for an industry-friendly, cookie-cutter set of rules.”

But those parties were able to negotiate terms that all thought fair and allow the companies to begin 5G deployments. Notably, the deals include having the companies contributing to a digital inclusion initiative and helping the city pay for accelerated permitting.

Let’s engage in a thought experiment: What if the FCC in 2011 had said that fiber deployment was critical to the future security of the United States and therefore mandated that every city should give Google Fiber the same deal that Kansas City gave Google?

I am certain that there would have been a huge uproar with all saying that such a mandate is crazy, unnecessary, and a clear usurpation of local power to benefit a large private enterprise.

That is, however, what the BDAC/FCC process appears to be moving to—a single federal mandate for how cities should price their rights of way and manage local construction for the benefit of a select group of companies.

Third, BDAC did not understand the value of asymmetric value creation.

I am often a big fan of asymmetry. In 10 years of practicing corporate law, as well as in being involved with dozens of deals between cities and next-generation network providers during the heart of the Gig.U effort, I saw how every successful deal involves asymmetric value creation.

That is, the two sides don’t want the same thing. So, the trick is to find the things that cost side A little and create considerable value for side B, with side B doing the same for side A. Both, in this way, get more than they give. That value creation may be asymmetrical but the idea of both getting more than they give is hugely powerful.

The BDAC, however, ignored this kind of value creation. Instead, it focused exclusively on what cities could do to improve the profitability of the carriers. It did not ask—obviously it was not interested—in what it would cost the cities. It involved the kind of cost-benefit analysis in which the costs to one side are ignored and only the benefits to the other side are considered.

…I expect the BDAC and the FCC will adopt a framework in which the industry gets all the benefits with no obligations and municipalities will be forced to bear all the costs and receive no guaranteed benefits.

Due to these three failures, I expect the BDAC and the FCC will adopt a framework in which industry gets all the benefits with no obligations, and municipalities will be forced to bear all the costs and receive no guaranteed benefits. This kind of process will result in a large transfer of wealth from public to private enterprises—and leave American cities and metropolitan areas no better positioned to tap into digital telecommunications to unlock innovation and shared economic prosperity.

So how should cities respond to a BDAC that ignored their voices, market realities and any principles of fairness and shared rights and obligations?

I think it would be wise for cities to establish their own working group to establish best practices, work collaboratively to find solutions to new problems, and generally lower the cost of deployment…..

Read his full text here.

And also at the Benton Foundation website here.

Remembering Why: Broadband Leadership for the 21st Century Economy

Some things are worth repeating. Recognizing that North Carolina was at the vanguard of technology deployment in the 1990s, CLIC’s North Carolina chapter, NC Broadband Matters, engaged a keynote speaker in April who received a standing ovation after he spoke about how North Carolina can be a technology leader again. The speaker, four-term Governor James B. Hunt (1977-1985, 1993-2001) drew praise and laughter from his audience, as he advised a large crowd at the North Carolina Rural Center that the key to broadband leadership for the 21st century economy is for them to engage in their own future and not believe “those who tells you your dream is not possible.”

Governor  Hunt parlayed his lessons from growing up on a farm in rural, eastern North Carolina to speak to the importance of establishing access today to modern Internet infrastructure for everyone in the state. He talked about how North Carolina residents stepped in and organized to preserve the things they knew they needed to survive, and to ensure “a good life” for their communities.  He talked about how the farmers organized when they worried that the lifeblood of their livelihood—their soil—was blowing away, and how they relied on themselves to improve their community. He spoke of the peaks in technology changes imprinted in his memories, such as the day his grandmother first obtained electricity and the election of state officials who changed dirt roads to paved roads.

As he put it: “Why did I say all this? To tell you there have been many times throughout our history when we have seen the needs of people and we have thought about it, and we planned about it, and we decided to do some real things, some big things, some important things to improve our lives.  And we have done it.  Don’t you sit here today and think that what folks have talked about here is impossible.”[1]

 “We got electricity put in by working hard understanding what it could mean to your life, to your family, and your community, and people worked hard to get electricity

Hunt reminded the audience that North Carolina was the first state to deploy fiber across the state in 1994. He and his colleagues called it an “information highway” and he remembered how no one knew what that meant and instead suggested it was impossible. “Now, it was difficult to explain it to people. When you’re going to do big things in the public, you have to talk to people about your ideas. First of all, they have to be based on people’s needs, and then you have to talk to them about the idea you have, and they have, and develop an approach to it. I remember how difficult it was to explain this to a lot of the legislators. And everybody else, really. And we were asking to put funding into it. ‘What do you mean you want $7 million for an information highway…? ‘” [2]

 “We have built this country. We have built our communities. We saw what we needed to have, to have a good life for our families, our children, our communities, and we have gone out there and historically done something about it.

Throughout his message, Hunt noted the importance of public-private partnerships and bipartisan support. “We all came together and talked about this new technology; What it was and how it worked and we talked about how we could have it. Well, we developed a public private partnership; and it took alot of educating. It took alot of thinking, it took alot of educating people, and deciding to do things. And figuring out how to do them. Which is what you are working on now. We got our first appropriation of $4 million, and Governor Cooper of Nashville and Representative Charles Preston from Catawba County led that for us, always approaching this in a bi-partisan kind of way. And we got that approved and started got it moving forward in the General Assembly.[3]

And then, slowly, Hunt read, one by one, a list of 32 counties in the state that still do not have access to 25Mbps/3Mbps internet access (the FCC’s definition of the minimum level of broadband needed to fully participate in modern life). He spurred the audience on: “I am glad you had a background that has made you aware of the need for all of this. And the potential for it, and a sense that it can be done.  Don’t you let people tell you this can’t be done. I know the financing challenges are big. You have some people here with some money. All that tobacco money does not have to go to Wilson County,” he said, to laughter. “There’s a lot of different ways to do it, you know.” [4]

 “I think it’s time we make a big decision that we’re going to do it in a big way. We are going to help all of our people. Give everybody who lives in North Carolina, every child and family, the chance to be all they can be.

Governor Hunt closed by challenging the audience to believe in themselves and in their long history.  And not to be satisfied with low expectations. He said “we’re talking about opportunity, we are talking about equal opportunity, we are talking about full opportunity. To become all that you can be and ought to be.  You folks can make that happen. This work can help make that happen. Don’t tell me it can’t be done. We’ve done things bigger than this before. This country has won wars. North Carolina has built a great economy. Think about where we are here today.”

“… let’s don’t be satisfied with low expectations and leaving people out and not becoming what we can be. I am proud of you all. Everyone of you is here for a purpose. You’ve got a job to do in this. You sense what’s possible.  I can tell it in your faces… So I commend you. I am proud of you.  Let’s make North Carolina all that it can be.

All that it should be.

All that it must be.” [5]

See more on twitter at  #NCBroadbandMattersNOW

[1] Governor Hunt Speaks: Part 1: 13:22

[2] Governor Hunt Speaks Part 2 at :54.

[3] Governor Hunt Speaks Part 2 at 2:27

[4] Governor Hunt Speaks Part 4: at 0:17

[5] Governor Hunt Speaks Part 6 at 5:08

Blair Levin Keynote at CLIC Austin: The BDAC, 5G and Cities: The Power and Perils of Asymmetry

On April 30, 2018, at CLIC’s event in Austin, Blair Levin, Non-Resident Senior Fellow at the  Brookings Institute’s Metropolitan Policy Project, gave a powerful keynote speech focusing on the FCC’s BDAC process which included his prediction that its primary result will likely be the asymmetrical transfer of wealth from the public to private enterprises with no associated public obligations for that benefit. We provide an excerpt of his written speech below, with the full text linked at the end.  

The BDAC, 5G and Cities: The Power and Perils of Asymmetry

 Blair Levin,  Brookings Institute, Metropolitan Policy Project 

The most significant meta-theme about governance in the United States today is that the federal government is dysfunctional and disrespected but that local governments are responsive, pro-active, effective and respected in building communities that improve the lives of their residents.

I see that not just in the press and academic writings, but also in my own experience in dealing with the federal and scores of local governments.

It also shows up in the polling data.  More than two-thirds of members of both parties express trust in local governments while the number of Americans expressing trust in the federal government is below 20%. Arguably, as former Indianapolis Mayor and now Harvard Professor Stephen Goldsmith argues, such numbers understate the trust citizens should place in local governments.  No one is saying the same for the federal government.

This causes me to believe, both as a philosophical and practical matter, that a key to moving this country forward is to give local governments more authority and freedom.

This puts me at odds with my twice-former employer, the FCC.

Today I am going to discuss the relationship between the FCC and cities and make  several policy suggestions for accomplishing goals stated by both sides.  I will also describe why cities should just ignore the FCC—other than to sue it—but that cities should develop a more productive relationship with carriers in helping accelerate the deployment of next generation networks to their residents and enterprises.

But what I am really going to discuss is the power and perils of asymmetry.

Before I get to that, I would like to note two historic achievements of the current FCC.

First, this the first FCC that has defined joke writing as an integral part of the deliberative policy process.

You might think I am joking.

But this FCC has, not once but twice, denied Freedom of Information requests for information about joke videos involving Chairman Pai on the grounds that the providing the information would impair the FCC’s, and I quote, “deliberative process.”

I have a personal conflict here, having participated in writing jokes for five different Chairman.

I would hate for early drafts to ever go public.  You can’t really write good jokes without writing a bunch of bad ones.  Believe me.  My personal ratio of bad to good is at least 50:1.

Nonetheless, despite many hours in the writers’ rooms’ session, I don’t recall any deliberative policy process.

Of course, my memory might have been impaired.  As the gospel of the writers’ rooms note, the jokes don’t write themselves.  Jim Beam does.

So while I am sympathetic to the FCC trying to keep those emails private, I wish the FCC lawyers had come clean and responded to the FOIA requests by admitting the videos were really not very funny.  Therefore, it simply is not in the public interest that unbelievably even lamer, earlier drafts of bad jokes ever become public.

But this FCC either believes that joke writing is actually part of its deliberative process or, like the Queen in Alice in Wonderland, it believes that words mean whatever they want them to mean.

Which brings us to the second historic accomplishment of this FCC: it is the first FCC to interpret its statutory mandate to say it doesn’t have much legal authority or policy rights to regulate broadcasters, telephone companies, cable companies, or wireless companies.  Instead, its principal regulatory mandate is to regulate another set of enterprises: local governments.

Well, if you have the talent to classify joke writing as part of the deliberative policy process, you certainly have the talent to argue that FCC stands for Federal Constraints on Cities.

And that, in turn, brings us to the FCC’s Broadband Deployment Advisory Committee (BDAC) process.

Its stated, and worthy, goals are to accelerate and broaden deployment of next generation broadband networks, and reduce the digital divide.

Will the process help achieve those goals?

If one ignores the DC rhetoric and focuses on market incentives, the analysis suggests probably not.  Instead, the primary result of the process will likely be to transfer wealth from the public to private enterprises.

If the FCC wanted to, as I will discuss at the end, it could take action to assure that the wealth transfer would not occur unless the deployment and digital divide goals were met.  Instead, however, the BDAC and the FCC will likely adopt a framework in which industry gets all the benefits with no obligations and municipalities get all the costs and no guaranteed benefits…. Read more here.

Come join CLIC in Austin Monday, April 30: The Vital Role of Local Internet Choice

Please join us in Austin this Monday, April 30, for CLIC’s latest half-day program which will take a deep dive into  “The Vital Role of Local Internet Choice.” Our full agenda is here.  Emphasizing the positive, we will showcase successful local initiatives reflecting the benefits of local control for the community’s economic and broadband future. We will discuss the factual and legal arguments that work best in refuting the new wave of objections to community broadband and public-private partnerships. And we will finish with a deep dive into the experience of a small rural community, Westminster, MD,  that furnishes an excellent example of how the public and private sectors working together can build a great community and an inclusive and advanced workforce.

This is all part of the Broadband Communities’ Fiber Putting Your Gigs to Work summit (April 30-May 3) . One day passes are available if you can’t make the entire event. You can register here. CLIC members can sign up with our $350 discount rate for the entire 4 day conference by using the code CLIC2018.  And follow us via #CLICAustin.

CLIC Strongly Rebukes FCC BDAC Process and Outcome

Dramatically Undercuts Local Governments Ability to Improve and Accelerate National Broadband Access

In a strongly worded letter submitted on April 12, 2018, CLIC has communicated to the FCC its deep concerns regarding the selection process and associated restrictive outcomes of its Broadband Deployment Advisory Council (BDAC). As CLIC states: “The Commission’s startling failure to include adequate local government representation in the BDAC process… has unsurprisingly resulted in BDAC recommendations that would undercut the important potential of local governments to help improve and accelerate broadband access and availability throughout the nation.”  CLIC’s letter details the failings of the BDAC member selection process and sets forth eight specific concerns with Article 12 of BDAC draft model state code. Our full letter can be found here.

Join CLIC in Austin to learn how broadband is MAGIC for economic development

Join us on April 30 in Austin as CLIC hosts local community officials for a half-day of discussion on “the Vital Role of Local Internet Choice.” One session will offer an in-depth look at how the small Maryland city of Westminster has successfully built and utilized community fiber-to-the-premises.

Westminster has built and owns the fiber network all the way to the home and business.  Its private partner, Ting Internet, which is known for its “crazy fast fiber internet” and spectacular customer service, leases the dark fiber and provides Internet service.

Westminster’s leaders consider Internet infrastructure a must-have. “In a world that is increasingly dependent on data every day, if you don’t have good broadband you’re going to be left behind,” said Robert Wack, president of the City Council and a speaker at CLIC’s event. Westminster envisions itself as a place whose residents can live away from the big city but still prosper, by telecommuting to city-based jobs and by using fiber as a platform to start a business.

The City’s role is focused on infrastructure and future-looking investment.  “Public sector entities epitomize ‘patient capital,’” he said in a December 2015 Broadband Communities article.  Localities “are able to make long-term investments with no pressure to expect fast, high margin returns. Local governments routinely spend millions of dollars on infrastructure with the only expectation of return being the long-term beneficial impact on the local economy… which ultimately allows them to maintain tax revenue without rate increases.”

And the City’s fiber network has become MAGIC for its economic development — the Mid-Atlantic Gigabit Innovation Collaboratory, that is. A joint effort of the City, Ting Internet, and a local wireless network company, MAGIC is a technology incubator — a “collaboratory” – focused on local high school and college-age students. MAGIC offers students a technology meeting place, “challenge based” tech learning events, classes, and a pathway to internships and employment.

Come learn how your community can replicate the Westminster experience as part of our CLIC half-day event on April 30 in Austin. CLIC members can register here for both our CLIC program and the Broadband Communities Summit conference at our CLIC discount rate of $350 by using the code CLIC2018. If you’re not yet a member, join here (it’s free).

Join CLIC in Austin April 30 to hear Local Community Broadband Success Stories

Come to CLIC in Austin on April 30 to discuss The Vital Role of Local Internet Choice on the first day of the 2018 Broadband Communities Summit. Hear stories of community broadband successes from North Carolina to Detroit, and take them home to refute the false narratives about community broadband efforts being peddled in D.C. and in various state legislatures.

We know that great nations are built on great cities and towns. And local communities across the country, of all political stripes, are stepping up to secure their economic futures by deploying modern broadband networks – the new roads of an economy now dependent on the Internet. They are engaging in public-private partnerships or building their own internet roads where others decline. Yet, despite this laudable leadership, local governments are frequently portrayed by industry lobbyists as impediments to rapid broadband deployment, particularly next-generation wireless. Traditional local powers, they claim, should be sharply curtailed or even preempted.

In sharp contrast, numerous successful local initiatives reflect the benefits of local control and involvement.  For example, public-private partnerships are popping up all around North Carolina. Multiple counties are working with Open Broadband to identify areas of need and then use local resources to address those needs. Gaston County partnered with Open Broadband to bring to Belmont free public Wi-Fi along the downtown main street and Internet service to public buildings and a local innovation center,TechWorks of Gaston County. TechWorks is using its new Gigabit connectivity to serve its new collaborative workspace (a repurposed textile factory) to enable entrepreneurs.

Come to Austin and hear from Open Broadband, Tech Works and many others. CLIC members can register here for both the half-day CLIC program and the Broadband Communities Summit conference at our CLIC discount rate of $350, by using the code CLIC2018. Or become a member of CLIC by joining here (it’s free).

Come to CLIC @BBC-Austin April 30 to Discuss “The Vital Role of Local Internet Choice”

What better place to talk about how vital “Local” is than in the uniquely local community of Austin, Texas. Come join us on Monday, April 30, in Austin, for CLIC’s important strategy session on “The Vital Role of Local Internet Choice,” at the foot of the Broadband Communities’ conference: “Fiber: Putting Your Gigs to Work.”

Great nations are built on great cities and towns. Over the last few years, communities across America have come to realize that their ability to achieve greatness, or even success, in the years ahead will depend on their ability to acquire affordable access to fiber-rich communications networks. That is so because fiber networks, like electric power systems a century ago, are platforms and drivers of simultaneous progress in just about everything that is important to communities, including economic development and competitiveness, education, public safety, health care, transportation, environmental protection, government services, democratic discourse and much more.

As a result, diverse local communities across the country are increasingly stepping forward to secure their communications futures by working with willing incumbents, entering into partnerships with new entrants, establishing their own networks or developing other creative options that work for them. On top of this, the Federal Communications Commission’s recent elimination of network neutrality protections has fueled a surge of interest in public broadband networks. At the same time, the communications industry has mounted an aggressive campaign to undermine local authority. Before Congress, the FCC, the FCC’s Broadband Deployment Advisory Committee and numerous states, the industry has sought to portray local governments as impediments to rapid broadband deployment, particularly next-generation wireless broadband. Traditional local powers, they claim, should be sharply curtailed or even preempted.

So join us at 1p.m. in Austin on April 30, where we will continue to help local communities and our allies  be as effective as possible in opposing barriers to local Internet choice. Emphasizing the positive, we will showcase successful local initiatives reflecting the benefits of local control for the community’s economic and broadband future. We will discuss the factual and legal arguments that work best in refuting the new wave of objections to community broadband and public-private partnerships. And we will finish with a deep dive into the experience of a small rural community that furnishes an excellent example of how the public and private sectors working together can build a great community and an inclusive and advanced workforce. The full agenda can be found here.

CLIC Members can register here with our CLIC discount ($350) using the code CLIC350 or CLIC2018. This registers you for CLIC and the entire BBC conference (May 1-3rd). Or become a member of CLIC by joining here (it’s free).

CLIC-Colorado Uses Video to Teach Legislators the Value of Local Net Choice

Here is a great example of how to use video to teach your state legislators why local communities need local internet choice. CLIC’s Colorado Chapter, CCUA, produced this short video to put their message in a nutshell. They utilized real-life stories from small businesses, schools and healthcare providers to emphasize the message that access to the 21st century internet is equivalent to access to electricity in the 20th century: You can’t live without it, Their message: “The time is now for state and local governments to be part of the solution.” For more information, contact Todd Barnes at Todd.Barnes@cityofthornton.net

CLIC CEO offers “A Better Game Plan” to Close the Digital Divide: Testifies on Capitol Hill

Background: On January 30, 2018, CLIC CEO, Joanne Hovis, testified at a hearing held by the House Subcommittee on Communications & Technology, Chaired by Representative Marsha Blackburn (R-Tennessee) on the topic of “Closing the Digital Divide: Broadband Infrastructure Solutions. Twenty-five bills were to be considered. A video of the proceeding can be found here.

We print below Joanne’s entire testimony for its insights on real solutions. She refutes the suggestion that local communities are the cause of the broadband digital divide, instead noting that the real cause is that high cost areas do not attract private capital (“that’s how private investment works”). She challenges the argument that preempting local control over public assets will incent private deployment, noting this would simply make more profitable deployments in already-served metropolitan areas. Of importance is how, with engineering precision, she challenges the notion that local control should be preempted to incent 5G deployment in rural areas. Joanne detailed how 5G is not being planned by wireless carriers for rural areas, and is not a technically appropriate technology for these expansive geographies.  She offers six real solutions to the digital divide problem.

——–>Testimony

As we look forward to Super Bowl Sunday, I suggest today that our country’s drive to bridge the digital divide is a critical test of our ability to develop a winning strategy on one of the most important playing fields of the 21st century.

My comments focus on two critical questions about this essential effort. My first question is, do we actually have a winning strategy? Much of the current discussion here in Washington seems premised on the idea that a winning broadband strategy will smash so-called barriers, such as environmental permitting, local process, and costs of access to public facilities.

The premise is wrong. In reality, the fundamental reason we do not see comprehensive broadband deployment throughout the United States is that areas with high infrastructure costs per user, particularly rural areas, fail to attract private capital. This is not surprising. Nor is it a value judgment. It is simply how private investment works. If return on investment is low or nonexistent, the investment will not be made.

To solve this, state, local, and federal governments can take steps to improve the economics of broadband deployment in areas where investment has been insufficient. These areas include not only rural communities, but also underserved urban areas such as small business locations in cities and suburbs, as well as low-income areas where adoption is low and incumbents see no return that justifies network upgrades. Particular attention and support must be directed to those areas; without such efforts, private dollars will continue to flow primarily to the most profitable areas.

A better game-plan would involve these plays:

  • First, support public–private partnerships that ease the economic challenges of constructing rural and urban infrastructure
  • Second, incent local efforts to build infrastructure—ones that private service providers can use—by making bonding and other financing strategies more feasible, potentially through reduced interest payments or expanded use of tax-exempt bonds
  • Third, target meaningful infrastructure capital support to rural and urban broadband deserts, not only to attract private capital but also to stimulate private efforts to gain or retain competitive advantage
  • Fourth, empower local governments to pursue broadband solutions of all types, including use of public assets to attract and shape private investment patterns, so as to leverage taxpayer-funded property and create competitive dynamics that attract incumbent investment
  • Fifth, require all entities that benefit from public subsidy, including access to public assets, to make enforceable commitments to build in areas that are historically unserved or underserved
  • And, maximize the benefits of competition by requiring that all federal subsidy programs are offered on a competitive and neutral basis for bid by any qualified entity

Such strategies directly address the core reason the digital divide persists: lack of return on investment in many areas of the country.

Let me be very clear why the current strategy doesn’t squarely face the challenge. Current efforts are focused on reducing the private sector’s costs of doing business, such as by removing local processes, waiving environmental protections, and forcing local communities to subsidize carrier access to public property. All of this simply makes more profitable the already profitable areas of the country. Reducing those requirements does not fundamentally change the economics of broadband deployment in areas where return-on-investment is challenging—because the local processes and environmental and historic protections are such a small part of the economics of reaching and serving a rural area.[1] Rather, at best, these efforts tinker at the margins of broadband economics; at worst, they distract from the key issues and misdirect resources.

If we want to solve deployment issues in rural and low-income areas, we must target our solutions to those areas, and the solutions we choose must be adequate to the task. One-size-fits-all approaches will not bridge the digital divide because they effectively provide most of their benefit to providers in better-served areas that don’t need incentives, without requiring the providers to invest some of their windfalls in more challenging areas. In other words, legislation or regulatory activity that purports to remove so-called barriers like local processes and fees may make for more profitable carriers in well-served areas. But they won’t be sufficient to incent deployment in rural and urban broadband deserts.

Furthermore, if these strategies are premised on the idea that removing so-called barriers will lead to rural deployment of the emerging wireless technologies known as “5G,” it’s critical to know that no credible engineer, market analyst, or carrier is claiming that 5G deployment is planned or technically appropriate for rural areas. This is because 5G, which is still in developmental stages, is a wireless technology for very fast communications over very short distances. No wireless carrier would use 5G to serve low-density rural areas, any more than a team would focus on short-yard plays when far from the end zone, behind at the end of the fourth-quarter. If the goal is to attract private capital to rural communities, making wireless deployment more profitable in high-return metropolitan markets is exactly the wrong way to do it.

In summary: Doubling down on existing broadband investment patterns by making them even more profitable will not close this nation’s digital divide. Rather, this approach is like moving the ball a few inches and calling it a touchdown.

My second question about our digital divide strategy is: Do we have the right players on the field? Let me suggest that local governments have proven themselves most valuable players in creating and incenting broadband deployment for many years—and that it’s counter-productive to vilify localities based on the evidence-free assertion that local efforts and local processes restrict or disincent private deployment.

The assumption that the federal government is more motivated to enable deployment of this critical economic development infrastructure ignores the immediacy of the broadband need and the digital divide for local officials. And the assumption that the federal government is more competent to develop strategies to incent broadband deployment ignores the experience of the past decade, which demonstrates that local governments, given the opportunity, will apply creativity, local resources, physical assets, and diligence to try to solve broadband problems. For example, when Google Fiber first got started, more than 1,100 communities offered access to infrastructure, data, and other help to try and attract the company.

And they are not alone. Hundreds of localities have reached out to companies like AT&T and other incumbents, C-Spire, Ting Internet, Metronet, ALLO Communications, and many others to offer what amount to economic development packages and other incentives in return for commitments to deploy broadband infrastructure. Local collaborations are in formation between public and private sectors in hundreds of communities, to the benefit of both. The federal and state governments should not disrupt them.

Make no mistake: It is in areas where localities have been free to use their creativity, public assets, and legal authority to incent opportunity where we have seen some of the most robust broadband deployment. Observe the small towns in the Tennessee Valley that are connected with ubiquitous community-owned fiber optics; the Google Fiber cities where incumbents, led by AT&T, have greatly increased their upgrade investments to react to the threat of competition; the communities in Mississippi that competed to attract C-Spire investment; the Indiana towns that developed economic development packages to attract Metronet; and so many others. The data are clear: The areas of the country with the best infrastructure and the liveliest competition are areas where localities have been able to engage in addressing their broadband needs based on local strategies and local needs.

Is it wise or appropriate for the federal government to interfere with those and many other potential local initiatives? Is the federal government better able to understand how to work with companies to meet both private and community needs? And is it really accurate to assume that industry giants like AT&T and Verizon cannot ably negotiate with localities—and require the intervention of the federal government to protect them?

Broadband is an existential issue for many local governments. No one recognizes better than an elected local official the importance of broadband to the economic vitality of a community, and its attractiveness for residents, workers, and businesses.

In short, it’s counter-productive to tie the hands of the public officials—the very people who have the greatest incentive to solve these problems effectively and efficiently.

Let me share a few examples of the local motivation and creativity I see throughout the country:

  • In Spring Hill, Kansas and Pikeville, Kentucky, local communities are seeking to deploy fiber optic infrastructure to enable private sector service provision and competition as part of a broader economic development strategy. In Pikeville, the goal is to replace the declining coal economy with a coding economy, which is possible only with robust and plentiful broadband.
  • Seattle has sought ideas from the private sector and has developed strategies for enabling wireless broadband service to low-income communities and users; the City is considering strategies to incent companies to serve lower-income parts of the City.
  • In Gallup, New Mexico, the city’s utility seeks to deploy infrastructure for public safety that will also enable private sector services in an area where private sector infrastructure deployment has not emerged.
  • San Francisco is considering establishing an innovative public–private partnership that would ensure deployment and provision of ubiquitous best-in-class services with particularly attractive and affordable pricing for the 150,000 San Francisco residents who are not currently able to purchase existing high bandwidth products.
  • In Michigan, a number of rural townships that are unserved with broadband are seeking to build broadband infrastructure in their rights-of-way and partner with private entities for service provision. A local non-profit, the Michigan Broadband Cooperative, formed to work with and coordinate among the townships so that they can learn from each other and build sustainable partnership strategies.
  • In Sublette County, Wyoming, and Huntington, West Virginia, the local governments are seeking to deploy infrastructure to business districts to enable private sector services in an area where private sector infrastructure deployment has not emerged. Bowling Green, Kentucky has done exactly that: the city built fiber infrastructure to businesses and has enabled local companies to compete in the global marketplace.
  • Boston has developed an innovative partnership with an open access fiber and wireless infrastructure provider in which the City incented new, open fiber deployment by leveraging the needs of schools and public safety facilities for fiber-based services.
  • Rural Queen Anne’s County, Maryland has been working with local incumbents seeking partnership opportunities to support broadband deployment.
  • New York City late last year released a request for information seeking industry ideas for how the city and private entities can collaborate to bridge the considerable digital divide in which low-income New Yorkers have fewer broadband choices and challenges affording high bandwidth options where they exist. In a clear indication of the potential for city-led public-private collaboration, the city received more than three dozen substantive responses.
  • In Wilson, North Carolina, the public utility extended gigabit internet to rural areas in its electric footprint. It enabled a large family farm to export its sweet potatoes to the European market by meeting Europe’s high food monitoring requirements. At the same time, the utility was the only carrier to help the 600-home rural town of Pinetops with free connectivity to the local church and shelter during the 2016 flood following Hurricane Matthew.
  • In Lafayette, Louisiana, Chattanooga, Tennessee, and dozens of other communities, local governments have developed their own advanced communications networks after finding the incumbent providers unwilling or unable to upgrade their networks in a timely manner to meet local needs.

Blaming localities for the digital infrastructure divide ignores these and thousands of other local efforts. At the same time, tying the hands of localities reduces their ability and incentive to work creatively with partners of all sorts to solve these problems. And preempting local authority over infrastructure assets such as light poles removes from the local toolkit incentives that localities can use to attract and shape private broadband deployment.

In short: Preempting local efforts and authority is not a winning strategy; it simply removes from the playing field one of the most important players: local government. Let me suggest that the urgency of this task, bridging the infrastructure digital divide, calls for all players to take the field.

My thanks for your consideration of my comments and for your commitment to this enormously important issue.

[1] Please see the declaration and report written by my colleague, Dr. Andrew Afflerbach, for the Smart Communities Siting Coalition. http://www.ctcnet.us/wp-content/uploads/2017/05/Streamlining-Deployment-of-Small-Cell-Infrastructure-by-Improving-Wireless-Facilities-Siting-Policies.pdf. This report, which has been filed in multiple FCC proceedings and never countered or disputed by industry participants, discusses how reducing local processes and fees will have marginal impact on rural broadband deployment. It suggests, rather, that local coordination, public-private planning, and partnership are tested means of enabling deployment.