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Some Questions for the New FCC Chairperson

Another Internet is Possible

by DAVID ROSEN

Julius Genachowski’s recent announced that he will step down from his post as FCC chairman.  This provides an opportunity to raise important questions about the future of U.S. telecommunications policy to both Pres. Obama and his potential appointee.  One of these questions concerns the future of the U.S. Internet and broadband service.

Few Americans know just how poor their service really is.  As of April 2012, one-third (33%) of American adults could not access some form of broadband connection from their home, whether via DSL, cable or fiber line or via a wireless service.  Akami ranks the U.S. 13th in terms of download data speed.  This is not only behind such super-fast countries like South Korea and Japan, but Latvia and Romania as well.

The FCC has managed the decline in U.S. telecom services, reducing America to a 2nd-rate Internet nation.  It, like other federal and state agencies, operates through a process commonly known as “regulatory capture.” Regulatory agencies that ostensibly oversee corporate practice to safeguard the interests of consumers and citizens are subject to influence peddling by politicians and corporate lobbyists.  The old notion that those serving in government agencies should have an arms-length relationship to the industry they oversee is but a hollow truism from a by-gone past.

The overly-close relations between the FCC and its corporate clients was most graphically displayed in 2011 when Commissioner Meredith Attwell Baker, shortly following her approval of Comcast’s acquisition of NBC Universal, took a well-paying position with the cable giant.

Similar revolving doors are evident in the career paths of the three most recent chairmen.  Kevin Martin, a Bush-II appointee, is now with Patton Boggs, a leading Washington, DC, law firm and lobbyist.   Michael Powell, Gen. Powell’s son and appointed by Clinton, now heads the cable industry trade association, NCTA.  And William Kennard, also appointed by Clinton, previously an executive with the banking firm, Carlyle Group, where he Mr. Kennard specialized telecommunications and media in investments; he now serves as the U.S. Ambassador to the European Union.

The major telecommunications companies, led by AT&T and Verizon are working closely with the American Legislative Exchange Council (ALEC) to consolidate their control the telecom market.  Together, they are promoting policies to reduce the number of Internet Service Providers (ISPs), privatizing the nation’s telecom infrastructure (i.e., the Public Switched Telephone Network or PSTN), pushing new “data caps” limitations to raise rates and moving aggressively to end net neutrality. And the FCC is working hand-in-glove with these corporate interests to facilitate this process.

In the face of this campaign to reduce industry competition and customer choice, efforts are underway throughout the country to provide local Internet alternatives.  These efforts range from Google’s 1-Gig network in Kansas City to a variety of community networks and even nonprofit ISPs involving municipal networks and nonprofit corporations.

These efforts, however, are under attack throughout the country.  ALEC-backed legislation has been adopted in approximately 20 states to stop local communities from investing in municipal broadband, including Arkansas, Colorado, Florida, Louisiana, Nevada, Pennsylvania, South Carolina and Texas.  Recent battles in Georgia and North Carolina won’t be the last.

* * *

If you live in City Kansas City, MO, and Kansas City, KS, you might be getting 1st-world Internet service courtesy of Google; it is expanding the network in Olathe, KS, with a population of 125,000.

As of April 2012, about a quarter of local Kansas City residents had no broadband access from home.  The Google network delivers symmetric (i.e., two way) 1 Gigabit per second (Gbps) connectivity to households across the city as well as to schools, libraries and hospitals. The 1 Gbps data rate is about 20 times faster than most current residential broadband services operating across the country.

Google offered a novel build-out and sign-up plan.  Residential customers were asked to pay a $300 fee to cover the construction costs to connect their home to the fiber network.  For this, they can access a free basic broadband service with “conventional” speeds up to 5 Mbps downstream and 1 Mbps upstream for the next seven years.

In addition to paying the $300 installation fee, subscribers can choose between two pricing plans to access the 1-Gig network. For $70 a month, subscribers get 1-Gig high-speed Internet service; in comparison, Verizon’s FiOS service, offers 300 Mbps downstream with 65 Mbps upstream for $205 for a month.

For $120 per month, Google subscribers get broadband Internet and Google’s TV service along with DVR functions, 1 terabyte of cloud data storage and an Android Nexus 7 tablet which functions as a TV remote. The Google set-top box will have built-in WiFi access for the TV set and other devices.  The company insists that there will be no monthly data caps or overage charges.

Google’s TV service will support what is known as “over the top” (OTT) TV offering access to YouTube and Netflix as well as on-demand movies and TV shows.  As of now, given Google’s undeclared war with the cable and phone companies, it won’t offer such popular channels as including CNN, ESPN and AMC.

It’s hard to get real cost data on building out a high-capacity fiber optic broadband network.  Google has not released the costs for building its Kansas networks. It has been reported that Verizon spent $23 billion to build its FiOS network.  An industry rule-of-thumb estimates the costs for a city wide, let alone nation wide, fiber network at $1,000 to $2,000 per home.  So, reaching 100,000 homes will run about $150 million. Google’s got big plans and deep pockets, but reaching a million or more households requires real money.

Google’s principle broadband service competitor in the Kansas area, Time Warner Cable, offers a 50 Mbps service for an introductory price of $80 a month. Its “triple play” package with TV, Internet and home phone service is priced about $200 a month.

Two recently announced community networks are noteworthy because they represent efforts to introduce broadband-bypass service into major markets. Gigabit Squared (GB2), in partnership with Gig.U, is promoting programs in Chicago and Seattle.  Earlier this year, GB2 announced that it has raised $200 million to fund its local initiatives.

Blair Levin, a former FCC staffer during the Clinton administration, heads Gig.U, otherwise known as the University Community Next Generation Innovation Project.  It has pulled together 30 research universities to anchor deployment of high-speed Internet services in surrounding communities.

The Chicago effort is located in the city’s south side, Hyde Park area, home to the University of Chicago and Pres. Obama.  GB2 has committed $5 million, Illinois $2 million and the University $2 million to build-out the new network.  In addition, Chicago is committed to a fiber-to-the-home service and is digging the trenches need for the fiber deployment.

As currently envisioned, the deployment campaign is taking a stepped rollout approach. The first phase is targeted to some 5,000 homes, businesses, schools, libraries and healthcare institutions in and around the University. Over the following four years, it will expand to adjacent neighborhoods of Woodlawn, Washington Park and Kenwood, eventually reaching over 210,000 residents in some 80,000 households as well as some 10,000 small businesses with fiber and Wi-Fi capabilities.

In Seattle, GB2 and Gig.U are following a similar development plan.  They are working with the University of Washington and have initially targeted some 50,000 homes in 12 neighborhoods and will offer both a 1-Gig fiber network as well as wireless services. To provide higher-speed Internet connectivity to residents beyond the 12 initial fiber neighborhoods, the new service will use transmitters located on top of 38 buildings to create a wireless “umbrella” covering the entire city.

Nonprofit ISPs involve two different types of providers – municipal or community networks and nonprofit corporations.

In 2001, there were only 16 government-run networks in nine states.  Today, there are an estimated 150 communities around the country with their own publicly owned broadband networks.  Among the leading municipal services are in Chattanooga, TN, Bristol, VA, and Lafayette, LA, which is offering a 1-Gig network as fast as the new Google network.

The Chattanooga service is operated through EPB of Chattanooga, the municipally-owned electricity company.  It serves approximately 170,000 business and residential customers with telephone, Internet and video services.

In western North Carolina, Main (Mountain Area Information Network) was launched in 1996.  In addition to an ISP, Main also operates IndyLink, national dialup service.

In western Massachusetts, WiredWest brings high-speed Internet access to 40-plus towns long inadequate served.

Oregon supports a number of local networks.  JEFFNET operates in southern Oregon and is the state’s oldest non-profit ISP dating back to 1995.  In Ashland, OR, the Ashland Fiber Network (AFN) set up its service between 1998-2000.  AFN is a high-speed cable television and data communications/Internet system; the cable TV service is an alternative to Charter Cablevision.

However, everything is not rosy with municipal service.  In Marietta, GA, the Marietta Board of Lights and Water set up FiberNET, operating it from 1996 to 2004.  It built a 400-plus mile network but only attracted some 180 customers; the city sold it in 2004.  The UTOPIA (Utah Telecommunication Open Infrastructure Agency) project was established in 2002 and services 10 municipalities.  Of the 56,000 households reached, only around 10,000 have signed up and it is running at an annual loss.

A second nonprofit approach is through a private nonprofit company.  One innovative company is Mobile Citizen that offers wireless Internet access for education and nonprofit groups.  It was launched in Portland, OR, in 2009, and now offers services in 50-plus cities across the country, including Chicago, Denver, Kansas City, Las Vegas, Philadelphia, Sacramento and Salt Lake City.  Mobile Citizen has begun to expand its user base to residential customers.  In Cleveland, it has signed up about 1,100 households, many low-income households.

Nicholas Merrill is promoting the most intriguing nonprofit wireless efforts, the Calyx Institute.  Merrill previously ran an ISP, Calyx Internet Access, and in 2004 the FBI served him with a National Security Letter (NSL) demanded that he provide the U.S. government with information about one of his clients.  He refused and the ACLU took up the case.   Over the following six years, Merrill was the subject of a major civil liberties case, Doe v Holder.

Now free from the NSL gag order, Merrill is establishing Calyx as a “non-profit telecommunications provider dedicated to privacy, using ubiquitous encryption.”  He’s promoting his venture through indiegogo.

So, when you get tired of the new data caps policies and ever-increasing charges of your current ISP, you should check out your local nonprofit provider.  You just might have a meaningful choice.

* * *

During the 1992 presidential campaign, then-Senator Al Gore presented a vision bringing broadband, the Information Superhighway, to the nation.  Now, two decades later, the fiber optics infrastructure that was supposed to link every home, office, school and library, not to mention government office and hospital, has yet to be fully deployed.  Two decades later, the broadband promise remains unfulfilled.

In 1996, Congress passed and President Bill Clinton signed the  Telecommunications Act to realize VP Gore’s info-highway.  That year there were 12 phone companies competing with one another; over the last decade-and-a-half, the 12 became essentially three, the mamouth duopoly, AT&T and Verizon; and the geographically widespread CenturyLink (formerlly Quest).  The telcos have pocketed an estimated $340 billion — that’s about $3,000 per household – to build-out Gore’s fantasy.  Where is it?

The leading telcos, AT&T and Verizon, have abandoned their much-hyped plans to build out high-speed fiber networks. Verizon, after reaching about 14 percent of the nation with its fiber-to-the-home FiOS service, ended deployment efforts in 2010. AT&T, after reaching only about half of its customer base with its U-Verse fiber-to-the-neighborhood service, stopped building it out at the end of 2011.

Now, as a new FCC chairperson is being considered, it’s the right time to question why the U.S. has become a 2nd-rate communications nation.  And why the giant telcos and cable companies have pocketed billion of dollars while, two deades after Gore’s info-highway was proclaimed, it has yet to be built out.  Failure to honestly address these questions will only ensure that yet another regime of regulatory capture will continue to run the FCC.  Oh yes, keep your eye on where Genachowski end up.

David Rosen writes the column, Media Current, for Filmmaker and regularly contributes to AlterNet, Huffington Post and the Brooklyn Rail, check out www.DavidRosenWrites.com; he can be reached atdrosennyc@verizon.net.