The following stories have been tagged telephone ← Back to All Tags

Highland Telephone Cooperative Gains Gigabit Recognition

The NTCA-Rural Broadband Association this month awarded the Highland Telephone Cooperative (HTC) of Sunbright, Tennessee, its national certification as a “Gig-capable” provider, reports the Independent-Herald.

HTC serves Scott and Morgan counties in Tennessee and McCreary County in Kentucky and is now one of 85 Gig-certified company/cooperative providers in the nation. The certification recognizes rural communities that are at the cutting-edge of broadband technology, offering Internet service of up to at least 1 Gigabit per second (1,000 Megabits per second or Mbps). The association launched this national campaign in the fall of 2015. 

Years of Planning

HTC completed its $66 million fiber-optic network within the last year; 1 Gig capacity Internet service is available to all 16,5000 members reports the Independent-Herald.  The six-year project upgrades the cooperative’s old copper network. Highland Telephone CEO Mark Patterson: 

"This gigabit certification caps off years of careful planning, investing and building a brand-new fiber network in our area...All along, we knew our commitment was worth the effort so our friends and families in this area could keep their rural lifestyle without sacrificing world-class connectivity."

The upgrade included more than 2,700 miles of fiber by the cooperative's crews and contractors — enough to stretch from Highland's office in Sunbright to Vancouver in British Columbia, the Independent-Herald reported.

"Our area lacks interstates and many economic advantages that other communities enjoy, and we've suffered through some extremely high unemployment in recent years," Patterson said. "An asset like a gigabit-capable network can be our competitive edge when it comes to bringing in industry and growing existing businesses."

85 Gig Networks

To date, the NTCA-Rural Broadband Association has recognized 85 companies and cooperatives from 26 states as Gig-capable. The list includes 26 recipients in Iowa and six from Minnesota. Among the Minnesota honorees is Paul Bunyan Communications headquartered in Bemidji.  

logo-community-bb-bits_0.png

Across the nation, more and more telecom cooperatives are helping bring high-speed connectivity to rural America. They are filling the void created by large Internet Service Providers (ISPs) who generally consider it financially unattractive to make major broadband investments in sparsely populated areas.

The latest FCC annual broadband progress report estimates 34 million Americans, or about 10 percent of the nation’s populace, lacks access to 25 Mbps down/3 Mbps up service, the agency’s current definition of what constitutes basic broadband service. Those numbers likely understate the true situation, however, as they are based on form 477 data provided by ISPs and national providers often overstate their coverage based on census blocks. For more on Form 477 data, check out episode #224 of the Community Broadband Bits podcast. Christopher interviewed our Research Associate H.R. Trostle, who studied mountains of data for her report on connectivity in North Carolina.

Cooperatives Work!

In October, we noted that it was National Cooperative Month and highlighted a long list of cooperatives now providing next-century Internet connectivity. We expect that list to grow as rural communities recognize the value of cooperatives in bringing better connectivity to rural areas.

Transcript: Community Broadband Bits Episode 224

This is episode 224 of the Community Broadband Bits Podcast. ILSR research associate and MuniNetworks.org writer, H.R. Trostle, joins the show to discuss the recent report on North Carolina's connectivity and the importance of cooperatives. Listen to this episode here.


H.R. Trostle: The telephone cooperative are very used to serving these very sparsely populated rural areas in North Carolina. That's what they were designed to do. That's why they were made.

Lisa Gonzalez: This is episode 224 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance, I'm Lisa Gonzalez. Recently, we released a report focusing on the availability of high-quality Internet access in North Carolina. H.R. Trostle, a research associate at the Institute and one of our authors on MuniNetworks.org, analyzed data from several different sources and she's talking to Chris this week to discuss her conclusions. She and Chris, who co-authored the report with her, discovered that municipal networks and cooperatives have an important role to play in North Carolina. Take a few minutes to check out the report and check out the detailed maps that show the results of their analysis. The report is titled North Carolina Connectivity: The Good, The Bad, and The Ugly. It's available at ILSR.org and MuniNetworks.org. Now here are Chris and H.R. Trostle, from the Institute for Local Self-Reliance, discussing in detail their recent report and their findings on Internet access in North Carolina.

Christopher Mitchell: Welcome to another edition of the Community Broad Bits Podcast. Coming to you live today from the Institute for Local Self-Reliance offices in Minneapolis, with H.R. Trostle, the co-author of our new report on North Carolina. Welcome to the show.

H.R. Trostle: Thanks Chris, it's great to be here.

Christopher Mitchell: Hannah.

H.R. Trostle: Hi.

Christopher Mitchell: I thought we would start with a broad overview of what did the report cover.

H.R. Trostle: The report covered everything from electric coops to municipalities and included telephone coops. It involved a lot of digging through a lot of FCC data.

Christopher Mitchell: What kind of data? What were we looking for?

H.R. Trostle: I looked at the FCC form 477, which is deployment data. It also includes maximum advertised upload speeds and download speeds, but it doesn't include things like pricing information.

Christopher Mitchell: Right. This has been long one of the issues that we have found infuriating is that the carriers can just say what they're offering. Maybe that's true, maybe it's not. To some extent, it's very difficult for CenturyLink to know what it can offer in rural areas, because the DSL is so poor. It varies from house to house, but they never have to disclose what they're charging for it, which really makes it difficult to make good policy around this.

H.R. Trostle: Yeah, they also don't differentiate between different tiers, so it literally only tells me the maximum advertised. They may advertise that they offer 15-20 megabits a second, when in actuality you get maybe two.

Christopher Mitchell: Right. We know that that situation in Pinetops, just outside of Wilson, which we'll cover here in a few minutes, but I think one of the things that I found most interesting was that basic broadband access, which is overstated. You know, actually, why don't you just give us the numbers and facts that we're going to use from 477 data, from the FCC. Is that super accurate?

H.R. Trostle: It's not the greatest amount of accuracy. I could wish for more.

Christopher Mitchell: Is it randomly inaccurate, or is consistently inaccurate in one direction?

H.R. Trostle: It's mostly inaccurate in rural areas, because the census blocks are so large. The way the FCC's 477 is set up is each provider notes what they offer by census block. Rural areas tend to have very giant census blocks, with very few people.

Christopher Mitchell: That means that if a few people have access, maybe it's like the census block in which you have the edge of a town and you have a few people who have access, but the rest of the census block has no access. The form 477 data would suggest that everyone has access on that block.

H.R. Trostle: Exactly, even if two people have access, all twenty some people in the census block are considered as having access.

Christopher Mitchell: Let's imagine one other thing, which is to say that you have a census block in which, in the North side you have one provider's that's offering a service. In the South side, you have a different provider that's offering a service. In the middle, nobody can get anything, but we can't tell. As far as we know, I think about how that data is often interpreted. People might think there is competition in universal service in that block.

H.R. Trostle: It's actually pretty great. The FCC's form 477 specifically says that you should not try to use it to generate competition data, but everyone tries to use it to generate competition data for exactly that problem.

Christopher Mitchell: Right, but we can have a sense of at least -- The report, and the numbers in the report are a best case scenario.

H.R. Trostle: Yeah, absolute best case.

Christopher Mitchell: I find it interesting, I actually thought that North Carolina has better basic broadband access than I expected. What's basic broadband access and who has access to it there?

H.R. Trostle: Basic broadband access is the FCC definition of 25 megabytes per second download and 3 megabytes per second upload speed.

Christopher Mitchell: Advertised.

H.R. Trostle: Just advertised, obviously. You might not actually get that. In fact, some areas, you can get 20 megabytes per second as a normal, affordable speed tier. Then they also offer 100 megabytes per second at some absurd price. You can't actually get broadband.

Christopher Mitchell: Because even though you could get a decent connection, maybe from a coop, I think that's what you're talking about here. You have the coop that has a plan. It's one of the rare cases in which we have an understatement of who has decent access.

H.R. Trostle: Exactly.

Christopher Mitchell: In general, 4 out of 5 people in rural North Carolina, approximately -- There's a little bit of an overstatement there, but still most people seem to have basic broadband access from one provider.

H.R. Trostle: 4 out of 5 rural residents for sure, do. Supposedly according to the data, 93% of all of North Carolina has basic broadband access.

Christopher Mitchell: One of the things that I found interesting was that I think, when you look at the state's reaction, the state of North Carolina did their own report a few months ago. We were not really impressed with it. I think their conclusion was, "Wow, we're doing really well. Sure, we got to figure out some way of doing better, but we're doing really well." Our conclusion was that North Carolina's really not doing that well. In fact, I found interesting that when you look at their access to higher quality Internet access, you often find it's utterly lacking. You have that basic broadband tier as the maximum in a number of these rural regions, but there's nothing above that level.

H.R. Trostle: Yeah, it's very, very frustrating. Especially looking at where fiber is actually available. It tends to be available in urban areas or from coops.

Christopher Mitchell: Right, so there's not a lot of what we would call private sector or private company investment in fiber in rural North Carolina.

H.R. Trostle: Not at all.

Christopher Mitchell: Which I find very interesting, because their urban areas seem to be getting more investment, on average. None of those big companies are building out to everyone, but parts of their triangle, parts of Charlotte, parts of the suburbs around there, are getting fiber optic access from Google, from AT&T, from CenturyLink. At the very least they've announced it and made it available in a few partner buildings, but there's been a lot of announcements.

H.R. Trostle: There have been a lot of announcements but there's, from what I can tell, very little actually been done.

Christopher Mitchell: Well, they might just be on their way to doing it. It might be a charitable way of reading. In part, it does seem to me, and you and I both follow these things closely. It seems to me that there is some more investment in fiber optics in urban North Carolina areas than in your average metro regions around the United States.

H.R. Trostle: For sure, I've been looking at Minnesota and Tennessee as well. Doing something similar. There is so little actual private investment in those urban areas of Tennessee and Minnesota.

Christopher Mitchell: Okay. Let's move on to talking about some of the subsidies, because what I'm confused about is AT&T and CenturyLink seem to be getting a king's ransom from the Connect America fund, and yet they're not investing significantly in these areas, from what I can tell. How much are they getting?

H.R. Trostle: From the Connect America fund, AT&T's accepted about three and a half million dollars each year, to serve about 13,000 people by 2020 with not a broadband connection, but a connection of 10 megabytes per second, download speed.

Christopher Mitchell: Let's unpack this for a second, all right. Three million dollars per year for four years. Twelve million dollars?

H.R. Trostle: Just about.

Christopher Mitchell: To connect how many homes?

H.R. Trostle: To connect 13,000 in rural and under-served areas.

Christopher Mitchell: Specific areas where they do not have, according to the map, broadband access. By 2020, they will deliver a connection that's 10 megabytes down and 1 megabyte up, at a minimum.

H.R. Trostle: Yes.

Christopher Mitchell: Now, in some areas, and we'll talk about CenturyLink's numbers in a second. In some areas, I think we'll see them exceed that. I think CenturyLink will only provide that basic connection to some of their homes, but some of their homes will probably get a 40 by 5 connection or, occasionally, maybe, a gigabyte. I really doubt that, frankly, but they'll probably -- Homes that are close to the DSLAM, which, I always call it the magical device that turns your copper phone lines into an Internet provisioning system. People that are close enough will get higher speeds than 10 by 1, but AT&T seems to be really going for that minimum speed. They're just doing this wireless only product. This news really came out after our report was put to rest, but it's worth noting that AT&T seems to be really taking it seriously that they do not have to out-perform 10 by 1.

H.R. Trostle: That's what they want to do. CenturyLink, meanwhile, is getting about 10 million per year. They're going to serve 36,000 people with that same baseline.

Christopher Mitchell: I can only imagine what these coops in North Carolina could be doing with 40 million dollars a year. I find it infuriating that Uncle Sam is throwing away here, in just two companies, 52 million dollars to provide connection that would have been obsolete last year. It's really, really frustrating. Let's move on to what the coops are doing. What did you find in terms of, let's talk about the telephone cooperatives first. What are they doing in North Carolina?

H.R. Trostle: Yeah, so there are eight telephone cooperatives in North Carolina. All of them are deploying some sort of fiber for Internet service. Six have committed to serving their entire service areas, several have actually completed those projects. The map is looking so much nicer.

Christopher Mitchell: Yeah, it's remarkable when you see the map that you've prepared, of where fiber exists in rural North Carolina. You see these areas in the central northern part of the state, you have this big block. In the northeastern part of the state, you have this big block where it seems that every last person has access because they're served by a telephone cooperative.

H.R. Trostle: Yes, and the telephone cooperatives are very used to serving these very sparsely populated rural areas in North Carolina. That's what they were designed to do. That's why they were made.

Christopher Mitchell: I was actually talking with a reporter and I made that exact point. The reporter was saying, "Is it surprising to you that the private sector is not getting this job done in rural North Carolina?" I was thinking, "No, it is not surprising." These are people who are served by co-ops because, for 100 years, we understand that the private sector does not do a good job providing the essential infrastructure for rural communities. The business model does not work for the way that they want it to. We have telephone coops and we have electric coops. It shouldn't be surprising that these approaches are the ones that are best serving North Carolina's rural communities.

H.R. Trostle: Yeah, and North Carolina has 26 electric coops. Several have already taken steps to providing Fiber-to-the-Home or Fiber-to-the-Business. Lumbee River, Blue Ridge Mountain, they are in possibly even more sparsely populated areas than the telephone cooperatives.

Christopher Mitchell: Yeah, and that's not very surprising, frankly. The electric coops serve so much of the state that, on average, I can imagine -- Not even average. The electric coops serve such a large part of the state that there's just so many more opportunities for them to be serving the least dense areas. The areas that are the hardest to reach, but these electric coops have, historically, I feel like, resisted getting involved. Are you seeing that changing in your conversations with North Carolina's electric coops or, as they call them, EMCs?

H.R. Trostle: Yeah. EMCs is electric membership corporation. That conversation is really changing and part of that is the electric cooperatives are deploying fiber to communicate with their substations. They already had that as a growing part of their electrical infrastructure. Now they can actually use that for telecommunications. Previously, their infrastructure that would have been good for broadband access would have been just the poles.

Christopher Mitchell: Yeah, when you say communicate with the substations, I always imagine them, "Hello substation, how are you doing today?"

H.R. Trostle: "Hello world."

Christopher Mitchell: I have to think, if I'm the state of North Carolina, I should be really excited about these coops investing and trying to promote that and doing everything I can to say, "Hey, how can we make this happen more quickly?" How is North Carolina reacting? You read the report. I skimmed it, I read some sections in-depth, but the state of North Carolina's report, did they really actually recognize the way that the coops are already doing this?

H.R. Trostle: They did not recognize the growing role of coops. Not at all. The state of North Carolina didn't even really address one of the barriers to electric cooperatives. Getting involved in telecommunications. There are some restrictions how an electric cooperative can access capital from the Rural Utility Service funds and from the USDA. It's rather discouraging to investment.

Christopher Mitchell: Yeah, so the state of North Carolina says, if you're an EMC. If you're a rural electric coop, you can not get telecom loans or grants from the Rural Utility Service to distribute those. You also can't form a subsidiary. Now there may be other ways for these EMCs to find of accessing capital and to be able to build these networks, but I just find it stunning that the state wants to say, "We're going to officially discourage you from accessing the USDA," which is the main system that has built our cooperative infrastructure system around the country. All of the electrical coops, the telephone coops, they've all depended on our rural utility service funding. North Carolina says, "Hey, you know what? You guys are investing in rural communities, but we're going to make it harder on you." It's the exact opposite of what you'd want.

H.R. Trostle: It is the complete opposite of what you want. That's not all -- Other states also discourage electric cooperative's investment. Tennessee, New Mexico, but there are work-arounds.

Christopher Mitchell: Where there's a will, there's a way, right?

H.R. Trostle: Pretty much.

Christopher Mitchell: That may not be true with some forms of municipal broadband investment, though. We've saved the biggest hot button issue for us last, which is HB129, or just H.129, depending on the system that you use in referencing it, but this is a law from 2011. We've talked about it so many times. The FCC repealed it, it came back through the 6th circuit, reinstated it, but basically North Carolina tells local governments, "You can not build broadband networks."

H.R. Trostle: North Carolina does not support municipalities building their own networks. H129 is sort of a zombie law in that it came back and has now ruined things for Highlands and Pine Tops and a few family farms that really were depending on that connectivity.

Christopher Mitchell: Yeah, let's talk about that. The City of Wilson, incredibly successful municipal fiber network. We've talked about them many times because they were, with Chattanooga, the two of them went to the FCC to roll back these laws. Wilson, during that period when the law was not in effect, built out to some of its neighbors that desperately needed access but did not have broadband access. This family farm in Nash County, they could not even basically run their IT systems, they couldn't be a modern packing facility because they didn't have the Internet access they needed. Wilson comes along, provides it to them, the state of North Carolina challenges the law, goes to the 6th circuit. The 6th circuit says, "The FCC does not have the authority to change that law, so the law's reinstated." Wilson's going to have to disconnect its fiber optics networks from the small community and the nearby family farms.

H.R. Trostle: Yeah, Wilson had to vote to do that. They could have tried to continue service, but it would have just led to an even greater mess.

Christopher Mitchell: They would have had to shut down their entire system, ultimately. Wilson City has universal access. Wilson County has significant access, but it all would have been at risk if they tried to continue under their current laws. As this goes to air, there will be one week left, basically, of service that Wilson will be providing nearby. Then it will have to turn them off. Now, this is the part that kills me, though. The fiber optics cables, the optical network terminal devices will be on the side of the house still. I find it incredibly frustrating that people are going to have all of the things that they need to have world class Internet service in their home, but the state will say, "You can't use it for that." Wilson can use it to monitor the electrical system, to say, "Hey, how you doing?" To the substations, to communicate with the substations. It's there, but they won't be able to deliver Internet service.

H.R. Trostle: I would say it's a quirk of the law, but it's actually the entire point.

Christopher Mitchell: Right, exactly. Here's a question then, as we head toward the end and I'm done ranting about the injustice in Wilson and Pine Tops and altitude in Highlands. What is the next step? What can North Carolina do if it actually has leadership that cares about promoting rural connectivity, rather than just lining the pockets of powerful CenturyLink and AT&T, their lobbyists and their interests?

H.R. Trostle: Well, it would be really simple to repeal H129, but I don't know if that's actually ever going to happen.

Christopher Mitchell: Well, let's go a step further and say, let's assume that that got rid of it. You have some towns that move forward, more importantly, perhaps, you have the existing networks able to expand and serve their neighbors. You still have a lot of areas, I mean what do you see in terms of the electrical -- Is it feasible to think that electric coops could solve most of North Carolina's problem? A way that partnerships with the telephone coops expanding outside of their areas? I mean, is this a pipe dream or is this something that could happen?

H.R. Trostle: No, this is entirely possible. The electric coops can work with the telephone coops to provide better connectivity. They don't have to actually worry about providing the telecommunication services themselves, they can simply partner with someone who already has experience in doing that.

Christopher Mitchell: One of the things that we're starting to get a sense, from some of the reaction to the report, is that this is starting to happen. There is hope, I think.

H.R. Trostle: There is. It would be a little bit nicer if they could get rid of some of the restrictions on the electrical cooperatives access to capital.

Christopher Mitchell: Right, and I also think, as you have the electric coops and the telephone coops doing this expansion. It must be incredibly frustrating. Let's imagine that you're just outside of the Wilkes cooperative area and the Riverfront Networks.

H.R. Trostle: RiverStreet.

Christopher Mitchell: RiverStreet Networks. You are right outside of there and you're not getting service from them. They're working with a couple of other areas nearby, but they can't build everywhere at once. North Carolina says, "Too bad, you can't get do it yourself. You have to wait until they come to you." Or something like that. I just, I think that the H129 restrictions are such a slap in the face to communities. To say, "Yeah, you're losing property value, you're losing businesses, people don't want to move in there, but you can't solve the problem yourself. You have to just hope that someone else is going to come along and solve it for you."

H.R. Trostle: Yep, even if you have the technical expertise, you're just not allowed to.

Christopher Mitchell: It runs totally contrary to everything that we believe in at the Institute for Local Self-Reliance and what people and communities should be empowered to do.

H.R. Trostle: Exactly.

Christopher Mitchell: I hope that people have a chance to check out this report. I think we're going to be seeing more maps, more exciting stuff coming from Hannah, from the work that you're doing. You already prove it a little bit, Tennessee and Minnesota are in the works. I hope people stay tuned to your work.

H.R. Trostle: I hope so too.

Lisa Gonzalez: That was Chris talking with H.R. Trostle, our colleague and one of the authors of our recent report on connectivity in North Carolina. You can download the report at ILSR.org and MuniNetworks.org to learn about the urban/rural digital divide and how coops and muni networks are finding ways to close the gap. Remember, we have transcripts for this and other Community Broadband Bits podcasts available at MuniNetworks.org/broadbandbits. Email us at podcast@MuniNetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @CommunityNets. You can also follow MuniNetworks.org stories on Twitter, where the handle is @MuniNetworks. Subscribe to this podcast and all of the podcasts in the ILSR podcast family on iTunes, Stitcher, or wherever else you get your podcasts. Never miss out on our original research by also subscribing to our monthly newsletter at ILSR.org. Thank you to the group Mojo Monkeys for their song, "Bodacious", licensed through Creative Commons. Thanks for listening to episode 224 of the Community Broadband Bits Podcast.

H.R. Trostle On Co-ops, Munis, Connectivity In North Carolina - Community Broadband Bits Podcast 224

In June, North Carolina released a report pronouncing that 93 percent of the state has access to broadband speeds. At the Institute for Local Self-Reliance, our Research Associate H.R. Trostle, who has been examining reporting data in North Carolina for the past year, came to some very different conclusions. In episode 224, she and Christopher talk about the report they co-authored, which gives a different perspective on the connectivity situation in the Tar Heel State.

In their report, North Carolina Connectivity: The Good, The Bad, and The Ugly, Trostle discovered that, while urban areas have been well served by the big private providers, those same national companies have shunned rural areas. Instead, rural cooperatives and municipal networks are attempting to serve their residents and businesses with high-quality Internet access. It isn’t easy, however, when state laws discourage investment and access to federal funding.

Trostle gets into her analysis of the data, its limitations, and what we can learn from both. She and Chris go through some of the recommendations they provide to the state of North Carolina as it moves forward. The obvious first step is to repeal the state’s barrier on municipal network expansion, which has caused real harm in Pinetops, North Carolina. They also offer advice on how to facilitate telephone and electric cooperative investment and what that could mean for rural North Carolina.

For more, take a few minutes to download the report, which offers useful maps of where to find various connection speeds in the state.

Read the transcript of the show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 23 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to mojo monkeys for the music, licensed using Creative Commons. The song is "Bodacious."

Authors Discuss NC Report On PRX

We have extensively studied the connectivity situation in North Carolina and just released our report, “North Carolina Connectivity: The Good, The Bad, and The Ugly.” Now you can hear from the report authors, H.R. Trostle and Christopher Mitchell, in our most recent PRX coverage.

We spoke with both authors who gave us a recap of the situation in urban and rural North Carolina. They explained how they examined the data and came to the conclusion that, while urban areas are served relatively well by big private providers, the same cannot be said in rural areas. Unless a muni or rural telephone or electric cooperative offers Internet access in a rural region, odds are rural residents and businesses just don’t have access to FCC defined broadband speeds. Audio coverage runs 5:22.

Listen to the story on PRX…

You can also download the report to dig into the details and learn more about connectivity in North Carolina.

North Carolina Connectivity: The Good, The Bad, and The Ugly

Publication Date: 
October 11, 2016
Author(s): 
H. R. Trostle
Author(s): 
Christopher Mitchell

North Carolina's digital divide between urban and rural communities is increasing dangerously in a time when high quality Internet access is more important than ever. Rural and urban areas of North Carolina are essentially living in different realities, based on the tides of private network investment where rural communities are severely disadvantaged. The state has relied too much on the telecom giants like AT&T and CenturyLink that have little interest in rural regions.

Download the Report

The state perversely discourages investment from local governments and cooperatives. For instance, electric co-ops face barriers in seeking federal financing for fiber optic projects. State law is literally requiring the city of Wilson to disconnect its customers in the town of Pinetops, leaving them without basic broadband access. This decision in particular literally took the high-speed, affordable Internet access out of the hands of North Carolina's rural citizens.

The lengths to which North Carolina has gone to limit Internet access to their citizens is truly staggering. Both a 1999 law limiting electric cooperatives' access to capital for telecommunications and a 2011 law limiting local governments' ability to build Internet networks greatly undermine the ability of North Carolinians to increase competition to the powerful cable and DSL incumbent providers. 

In the face of this reality, the Governor McCrory's Broadband Infrastructure Office recommended a "solution" that boils down to relying on cable and telephone monopolies' benevolence. What this entire situation comes down to is a fundamental disadvantage for North Carolina's rural residents because their state will not allow them to solve their own problems locally even when the private sector abandons them.

"It's not as if these communities have a choice as to what they're able to do to improve their Internet service," says report co-author Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance. "There's a demonstrated need for high-quality Internet service in rural North Carolina, but the state literally refuses to let people help themselves."

Read ongoing stories about these networks at ILSR’s site devoted to Community Broadband Networks. You can also subscribe to a once-per-week email with stories about community broadband networks.

From The Report:

  • Despite significant tax subsidies from the state and federal government, North Carolina's private providers are building their fiber-optic networks only in certain metro areas and none in rural regions.
  • Only 12 percent of North Carolina's rural population has a choice for their broadband access, the rest are stuck with only one option and no control over their Internet prospects.
  • All of North Carolina's telephone cooperatives are investing in fiber for members in their service territory, some have entirely replaced their copper lines with fiber-optic. 
  • While North Carolina has 26 electric cooperatives capable of bringing fiber-to-the-home to rural residents, a 1999 state law (N.C. Gen. Stat § 117-18.1) limits the co-ops' access to capital for telecommunications projects.

Download the Report

Feds Are Fed Up With AT&T's Lame Excuse For Abusing E-rate

In late July, the FCC released a Notice of Apparent Liability (NAL) in which it found the telecommunications giant AT&T Southeast liable for a $106,425 forfeiture. The agency also ordered the company to return $63,760 of E-rate funds it described as “improperly disbursed.” AT&T overcharged two school districts in Florida and, in a response released last week, are trying to justify their pilfer by blaming the E-rate rules and the schools themselves, much as a criminal blames victims for being such easy targets.

Funded By Phone Users

E-rate funds are collected as a surcharge on telephone bills; the funds go to schools to help pay for telecommunications costs at schools, including telephone, Internet access, and infrastructure costs like fiber network construction. The amount a school district receives depends on the number of students in the district that qualify for free and reduced lunches; schools with higher numbers of low-income students are reimbursed at a higher rate. Given that many of our schools are funded through property tax rolls, this means that schools in poorer neighborhoods that are more likely to need help with their budgets receive the higher reimbursement rates.

According to the program rules, phone companies and Internet Service Providers (ISPs) that participate are required to offer the “lowest corresponding price” to schools. Providers aren’t permitted to charge rates that exceed the “lowest corresponding price” or bid higher than that price on contracts to serve similarly situated entities if those entities are eligible to receive E-rate funds. School districts do not carry the burden of getting the lowest corresponding price - telephone and Internet access providers are responsible to ensure that they offer the lowest price in exchange for the opportunity to participate in the program. Between July 2012 and June 2015 alone, AT&T received $1.23 billion in E-rate funding nationwide.

Filching In Florida

In Orange County and Dixie County, AT&T charged the districts prices that were 400 percent higher than other phone rates in Florida, claims the FCC. Their investigation focused only on two types of telephone services. The FCC noted that when Florida deregulated phone services in 2011, AT&T “dramatically increase[d] its pricing.” According to the the NAL, the company repeated the pattern between 2012 and 2015. Each year AT&T would file paperwork, falsely claiming they had followed the rules regarding price.

The NAL describes AT&T’s substantial rate increases after 2011 for the two types of phone service. Increases occurred every year and “both Districts paid among the highest rates of all non-residential customers” which contradicts the purpose of the E-rate program. When pressed as to why they increased rates so dramatically:

Indeed, AT&T has not offered any justification for its pricing at all despite requests from the Enforcement Bureau (Bureau). We are left to conclude that AT&T sought to maximize profits at the expense of the Districts and at the expense of the publicly-funded E-rate program. 

This isn’t the first time big telephone providers have been known to push the limits of the rule. Verizon and others have been criticized for similar behavior but this is the first enforcement action for violating the lowest price requirement. Back in 2012, AT&T was caught overcharging schools for telephone service by 325 percent. In 2010, a Detroit Public Schools audit recommended $3 million be recovered from AT&T, in part because the telecom had not provided the lowest corresponding price. There are other reported instances and probably numerous unreported ones.

AT&T's luck appears to have run out, however, because the FCC seems to have had enough of the bad behavior. In calculating the amount of the fine, the FCC focused only on the instances of false reporting and limited the number of years they included. Considering the large sum of money AT&T has taken from the program, and their pattern of misbehavior, the fine could be much higher. For more on how it was calculated, check out the Common Law Monitor

money1.png

AT&T Responds

On August 26th, AT&T filed its response to the NAL and posted a blog the same day. The company argued that they charged the school districts higher rates because they chose to receive services on a month-to-month basis rather than via one-year contracts. The FCC disputes that conclusion, determining that the districts inherently requested one-year service as a matter of course.

Charging more for month-to-month contracts is the way telecom businesses typically operate, which gave AT&T an excuse to increase telephone rates by 400 percent. How convenient that school administrators did not feel the need to shout, "We want an annual contract!" at every turn - their mistake.

The FCC also found that AT&T should not have charged such exorbitant rates because of the presence of the state's E-rate Consortium. The Consortium allows schools to band together and negotiate for lower rates. The schools did not belong to the group but, because it reduced possible rates for similarly situated entities that qualify for E-rate, AT&T was not permitted to charge rates higher than those available to those in the consortium. The company argues, again, that the schools wanted month-to-month service, rather than the yearly contracts that are negotiated for consortium members, so the rates did not apply.

AT&T claims that the "lowest corresponding price" rule is not well-defined and blames their decision to apply a price 400 percent higher than acceptable on that ambiguity. 

Solid Track Record

AT&T has proven to be a virtuoso of swindle over the years, typically in the form of shifty rate practices. David Cay Johnston has written about AT&T's stylistic theivery perfectly described by an incident involving his friend Bruce Kushnick:

When he cross-checked his aunt’s telephone bills over the years, he could hardly believe the numbers. His aunt paid $9.51 for her local phone service in 1984. By 2003 her bill had swollen fourfold to $38.90. In the two decades since the breakup of the AT&T monopoly, even after adjusting for inflation, his aunt’s telephone cost $2.30 for each dollar paid in 1984. And that was without any charges for long-distance calls.

Taking advantage of elderly ladies, school budgets, and taxpayers are all in a day's work at AT&T.

Bel Air, Maryland, Latest To Save With HMAN

Time to check in at Harford County, Maryland. When we last reported on the Harford Metro Area Network (HMAN) in July 2014, it had only been lit for a few months. Now, more than 100 public facilities are connected to the network and more are expected; the latest will be Bel Air, Maryland.

Saving With County Connections For VoIP

A recent GovTech article reported that the Board of Town Commissioners voted 4-0 to invest approximately $25,000 in a new VoIP system that will use HMAN for telephone service. The new system will serve 65 new phones and will include the software for the new system. Apparently, Bel Air sought cost estimates to replace their old traditional system with VoIP with a private provider and the estimates were more than $65,000 beyond what the city had budgeted for the project.

We often point to significant public savings when local government uses publicly owned infrastructure for Internet access, but switching from traditional phone service to VoIP via a muni can reduce communications costs even more. In places such as schools, government offices, and other administrative facilities where there are multiple lines, the budget for telephone service can be astronomical. VoIP eliminates leased lines and, because a fiber-optic network like HMAN is designed with redundancy in mind, users can expect reliable connections.

In addition to saving substantially, Bel Air’s new system will be compatible with the systems used by Harford County Government and the Department of Emergency Services.

HMAN connects schools, public safety facilities, libraries, government offices, and other public facilities in the northeast Maryland county. The network is 160 miles and four main rings with laterals off those rings. The network cost approximately $13.8 million, funded with general obligation bonds from the county’s capital improvement budget.

Problem With Poles In Connecticut: Petitioning PURA For Precision

In Connecticut, local municipalities want to take advantage of the state’s unique “Municipal Gain Space” but invoking the law has not been hassle-free. As towns try to place fiber-optic cables on this reserved section of utility poles, questions arise that need answering. 

Giving Towns Some Room On The Poles

The Connecticut statute grants state departments and municipalities the right to use space on all of the approximately 900,000 utility poles sitting in the municipal Rights-of-Way (ROW), regardless of ownership. One of the state's electric providers and either Verizon or Frontier jointly own most of the poles.

The law was created in the early 1900s for telegraph wiring and as new technologies and wire types evolved, a number of law suits ensued. Cities and state entities usually won, preserving the space, but the process of getting attachment agreements approved became more burdensome and expensive. In 2013, the state legislature amended the law so municipalities could access to the space “for any use.” The change opened the door for hanging fiber for municipal networks and partnering with private providers.

A Little Help Here...

In theory, it seems simple but in practice, pole administrators - Electric Distribution Companies (EDCs) and telephone companies - and government entities need guidance. As communities across the state band together to improve local connectivity and try to use the law, they have uncovered its flaws. It has potential, but the Municipal Gain Space law needs sharpening to be an effective tool. Its application rules are not sufficiently defined and a number of technical issues are not addressed. 

The state’s Public Utility Regulatory Agency (PURA) has the authority and responsibility to establish rules to settle the problems with the law. Deploying a municipal network is no small task; the Office of Consumer Counsel (OCC) and the State Broadband Office (SBO) hope to simplify the process for local communities. They have petitioned PURA to clarify the Municipal Gain Space rules. In their formal petition, they ask PURA to investigate and remove barriers that interfere with the “timely and efficient use of Municipal Gain.” Read the petition at the PURA website.

Lack Of Direction Jeopardizes Local Projects

We spoke with Elin Swanson Katz, Consumer Counsel, and Joseph Rosenthal, Principal Attorney from the OCC. Bill Vallee, the state's Broadband Policy and Program Coordinator joined the conversation. They described how a lack of direction for pole administrators and other gaps in the Municipal Gain Space law negatively impacts deployment for municipalities that decide to employ it. From inception to implementation, communities find themselves confronting some common questions.

A city may decide to invest in a project and use the Municipal Gain Space law to determine a route for their fiber-optic network cables.  As they move forward, they find that there are a number of unresolved questions, beginning with where on the pole the Municipal Gain Space should be located. Often the other entities that are using the poles have not reserved space for a municipality’s unrestricted use.

utility-pole-1.png

Once they answer the important issue of where on a pole a cable belongs, the next question is who pays to rearrange the existing wires so the new cable can be attached? For example, if a telephone company hung its wire but failed to reserve the space for the town to use later, who should pay for the make-ready costs when the town decides to use its statutory space under the Municipal Gain Space rule? How should make-ready costs, which can make or break a municipal fiber project, be allocated?

Time is critical; that holds true in the telecommunications industry in a number of ways. New rules would also establish who would be responsible for assessing the condition of the poles to expedite projects that depend on pole availability. Scheduling trucks and technicians from the various entities using the poles, fragile financing schedules, deployment delays that cause subscription losses, are only a few factors impacted by timing that affect the viability of a public or private network.

Limiting Competition With “An Offer You Can’t Refuse”

As communities have moved forward with fiber projects, some have entered into agreements with pole owners whose draft pole attachment agreements dictate the terms. Local communities may feel they have little choice, especially if they depend on critical funding tied to a tight deadline.

Some pole attachment agreements violate the law because it includes language that restricts municipalities’ use of the Municipal Gain Space. By limiting the space to “government use,” pole owners are able to prevent partnerships between municipalities and other Internet Service Providers (ISPs) who may wish to provide services to businesses or residents via publicly owned infrastructure. Such a restriction eliminates a range of options for local communities who may not have the ability to operate and maintain a fiber network alone. Incumbent providers are using their pole attachment agreements to stifle and delay municipal networks, including those that involve private partners, as a way to limit competition.

seal-somers-ct.jpg

Local communities must go out of their way to avoid these restrictive agreements if they want to preserve their ability to one day use their fiber for something other than a "government use."

For example, Somers had been awarded state funding to connect to the state education network but refused to sign the pole attachment agreement from Frontier. The resulting delay almost caused them to lose the state grant and they eventually engineered the network to avoid Frontier poles so they would not have to restrict away their Municipal Gain Space.

As part of the petition, the OCC and SBO are asking PURA to develop rules that could be used to build a standard agreement between municipalities and the telecommunications companies or EDCs that own the poles.

Washing Away The Mud For Everyone

In their June 21st news release, the OCC emphasized that the Municipal Gain Space rules affect a number of entities:

Other interested stakeholders in a PURA proceeding regarding the municipal gain would likely include the Single Pole Administrators (the two Electric Distribution Companies), the incumbent telephone companies, the several cable operators, long-term infrastructure investors, the diverse set of utilities, municipalities, investors, other entities that already engage in pole attachments, and Connecticut business and technology promotion groups seeking high-speed internet access.

"The process is daunting and in some circumstances clear as mud...That whole process needs to be clarified," Katz told the Hartford Courant in June. If PURA agrees, the Municipal Gain Space may soon be sharpened and ready to break new ground for Connecticut communities.

Fiber in Lenox, Iowa

When community leaders in Lenox, Iowa, gathered together to examine the community's cable TV options in the 1980s, they probably didn't expect their decision to impact local Internet access. Fast-forward 30 years, and this town of 1,400 people now has one of the most sought after forms of Internet access infrastructure: Fiber-to-the-Home (FTTH).

Lenox Municipal Utilities owns and operates a FTTH network that offers symmetrical speeds to hundreds of customers in town. It’s just one of many communities around the nation that have invested in this rugged, future-proof technology.

Same Utility, Changing Technology

We spoke with the Lenox Municipal Utilities General Manager John Borland who graciously provided some of the history of the network.

Since the early 1900s, Lenox has operated its own electric and water systems. These essential services enabled the community to thrive in the southern plains of Iowa. Eventually, a local entrepreneur decided to build and operate a TV system to ensure that the Lenox community stayed connected. In the 1980s, the town purchased the coaxial network from the owner who was ready to sell the system, but wanted to keep ownership within the community. Unfortunately, Borland didn’t know the identity of the entrepreneur whose investment eventually led to top-notch connectivity in this most unexpected place.

By the late 1990s, the network needed replacing, and nationwide, communities had already begun to realize the importance of Internet access. The incumbent Internet service provider, Frontier, offered dial-up and some DSL. Anticipating future need, Lenox decided to rebuild the entire network with fiber. 

Better Connectivity in the Community

In 2005, the community voted on a referendum to enable the utility to provide Internet service; it was one of many towns voting that year to ensure local control. The FTTH build cost about $1.5 million, which they funded through municipal revenue bonds.

Farmers Mutual Telephone Company ran a fiber line to Lenox, ensuring middle mile connectivity. By 2008, Lenox Municipal Utilities had the FTTH system up and running, bringing high-speed Internet to residents and businesses.

Now, Lenox Municipal Utilities offers triple play: television, telephone, and symmetrical Internet service, so upload and download speeds are equally fast. They also provide bundled packages for customers who want to purchase all three services. The network has about 450 customers for their Internet service, and several larger businesses have dedicated lines. 

Lenox is just one of the many small communities that offer next-generation high-speed connectivity in Iowa. For more stories about these self-reliant Iowa communities, check out our past stories in the Iowa tag.

Over 100 Years of Muni Telecom in Churchill County - Community Broadband Bits Podcast 204

For more than 100 years, Nevada's Churchill County has been operating its own telecommunications system, Churchill Communications. In recent years, they upgraded the vast majority of the county from copper to fiber offering a gigabit connection to the Internet. Churchill Communications General Manager Mark Feest joins us this week for Community Broadband Bits Episode 204.

We discuss the fascinating history behind their network and how they have built it without using any local taxpayer dollars.

Mark also explains two recent announcements that involve Churchill Communications offering its services in nearby areas where it already has some fiber. Finally, we discuss how some of the people that were originally skeptical of municipal networks have come around and are even asking Churchill Communications to expand.

Read the transcript from this show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 18 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Forget the Whale for the music, licensed using Creative Commons. The song is "I Know Where You've Been."