Postmortem on Kansas, Utah: What Anti-Muni Net Bills Say about Broadband Competition

A month ago tomorrow the telco/cable lobbyist machine launched an unprecedented assault on communities’ ability to determine their broadband future by attacking the private sector. Twice! Luckily, community and national broadband activists unleashed a swift strike-pivot-strike counterattack that proved effective and seemingly successful.

post mortemNo one believes these battles are done, but broadband advocates feel communities are better prepared for future challenges that are sure to come from incumbents. It is wise to assess what was done in these last 30 days to beat the bills, but more importantly to look at incumbents’ changing behavior in the face of a changing competitive landscape in community broadband.

Incumbents are in a box

Ignore the rhetoric that the public sector should not be spending taxpayer money to enter the broadband business. It’s a diversion to hide who’s really wasting tax dollars. The combine taxpayer dollars invested in all of the community nets don’t even begin to rival the tax dollars local and state governments have subsidized telcos and cablecos to deliver fiber broadband WE HAVE NOT SEEN (as described in this interview)!

The real issue here is competition. Not unfair competition. Any competition is something to be destroyed, in the eyes of large incumbents. They are single-minded, relentless and ruthless in that pursuit. Think Mongo. In Kansas on January 27 and a couple weeks later in the Utah statehouse, three bills reared their ugly heads in a dramatic change in strategy that aligns with the real motive – a drive to nuke competition.

For years incumbents have attacked municipal governments and public utilities that want to build and run their own networks. They convinced their pocket legislators in 19 states to pass laws with various levels of restrictions on muni nets. N. Carolina was their most recent and most restrictive, preventing munis from even forming public private partnerships. However, incumbents now see the bigger competitive threat coming from the private sector, but incumbents are boxed into a corner because these laws were passed to “protect” the private sector.

Kansas, if they had been successful, would have been incumbents’ 20 state victory. But here, in order to smother the bigger threat, this bill went full out to kill the ability of any private-sector company other than existing incumbents to provide broadband, no matter how slow or poor the existing service. The Utah bill added a dimension by preventing private companies from doing business with UTOPIA, a network owned by 11 Utah cities. So much for that rhetoric about the free market.

It’s more than Google causing panic 

Google has changed the competitive landscape for incumbents. Muni nets exploit incumbents’ core competitive weakness – they can deliver insanely faster speeds and for much less money than incumbents can. Local constituents’ loyalty plus the financial dynamics of public organizations make their networks difficult to kill even under the merciless well-financed assaults of the likes of Comcast and AT&T.

Google traumatizes that competitive weakness by bringing enough bucks to be able to launch faster, better networks in multiple markets. Worse, incumbents don’t have just Google to worry about. In Utah, a private company called Macquerie Capital with ginormous bank ($100 billion at least) swooped in to partner with UTOPIA and extend that network to every home and business. But wait, there’s more. Small companies such as OSIsoft in San Leandro, CA are getting into the act, becoming a hometown Google that pays to build a gig network for the community.

Now, incumbent restrictions in those 19 states don’t mean jack. Munis could bring competitors into the fray despite the restrictions. Oh yeah, Kansas has no restrictions, so the small town of Chanute reminded incumbents that munis in the other 31 states still could do their thing, causing big trouble. So what else could they do? Don’t hesitate, legislate! Literally.

In Kansas, a cable industry lobbyist wrote the bill from hell AND entered it on the state Senate Commerce Committee docket. In Utah, the incumbents at least tried to maintain the charade of representative democracy and influenced their legislative ally in the house to introduce that bill.

When incumbents strike – the response?

The incumbents have played a pretty aggressive hand, but the Kansas bill is pretty much dead and legies don’t want to bring it back. In Utah. the house bill attacking UTOPIA lies dormant in committee and its legie sponsor doesn’t seem to have the heart to administer CPR. Btw, there is a second bill in Utah, this one in the state senate that tried to alter accounting requirements to make it difficult for UTOPIA (and UTOPIA alone) to do business. Under media and public scrutiny, its sponsor made some amendments that rendered the bill benign and likely to stay so if it gets passed.

The incumbents are clearly in an agitated and panicky state. Except for the very blue states such as California and Massachusetts, we should expect to see more of these bills that go after public-owned networks and private competitors. Some foolish mortals may try to run a bill as transparently anti-competition as the Kansas and Utah efforts. Most likely they will come cloaked in words of seemingly rational logic. Don’t be fooled!

By casting off any pretenses, incumbents are declaring they are all about killing competition in any shape or form. Communities have to prepare to play by a different set of rules.

Don’t be blindsided. Broadband supporters, vendors and smaller ISPs across the board need to start watching bills like hawks, searching for subtly written bills with the intent of enabling a scorched earth attack against both public and private competitors. A bill might come out of a committee that’s not even responsible for telecom or commerce legislation.

Be on the lookout for bills and legislative procedures that use trickery to erect barriers to competition. Call your legies on it, early and often.

Private sector companies, local government and individuals have to be better lobbyists than the professional lobbyists, even if you don’t have their kind of money to throw around. You have to educate, educate, educate your legies.

When bills strike, make your responses swift, focused, consistent, unrelenting and quite public. The media is your best friend. Lobbyists and Legies in particular hate to have their business and connections put on the street, or to have the public’s wrath land on their doorsteps (though avoid personal attacks, as these hurt the cause). National broadband advocates such as Chris Mitchell and Phillip Dampier can help turn up the light.

The quick, stealthy nature of the Kansas bill on a Monday morning caught everyone flatfooted, and even with advance warning, communities can’t match the dollars the industry can unleash. How do you convey all of the complexities reflected in the bill and broadband to get citizens to care? By Thursday broadband champions across the state united and harnessed the power of social media to deliver a consistent powerful message that educated and rallied individuals and businesses. They journeyed to the statehouse in Topeka to make their presence felt. Their efforts were supplemented with national public advocates working aggressively behind the scenes.

Over in Utah, they too got caught a little off guard. But  advocates and the media responded quickly to neuter the threat. They’re now watching the amended bill wind through the final process to be sure nothing detrimental gets added before the legislative session ends March 15.  Editor of the blog FreeUTOPIA, Jesse Harris, recommends interested parties go to the bill’s page and subscribe to updates:  http://le.utah.gov/~2014/bills/static/SB0190.html Email alerts are on the status tab. Utah residents should write their representative AND senator to express leaving the bill as-is. Find out who they are here:  http://le.utah.gov/GIS/findDistrict.jsp

You can watch and/or listen to floor debates and committee meetings at http://le.utah.gov if you can’t show up. “That’s about all that’s needed. If I see something noteworthy, I publish it and put it on Reddit for maximum exposure.

I want to take this opportunity to thank the many people in both states who worked some long, late hours against what initially looked to be impossible odds, and stopped three bills that could have devastated community broadband. Ya’ll were awesome folks to work with, and your effectiveness was a wonder to behold. Like the people of Georgia who last year fought a similarly uphill battle to beat down an anti-muni network law there, you have proven that motivated grass roots efforts and sharp execution can turn the tide. Well played Kansas and Utah, well played.

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One Response

  1. […] A month ago tomorrow the telco/cable lobbyist machine launched an unprecedented assault on communities’ ability to determine their broadband future by attacking the private sector. Twice! Luckily, community and national broadband activists unleashed a swift strike-pivot-strike counterattack that proved effective and seemingly successful.No one believes these battles are done, but broadband advocates feel communities are better prepared for future challenges that are sure to come from incumbents. It is wise to assess what was done in these last 30 days to beat the bills, but more importantly to look at incumbents’ changing behavior in the face of a changing competitive landscape in community broadband.Ignore the rhetoric that the public sector should not be spending taxpayer money to enter the broadband business. It’s a diversion to hide who’s really wasting tax dollars. The combine taxpayer dollars invested in all of the community nets don’t even begin to rival the tax dollars local and state governments have subsidized telcos and cablecos to deliver fiber broadband WE HAVE NOT SEEN (as described in this interview)!The real issue here is competition. Not unfair competition. Any competition is something to be destroyed, in the eyes of large incumbents. They are single-minded, relentless and ruthless in that pursuit. Think Mongo. In Kansas on January 27 and a couple weeks later in the Utah statehouse, three bills reared their ugly heads in a dramatic change in strategy that aligns with the real motive – a drive to nuke competition.For years incumbents have attacked municipal governments and public utilities that want to build and run their own networks. They convinced their pocket legislators in 19 states to pass laws with various levels of restrictions on muni nets. N. Carolina was their most recent and most restrictive, preventing munis from even forming public private partnerships. However, incumbents now see the bigger competitive threat coming from the private sector, but incumbents are boxed into a corner because these laws were passed to “protect” the private sector.Kansas, if they had been successful, would have been incumbents’ 20th state victory. But here, in order to smother the bigger threat, this bill went full out to kill the ability of any private-sector company other than existing incumbents to provide broadband, no matter how slow or poor the existing service. The Utah bill added a dimension by preventing private companies from doing business with UTOPIA, a network owned by 11 Utah cities. So much for that rhetoric about the free market.Click headline to read more–  […]

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