Reroute to the Legislature
It became clear to many of us that the best solution to the problem (as we see it) was legislative; make §16-233 absolutely clear in its intentions, with an overt or clearly implied demand that municipalities be authorized to build fiber optic networks to residences and businesses, as happens now in so many other states. Thus three legislators introduced a bill to amend the language of §16-233 accordingly. It was assigned to the Energy and Technology Committee, where such matters are hashed out before asking the entire Congress to wrap its head around the problem’s complexities. That committee decided to combine this suggestion with two others to create Senate Bill (SB) 846. The two additions are: (1) a requirement that PURA adopt so-called One Touch Make Ready procedures similar to ones issued by the FCC in July of 2018 to make the process of attaching new wiring to existing telephone poles much more efficient; and (2) a set of rules for the proper fiscal management of municipal networks, including the establishment of an Enterprise Fund to channel money in and distribute money out.
This bill was passed out of the Committee on March 19 by a vote of 18 to 7. It will now be considered by the Congress as a whole. It requires majority votes in both houses, and then a signature by the Governor. It is subject to amendments as it winds through this part of the mill. One such amendment already suggested would preclude municipalities from “selling” its right to pole access to a third, private party without pole fees, that is, the third party would have to pay pole fees. It is a reasonable if potentially confusing demand, as it prevents communities from simply handing the free pole use to, say, a cable company who now has to pay pole fees. However, the pole fees themselves are not of sufficient size to determine winners and losers in the broadband market when municipalities enter.
The Committee held public hearings before passing the bill on. Some 45 people provided written comments. Some represented organizations such as PURA, DEEP, AT&T, AARP, and Northwest Connect. The split was the same as the litigation. Everyone representing a community or a community association (the vast majority of comments) favored the bill for all the reasons given on this web site. Comments from PURA and DEEP focused more on removing the compulsion in the bill to have new pole attachment regulations completed by the end of the year, asking that PURA alone settle on new rules. Curiously, PURA did not defend its own ruling on municipal gain. All comments can be found at https://www.cga.ct.gov/asp/menu/CommDocTmyBillAllComm.asp?bill=SB-00846&doc_year=2019. For what its worth, we offer the comments from Northwest Connect here.
The response from AT&T bordered on the hilarious. While intoning the common canard about unfair competition arising from free pole attachment, it handed out all the false news items incumbents parade before congress year after year, that Connecticut is so advanced, that competition is pushing the state to next generation networks, that 5G is coming so fast that nothing else need be done (this by implication). But the high point was observing that municipalities had more important things to spend money on, like education, public safety, and transportation, and they should not be squandering their dear tax dollars on competing with private carriers. If we measure Connecticut just by the number of potentially gigabit connections available to homes today, we would be a third-world country, with none. Broadband has become as important as education, public safety, and roads. Indeed, many critical community functions now require universal broadband services. Other than its efforts around 4G and 5G, AT&T isn’t even in the mix; they sold their Connecticut telephone network to Frontier, so dedicated are they to the future of Connecticut.
Perhaps the most telling argument was the absence of one. No incumbent carrier represented to the Committee that they were committed to universal broadband heading for gigabit speeds throughout the state, or anywhere in the state for that matter. These have to be the cardinal questions to carriers: when are you going to really serve everyone, not just say you are, and when are you offering gigabit symmetric speeds, as can be obtained now in many other states? Answers like “we don’t believe demand is there now” or “our plans are being formulated around those goals” or “trials will begin soon in select markets” are equivalent to “we haven’t any real plans for such a thing in Connecticut yet.” And that would be the real answer.
Is There a Happy Ending?
PURA recently asked contestants around §16-233 litigation to suspend oral arguments until after this legislative sessions on grounds that passage of SB 846 would render the litigation moot. The contestants have agreed with the condition required by Frontier that if the bill passes they have the right to rebrief the question before the court, no doubt to observe that the new law does not address the inequity of free pole use. As the question of free pole use has also concerned some congressmen, an amendment has been proposed by the Office of Consumer Counsel that would require municipalities to pay pole fees unless the municipality can demonstrate that pole use was to provide services to homes otherwise unserved (the language is rather convoluted). However, as pole fees themselves do not constitute a significant cost (or competitive advantage) it does not constitute a significant competitive disadvantage, and it would not surprising to see this bill pass, if it passes, with pole fees restored under any circumstances. This may fell like a loss, but the substantive benefit of §16-233 is its grant of power to communities to create and own a broadband network at all, and that would be gained.
The Political Divide
We are divided, perhaps as never before, between two political parties. Democrats tend to be suspicious of large corporations, Republicans tend to defend them. As the carriers involved in this dispute are all huge corporations, they naturally elicit suspicion from one side and support from the other. We are advocating a middle road, indeed, a road for both sides.
We are not proposing that communities get into the network business by themselves; most wouldn’t know how to start. We are proposing that communities think about networks like roads, something that abets communications as roads abet transportation, but are not the thing itself. We are proposing that communities pay for and own the trunk wiring on poles or underground, just as they pay for and maintain roads. But we are proposing that private carriers do the rest, in a fully competitive manner. If the state were to adopt this model, wire the whole state, it could open up the drop wire and consumer side of the business to every existing carrier who would then really compete for user business without having to make huge capital commitments before hand. This is the only sensible model that truly fulfills the intentions of the 1996 Telecommunications Act for competition and investment in broadband andthe provision of universal service at the same time. It is the perfect blend of central control and free market forces, a blend we have become so used to in other areas that we forget how successful they have worked. Our sewer systems, our transportation systems, our education systems, our health care systems, our national defense systems, rely crucially on public/private partnerships in which portions of each system are owned and operated by the public and other portions are owned and operated by the private sector. We just have to face the fact that broadband communications have reached the same state, for the same reasons, as these other business sectors.