Co-op Tactics for Community Broadband

If you’re Wally Bowen (founder and executive director of Mountain Area Information Network – MAIN), Larry Baumgart (CEO of Virtual Networking Service Inc), or another community IT advocate, the battle for broadband resembles the Charge of the Light Brigade.

“Cannon to the right of them, cannon to the right of them, cannon in front of them.”

On the left is the FCC with broadband policies a growing number of people feel will be less-than-effective at bringing broadband to under-served communities. To the right incumbent telcos are increasing their anti-municipal network wars in state legislatures. And in front are communities that may be shortchanging themselves with a one-dimensional view of what constitutes community broadband.

The broadband wars currently happening in North and South Carolina are particularly frustrating for those who believe communities could minimize, or avoid outright, the damages of incumbents’ scorched-earth attacks by taking different options. Instead of public networks that are owned by local government, opt for private, nonprofit networks run literally by the community. It’s a subtle difference that could have a major impact.

“Government owned infrastructure creates political vulnerabilities given how incumbents are behaving,” states Bowen, whose nonprofitnetwork is in western North Carolina. He contends that federal officials and incumbents often equate all community networks with government-owned and operated services, a position leaving them open to claims that government is competing with the private sector. There is great irony here given that broadband supporters frequently draw parallels between community networks and the nonprofit electric cooperatives that brought electricity to rural areas during President Roosevelt’s New Deal program.

In actuality, electricity and other utility co-ops were (and continue to be) comprised of constituents and businesses in the community who built the infrastructure and run the utility business. Local government may have representation in a co-op, but it doesn’t directly run the operations. Subsequently the government does not have the same legal relationship and legislative exposure as is the case with a public utility- or municipal-owned network.

Baumgart believes communities should consider as an option, forming a community development co-op that includes residents, businesses, associations and institutions. He says, “This entity can create a community foundation through which private donations, grants, and even Universal Service Funds could pass. The co-op would have controlling interest in an open-source network that maximizes Internet revenue and operations for the benefit of the community.”

Up to 49% of the entity’s stock could be used for building equity relationships with providers, the public utility or other organizations that make the network successful. “A co-op, when you think about it, has more clout from the perspective that it’s a true democracy,” Baumgart concludes.

Local government-run broadband networks also represent the democratic process and the will of the community, but in some states such as North Carolina, legislators totally ignore this. Communities therefore must be able and willing to take a different approach.

MAIN, in Western North Carolina, was invited in 1997 to join a regional economic development “visioning effort” that included each county’s economic development officer, chambers of commerce, and major institutions such as colleges, hospitals, and industry. The effort helped birth a nonprofit “middle-mile” fiber network, ERC Broadband, serving the greater Asheville area and several adjacent counties. Surrounding communities followed suit to create a second nonprofit fiber network, PANGAEA, while a nearby rural electric co-op added broadband fiber to its portfolio. Meanwhile, the Eastern Band of the Cherokee partnered with a private local software firm to
serve counties west of Asheville. A rural telephone co-op, Skyline, deployed broadband fiber to serve counties northeast of Asheville. 

The bills pending in the Carolinas are abysmal in their overreach, their intent to micromanage/choke existing community networks out of existence and prevent new ones from seeing the light of day. But the community networks appears safe. “I don’t see how any of our community broadband networks could possibly be affected by this bill,” Bowen says regarding North Carolina’s proposed legislation.

A map of some of the community-owned IT networks nationwide.

Given the viciousness with which telecom and cable companies try to stamp out any semblance of competition, it is never safe to assume a community network is immune to attempts against its existence. However, when communities can see a range of network ownership and management options, they are likely to fare much better politically as well as financially. At the moment, communities own the infrastructure while service providers compete to deliver services across these networks. Over 130 communities own wireline networks and operate services outright via local government or public utilities. A still-to-be-calculated number of co-ops and nonprofits such as those in Wesern North Carolina provide broadband services. More options are sure to evolve.

Filing with the FCC

The coalition of community broadband non-profits that filed comments with the FCC doesn’t feel the federal agency is helping matters. Though few probably know it, the National Broadband Plan endorses community broadband networks several times. “They [communities] should have the right to move forward and build networks that serve their constituents as they deem appropriate” is one such endorsement. Yet it is extremely difficult to find any FCC officials publicly discussing community networks. Probably just as well, as far as the Coalition is concerned.

“For too long the dominant assumption has been that municipal networks are the only alternative to commercial providers,” says Bowen. “This ‘blind spot’ is also reflected in the National Broadband Plan, which defines ‘community broadband’ providers as local government networks.” Together with others in the Coalition, Bowen filed comments March 2 with the FCC in response to the agency’s request for public comment to evaluate and update the 2009 “Report on a Rural Broadband Strategy.”  They asked the FCC to reform its rural broadband policies by expanding its definition of community broadband to include nonprofits and co-ops, and to acknowledge that these networks may serve some rural communities more effectively than non-local, for-profit carriers.

While the filing has merit, the “off the record” feeling circulating among community advocates, consultants and industry watchers is that these networks can expect little acknowledgement or support from many in DC. Since 2009, AT&T and Verizon have spent millions of dollars lobbying and promoting wireless as the “innovative” technology that will deliver on the promise of broadband. The National Broadband Plan’s broadband speed goals (4 Mbps down, 1 Mbps up) and other objectives favor wireless technology. President Obama’s State of the Union address and other public statements favored wireless. The net neutrality rules eventually put in place by the FCC provide exemptions just for wireless services. The first look at potential Universal Service Reform reveals policies, such as the heavy emphasis on spectrum acquisition, that further cement wireless’s role as the central broadband technology in our national strategy.

As long as this wireless focus persists, along with speed goals that play to wireless’s limitations in what is increasingly becoming a “gigabit network world,” community broadband can expect minimal attention from the FCC. Communities that need/want city- or countrywide gigabit networks won’t find much help here.

Luckily, agencies such as the Agriculture Department’s Rural Utilities Services (RUS) with its new $700 million broadband loan program view all flavors of community networks as valid as any other potential loan recipients. Communities just have to come forward with the strongest plan possible in order to get a seat as the table – as it should be.

Craig Settles, of Oakland, California, is an analyst and business strategist in the broadband industry.

x

News Briefs