2C or not 2C isn’t the question

Should Boulder follow Longmont’s lead and provide a public option for faster, more affordable Internet?%uFFFD

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Gavin Dahl | Boulder Weekly

Have you moved to Longmont yet?” Susan Wisecup, business manager for Longmont Power and Communications, is really asking. She’s ecstatic about the century-old public utility in Longmont building Colorado’s most cutting-edge Internet project.

 

With upload and download speeds of 1 gigabit per second for around $50 per month, soon Longmont residents will be able to download entire HD movies in 10 seconds while paying the best price in the state. Construction began in August and customers can begin signing up for Longmont’s new service in November. The utility plans to connect 25 percent of the city within a year and all of Longmont by 2017.

“There was no formal ribbon-cutting, just get the equipment in and get to work,” says Scott Rochat, the project’s marketing director. Lighting up Colorado with globally competitive Internet speeds makes the state more attractive, he says, but he doesn’t think most people comprehend what a gig means.

“We talk about moving at the speed of your life, as much speed as you need,” Rochat says.

Longmont is deploying fiber optics, bundles of transparent fiber made of glass or plastic about as thick as a human hair, that transmit information with exponentially more bandwidth than wire cables. In a society where commerce, entertainment and democracy require increasingly more robust communication systems, Rochat says, Longmont’s new fiber network will be “fast enough that you should never have to worry about how fast it is.”

That raises questions about whether Boulder and Longmont will find themselves in a digital arms race.

Boulder City Councilman Macon Cowles acknowledges local businesses may decide to move north because they’re simply not able to get comparable speeds at any cost here.

“It would be a rational choice for them,” Cowles concedes. “It costs four times more for upload speeds that are one-hundredth that fast.”

Boulder Chamber of Commerce Public Affairs Director Angelique Espinoza concurs that relocating from Boulder to Longmont is a conceivable choice businesses may make in the coming years. That’s why she and the Chamber are leading a low-key coalition of local business and public interest groups supporting ballot issue 2C, which seeks to affirm the City of Boulder’s right to be proactive about improving Internet access within city limits.

“The point is,” Espinoza says, “we’re in competition to attract and retain the highest quality employers and the highest quality talent.”

Longmont is now mentioned in the same sentence as Chattanooga, Tenn., which offers gigabit speeds at low cost to all homes and businesses. Ken Hays, director of the Enterprise Center there, is tasked with generating new gigs in “Gig City.”

“You don’t really know what you have until you leave and you experience what they have in other places,” he says. “One startup team spent the whole summer here, and then they went back home to Florida. In six months, they were back in Chattanooga and they still are today because they had gotten so addicted to fast broadband.”

Boulder’s ballot issue seeks an exemption to one particular state law: the controversial Senate Bill 152, passed in 2005 and sponsored by Jennifer Viega (D-Denver), which restricted public agency involvement in the development of telecommunications services.

Press coverage at the time focused on local governments wanting to provide free public Wi-Fi and the industry view that public financing was supposedly unfair competition.

A decade later, incumbent providers are offering gigabit speed to just tens of thousands of Coloradans in what CenturyLink refers to as “select areas.” Advocates of 2C and measures like it argue that local governments should be able to act on behalf of constituents when Internet service providers cite low return on investment as a barrier to network upgrades.

Comcast’s Cindy Parsons claims they have spent billions on their network in Colorado and told BW, “We’ll continue to invest.” Parsons says of their download speeds that “all residential customers across Colorado currently have access to 105 megabits per second in Comcast serviceable areas.”

As the first public provider in the state, Longmont is touting download speeds 10 times faster and upload speeds 100 times faster.

Local officials like Yuma County Economic Development Corporation Executive Director Darlene Carpio say the lack of investment from the private sector has hurt their communities.

“We just don’t have what we need here — the speeds, affordability, reliability,” she says. “The first hurdle is that Senate Bill 152 precludes us from being able to consider all options.”

So Yuma County, and the county seat city of Wray, like Boulder, are sponsoring ballot questions to let their constituents vote to remove that hurdle.

They’re all following Longmont’s lead. Initially in 2009, the telecom industry defeated Longmont’s first attempt to opt out of SB152, spending an unprecedented amount of money to convince voters to oppose the effort. The city can’t spend campaign funds or lobby in favor of ballot issues. By 2011, despite well-funded opposition, 61 percent of voters supported their city’s right to make local Internet choices. Rochat says the question on people’s minds had become “When do I get my gig?” In 2013, Centennial tested the waters, but with a limited exemption that does not allow the city to provide Internet service directly, only through public-private partnerships utilizing city-owned resources. Seventy-six percent of residents voted yes.

“Seventy-six percent voter approval was amazing. We were very excited,” says Allison Wittern, Centennial public information manager.

This past April, 74 percent of Montrose voters approved a measure modeled on Longmont’s full exemption language.

“I think a 3-to-1 vote, like we saw, sends a message,” says Montrose Director of Innovation and Community Engagement Virgil Turner.

Legislatures in nearly half of all U.S. states have passed laws like SB152 limiting local telecommunications authority.

Thanks to a lack of public oversight and one merger after another, phone and cable providers enjoy virtual duopolies in countless markets.

“Comcast and CenturyLink — that’s it right now,” Wittern says. “Let’s allow other people to come in and increase the competition. That’s going to improve the service and lower the cost.”

The market power of being the only phone or cable company available in an area means corporations are operating in “harvesting mode,” scholar Susan Crawford writes in her book Captive Audience. It is common for shareholder-driven giants to invest less than 15 percent of revenue reaped from subscribers back into improving their networks.

The problem out West, Turner explains, is the infrastructure used by Charter Communications, their cable provider. Copper, which was first installed in the 1930s for the telephone system and then in the 1970s with the cable system, has now reached the end of its usefulness to society.

But Montrose had no leverage to insist Charter meet the needs of local residents.

“As we looked at making a big change, the incumbents seemed to be standing in our way, protected by this state law,” Turner says. “Say we wanted to build out a carrier-neutral location on city property where we could invite all the providers in and they could take a handoff to better aggregate supply into our community, for the city to be able to partner with a local provider that wants to use city-owned infrastructure — all of those things are prohibited by SB152.”

In Boulder, there are 85 to 100 miles of existing fiber infrastructure currently used by Boulder Valley School District, the city, the University of Colorado and the federal laboratories, according to Cowles.

“The question really is how this existing asset can serve the community more widely,” he says. “That’s what the ballot initiative is about, to get the authority of residents here to expand broadband in a new direction. The speeds that are available from existing providers are too slow and too costly.”

Boulder’s ballot language goes further than the partial exemption passed in Centennial. Like Montrose, Boulder is following the Longmont model and asking voters to approve a full exemption to SB152.

While nonprofit policy research organization Boulder Tomorrow is not opposing the ballot measure, Executive Director Dan Powers wonders why the city explicitly gives itself the option to operate municipal Internet service.

“If there is really no intention to do so, why is this language necessary?” he asks.

Espinoza says she has heard this skepticism from folks who are frustrated about the power utility and are concerned this is just one more thing the city wants to take over.

“This is an entirely different matter.

I don’t think it’s a parallel situation at all,” she says. “What the language does is exempt us entirely from SB152. I don’t see a realistic path to the city providing municipal broadband in any large way in the immediate future.”

“If I were living in Boulder, I would be clamoring for it, absolutely,” says Vic Ahmed, the founder of Innovation Pavilion, a tech incubator that has supported 85 companies in Centennial. However, he prefers his city’s public-private partnership approach to Longmont’s public option.

“Whenever a city goes out and asks for, bids for something like this, as Centennial is doing, not everybody is going to be awarded the contract,” Ahmed says. “So that puts pressure on all the companies in the area, competitive pressure. This will make a huge difference to the price point.”

While Longmont will soon offer great prices for world-class Internet, it won’t be the first city launching fiber under the authority of its local public utility. The assets of Chattanooga’s Electric Power Board also belong to the people.

“It’s old news that we have it,” Hays says. “The news that everybody is waiting for is, what are you doing with it? If we’re serious about using this as an economic development tool, we have to have an entity that wakes up everyday and works on these issues.”

Wisecup, business manager for Longmont Power and Communications, says Longmont having its own electric utility and now adding broadband is a good thing.

“Like Chattanooga and Cedar Falls in Iowa, adding broadband is an easier way than just starting your own broadband utility in a city that doesn’t have its own municipal utility,” she says.

Successful publicly run fiber projects have been launched in locales as varied as tobacco town Wilson, N.C., twin college towns Urbana and Champaign, Ill., and Portland suburb Sandy, Ore.

Whether or not anyone else in Colorado launches municipally run projects, the industry is responding to the possibility of new local competition.

When local officials decided to conduct a study to look into broadband options for Hinsdale County, according to Joanne Hovis, CEO of the nationwide Coalition for Local Internet Choice, “This step alone was sufficient to spur action on the part of the service provider,” she wrote in comments filed with the Federal Communications Commission.

“When we would talk to our incumbent providers in the past,” Turner recounts, “Their line was ‘Your city is well-served. Our customers in your city are satisfied with the service. No, we don’t have plans to improve or bring new services to Montrose because there’s just not sufficient return on investment.’ Those were our marching orders to solve the problem on our own, if that’s what it takes. They are certainly interested in coming to the table and talking to us now.”

Turner confirms he is now acquainted with phone and cable staffers he didn’t know existed before Montrose voters approved their ballot question.

Scott Russell of CenturyLink Denver told BW, “CenturyLink would welcome the opportunity to explore public and private partnerships, but to date we have not been approached with any specific proposals.”

“We have a lot of businesses and consumers who complain about their Internet service,” Boulder Councilman Cowles says. “We have people who work out of their home, scholars, students and artists who need faster broadband service that is less expensive. It’s a need that the city government should respond to, and the citizens as well. Boulder voters are very, very smart. I think they will see the advantage to voting for this, so I expect it to pass relatively easily.”

There is no formal opposition to 2C. A yes vote doesn’t create any specific action. It doesn’t promise fiber to every home. There is no municipal bond. If that happens later, Boulder’s voters may see the existing providers up the ante.

Boulder Community Media Executive Director Alan O’Hashi says he hopes 2C passes and wants to help lead a working group if Boulder convenes one. He is less concerned about whether the city of Boulder gets into running its own fiber business. The big question is how newly accessible networks will be managed, he says, and how the city will address questions of net neutrality, the concept that users should have equal access to any legal content online and all content providers hoping to reach online audiences must be treated equally by network operators.

Net neutrality allowed great ideas like YouTube and Twitter to grow across networks big and small. But at the national policy level, phone and cable lobbyists are pushing to change the nature of the Open Internet. Public interest groups warn of a two-tier Internet, where fast-loading content is only available to the highest bidder and the next big idea is stifled because only Facebook or Netflix can afford to pay top dollar to Comcast or Time Warner Cable for optimal delivery.

“I think they’re really trying to take away this net neutrality thing,” O’Hashi says of existing Internet service providers. “So the idea of the city being able to carve out this niche of net neutrality is really interesting.”

The idea of Boulder as a Gig City raises other questions about how faster Internet could affect local industries and the city as a whole, including familiar concerns like cost of living and highway congestion. Could the rise of 3D printing, telemedicine innovations like rapid diagnostic imaging and other startups make Boulder even more expensive, more sprawling, more traffic-snarled?

Councilman Cowles points to the promise of easier telecommuting in response.

What about Cowles’ well-intentioned comment in August during a Boulder City Council meeting that the startup economy brought a lot of very highly paid white men to the city, who are pricing out families?

“Are you kidding me? Walk into an office and look around,” Espinoza says. “The idea that a person of color can’t compete in that environment, or a woman can’t compete, is just not the case. We live in a somewhat segregated community but I would say it’s better now than it used to be in part because of the high tech sector. I haven’t been asked if I speak English in some time now.”

With the industry paying attention to measures like 2C, the added pressure could lead to investment in faster speeds and lowered prices for existing Comcast and CenturyLink customers, or it might not. Longmont Power and Communications officials are scheduled to make a detailed presentation to Longmont City Council on Oct. 21, including a pricing card.

“A lot of these carriers are still cherry-picking their neighborhoods, so it’s not gonna be a product for everybody,” Hays points out. “AT&T, Cox, Comcast, these are the companies that were telling us four years ago we didn’t need fiber. I think any city that gets fiber only helps propel more applications and more future development. It just depends on whether you feel broadband is a utility, and I think we’ve answered that question.”

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