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Bills In Washington State Legislature Would Allow Public Utility Districts into Retail Broadband

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Photo of Washington State Sen. Lisa Wellman from her website

Though Washington is home to one of the nation’s fastest growing tech hubs, many communities throughout the state lack adequate broadband infrastructure. The stark divide between those Washingtonians with reliable home broadband connections, and those without, became especially salient last year, when many were forced to rely on their home Internet access for work, school, health, socialization, and much more.

A year into the pandemic, it seems lawmakers in Olympia are finally waking up to the connectivity issues currently plaguing the state. In January, bills aiming to advance broadband connectivity by allowing public entities to participate in the retail broadband market were presented in the House and Senate of the Washington State Legislature. The two bills have both cleared their respective chambers, and are waiting to be heard in committees of the opposite legislative chamber.

Discussions surrounding the two bills will continue on March 11th, when Washington’s Senate Energy Committee is set to hold a hearing for House Bill 1336, one of two bills being considered (the other is Senate Bill 5383).

Both bills aim to grant public entities, such as Public Utility Districts and ports, the authority to operate as Internet Service Providers. Currently PUDs and ports can build broadband networks but must offer wholesale access to private ISPs, and are prohibited from offering direct retail services to residents and businesses. The bills being considered now would allow them to deliver Internet access to Washington residents without a charter or third-party business overseeing network management operations.

While the bills are similar, they possess important differences. At the heart of the dispute between the two proposed laws is a preemption clause included in Senate Bill 5383, sponsored by State Sen. Lisa Wellman.

Wellman’s bill gives incredible veto power to private, incumbent ISPs. SB 5383 would change existing state laws to allow PUDs and ports to offer broadband service directly to residents only if they do not “receive notice from the governor’s statewide broadband office that an existing broadband service provider has not submitted an objection.”

SB 5383 would give private companies authority over public entities that want to expand into territory or build in areas where incumbent ISPs claim they plan to expand service within the next six months.

House Bill 1336, sponsored by State Rep. Drew Hansen, does not include such a veto clause. Instead, HB 1336 would grant retail authority to PUDs, ports and municipalities with populations under 10,000 without requiring private third-party network managers or operators. Hansen’s legislation would initiate critical changes to state laws, under which counties and small towns operating without a charter currently lack any authority to provide telecommunications services.

Champions of SB 5383 claim the new law would focus more on rural broadband than Hansen’s legislation. The Senate Bill calls for creating maps that pinpoint underserved areas and targeting these communities with funds and incentives. Yet, SB 5383 does not allow counties or municipalities to provide telecommunications services directly, nor does it allow ports or small towns operating without a charter to provide services directly.

Public-backed vs. Private-backed

While Comcast, small telecom companies, and business lobbyists have supported Wellman’s more limited legislative proposal, PUDs, ports, rural health clinics, the Suquamish Tribe, parents, teachers, broadband activists, and over a thousand citizens who signed up to testify, have rallied behind Hansen’s bill.

Many in the public sector have voiced concerns with SB 5383 and the veto power it gives private telecommunications companies. Some have also criticized Wellman, a former Apple executive, as being a naïve champion employed by for-profit telecom lobbyists.

“The veto provision allowing an ‘existing broadband service provider’ to block a public utility district from providing Internet [access] is anti-competitive and frankly insulting,” said Devin Glaser, Executive Director of Upgrade Seattle.

There are a number of reasons for a local government to provide a utility directly, without waiting for the private sector’s permission, he said, noting how incumbent providers often do not provide service to all residents in a community, have unreasonable pricing, or offer speeds that are insufficient for individuals attempting to work from home.

Objecting to Wellman’s proposal, Glaser maintained that Washington residents deserve a competitive market in the delivery of Internet services. “If the private sector wishes to compete with a public utility district, town, port, or county, they can offer better service or lower prices,” he said.

In the absence of reliable broadband at competitive prices, many PUDs have worked within current state limitations to offer broadband on a wholesale basis, through dark fiber or open access networks. For more on this tune into Episode 316 of the Community Broadband Bits podcast, where Justin Holzgrove of Mason County PUD 3 and Isak Finer from COS Systems discuss how COS Systems is helping the public utility’s strategic deployment approach in Mason County, Washington.

Claims of Overbuilding Are Suspect

Wellman argues that the veto power provided to ISPs by SB 5383 will prevent “overbuilds” and encourage public entities only to build infrastructure where it currently does not exist.

Still, others have contended that the veto clause included in SB 5383 will allow incumbent ISPs too much leverage to convince the Washington Statewide Broadband Office that some community broadband initiatives — aimed at connecting the unserved, creating a more competitive marketplace, and improving end-user experience — classify as “overbuilding”.

The term overbuilding, often used to describe the construction of new, futureproof networks in localities where only one incumbent ISP offers service, has been widely utilized by lobbyists attempting to protect private companies’ monopolies on telecommunications services.

For an in-depth discussion of “overbuilding” and competition, watch or listen to Episode 7 of the Connect This! Show.

In conversation with the Institute for Local Self-Reliance, Laura Loe, Executive Director of Share the Cities, called lobbyists’ utilization of the term overbuilding an “excuse to not allow public entities to eat into private profits,” which echoes a point made more substantively by John Sallet in the recently published report, Broadband For America’s Future [pdf]. In that report, Sallet wrote “what some call ‘overbuilding’ should be called by a more familiar term: competition.”

ILSR’s Director of the Community Broadband Networks initiative Christopher Mitchell voiced concern that SB 5383 will allow an incumbent ISP claiming to offer 100 Mbps service for $150 per month to some residents of an area the ability to veto a PUD attempting to expand gigabit fiber to everyone in a region for a much more reasonable price to end-users. “This ‘right of first refusal’ is counter-productive and poorly constructed,” Mitchell said. “It demonstrates that some lawmakers are more worried about the concerns of deep-pocketed monopolies than the small businesses and residents that desperately need more investment in rural Washington.”

Moving Towards Digital Equity

Discussions surrounding the two bills will continue on March 11th, when Washington’s Senate Energy Committee is set to hold a hearing for HB 1336. Loe considers the hearing scheduled for Thursday an organizational victory for the public sector. According to Loe, who heads a Seattle-based special interest group focused on housing and other tenant rights, it took a month of campaigning before Sen. Reuven Carlyle, a recipient of telecom PAC money, announced he would allow the bill to be heard in the state Senate.

Loe maintained that while HB 1336 will not resolve all of the factors that perpetuate digital inequity, it is critical in overturning Washington’s restrictions on public broadband and a step in the direction towards more universal access to broadband infrastructure.

“This bill isn’t doing anything for digital equity,” reminded Loe. “I don’t want people afterwards to feel tricked when Hansen’s House Bill goes through, and … Washington residents are essentially getting Comcast services again.” This is a big, but important, conflict over access for a comparatively small number of rural residents.

“This bill won’t help an elder access telemedicine; this bill won’t help a student who doesn’t have a laptop,” Loe said, adding a sobering dynamic to the conversation surrounding the legislation.

Loe believes there is confusion on both sides about what HB 1336 will actually do, if enacted.  “HB 1336 is not mandating public broadband,” said Loe. “We would still need to fight on a municipal level” after the law passes, in order to get reliable, affordable broadband to all Washington residents.

Read full text of bills below.

Editor’s Note: This piece was authored by Jericho Casper with the Institute for Local Self Reliance’s Community Broadband Network Initiative. Originally published on MuniNetworks.org, the piece is part of a collaborative reporting effort between Broadband Breakfast and the Community Broadband Networks program at ILSR.

Open Access

UTOPIA’s Projects Proceeding in California and Montana, CEO Says

Both the GSCA and Yellowstone Fiber are using UTOPIA’s techniques to provide open access broadband over fiber.

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Barbara Hayes (left) and Roger Timmerman (right) speaking at Broadband Communities Summit 2022 on May 4

HOUSTON, May 4, 2022 — UTOPIA Fiber’s open access model has found success in California, Montana, and Idaho as it continues to deploy across Utah, the company’s CEO said Wednesday.

“Right now, we are working with [Golden State Connect Authority] to identify various pilot areas for the project and have started preliminary engineering work to determine the initial project area,” Roger Timmerman said at the Broadband Communities Summit 2022.

During the press conference, Timmerman also pointed to UTOPIA’s expansion into Santa Clara, Utah, and its completion of its original 11 Utah cities by the end of 2022.

Timmerman was joined by partners Barbara Hayes of the Golden State Authority and Yellowstone Fiber CEO Greg Metzger as they delivered remarks on their joint ventures. The partnership will create the largest publicly owned fiber network in the US, and as it stands now, would span 38 of California’s 58 counties.

“California may be the world’s fifth-largest economy, but our state’s connectivity is decades behind,” Hayes said. “Investing in open access fiber will be transformative for California.”

Both Metzger and Hayes emphasized that their decision to partner with UTOPIA was largely informed by the company’s track record.

“We needed to have a partner who was successful and had done it before,” Metzger said. “For Montana, this is going to be a breath of fresh air.”

Yellowstone Fiber, formerly known as Bozeman Fiber, is a not-for-profit that will replicate UTOPIA’s open access model to provide broadband to the greater Bozeman region; it will own and operate the fiber but will rely on UTOPIA for assistance on the backend.

UTOPIA’s model of open access has long been a point of interest in the telecom industry. While some claim it will be a solution to the digital divide, other assert that it has merely created a “race to the bottom” where internet service providers are constantly pushed to undercut their completion. Timmerman and others have pushed back against the “race to the bottom” assertion, claiming that providers can find ways other than price to distinguish themselves from their competition, such as superior customer service. Additionally, they point to their recent track record as evidence that critics’ concerns that they can maintain a positive cash flow are unfounded.

Though UTOPIA, a sponsor of Broadband Breakfast, now has positive revenue and has served as a model for open access projects around the country, critics still point toward its more than $300 million in outstanding debt it accrued in its early days, before Timmerman was at the helm.

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Open Access

‘Worst Broadband City’ Brownsville Approves Open Access Fiber Project with Lit Communities

Lit Communities will operate the network, with subsidiary BTX Fiber as the last-mile provider. HMI Utilities is prime contractor.

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Photo of Elizabeth Walker and Andres Carvallo at the city council meeting.

BROWNSVILLE, Texas, April 1, 2022 — During a special city commission meeting on Wednesday, council members voted to approve a fiber project that will bring high-speed broadband to 100% of its citizens.

Elizabeth Walker, Brownsville assistant city manager, and Andres Carvallo, CEO and founder of CMG Consulting LLC, recommended that the council authorize two respondents, HMI Utilities with Lit Communities, for a combined proposal to maximize technical and financial capacity.

Brownsville, Texas, is a city of more than 182,000 people and is one of the cities with some have called the worst broadband city in the country.  The National Digital Inclusion Alliance in 2018 listed Brownsville and a neighboring community as one of the top two worst connected cities in the country with a population of more than 65,000. For Brownsville, 47.1% of households do not have broadband of any type, NDIA found

Lit Communities, a fiber-builder that partners with municipal, county and other government entities, will operate the network, with HMI Utilities as the prime contractor. Lit Communities subsidiary BTX Fiber will be the last-mile provider on the network. However, the project will be an open network with multiple internet service providers.

Standard service on the network will be at least 100 Megabits per second (Mbps) symmetrical.

The research for this project began nearly a year ago in April 2021 when Walker and Carvallo looked at different business models, like public policy only, public services, open access, infrastructure, municipal retail (business only and residential). They looked at these models in similar projects in Texas and across the country, including in places like Knoxville and Santa Cruz County. Eventually, they decided on an open access model.

Specifics of the Brownsville network

All citizens will have access to this broadband. “It is eight middle-mile fiber rings to address the full geography of Brownsville,” said Walker.

The city will own 100% of the middle mile and will be able to license it out in private-public partnerships to create revenue, as well as revenue from the last mile connectivity. To ensure affordability, there will be a cap on what providers can charge.

Affordability “is very important,” said Walker. “The crux of the consideration is just to not deliver access, but to make it affordable.”

This infrastructure will have a life expectancy of 50 to 100 years, said Walker.

Walker said that “evidence suggests that broadband services have a net positive economic and social impact to communities by enhancing key functions such as economic competitiveness, workforce development, training, educational capabilities, municipal operations, and smart city developments.”

This is part of the private-public partnership model of Lit Communities. The company recently partnered with Ohio’s Lorain-Medina Rural Electric Cooperative to install fiber on existing utility poles. In these projects, the municipality in question provides the capital necessary to build a middle mile or backbone network.

“We are not stopping with these initial groups of towns that we are looking at and working into right now,” said Rene Gonzalez, Lit Communities’ chief strategy officer. “It is just the beginning.”

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Open Access

Construction of Yelllowstone Fiber Network in Montana Begins Ahead of Schedule

The project will be Montana’s first open-access fiber-to-the-home network.

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Photo of Bozeman, Mont., from January 2011 by Mike Cline used with permission

WASHINGTON, March 24, 2022 ­– Montana fiber provider Yellowstone Fiber announced Wednesday that construction has begun on a $65-million network based in Bozeman, well ahead of anticipated pace.

The network, operated in partnership with large Utah-based open-access network UTOPIA Fiber (a sponsor of Broadband Breakfast), will be Montana’s first high-speed all-fiber internet network as well as its first open-access fiber-to-the-home network.

The start of construction for the privately-funded network comes only six months after initial announcement of the project.

Not only will the network connect every address in Bozeman, but it will also extend “deep into Gallatin County,” according to the developer.

Businesses are expected to receive speeds of up to 100 Gigabits per second and residential properties will experience up to 10 Gbps to create what the city of Bozeman has called “the first true gigabit city in the state of Montana.” Pricing plans are expected to be announced this spring.

The first six internet service providers to provide services on the network will be Blackfoot, Global Net, Hoplite Industries, Skynet, Tri-County Telephone Associates, and XMission.

Montana is one of the least-connected states in the U.S. About a third of residents in Gallatin County, in which Bozeman is a city, lacks internet access.

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