Georgia Kills Bill Restricting Municipal Networks Second Year in a Row

"This bill has nothing to do with Georgia,” North Georgia Network CEO Paul Belk told us. “It has everything to do with Windstream trying to corner USF funds. ... We have a major disconnect with our legislators on how things work.” He called the bill “a willful attempt of a handful of people to protect special interests.”

"Windstream does not believe that it is good public policy for government-owned networks to overbuild and undermine existing networks that have been constructed with significant private sector investment,” Senior Vice President Eric Einhorn said in a statement. The telco was a prominent backer of the bill (CD Feb 21 p11). “To achieve faster broadband speeds, the more efficient approach is to augment existing networks, rather than build altogether new ones. We were pleased to see that many Georgia legislators share this view of public policy, and we look forward to ongoing discussions regarding the appropriate role of government-owned networks.” Einhorn questioned Belk’s assertions about Windstream: “Our objection to government funding for overbuilding of existing networks has nothing to do with federal universal service,” he responded in a statement. “From what Windstream has seen, government-owned networks like North Georgia Network are not focused on serving rural areas with low population densities, which is what federal high-cost funding targets.” Belk had also suggested Windstream wanted to “lock up” census blocks in anticipation of future broadband funding. But the FCC plans to make broadband funding available where no unsubsidized competitor exists, Einhorn said, noting “government-owned networks, by definition, are subsidized competitors, so their presence should have no bearing on a company’s ability to attain federal USF support for broadband.”

The bill proposed forbidding municipalities from building networks unless they were deemed underserved or unserved, with a threshold of 3 Mbps. The bill’s latest version exempted electric utilities as well as existing municipal networks, affecting 52 communities total. Proponents argued such restrictions preserve marketplace fairness. Opponents ranged from state mayors to the Georgia Municipal Association to national community advocates and companies -- including Google, Alcatel-Lucent and NATOA. “We're pleased to have the vote behind us,” said Amy Henderson, spokeswoman for the Georgia Municipal Association, which represents 512 municipalities.

"The defeat of this bill confirms that state legislators of both parties are beginning to understand the barriers to community broadband initiatives are bad for the communities involved, bad for the private sector and bad for America’s global competitiveness,” Washington attorney Jim Baller, an advocate for municipal networks, told us by email. He’s tracked the bill and helped shore up its opposition, particularly among the tech companies and associations.

"I can honestly say I've never heard so many innuendos, mistruths, half-truths about a bill that is so straightforward and two and a half pages,” said Rep. Mark Hamilton, the bill’s Republican author, Thursday night before the vote. “I can certainly say that I've felt many mayors across this great state have wanted me to lose my head in the last 24 to 48 hours.”

But the bill wouldn’t have impacted most of those community leaders, Hamilton added. He defended the 3 Mbps threshold, suggesting email requires 0.5 Mbps, short educational videos 1 Mbps and standard video streaming 0.7. He called the idea that it’s too slow to allow Internet use “simply false.” Companies are investing capital to improve speeds due to services like Netflix and Hulu and will continue, he said. He slammed the North Georgia Network, a broadband stimulus grantee that received $42 million from NTIA, local communities and other sources for what Hamilton said was overbuilding private industry. In a recent meeting, he asked Belk “when he’s going to pay back the $42 million,” begrudging the grant money as “a gift,” he told House audiences. A yes vote for 282 reflects free market beliefs, he said. In an interview, Belk defended the North Georgia Network as well as its funding from grants and private sources. He referred to attracting a $500-million data center recently: “It would not have been here if we weren’t.”

Legislators in opposition pointed out, as did Belk, that AT&T, Windstream and other companies have received tax breaks and stimulus money. “This bill is really about stopping local communities from doing what they need to do for the citizens and to help economic development in underserved areas,” argued Rep. Tom McCall, a Republican from rural Georgia. Rep. Don Parsons, the Republican chairman of the House Energy, Utilities and Telecommunications Committee, pleaded in favor of the bill after hearing opposition. He questioned opponents’ emphasis on local control and called the real local issue “taxpayer-paid lobbyists down here lobbying against this bill, lobbying so these local governments they represent can put taxpayer money at risk.” He denied that broadband service is a utility and referred to the powerful lobbying power of the Georgia Municipal Association and others. “Our viewpoint is that cities need to have a voice,” Henderson told us in response. She credited the local officials who made their voices heard and the belief that broadband truly is a utility these communities depend on, a belief Belk also expressed.

"We knew that very likely we didn’t have the votes,” Hamilton told us. He said he knew it would be close: “We wanted to find out who was with us and who was not.” The goal now will be to regroup and put together a strategy for what he called “a long-term process” in a policy area that needs to be addressed, he said. Belk had told us Hamilton acts for special interests rather than rural Georgia, an assertion Hamilton disagreed with. “I did my research,” Hamilton said, saying he based his concern on millions of dollars being lost in these municipal projects. There’s a “storm of interest” around bills like 282, he said, pointing to the U.S.’s “tough economic times” and the 19 states that have passed similar laws.

The campaign against the bill reached a fever pitch once the bill escaped its House committee Feb. 28. “High-speed, affordable Internet access is crucial to enhancing economic development and boosting employment, and will become even more important in the future,” Savannah Mayor Edna Jackson said in a recent statement, joining city council leaders and aldermen in opposition (http://bit.ly/16cSll2). “This bill decreases a community’s ability to address these critical needs.” The Institute for Local Self-Reliance and Free Press encouraged campaigns against House Bill 282. “It just doesn’t make sense to prevent underserved communities from building” these networks, Free Press Internet Campaign Director Josh Levy wrote (http://bit.ly/YPZY9J) hours before the bill died. “Yet that’s what 19 states have already done. We can’t let Georgia become #20.” Baller credited the work of “a wide range of local governments, private sector companies, trade associations, public interest groups and individual Georgians” who worked with the Georgia Municipal Association. Baller and NATOA credited opposition from FCC Chairman Julius Genachowski and Commissioner Mignon Clyburn.

"The more people learn about these state bills, the more they speak out against them,” Free Press Policy Director Matt Wood said Friday. “The people of Georgia should be proud of their win today.” He called the vote “a shot across the bow for [American Legislative Exchange Council]-backed bills in other states” and criticized the wait for quality service from incumbents. NATOA Executive Director Steve Traylor also congratulated the people of Georgia and said “this victory protects the ability for continued economic development and broadband deployment for Georgia residents."

"The official word from me is that this was not an ALEC bill,” ALEC Communications and Technology Task Force Director John Stephenson told us, noting shared sensibilities despite different approaches in the legislation. He’s tracked the bill and provided background to Georgia legislators but no formal testimony or memos. He called the campaigns against such bills “common” and a matter of continuing education and awareness. North Carolina’s 2011 law restricting municipal networks was the culmination of a “two-year process of education and determination,” Stephenson said. “This is a long-term process ... I think the issues are not going away."

Free Press agreed: “The victory in Georgia should send a signal to Washington,” Wood added. “The American people are ready for federal legislation that would keep broadband choices local and protect community broadband networks.” Belk said the North Carolina law happened “because people were asleep,” adding that the industry would keep pushing laws against municipal networks and that he'd support a federal move to stop such bills.