A Practical Navigator for the Internet Economy

Mary Beth Henry and Portland Oregon


From Mary Beth Henry we present the origins of Portland’s Strategic Broadband Plan.  From Susan Crawford we come to understand why, if a municipality is unable to do so, they will face an unregulated  monopoly.

The COOK Report interviews Mary Beth Henry about the city’s 15 year long struggle for broadband infrastructure.  This is a story that leads to and through the Brand X Supreme Court decision.  We also chronicle the steps post 2003 that lead to the city’s Strategic Broadband Plan which I believe is the first by a City of Portland’s size or larger.  Mary Beth is “the Deputy Director of the Office of Cable Communications and Franchise Management for the City of Portland, Oregon and the Mt. Hood Cable Regulatory Commission.  . . . She has been deeply involved in local government efforts to protect the public interest as legislative efforts on communications policy move at the State and federal level.”

No one outside of the Portland area had heard of the Mount Hood Cable Commission until it took the prescient stand to insist when ATT acquired the Portland Cable Franchise from TCI in the late 90s that ATT agree to open access - that is to let other ISPs provide for their customers by buying access to the installed cable plant at wholesale rates. This had been a course of action that was considered legitimate compensation for a franchising entity to give a private company access to public streets. Of course ATT sued and in 2005 won, in the Supreme Court, a major setback for what used to pass for the Public Interest in the USA.  We present a detailed time line of the legal battles.

In Portland the local “chemistry” that supported the policy moves of the late 90s did not disappear.  The way forward was to always try something new.  Mary Beth recounts how the city built a interest in the public infrastructure and bandwidth in excess of 100 megabits per second for the county’s public schools.  The interview covers the history of what evolved into the Strategic Broadband Plan of September 14 2011.

Here is a list of planning and operational strategies taken from the interview.

Planning and operational strategies

Preamble

Learn from the past and apply these lessons to the future.
That is precisely what the Portland Broadband Strategic Plan is all about.

Understand the issues but gain understanding through work with your community.
Example: we learned the importance of working with community partners and building social capital. We worked with existing non-profits figuring that they already have the relationships with the vulnerable populations whose technology adoption needs we were trying to address through the BTOP grant.

Be clear and transparent about where you are trying to go.
Example: we developed a Project Charter outlining the process. 

Research the economics.
Example: In 2007 we did a business case on whether it was feasible for Portland to develop a community fiber network.  Also correlate what you are doing with any and all local economic development agencies

Define stakeholders according to community and economic sector.
Example: public safety, economic development, planning sustainability and transportation, education and health, and digital inclusion.

Organize discussions of stakeholders.
Example: As a result the content of the draft broadband plan is community sourced.  We provided each of the groups with the relevant sections of the national broadband plan for information purposes.  But all of our goals and strategic objectives really came from our local participants.

Seek further community input.
Example: We had 50 citizens with content expertise in each of these five areas volunteer to participate in three facilitated sessions over an eight-week period

Pay attention to providers.

Example: we invited all facilities-based wireline and wireless providers to an industry forum to discuss their broadband plans for Portland and ask for feedback on the draft plan.  Take an inventory of all your facilities based wireline and wireless providers both at the level of basic transport and ISP.

Strategy for public private partnership
.
Example: question of public private partnerships this way; “Are there things that we can structurally do within a public-private partnership that help move us faster towards the public goals without disrupting the financial metrics of the private sector?”  Are there structural things that we can do that are basically win-wins for both sides?

Strategy – Leadership Teams Find Opportunity by Crossing Sectoral Boundaries.
Example: you take your community’s political structure and try to think in terms of how to map local network and technology issues onto that political structure and to give the right people encouragement in gathering information on their roles from the point of view of how they can use broadband to increase productivity within their departments.

Map the key communities that need to be a part of the conversation.
Example: How did you develop the ideas leading to this process?  Identify the problems, the people responsible for them, get them together, cross fertilize and get them to partner to achieve things that they could not if they stayed within the silo?

Strategy -- don’t let lack of funding deter you.
Example: We started the process with no budget. You have to understand your local government setting. Had I asked for a budget in the Broadband Resolution there would have been push back. Therefore what I did was to get the Resolution through, build on the momentum from Google and BTOP, show progress and then guess what?

Map your infrastructural assets.
Example: What is your political structure?  City Manager or Administrator?  Find someone who understands the issue or help them understand the issue.  Engage the sectors – education, business, healthcare, transportation, planning etc.  In the case of Oregon, we are going to be developing local broadband strategic planning templates for communities through the Oregon Broadband Advisory Council

Strategy - Process steps
Example: First, assemble the right people.  Second, be transparent and inclusive.  Third, do your homework.  Fourth, listen and engage.  Fifth, follow-through.

Susan Crawford - Looming Cable Monopoly

Susan documents the confluence between the regulated and the regulator. And the fact hat we appear to have learned nothing in either area from the policy failures of the last decade. From this perspective - the opinions of the banking sector and the telecom sector and those of Washington became one.  She tellingly notes that: either quoting or paraphrasing her from this point on.

This is far more powerful than mere corruption.   It is not about paying people off directly.   There is no need when they have a mutually shared cultural comfort and an agreement with a common approach to the world.   It is a case where the positions of Wall Street really became the consensus view in Washington.

Of course the failure to regulate not only derivatives but also other exotic financial instruments made possible a decade-long financial bubble which burst and ultimately created the deepest financial crisis the world has seen since World War II

So here are some significant moments in telecom regulatory history. The first one of recent vintage was the complete deregulation of high-speed Internet access in 2002 by the Bush Federal Communications Commission.

Broadband internet requires high up front investment.  Like the railroads and highways, a natural monopoly service for which for a century we have compensated by demanding that the monopolist share the infrastructure.  But in 2003 we abandoned this.

They followed that up in 2005 with the deregulation of cable modems and then the deregulation of DSL and wireless.  As a result -- right now -- those services are subject to absolutely no regulatory oversight. There is no regulatory structure that would constrain prices or discrimination in the delivery of services; or that would make it possible for all Americans to have access to high-speed services – none of that now exists –

There was now to be no obligation from the infrastructure owner to lease lines to other competitive carriers that might provide better cheaper faster Internet service or more innovative techniques. So that’s our first moment.  De regulation.  That was big.   But deregulation came back to plague the deregulators

After 2008 Kevin Martin, who hated the cable companies, was heading the FCC, told Comcast to stop the blocking but he, in reality, as it turned out, no longer had any jurisdiction to do so.

The current FCC the Obama FCC, has the opportunity to undo the mistakes of the Bush FCC. They could say: we got it wrong in 2002.

At the onset of the Obama Administration the ideas were . . .we would preserve open access to the Internet as an engine for economic growth; we would use access to the Internet as a tool to achieve all the other economic goals.

April 2010 DC Circuit to FCC -- You have deregulated these actors as enhanced service providers. Therefore you do not have any legal basis on which to tell them that they must operate their networks ‘reasonably.’

If the Chairman does not use the three votes he now has to reclassify Internet access as a telecommunications service, it will be very disappointing.

Later in 2010 the FCC proposed regulation lite. The lobbyist were screaming don’t regulate the internet.  If anyone says this is about regulating the Internet, stop them in their tracks and say “No! This is about regulating the basic access, the basic transport and not about regulating the communications or the content that flows over that transport.

The over all regulatory framework for FCC having the authority to say anything about high-speed Internet access is now in doubt. And, as Verizon backs out of providing FiOS service to Alexandria and other areas of the country, the cable monopoly steps in. “The Internet is essentially just a couple of virtual channels out of the hundreds that they provide as pay TV services, and now they can do whatever they want–slice dice price, prioritize, monetize. The problem is when Verizon steps back from competing with cable, net neutrality becomes this tiny little issue.  Who cares about that?    Because the problem is that now we are dealing with one pipe for news, information, a little bit of internet access and–everything that reaches Americans.

The cost of the Comcast NBC merger will run north of $100 million in order to make sure all of this goes through. Another source of their power is to guarantee that people as they come out of governments will be able to find jobs in the telecommunications sector.    All the people possessing relevant data are outside the regulator.    We don’t have actual pricing data inside the FCC that would tell us what the story really is.    Wall Street’s positions on telecommunications policy have become the conventional wisdom in Washington. They are the accepted way of thinking.

And I’m actually worried that there is not an easy way to stand up and be counted. And finally, I don’t know how we get to structural separation either, but getting there seems to be the only course to save our economy. Editor: Susan’s conclusions are powerful and troubling.

Contents



Portland, Oregon’s Strategic Broadband Plan

Mary Beth Henry Describes Her City’s 15 Year Struggle for Self-Determination


Introduction                                         p.  4

The Short Life of Open Access                             p.  5

Chronology of Portland’s Battle for Open Access              p.  6

The 1999 RFI for Overbuilders                               p.  8

Conduit Access and Pittock Internet Hotel                    p.  8

From Interconnection at Pittock to IRNE                     p. 10

Community Fiber Network Feasibility Study Through Google
and BTOP (2005 – 2011)                                p, 12

The Present and the Strategic Broadband Plan of 2011        p. 14

Industry Forum on Draft Strategic Plan                    p. 15

What the Community Must Know                        p. 15

Unsubmitted BTOP Dream                                p. 16

Strategy – Leadership Teams Find Opportunity
by Crossing Sectoral Boundaries                        p. 17

Get Momentum Going and Map your Assets                  p. 18

Changing Duration of Franchising                          p. 20

Planning and Operational Strategies                         p. 21

The Broadband Plan - two noteworthy citations - From the Plan
Introduction and Broadband is Critical Infrastructure            p. 23


The State of Telecommunications Policy in the US Today

Susan Crawford - Courant Institute, NYU, November 29, 2010


Introduction                                           p. 27

Brooksley Born Moments in Telecom Policy –
Complete Deregulation of High Speed Access in 2002          p. 29

Obama’s Election as Another Key Moment                  p. 30

Enter Cable Modem Service                               p. 33

Comcast vs BitTorrent 2007 and in 2010 FCC Finds
Little Authority Left                                       p. 34

A Third Way?                                           p. 36

Comcast NBC Merger – the Final Big Regulatory Moment?          p. 37

But What Was the FCC for in the First Place?                  p. 40

Any Questions?                                      p. 42

Executive Summary                                       p. 47