CML s 91 st Annual Conference June 18 21, 2013 Vail, Colorado. Why Municipal Broadband? 6/21/2013

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1 BROADBAND AND EMERGING TELECOMMUNICATIONS ISSUES June 20, 2013 CML s 91 st Annual Conference June 18 21, 2013 Vail, Colorado Ken Fellman, Esq. Kissinger & Fellman, P.C Cherry Creek N. Drive, Suite 900 Denver, Colorado Why Municipal Broadband? Economic development/jobs Health care Educational opportunities More cost effective government use of broadband Local governments and regions often organize themselves to support deployment in their communities. According to recent market research, as of October 2009, there were 57 fiber-tothe-premises (FTTP) municipal deployments, either in operation or actively being built, in 85 towns and cities in the United States. These deployments collectively serve 3.4% of the FTTP subscribers in North America. While it is difficult to measure the impact of many local efforts, these efforts should be encouraged when they make sense. However, 18 states have passed laws to restrict or explicitly prohibit municipalities from offering broadband services. Some states have outright bans on municipalities offering any wholesale or retail broadband service. Other states set conditions that make municipal broadband both harder to deploy and more costly for consumers. Restricting these networks in some cases restricts the country s ability to close the broadband availability gap, and should be revisited. NBP Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks. Municipal broadband has risks. Municipally financed service may discourage investment by private companies. Before embarking on any type of broadband buildout, whether wired or wireless, towns and cities should try to attract private sector broadband investment. But in the absence of that investment, they should have the right to move forward and build networks that serve their constituents as they deem appropriate. 1

2 Gigabit Challenge On January 18, 2013, FCC Chairman Julius Genachowski called for at least one gigabit community in all 50 states by 2015 American economic history teaches a clear lesson about infrastructure. If we build it, innovation will come. The U.S. needs a critical mass of gigabit communities nationwide so that innovators can develop nextgeneration applications and services that will drive economic growth and global competitiveness. Not Many Gigabit Options in Colorado Why Not? Why? SENATE BILL 152 Any local government that provides or is considering providing communications services in government facilities or to end user customers must consider how Colorado Senate Bill 152 will affect the offering of these services Legislative Background In 2005, the Colorado General Assembly passed. Competition in Utility and Entertainment Services. o Codified in COLO. REV. STAT. ANN et seq. Legislature s stated intent behind the act: Predictability, uniformity, and fairness in the cable television, telecommunications, and high-speed Internet access industries, especially where affected by municipal actions. o COLO. REV. STAT. ANN (1), (2)(a), (2)(c) Legislative Background In general, prohibits local governments from directly or indirectly providing cable television service, telecommunications service, or advanced service. o COLO. REV. STAT. ANN

3 Some Key Cable television service The one-way transmission to subscribers of video programming or other programming service, as well as subscriber interaction, if any, that is required for the selection or use of the video programming or other programming service. o This is the same definition that appears in the federal Cable Act. Some Key Telecommunications service The electronic or optical transmission of information between separate points by prearranged means o This is a far broader definition than the way telecommunications service is defined in federal law Some Key Advanced service High-speed internet access capability in excess of two hundred fifty six kilobits per second both upstream and downstream o COLO. REV. STAT. ANN (1) Analysis Providing Service The relevant portion of the legislation states that a local government provides cable, telecommunications or advanced service if the service is provided directly to one or more subscribers. COLO. REV. STAT. ANN (2) Analysis Subscriber Does providing service to subscribers entail someone signing up and paying for the service? That is not the case under state statute The statute defines subscriber as a person that lawfully receives cable television service, telecommunications service, or advanced service. In other words, if a person is using the service with permission, he or she is a subscriber under state law o COLO. REV. STAT. ANN (5) identifies four ways in which a local government can engage in the provision of services: The locality can provide a limited category of services that are not otherwise covered by the statute o COLO. REV. STAT. ANN (5) 3

4 The local government may sell or lease to private entities excess capacity on its own network, if that excess capacity is insubstantial in comparison to the governmental uses of the network o COLO. REV. STAT. ANN (3) The local government can provide those services that private providers choose not to provide within the government s jurisdictional boundaries o COLO. REV. STAT. ANN (1)(a) Provision of services allowed after voter approval o COLO. REV. STAT. Ann (1) The ballot question in such an election must pose the question as a single subject and include a description of the nature of the proposed service, the role that the local government will have in provision of the service, and the intended subscribers of such service. o COLO. REV. STAT. ANN (2) Voter Approval - Longmont A Frequently Asked Question Is it legal for government to provide free Wi-Fi in public places? A: Without prior voter approval (unless no private provider offers Wi-Fi or the service was being provided by the government prior to the 2005 effective date of the legislation), almost every municipality, county, public library, airport (and yes, even the General Assembly at the State Capitol) offering Wi-Fi is violating the statute. Why Are These Actions Not Challenged? Industry pushed the legislation to make it difficult for local governments to compete in providing services Statutory definitions and prohibitions are intentionally broad While a local government push to provide paid service to residents and businesses without voter approval would likely be challenged, no company wants the headline in the local paper to read [Insert name of company] Shuts Down Wi-Fi at Public Library. Possible Future Legislative Change? Should be amended to promote public-private partnerships, enabling governments with excess network capacity to make that infrastructure available to private entities without a vote? Should be amended to eliminate the vote requirement when a provider offers service just not the level of service a community needs for its economic development, educational or other plans? Should be repealed in order to restore complete local control to the entity most concerned and directly responsible for our broadband futures? 4

5 Recovery Act: Broadband Technology Opportunities Program (BTOP) In Colorado, the EAGLE-Net Alliance (an intergovernmental entity) is building a statewide, middle mile broadband network to bring bigger, faster and more affordable broadband access to schools, libraries, city halls, E-911 authorities and other community anchor institutions $100.6 million federal grant Controversial project has faced significant opposition Ken Fellman, Esq. Kissinger & Fellman, P.C Questions 5

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