Current News Regulation - What is it Good For?

Free the Fiber Now

A few blogs ago I mentioned that the FCC had taken away restrictions to allow broadband supplied by E-Rate funding to be used to provide free WiFi for the public. That’s a good idea that will provide some relief for areas with little or no other broadband. But the announcement raises a more fundamental question – why was such a restriction in place to begin with?

I see such restrictions all of the time where broadband infrastructure that is built with public dollars cannot be used for commercial purposes, or in the case of school bandwidth, can’t even be used to distribute broadband to the public for free.

The first time I ran across this was over twenty years ago when I was working with a city in Virginia that wanted to build a backbone fiber to connect city buildings, but also to connect to a few business districts that had lousy broadband. The city had a fairly robust fiber network that was used to control streetlights and there was enough spare fiber in this network to provide a significant portion of the needed solution. Upon investigation, it turns out that about one-fourth of that fiber had been funding through a grant from the state highway department that came with a clear prohibition from using the fiber for any other purpose other than traffic control. The city attorney read that grant prohibition to even mean the city couldn’t use the fiber to connect city buildings, let alone run the fiber to a business district. And this was after the city had paid for most of the fiber out of local tax dollars. The city would have been far better off financially had it never taken the highway grant.

This happens all of the time. I’ve seen similar restrictions on fiber networks built to reach schools. There are often similar restrictions on fiber built to connect public buildings. Some states have laws that prohibit fiber built by a municipal electric or water utility to be used for any other purposes.

There are other fibers funded 100% by taxpayer dollars that are also off-limits for other purposes. For example, there was a lot of middle-mile fiber built as part of the $11 billion CAF II program that was given to the large telcos. The fiber was built as middle-mile fiber to reach DSL huts and cellular towers. None of that fiber was made available to anybody else, although the fiber was funded by federal money and most of the fiber sits unused today.

There are a few reasons such restrictions exist. In the case of the Virginia city, after a lot of investigation, we figured out that Comcast and Verizon had lobbied to restrict the use of state-funded fiber. The restriction wasn’t from a specific law in this case but had been written into state grant awards. In some cases such restrictions are written in state law, which likely is also due to lobbying by the big telcos and cable companies. We’ve found a few restrictions against using government-funded fiber that seem to come from bureaucrats who simply invented the rules without understanding the long-term ramifications.

The COVID-19 pandemic has shown us that all of these restrictions must go. Government-funded fiber ought to be made available to ISPs, cities or others that want to use it to solve the digital divide. It’s ridiculous for the country to be sitting on huge amounts of empty fiber due to stupid political restrictions or boneheaded bureaucratic decisions at a time when people don’t have broadband in their homes.

The only way to fix this is in Congress. They could write and a pass a short simple bill that would remove all restrictions against using fiber funding by the government. The federal law should override contracts, state laws, and any restrictions created by state or federal agencies. The FCC sadly can’t consider this kind of ruling since they have written themselves almost completely out of the broadband regulation business. Since the FCC killed its own regulatory powers, a federal law should give the power to state regulatory commissions to work out any details.

I run into people all of the time who are upset because they live close to fiber but have no broadband. They get doubly mad when they find out that the fiber was funded by their tax dollars to provide broadband to highway signs or to serve a nearby school. A new law won’t automatically bring relief to everybody who lives near fiber because you shouldn’t cut into a long-haul fiber anywhere except existing access points. However, there is a huge amount of government-funded fiber in the world and this one simple change would unleash ISPs to find many more last-mile solutions.

One reply on “Free the Fiber Now”

There’s a fundamental difference about the IRREGULATORs version of freeing the fiber, which I’ve been talking about since i was a senior analyst to the telcos when the Clinton-Gore campaign announced something called “the information superhighway in 1991 to have America be upgraded to fiber optics by 2010.

Starting in 1992, state laws were changed to charge local phone customers for the upgrades of the networks — and over the last 3 decades New Networks Institute and other analysts, auditors and lawyers that have been part of our research and consulting group (sometimes activist as a group called Teletruth, now the IRREGULATORS) have been documenting this — and attempting to take actions to have the state-based telecommunications utilities upgraded– because we paid for it.

FREE DOWNLOAD: The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net is the 3rd in a trilogy that started in 1998. Published in 2005, it is encyclopedic in the coverage.

The FCC’s Advanced networks reports (706) rewrote the history of broadband and internet and left out every state-based commitment to upgrade cities and states to fiber optics– while charging local phone customers– if’s over $500 billion dollars since 1992.

And almost everyone quotes the rewritten history.

In fact, using the New Jersey state commitments we helped 2 towns, Stow Creek & Greenwidh get upgraded in 2013 by Verizon NJ — We were so successful that the state commission decided to get rid of the commitment to have 100% of the Verizon NJ upgraded to fiber with 45 mbps in both directions by 2010 — for wireless at DSL speeds.

IRREGULATORS v FCC: But this is only 1/2 the story. In 2010 we found that, in plain sight, Verizon New York is required to publish financial annual reports — and New York is the only state we know of that has this requirement left — We found massive financial cross-subsidies that were based on the FCC’s cost accounting formulas that have been deformed to put the majority of all expenses into the copper-based local phone service– including using the construction budgets for wireless- which is not necessarily legal.

After filing at the FCC over 18 reports and filings to investigate, our group -(2014-2019)- IRREGULATORS took the FCC to court — A decision on March 13, 2020 stated that the states are now independent of these rules and they can go after the cross-subsidies — in NY, it is over $2 billion in just 2017-


in fact, our research was used in an investigation of Verizon New York, which was settled in July 2018, estimated at $300-$500 million, with CWA the state telco union, we got the copper wires maintained and upgrades of over 30K lines of fiber to unserved areas — But this was chump change.

We are now looking for funding and partners to take actions in multiple states. Everyone seems to have forgotten that AT&T California, Centurylink Colorado, Verizon Pennsylvania and New York are still state telecommunications utilities, which are being dismantled to hand over to the wireless company as private property for private use.

This current pandemic has exposed at the core that Verizon, AT&T et al never upgraded their networks, even though there were commitments, and now the idea that 5G, a service that is a fiber-optic based wireless service is going to serve rural areas– is a bait and switch as far as we’re concerned.

Cities and states should be demanding audits of the financials and the infrastructure. They should be questioning the ‘price caps’ regulations based on the manipulated accounting and go after the dumping of corporate operations expenses — billions in executive pay, the corporate jets, lobbyists et al that should never have been charged to the wired utility networks.

Please feel free to write me o to discuss this — Bruce Kushnick, Managing Director IRREGULATOR


Scott McCollough, Esq
Chuck Sherwood
Kenneth Levy, Esq
Paul Hartman,
Tom Allibone

And others

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