In Support of Connecticut's Municipal Broadband Deployments, Economy
I was asked last week to testify before the Energy and Technology Committee of the Connecticut General Assembly in support of Senate Bill 846 that clarifies Connecticut's long-standing Municipal Gain statute, adds language regarding municipal broadband deployments, and bolsters policies surrounding utility pole attachments. Sexy stuff!
In Connecticut, where my family and I reside, our state has a unique statute allowing municipal government to use allotted space on utility poles for any reason, for the public good. The legislative intent of this statute has been called into question by the telecom lobby, fearful it will enable new entrants into the market (including municipally-owned networks), creating a more competitive environment. Problem is, big telecom has neglected large swaths of our state--and our nation--and has created a wide digital divide that virtually cuts communities off from the digital economy, and they have little intention of bridging that divide as the economics don't work for their business model.
Communities are trapped. Various studies peg the number of people in the nation without access to minimum broadband speeds 25/3 mbps anywhere between 20-50%--highest in lower-and-moderate income areas in rural and urban America.
But, Connecticut is lucky. Although the Nutmeg State suffers from connectivity gaps, the State Broadband Office led by Elin Katz, Consumer Counsel and Bill Vallee, have a sophisticated understanding of how to protect consumers and simultaneously position the state for prosperity in the digital economy. I thank them both for their strong efforts and for the invitation to testify at the February 26 public hearing.
If interested, here is a copy of my testimony, written in plain language:
Testimony of Bob Knight
Resident, Town of Ridgefield, Connecticut
Energy and Technology Committee Hearing
Tuesday, February 26, 2019
S.B. No. 846 on Municipal Broadband and The Municipal Gain
Good afternoon Mr. Chairman and members of the Energy and Technology Committee. I am Bob Knight, a partner at Harrison Edwards, the nation’s leading strategic communications firm specializing in community broadband deployment. I’m a long-time Town of Ridgefield resident and the former Chair of the Ridgefield Economic Development Commission. I currently have a seat on the Regional Plan Association’s Connecticut Committee. My comments today reflect my own personal and professional opinions.
I am here today in enthusiastic support of S.B. No. 846 in relation to The Municipal Gain, pole attachments, and municipal broadband. I’d like to illustrate the reasons why:
1. Municipal broadband will help fix Connecticut’s economic woes
We need to attract new, innovative digital companies to our state, and to create the ecosystem for existing companies to scale and grow. Connecticut needs that both to retain young talent and increase revenue. Broadband connectivity is the lynchpin. It is the critical infrastructure that enables such economic growth. But the business models of incumbent carriers have them focused on deploying broadband-carrying fiber only in our most densely-populated, wealthier communities since they have no financial or political incentives to push fiber deeper into needy Connecticut communities. So, if the carriers won’t do it, we should.
The most productive path to rebuilding Connecticut’s economy is the addition of municipal networks that can be deployed efficiently through our unique Municipal Gain statute. There are now 200 community broadband networks across the US either operating or in the works. Cities with municipal networks like Chattanooga, TN, Ammon, ID, and Medina County, Ohio are attracting and scaling companies, and are now thriving largely because of their fiber networks.
We need widespread municipal broadband to supplement the work of the national carriers such as AT&T, Comcast, Charter, and Verizon. But in our current situation, we have spotty broadband coverage with asymmetric speeds, and that’s inhibiting the state’s economic opportunities. Connecticut’s State Broadband Office reports that that densely-populated areas and neighborhoods with higher incomes get the broadband service, but lower income areas and rural parts of the state do not have adequate coverage. Ladies and gentlemen: This is 2019 and these communities have waited long enough for service. Municipal broadband will bridge that gap and help close the digital divide.
2. Fewer residents have access to broadband service than reported by the FCC
The FCC Broadband Map, which purports to show where broadband has been deployed, has serious flaws. It shows that 10% of the nation does not have broadband service, and it incorrectly claims that Connecticut is nearly completely wired. That is not so. But the FCC relies on Census-block data that say if two households in a square mile have broadband service, then every residence within that area has the service. If this were true, Connecticut would he completely covered and there’d be no reason for these hearings. We’d be years ahead of the national curve and would be boasting about the companies we’ve attracted, debating best ways to deploy autonomous vehicles, and benefitting from our robust telehealth networks in the battle to combat the Opioid Crisis. In their most recent study, Pew Research found that 20% of the nation lacks broadband access. And Microsoft’s most-recent study, released at the end of 2018, pegs the number at between 30-50% of Americans living without broadband--lower in rural, tribal, and low-income urban areas. In short, the lack of broadband service has created a real and deep digital divide. S.B. No. 846 is the most important tool to efficiently and inexpensively help Connecticut solve this problem.
3. Without broadband access, the Federal Reserve predicts downward mobility
In her 2016 whitepaper “Closing the Digital Divide: A Framework for Meeting Your CRA Obligation,” the Federal Reserve Bank’s Senior Advisor Jordana Barton laid out the economic case for high-speed broadband, pointing to the need for a digital workforce and access to the jobs of the future. Her conclusion was that, for the first time in our nation’s history, we are looking at communities facing downward mobility. Barton’s paper made a compelling case that the digital divide leads to the economic divide. But we can do something about that. Through municipal broadband networks, we can help to quickly deploy fiber to underserved communities to ensure that kids have internet access at home, and can prepare for the jobs of the future.
4. Hospitals, opioids, and curbing State Medicaid spending with municipal broadband
Our state’s healthcare institutions urgently need widespread municipal broadband to meet stringent requirements from Washington. Medical reimbursements are tied to keeping patients out of the hospital and proactively managing/treating small problems before they become big, expensive problems. How they do this is heavily-dependent on municipal broadband. Hospital systems must send large imaging files across their facilities, often miles apart; they rely on the efficiency of data analytics. But first, they need to move their data instantly throughout their systems. I recall the story from a few years ago of Sharon Hospital, in the Northwest corner of our state, that was unable to transmit files from a facility across the street! Municipal broadband bridges this gap.
And it will play a key role in combatting the opioid crisis. According to the American Enterprise Institute, the cost of opioids to the State of Connecticut in the aggregate – healthcare, Medicaid, criminal justice, social services, and public safety costs, etc…-- is over $9.5 billion annually, or about 4% of Connecticut’s GDP. But there’s a glimmer of hope. AEI reports that patients who have a telehealth component as part of their opioid treatment program remain in treatment 50% of the time vs. 39% who receive only traditional methods of treatment. With 30% of the non-elderly Medicaid population struggling with opioid use, the numbers speak for themselves. The Medicaid population is typically rural and urban poor, two areas where incumbent carriers have been slow to deploy broadband service. With these proposed changes to The Municipal Gain legislation, municipal broadband can be enacted more rapidly and more efficiently in underserved communities, helping significantly curb the pace of opioids in our state, and taking pressure off the state’s Medicaid budget.
5. Municipal broadband makes 5G deployment more efficient
There’s been a lot of talk recently from the major carriers about forthcoming 5G deployments and how it will bridge the digital divide, enable new applications like autonomous vehicles, and bring broadband speed to our wireless devices. 5G’s promise is very exciting, but it requires a massive outlay of fiber to handle the backhaul of data. This means that communities and neighborhoods without broadband access will be the last to have 5G. Frankly, some of these communities don’t even have 4G yet. And help isn’t coming. That’s why municipal fiber networks can play a key part in rolling out mobile connectivity. The Municipal Gain makes deploying municipal fiber networks much more cost effective, and therefore, is a smart option for those without broadband in our state.
There’s another benefit with municipal networks and 5G: Right now, each carrier plans to deploy its own fiber on our poles and in our conduits. Each carrier will erect its own 5G antennae every hundred feet or so. This is grossly inefficient and will clutter up utility poles. Imagine if FedEx, UPS, and the Postal Service all constructed roads to deliver packages to your home! It would be extremely inefficient. Instead, the delivery companies use public roads, which are a streamlined approach. Connecticut communities are in jeopardy of having 5G equipment from each carrier all over the place, in an uncoordinated manner. Right now, it’s the Wild West! But, municipal broadband networks streamline the process. Our cities and towns can do deals with the carriers to lease space on the municipal network’s fiber cables to deploy 5G service. This common infrastructure approach declutters our poles, reduces the amount of weight on each pole, and helps incumbent carriers deploy faster, with a smaller capital outlay. These kinds of lease agreements can become a revenue stream for our cash-strapped cities and towns throughout Connecticut.
6. Municipal broadband enables new applications like autonomous transportation
By 2020 there will be 50 billion connected devices globally. From smart watches, to phones, tablets, connected appliances, and X-Boxes, it seems like everything is connected to the Internet. By the end of 2018, nearly 60% of American households had a smart speaker (like Amazon’s “Alexa”). Autonomous transportation options will be hitting the market in the next few years. Smart home automation, maximizing energy efficiency, is hitting the market now. To run it all, we need robust fiber networks, and having Municipal Networks is part of the solution. The last thing we want are autonomous vehicles only able to operate on a few streets because their connectivity ends where the fiber lines stop.
7. Municipal broadband enables big gains in workforce, real estate and education
Economic Development Futurist Dean Whittaker says that by 2025, one third of the workforce will be working remotely, full-time. That’s in six years. By 2022 (three years away), Whittaker says that close to 100% of the workforce will work remotely at least once a week. Have you worked on your laptop at home or accessed e-mail on your iPhone? You’re living proof of this statistic. A distributed workforce means that employees will be able to work from anywhere. Your main office may be in Boston, New York, or Los Angeles, but you can live and work in Stamford, Danbury, Old Saybrook, or Woodstock. Millennials looking to escape the steep price of housing in major cities will be able to give Connecticut a serious look when searching for suitable living options. Municipal broadband and The Municipal Gain are critical in making this scenario a reality. And as more and more of the workforce works remotely, there is less need for commercial real estate space (sort of Amazon’s effect on brick & mortar retail space). This will have a direct impact on local Grand Lists as commercial tax revenue and inventory revenue will dwindle over time. So, for our State’s long-term financial health, we need municipal networks to attract new residents who can live/work here. This is key to the state’s future fiscal health.
Additionally, our schools are increasingly dependent on technology and apps like Google Classroom. My home district—Ridgefield—issues Chromebooks to middle and high schoolers. Students do not regularly use textbooks as part of their curriculum. It’s all online. Ridgefield is lucky. For the most part, because of our close proximity to New York, the Town has satisfactory broadband service. But, the districts in our state that don’t have widespread internet access do not have this luxury. In fact, there are many students who do not have internet access at home—either it’s not available or unaffordable—and have to do homework at the library, or at a McDonald’s. There’s even a nickname for these kids: “leaners,” because they’re frequently caught leaning against an exterior wall of a closed Starbucks or McDonald’s trying their best to access WIFI. These children are slave to business hours. This is unacceptable in Connecticut. This is the homework gap, and it’s crushing some of our students here. Municipal Networks will bridge this digital divide by bringing fiber to every premises in town, not just some. We’re developing students into the digital workforce of the future, who can stay, grow, and invest in our state, enabled by municipal broadband and our Municipal Gain.
8. Municipal Gain helps incumbent carriers meet their goals
Lastly, I’d like to address the role of incumbent carriers like AT&T, Verizon, Comcast, and Charter. They are large employers in Connecticut and their continued health is important to our economy. Charter and Frontier are both headquartered here. And we want incumbent carriers to invest and grow in our state. But, they are under pressure from investors to deploy small cells in preparation for 5G networks. Why? There’s billions on the line!. Let me explain: The carriers understand that, more and more, we are choosing to access entertainment from our mobile devices and streaming services. This is a big shift away from traditional cable television. That’s why the carriers have purchased entertainment studios: Comcast/NBC, AT&T/Time-Warner, and so on. If they own the studios, carriers will then control the content and distribution networks (your phone), and that will enable them to make billions in ad revenue. So their marching orders are to deploy small cells in densely populated areas with higher disposable incomes (areas which are attractive to advertisers). Unfortunately, this carrier-driven model, actually serves to widen the digital divide. It means that fiber and 5G aren’t coming to rural and poorer communities anytime soon, unless the General Assembly leads by strengthening the impact of the Municipal Gain statute in enabling Municipal Networks. The carriers do say that they have plans to deploy fiber throughout the state, but here in Connecticut, and in scores of other states, there’s no firm timeline or plan to reach each premises. Connecticut’s residents and businesses can’t wait. Our cities and towns can’t wait.
But, supporting S.B. No. 846 accelerates the process. Municipal Broadband is the shot of adrenalin Connecticut’s economy and communities so desperately need. It’s why I enthusiastically support the bill and hope you will, too.
-End of Testimony-