Mapping Broadband in Western North Carolina

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The Rural Broadband Crisis:
How Bad Is It? How Do We Solve It?

Kill The Public Utility, Create Private Fiefdoms

Since 1913, the US telephone system, known as the Public Switched Telephone Network (PSTN), has operated under public-interest rules that guarantee telephone service to every American household that wants it. The PSTN is also governed by privacy and “common carrier” rules similar to those for US highways, waterways, and rail lines.

The PSTN's public-interest rules guaranteed non-discriminatory treatment of network content plus the freedom to connect to the network. These “hands-off” regulations prevented the network owner from blocking content or access. The freedoms guaranteed by the PSTN's “open network” were essential to the mainstream emergence of the Internet and its revolutionary decentralized “plug-and-play” architecture.

As Internet innovation boomed, so did demand for bandwidth. The inevitable shift from dial-up to broadband opened the door for incumbent carriers to snag more than $500 billion in rate hikes and tax breaks earmarked for upgrading the PSTN for broadband. But the money went elsewhere, say industry analysts like Bruce Kushnick and David Cay Johnston.

Some subsidies financed fiber upgrades in high-profit segments of the PSTN. But most of the billions were re-directed to executive pay, stock dividends, and expansion of unregulated wireless networks. “With this sleight-of-hand, a once regulated utility becomes a deregulated private service – even though it goes over the same wire that was originally a phone line,” writes Kushnick.

Re-directing public subsidies ensured the PSTN's decline, especially in rural and low-wealth communities. The incumbents further distanced themselves from the PSTN via a loophole in the 1996 Telecommunications Act.

Change a Name, Capture Broadband

For more than 100 years, common-carrier rules imposed “hands-off” restrictions on owners of telegraph and telephone networks. The 1934 Communications Act refined the rules to apply to “telecommunications,” the law's term for the physical networks over which content is transmitted.

But in 1996 Congress amended the 1934 law to create an “information service” category to describe online offerings such as AOL, e-mail, and the emergent World Wide Web. These services ride atop physical networks and are therefore not subject to rules governing the PSTN. No big deal, right?

Not quite. Attorneys for the cable industry saw a big loophole. In 2002, the cable industry petitioned the FCC to re-classify its cable-modem broadband as an “information service.” A corporate-friendly FCC complied in a controversial 3-2 vote. That action was later upheld by a divided Supreme Court. The cows were out of the barn. Broadband and the PSTN were torn asunder.

Immediately, the telephone companies petitioned the FCC to “level the playing field” by reclassifying DSL as an “information service.” In another controversial 3-2 vote, the FCC granted the phone companies' request. The dial-up Internet remained under the PSTN's “hands off” protection. The broadband Internet was now on its own.

With the Internet-via-broadband at-risk, calls for non-discriminatory “net neutrality” – or Open Internet – rules grew louder. Calls came not only from public-interest advocates, but also from technology firms whose existence and growth depend on the Internet's original open-network architecture.

In 2010, the FCC issued Open Internet rules to restore “hands off” restrictions on the owners of broadband networks.

Then, on July 2, 2012, Verizon took a radical and breathtaking step: it filed suit claiming that the Open Internet rules violate its First and Fifth Amendment protections. With the line between physical networks and the content they carry blurred, Verizon claims ownership of both.

“Broadband networks are the modern-day microphone by which their owners (e.g. Verizon) engage in First Amendment speech,” Verizon's suit claims. With the stroke of a pen, Verizon recast itself as a “publisher” rather than a “common carrier.” It's like a railroad operator claiming ownership of the cargo it transports.

Net neutrality advocates call Verizon's claim “absurd.” Tim Wu is the Columbia University law professor who coined the term “net neutrality.” He says that “articles a newspaper runs are understood to be part of, and the responsibility of, the newspaper. If a blogger wrote something outrageous on the Internet, it would be absurd to complain by saying, 'Can you believe the blog Verizon ran yesterday?'”

But Verizon doesn't stop there. It also claims that net neutrality constitutes a “government compulsion to turn over [network owners'] private property for use by others without compensation” in violation of the company's Fifth Amendment rights. The suit was filed with the DC Court of Appeals, which has a history of siding with corporate interests against the FCC.


Additional Reading

Rural broadband access still lags cities,” Daily Yonder, June 9, 2013.

"How ‘white spaces’ could change the world," Tech Central, May 19, 2013.

"Utilities want piece of FCC's $4.5 billion rural broadband push." Greentech Media, May 29, 2013.

California gets first commercial 'white space' high-speed Internet,” C-Net, April 22, 20 13.

Obama's new FCC pick could determine the future of the Internet,” by David Corn, Mother Jones, March 26, 2013.

Broadband 101: Guide to the Basics of Broadband Terminology,” Institute for Local Self-Reliance, March 2013.

FCC to probe rural phone problems,” The Hill, Feb. 7, 2013.

Moving from broadband scarcity to broadband abundance,” Christopher Mitchell, Seattle Times, March 11, 2013.

Expand wireless Wi-Fi access to public airwaves,” Sacramento Bee editorial, Feb. 16, 2013.

The Broadband Factor: How connectivity expands economic and community development” by Kristin Peterson, Huffington Post, February 4, 2013.

The broadband-deprived study at McDonald's” by Anton Troianovski, Wall Street Journal, Jan. 30, 2013.

NC at the bottom of the broadband barrel” by Christopher Mitchell and Todd O'Boyle, Raleigh News & Observer, Jan. 28, 2013.

How to get high-speed Internet to all Americans” by Susan Crawford, New York Times, Jan. 24, 2013.

Co-ops make rural broadband possible,” Electric Co-op Today, Dec. 17, 2012.

Book talk by by Susan Crawford, author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” at Harvard University's Berkman Center for Internet & Society, Dec. 12, 2012.

Break Up the Telecom Cartels,” New York Times op-ed by David Cay Johnston, Nov. 27, 2012.

Many rural AT&T customers still lack high-speed Internet access despite merger promise,” by Gerry Smith, Huffington Post, Nov. 12, 2012.

Like paying for a car that's sittin' on blocks,” radio story on rural broadband in Appalachia from community radio WMMT, Whitesburg, KY, Nov. 8, 2012.

Broadband for Rural America: Economic Impacts & Economic Opportunities
Hudson Institute policy study by Hanns Kuttner, October 2012.

Rural broadband in serious trouble,” DSL Reports, Oct. 16, 2012.

C-SPAN panel on “Rural Telecommunications” featuring Hanns Kuttner, Oct. 15, 2012.

FCC Report: Thousands in WNC lack broadband access,” MAIN, Sept. 12, 2012.

White space broadband as a white knight for rural America,” GigaOM, July 15, 2012.

Rural broadband via nonprofit networks,” by Wally Bowen, Raleigh News & Observer, Feb. 6, 2012.

Score! for two rural broadband teams,” by Craig Settles, The Daily Yonder, Jan. 26, 2012.

National Broadband Plan

Broadband access