Victory Again: HB60 withers without so much as a hearing

"HB60 is dead, Jim." (from Wikipedia)

“HB60 is dead, Jim.”
(from Wikipedia)

Without any official action, HB60 died in the same fashion as SB190 and was sent back to rules to rot out the rest of the session without so much as a committee hearing. Between these two bills,¬†municipal broadband advocates in Utah have racked up some big wins when we’re used to nonsense punitive laws sailing through without any opposition. What changed this year was being on top of these bills and swiftly letting legislators know how we feel about them. It might not be a bad idea to write Rep. Curt Webb to express appreciation that he backed down on HB60 once we spoke up. I have a gut feeling that he was had.

And no, I’m not going to take credit for anything. Each of you who took the time to write legislators and share this information as widely as possible across social networks (Facebook, Twitter, Google+, Reddit, etc.) had at least as much of a hand in this success. I think we’ve proved that we’re a force to be reckoned with. We just have to show up.

While I think we’ve reached a point where the war is now going in our favor, it’s not over. I’m sure Comcast and CenturyLink will be more than happy to use their hatchetmen at the Utah Taxpayers Association yet again to try and throw up roadblocks next year. Sen. Valentine is not the type to go quietly into the night, and SB190 (or something like it) is probably going to be discussed in interim committees. I have little doubt that other restrictive measures will come up too. Once I find out about them, you’ll know too.

Legislation Proposal: Assignable tax credits for building gigabit broadband

After seeing SJR18, it makes it obvious that some kind of broadband bill is likely to come to fruition next session. While the current session isn’t even over, legislators can start submitting new bills on May 13 for the 2015 session. If we get in early, we could have a shot at influencing the debate for good. A local broadband expert clued me in on something he’s been working on at the federal level, and I think it would work at the state level: an assignable tax credit for building gigabit broadband.

Tax credits are nothing new when it comes to incentivizing broadband construction, but they often come with such weak conditions that they amount to nothing more than discounts on a system that’s barely a marginal improvement over what we already have. Without strong conditions, we end up with situations like the $300B+ scandal that is the Telecommunications Act of 1996. We can’t afford to flush tax money down the drain like that.

Here’s how we fix it. The first condition should be that tax credits will only be available for a service that delivers 1Gbps or better symmetric connections. This ensures that we aren’t dropping money on last-gen ADSL2+ or DOCSIS 3.0 systems. There should be an additional tax credit if the retail price is less than the average selling price for a current broadband connection. Based on data from SpeedTest.net (average download speed of 26.42Mbps at a cost of $3.62/Mbps), this would require gigabit service to be sold for under $95.64 per month including below-the-line fees. Finally, an additional tax credit should be offered if the infrastructure offers the choice of two or more retail service providers. This would encourage real competition rather than simply shuffling the deck on who the incumbent providers are.

This creates a very level playing field for all providers. If Comcast is serious about using the upcoming DOCSIS 3.1 standard to deliver gigabit service, they could get the tax credit. If CenturyLink is serious about building gigabit FTTH, they could get the tax credit. If Google is serious about expanding to Salt Lake City, they could get the tax credit. If Macquarie is serious about expanding UTOPIA across the entire state… well, you get the idea. Setting serious standards is what makes these tax credits actually worth something.

So what does this “assignable” bit mean and why does it matter? It means that the tax credit is applicable to the individuals served by the network, but the entity actually building the network would be eligible to claim it on your behalf and pass it on to you. This means consumers don’t have to front the money and get reimbursed, but rather companies with the money to invest will do it for you. That makes it much more likely that the infrastructure will actually get built.

Right now, I need to find a legislator willing to sponsor this kind of bill. You can help me find one. Write to your members of the House and Senate summarizing this proposal and copy me on it. We may have a shot at turning the tide for good in 2015.

Bill Watch: SJR18 asks the governor to work on streamlining broadband construction

Sen. Howard Stephenson

Sen. Howard Stephenson

Wait, the legislature has a¬†pro-broadband position in the works? I’m as shocked as you are. Best of all, it’s coming from Utah Taxpayers Association President Sen. Howard Stephenson. SJR18 encourages the Governor’s Office of Economic Development (GOED) to work with municipal governments to improve the process of building broadband infrastructure in our state. As a joint resolution, it doesn’t have any teeth, but I’ll take it.

There’s actually some decent ideas behind this one. Permitting processes for construction can vary pretty widely between cities, pole attachments are often messy, and Google has made these issues part of their chief criteria for determining which cities they want to expand to. I also like the idea of laying conduit while the city has an open trench for other purposes, often the most expensive part of any build.

Of course, we shouldn’t expect too much from the actual implementation. Given the source, the rhetoric matches up perfectly with the incumbent pattern of “give us tax breaks and less regulation so we can do what we already were going to do, just with higher profit margins”. I wouldn’t expect that higher standards will be imposed upon providers looking for a streamlined process, nor would I expect said streamlining to benefit anyone beyond those with existing networks or an expressed intent to build them. The fantasy that it would bring in additional overbuilders is just that.

See Sen. Stephenson explain it himself and watch carefully for the code words.

Hat tip to reader Chris for sending this my way.

We win: SB190 is dead this year

Sen John ValentineSB190 is no more. Sen. John Valentine made a motion to send SB190 to the rules committee to be studied in the interim which passed the Senate. This effectively ends consideration of SB190 this year, though it’s possible it may come up again next year. Short version: we win.

So what do we do now? Once the session is over, make sure you go to those interim meetings and write the committee members. I have no doubt that so many of you contacting legislators made a huge difference both in getting the bill amended and ultimately getting it shelved. Between this and HB60 appearing to rot on the vine, broadband advocates in Utah have scored major victories this year.

When I hear more about the movements on the committee and its proposals, I’ll be sure to pass them along.

Was HB60 an inside play by the Utah Taxpayers Association? All signs point to yes

Utah Taxpayers AssociationOnce HB60 hit the wires, I was quick to file a GRAMA request to find out what kind of communication Rep. Curt Webb had been receiving on the bill. Most of it is angry emails from Utah residents, many of whom were not accepting Rep. Webb’s cut-and-paste boilerplate reply about “transparency”. Here’s what he wrote along with my comments on each part:

Somehow the bill has gotten mischaracterized in the public eye. I have met with lobbyists and industry people over the past few days. I believe that much of the misunderstanding has been cleared up, and you may see a few minor amendments to provide that clarification. If it did what is being said of the bill, it would violate all of my conservative free market principles and run contrary to my voting record.

Actually, Rep. Webb, we understand the restriction all too well. You’ve been had. Just own the turkey and move on.

The bill does not prohibit infrastructure expansion. In fact it addresses no other entity than UTOPIA. UTOPIA is government entity created by an interlocal agreement and the public asks for and deserves transparency and accountability of them. The bill requires that any city into which UTOPIA expands become a member city. HB60 is not designed to damage UTOPIA is any way, but rather to provide clarity and accountability to citizens who may be involved in that expansion.

When UTOPIA builds in a non-member city, it has to negotiate a franchise agreement with that city like any other telecom builder. It’s already on a level playing field. Non-member cities can enforce transparency and accountability via this agreement. The only distinction with a member city is that the franchise agreement has been negotiated in advance for the entire municipality. By prohibiting UTOPIA from negotiating franchise agreements except on a citywide basis, you’re making them play by a different set of rules. That is, at the very core, damaging.

Why? Example: We must keep in mind that UTOPIA is an entity composed of member cities. If an expansion were installed in a non member city, and problems with the network arose; who would the citizens in that area turn to? That user is not a citizen of the proviing [sic] entity. Their own non member city could say “We are not UTOPIA.” If they turned to UTOPIA for help, those member cities could say “You are not our constituent”.

We’ve already established that the franchise agreement gives the non-member city power to establish and enforce terms with UTOPIA. It seems like Rep. Webb either doesn’t understand franchise agreements or is convinced that unless cities increase their involvement with UTOPIA, they won’t enforce the provisions of them. The former is most likely as the latter is simply outlandish. Unless, of course, he’s conceding that cities don’t properly enforce the terms of franchise agreements with operators like CenturyLink and Comcast. That, however, seems unlikely.

The bill only applies only [sic] to government entities as providers, (iProvo no longer applies), and requires as a matter of government accountability to users, that expansion areas become member cities. Some already have.

The cities are and have been accountable to their citizens, member or not.

Email between UTA and Curt Webb on HB60

Email between UTA and Curt Webb on HB60

So I find myself wondering how his confused logic spawned this bill in the first place. Then I came across the one email not between Rep. Webb and someone furious at this bill: an exchange between himself and none other than Royce Van Tassell of the Utah Taxpayers Association! Most telling, Rep. Webb emailed Van Tassell directly and out of the blue to solicit their talking points on the issue.

Unshockingly, the UTA has the same fundamental misunderstandings of how franchise agreements work as Rep. Webb expressed in his missive. Van Tassell also alluded to the push coming straight from UTA’s president, Sen. Howard Stephenson. Don’t take my word for it: read the email yourself.

This is just the latest in the long and disturbing trend of incumbent providers funneling money into a sitting senator’s company to influence the legislative process from the inside while keeping their hands “clean”. How the voters of Draper can tolerate it is beyond me. It’s my hope that they’ll wise up to it and send Stephenson packing.

Sen Valentine waffles on Amendment 2 to SB190

Sen John ValentineNo sooner did Sen. John Valentine promise to UTOPIA and Macquarie to withdraw Amendment 2 to SB190 than he started telling constituents that he hasn’t made up his mind yet. As previously covered, this amendment would keep Macquarie from doing the same kind of utility fee deal in new cities that it’s currently arranging with UTOPIA. It seems now that Sen. Valentine is dealing with UTOPIA and Macquarie in bad faith, telling them one thing while he tries to do another.

This means we need to keep up the email campaign to oppose it. In addition to hitting the Senate body, you should also contact Rep. James Dunnigan, the House sponsor, to let him know that you don’t want to support Amendment 2. The only way this goes through in a way to benefit all Utahns, not just those in UTOPIA cities, is if the bill is preserved as amended in the Senate Business and Labor Committee.

There’s only 13 days left in the legislative session. Make them count!

PS Yes, I have a GRAMA request in to see who’s been talking to Sen. Valentine about this bill.

SB190 gets amended to slam the door on new UTOPIA cities

Sen John ValentineDid you have a glimmer of hope that you’d be able to get UTOPIA service in your city once Macquarie comes in? Sen. John Valentine just smashed it with a hammer. His floor amendment to SB190 makes it so that only current UTOPIA cities can use a utility fee to finance construction of the network. Any new cities that join would be unable to do so at all.

Why does this matter? Because Macquarie has structured the entire deal around it. If future cities can’t do it, they can’t get the same terms that Macquarie is offering UTOPIA. This could derail their rumored plans to cover the entire state in gigabit fiber with over a dozen competing providers.

Right now, the bill is in the Senate and will come to a floor vote. It’s urgent that you contact members of the Senate, particularly your senator, to tell them to oppose this amendment. Sen. Valentine is working in bad faith by not involving UTOPIA cities either in this new amendment or the original bill.

Click here to email the entire Senate body and voice your opposition! They need to hear from you.

UPDATED 2-27-2014 2:25PM: We won! Valentine has committed to UTOPIA mayors to pull Amendment 2. Now if it can just go through without any other trickery…

SB190 passes from committee with Macquarie’s blessing

On a 4-0-3 vote, SB190 was amended and passed from the Senate Business and Labor Committee this morning. XMission founder Pete Ashdown and myself both spoke in opposition to the bill while Macquarie themselves endorsed the amended bill. Layton sent Gary Crane to represent them to oppose the unamended bill and support the amended bill. It now goes to the second calendar of the Senate for its first floor vote.

During the bill presentation, Sen. Valentine explained the rationale behind the bill as a potential ambiguity in the state code. As currently worded, it prohibits any subsidy of a municipal network by the city. His interpretation is that this could include a utility fee that covers existing bond debt but not operating expenses. Naturally, I disagree and think it’s silly to call paying your debts a subsidy. All the same, the state code now explicitly states that it’s not a subsidy provided that there’s a plan to waive the fee for the indigent.

Speaking of that provision, I found out that it was something the cities were all planning on doing anyway. In the end, SB190 codified what cities were already doing on their own, but only after first attempting to kill the Macquarie deal without input from UTOPIA cities. Kind of a useless bill if you ask me.

This doesn’t mean it’s all a done deal, however. The bill also needs to be voted on in the Senate, go to a House committee, then get voted on in the House. Amendments to the bill could be proposed at any step. Right now, the best thing you can do is email your legislators and make sure they’ll accept the bill as-is so we don’t get anything worse.

SB190 revised: is the bill “fixed”?

Sen John ValentineI’ve been looking over some amendments that Sen. John Valentine has made to SB190 and it appears to be much improved over its original form. The utility fee is back on the table, but it does require that municipalities carve out exemptions for “economically indigent” persons if they can’t afford the fee. It also conveniently still omits Provo from these new requirements despite its large low-income student population.

The changes came after Sen. Valentine met with mayors from UTOPIA cities, something he probably should have done before even drafting the bill. It also cites unnamed “mayors” who initially pushed him to run the bills, presumably not from UTOPIA cities. I’d personally like to know who they were and why they would care what UTOPIA cities are doing with their budgets and bond debts.

One lingering concern I have is that “economically indigent” isn’t a defined term I can find in either in the bill or elsewhere in the chapter. The best I can find is in Title 77-32-202, paragraph (3)(a)(ii) where indigent is defined as under 150% of the federal poverty level for purposes of assigning free legal counsel. Based on the current federal poverty level, that would work out to $35,325 for a family of four. It’s unknown if that would be the standard by which all cities would be judged or if they’d be free to establish their own guidelines.

Even with the improvements, I still plan to speak against this bill. If it’s a good idea, there’s no reason to exempt Provo (thus providing an indirect advantage to Google). I’m also not comfortable with leaving terms undefined as a “gotcha” to try putting the original restrictions in place in another session. Finally, I don’t like the legislature trying to dictate terms to cities as if they are a super-city council. If they want to run the city, they should get on the council themselves.

Bill Alert: SB190 will be heard in committee Monday Feb 24 at 8AM

I just got a notice that SB190, the bill that could chase off Macquarie, will be heard Monday February 24 at 8AM in the Senate Business and Labor committee. Word on the street is that members of the committee have been getting a lot of emails in opposition (good job, folks), but we also should show up to speak against it. Make sure you spread this around so we can show up in force!