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TRANSCRIPT
American Public Power Association Community Broadband Conference
Municipal Wi-Fi Systems
Nicholas MillerSt. Louis, MO
October 24, 2006
Introduction
• What’s happening
• The Argument—Pro & Con
• The major legal issues
• Legislative Developments
• Keys to Doing Deals
What’s Happening?
• How many/what size communities?– Large metropolitan areas
• Philadelphia—140 sq mi• Houston—largest city in nation, and possibly extend
to surrounding • Riverside—at&t claims “largest”; 90 sq mi• Portland—denser population, many obstructions
– Middle • Corpus Christi TX• Arlington County VA
– Small • Fairfax City VA• Alexandria VA
What’s Happening?
• Operating Models – Non-Profit Model– Cooperative Model– Contracting Out Model– Public-Private Partnership Model– Municipal Model– Government Loan-Grant Model
What’s Happening?
• Major Wireless Internet Technologies – Wireless internet standards using
unlicensed radio band spectrum.– Wireless internet standards using
licensed radio band spectrum.• 3G• 700mhz
– Satellite technologies.– Broadband over power lines.
What’s Happening?
• How intrusive is the Equipment?– “shoe box size antennas”– Power (metered?) from poles—about a
60 w bulb• Rates between $30 and $100/pole/year
– Occasional “base stations” with• fiber or• micro-wave or• WI-MAX connection to control point
What’s Happening?
• What services are being offered?– Internet Access (Primary)
• For monthly fee• For one time use fee• For “digital divide” purposes
– VoIP (Possible)• Issue: sufficient capacity?
– City “Anchor Tenant” services• Meter reading• Public safety mobile broadband• Mobile/home city workers• ITS
– Traditional and 3G cellular (not “wi-fi”)– No Television?
Arguments in Favor of Municipal Wireless Internet
• Incumbents won’t serve certain areas
• Municipal provision increases competition.
• Improves efficiency of other municipal services.
• More cost-effective than private provision.
• Positive externalities.
• Political accountability.
Arguments Against Municipal Wireless Internet
• No incentive to be efficient• Risk of anticompetitive conduct.
– Below-cost pricing.– Raising rivals’ costs– Predation through government processes.
• Government intervention in the Marketplace not justified.
• Technological obsolescence or lock-in.
The Major Legal Issues
• Fundamental Legal Question: What Service Is Offered?–“Telecommunications Service”?–“Cable Service”?–“Information Service”?–“Private Service”?
The Major Legal Issues (con’t)
• “information service” Defined:– offering a “capability for. . . making
available information”– “via telecommunications”– not including management, control, or
operation of a telecommunications system
So You want to be an “Information Service”?
– No state PUC or local regulation– FCC actively considering
– CALEA– 911– Other requirements
– No rights against “carriers” for• Interconnection• Non-discrimination• Revenue sharing
– No IP rights of CATV– No 224 (pole attachment) rights of CATV or
“Telecomm Service”
The Major Legal Issues (con’t)
• WiFi spectrum is “unlicensed”—no protection against interference
The Major Legal Issues (con’t)
• 253 non-discrimination issues– No “Prohibition” of “telecomm services”
• Bans exclusivity?
– If “may prohibit”, then non-discrimination• Right of access to same poles?• Right of access to same financing?• Service preferences? • Qwest argues (against Portland’s IRNE) –
any “preference” is discrimination.
The Major Legal Issues (con’t)
• Scope of Public Authority– Do you Have Authority?
• City Charter• State Authority• Bond Limitations
– Abilene• State can prohibit municipal participation
Major Legislative Developments
• RBOCs Succeed in PA– Phil “grandfathered”– All other communities Prohibited from Providing
Broadband
• Campaign Moves to Many Other States– Kansas, Indiana, South Carolina, Missouri
prohibit– But Texas, California, New Jersey, Virginia
reject prohibition
Major Legislative Developments (con’t)
• Major Backlash Against RBOCs—– Coalition of Vendors, Public Interest Advocates, Local
Governments, APPA– Stopped or moderated in all states after mid-
year– Stimulated Congressional interest in possible
preemption of states.• Louisiana Compromise
– Proposed ALEC Model– Major Improvements through Muni Lobbying– Final Result –reasonable compromise– Useful Example to show your state legislator
Major Legislative Developments (con’t)
• Federal efforts to preempt state prohibitions– Lautenberg/McCain– COPE– ATOR
Major Legislative Developments (con’t)
• McCain/Lautenberg Community Broadband Act of 2005
• Bars states from prohibiting “public providers” offerings of advanced telecom capability
• Public providers may not favor themselves if they compete with private entities
Major Legislative Developments (con’t)
• Several other bills introduced
• House passed “COPE” bill (H.R. 5252) June 8, 2006, by 321-101 vote
• Sen. Stevens (R-Alaska) “ATOR” bill (labeled as substitute for H.R. 5252)– accepts Lautenberg language– adopted by Commerce Committee June 28,
2006
Major Legislative Developments (con’t)
– No action likely this year.• Maybe next year as stand-alone.• Net Neutrality jamming broader
legislation. – Issue: does it solve 253 “preference”
problem?
Keys to Doing Deals
• What drives the economics of the project?– Different designs generate different results.– Exclusivity vs. Open network architecture.– OTARD vs. Central antenna systems.– Subsidize or not? If so, construction?
Users? Particular services?– Anchor tenant or open competition for local
government usage?
Keys to Doing Deals (con’t)
• Three Distinct “Markets”– Traditional, commercial services: internet
access– Government Services: public safety; e-
government; internal networks– Digital Divide Services: universal
internet access; service to unserved
Keys to Doing Deals (Con’t)
• Don’t garble concepts through careless drafting.– Network is Landlord–Tenant relationship.
– Services are Vendor--Subscriber relationship.
– Keep separate and allow creative solution to 224 and 253 simultaneously.
– If public funding required, then need to consider structure carefully.
Keys to Doing Deals (Con’t)
• Don’t lose sight of important local priorities.– Indemnification for activities in PROW.– Control of transfers of PROW and other
rights.– Wi-Fi is NOT protected spectrum– DAS systems are coming – use
coordinated planning.
Hidden Prohibitions on Local Authority
• Adequate Charter authority? (Is it a permitted function?)
• Adequate Constitutional authority? (Is it a proprietary v. governmental function?)
• Adequate funding authority? (revenue bonds available?)
Nicholas P. [email protected] & Van Eaton, P.L.L.C.1155 Connecticut Avenue, N.W.Suite 1000Washington, D.C. 20036-4301Phone: 202-785-0600Fax: 202-785-1234
Miller & Van Eaton: We Assist Local Governments In AchievingThe Full Benefits Of The Communications Age For Their Communities