Friday, March 04, 2005

Chamber Made

In October 2004, the U.S. Chamber of Commerce released a report ironically called “Sending the Right Signals: Promoting Competition Through Telecommunications Reform.” The report is a romantic tribute to the telecommunications industry. It bemoans that regulation has caused the industry to sink into “a depressed economic condition.” It calls for closing networks to sharing, ending regulated wholesale prices, giving valuable spectrum to commercial wireless operators, ending common carrier rules and raising funds for universal service from general tax revenues.

Just as I was choking on this pabulum, I came across a story in the British newspaper, the Guardian (March 3, 2004) reporting that municipal wireless projects are starting to take hold in the U.K. The story compared Great Britain’s efforts to Philadelphia’s plan for a muni-network.

“These tiny, cooperative projects are in remote corners, but what they have in common with Philadelphia is that they have been established in the wake of the market's failure to deliver affordable high-speed internet connections to everyone who needs it. The rural outposts going wireless are those that feel they are poorly served by BT.”

BT is Britain’s largest telecommunications corporation. Even more interesting in the story is a quote by BT’s Chris Clark, chief executive for BT Wireless Broadband saying that they would not be taking the same approach as Verizon.

“The community wireless projects, which started in an environment of concern about rural service, are evolving into providing all sorts of innovative services,” he says. “It would be a pity to see such innovation stifled. More recently, a number of metropolitan wireless projects have been in the pipeline. BT is fully supportive of these initiatives.”

Say what? A telecom giant supportive of municipal roll out? What in the world could be going on across the big drink? Have they lost their minds?

That got me thinking about the experiential differences between us and the Brits. And I think we could easily credit Samuel Adams and the Sons of Liberty for the British mindset in this regard.

Most of us think the Boston Tea Party happened because the colonists objected to being unfairly taxed on tea. But it happened because the Parliament eliminated the tea tax in order to give the British East India Company an unfair advantage against colonial tea importers (many of them smugglers). The Tea Act of 1773 actually lowered tea prices in order to promote East India as a monopoly and save it from bankruptcy. The colonists didn’t like being forced to accept the government supported monopoly, thus they boycotted the tea, dumped it into Boston Harbor, burned ships in Annapolis and generally wrecked havoc on the Brits up and down the Atlantic seaboard.

What a difference 232 years make. Had the Chamber of Commerce issued a report on “tea” in 1773, the East India Company would still be around today, subsidized by taxpayers and delivering shoddy products at a premium price.

The Chamber’s own report says the U.S. now ranks 11th globally in broadband deployment. The U.S. is not falling behind because regulation has strangled competition, it is falling behind because all of the reasons I have cited numerous times on this blog: cherry picking, redlining and the industry’s success in thwarting communities through lawsuits and legislation.

I would never suggest we don outrageous costumes and start dumping our laptops into the Potomac, but I will say to the Chamber of Commerce and their sweethearts in the industry, you’d better pull up anchor while you still have the chance because there’s a revolution coming your way.

(Attorney Jim Baller of Baller Herbst, has compiled a list of current state legislative attempts to block municipal telecom projects. View or download this document at:

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Tuesday, March 01, 2005

Welcome To The Jungle

It’s always exciting to start a new job. Especially a job in an industry you know nothing about. The learning curve may be stiff, but that’s part of the fun and when you get a firm grasp of the issues, you can feel proud of yourself for having met the challenge.

Today, Kyle McSlarrow officially begins his reign as President of the National Cable & Telecommunications Association. After running for Congress twice and working in various Hill offices, Mr. McSlarrow will undoubtedly encounter new terrain as he learns to manage a national membership association. To smooth his path, I’ve decided to offer him a few hints and tips:

Realize that even though NCTA is a membership organization, you only have three members; Comcast, Time Warner and Cox. The rest of your members are minor league and their opinions don’t really count. Actually, you only have one member, Comcast. If you will just do what Comcast tells you, you’ll make out just fine.

You need to convince the Board of Directors to remove the word “Telecommunications” from the association’s name. NCTA is strictly cable and not telecom, unless you are attempting to get out from under local franchising and franchising fees and then you are not cable you are telecom and most often an “information service” association.

Be prepared to move quickly. An example of the importance of flexibility was provided just yesterday in Walnut Creek California. Multichannel News reported that Comcast and Walnut Creek were very close to reaching agreement on the new franchise and then by 6:28 p.m. the East Bay Business Times reported that Comcast had sued the City of Walnut Creek. Now that’s fancy footwork!

Learn how to drag your feet. Dragging your feet can be a tricky thing if you also have to be prepared to move quickly, but it can be done. Again, with Walnut Creek, those franchise negotiations have been dragging out since 1999. Sure a franchise transfer added to the snail’s pace, but ensuing intractability on behalf of Comcast has enabled Andrew Johnson, Vice President of Communications to justify his salary.

You are no longer in public service. I’m thinking you ran for Congress because you had a desire to serve the people of your state. You need to vanquish those urges in your new position because the last thing you will be advocating for is people. As you said yourself “Once I made a decision that I was going to do this job, we are a pro-cable household and that’s the way we are going to be.” You can’t serve two masters and with what they’re paying you, the public deserves what it gets.

Adjust your vocabulary. Replace the term “consumer” with the term “customer.” “Regulation” now becomes “cumbersome government interference.” “Franchise agreements” are “barriers to free enterprise.” “Redlining” is “obligations to our stockholders.” “Anti-municipal lobbying” is “leveling the playing field.” I’ve got hundreds of them gathered over years of experience so if you get stuck, just give me a call.

I’m sure as time goes on and you continue to expose your inner most secrets to the press (like how you can’t wait for the Sci-Fi channel’s Friday night lineup) I’ll think of more tips to send your way. Meanwhile, Kyle, be prepared to do things you never thought you would do, that’s what happens when you lay down with the big dogs, you usually find yourself covered with fleas.

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