A municipal fiber plan in Illinois' Tri-Cities failed twice. The region's leaders and residents offer cautionary tales as Lafayette heads toward its July 16 fiber-to-the-home referendum.
After first being introduced to the public more than a year ago, Lafayette Utilities System's fiber-to-the-home initiative is headed for a public referendum on July 16 for bond approval. It's the home stretch for the contentious battle between Lafayette Consolidated Government and incumbent telecom providers BellSouth and Cox Communications, and no one knows what unexpected twists the next seven weeks will bring. Only the dueling storylines are set in stone: LCG wants to build its fiber network for economic development, while BellSouth and Cox say government should not compete with private business.
For the Tri-Cities' area of Illinois, Lafayette's baptism-by-fire education on fiber is old hat. Batavia, Geneva and St. Charles, Ill. are located 45 miles outside of Chicago and have a combined population of approximately 80,000 people; Tri-Cities government has been trying to offer its own fiber program since 2003.
Telecom providers Comcast and SBC have vehemently opposed the Tri-Cities' plan; the two companies mounted fierce opposition campaigns that doomed cities' fiber network twice at the polls. A Comcast representative declined to answer questions about Tri-Cities from The Independent Weekly, issuing only a one-sentence statement: "By voting down the idea of launching municipal broadband twice in 19 months, residents sent a clear message that they do not support a municipally owned broadband utility." SBC spokesman Marty Richter echoed that sentiment, saying, "[Voters] looked at both sides of the issue, and didn't favor the cities plunging into this very risky business, especially when they're already very well served by the private sector."
Tri-Cities officials and residents paint a different picture. And the image that emerges is David being crushed by Goliath ' or in this case, a pair of Goliaths determined to maintain their market dominance with a variety of tactics.
THE BLINDSIDED MAYOR
One of the low points for Mayor Kevin Burns of Geneva, Ill. during the city's battle to build a municipal broadband network came when the opposition called his father.
"My Kevin?" the elder Burns asked incredulously, when the caller asked a question containing an implicit criticism of the mayor.
The caller abruptly hung up without identifying whom he represented.
But the elder Burns knew it could only have been a pollster hired by communications giants Comcast and SBC. The caller was conducting a push poll, the telemarketing technique where questions are slanted to convey a negative impression of the opposition. "We felt it was important to play a role in educating voters with the facts, to make it clear that there were still a lot of unanswered questions, and to help Tri-Cities make an informed decision," says SBC's Richter. (Cox Communications and BellSouth commissioned an anti-LUS push poll in Lafayette earlier this month.)
According to Burns, push polls are just the beginning of a tidal wave of misinformation Lafayette Parish residents can expect leading up to the July 16 fiber referendum. He says to expect a "ticker tape parade" of fliers, television, print and radio advertisements, letters to the editor, e-mails, phone calls and maybe even a promotional cup of hot coffee from fiber opponents. And people, most likely your friendly neighborhood BellSouth and Cox employees, will be knocking on doors trying to convince voters to say "no" to the proposition.
That's if the two communications giants here follow in the footsteps of their corporate Northern brethren. The almost vicious campaign launched by the companies against the referendum was a stunning eye-opener, Burns says ' especially because he was the only loudly outspoken politician in favor of the project.
His area desperately needed high-speed broadband access, and the communications companies had been terribly slow in providing it. This part of Illinois is home to high-tech companies like the Fermi National Accelerator Laboratory, where they smash atoms, but the employees who lived there had to make do with much slower dial-up Internet access at home. The effort wasn't just for residents, either, because the area needed fast access to attract more jobs.
City officials thought they had a fail-proof plan that would use municipally owned fiber optic cables to provide television, Internet access and telephone service along with the electricity they were already providing.
But SBC and Comcast argued that the electric company had no expertise to build the infrastructure or to provide necessary customer service once it was up and running. The companies also maintained that the project would be unprofitable, eventually causing the cities to raise taxes.
"We were offering another option," Burns says, scoffing at the notion that the city couldn't provide effective customer service, even though they'd been doing that with the electric company for more than 100 years. "If something went wrong with their cable, customers would have called me directly and said, 'You bastard, come fix my cable!' Try doing that with the telephone company."
Geneva Information Systems Manager Peter Collins took particular offense to the charge its public utility wasn't equipped to run phone, cable and Internet services.
"This is not rocket science," he contends. "If you have people capable of running an electric utility, they're certainly capable of running this. We know what customer service is. We know what 24-7 means. We provide life-critical services to our hospitals. We can handle this."
Burns was equally incensed by the lack of accessibility he had to the people pulling the strings at Comcast and SBC. "Even in war there are rules of engagement," he says. "We had a hell of a time trying to find the decision makers. I kept asking, 'Who do I call?'"
He advises Lafayette residents "to prepare for anything." For instance, at a public meeting called to discuss the broadband plan, the mayor was heartened by the turnout, until he realized that 90 percent of the audience was made up of Comcast and SBC employees, planted there to ask disparaging questions.
The bulk of any marketing campaigns by BellSouth and Cox Communications likely won't start until 29 days before the vote here, so the companies won't have to report under campaign finance laws how much it spends to sway the vote until after the election.
"I used to say jokingly that if I were a newspaper, I would want this referendum every year," says Burns. "The advertising was extraordinary." ' Kristi H. Dempsey
'THIS IS NOT ROCKET SCIENCE'
In 2002, broadband Internet access was still an elusive luxury for most Tri-Cities residents ' even for those whom money was no object. Information Systems Manager Collins remembers the shock experienced by incoming residents to a newly developed high-end neighborhood, with homes starting at $500,000, who still could not get a DSL or cable modem hook-up.
"You had people who were working in Chicago, living out here," says Collins. "[They] were floored that they paid all this money for this new house, and they couldn't get high-speed Internet access."
Meanwhile, lower income residents living in dilapidated apartment buildings closer to Chicago were continuously solicited to buy DSL and cable service from the same telecom providers who were denying access to Geneva residents.
"If you look at it from a purely capitalistic point of view, it doesn't make sense," Collins says. "That's how stupid it got."
Comcast did not roll out cable modem services to the majority of the Tri-Cities area until the spring of 2003 ' just prior to the first Tri-Cities' referendum over whether to build their own telecommunications network. Local phone provider SBC Communications did not finish its DSL upgrades for the area until the fall of 2004 ' just prior to a second Tri-Cities referendum over a government-owned system. When the upgrades came, prices were high, averaging about $35 a month. Local businesses that wanted an even faster T-1 line were charged up to $1,000 monthly.
The situation underscored the fear that Tri-Cities risked getting left out of technology advancements needed to encourage growth. Exasperating the problem were meetings that Collins and other Tri-Cities officials had with AT&T Broadband, now SBC, dating back to 2000.
Geneva was interested in getting AT&T Broadband to build a high-speed fiber optic network. To start, the city wanted to link its public schools and government buildings with fiber. In June 2000, AT&T Broadband said it would build Geneva's fiber network for $4.8 million, leased out to the city over 10 years. The city would be limited to speeds of 100 megabits per second, and after the 10-year lease was paid, AT&T would still own the network.
"That's when we started saying, jeez, we can do this," says Collins. In summer of 2003, the city's public utility linked a majority of its public buildings with fiber, at speeds 10 times faster than what AT&T Broadband had proposed, and it did so for approximately $1.8 million. The move resulted in a bundle of savings for the city on its monthly phone and Internet costs.
Around the same time the city of Geneva began talking to AT&T Broadband, Collins says city officials from the Tri-Cities questioned the company about when they could get a fiber-optic network built to every home and business ' and whether the company would be willing to partner with local government to build one.
"They pretty much walked out of the room," Collins says. "They're not interested [in partnerships]. They want to own the whole thing."
Collins adds that, given the relatively small interest the telecom providers had expressed for their market, it was surprising how vigorously SBC and Comcast later fought the referendums to allow a government entity to retail their own cable, Internet and phone service.
"The first time around," he says, "our elected officials got more than they expected. They were surprised by the nastiness of Comcast and SBC."
In retrospect, had they not been taken by surprise, Collins says that Tri-Cities elected officials probably would have done more to counter the Comcast/SBC marketing campaigns. Governments are limited by law to strictly providing information about a referendum issue and cannot tell residents how to vote. For its first election, Collins estimates Tri-Cities governments spent roughly $10,000 on information flyers. The second pro-fiber election campaign was completely citizen-driven. (By comparison, LUS says it is prepared to spend up to $250,000 to refute inaccurate information about its fiber initiative.)
"It takes more than a citizens' group," notes Collins. "It takes the political backing. You have to have that kind of backing because Comcast and SBC could easily buy out the marketing end. No citizens' group could ever compete with this. This is big money. [Incumbent telecom providers] are fighting this because they're standing to lose a lot of money."
Collins says he still hasn't given up on the idea that the utility will one day run its own fiber network, saying local dissatisfaction with SBC and Comcast hasn't really subsided.
Marion Jacobson, co-owner of the computer-services company EMMtek, attests to the low consumer confidence in the area. EMMtek moved from St. Charles last October into downtown Batavia after being assured the area had finally gotten access to high-speed DSL lines. After moving, Jacobson was shocked to discover SBC was not offering DSL service to their building. Eventually, SBC agreed to meet EMMTek's needs.
"We made enough noise that it was worth shutting us up," Jacobson says. "We have a direct DSL line with SBC now that is still less [bandwidth] than what we wanted. We had to pull a lot of strings to get that. So the situation in Batavia still is not good."
The Tri-Cities' two fiber referendums did help wake SBC and Comcast up to the needs of the community. However, the roughly $15 cable-rate increase imposed by Comcast last year has only hardened Collins' conviction for a publicly owned system.
"It's kind of a double-edged sword," he says. "Yes, we've got cable modems all around the Tri-Cities area, but our rates have gone up too. We had to beg and plead for this. Our profit isn't the same as Comcast and SBC. We're trying to get new businesses to come in. Our profit is increasing the brain pool in town. It's as much social as it is economic." ' Nathan Stubbs
ANNIE, GET YOUR GIGABYTES
"I'm your average middle American housewife," says Annie Collins in a phone conversation from her home in Batavia, Ill. The 38-year-old mother of three was a flight attendant for United Airlines for 14 years before quitting her job two years ago due to health problems. She's also active with her local Jaycees and her city's downtown revitalization efforts.
Collins became involved with fiber by way of her husband, Peter Collins, and his work as Information Systems Manager for Geneva, Ill. In 2001, a group of community and civic leaders, calling themselves TriCity Broadband, began researching the possibility of providing fiber optics to its residents. The group looked at models in Palo Alto, Ca.; Spencer, Iowa and Thomasville, Ga. After determining that fiber to the home was feasible, the group placed a referendum on the ballot in 2003 for $62 million in general obligation bonds.
Annie Collins became chairman of Fiber for our Future, a group of 350 pro-fiber Tri-Cities residents. She's spent the last few years talking about fiber-to-the-home. "The technology is so superior to anything that's offered by the incumbents," she says. "It's good for families, and it's good for our country." With no operating budget and about 10 actively involved members, she spearheads the group and maintains its Web site, www.fiberforourfuture.com.
Collins says she and her cohorts spoke at the local Lions Club, Kiwanis Club, to "anyone that would listen," and conducted town hall meetings in each of the cities to field questions about fiber-to-the-home. "These builds are people-driven, not profit-driven, like it is for the incumbents," she says.
Comcast and SBC were also busy presenting their views about fiber to the public. "We figured that for the air time, the coffee mugs at the train stations, and signs," Collins says, "it would have cost us a million dollars, and [SBC and Comcast] never disputed that."
Mother Jones magazine reported in its current May/June issue that SBC and Comcast reported expenditures of more than $300,000 ' not including TV ads and staff time ' between the first referendum and the second referendum. "All documents relative to SBC's expenditures related to the issue were filed," says SBC spokesman Marty Richter. "The actual expenditures were a far cry from the vastly exaggerated numbers proponents of the municipal network claimed we spent."
Despite the efforts of Fiber For Our Future, the 2003 referendum was defeated in all three cities by a vote of 60 percent against 40 percent. So Collins began working on another referendum for the upcoming 2004 election, with the idea of using revenue bonds.
"We didn't have any money for any TV commercials," Collins recalls, "but we did do two full-page [newspaper] ads for the 2003 campaign and two half-page ads for the 2004 campaign, but that's all we had money for. We didn't do any mailers. We tried to get out in the community to talk to people, and we handed out materials to them. But Comcast and SBC sponsored every community event they could get their hands on. They even sponsored the Geneva Chamber [of Commerce] Christmas dinner." Geneva's Chamber of Commerce ' of which SBC and Comcast are members ' nevertheless endorsed the city's fiber initiative.
For the 2004 referendum, Collins says voter turnout was better than the previous referendum, since there were also elections for city alderman, county board members and the national presidential election. Even with a better voter turnout, the second referendum was again defeated in all three cities. Collins notes that it took Comcast only 29 days after the vote of the second referendum for the cable company to hike its rates by 6 percent.
"It's not necessarily a sexy campaign you can put on about fiber," Collins says. "It's hard when newspapers and the media are telling people, 'This is too hard to understand. Fiber is this huge, big technology, and you're not going to get it.' That's a problem we had up here. I had to overcome a lot of that."
Today, Collins spends most of her time educating other communities that are considering fiber initiatives. Although Fiber For Our Future isn't actively pursuing another referendum for the Tri-Cities, Collins says it's not out of the realm of possibility. And looking back on the last four years, Collins says she doesn't know what she or her group could have done any differently.
"It's not too hard to understand that your communities need new businesses to survive," she says. "It's not too hard to understand that you don't need big corporations in your community controlling how much you're paying for these services, when you can have your own hometown utilities creating jobs. It's not too hard to understand that competition is good. That's all you need to understand. Do you get your bill from Comcast and not get it? I mean, what don't you get? Why is that so hard?
"You don't have to understand how the routers connect to whatever," she continues. "Take a class at ITT Tech or whatever you want to do. But don't make it harder than what is. Don't try to confuse the issue and try to get people off track so that no one focuses on these people doing the push polls. And why are they so concerned? They don't care about your future taxes. They don't care about any of that. What they care about is their bottom line."
Collins has been closely following the debate over Lafayette Utilities System's proposed fiber-to-the-home project. When it comes to advice for Lafayette, Collins doesn't mince words. "Be suspicious of corporations that are lying to you," she says. "They are only concerned with their profits. I don't think your local cable and phone company really care about any economic development for your community. They don't live there, meaning that their corporate headquarters aren't there. Of course, they have employees that live and work there, and I'm not saying that that doesn't count for something.
"However, there is more of an opportunity for the future ' in terms of economic development, education, medical opportunities and the future of Lafayette in general ' with fiber," says Collins. "I think you would be crazy to let this opportunity to pass you up." ' R. Reese Fuller