New legislation looks to block municipal Wi-Fi

As promised... here's the article on HR 2726. I think both sides have good points. And I'll take Sessions' Communications Director at her word when she says SBC had no influence on Sessions' decision to push the bill. But what do you think?

Texas Representative Pete Sessions has introduced a new bill in Congress that might put a stop to locally organized Internet networks, telecommunications and Wi-Fi access.
HR 2726 was proposed last month and would prohibit municipalities from providing telecommunications, information or cable services.
Sessions, who is a former Southwestern Bell (SBC) and Bell Labs executive, has said the bill will protect private companies.
“The main reason for this bill is that private companies should not have to compete with government,” Sessions Communications Director Gina Vaughn said. “This bill is to help encourage greater roll-out of telecom services from private companies.
Texas was one of nine states that recently rejected a bill similar to HR 2726 in the state legislature. Out of the 13 states that recently considered similar bills, only four states voted to approve a similar bill.
“This bill also provides guidance to municipal governments about what services they can provide,” Vaughn said. “This is important because several states have either passed or considered legislation to completely ban municipalities from providing information and/or telecom services.”
In Belton, the Belton ISD school board has discussed working to provide Wi-Fi access across the city for school district students.
Currently the Chamber of Commerce, Belton ISD and UMHB have helped organize a number of free Hotspots at local businesses.
Pizza Hut, The Daily Grind, Morning Glory Bed and Breakfast and the Chamber of Commerce have each established Hotspots through the organization.
Shipley’s Doughnuts and McDonalds also offer similar services through other providers.
The businesses pay a small startup cost for hardware and pay for their broadband service through any of the local providers.
Customers can then access the Internet for free on any Wi-Fi enabled laptop or any other Wi-Fi device, such as PDA’s.
“I don’t really think this will hurt our current situation in Belton but it could in the future,” Councilmember Marion Grayson said. “Currently we partner with the local ISP’s and the businesses pick their own provider. The Chamber and the city are not providing Internet access, but we don’t want the state or federal government to tell us we can’t do it later if we decide to.”
Grayson, owner of YourBoxLady.com and organizer of Belton’s Hotspot program, was active in fighting HB 789, which was similar to HR 2726 and voted down in the Texas Legislature during this year’s session.
The bill would have also allowed phone companies and cable companies to receive statewide franchise licenses, rather than applying for local franchises, as they currently do.
“We don’t believe the state or federal governments should have the right to say who operates in our community or not,” Grayson said. “With a statewide franchise, companies can choose where to operate and where not to. They are in it to make money. If an area is not profitable, they’re not forced to provide service to it. If they decide to tear up a street to put in a phone line, they have every right to do so, and the city can have no say in it. Then the cities can get left footing the repair bill.”
The final bill will not likely endanger Belton’s current or future free hotspots, because local companies provide the Internet service. Also any networks or services offered by municipalities currently would be grandfathered under the bill.
“In the event of market failure, local governments would be free to fill the void,” Sessions said. “For example, in Granbury, about 4/5 of the city has private providers of high-speed Internet, but no one provides high-speed Internet to the other 1/5. Under Congressman Session’s bill, the city can provide service to the unserved.”
Grayson said that logic scares her.
“Right now I believe everyone in Belton has the ability to access the Internet,” Grayson said. “They may not have high-speed access, but our local ISP’s are providing service across Belton. If it proved to be unprofitable for a company to provide high-speed Internet to South Belton, then it’s very likely they wouldn’t provide the service. If that happens, the city is stuck with a large portion of their residents not being able to access the Internet with broadband. Then the entire city has to pay to provide a basic service to those unfortunate residents in South Belton. I don’t think that’s fair.”
Grayson believes a company will simply pick and chose what areas are profitable for them.
“If a company gets a franchise from the city, they have to provide services to the entire city,” Grayson said. “On the other hand, if a company can simply go to the state or federal government for a franchise, they can pick and chose the areas profitable for them. For businesses to do business broadband is becoming a necessity. With this law entire communities can be shut off from Internet access. The federal government should not be writing laws restricting technology that is changing daily.”
Sessions believes that allowing local municipalities to provide the service will be detrimental to residents.
“Some municipal governments are putting taxpayer money at risk by duplicating services already offered by private entities,” Sessions said. “Unfair competition by the government discourages investment by private entities and ultimately leads to consumers having fewer choices of service and outdated technology, due to the fact that the government often does not have the financial resources to keep up with that technology.”
In Lafayette, La. the city recently proposed a $125-million bond issue, paid for by the taxpayers, to provide high-speed Internet access for residents.
This proposal was made, while according to Vaughn, “91-percent of the city’s phone lines were capable of offering high-speed Internet access and the local cable company also offered broadband service over their cable network.”
Lafayette Mayor Joey Dorel told PC World Magazine, that his city “begged” its phone and cable company to wire it with fiber-optic access and had no success.
The city now plans to build its own fiber optic network, with Bell South and Cox Communications fighting the action in court.
Along with Lafayette, North Kansas City, Mo. announced recently its plan to offer affordable high-speed Internet access, after residents complained about poor service and slower than expected speeds.
Time Warner Cable attempted to block the city’s efforts but the courts ruled in favor of the city. Time Warner Cable appealed the decision and wants to stop the city from offering services it planed to offer later this year.
Cities see wireless broadband as a way to offer low-cost Internet to low-income residents.
“The practices of corporate America are hurting communities like Lafayette,” Dorel said. With high-speed and fiber-optic connections to schools, businesses and hospitals, the cities have argued that the city owned networks will make the community a better place to live as well as provide cheaper service to their residents.
“By wearing two hats, provider and regulator, municipal governments create unfair competition in the marketplace,” Sessions said. “Their competitive presence drives private entities away from that market and hurt consumers in the long run.”
With the large upfront costs and maintenance and service costs, Sessions believes the taxpayers will be hurt the hardest.
Earlier this year Whatcom County in Washington had to sell its unfinished fiber-optic system for $126,000 after spending $2.3-million on it. Private companies saturated the market shortly afterwards.
Almost immediately after Sessions introduced his bill, websites and blogs for citizen groups and government accountability began blasting Sessions for his support of the bill.
Free Press, a national nonpartisan media reform group reported, “Sessions owns $500,000 worth of stock options in telephone giant SBC.”
According to Sessions’ office, the congressman has no stock options with the company.
“Sessions does not have any stock or stock options in the company,” Vaughn said. “The congressman decided upon this bill without any request from SBC or another company. It’s not just an SBC issue. This is for cable providers, broadband providers and any other company that provides telecommunications. The congressman being a former employee at SBC helps him to understand the need to protect business from competing with government.”
For Belton’s House Representative John Carter, Dist. 32, (R), it is too early to make a decision on the bill.
“The bill hasn’t made its way out of committee yet,” Carter’s Press Secretary Gretchen Hamel said. “There will be any number of changes to the bill if it comes out of committee and the congressman would like to see the entire bill before deciding on it.”
Another Washington insider speculated that the bill would likely be left behind in the wake of a new complete Telecommunications Act, which may be written later this year.
“I think the bottom line is that the federal government should stay out of this issue,” Grayson said. “I understand the need for fair competition and I understand that the companies are looking for new means of revenue. But if a phone company or cable company wants to provide services to a community, they should have to come to the city for approval, just as they’ve always done. If not – the city should have the option to provide the same services.”
With the HR 2726 still being worked on in committee and a possible new Telecommunications Act pending, the debate for broadband service is just beginning.


Wireless Terminology
Wi-Fi - Short for "Wireless Fidelity", is a set of product compatibility standards for wireless local area networks (WLAN). It enables a person with a wireless-enabled computer or personal digital assistant (PDA) to connect to the Internet when in proximity of an access point. The geographical region covered by one or several access points is called a hotspot.
Hotspot - A Wi-Fi access point or area, in particular for connecting to Internet. Hotspots are found near restaurants, train stations, airports, cafes, libraries and other public places.
PDA - Handheld devices that were originally designed as personal organizers, but became much more versatile over the years. A basic PDA usually includes a clock, date book, address book, task list, memo pad and a simple calculator. One major advantage of using PDA’s is their ability to synchronize data with desktop and notebook computers and connect to the Internet.
Fiber-Optic - An optical fiber is a transparent thin fiber, usually made of glass, for transmitting light. Fiber optics is the branch of science and engineering concerned with optical fibers. The optical fiber can be used as a medium for telecommunication and networking because it is flexible and can be bundled as cables. Because of the remarkably low loss and excellent linearity and dispersion behavior of single-mode optical fiber, data rates of up to 40 gigabits per second are possible in real-world use on a single wavelength.
Telecommunications - The extension of communication over a distance. In practice it also recognizes that something may be lost in the process; hence the term 'telecommunication' covers all forms of distance and/or conversion of the original communications, including radio, telegraphy, television, telephony, data communication and computer networking.

Definitions taken from Wikipeida.org