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An investigative report describes Connected Nation as a front group for the telecommunications industry.

Telecom industry brings Connected Nation to North Carolina 

High stakes for high-speed Internet

Citizens across North Carolina are clamoring for better access to the Internet, but cable and telecom companies say it's too expensive to build service that reaches them. Now the industry has decided it is willing to pay an outside group, Connected Nation, to collect data about who's stuck on dialup, ostensibly to deliver improved service. But critics say the motive is hardly altruistic, charging that cable and telecom companies are more interested in warding off regulators than in bridging the digital divide.

In Chatham County, where many residents commute to work in Research Triangle Park or at area universities, 45 percent of homes and businesses don't have access to high-speed Internet service.

"Right now there is an information superhighway," Pittsboro Mayor Randy Voller told state lawmakers at a recent meeting on the issue, "but too many of our citizens are accessing what we all know as the equivalent of the information dirt road."

The first step to getting more people out of the dirt and onto the highway is to precisely determine who has access and who doesn't. But controversy is brewing in the General Assembly over how that information will be collected and who will control access to it.

The state's telephone and cable industry associations have hired Connected Nation, a nationwide nonprofit, to map the availability of broadband services statewide for an undisclosed fee. (See "Who is Connected Nation?" below.)

But North Carolina already has a state government authority called e-NC Authority doing the same work. In fact, e-NC did some of the first broadband maps in the country in 2001. The organization, which is a state authority housed in the N.C. Rural Economic Development Center, also gives matching incentive grants to encourage the industry to build out to the state's most under-served areas.

If the state were to fund Connected Nation, it could serve as a stamp of approval for a group critics say is merely an industry front. It would also signal a lack of confidence in an existing state effort that's garnered rave reviews from across the country.

"I think e-NC is the model of how you do it right," says Art Brodsky, communications director of Public Knowledge, a Washington, D.C. public interest group. "They do their own surveys and they're not industry-backed. E-NC has a proven track record."

"This appears to be the first public step of an aggressive hostile takeover attempt by Connected Nation and its Bell company ally, AT&T," says Drew Clark, executive director of BroadbandCensus.com, a Web site designed to provide information about broadband availability to the public. Clark has called e-NC "arguably the most advanced effort of its kind in the nation."

Chatham officials delivered their comments at a Dec. 18 meeting of the N.C. House Select Committee on High-Speed Internet Access in Rural Areas, which is working on plan to overcome obstacles to delivering broadband access to the state's citizens. The committee will present its recommendations to the General Assembly in January.

Lobbyists in pinstriped suits numbered about two dozen at the meeting, while only eight legislators sat at conference tables. It was a visual reminder of how high stakes are for the industry, which appears determined to make Connected Nation the go-to source for state broadband policy.

Part of the reason Connected Nation's approach appeals to the industry is that it addresses demand as well as supply. Industry representatives say only about 30 percent of households with access to broadband will actually subscribe.

"Our goal is to do two things," explained Brent Legg, Connected Nation's vice president for state and local initiatives, during his pitch to legislators. "To help providers build their businesses while creating a climate that makes it possible for them to extend service into un-served areas."

Legg boasted of Connect Kentucky's accomplishments, saying 96 percent of Kentucky households have access compared to 60 percent in 2004.

"E-NC is doing great work, and our goal is to complement that work," he said.

Legg presented color maps that show broadband availability down to the street level—far more detailed than e-NC's countywide averages—and explained the technical methods Connected Nation uses to compile them. He said the group does not rely solely on industry-reported data.

"The maps we produce are truly accurate and verifiable and open to the public," Legg said.

But Rep. Angela Bryant, a Democrat from Nash and Halifax counties, sounded skeptical. When she pressed Legg to say how Connected Nation's data is "independently verifiable," he gave this explanation: If a consumer finds that Connected Nation's online map says a household does have broadband when in fact it does not, the consumer can go online and fill out a form to report the inaccuracy. "We will aggregate that information," Legg said, and provide a list of "false positives" to lawmakers or the public upon request.

In other words, the only way lawmakers would find out if industry's claims are false is if individual consumers speak up to challenge industry-backed research.

Connected Nation's move into North Carolina appears to be the result of legislative pressure on the industry.

When N.C. Rep. Bill Faison launched a committee to study the issue last spring, he noted e-NC's difficulty in corralling industry data and urged lobbyists for the industry to come up with some way to provide it. At November's committee meeting, they announced their intent to bring in Connected Nation. Faison praised them for "stepping up," but resisted a motion to endorse the project.

Then at a Dec. 11 meeting of e-NC's board, chair Oppie Jordan said a member of the house committee had asked e-NC Authority to fund Connected Nation's project in North Carolina. She moved that e-NC allot $15,000 of its $1 million operating budget to fund a mapping project that would effectively duplicate e-NC's effort. The board voted against the motion.

By the time Faison's house committee met in December, the legislator who had made the suggestion to Jordan had backed off. Rep. Joe P. Tolson, a Democrat from Edgecombe County, said he had asked Jordan to pass along a request for funding to the e-NC board. "I was just trying to get everybody on the same page," he said.

Now that it's clear the industry is willing to bankroll Connected Nation's mapping project, however, Tolson said Connected Nation should not use state money.

Rep. Bryant cautioned against any state funding of Connected Nation, "because at some point we have to have a boundary." She said "somebody from a disinterested perspective" should be involved in any state incentive grants, government contracts or other public money.

Right now, Connected Nation is not asking for money from North Carolina taxpayers to complete its map. But the experience of other states suggests Connected Nation may yet come calling for state money. The organization created a map for the state of South Carolina at no charge, but would not update that map without public investment.

Once Connected Nation does produce a map for North Carolina, it will be up to lawmakers whether to base a statewide broadband policy—and its request for federal funding—on industry-funded information, or whether to empower an existing public effort that is nationally regarded as a model for other states.

Information about where service is available isn't really secret, in that consumers can go on to most Internet service providers' Web sites and plug in either an address or phone number and find out if access is available where they live.

Yet industry has consistently pushed back on providing any detailed information, saying competitors would exploit it.

While e-NC has done independent surveys of consumers across the state, its mapping projects rely on the same data collection model Connected Nation uses: It gets most of its information from the industry. But e-NC does not have the legislative authority to compel companies to share that information. Companies' resistance has hampered e-NC's mapping efforts, limiting the information to countywide averages that don't tell the whole story, especially in counties like Chatham, which have a mix of dense and sparsely populated areas.

Earlier this year, as AT&T prepared to roll out its U-verse Internet and television service in parts of the state, the company refused to share with e-NC information about its service area without a non-disclosure agreement that would keep the information out of the public record. Hoping to assuage industry concerns, e-NC signed the agreement in July.

Clark says the company is making aggressive moves across the country. "In Washington, AT&T talks about conciliation and compromise," he says. "But in the states, the company and its allies are bullying and intimidating players—like e-NC—that they cannot control. They've chosen their player, and they like that player because it creates proprietary maps that show broadband deployment the way AT&T wants it to be seen."

Industry critics say the real reason incumbent providers don't want to provide a big picture of where their services are available is that it would be unflattering, showing disparities in race and income, and invite further regulation of the industry.

Bunny Sanders, mayor of the tiny coastal town of Roper in Washington County, urged lawmakers at the house committee meeting to base state policy on independently verifiable data. "If you accept educated guesses or information controlled by the carriers, there are communities that will be left out," she said. "More than likely they will be remote, rural, sparsely populated poor communities which will not produce profits for the carriers. Communities like where I live."

She was harshly critical of Connected Nation, handing out to lawmakers copies of complaints Kentucky officials had filed with the FCC (PDF, 4.6 MB). "I submit to you that under no circumstance should the state of North Carolina knowingly base its broadband deployment to un-served communities on [an organization] with such a deplorable track record," Sanders said, "even if AT&T does agree to pay for the study."

Sanders described herself as an advocate of broadband access who works with Windows on the World e-Community Development Corporation (WOW e-CDC), which receives state money to improve broadband availability in northeastern North Carolina.

The group conducted its own study of 21 counties, surveying residents and checking the very utility poles and switching stations. The $30,000 study showed 10 to 20 percent more households did not have broadband access than were reported by e-NC.

Sanders argued that the state should impose a moratorium on incentive funds until it collects "transparent, verifiable" data on broadband availability that does not rely on the industry's self-reported numbers. She suggested WOW e-CDC should be the mapping agent for e-NC.

Without such data, she said, there's no accountability for the companies who use state incentive grants to build service to rural areas. "The state, in effect, allows the carriers to whom they provide incentives to police themselves."


Who is Connected Nation?

And why does it want to come to N.C.?

The state's telephone and cable industry associations have hired Connected Nation (www.connectednation.org), a nationwide nonprofit based in Washington, D.C, to map the availability of broadband services in North Carolina for an undisclosed fee. North Carolina already has e-NC Authority, a state-funded, quasi-governmental entity charged with the same task (www.e-nc.org). Unlike Connected Nation, e-NC is subject to open records and meetings laws.

Connected Nation has been expanding its operations. It now has programs in five states, including Tennessee, Ohio, West Virginia and Minnesota. However, its reputation is spotty: Officials in Kentucky, where Connected Nation formed, have filed complaints with the FCC about the group, saying it makes claims and provides data that are "misleading" and "untrue." Its board of directors includes several heavy hitters from the telco industry:

  • James W. Cicconi: AT&T senior executive vice president, external and legislative affairs
  • Steve Largent: CTIA, The Wireless Association president and CEO
  • Joseph W. Waz: Comcast senior vice president, external affairs and public policy counsel
  • Thomas J. Tauke: Verizon executive vice president for public affairs, policy and communication
  • Walter B. McCormick: United States Telecom Association president
  • Kyle E. McSlarrow: National Cable and Telecommunications Association president
  • Grant Seiffert: Telecommunications Industry Association president (The members are the equipment makers who sell their gear to the telecom industry.)

In January 2008, Art Brodsky, communications director of Public Knowledge, a Washington, D.C., public interest group, published an investigative report (www.publicknowledge.org/node/1334) on Connected Nation that described it as a front group for the telecommunications industry.

Its first incarnation, Connect Kentucky, used $7 million in state funds to map broadband availability, then hired "leadership teams" to go into each county and encourage people to sign up for service.

But not just any service: Brodsky's report says Connect Kentucky pushed AT&T's DSL, rather than competing services from independent companies.

According to Brodsky's sources, "Connect Kentucky is nothing more than a sales force and front group for AT&T paid for by the telecommunications industry and by state and federal governments that has achieved far more in publicity than it has in actual accomplishment. Connect helps to promote AT&T services, while lobbying at the state capitol for the deregulation legislation the telephone company wants."

Connected Nation has denied these claims.

Brodsky says, "There is no evidence that any of the millions of dollars they have spent of primarily public money has done any good for anyone. Connect talks a good game, but a lot of what they claim just hasn’t materialized."

E-NC has a strong track record, he says. "You’ve got a world-class, homegrown operation down there that has infinitely more knowledge and expertise than any other state organization." By contrast, he says Connected Nation is "sort of like a franchise—the Applebee’s of telecom policy."

  • An investigative report describes Connected Nation as a front group for the telecommunications industry.

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