Monday, March 30, 2009


Amazingly bad bill could deregulate cable and broadband, kill public access, create a real “czar,” put us at mercy of Mainland telcos, and could cost you $$$

by Larry Geller

Now 49th in the country in broadband services, we have almost nowhere to go except up, and that means big bucks for whatever companies can get into the game. Our federal stimulus money is on the table and the stakes are high.

Believe it or not, Hawaii may give the whole thing away to corporate interests for their profit, not ours, by installing a "czar” and restricting public access to the broadband development process.

Senate bill 1680 sailed unamended through Rep. Bob Herkes’ Corporate Protection Committee. That alone should raise warning flags for consumers.

Complicated bill The devil is in the details as they say, and this bill is a fat one, full of jargon that is hard for the average person to understand.

This is a stealth bill. There’s even a corporate “mConnected Nationole” involved, an operative in Hawaii from an organization seeking to keep public data from the public for the benefit of those who run it, big telecommunications interests. Hawaii was alerted by an exposé released last week by a group of watchdog organizations including the national Common Cause.

Committee reports show testimony by an organization called Connected Nation, but there is no written testimony on the Capitol website. The organization made a presentation to the Broadband Task Force (website is here). Did the public react to the questionable parts of their presentation? No, the public was not represented (but Senator Inouye’s staff was, more about that later).

Connected Nation is not a local organization. The testimony was reportedly given by a guy with a Kentucky accent. Common Cause, along with Public Knowledge, The Media and Democracy Coalition, and Reclaim the Media published an exposé of this organization that you can read about on the Common Cause website and download a copy from here.

Here’s what Common Cause had to say:

Connected Nation's strategy is to accept public funds for collecting information from its sponsors which is then kept largely private, hidden behind strict non-disclosure agreements (NDA). This privatized data gathered with public money is a violation of the public trust.

Broadband mapping is to be used in the public interest, and this paper shows that Connected Nation has a history of using this process for their own interest at the expense of the public. Broadband is too important for the future of our democracy and economy to allow Connected Nation to subvert the public interest.

Broadband mapping is one of the things this bill sets up. If Connected Nation has anything to do with it, the results will benefit those who run it (see below) instead of you and me.

The report says:

Connected Nation is not a neutral broker in broadband information. It is run by, and boasts of its connections to, telephone and cable companies. Yet, it accepts public funds in the millions of dollars to conduct a public function—mapping of broadband.

The end result is a project from Connected Nation which, instead of reflecting neutral information on which good public policy can be based, instead represents only the information that the most interested of parties wants reported.

Quite simply, Connected Nation’s strategy is to accept public funds for collecting information from its sponsors which is then kept largely private, hidden behind strict non-disclosure agreements (NDA). This privatized function is a violation of the public trust.

Who runs Connected Nation? From the exposé:

Let’s take a look at the Connect Board of Directors. There are 12 outside directors, eight of which are directly in the orbit of network operators. They are not small players.

• 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
• Larry Cohen – Communications Workers of America president. CWA is in frequent agreement with telecom companies on policy issues.
• Thomas J. Tauke – Verizon executive vice president for public affairs, policy and
• 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.)

These individuals, and others, are listed as “national advisors” on the Connected Nation Web site. They are listed as “directors” in their filing with the Kentucky Secretary of State.

Connected Nation came out of Connected Kentucky. Here is some more discussion, from

The group wants each State to adopt (and pay for) their "Connect Kentucky" model, which they claim resulted in Kentucky broadband adoption growing 83% from 2005 to 2007, while the national broadband adoption rate grew only 57%.

Of course given that Kentucky consistently ranked near the bottom of most penetration rankings, even a slight improvement in penetration would make it appear they were doing something a more wired state like say, California, wasn't.

The Connect Kentucky model consisted of using $7 million in state funds to map penetration, then using local outreach to push private service into under-served areas. But if Art Brodsky's report is to be believed, the group's mapping efforts use rose colored glasses, and the outreach program is little more than a sales call for small scale AT&T DSL deployments, or if DSL is not financially viable, AT&T-resold Wild Blue satellite service:

The second major piece of Connect’s program is its formation of “leadership teams” to go to each of Kentucky’s 120 counties to preach the word of the necessity of broadband. Sources who have been in those meetings aren’t impressed with Connect’s expertise. One Kentucky source said a Connect community session he attended “reminded me of an Amway meeting,” comparing it to the direct-sales company. Connect gathers together people from health care, education, industry and local government to persuade them that broadband is needed in their community. The preferred provider is not an independent ISP or a local CLEC. Instead, the service being pitched is BellSouth DSL. Think of the presentation as a state-sponsored sales call for AT&T (the former BellSouth) low-speed DSL.

These are the folks seeking to guide Hawaii legislation.

Czar Nicholas II The two bills, though, do a lot more. They set it up so that a single person, a communications “czar,” controls almost all communications services in the state.

From the Senate bill:

§   ‑2  Hawaii broadband commissioner.  There shall be established the Hawaii broadband commissioner as an independent agency that is attached to the department of commerce and consumer affairs for administrative purposes only.  The implementation of this chapter shall be placed under the supervision and control of the Hawaii broadband commissioner, who shall be exempt from chapter 76 and shall be appointed by the governor, with the advice and consent of the senate.

§   ‑7  (b)  The commissioner shall have general supervision over all telecommunications carriers and cable operators and shall perform the duties and exercise the powers imposed or conferred upon it by this chapter.

    (d)  The commissioner shall have general supervision over public, educational, or governmental access facilities and public, educational, or governmental access organizations.

Another section requires anyone disagreeing with a decision of the czar (“commissioner”) to take him to court. That’s a sure way to deplete the budget of a public access provider, of course. You don’t like? Sue me.

In fact, the czar can harass the public access providers endlessly. For example:

§   ‑19  Telecommunications carriers, cable operators, and PEG access organizations, to furnish information.  Every telecommunications carrier, cable operator, PEG access organization, or other person subject to investigation by the commissioner, shall at all times, upon request, furnish to the commissioner all information that the commissioner may require respecting any of the matters concerning which the commissioner is given power to investigate, and shall permit the examination of its books, records, contracts, maps, and other documents by the commissioner or any person authorized by the commissioner in writing to make the examination, and shall furnish the commissioner with a complete inventory of property under its control or management in the form as the commissioner may direct.

     §   ‑23  Penalties.  (a)  Any telecommunications carrier, cable operator, or PEG access organization violating, neglecting, or failing in any particular way to conform to or comply with this chapter or any lawful order of the commissioner, including, but not limited to the grounds specified in section    ‑68 for cable operators and PEG access organizations, shall be subject to a civil penalty not to exceed $25,000 for each day the violation, neglect, or failure continues, to be assessed by the commissioner after a hearing in accordance with chapter 91.  The commissioner may order the telecommunications carrier or cable operator to cease carrying on its business while the violation, neglect, or failure continues.

Yup, provide endless paperwork or be fined $25,000 for each day, So sue him, while he shuts you down. This is a czar created very much in the old Russian model.

How is this czar’s operation to be paid for? By repealing the Universal Service Program and stealing those funds. Currently, the Universal Service Program is the surcharge on your phone bill that provides that:

The [Public Utilities Commission] shall adopt rules regarding the distribution of moneys from the fund including reimbursements to carriers for providing reduced rates to low-income, elderly, residents of underserved or rural areas, or other subscribers, as authorized by the commission.

Instead, there will be one of those special funds that the legislature occasionally raids.

Oh, the federal stimulus funds. Guess what: this guy gets to determine what happens to them:

 §   ‑75  Use of American Recovery and Reinvestment Act of 2009, federal funds from fiscal year 2009 and fiscal year 2010 appropriation measures, and other federal moneys.

    (d)  Any moneys applied for or received by the department under the American Recovery and Reinvestment Act of 2009 or federal funds from fiscal year 2009 and fiscal year 2010 appropriation measures for uses related to the purpose of this chapter shall be transferred to the Hawaii broadband commissioner upon its establishment.

… and he can spend them any way he likes, without complying with Hawaii’s procurement code!:

     (f)  Contracts or purchases hereunder using moneys from the American Recovery and Reinvestment Act of 2009 or federal funds from fiscal year 2009 and fiscal year 2010 appropriation measures shall be exempt from chapter 103D.

Why is that in the public interest???

Not only is the czar exempt from Hawaii procurement laws, but the broadband penetration mapping services that are provided, for example (!) by Connected Nation would be exempt, according to this bill, from federal Freedom of Information laws (can a state legislature do that?) and of course Hawaii’s open records law, the Uniform Information Practices Act. This is how Connected Nation gets to keep its data and procedures secret:

§   ‑76  Broadband inventory maps.  The commissioner shall be designated as the entity within the State responsible for developing and maintaining broadband inventory maps, as described in the American Recovery and Reinvestment Act of 2009 and the Broadband Data Improvement Act of 2008.  Subject only to any limitations imposed by federal law, all providers of broadband infrastructure and services in Hawaii shall be required to furnish information requested by the commissioner in support of broadband mapping, reporting, and data-driven policy support.  Proprietary data on private infrastructure furnished by private providers shall be protected from disclosure under the Freedom of Information Act or Uniform Information Practices Act and shall be made available to the public only in a summarized form that appropriately protects the proprietary concerns of those private providers.

The commissioner shall have the authority to designate economic zones anywhere in the State at a location that may be identified as a strategic site to create facilities that will stimulate job growth."

Wow! This guy gets to designate economic zones too. He could be more powerful even than our governor.

Now get this—this bill would give the czar virtual taxing power.

There is created in the state treasury a special fund to be known as the compliance resolution fund to be expended by the director's designated representatives as provided by this subsection.  Notwithstanding any law to the contrary, all revenues, fees, and fines collected by the department shall be deposited into the compliance resolution fund.

There’s a long list of exemptions (for example, driver education fund, workers’ comp fund, etc.), but no list of what is covered by this blanket steal of revenue.

Speaking of  sue me, the bill allows the czar to have his own attorneys, separate from the state Attorney General.

This project is so important that Senator Inouye’s staff member, Jennifer Goto Sabas, was assigned to the task force. According to reports, she has also contacted legislators about fast-tracking this bill into law. Senator Inouye has received contributions from the telecommunications industry, but of course I wouldn’t suggest that this has influenced him.

The bill is long enough that I’m sure legislators’ eyes might glaze over before they get to the end. There are things deep down in it that I don’t understand completely, but that appear scary, for example this:

    SECTION 12.  Section 166E-10, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§166E-10[]]  Non-agricultural park land development.  On behalf of the State or in partnership with a federal agency, a county, or a private party and except as provided in this section, the department may develop non-agricultural park lands that, at the option of the board, may be exempt from all statutes, ordinances, charter provisions, and rules of any governmental agency relating to planning, zoning, construction standards for subdivisions, development and improvement of land, and construction of buildings thereon…

Where is this bill going, and is there no limit to the czar’s powers? Do we really want to do this??

The bill has been collecting positive public testimony because it exempts the public access channels from the procurement code. This can be stripped out in the conference committee, of course, and the lege can still claim that the public supports the bill. Let’s see what happens with that protection. It seems like a convenient way to gain support for a bad bill—put something in it that the public very much wants. Then take it out later.

In any case, the czar wields dictatorial power over the public access providers, and this bill repeals the system that has been in place to protect them since about 1989.

Two letters and four numbers, SB1680, could:

Your input in this process is not wanted. Jay April, President and CEO, Akaku: Maui Community Television wrote in an email:

… it was a surprise to find out that the Broadband Task  Force had sought no public input prior to issuing its final report and the PEGS were not included in the discussion or invited to the table.

Any bill which promises legislators that Hawaii will become a world leader (Department of Commerce and Consumer Affairs testimony) Funny! is immediately suspect. There should be a laugh button that legislators can push when this testimony is read aloud. No, a bunch of islands in middle of the Pacific are not about to become world leaders in anything because of this bill.

We heard that before when the trans Pacific fiber-optic cable stopped off here on its way to the Mainland. It landed in Hawaii, true, but all the capacity was spoken for by Mainland communications companies. Aloha Conferencing Services, formed in the early 1990’s with a state loan, had to flee to the Mainland for fiber circuits because “world leader” Hawaii could not supply them.

Why Hawaii? Why not Kentucky, which beats us out already, for example? Let’s cut the hype and just get the best broadband services we can for Hawaii consumers and small businesses.

These two bills need to be stopped. They have advanced completely under the radar. No more, now you know something about them. You may want to contact your legislators about it. The bill is headed for the House Finance Committee, it’s last stop on the committee circuit.

More in a day or two on this important issue. Stay tuned (while you can).



The purpose of broadcasting regulation in the United States to begin with was to generate programming that elevates American Democracy and cultivates localized civic engagement with public deliberation as the highest form of democratic engagement. The current versions of these bills ignore the public interest entirely and punish the public access stations that showcase the diverse voices we represent. But it is not too late, language to protect PEG access can still be inserted if this thing is going to pass and if there is political will some of these more onerous passages can still be dumped. Bottom line though is that many of our lawmakers are in a broadband frenzy and are about to pass what they are told to public interest or no public interest.

As introduced, these bills do not adequately protect consumers nor do they secure the public interest. Hawai'i House leadership and the Governor need to actively support amending the legislation to include consumer protection and public interest obligations for broadband media access.

At a minimum, the immediate interests of PEG access providers need to be addressed. Even better would be a deep reconsideration of consumer protection and public interest obligations as currently apply to telecom and cable operators in Hawai'i and across the nation. State law needs to address the corrupt history of Hawaii's cable regulation, and the deep flaws in current cable administration - for starters, there needs to be a complete audit of the DCCA's Cable TV Division over the past decade.

Public interest and consumer groups following the current legislative effort to create a Hawai'i Communications Commission are invoking some excellent language authored by Senator Inouye way back in 1994 - attached below! For summary, just check the last four points.

Similar language is needed in the 2009 Hawaii Communications Commission Act (SB1680/HB984, Relating to Technology)! Here below is the complete "Findings" from Senator Inouye's 1994 legislation:

Findings in S.2195 (1994)
"National Public Telecommunications Infrastructure Act of

(1) The United States Government has consistently encouraged the
development and dissemination of public telecommunications services in
broadcast and nonbroadcast technologies through, among other things, the
Public Broadcasting Act of 1967, the Public Telecommunications Financing
Act of 1978, and the Public Telecommunications Act of 1992, wherein
Congress found that `it is in the public interest for the Federal
Government to ensure that all citizens of the United States have access
to public telecommunications services through all appropriate available
telecommunications distribution technologies. . . '.

(2) The Government has a compelling interest in ensuring that all
citizens of the United States have access to noncommercial governmental,
educational, informational, cultural, civic, and charitable services
through all appropriate telecommunications networks.

(3) New telecommunications technologies will enhance the ability of
schools, libraries, local governments, public broadcast institutions,
and nonprofit organizations to deliver and receive noncommercial
governmental, educational, informational, cultural, civic, and
charitable services throughout the United States.

(4) It is in the public interest that these entities be granted access
to capacity on telecommunications networks for the purpose of
disseminating and receiving noncommercial governmental, educational,
informational, cultural, civic, and charitable services throughout the
United States.

(5) It is necessary and appropriate that these entities have access,
without charge, to the capacity on telecommunications networks to enable
the public to have affordable access to the governmental, educational,
informational, cultural, civic, and charitable services provided by such

(6) Telecommunications services, including cable television programming,
basic telephone service, and telecommunications services not yet
available, are likely to become an increasingly pervasive presence in
the lives of all Americans.

(7) Most Americans are currently served by telecommunications networks
that lack sufficiently open architecture, sufficient capacity, and
adequate nondiscriminatory access terms necessary to provide open access
to a diversity of voice, video, and data communications.

(8) Private telecommunications carriers are likely to control access to
telecommunications networks that lack sufficiently open architecture,
sufficient capacity, and adequate nondiscriminatory access terms.
Without narrowly tailored governmental intervention, the existence of
these private `gatekeepers' is likely to restrict access to these

(9) Private telecommunications carriers respond to marketplace forces,
and therefore are most likely to exclude those members of the public and
institutions with the fewest financial resources, including but not
limited to small town and rural residents, low income people,
minorities, individuals with disabilities, the elderly, and
noncommercial organizations such as schools, libraries, public
broadcasters, and nonprofit community and civic organizations.

(10) To facilitate widespread public discourse on a range of public
concerns between and among all Americans, the Government has a
compelling interest in providing broad access to telecommunications
networks for a diversity of voices, viewpoints, and cultural
perspectives, including access for members of the public whose voices
are most likely to be excluded by private telecommunications carriers.

(11) Assuring access to a diversity of voices, viewpoints, and cultural
perspectives over telecommunications networks benefits all members of
the public who use telecommunications networks to disseminate or receive

(12) Government support and encouragement of a diversity of voices,
viewpoints, and cultural perspectives over telecommunications networks
furthers a compelling governmental interest in improving democratic
self-governance, and improving and facilitating local government
services and communication between citizens and elected and unelected
public officials.

(13) Telecommunications networks make substantial use of public
rights-of-way in real property and in spectrum frequencies.

(14) Because of the Government's compelling interest in ensuring broad
and diverse access to telecommunications networks for the purposes of
disseminating and receiving noncommercial educational and informational
services, and in exchange for the use of public rights-of-way accorded
telecommunications networks, it is appropriate for Congress (through the
assertion of concurrent Federal jurisdiction over rights-of-way held or
controlled by State or local governments) to require that owners and
operators of telecommunications networks reserve capacity on such
networks for public use.

(15) The least restrictive means to ensure that those members of the
public whose voices are most likely to be excluded from
telecommunications networks can access those networks is to require
those networks to reserve a portion of their capacity for that access.

(16) It is in the public interest that reserved network capacity for
public use be accompanied by funding to facilitate use of such capacity
to provide noncommercial governmental, educational, informational,
cultural, civic, and charitable services for the public.

# # #

Thanks to US Senator Daniel Inouye for his historic and continuing
leadership with regard to broadband media policy!

Hopefully Senator Inouye's vision will not be forgotten in Hawaii Legislature's rush to restructure broadband telecom and cable regulation in the State!

Feel free to contact Sean McLaughlin, cel: 707-616-2381 or via e-mail
at if you would like more information.

# 30 #

Sean McLaughlin
Spokesperson, Hawai'i Consumers

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