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Property of the Borough of Kutztown, jv1-052804
Hometown Utilicom
Borough of Kutztown, FTTH Project
American Public Power Association
2004 National Conference
State Legislative Challenges to Community Broadband
Seattle, WA
June 21, 2004
Jaymes Vettraino, Manager
45 Railroad Street
Kutztown PA 19530-1112
610-683-6131 * (f) 610-683-6729
[email protected]
“Keeping Your Money in Your Community Working for You!”
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Property of the Borough of Kutztown, jv1-052804
Borough of Kutztown, PA
Population:
5067
Total Budget:
$17 million
Size:
1.5 square miles
Households:
2200
Rental properties:
45%
Student Residents:
1800+
Median Age:
24.5 (2000 U.S. Census Bureau)
Median Income:
$49,653 (2000 U.S. Census Bureau)
• Kutztown University (enrollment of 8000+) located on western boarder
• Approximately twenty (20) miles from the Cities of Allentown and Reading, PA
• Low taxes relative to the surrounding communities
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Property of the Borough of Kutztown, jv1-052804
Services Provided by Kutztown
Electrical Utility
Water Utility
Wastewater Utility
Telecommunications
Voice, Video and Data
Police Services
Refuse/Recycling Collection
Planning and Zoning
Railroad Management
Parks and Recreation
Highway Maintenance
“Providing Utilities and Communications Services To Your Community”
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Property of the Borough of Kutztown, jv1-052804
Fiber to the Home (FTTH)
Objectives
•Enhance current municipal services
•Bring broadband technology to our community
•Create opportunities for Economic Development
•Control our own destiny in the “knowledge based economy”
•Complimentary function to our Electric Service
* grow an existing asset
•Diversify the Borough’s operations
•Reduce telecommunication costs for residents
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Property of the Borough of Kutztown, jv1-052804
2003 Legislation
• January 2003: Prohibit government
competition with private enterprise
– House Bill 298, companion Senate Bill 321
• April 2003: Prohibit government
involvement in telecommunications
– House Bill 30, companion Senate Bill 30
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321
“Prohibiting government competition with private enterprise”
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321 (con’t)
• Yes. The legislation is that broad… it is
meant to stop ALL competition .
• From a summary distributed by the
sponsoring politicians, the legislation is
targeted to prohibit governments from
Housing projects
operating: Book stores
Cable television
Child care centers
Conventions centers
Fitness centers
Golf courses
Home security monitoring
Internet services
Nursing homes
Parks (amusement)
School buses
Telecommunications
Telephone service
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321 (con’t)
• The following function or services are excepted
from the government competition prohibition:
• “Essential services, except that if private industry
can provide essential services, government
agencies and authorities shall entertain bids from
private enterprise, and if practicable, contract with
private enterprise to provide essential services”
– “Essential services” are defined as “water supply,
sewers, garbage removal, recycling, utilities, streets and
local correctional facilities.”
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321 (con’t)
• The following function or services are
excepted from the government competition
prohibition:
• “Vital services, but only to the extent they
are not available from private enterprise.”
– “Vital services” are defined as “food stores,
drugstores, child care, elder care and
telecommunication services.”
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321 (con’t)
• The legislation contained inadequate “grandfathering” language:
– “…the government agency or authority may continue to
engage in competition but may not exceed the scope of
the competition.”
– This language would not protect the Kutztown project.
• To continue to leverage our investment in FTTH we must be
free to provide new services
• The language could be read as not allowing us to “sign-up”
any more customers
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321 (con’t)
• Borough of Kutztown’s reaction
– Wrote drafting legislators
– Wrote local legislators and chairpersons of
critical committees
– Communicated with the Pennsylvania League
of Cities and Municipalities and Pennsylvania
State Boroughs Association
– Testified at a Intergovernmental Affairs
Committee Hearing on May 15, 2003
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321 (con’t)
• Testimony given at the Intergovernmental Affairs
Committee Hearing
– Goal #1, work with municipal partners to argue that the
legislation is overly broad and unnecessary
– Goal #2, argue that telecommunications services should
be considered “essential”
• Testimony was also given at the Hearing by
– The Pennsylvania Cable and Telecommunications
Association, speaking in-favor of the legislation
– Business associations testified in-favor of the
legislation (health clubs, private pools, etc.)
– Other municipal service providers and associations
testified against the legislation
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Property of the Borough of Kutztown, jv1-052804
HB 298 and SB 321 (con’t)
• Current status:
– Bill did not moved out of Committee
– Most likely will not be dropped by sponsors
and “corporate pushers”
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Property of the Borough of Kutztown, jv1-052804
HB 30 and SB 30
• The bills propose amendments to Title 66 of the
Pennsylvania Consolidated Statutes.
– Title 66 (the original Chapter 30 legislation), passed in
1993, outlines telecommunications laws for the
Commonwealth. The legislation contained a 10 year
sunset provision.
• The stated purpose of the legislation is to
encourage the deployment of “broadband” across
the Commonwealth.
– The legislation is broad and far reaching, attempting to
make law on everything from the definition of
broadband, to the distribution of service to tax subsidies
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for deployment.
Property of the Borough of Kutztown, jv1-052804
HB 30 and SB 30 (con’t)
• Language from the bills
– “A political subdivision or any entity
established by a political subdivision, including
a municipal authority, may not provide any
telecommunications services to the public for
compensation within the service territory of a
local exchange telecommunications company
operating under a network modernization plan”
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Property of the Borough of Kutztown, jv1-052804
HB 30 and SB 30 (con’t)
• Effect of the bill
– Once a telecom company enrolled in a network
modernization plan which, (based on the experience of
the original Chapter 30 legislation) guarantees nothing,
the local municipality is hostage to the deployment
whims of the telecom company.
– Would be disastrous to rural municipalities
• The bill is anti-competitive, at a time when the
only proven motivator for private companies to
deploy broadband to rural communities is the
introduction of competition
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Property of the Borough of Kutztown, jv1-052804
HB 30 and SB 30 (con’t)
• Quick Progress of HB 30
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–
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–
Referred to CONSUMER AFFAIRS, April 30, 2003
Reported as amended, Nov. 17, 2003
First consideration, Nov. 17, 2003
Laid on the table, Nov. 17, 2003
Removed from table, Nov. 18, 2003
Second consideration, Nov. 18, 2003
Re-referred to APPROPRIATIONS, Nov. 18, 2003
–
–
–
–
Re-reported as committed, Nov. 24, 2003
Third consideration, with amendments, Nov. 25, 2003
Final passage, Nov. 25, 2003
In the Senate Referred to CONSUMER PROTECTION
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AND PROFESSIONAL LICENSURE, Dec. 1, 2003
Property of the Borough of Kutztown, jv1-052804
HB 30 and SB 30 (con’t)
• Borough of Kutztown’s reaction (scrabbling
because of the quick progress of the legislation)
–
–
–
–
Worked with consumer advocate groups
Worked with “non-Verizon” private companies
Wrote drafting legislators
Wrote local legislators and chairpersons of critical
committees
– Wrote the Governor
– Communicated with the Pennsylvania League of Cities
and Municipalities and Pennsylvania State Boroughs
Association
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Property of the Borough of Kutztown, jv1-052804
HB 30 and SB 30 (con’t)
• Legislation did not pass by the end of 2003
– Legislation passed to extend the original
Chapter 30 legislation by one year
– The threat still looms large
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Property of the Borough of Kutztown, jv1-052804
Lessons Learned
• Private Companies understand the power of
legislation
– They are willing to spend, spend and spend
• Local government is not equipped to lobby
– Organizing local governments to work together is a
huge challenge
– It is very difficult for small (and politically
inexperienced) municipal staffs to track legislation and
lobby over a long period of time
• Convincing local governments that it is in there
interest to be involved is very difficult
– If the legislation is in Committee or seen as a “distant
threat” it is hard to get local government to react
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Property of the Borough of Kutztown, jv1-052804
Conclusion
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•
•
•
Be diligent
Be informed
Be supportive
Do not give up
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Property of the Borough of Kutztown, jv1-052804
Additional Conclusions
• National organizations (like the APPA) need to
help locals in tracking and lobbing for (or against)
legislation.
• Anti-municipal legislation will impact all of
Public Power, especially with the emergence of
Broadband of Power Line (BPL). Public Power
must have a “telecom option” in order to offer the
services that customers will require of their
electric companies in the next 5 to 10 years.
– Private electric will offer BPL, customers will expect
the same service from public power
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Property of the Borough of Kutztown, jv1-052804
Questions?
Borough of Kutztown, FTTH Project
American Public Power Association
2004 National Conference
State Legislative Challenges to Community Broadband
Seattle, WA
June 21, 2004
Jaymes Vettraino, Manager
45 Railroad Street
Kutztown PA 19530-1112
610-683-6131 * (f) 610-683-6729
[email protected]
“Keeping Your Money in Your Community Working for You!”
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