Why'd Nixon hire Internet consultant? Because Missouri needs his help

Monday, October 12, 2009 | 11:55 a.m. CDT; updated 4:30 p.m. CDT, Tuesday, October 27, 2009

There was a reported case of dumbfoundedness at the state Capitol a few weeks ago, if you can believe it.

According to the St. Louis Post-Dispatch, Missouri Sen. Brad Lager, R-Savannah, was “dumbfounded” to learn that Gov. Jay Nixon had hired a consultant to help the state apply for federal stimulus funds to bring the Internet to rural Missouri.

Struck dumb or not, Lager doesn’t like anything about the stimulus, nor does he support MoBroadbandNow, Nixon’s plan to extend broadband service to 95 percent of Missouri homes. So it’s not surprising that the senator opposes the hiring of a consultant, even if he is the nation’s foremost expert on the challenge at hand.

James Baller is founder of the U.S. Broadband Coalition, some 150 groups — telecoms (big and small), consumer advocates, tech outfits, utility companies, local governments and others — that support public investment in a national broadband strategy. This isn’t a hard sell right now: The Obama Administration wants a high-speed Internet connection in every American home and business and has committed $7.2 billion to do it.

The money started to flow last week. Four states — California, Indiana, North Carolina and Vermont — received a total of $5.5 million to collect data on the availability, speed and location of broadband connections. California and North Carolina also received grants to plan out universal access.

Meanwhile, the Federal Communications Commission has until February to establish rules to protect consumers and increase competition in the broadband industry.

That won’t be easy. Fewer than two-dozen cable and telephone companies control more than 95 percent of the country’s residential broadband market. In the past decade, the “incumbents” have shut out competitors by restricting the use of their existing infrastructure and by suing any municipality or public utility that has tried to build its own network.

Baller and his Washington, D.C., firm, Baller Herbst Law Group, have been involved in nearly every case, including one by CenturyTel that argued state law prohibited the city of Columbia from extending its fiber-optic network to local businesses. Baller represented the Missouri Municipal League, on behalf of Columbia and two other cities; opposing counsel was none other than Jay Nixon, who was state attorney general.

Baller lost that case, which went to the U.S. Supreme Court in 2004. But, a year later, he helped North Kansas City defeat a challenge by Time Warner. The cable giant had tried to stop the city’s $10 million plan to build a network to provide telephone and Internet service, claiming it required a public vote. A federal appeals court disagreed.

Perhaps Baller’s most significant victory came in Lafayette, La., where SBC and Cox Communications sued to force a referendum on a city-owned network. In July 2005, despite an aggressive campaign by the incumbents that warned of, among other calamities, TV rationing, two-thirds of voters supported the city’s plan, which promised to save residents 20 percent on their Internet, cable and telephone bills.

Afterward, Baller said the vote in Lafayette would be an “important milestone in America's recovery of its global competitiveness.” Indeed, Baller and others who support a national broadband strategy blame the telephone and cable industries’ broadband “duopoly” for the digital divide in America.

In 2001, the U.S. was ranked fifth in the world in the number of broadband connections per capita, according to the International Telecommunications Union. Now, depending on whose data you use, the U.S. ranks anywhere from 12th to 22nd. Americans also pay more for slower connection speeds than countries like Sweden, France and Japan, which have invested in broadband expansion.

Meanwhile, poor, rural and minority Americans are becoming increasingly isolated from the digital mainstream. According to Free Press, a nonprofit “media reform” organization, urbanites are nearly twice as likely to have a broadband connection as rural residents. Only one in 10 households with incomes below $30,000 have broadband access, compared to 60 percent of households with incomes above $100,000.

In Missouri, an estimated 1.2 million people don’t have cable or DSL broadband, according to a 2007 report by the Missouri Public Service Commission. Moreover, noting the lack of infrastructure investment by incumbents, the commission concluded, “businesses and residents without access to high-speed connections may never be served by the market.”

This is a slice of reality that opponents of Nixon’s plan would like to ignore. Lager, who chairs the senate committee that oversees utilities, told the Post-Dispatch the state should take “a more thoughtful approach” to broadband expansion. The senator wants a study done first, although he may simply dislike broadband: Lager owns LMS Communications, which according to his legislative Web page, “focuses on wireless issues.

Nonetheless, Nixon has asked for $142.3 million in stimulus funds to lay 2,500 miles of fiber-optic cable and build 200 new broadband towers. The state would then contract with local Internet service providers to connect the new, publicly owned “backbone” to consumers. One of those “last-mile” providers would be Big River Telephone. The Cape Girardeau company says, if chosen by the state, it would open offices in nine counties and offer high-speed Internet for less than $10 a month.

Last month, in a 50-page policy recommendation, the U.S. Broadband Coalition urged the FCC to lift barriers that, in the past, have prevented such public-private collaborations.

You don’t have to agree with that strategy, or expect much to come of it. But, it does explain why the governor hired James Baller.

Brian Wallstin is a Columbia resident and a former city editor for the Missourian. E-mail him at

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Brian Nitsllaw October 12, 2009 | 9:04 p.m.
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Brian Nitsllaw October 12, 2009 | 10:11 p.m.
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John Schultz October 13, 2009 | 3:44 a.m.

So what I'm getting from this piece is that competition is good, especially if it comes from government regulation (that created the monoplies Wallstin is griping about), government money (i.e. our tax dollars), and government offering services that are already available in the private marketplace for the vast majority of residents.

(Report Comment)
Robert Olive October 14, 2009 | 6:53 p.m.

Why is Sho-Me Technologies not listed on the MOBroadbandNow as a "Due Diligence Partner"...something is fishy with this process.

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