Tuesday, April 28, 2009

Massachusetts Broadband Institute: Gov. Patrick Files Legislation Seeking Competitive Edge in Federal Broadband Stimulus Grants

StimulatingBroadband.com 04/28/09 Boston -  Massachusetts Governor Deval L. Patrick (D-MA) has filed legislation to strengthen the legal and operating powers of the Massachusetts Broadband Institute (MBI), the state's previously authorized broadband development authority. His stated purpose in doing so is to better "reap the benefits" of the broadband stimulus provisions of the American Recovery and Reinvestment Act of 2009 (ARRA).

The initiative filed with the Massachusetts legislature on April 24, seeks to clarify the legal powers of MBI, particularly in its authority as a state agency to partially preempt local municipal zoning restrictions. The Institute will be able to do so as it constructs and operates wireless towers, buildings, or other broadband network facilities.

Ms. Kofi Jones, Spokesperson for the Massachusetts Executive Office of Housing and Economic Development (EOHED) stated in an interview today with StimulatingBroadband.com, "this is a technical clarification matter." Certainly had the legislation sought to empower MBI with greater preemption of local zoning strictures, the measure would likely have generated opposition even in communities in rural Western Massachusetts which MBI is primarily tasked to assist.

National Broadband Stimulus Competition
The legislative proposal, although it arguably does not call for substantive changes under Massachusetts law, is significant vis-a-vis other state broadband programs nationally. If Patrick's bill is passed into law, MBI will be able to demonstrate to federal grant issuing agencies that Massachusetts is proposing broadband projects that are as "shovel ready" as possible.

Several telecom industry veterans have recently confirmed what any operator in the industry knows instinctively: Local permitting requirements are always the greatest cause for delay in any network development project, especially those involving the construction of wireless facilities.

The legal housekeeping measure also diminishes the risk to Massachusetts of litigation from the foes of government operated or subsidized networks. The proposal iterates the public purpose of a state broadband authority acting to maintain ownership of network facilities it pays to capitalize. Current events in North Carolina demonstrate that the opponents of public broadband ventures remain.

The bill also seeks to allow MBI to hold indefeasible rights of use (IRUs) in fiber projects, and to allow the Authority to hold FCC wireless licenses.

MBI was funded with $40 million in state bonded monies. MBI's parent public authority produced broadband mapping of the state almost 2 full years ago. If Patrick is able to win near-term legislative approval of his proposal to clearly delineate the legal status of MBI, of its state parent, and of public and private broadband grant recipients, he will have built the necessary framework to geometrically leverage the Commonwealth's $40 million with federal dollars.

Patrick's Broadband Promise: Policies and Players
The MBI was established by an Act of the Massachusetts Legislature in August of 2008, based on legislation filed by the Governor in October 2007. Bringing broadband to the underserved communities of rural Western Massachusetts was a campaign promise made by Patrick during his successful effort to win the gubernatorial "corner office" at the State House in 2006. The small towns of the region gave Patrick his highest electoral performance numbers in that election.

Prior to Patrick taking up the broadband cause, the successful demand-side aggregation project, Berkshire Connect, launched in 1998, had been supported by the Administration for former Governor William Weld (R-MA). With the exception of US Senator John F. Kerry (D-MA), a champion of Berkshire Connect and of the needs of Western Massachusetts for broadband generally, few statewide officials during the intervening 8 years had taken up the cause. Kerry, a long term member of the Communications Subcommittee of the Senate Commerce Committee, now serves as Chairman of the reconstituted Subcommittee on Communications, Technology and the Internet.

As we previously reported, Kerry recently called the ARRA's $7.2 billion "a down payment on a national broadband strategy" that he will have a significant role in shaping from his Subcommittee chairmanship.

Governor Patrick, owing largely to his close personal and political relationship with President Obama, has been in the front rank of Democratic governors nationally that have both groomed their in-state agencies to receive ARRA monies, and have helped craft the administration of the Act itself.

While Patrick has counted on the support of friends and political allies in Washington, the work of cobbling together his broadband policy, and of knitting it into emerging federal programs, has been done by two of his Administration's aides in Massachusetts. F
ormer Commissioner of the Department of Telecommunications and Cable (DTC), Sharon E. Gillett, and EOHED Assistant Secretary Stanley McGee have been the workhorses moving the broadband agenda ahead. Attorney McGee serves as Chairman of the MBI's governing Board of Directors.

Ms. Gillett, who recently stepped down from serving as Patrick's first DTC Commissioner, previously chaired the Broadband Working Group at the Communications Future's Program (CFP) of the Massachusetts Institute of Technology (MIT). While at CFP Gillett authored a series of research studies demonstrating the economic developmental benefits of telecom competition and broadband deployment.

Commissioner Gillett, along with California Public Utilities Commission Chairperson (and former FCC Commissioner) Rachelle Chong, has been a leader in the nationwide effort by state utility regulators to assert the role of states in approving and selecting broadband stimulus grants and loans in their respective jurisdictions.



The Broadband Institute is "housed" legally and physically within the Massachusetts Technology Collaborative (MTC), a quasi-public state economic development authority which also hosts the Massachusetts Renewable Energy Trust (MRET). MTC initially helped incubate Berkshire Connect, and its in-state sister organization, Pioneer Valley Connect. As a state authority, MTC has existing legal preemption rights in relation to local zoning regulations for public purposed projects. The Governor's recently filed legislation clarifies and reasserts MBI's collateral authority.

MBI advertised the position of its Executive Director in October of last year. Spokesperson Jones today told StimulatingBroadband.com that the position will be filled "in about 10 days from now."

State Rights-of-Way Provisions
The bill filed last week also seeks to allow the Massachusetts Highway Division (MassHighway) to transfer real property to the MBI for up to 25 years. Under the same Section 4 of the bill, the real property transferred to MBI "may be subsequently transferred, leased or licensed" by the broadband program to "public entities or non-profit or for-profit private sector entities". Rules for the implementation of any such transfers are to be issued by the Inspector General of Massachusetts, a government watchdog who is appointed jointly by the state's Governor, Auditor, and Attorney General.

If passed into law, this provision will allow underground conduit duct banks in state owned highway public rights-of-way (ROW) to be used by MBI for the installation of new fiber optic telecom networks.

Of particular interest to MBI are the conduit banks now being constructed in state highway ROW adjacent to Interstate Routes I-91 and I-291, from the Connecticut border northerly to the Vermont border. This 63 mile project bisects the 4 counties of Western Massachusetts. The infrastructure was designed both as a federal-state Intelligent Transportation System (ITS), and as a pathway for long haul and "middle mile" fiber optic systems routed into splice points in undeserved towns.

The majority of the project will be constructed in the Massachusetts First Congressional District, of Congressman John W. Olver (D-MA). As the only member of the Massachusetts delegation currently sitting on the powerful House Appropriations Committee, Olver was able to secure the $30.7 million in funding for the project in via several earmarks. The appropriations were drawn from funds under the Federal Highway Administration's (FHWA) Intelligent Transportation System (ITS) program. The I-91 project was one of only three such federal efforts examined in the FHWA's Rural Interstate Corridor Communications Study Report to Congress (download .PDF) in August of 2007. The project is now being managed by Adesta LLC of Omaha, NE, under contract with MassHighway.

Less clear is the impact the filed legislation would have on the conduit capacity, and both dark and lit optical fiber, in the ROW of the Massachusetts Turnpike Authority (MassPike). In the telecom boom era of 1998-2001 high capacity backbone carriers Level 3 Communications (NASDAQ: LVLT) and the former Williams Communications (acquired by LVLT, 2005) constructed fiber duct banks along the 130 mile length of the MassPike from Boston to the New York border. MassPike negotiated fiber use agreements for non-commercial state communication purposes with the carriers at the time of construction. This contractual language, and the fact that MassPike remains, despite the transportation consolidation efforts of Patrick, another quasi-public state authority means that MBI use of "free" MassPike fiber is not going to occur anytime soon.

Massachusetts as Model State Broadband Program
Our takeaway: Under the leadership of a governor who chose to carry through on the political and economic developmental promise of ubiquitous broadband, Massachusetts has developed one of the very few truly model state broadband programs in the nation.

If Ms. Gillett and Mr. McGee continue to be empowered by Deval Patrick to deliver on that promise, Massachusetts will remain extremely well positioned for the federal competitive funding rounds. The Obama Administration will continue to listen to the Patrick Administration. The states will have more than the mere 'consultative' role referenced in ARRA largely because of that particular communications channel.

Massachusetts joins California, New York, North Carolina, and Vermont in having set the standard for the other states to meet in terms of state-level broadband programs.

Governor Patrick is right, the feds are paying attention. The first movers will be rewarded.
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