Presentation on theme: "The Tri-Cites Broadband Referendum Batavia, IL Geneva, IL St. Charles, IL."— Presentation transcript:
The Tri-Cites Broadband Referendum Batavia, IL Geneva, IL St. Charles, IL
Tri-Cities Broadband Referendum Tri-Cities believed they were underserved over the years by incumbent providers of telecommunications and cable Illinois Bell/Ameritech/SBC Jones/AT&T Broadband/Comcast Issued Telecom Feasibility Study RFP 1/25/02 Said Broadband will be successful in the Tri-Cities or in individual cities Heartland Institute Study Broadband Will Not Work (KCC 10/31/02) Citizens for Responsible Broadband formed 11/26/02 Fiber for our Future formed 1/06/03 Referendum placed on ballot for 4/1/03 Election law restricts municipalities from campaigning Municipal leaders can inform voters of choices but not solicit support
What did the opponents say? Municipal Government should not be competing with private enterprise. The municipalities would be administering the franchise agreements of their competitors. The highly complex task of predicting future buying decisions is a specialized area that the Tri-Cities can’t do. Tri-Cities Broadband would become available in two years after Comcast and SBC retrofit their networks. Real estate taxpayers would have to foot the bill if a profit is not realized. There is a high penetration of other broadband companies already offering services in the Tri-Cities. Television programming controversies may erupt among local users.
What did the opponents say? “Since 2000, $40 Million dollars has been put into the infrastructure of the Tri-Cities. Of that, $4.5 million is directly in DSL. Competition is something we believe in and thrive on. We employ 20,000 people in Illinois and 300 in the Tri-Cities”. Kay Hacher, Director, External Affairs, SBC, KCC 1/27/02 “The Tri-Cites lack a proper business plan to show the project will survive financially. A sixty cent increase per $100 of assessed value would result in a $200,000 house being billed an additional $379 a year. Depending upon the terms of the default, liability to the citizens of Batavia….particularly our senior citizens…would be catastrophic”. Larry Smith, Batavia citizen and former Ameritech employee, The Sun 2/5/03
What did the opponents say? “Had the market demanded a fiber to the home technology, I’m sure that’s what we’d be building right now”. Debra Piscola, Comcast Manager of Corporate Affairs, KCC 3/19/03 “We will respond to the market in whatever way we have to. The cities are asking residents to take a big risk. These are tough economic times. Taxpayers have to ask themselves what additional encumbrances do they want to add. It’s a bad time to embark on a project with a price tag of this size”. Carrie Hightman, President SBC Illinois, KCC 3/19/03 “How much better could that money be spent, like on an educational referendum?” Patricia Andrews-Keenan Comcast VP of Communications, KCC 3/19/03
The Opponents Mobilize Informational flyers appear in doors in the Tri-Cities. House to house campaigning by Comcast Numerous Letters to the Editor Letter to City of St. Charles Letters to SBC employees from SBC Full page newspaper ads Telephone Survey
The Opponents Mobilize “The Failed Cites” Eugene, Oregon Paragould, Arkansas Lebanon, Ohio Tacoma, Washington Braintree, Massachusetts Coldwater, Michigan
The Opponents Mobilize In mid-February 2003 a Broadband Survey was conducted by third parties paid by SBC and Comcast with calls made to residents of the Tri-Cities. Opening lines from the phone solicitors included: “We are working with your City Council” “The Tri-Cities paid for this survey”. “That is a lie.” Kevin Burns, Mayor of Geneva, KCC 2/21/03 “We don’t mean to upset anyone…we are doing what any legitimate business would do. This is legitimate research.” Andrea Brands, SBC spokesperson, KCC 2/22/03 “The things that have been said that we are asking about are not true.” Comcast spokesperson Pat Andrews-Keenan, KCC 2/22/03
SBC/Comcast Survey Questions Do you believe local schools will have to cut teaching staff, increase class sizes and eliminate after school programs because the Tri-Cities broadband referendum competes with existing school referendums? Should tax money be allowed to provide pornographic movies for residents? Would a government owned Broadband network invade privacy and allow the government to listen to your telephone conversations, monitor the internet sites you visit and know what cable shows you watch? Did you know that ATT Broadband and SBC offer high speed internet access to most businesses in your community? Is it appropriate to spend $62M when two private companies already provide that service?
SBC/Comcast Survey Questions Would the following statements make you more or less likely to support Tri-Cities Broadband? The technology local government would use would be obsolete in a few years therefore requiring another bond issuance later. The government plan requires property taxes to increase if 30 per cent of the households do not immediately sign up for service. Because private companies already offer Broadband service there is no need for government to provide this same service.
The aftermath The three mayors of the Tri-Cites came out in support of the Broadband referendum on 3/24/03. The Tri-Cities were always on the defensive. They never were able to effectively provide answers to: “Having dial up internet access means people already have broadband.” “SBC DSL and Comcast Cable Modem service are the same as a FTTH product.” “It’s going to raise taxes.” “Only a few citizens want high speed broadband.” “Comcast and SBC already provide it.” “Municipal networks have all failed.” “The municipal utilities can’t deal with building and maintaining complex telecom networks.”
The aftermath School referendums that were on the same ballot passed by a 60/40 margin in both Batavia and St. Charles. The Broadband Referendum failed by a 60/40 margin in Batavia, Geneva and St. Charles. “I congratulate SBC and Comcast for effectively scaring…our communities.” Kevin Burns, Mayor of Geneva, Daily Herald 4/2/03
The aftermath Since the referendum both SBC and Comcast have moved quickly to expand DSL and Cable Modem service in the Tri-Cities. Offering SBC Yahoo DSL at $29.95 for 12 months. SBC is ready to ask for approval to offer long distance service in Illinois. Approval will give them with the ability to offer bundled services. Local service Internet service Wireless service Television Long distance
The aftermath Prior to being bought by Comcast, AT&T Broadband had picked up 1.3 million local phone customers with a 14% penetration in the 8 million homes it served. In the Chicago area Comcast has 1.6 million subscribers which is an 85% share of market. Average cable rates are up 6.2 % in Chicago this year and nationwide cable rates have went up 21.6% since KCC 12/4/02 Comcast has offered three months of cable $19.95 and then it goes to $42.95 (if you have cable). Comcast has stated that while it is conducting Voice over IP trials for a launch at a later date, telephony is not its main priority this year.