Hometown Utilicom

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Hometown Utilicom
Property of the Borough of Kutztown, jv1-052804
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, Manager45 Railroad StreetKutztown PA
19530-1112610-683-6131 (f) 610-683-6729jvettra
ino_at_kutztownboro.org
Keeping Your Money in Your Community Working for
You!
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Borough of Kutztown, PA
Property of the Borough of Kutztown, jv1-052804

• 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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Services Provided by Kutztown
Property of the Borough of Kutztown, jv1-052804
Electrical Utility Water Utility Wastewater
Utility TelecommunicationsVoice, Video and Data
Police Services Planning and Zoning Parks and
Recreation Highway Maintenance
Refuse/Recycling Collection Railroad Management
Providing Utilities and Communications Services
To Your Community
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Fiber to the Home (FTTH) Objectives
Property of the Borough of Kutztown, jv1-052804

• 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 Boroughs operations
• Reduce telecommunication costs for residents

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2003 Legislation
Property of the Borough of Kutztown, jv1-052804

• 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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HB 298 and SB 321
Property of the Borough of Kutztown, jv1-052804
Prohibiting government competition with private
enterprise
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HB 298 and SB 321 (cont)
Property of the Borough of Kutztown, jv1-052804

• 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 operating

Housing projectsInternet servicesNursing
homesParks (amusement)School busesTelecommunica
tionsTelephone service
Book storesCable televisionChild care
centersConventions centersFitness centersGolf
coursesHome security monitoring
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HB 298 and SB 321 (cont)
Property of the Borough of Kutztown, jv1-052804

• 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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HB 298 and SB 321 (cont)
Property of the Borough of Kutztown, jv1-052804

• 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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HB 298 and SB 321 (cont)
Property of the Borough of Kutztown, jv1-052804

• The legislation contained inadequate
  grand-fathering 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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HB 298 and SB 321 (cont)
Property of the Borough of Kutztown, jv1-052804

• Borough of Kutztowns 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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HB 298 and SB 321 (cont)
Property of the Borough of Kutztown, jv1-052804

• 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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HB 298 and SB 321 (cont)
Property of the Borough of Kutztown, jv1-052804

• Current status
• Bill did not moved out of Committee
• Most likely will not be dropped by sponsors and
  corporate pushers

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HB 30 and SB 30
Property of the Borough of Kutztown, jv1-052804

• 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 for deployment.

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HB 30 and SB 30 (cont)
Property of the Borough of Kutztown, jv1-052804

• 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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HB 30 and SB 30 (cont)
Property of the Borough of Kutztown, jv1-052804

• 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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HB 30 and SB 30 (cont)
Property of the Borough of Kutztown, jv1-052804

• Quick Progress of HB 30
• 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 AND
  PROFESSIONAL LICENSURE, Dec. 1, 2003

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HB 30 and SB 30 (cont)
Property of the Borough of Kutztown, jv1-052804

• Borough of Kutztowns 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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HB 30 and SB 30 (cont)
Property of the Borough of Kutztown, jv1-052804

• 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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Lessons Learned
Property of the Borough of Kutztown, jv1-052804

• 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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Conclusion
Property of the Borough of Kutztown, jv1-052804

• Be diligent
• Be informed
• Be supportive
• Do not give up

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Additional Conclusions
Property of the Borough of Kutztown, jv1-052804

• 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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Questions?
Property of the Borough of Kutztown, jv1-052804
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, Manager45 Railroad StreetKutztown PA
19530-1112610-683-6131 (f) 610-683-6729jvettra
ino_at_kutztownboro.org
Keeping Your Money in Your Community Working for
You!