The deep dive concludes.
Recent Developments
The move to broadband threatens the telecommunication carriers’ historic reliance on income from plain old (voice) telephone service (POTs) because people are canceling their landline phone service in favor of cell service and other broadband voice services, like Skype.
[Footnote #29. AT&T stated this succinctly in a December 2009 filing with the FCC: "With each passing day more communications services migrate to broadband, leaving plain-old telephone service (POTS) as relics of a by-gone era. With an outdated product, falling revenues, and rising costs, the POTS business is unsustainable for the long run".]
COMMENTS OF AT&T INC. ON THE TRANSITION FROM THE LEGACY
Thus the carriers realize that broadband is a major source of their future business and they will take whatever actions necessary to protect that business. In protecting their business the carriers have long viewed the UW and WiscNet as inappropriately intruding in their market, and the CAN grants significantly increased the carrier’s angst. This concern is reflected in a June 7, 2011, Access Wisconsin press release: "We take great offense at the idea that taxpayer money should be used to subsidize [30] a government agency such as UW-extension to duplicate and compete with our services. This is wasteful and inappropriate."
[Footnote #30. In relation to taxpayers subsidizes, Access WI does not mention that its members and other carriers receive $24 million annually in TEACH subsidies or that in 2010 Wisconsin carriers received $131 million in direct federal telecommunication subsidies. Both subsidies are ultimately paid by taxpayers.] (Emphasis added.)
First page of Access Wisconsin news release.
Access Wisconsin also states that in some small communities the school district is the carrier’s largest customer—implying that the district should feel some type of obligation to remain a customer even if it means paying more for less service. [Emphasis added.]
In an attempt to protect their market by legislation the telecommunication carriers once more successfully lobbied the legislature to take action. As a result, in early June the legislature’s Joint Finance Committee (JFC) passed a motion—with no public hearing, notice or input—to amend the biennial budget bill as follows:
1. Prohibit the UW from participating in the three broadband grants and require that the funds be returned;
2. Prohibit the UW from providing telecommunication services, including Internet and broadband, to any other entity when such services are available from a carrier.
3. Prohibit the UW from having any relationship with any entity that provides telecommunication services, Internet or broadband unless that entity only provides these services to the UW. (While clearly aimed at severing the WiscNet – UW relationship, taken at face value this language would likely have prohibited the UW from getting Internet access or even basic voice phone service.) [Emphasis added.]
4. Require the Legislative Audit Bureau to conduct a program and financial audit of the UW’s use of telecommunication services and its relationship with WiscNet
After considerable objections from the UW, the CAN grant participants and the broader education and library communities—and including the citizens who utilize these institutions—the final budget bill that passed will allow the UW to proceed with its grants. It will also delay the imposition of prohibition #3 above until July 1, 2013. The bill allowed Joint Finance to remove #3 but Governor Walker vetoed this and thus the full legislature will need to act by July 1, 2013, to remove this prohibition.
The language also required the UW to have all ―uncommitted’ grant funds approved by Joint Finance. The only grant funds not committed by mid-June were for the Wausau CAN and Joint Finance approved this funding unanimously on July 19, 2011. [Footnote #33.
Legislative Fiscal Bureau 3-page memo to Joint Finance. ]
[Footnote #34. As a telecommunications carrier CCI Systems is not prohibited by law from providing telecommunications services. Rather they are being asked to return the grant money that they have been already expended because of the alleged "llegal" UW activities. The suit wants to enjoin the Department of Transportation from providing to the grant the rights-of-way permits needed for the middle-mile, long-haul fiber routes.]
Access Wisconsin claims that its members will be ―irreparably harmed by the defendants’ conduct‖ in implementing the CAN broadband grants. While the suit is based on several claims, a primary one is that UW’s participation in the broadband grants violates the statute(36.585[2]) prohibiting the UW from providing telecommunication and broadband services outside of its own campuses or mission. The UW very much believes that it is acting wholly within the law, in part because it is acting within its mission.
On July 21, 2011, the circuit court denied a request by Access Wisconsin for a temporary restraining order to stop any further work on the CAN grants. Another hearing will be held on August 30. [
The hearing is now scheduled for Thursday, September 15. The WistNet lawyers requested a 2-week delay in order to have more time to gather background docments for their case.]
Depending on the outcome of the August hearing, the losing side can appeal and thus this issue could remain in the courts for many months. The UW and its private sector telecommunications partner, CCI Systems, have already invested millions of dollars in the CAN projects and they are proceeding.
For Further Information
If you have any comments, suggested edits or need further information, please contact Bob Bocher, 608-266-2127; robert.bocher@dpi.wi.gov.
Part 1.
Part 2.
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