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Hometown Utilicom

Property of the Borough of Kutztown, jv1-052804. Hometown Utilicom. Borough of Kutztown, FTTH Project American Public Power Association 2004 National Conference State Legislative Challenges to Community Broadband Seattle, WA June 21, 2004

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Hometown Utilicom

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  1. Property of the Borough of Kutztown, jv1-052804 Hometown Utilicom 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) 610-683-6729jvettraino@kutztownboro.org “Keeping Your Money in Your Community Working for You!”

  2. Property of the Borough of Kutztown, jv1-052804 Borough of Kutztown, PA • 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

  3. Property of the Borough of Kutztown, jv1-052804 Services Provided by Kutztown 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”

  4. Property of the Borough of Kutztown, jv1-052804 Fiber to the Home (FTTH) Objectives • 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 Borough’s operations • Reduce telecommunication costs for residents

  5. Property of the Borough of Kutztown, jv1-052804 2003 Legislation • 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

  6. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 “Prohibiting government competition with private enterprise”

  7. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 (con’t) • 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: Book storesCable televisionChild care centersConventions centersFitness centersGolf coursesHome security monitoring Housing projectsInternet servicesNursing homesParks (amusement)School busesTelecommunicationsTelephone service

  8. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 (con’t) • 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.”

  9. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 (con’t) • 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.”

  10. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 (con’t) • 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

  11. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 (con’t) • Borough of Kutztown’s 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

  12. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 (con’t) • 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

  13. Property of the Borough of Kutztown, jv1-052804 HB 298 and SB 321 (con’t) • Current status: • Bill did not moved out of Committee • Most likely will not be dropped by sponsors and “corporate pushers”

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

  15. Property of the Borough of Kutztown, jv1-052804 HB 30 and SB 30 (con’t) • 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”

  16. Property of the Borough of Kutztown, jv1-052804 HB 30 and SB 30 (con’t) • 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

  17. Property of the Borough of Kutztown, jv1-052804 HB 30 and SB 30 (con’t) • 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

  18. Property of the Borough of Kutztown, jv1-052804 HB 30 and SB 30 (con’t) • Borough of Kutztown’s 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

  19. Property of the Borough of Kutztown, jv1-052804 HB 30 and SB 30 (con’t) • 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

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

  21. Property of the Borough of Kutztown, jv1-052804 Conclusion • Be diligent • Be informed • Be supportive • Do not give up

  22. Property of the Borough of Kutztown, jv1-052804 Additional Conclusions • 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

  23. Property of the Borough of Kutztown, jv1-052804 Questions? 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) 610-683-6729jvettraino@kutztownboro.org “Keeping Your Money in Your Community Working for You!”

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