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2 years ago

Alabama taxpayers beware: Broadband consultants collect hefty fees as they push taxpayer-supported networks

Alabama Internet

By Johnny Kampis | Watchdog.org

If you build it, they will come.

It’s not just fictional Iowa corn farmer Ray Kinsella hearing those words. More and more, local governments across the country are getting such positive feedback from consultants, who recommend the construction of expensive taxpayer- or ratepayer-supported broadband networks with promises the moves will attract businesses and improve the area’s quality of life.

In Alabama, CTC Technology & Energy recently consulted with Huntsville Utilities on its $57 million network, while Strategic Networks Group is helping an entrepreneurial center in the Shoals establish broadband.

Critics argue that consultants are just telling local bureaucrats what they want to hear.

“They already want to create a government-owned network,” said David Williams, president of the Taxpayers Protection Alliance, “they’re just looking for confirmation.”

He jokingly calls government broadband consulting work “Jeopardy research.”

“They already have the answer, they’re just looking for the question,” Williams told Watchdog.org.

If you pore over the various reports scattered across the web, posted by cities and counties in which consultants have researched broadband, it’s hard to find an example in which a consultant told a government not to offer high-speed internet in some capacity, whether it’s building a full-fledged utility-operated network or a fiber-optic backbone onto which providers could connect.

Peachtree City, Ga., is the rare municipality to go against the advice of its consultant.

Community Broadband LLC of Midway, Ga., anticipated profits of $451,901 by year five if the city built its own $3.2 million network, but city leaders weren’t so confident. An initial survey yielded mostly favorable responses from local businesses indicating they might subscribe to a high-speed service from the city, but questions were raised about the reliability of that survey.

Peachtree City leaders saw enough failures of government broadband projects that they ultimately decided to scrap the project, and contract with a local provider to serve city facilities’ broadband needs. But even though the City Council voted down the plan, it didn’t create animosity between the consultant and the city: Peachtree City spokeswoman Betsy Tyler told Watchdog the city continues to use Community Broadband as a consultant on communications issues.

Kelly McCutchen, president of Georgia Public Policy Foundation, said unlike government leaders, consultants can’t be held accountable for the results by voters.

“They’ll tell them they can do it cheaper, and it’s not based in reality,” McCutchen told Watchdog. “And taxpayers are left holding the bag.”

“Typically these consultants are the only ones that come out good on these deals,” he said.

He points to Marietta, which sold its FiberNet broadband system at a loss of $24 million in 2004. Its fiber-optic system, stretching from Kennesaw to Alpharetta and partially into Atlanta, had all of 180 customers along its 210-mile route when the city got rid of it.

Bill Dunaway, then the mayor, who ran on a platform that included dumping FiberNet, told USA Today the city couldn’t keep up with the necessary equipment upgrades.

“That’s why we should not be in this business — you have to keep reinvesting,” he said.

Baltimore mayor-elect Catherine Pugh listed a litany of other municipal broadband failures in a 2013 op-ed in the Baltimore Sun when she served in the state Senate.

The Democrat pointed to Provo, Utah, which spent $40 million to build a network it would ultimately sell to Google Fiber for a $1, as well as Marietta and Groton, Connecticut, where taxpayers lost $38 million.

“For many local governments, the promise is seductive. A cottage industry of consultants and network builders — who stand to profit handsomely — sell the idea to misty-eyed government officials that building a municipal broadband network will spawn a local Silicon Valley microcosm that will be a monument to their incumbency,” she wrote. “But what they don’t see is that the economics of the grand venture doom it to likely failure.
“For the most part, municipally-built broadband networks have the economic chips stacked against them and, where tried, have saddled local taxpayers with a mountain of debt and half-built networks that are then sold at fire-sale prices to vulture investors,” Pugh continued.

Leaders in the field

The leaders in the consulting field are Magellan Advisors of Denver, Col., and CTC of Kensington, Md., each consulting on hundreds of broadband projects. Magellan says in press releases that its staff “has planned and developed fiber optic networks in over 200 communities across the U.S.”

The company said that through its services more than $1 billion of broadband investments have resulted, “connecting more than 1,000 schools, hospital, libraries and governments and passing nearly 1 million homes with fiber.”

In Jupiter, Florida, Magellan both consulted on a municipal broadband project and helped build it.

Magellan urged Baltimore, where it earned $157,000 for its report, to pursue federal funding to connect schools to fiber, and to lease 122 miles of existing fiber that was part of a emergency responders communications network to interested providers.

Google Fiber will tap into the network CTC helped plan in Huntsville to provide gigabit-capable speeds to homes and businesses. CTC has consulted with the public sector for more than 30 years. Its current projects include fiber-optic and wireless regional communications interoperability initiatives in the Washington, D.C., area for the U.S. Department of Homeland Security.

A lengthy list of its partnerships can be viewed here.

CTC didn’t return a call from Watchdog for comment on its consulting work. Magellan president and CEO John Honker also didn’t return a call.

Strategic Networks Group, based in Ottawa, Canada, and Superior, Col., recently announced a partnership with the Shoals Entrepreneurial Center in north Alabama. SEC got a nearly $1 million grant from the Appalachian Regional Commission for a three-year partnership with SNG to develop digital strategies for the region. This will include the Small Business Growth Program, “a program that shows businesses the economic impacts that inspire greater Internet application utilization, grow businesses, and create job opportunities.”

SNG says it helps communities “uncover the transformative power of technology investment.”

Magellan continues to do brisk business in the government broadband consulting sector today, even nabbing two projects in Chatham County, Georgia. First, the city of Savannah paid Magellan $65,200 early in 2016 for a broadband network feasibility study, then Chatham County, of which Savannah is the seat, agreed to a similar consult for $65,500 in September.

Savannah is served by some two dozen broadband providers, but Comcast captures most of the business. That company is planning on upgrading its network to provide 1 gb speeds to residents and 10 gb speeds to businesses in the coming years.

Williams argues it doesn’t take a $65,000 study to determine the scope of the broadband market.

“When I go to talk to lawmakers about broadband, I do a Google search to see who serves an area,” he said. “And I don’t charge $65,000 for that search.”

Williams said local governments can ill afford to spend that kind of money on broadband consulting, calling it “a big waste of resources.”

“People think consultants are a mystical group of people who have all the answers,” he said. “They’re selling snake oil. They’ve found a niche for getting taxpayer money.”

Magellan was initially rebuffed this spring in Lakeland, Fla., where the city’s chief financial officer, Mike Brossart, warned city leaders against a $220 million to $270 million plan to build a new government-owned internet utility across Lakeland Electric’s service area.

Magellan’s report anticipated a quick return on investment, but its projections required that 40 percent of Lakeland Electric’s customers sign up for internet and face an annual 1.5 percent price increase. Brossart deemed that financial model too sensitive.

“It’s highly speculative and we’re not in the business of being highly speculative with the citizens’ money,” Brossart told The Lakeland Ledger.

Lakeland leaders considered building a network, but on a much smaller scale, before scrapping the idea altogether in October.

In Stark County, Ohio, Magellan recommended county leaders create a broadband authority and consider building a 130-mile middle-mile fiber-optic backbone with an estimated cost of $22.5 million. Providers could then build the last mile from the backbone to facilities desiring broadband.

Nearly all of the homes and businesses in the county that were randomly sampled are already able to subscribe to broadband-speed services at reasonable prices.

Magellan noted in its study that if the county built the backbone, many of its cities could use it to plan their own networks.

“An additional benefit of the middle-mile fiber backbone, is that it would provide political sub-divisions the ability to develop their own fiber initiatives,” Magellan wrote in its report.

And if those municipalities need any consulting work in planning those networks, Magellan is just a phone call away.

42 mins ago

Nominations being accepted for ‘Bama’s Best Breakfast Joint’

Alabama is well known for its Southern hospitality and cooking, and now one contest will attempt to crown the best of the best when it comes to the Yellowhammer State’s breakfast joints.

“Breakfast — It’s the most important meal of the day, and ‘Simply Southern TV’ wants to know which local restaurant butters your biscuit by serving up the state’s best breakfast,” a release from the Alabama Farmers Federation announced.

From coffee shops, downtown diners or donut dives, Alabamians can now nominate their favorite local breakfast spot in the Bama’s Best Breakfast Contest.

To make a nomination, simply comment on the Facebook post here. Comments must include the respective establishment’s name and city.

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Please note that Bama’s Best Breakfast seeks to promote Alabama-based restaurants, so national chains will not be eligible. However, specific locations of Alabama-based chains will be eligible to compete.

Nominations close November 29 at 1:00 p.m. The top eight nominees will be ranked in a bracket and then compete in daily head-to-head matchups from December 10-20.

The winner, which will be announced December 20, will receive a $300 cash prize and a commemorative plaque, along with being featured in the fifth season of “Simply Southern TV.”

This contest is sponsored by the Alabama Wheat & Feed Grain Producers, a division of the Alabama Farmers Federation. “Simply Southern TV” is a production of the Alabama Farmers Federation and the Alabama Farmers Cooperative. It airs on Sunday mornings in each media market across the state.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

1 hour ago

Alabama to receive $49M in BP oil spill restoration grants

Four Gulf states are getting an additional $280 million in restoration grants from the BP oil spill of 2010.

Louisiana is getting $161.4 million to restore two barrier islands and a headland in the Terrebonne Basin.

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The work will restore Timbalier and Trinity islands, which “are currently at a critical minimum width in some areas,” and the West Bell Headland.

“Additionally, this proposal includes funding to enhance plans for the long-term sustainability of the entire length of Louisiana barrier islands,” the National Fish and Wildlife Foundation said Monday.

Florida is receiving $53 million for seven projects, including $16 million to protect coastal forest and wetlands along the Lower Suwanee River and Big Bend coast, the foundation said in a news release.

Nearly $49 million will go to eight Alabama projects, including $22.5 million to create and restore artificial reefs.

Texas will get $19 million for five projects, including $6 million to protect 575 acres of coastal habitat in Cameron County, next to the Laguna Atascosa National Wildlife Refuge’s Bahia Grande Unit.

The foundation is getting $2.5 billion over five years for restoration projects.

The money’s coming from criminal damages paid by BP PLC and drilling company Transocean Deepwater Inc.

Monday’s grants are the sixth round and bring the total so far to $1.3 billion.

The spill was off Louisiana, which suffered the worst damage and has received more than $625 million for 13 projects.

Alabama has received more than $195 million for 32 projects; Florida more than $160 million for 33 projects, and Texas more than $150 million for 47 projects.

Foundation spokesman Rob Blumenthal said Mississippi, which has received nearly $140 million for 18 projects, did not have any new projects considered for this round of grants.

The smallest grant awarded Monday was $100,000 to remove invasive species and debris from Hurricane Harvey and then plant native vegetation at the Leonabelle Turnbull Birding Center within the Port Aransas Nature Preserve.

“Hurricane Harvey destroyed two miles of boardwalk and uprooted significant stands of wetland vegetation in the preserve that settled as debris, smothering existing wetland vegetation and causing significant degradation of coastal marsh habitat,” a news release said.

“The debris has prevented the regrowth of marsh vegetation and limited the flow of freshwater to the area.”
(Associated Press, copyright 2018)

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2 hours ago

7 Things: Controversial deputy AG is out, Walt Maddox gets a participation trophy from himself, the SPLC demands no penalties for unpaid speeding tickets and more …

7. Ivanka Trump has a Hillary Clinton problem

— In what will surely be viewed as hypocritical and foolish behavior, President Donald Trump’s daughter and White House official, Ivanka Trump reportedly had been using a personal email account to conduct government business including interactions from a private email account with cabinet secretaries and forwards of her schedule to her assistant.

— There are no serious allegations that Trump used the email for anything that would be considered classified, but with the Democrats taking over the House of Representatives, they will surely be looking to exact revenge for the issues raised in the 2016 campaign. The fact that Jared Kushner set up a series of ijkfamily.com email accounts will also be scrutinized.

6. Alabama native and Yellowhammer founder Cliff Sims has written “Team of Vipers: My 500 Extraordinary Days in the Trump White House” about his time in the White House

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— While going from Trump’s campaign to the West Wing, Sims kept pages of notes from his time as one of Trump’s trusted confidants.

— Sims summed the book up with a twist on one of Trump’s famous quotes, “Lincoln famously had his Team of Rivals. Trump had his Team of Vipers. We served. We fought. We brought our egos. We brought our personal agendas and vendettas. We were ruthless. And some of us, I assume, were good people.”

5. The dumb fight with the Trump administration and CNN may be over

— After suggesting the White House would still revoke the press pass from CNN’s Jim Acosta, it appears they are prepared to give him back his pass permanently and issue a series of rules that all reporters must follow.

— The rules state that reporters may only ask one question, follow-ups are given “at the discretion of the president or other White House officials” and reporters must “physically surrender” the microphone when asked to, but these have not been agreed to by the press so this could enter another contentious phase.

4. Another federal judge has decided he is in charge of immigration enforcement and stops President Trump from enforcing new asylum rules while the border patrol had to close a border entry point yesterday

— A federal judge says the Trump administration can no longer deny asylum to migrants who illegally cross the southern border. The judge added, “[H]e may not rewrite the immigration laws to impose a condition that Congress has expressly forbidden” while the previous president’s DACA decision still stands.

Democrats are also raising concerns about an email conversation between Trump administration officials wondering if the administration will share census information with other agencies, making it less likely that illegals will fill out the census.

3. The Southern Poverty Law Center thinks Alabama shouldn’t be able to use unpaid traffic tickets to suspend licenses — They already want bail ended 

— The SPLC wants to block Alabama Law Enforcement Agency from suspending driver’s licenses of drivers with unpaid parking tickets, leaving the tickets unpaid and without penalty for not paying them.

— The lawless argument the SPLC is making here is basically that people shouldn’t have to pay the penalties for the offenses they commit, which is similar to their argument that bail is illegal.

2. Failed gubernatorial candidate Walt Maddox gifts himself a participation trophy for getting 20,000 more votes than Senator Doug Jones and still losing

— In what millennials would call a “weird flex,” Tuscaloosa’s mayor decided to take to Twitter and post an infographic laying out how his loss to Governor Kay Ivey in early November was a really some symbolic victory.

— Maddox cited his 20,000 more votes than Sen, Doug Jones (D-Mountain Brook) got in 2017, claimed he had enough votes to win any other gubernatorial election since 2018 and surpassed his expected vote total and his number of donors. But he still lost by 300,000+ vote.

1. Alabama’s Attorney General fires/accepts the resignation of controversial prosecutor Matt Hart

— Matt Hart, the deputy attorney general of Alabama who led the Special Prosecutions Division, left his position on Monday. Hart has a series of high-profile government corruption convictions under his belt.

— Hart oversaw the convictions of former Alabama Speaker of the House Mike Hubbard, the deal that saw Governor Robert Bentley resign and numerous other high-profile cases, but his tactics have been questioned repeatedly and many have alleged there is something more to this move than meets the eye.

3 hours ago

Doug Jones at Mobile U.S. Senate trade roundtable: Pentagon could play role in national security tariffs

MOBILE – Although President Donald Trump remains very popular in Alabama, his trade policies among the state’s business leaders appear to be mixed.

For the steel industry, which has been a fixture in Alabama for generations, the Trump administration’s handling of trade is a resounding success. Yet, for those in agriculture and auto manufacturing, there is much room for improvement.

That seemed to be the takeaway from a roundtable convened by Sen. Doug Jones (D-Mountain Brook) at the University of South Alabama on Monday.

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The roundtable, an event sanctioned by the U.S. Senate under the body’s Homeland Security Committee, will be part of the permanent record of the Senate and that will be considered for legislation.

“I have a couple of bills pending involving automobile tariffs and national security tariffs,” Jones said. “So, it will be part of that record in the legislative history should those come to the floor or come to a vote.”

A statutory change under consideration according to Alabama’s junior senator regarding trade has to do with which cabinet department handles tariffs levied on a national security basis.

Jones says that could be best handled by the Department of Defense and not the Commerce Department.

“Under the national security threat, it bifurcates the process and moves the initial determination about national security – for instance, automobile – whether or not automobiles are a national security threat – that would move that to the Defense Department, who is better equipped to address national security concerns rather than the Commerce Department.”

Jones told Yellowhammer News the roundtable provided insights into how current trade policy directly impacted Alabama and influenced decision-making by business executives.

“It confirms what we’ve been saying – that the uncertainty of this policy is creating some problems,” Jones said to Yellowhammer News. “People are holding off. They’re not sure whether or not to expand their business, whether it is a small business or whether it is a big business. It shows there can be some serious consequences if certain tariffs are imposed. At the same time, it shows you where there can be successes – with the steel industry to stabilize markets.”

“One of the purposes of the hearing is to make sure the public is aware, people are aware,” he continued. “I think one of the takeaways that people will understand is that this policy and the retaliatory tariffs right now are having a devastating impact on farmers. We stand to lose a lot of overseas markets if this is not resolved. That’s the whole point of this. Let’s get it resolved one way or another, so we know where we stand. It’s gone on long enough.”

Jones elaborated on his personal views on trade when asked if a “free trade” or “fair trade” label could be applied to his views. He acknowledged there needed to be a balance of elements of free and fair trade. However, he also said his preference is trade alliances as opposed to trade wars.

“I don’t if you can really describe – I think fair trade is the most important aspect of that,” Jones said to Yellowhammer News. “There is always a strong element of free trade that’s included in that. You’ve got to balance trade with rogue countries like China has been over the years. And you got to make sure that countries that are subsidizing their trade do not have an unfair advantage because we want to protect our workers here in this country.”

“At the same time, we are much more of a global economy now and interconnected than we have ever been in the history of this earth,” he added. “And we got to recognize that – that what we can do, work together, is the way to try and manage this and help our country help other countries and help the global economy as well as our own. We want to make sure our workers are protected. We can do that better by forming alliances instead of doing trade wars.”

Monday’s roundtable participants included Hyundai Motor Manufacturing Alabama vice president Robert Burns, Mercedes-Benz U.S. International general counsel Rick Clementz, Honda Manufacturing of Alabama assistant division manager Allyson Edwards, Toyota Motor Manufacturing Alabama president David Fernandes, Aker Solutions project director Graham Jones, Baldwin County farmers Mark Kaiser and Daniel Perry, Nucor Steel Decatur vice president Mike Lee, Alabama State Port Authority Director & CEO Jimmy Lyons and Fairfield Works Tubular plant manager Brent Sansing.

@Jeff_Poor is a graduate of Auburn University and is the editor of Breitbart TV.

4 hours ago

Terri Sewell slams Kay Ivey — Claims ‘daughter of the Black Belt’ would not help save Camden hospital

SELMA – One of the primary themes at a town hall hosted by Rep. Terri Sewell (D-Birmingham) on Monday night was health care, which is also one on which that House Democrats campaigned in this year’s midterm elections.

Although Democrats nationally had success in the midterms, in Alabama they were unable to capitalize electorally on health care, especially given the emphasization Tuscaloosa Mayor Walt Maddox gave to expanding Medicaid in his failed gubernatorial bid.

Nonetheless, Sewell argued before a crowd assembled at the Selma Interpretive Center for her town hall event in downtown Selma that Medicaid expansion was a priority and she decried the unwillingness of Alabama policymakers to agree.

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“States like Alabama were not supposed to be able to opt out of expanding Medicaid,” Sewell said. “The last two governors have not done that. It’s horrible. The reality is the fact that we have not expanded Medicaid means rural hospitals are under threat. Alabama has a bare-bones Medicaid system. They pay less than 10 percent on a dollar for the services for Medicaid.”

According to Alabama’s lone Democratic member of Congress, the closure of rural hospitals was the result of not expanding Medicaid.

“We have missed out on millions – actually billions of dollars in the state of Alabama in not expanding Medicaid,” Sewell said. “We could use that money, and the fact that we don’t have that money means that so many of our rural hospitals are under threat of closing. I don’t have to tell the Black Belt.”

Sewell referenced the John Paul Jones Hospital in nearby Camden, which was on the verge of closing in 2017 but got a last-minute reprieve after an agreement was made with UAB earlier this year.

She took aim at Gov. Kay Ivey, a native of Camden, for not doing more to save the Wilcox County hospital.

“We saved [John] Paul Jones Hospital, but we did so with the help of UAB,” she said. “Now, that’s not a model that can be done to scale. What I did is I begged UAB because our own governor, who is from Wilcox [County], would not help us to save Wilcox County’s hospital. That’s unacceptable, by the way. And I’m not telling her anything that I wouldn’t tell her to her face and have told her because when you’re a daughter of the Black Belt, you have to understand that you have got to take care of home.”

Sewell told those in attendance she went to UAB Health System CEO William Ferniany and warned if Camden’s John Paul Jones Hospital closed, hospitals in Selma and Demopolis could be threatened, and that might result in everyone “bum-rushing” UAB for health care.

“Rural hospitals are on the chopping block and the number-one priority for me is keeping the doors open and making sure access is there, but also making sure quality is there,” she added.

@Jeff_Poor is a graduate of Auburn University and is the editor of Breitbart TV.