Wisconsin Local Operators Seek to Block Stimulus Funded Broadband Project
Wisconsin’s local telecom operators continued to attack the University of Wisconsin’s stimulus-funded broadband project, UW-System, with a lawsuit and in an audit process. Local telcos had sought the state legislature’s action last year to block the project, but that effort failed (CD Oct 21/2010 p10).
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The Wisconsin Independent Telecommunications Systems, operating as Access Wisconsin, filed a lawsuit at a Wisconsin circuit court against the UW Board of Regents, WiscNet (Wisconsin’s research and education network), CCI Systems (private contractor for UW-system) and the state Department of Transportation. The Transportation Department is providing highway rights-of-way for telecom facilities “as an in-kind contribution” to the stimulus project in exchange for the department receiving fiber facilities, the lawsuit claimed. WiscNet was named a defendant for the role it plays in executing the stimulus grants, said Bill Esbeck, head of the Wisconsin State Telecom Association. The telcos are asking the court to block the construction of the project, even though the state legislature gave it the green light, said a spokesman for the UW System. He declined to comment on the specifics of the lawsuit.
The UW System project creates unfairly subsidized competition and would reduce revenue to local phone companies, especially in rural areas, said Mark Weller, CEO of Access Wisconsin. Weller said UW’s project is prohibited by state laws preventing the UW System and the Wisconsin Department of Transportation from offering, reselling or providing telecom services to others. Access Wisconsin, representing 30 independent operators, claimed some of the fiber cable that UW plans to deploy would be on top of fiber owned by its member companies and by other private service providers. UW’s actions would harm the BadgerNet Converged Network, the broadband network provided by the Department of Administration through private contracts, Weller said. BadgerNet provides services to government, public and private schools districts, higher education and libraries at more than 2,000 sites in the state. The price is the same no matter how rural a school or library may be. UW plans to “skim off the easier-to-serve sites, leaving the more expensive sites on the DoA network,” Weller said. NTIA said each grantee underwent “a rigorous due diligence process” and demonstrated that its project would help to address “a clear need in the communities it will serve.”
In addition to the lawsuit, the state’s telecom industry is concerned about the subsidy WiscNet receives from UW to offer services that are already available from private operators, Esbeck said. That gives WiscNet significant competitive advantage and duplicates private services, he said. The issue should be examined through legislative process, he said. The industry brought the issue to the governor’s office and as a result, an audit process that will examine the relationship between WiscNet and UW is expected to be completed before the end of 2012, he said.
Wisconsin’s broadband stimulus project has a competitive advantage, not by being unfair, but because it offers a service that incumbents don’t have and are unwilling to put into place, said municipal broadband consultant Craig Settles. The court needs to reject the lawsuit, and the state legislature needs to “neuter incumbent lobbyists’ efforts in that body,” he said. Access Wisconsin claimed several cities covered by the UW project aren’t rural and not underserved.