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Kentucky Cable Companies Oppose Connected Nation

August 24, 2009 ,

Connected Nation is coming under increased pressure at its birthplace in Kentucky, with the cable industry and municipal utilities raising opposition to the telecom-based organization and Kentucky Gov. Steven Beshear (D) asking Connect Kentucky (CK) to respond to the municipal organization’s concerns about CK.

In a remarkable vote on Aug. 19, the Kentucky Cable Telecommunications Association (KCTA) board voted 8-2 not to endorse CK as the state-designated entity to map the state’s broadband assets, despite what sources said were three attempts by Connect Kentucky to gain the group’s endorsement.

Rene True, Connect Kentucky’s executive director, asked for the cable group’s endorsement, drafting a letter for the group’s signature that would be sent to Greg Haskamp, the state official in charge of broadband policy in the Finance and Administration cabinet. The letter, which the cable group declined to sign, would have pledged the cable group’s full support for the Connect Kentucky application to be the state’s mapping contractor.

Current KCTA Chairman Dale Haney polled the board and found the opposition from the major providers in the state, including Comcast. Sources said that there were serious concerns about Connect Kentucky’s close relationships with telephone companies, which are competitors to cable, as well as with Connect Kentucky’s mapping methodologies.

The opposition of the cable group could harm CK’s ability to win the state’s mapping contract. The state issued a request for proposals which says, in part, “Vendor shall provide a detailed description of the plan Vendor is proposing to ensure the participation of all broadband providers conducing (sic) business within the Commonwealth of Kentucky.” The state’s request for proposals was issued Aug. 18, and replies are due Sept. 1.

The Kentucky Municipal Utilities Association (KMUA) sent an Aug. 5 letter to Beshear outlining that group’s “serious concerns” about the potential selection of CK as the state’s broadband mapping contractor. It was that letter that Beshear sent on to CK for comment.

In the four-page letter, KMUA pointed out that any organization which wants to apply for a federal broadband stimulus grant needs Census-block level information on broadband availability and speed, and that Connect Kentucky is apparently the only source of the information, a situation which raises “serious concerns” for the municipal utilities. The municipal organization asked that CK make its data available, although there is no indication that the information was produced.

More than that, however, the municipal group raised questions about CK’s mapping, under-reporting broadband deployment for municipalities and over-reporting broadband availability from commercial incumbent telephone and cable companies. The result, the letter said, would be to encourage grant projects in municipal service territory and to discourage projects in incumbent commercial companies’ territory.

The larger issue is that the incumbents have the incentive to provide information showing that broadband is available in their territory, but not in the service areas of others, the letter said, adding that while “No one means to suggest that CK’s industry board members’ companies are intentionally giving data to CK that is slanted in their favor or against KMUA members, but it should be pointed out that there is nothing in the currently private and confidential structure of CK’s data collection system that would discourage, or would impose any meaningful sanction on incumbents for such behavior, and that the potential financial rewards to incumbents for doing so (rendering new competitive entrants ineligible for grants) would be considerable. Put a little differently, the temptation for incumbents to skew the data would be high.”

The group asked that the state impose a certification requirement on the accuracy of data provided to, and reported by CK and “enforceable legal sanction” against any party that violates the certification.