On the last Thursday in October, a unique government institution known as the S.C. Budget and Control Board quietly approved a $143 million contract that effectively leased out 95 percent of the state’s broadcast bandwidth — owned by the public for decades — to two little-known private telecommunications companies for the next 30 years.

Though certainly a transformational step in the state’s digital future, the deal went virtually unnoticed, even to some in the General Assembly. No headlines announced the approval of the contract, and several officials involved have remained curiously tight-lipped about the specifics of the deal. But for better or worse, the deal could mark the end of a years-long debate over what to do with a unique state asset — publicly owned broadband spectrum.

Depending on one’s perspective, the brokerage by a handful of technocrats either landed the state the deal of a lifetime or struck a long-term digital deal with the devil.


South Carolina’s Digital Goldmine

South Carolina has always enjoyed an exceptional status as the only state in the nation to own every educational broadcast license that the Federal Communications Commission (FCC) issues within a state. In many other states, higher education institutions, community nonprofits or membership organizations own the licenses.

South Carolina also has the only state agency (S.C. Educational Television, or ETV) that owns and operates all of the state’s educational broadcasting spectrum. In addition, it has a scattered network of state-owned infrastructure that creates a virtual cloud of connectivity covering the state.

This spectrum of invisible microwave frequency transmits different kinds of signals for TV, the Internet, radio stations, cellphones and wireless remote controls, among other uses.

As technology has advanced, ETV has found itself in the enviable position of being able to free up 95 percent of its spectrum by doing more with less. In doing so, when it comes to radio and microwave technology, as well as broadcast and broadband — basically anything wireless — South Carolina has for a very long time been sitting atop a proverbial pile of digital gold.

And on Oct. 29, a quiet contract to lease out that spectrum was finalized on the first floor of the Wade Hampton building on the State House complex.

John Crangle, director of South Carolina Common Cause, a nonprofit watchdog group that promotes an open and accountable governmental process, says the low-profile nature of the deal is merely a symptom of a more generic problem in state government.

“You have a lot of insiders that have a great deal of power and they want to exercise it without more scrutiny,” Crangle says. “This is a commonplace problem in South Carolina — of information that really should be shared with the public. I think the whole business of the Budget and Control Board needs to be looked at and [the agency] probably needs to be overhauled or abolished.”


Windfall or Giveaway?

The Budget and Control Board, however, was only the final step in a long, interlocking process of government-appointed panels made up of lawmakers and private citizens to make recommendations on the deal. Throughout that process and its outcome, two different narratives have emerged.

To its supporters, auctioning off the state’s broadband spectrum has meant snaring millions of much-needed dollars for the state’s ailing coffers. At the same time, the state has been able to unburden itself of a unique but elusive asset that might have been difficult for it to ever effectively use on its own.  

To its opponents, the deal represents an ocean of salt poured into a wound developed through years of unsung struggle to protect the privatization of the public trust and another deep gulf carved into the state’s massive digital divide.

For its part, ETV is confident that the deal will not have any negative impact on its mission. Communications director Rob Schaller says ETV will still be able to continue its educational outreach and other efforts with the 5 percent of spectrum it will maintain.

“We’re certainly looking forward to the opportunities that this will provide to the citizens of South Carolina in the form of the wireless services,” Schaller says of the deal. “We’re going to now have this new technology that we can use all over the place when the companies build it out, and that would be a great service to the people … hopefully we’ll be able to attract new businesses to come [to the state].”

But to some, the cost of those wireless services is a concern.

Over the years, stories about South Carolina one day developing a “wireless cloud” that allowed free, public Internet to every South Carolinian with a computer and a wireless card became a kind of folklore in information technology circles. Bills dedicated to the idea were introduced, but somehow never got anywhere. Rumors have floated that executives in state agencies who spoke openly about pushing something like it might find themselves out of a job.

All the while, critics of the deal claim that an under-the-radar campaign to lease up to 95 percent of the state’s broadband spectrum continued to pick up steam and culminated in the contract’s autumn approval.

According to Sascha Meinrath, an expert on community wireless networks and municipal broadband and also the research director of the Washington, D.C.-based New America Foundation’s Wireless Future Program, the move South Carolina recently made was a tack in the wrong direction.

Meinrath believes that what the Palmetto State had when it comes to broadband capability was unbelievably special and the state should have held onto more of it. For months, he had warned a panel of lawmakers that the state was in the possession of a “magic bean,” something they knew was incredible but had no idea exactly how much was actually worth.

To hear him say it, the recent leasing off of a majority of the state’s spectrum for $142.7 million to two private companies means the people of South Carolina have been sold stunningly short.

“Squandering the incredible value of the state’s broadband assets in return for a quick buck is a travesty,” Meinrath says bluntly. “Under a far more legitimate deal, the residents of South Carolina could be enjoying the benefits of low-cost or possibly even free broadband connectivity. Instead, they are being forced to watch as one of the state’s most valuable resources is being plundered for pennies on the dollar of its actual worth.”

The precise value of South Carolina’s broadband spectrum is unclear, but Meinrath estimates the fair-market value of such spectrum nationwide “in the trillions of dollars.”


The Buyback Provision

The two companies that paid for the spectrum are Clearwire Communications LLC, based in Kirkland, Wash., and Virginia-based DigitalBridge Communications Corp.

Clearwire offers high-speed Internet services to customers and businesses in several markets worldwide and partners with telecom heavyweights such as Time Warner Cable, Google and Sprint. (The company, through a spokesman at its public relations firm, declined to comment for this story.)

DigitalBridge Corp., or “DBC,” is a 4G wireless provider that focuses on delivering broadband services to smaller metropolitan areas and surrounding rural communities.

For years, critics of South Carolina privatizing large chunks of the state’s broadcast spectrum have fought for the public to retain 25 percent of it to use for the common good — even if they were unsure of exactly what could be done with it.

Bill Byrd, a Lexington businessman with a long telecommunications background, served as a member of the S.C. Educational Broadband Service Commission (EBSC), a seven-member panel created last year with the task of designing a framework for how the state’s licenses could be auctioned off for sublease. The EBSC would also hold the auction and ultimately give recommendations to another legislative panel on how to proceed with a contract for the Budget and Control Board to either approve or deny.

Once, Byrd too wanted the state to control a quarter of the spectrum. He describes the ultimate decision now as a compromise.

“This idea of holding onto 25 percent was heavily debated [in the EBSC],” he says. “A lot of people thought that was a good idea.”

Because governmental guidelines mandate that the state must use at least 5 percent of the broadband spectrum for educational purposes, the EBSC eventually left 95 percent of it open to the market.

“The [commission’s] conclusion was, ‘Yeah, it would be great if we could [keep 25 percent],’” Byrd says, “‘but we might do better if we go ahead and lease 95 percent with a buyback,’” which is ultimately how the deal went down.

According to sources familiar with the contract, the public may be able to “recapture” up to 20 percent of the broadband spectrum, called the “midband,” on a first-come-first-serve basis. The problem is, no one really knows how it should be done. Currently, it appears no state agency has been charged with the responsibility of helping the public obtain the 20 percent of it that may still be available.

Byrd, however, remains optimistic when it comes to broadband use in the state.
“It’s one of the best opportunities that the people of South Carolina have ever had,” he says. “It’s really a neat thing … it’s all in how you look at it.”


Lone Crusader

Not everyone is as hopeful.

Brett Bursey, the director of the South Carolina Progressive Network and an advocate for narrowing the digital divide, believes that by finalizing the deal on Oct. 29, the state essentially blew its chance of serving the public good in the best way possible. Bursey has long maintained that powerful free-market forces in state government have been trying to lease off the spectrum in order to keep the public from competing with the private sector. The recent deal is proof positive of it, he believes.

Activist Brett Bursey tried unsuccessfully to convince state officials to retain 25 percent of the state’s broadband spectrum for public uses. Photo by Jonathan Sharpe

His theory on the matter isn’t unsupported. In fact, EBSC chairman Gary Pennington said in the Oct. 14 issue of the Free Times, “Basically, the commission agreed that the state had no business competing with private telecommunications companies.”

Pennington, an appointee of Gov. Mark Sanford, is also an attorney who represents telecommunications companies. He would not divulge who his clients were, but said none were involved in the deal.

Bursey says the deal sends a clear signal that ideology has prevented state politicians from making the best use of a valuable state asset.

Bursey believes that if the state held onto just 25 percent of the spectrum, it could create its own network and potentially provide communication access to every county law enforcement agency, public safety agency, county government or other public institution in the state. His argument is that taxpayers have already paid for the infrastructure through ETV funding, so why lease it all away and then be forced to rent it back? The state could also potentially provide Internet access to every resident with a capable computer. 

A longtime local activist, Bursey’s crusades throughout the years have landed him in both the courthouse and the jailhouse. His causes mostly lean hard left, and he’s not unused to finding himself somewhat alone in his battles with the legislative establishment.

This one was no different.

Since early 2007, Bursey has functioned as a kind of one-man sounding alarm, warning anyone who would listen that the state had plans to auction off one of its greatest assets without ever trying to find out how much it was actually worth.

Puffing on a tobacco pipe on Oct. 18, in the historic Modjeska Simkins House in downtown Columbia that sometimes serves as his office and war room, Bursey laments that no one knows what the state agencies needs are when it comes to broadband technology.
“No one ever did a study,” he says.

In front of him is a mountain of papers, folders and files, all dulled weapons used in his years-long fight against what he’s perceived as an army of professional profit seekers dead set on selling off the commons at a comfortable clip.

He pulls out a March 5, 2008, letter that he calls the sharpest knife in his drawer. It’s from former ETV president Maurice “Moss” Bresnahan to State Senate President Pro Tem Glenn McConnell. In it, Bresnahan writes that that since as early as 2003 ETV had urged the FCC to “allow educational institutions to maintain the licenses, rather than pursuing another option — auctioning the licenses to the private sector.”

Seven months later, Bresnahan left ETV to run KTCS, a Public Broadcast System station in Seattle. He says his departure had “absolutely nothing to do with this issue.”

From everything he’s seen, Bursey believes the Oct. 29 deal was exactly what powerful privateers in the state had been after for years. His suspicions were piqued more than two years ago when McConnell, a Charleston Republican and president of the Senate, appointed members to a special study commission to examine the issue of the state’s broadband technology. Often when Bursey showed up to listen, he was the only person at the meetings not paid to be there, he says, and most times the commission members met privately in executive session.

As the meetings went on, the idea of how to lease off a majority of the state’s broadband spectrum started to congeal. According to one commission member, several telecommunications companies showed interest, but because much of the conversations dealt with contract issues the discussions were done behind closed doors. All the while Bursey continued to show up, arguing against privatizing so much of the public airwaves.

Neil Mellen, a former Peace Corps volunteer and the communications director for the limited-government nonprofit group South Carolinians for Responsible Government, was appointed to the EBSC by McConnell. In conversations, Bursey has referred to Mellen as “Mr. Privatization.”

Mellen says that while a lot of the things Bursey brought up to the commission were important, he might have gotten involved a little late in the game. He also believes the deal is a good one.

“The framework developed by [the EBSC], and approved by the Budget and Control Board, will spur the development of a robust telecommunication infrastructure across the state, and especially in areas where service is now limited or nonexistent,” Mellen says about the recent contract deal.

“The design not only includes rich public-private partnerships for economic development and educational outreach, but also allows for state lawmakers to ‘recapture,’ or retain, a sizable portion of the spectrum should they determine that the state government itself has the interest and capacity to manage sizable portions of the licenses,” Mellen continues. “In either scenario, the plan does not place state or local government alone in the expensive, risky, and speculative position of micromanaging [information technology] development, competing with the private sector, or trying to predict future technology trends.”

After the EBSC made its final recommendations in May of this year, a special subcommittee of the state Joint Bond Review Committee (JBRC) was set up by Senate Finance Committee Chairman Hugh Leatherman to hear further testimony. They would eventually vote on the contract and send it to the Budget and Control Board. (Among other business, the JBRC vets state contracts.)

On the committee, Bursey found an ally in Rep. Gilda Cobb-Hunter, a social worker from Orangeburg and the only Democrat and ethnic minority appointed. Others who served included Leatherman, Senate Majority Leader Harvey Peeler and House Ways and Means Chairman Dan Cooper.

During her time on the JBRC subcommittee and through subsequent research, Cobb-Hunter became convinced that the state should hold onto much more of the spectrum than some appeared willing to do.

Representing a rural district, Cobb-Hunter is familiar with the consequences of an expansive digital divide and the disparity between those with Internet access and those without. She’d like to see a day where computers linked up to the Internet are available in every senior citizen center and public gathering place. The libraries can’t service everybody, she says. There are parts of her district that don’t even have libraries.

“I just thought that the prudent position would be to maintain what we already had and not sell everything,” she says, reflecting on her time on the committee. “But I didn’t carry the day on that.”

Cobb-Hunter was also surprised to learn how many people in South Carolina didn’t seem to know about the unique position the state was in when it came to the technology available.
“It wasn’t a sexy issue,” she says. “It was hard to get people engaged in it. And for a very long time I just felt like I was tilting at such a really huge windmill.”

And there was also the fear.

People in state agencies seemed to want to speak up, but didn’t.

“I think that there is a lot of fear in state government about rocking the boat,” Cobb-Hunter says. “There are so many examples out there: retaliation for people who have rocked the boat. So there was this chilling effect for what people were willing to say publicly.”

Cobb-Hunter’s would be the only dissenting vote by the JBRC to lease out 95 percent of the spectrum.

“I thought that we were being pennywise and pound foolish,” she says of the committee’s recommendation to the state Budget and Control Board. “[I thought] that we were looking at saving a dime today and spending a dollar tomorrow … For once, South Carolina was in an enviable position in that we are the only state in the country who owned all of the licenses. You know, no other state had ownership of the spectrum like we did in South Carolina.”


Racist Roots of the Spectrum?

Understanding how South Carolina came to own such a spectrum might be just as interesting as what will eventually become of it.

Back in 1958, the state of South Carolina created one of the most outstanding educational television networks that the country had ever seen and called it ETV. The Legislature at the time jammed money into it by the fistfuls. It won fantastic awards. By 1973, 60 percent of South Carolinians claimed they were regular viewers of ETV, according to a study at the time by the University of South Carolina School of Journalism.

It was a progressive accomplishment for the Palmetto State. But some believe it might have been born for all the wrong reasons: as an attempt to circumvent federally forced school integration, they argue. The claim might not be unfounded.

In the spring of 1975, The New York Times ran a long story that lauded the relative greatness of ETV compared to networks in other states. But it also offered this: “There were widespread suspicions that the network was a sly product of the South’s resistance to court-ordered school integration.”

In the years that followed the U.S. Supreme Court’s Brown v. Topeka Board of Education decision, many white Southern politicians concocted strategies to get around desegregating their schools. One of them was to shut down the public schools entirely. If that happened, went one line of thought, ETV might make it possible to continue public education while keeping chains locked on public school doors all across the state — and white children from having to mingle with blacks.

South Carolina’s powerful then-Speaker of the House, Solomon Blatt Sr., acknowledged to the Times that the idea of using ETV as a “backup mechanism” if the schoolhouses were shuttered had indeed been discussed, though he said it was ultimately discarded as unworkable.

Fast forward 30 years and Bursey is sitting in the Simkins house, formerly owned by a black female leader in the civil rights movement and a hero of local social reform. He isn’t missing the irony of any of it as he sighs.

“Historically, one of the explanations why South Carolina got early into the game of educational broadcasting, I believe, has its roots in racism,” he says.


The Push

Regardless of whether the creation of such a large public spectrum has any racist roots, a statewide, publicly owned wireless cloud could be one of the most egalitarian moves ever contemplated by South Carolina politicians. But that doesn’t mean it’s ever going to happen.

Gov. Mark Sanford has made a habit of vetoing bills that mentioned a public wireless cloud. Anyone asking why clearly hasn’t been paying attention.

If wireless Internet ever became synonymous with garbage pickup and water supply, private telecommunications companies operating in the state would lose an incredible amount of money. The barriers set up by the telecommunications industry and the people who are handsomely paid to represent them haven’t gone unnoticed.

“The problem is that politics, greed and shortsighted politicians are a bigger barrier than the technical barriers,” says Phil Noble, president of the South Carolina New Democrats, when discussing the possibility of a free, statewide Internet network.

The New Democrats, an independent reform group, lists obtaining universal wireless broadband for every family in South Carolina as one of its five big ideas for the 21st century.

Noble and the New Dems have also been part of an initiative to provide an innovative $100 laptop to every school child in the state. “The laptops are like a race car to educational improvement,” Noble says. “Broadband would be supercharged fuel.”

As anyone who has lived far enough from a metropolitan center knows, it can often be hard to get broadband access. There are a lot of places in the country where slow dial-up is still the norm for hopping on the Net.

Depending on one’s perspective about the recent deal, South Carolinians will either be the steam engine or the caboose on the light rail toward the new frontier of wireless broadband. And while how it all plays out remains to be seen, it might at least be comforting to know that for once the state is at least on the tracks. 


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