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By Institute for Local Self-RelianceSociety & Culture News News Commentary

Building Local Power episodes

September 16, 2021Building America’s Zero Waste Future
On this episode of Building Local Power, host Jess Del Fiacco is joined by Neil Seldman, Director of ILSR’s Waste to Wealth initiative. Jess and Neil interview Gary Liss, Vice President of Zero Waste USA, and Bob Gedert, President of the National Recycling Coalition, about the Recycling Is Infrastructure Too (RIIT) campaign and the proposed American Recycling Infrastructure Plan (ARIP).
Highlights of their conversation include:
Why now is the right moment for investing in recycling infrastructure, and how this could reshape American recycling.
The current landscape of federal legislation and how the RIIT campaign is influencing policy decisions and rulemaking.
Key provisions in the proposed American Recycling Infrastructure Plan and how each of them move the recycling needle forward in the US.
How the ARIP would help level the playing field for small-scale reuse and recycling enterprises.

“Zero waste is all about not only diverting tons, but reinvesting those resources in the community. And the American Recycling Infrastructure Plan is based on that idea: that we should not only invest in recycling and composting, but also in those other activities upstream, to redesign the systems and to set up reuse programs and reuse facilities, and help with innovations like fix-it clinics, and repair fairs, and other new reuse systems for reusable foodware that are being pioneered all over the country… We’re not just investing in diversion from landfills and incinerators. We’re investing and reinvesting those resources in the local economy.”

Join the next Recycling Is Infrastructure Too Webinar, “What’s IN the Infrastructure Bills for Recycling?” on September 28th! Learn more and register here.
Related Resources
How Recycling and Reuse Created Thousands of Jobs and a $1 Billion Boost to Austin’s Economy — Episode 120 of Building Local Power
American Recycling Infrastructure Plan
Letter to Biden-Harris Administration: Recycling is Infrastructure Too
Transcript
Jess Del Fiacco:
Hello, and welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies, and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and communications manager here at the Institute for Local Self Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities, where power, wealth, and accountability remain in local hands. Welcome to the show. Today, I am joined by Neil Seldman, who is the director of ILSR’s Waste to Wealth program, as well as Gary Liss, who is the vice-president of Zero Waste USA, and Bob Gedert, who is the president of the National Recycling Coalition. So welcome to the show, all of you.
Neil Seldman:
Thank you.
Gary Liss:
Thank you.
Bob Gedert:
Thank you very much.
Jess Del Fiacco:
Yeah, we are so happy to have you. We’re going to talk about the Recycling is Infrastructure Too campaign, which Neil, Gary and Bob are all involved with, as well as the proposed American Recycling Infrastructure Plan. And I think Neil, I will give it to you to maybe give us a little bit more context before we get going with questions, so.
Neil Seldman:
Thank you, Jess. And thank you, Gary and Bob for joining us. I want to point out that Gary and Bob have each put in decades upon decades of work on recycling, zero waste, and it’s been a pleasure working with them from the point of view of the Institute for Local Self Reliance. We’ve done many projects and many good discussions together. This is a very nice occasion for myself. We’re addressing recycling in the middle of a lot of dynamic change in the country, in the recycling and wasting fields. And we’re hoping to clarify some of those.
Neil Seldman:
I just want to point out that the key, in my opinion, to the next few years is getting money, investment capital, to the local governments for the necessary infrastructure changes for composting, reuse, recycling, and of course, waste prevention. There are a lot of different approaches to this. The issue of extended producer responsibility is very much in the air at the state level and at the federal level. And the efforts that we’re looking at do not mean that EPR is not a useful tool.
Neil Seldman:
EPR is certainly a useful tool, but we all know that it’s very controversial. It’s happening at the state and federal level. And from my interview of a good many people promoting EPR, the issue in Congress will probably take three years, if not more, to get through Congress under the best of circumstances, as we know Congress is split right now. So the importance of this interview is to find out, is… not is… but what are the alternatives for immediate injection of cash to local governments, cities, counties, to move this recycling movement, zero waste movement, forward? And I think what we’re going to hear is that there are alternatives, and that these alternatives are involved in legislation that is actually in the pipeline already in Congress.
Neil Seldman:
So the potential for the Recycling is Infrastructure Too campaign, and of course the American Recycling Infrastructure Plan is very pertinent, because we will be hopefully getting these infrastructure bills through Congress, and the monies will be flowing to the local level. And now I’m going to look forward to how Gary and Bob describe what they’re involved in. And again, thank you for the audience listening, and thank you to Bob, Jess and Gary for participating.
Jess Del Fiacco:
Thanks, Neil. So I think that leads us right to Gary. Could you talk about what the Recycling is Infrastructure Too campaign, which Neil just mentioned? What that is, and what you’re advocating for, what your strategy is to make this change?
Gary Liss:
Yeah. So thank you so much, Justin, Neil, for this opportunity. One of the things that was happening earlier this year was a new administration on Institute for Local Self Reliance, and Zero Waste USA started talking about how to influence them to focus on recycling and zero waste more broadly. And working with the National Recycling Coalition, decided to do a letter to the president and Vice President Harris in March of 2021, outlining the types of things we were hoping they would do to promote all the benefits of expanded recycling, waste reduction, reuse, and composting to get to zero waste. That would have many benefits, including job creation and addressing climate change, which was clearly a priority for this administration. The National Recycling Coalition joined in that effort around April and May, and helped follow up the letter to the president and vice president with a change.org petition, and then National Recycling Coalition led the development of the American Recycling Infrastructure Plan.
Gary Liss:
Some of the key messages that we’ve been advocating for is that recycling is infrastructure too. That in all the talk about infrastructure, there hadn’t been as much attention focused on it, particularly in the general media, that recycling, reuse, composting, creates lots of jobs, but needs infusion of capital to address some of the issues that Neil was talking about in his introductory comments. And the messages we were trying to get across is for US senators and Congress representatives to understand that recycling needs to be part of this. And one of the ideas is that include as eligible activities for all infrastructure projects, use of reuse systems, recycled content, and compost products. That’s one of the basic messages, Bob will be going into more of the details that we came up with. The campaign has been doing monthly webinars, and in our webinar in July, Bob highlighted the details of the American Recycling Infrastructure Plan, which our network had been calling upon what are we specifically advocating for in more detail, and that’s what the plan is outlining.
Jess Del Fiacco:
Could you talk a little bit more about these discussions you’ve been organizing? I mean, you’re bringing a lot of different voices into this conversation to determine priorities. So what are some of the things you’ve discussed in these monthly webinars? What are you planning to talk about in the future, and who’s involved?
Gary Liss:
Sure. So far we’ve focused on the American Recycling Infrastructure Plan. Most recently, the better bottle bill, the best bottle bill possible that Institute for Local Self Reliance hosted in August. And that was recommended as part of the American Recycling Infrastructure Plan, to go for and support a national bottle bill. We’ve done other webinars earlier, just trying to figure out what has been done, in terms of advocating for recycling infrastructure. And we’ve had convened and invited the key lobbyists who are at the table already in DC, to have them tell us what was going on and what could be possible to include in the message.
Gary Liss:
And that’s been one of the big successes. Our campaign doesn’t have a big budget, actually, no budget. And we are relying on understanding what is happening in DC by engaging and involving the different lobbyists who are already there. Like people from ISRI, the Institute for Scrap Recycling Industries, and the Solid Waste Association of North America, the Break Free From Plastic Network. So environmental, local government, and industry lobbyists that are working every day in DC on these issues have been part of our campaign, and some of our earlier webinars where we’re getting their input, which then led into the American Recycling Infrastructure Plan.
Neil Seldman:
Gary, I want to ask you a quick question here. I know that the break free from plastic bill at the federal level has been put in through Congress, but could you just give us a bit of detail about the bottle bill component of the general break free bill, and the latest developments in Congress as far as the bottle bill is concerned? The national bottle bill.
Gary Liss:
Yeah, actually, it’s a really interesting area of this activity. In Break Free From Plastic Pollution Act, introduced most recently by Representative Lowenthal from California and Senator Merkley, it includes beverage containers as part of an extended producer responsibility EPR system. And that was the type of thing that was of concern to some folks, including the National Sierra Club just recently came out with a beverage container guidance document, saying to be careful about doing exactly that. That it was, Sierra Club highlighted that the bottle bills are much more effective in getting recovery of quality materials when there’s a deposit on containers directly, like in the 10 states that already have beverage container deposits incorporated into them.
Gary Liss:
That there’s a better return and recovery of high quality material from those programs than there might be through a beverage container EPR program. And because of that concern, the Sierra Club just came out with this guidance document, highlighting those details. What’s being proposed that we understand is a separate and distinct national bottle bill. It’s not the first time it’s been introduced, but it’s building off of the momentum coming out of the Break Free From Plastic Pollution Act. The people who are working on that worked on the Break Free From Plastic Pollution Act, and they hope to have a standalone national bottle bill coming forward shortly.
Neil Seldman:
Thank you, Gary.
Jess Del Fiacco:
I had a question about, well, two things. One is, why now? Why is this the moment for this change? And then what’s your sense of, I guess, awareness and support among legislators for what you’re arguing for? Are you having to do a lot of education, or are people already pretty receptive and understanding of the issues that you’re advocating about?
Gary Liss:
Well, as far as why now is infrastructure is finally getting its due. There’ve been many folks involved in championing the need to invest in our national infrastructure, from transportation, to energy, to communications, and even on recycling. Five years ago, ISRI highlighted that they were working on the Recycle Act, and proposing to move forward with that. The National Recycling Coalition also discussed those types of issues five years ago. But it was with the new administration, commitment to infrastructure in the time of COVID as not only helping to address investment, and infusion of funds into the economy, to strengthen, to build back better. But also I would say a once in a generation investment in competing in the global marketplace. So infrastructure and getting the entire country economy and moving in a more efficient way has become something that is a bipartisan interest. And in fact, in August, the 2,700 page HR3684 Infrastructure Investment in Jobs Act was approved by the United States Senate, which was fantastic.
Gary Liss:
In July, the Compost Act was introduced. The Recycle Act had been introduced before, and the Recover Act and several other acts. And the way we understand things are happening in Congress is people focus on a particular subject area, like the Recycle Act, and they may not think that that bill will get adopted as is, but they may get be part of another bill. And that’s exactly what happened. The Recycle Act was incorporated into the bipartisan Infrastructure Investment Act in August. And as a result, we have several hundred million dollars of funds targeted for implementing the Save Our Seas Act that was adopted and signed into law last year, in 2020. Millions of dollars for the EPA to help on recycling right outreach and education programs, and up to $3 billion to deal with the critically important problems associated with battery recycling, and addressing the problems of battery fires, particularly from lithium ion batteries, that’s burning down our infrastructure all over the country.
Gary Liss:
So the bipartisan Investment Act is well on its way to addressing some really important aspects of what our needs are in the recycling world, and the zero waste arena. So now is the time, while there’s this momentum, while there’s this focus on infrastructure, to be part of all that movement. And we’re not having to convince people. The congressional leaders had been hearing about these things for years. What we’re needing to do is get our best ideas going forward to them, to incorporate into these different acts that can then be massaged in the sausage making process that is congressional legislation, into something that will get enough votes to get through both the Senate and the House.
Neil Seldman:
Gary, thank you so much for these details. You’ve been a terrific liaison with the recycling movement, and the zero waste movement, between us and Congress. And I just want to let the audience know that Gary has been identified as the vice president of Zero Waste USA, a nonprofit, but I also want to point out that he’s a very formative participant in the Sierra Club, as he mentioned earlier, and also with the National Recycling Coalition. So Gary covers a lot of bases.
Jess Del Fiacco:
And as always, we’ll have links to those different organizations, and any other resources that are mentioned in this conversation, in the show notes for this episode on our website.
Neil Seldman:
As we transition temporarily to Bob Gedert, I want to point out, of course, he’s the president of the National Recycling Coalition, but Bob has been a very active player, and among his many accomplishments, he took over the Zero Waste Program in Austin, Texas, which is a leading US city. He oversaw the Zero Waste Business Plan, which is quite a remarkable document. And he oversaw the development of the Zero Waste Plan for Austin, and among the other great things he’s done, he immediately renamed the department of solid waste in Austin to the department of resource recovery, which is a great psychological and strategic move. So it’s a pleasure to be talking to Bob, given his quite successful career in zero waste and recycling.
Bob Gedert:
Thank you, Neil. Thank you. And pleasure to be speaking to our audience today.
Jess Del Fiacco:
Yeah. So I think Gary mentioned trying to package all of your best ideas in order to get them out there, and into the hands of people who can make them happen. So I think it’s up to you to tell us what the American Recycling Infrastructure Plan is that you’ve developed, and how it was constructed.
Bob Gedert:
Yes. And thank you, Jess, for this program. And the question at hand, when we first heard President Biden speaking about infrastructure and the jobs bill early on, our first thoughts were on the great opportunity before us, of new roads and bridge construction infrastructure bill, and that it could utilize reused, recycled, and composted material. And all the way across the country, and that was our starting point there. Then our thoughts expanded to the fact that our recycling infrastructure across the country is aged, and in need of rebuilding to meet the recent 21st century needs. So to bring those thoughts further forward, we developed the Recycling Infrastructure Too campaign that Gary was speaking of, expanding the traditional definition of infrastructure to include recycling infrastructure. Moving forward from there, we built up the American Recycling Infrastructure Plan on two starting platforms. We incorporated the basic initiatives from some prior advocacy plans from some numerous partners of ours.
Bob Gedert:
We wanted to start with a good starting base of some very good ideas. And then we added some NRC policy initiatives that supported waste reduction, reuse, and recycling activities that were not addressed in these other plans. So we’ve built around these plans. This strategy created a comprehensive 50 initiative plan that is synergetic, and creative, and approaches an infrastructure that’s built around the three Rs, the reduce, reuse and recycle, and the plan was released on July 15th. It was sent to congressional staff and media contacts, and it has 50 initiatives like I mentioned, and includes requests for funding of $6.6 billion in the first year, and over a three-year package plan, the plan recommends a total investment of $16.3 billion. So that was our starting point. We are now campaigning for the inclusion of these 50 initiatives in the infrastructure conversations.
Neil Seldman:
Bob, if I could interject a quick question here, I know that the NRC ARIP plan drew on other plans. Could you just mention the other plans that you analyzed, curated, and eventually harmonized into your ARIP plan?
Bob Gedert:
Absolutely. Yes. The other plans we’ve worked on, and they’re very good advocacy plans, we pulled strengths from the paying it forward, the recycling partnership plan, the US food loss and waste policy action plan, which is a partnership of Harvard Law, Policy Clinic, Re-fed, and RDC, and WWF. Also recommendations to reduce plastic from pollution, from the Break Free From Plastics Act, priority plastics actions from President Biden’s first year, and the compost act from the compost infrastructure coalition. All of those had very strong recommendations that we pulled from, and that’s about 25 to 30 of our recommendations. And then we built around there, and added another 25 recommendations and basic initiatives, to create our 50 initiative plan.
Neil Seldman:
Great, thanks. I think people will appreciate that methodology.
Jess Del Fiacco:
So this is substantial, to say the least. There’s a lot in here. Could you share what are the highlights of the plan, and then how do you picture each of them changing recycling in the United States?
Bob Gedert:
Yes. And I’ll start, obviously I can’t list all 50 of them, but I’ll highlight some of the major initiatives. Funding the implementation of cart based collection to improve recycling services to 38 million residents in underserved communities. Recognizing that major cities may have curbside recycling, but some of the underserved communities that can’t afford it don’t have a recycling services. Invest in new and existing material recovery facilities, MRFs, and certain areas don’t have MRF sheds, that hamper collection of recyclables. Invest in hub and spoke transfer infrastructure in the rural areas where it’s more efficient to create collection infrastructure, recycling collection infrastructure, through a hub and spoke system rather than a single stream MRF collection system.
Bob Gedert:
Invest in recycling infrastructure development for lithium ion batteries. As we invest in electric vehicles, we need to develop a battery system that doesn’t catch fires at the MRFs, and can be recyclable, and can support the electric industry. My favorites that I want to highlight is require infrastructure use of recycled content products through the federal agencies, and through private agencies as well, too, to support and require that all federally funded infrastructure projects use these recycled and compost products on all the federally funded infrastructure projects across the nation. That would be a huge support for our recycling infrastructure, if every single infrastructure project across the nation used reused, or recycled, or compost products.
Jess Del Fiacco:
Thank you, Bob. We’ll continue talking about the campaign and the American Recycling Infrastructure Plan after a short break. Thanks for listening to the show. If you’re enjoying this conversation, I hope you consider heading over to archive.ilsr.org/donate to help support us. Your donation makes this podcast possible, as well as all the work that we do here at ILSR. Again, you can visit isr.org/donate to make a contribution today. Any amount is sincerely appreciated, and while you’re on our website, you might want to check out the other shows in the ILSR podcast family. They cover everything from broadband, to local energy, to composting. With that, let’s head back to the show.
Jess Del Fiacco:
I think, because this is the Building Local Power podcast, I do, I want to push on how this might affect the local level. What provisions in the plan are focused on the local level? So cities, counties, independent businesses. Could you talk about that?
Bob Gedert:
Yeah. I’ve run some numbers, and $3 billion would be available through 10 infrastructure programs and the plan offering grants to local cities, counties, solid waste districts, and Native American tribes. And $875 million is offered through 10 infrastructure programs in the plan, offering grants to small businesses. $1 billion through a infrastructure program. In the plan for MRF businesses. MRFS could be large or small throughout the country. The intent of all these proposed infrastructure initiatives in the plan, as we wrote it, are to provide opportunities to all communities through the lens of justice, equity, diversion, and inclusion. However, those values are not written into legislation, but rather in rulemaking and grant application processes, which comes down the road. All of us need to be at the table when the rules of the grants are written, and so it’s very important that our audience, as well as our organizations, be involved. And after the infrastructure bills are passed, that we are at the table when those rules are written.
Neil Seldman:
Bob, thank you for that last point, because the reality is that things can change very quickly when you write the rules. So we have to be on top of it. I have a couple of other points, actually questions. Do you foresee this money flowing directly to cities and counties, and towns, or do you see this going through state agencies, which are responsible for solid waste management?
Bob Gedert:
That’s a good question. And we’re initially writing it to include local communities. And as I’d wish to be involved, that this legislation passes the buck to the EPA, or the Department of Energy, or one of the federal agencies. So if we can get these initiatives pass through Congress, Congress assigns it to a federal agency to develop rules, to develop the grant programs. The grant programs are then developed internally at a federal agency, and they develop those assignments of where the grants will be delivered to. Generally speaking, they have their habits from past practices, and what we need to be at that table to talk to them about local communities. And local communities are not state level. They’re more local. And we need to be more inclusive, not just at the city level, but at the Native American tribe level, as well as even more local, at the non-profit, grassroots level as well. And we need to be more inclusive. And that conversation needs to be at that time, when the application rules are being developed.
Neil Seldman:
Very helpful and all the more reason why people like you and Gary have to be at the table. One last point, I want to make, not a question, but as I anticipate, as you’re rolling this out, that when the money flows to cities, counties, towns, or Native American agencies, et cetera, the locals will be making decisions on their infrastructure. As you know, some forms of EPR take that decision making authority and remove it to the stewardship organizations, the corporations. So I wanted to emphasize the continued tradition of local decision making, as the money flows through either directly from federal agencies, or through the state agencies. And I also, I’m assuming that if the money goes to a state agency, there would be administrative fees that are covered so the states don’t have the burden of handling money without administrative support.
Bob Gedert:
Absolutely agree there. Gary has a point there, I think.
Gary Liss:
Yeah. I just wanted to interject that the main EPR bill is a good example of essentially a compromise, in which it was the municipalities that have been struggling since the China National Sword policies were adopted that have made it much more difficult for marketing materials, and increasing costs for recycling programs. That it was those municipalities that wanted to continue their recycling programs, but couldn’t fund it that led to Maine adopting an EPR bill that will charge the industry that sells products into the state, charge them a fee that will then help fund the municipal recycling programs. And this infusion of infrastructure funds could have the same impact, in terms of making available funding for the needs of municipalities at the local level. So they’ll be able to continue and hopefully expand their waste reduction, reuse/recycling, and composting programs.
Gary Liss:
And most of the composting interest around the country is huge, but many places don’t have composting facilities. So the infusion of this type of funding could contribute significantly to enabling a lot more communities to move forward, and to move forward with innovative ways like community based composting, like the Institute for Local Self Reliance has been advocating for as a key component. So that there’s all different sizes and scopes of composting and recycling opportunities, that will hopefully come out of these types of investments.
Neil Seldman:
Thank you, Gary, just to point out that the type of EPR that Maine has passed, the first in the nation, is called EPR Reimbursement, because the fees are reimbursed to the cities, as opposed to some EPR systems where the money stays with the industry, and they conduct the recycling activity. I also want to point out that the infrastructure for small towns and rural areas on compost, and it’s critical, because all over the country, if you produce good compost, there’s a market for it year round. So this is a real boost to the communities to divert maybe one-third or up to 40% of their waste. And it also creates jobs, small businesses, landscaping businesses, et cetera. So infrastructure money on composting is critical. Thank you, Gary, for adding that.
Jess Del Fiacco:
I just wanted to go off that point. So this could be a question for any or all of you, and ask about small businesses and nonprofits that are currently involved in reuse and recycling, or composting, and what barriers they’re facing now, and what policies might come out of this plan to change things for them. If there’s any examples that you could share?
Neil Seldman:
I could start by talking to, or talking about, a project that my colleague Brenda Platt in our compost initiative… She has been working for several years with the Baltimore Compost Collective, and they’re moving along. It’s a small business, young people are involved, it’s a very charismatic leader, but they are restricted from expanding their collections and processing of compost, even though they could sell everything or use everything, because a lot of their compost just goes to community gardens. And they need a truck…I don’t have to describe what you need for a composting business. So they’re alive, they’re working, and they can do better and expand much more with an injection of capital. So that would be one small example of an inner city program, and I’m sure that would be… if the capital were available… it would be replicated throughout the country in small towns and rural areas.
Bob Gedert:
I would add that many of the initiatives in the American Recycling Infrastructure Plan that focus on waste reduction and reuse grants are specifically focused on small businesses. The large businesses totally ignore waste reduction and reuse opportunities. They’re very focused on large city recycling opportunities. So the waste reduction and reuse grant opportunities are very much open to the small business community, and an example of one of the initiatives is establishing reuse warehouses and reuse centers throughout the country, with a $250 million annual investment.
Neil Seldman:
You reminded me of, for instance, there’s a wonderful model in Pawtucket, Rhode Island, where money is being invested to help get reusables out of households into the warehouse system, and of course the distribution system, ultimately.
Gary Liss:
The key point to that is in terms of job creation, the investing in reuse creates upwards of 250 times more jobs than landfilling or burning that same material. Those are statistics, research by the Institute for Local Self Reliance. And that’s why there’s that emphasis in the American Recycling Infrastructure Plan, not only on recycling, but also on waste reduction, designing things out, getting it right from the beginning. Changing the systems, and setting up reuse systems, and building on, I call it the hidden investment in the reuse industry, because it’s hidden because most local governments don’t pay a lot of attention to it, because they don’t see it as diverting that many tons of materials. And reusables are typically two to 6% of the total amount of materials discarded in any given community.
Gary Liss:
But zero waste is all about not only diverting tons, but reinvesting those resources in the community. And the American Recycling Infrastructure Plan is based on that idea, that we should not only invest in recycling and composting, but also in those other activities upstream, to redesign the systems and to set up reuse programs and reuse facilities, and help with innovations like fix it clinics, and repair fairs, and other new reuse systems for reusable food ware that are being pioneered all over the country, just in the last year or two. So that’s what we’re envisioning some of that funding to go into, putting more of an investment so we’re not just investing in diversion from landfills and incinerators. We’re investing and reinvesting those resources in the local economy.
Neil Seldman:
I just want to add to that great statement, just a couple of things. Reuse stores pay sales tax. Recycling projects don’t. Urban Ore, which is a reuse organization at Berkeley, a reuse company, excuse me, they’re paying a quarter of a million dollars this year in sales tax. According to reuse Minnesota, the number of jobs is multiplying as Gary said. The Second Chance Baltimore has grown from 13 workers to over 200 workers in the last few years. And I hear from all the reuse people that I interview that sales are booming during COVID, doubling and tripling their gross revenues. And also Gary mentioned the companies. They’re such great names, The Bottle Underground, I can’t think… Oh, Conscious Container, the Reloop platform. And it’s very interesting because most of these new businesses, and there are dozens as Gary I’m sure could list more, just like the old days in the ’70s, most of these projects, enterprises, are run by women.
Neil Seldman:
Started and run by women, just like the drop-off centers. So we’re really seeing a recurrence, in both composting and reuse, of the early enthusiasm that we had in early recycling. And finally, these are where the growth numbers are coming from with recycling. Composting is soaring, and reuse is soaring. So we’re really, if you will, filling out the whole panoply of strategies. Not just recycling, but the composting, reuse, and people are just so creative that we want money flowing to them because we need this creativity to get to zero waste.
Gary Liss:
Unfortunately, the other thing that’s soaring is single use plastics, and the American Recycling Infrastructure Plan calls for eliminating oil depletion allowances, and other subsidies of the plastics industry embedded in federal policy and federal budget. And there’s many policies that need to be addressed. The American Recycling Infrastructure Plan didn’t try to address all of the different policies, but did look at those that would impact on infrastructure, and the differential of virgin versus recycled content being influenced by federal subsidies. And we recommended in the plan to eliminate a whole variety of federal subsidies, as one of the tools for funding that plan.
Gary Liss:
There are a number of other funding mechanisms, Bob, you might want to highlight, also in the plan. But this is a plan, not just how to spend money, but it’s how to generate the cash needed to be implementing these types of projects. And even if this doesn’t go forward at the federal level, the ideas in this plan could be applied at the state level, and communities around the country could advocate for their state to adopt similar funding mechanisms as Bob’s about to describe in the plan.
Bob Gedert:
And just piggyback on Gary’s statement there, eliminating federal subsidies, the plan states adopting a set of federal government source reduction and waste elimination policies is one initiative. Stop subsidizing plastic producers, particularly in federal purchasing policies. Stop all subsidies for chemical recycling, also known as advanced recycling and conversion technologies, and alternative technologies, and support policies to reduce waste. Eliminate federal subsidies to fossil fuel industries that fuel the climate crisis, and eliminate federal subsidies to mining, extracting, and manufacturing of products. So that’s what Gary was referencing there. And we also are proposing a funding mechanism to support many of these activities in our plan, adopting a national job, a green jobs fee on landfills and incinerators. Just a $20 a ton fee at all landfills and incinerators to generate revenue to support these initiatives. And fees on non-recyclable packaging or products that are toxic to the environment, or create needless waste. And then these fees would be a producer responsibility fee, that would be collected to pay for these infrastructure expenses as well, too.
Neil Seldman:
I want to add a historical note to this.
Bob Gedert:
Go ahead.
Neil Seldman:
Way back, in the early ’70s, Nottingham, New Hampshire was one of the first communities to get involved in recycling. Small town, of course. And there was a gentleman, his last name was McDonald. He had a plan to reverse the subsidies to virgin extraction by giving credits to every town that was doing recycling the same equivalent extraction. Now that would be ideal, of course, just to let you know that the great minds have been thinking like this for 40, 50 years. So now it’s time to put them all into practice, to save recycling, improve jobs and climate, et cetera.
Gary Liss:
But Neil, that is actually a model that’s being implemented in Berkeley, with a service fee, where the city of Berkeley is paying Urban Ore the same amount per ton as they’re paying to landfill materials that have to go to landfill. So that same idea is being implemented as a service fee in Berkeley, right, today.
Neil Seldman:
Yes, very important. And just to let people know, Urban Ore has a contract to be literally at the transfer station where the trucks are dumping it, and then it’s getting put in the trailers. And they can pick out… they’re professionally trained, of course… reusable, recyclable materials, and they’re getting, I believe about a hundred tons a week. And that’s what they’re getting paid for. They get $47 and change, which is exactly what the city would have to pay to tip it. But actually Urban Ore is saving them money because there’s no transportation to the landfill. Because Urban Ore is literally taking it and bringing it into their warehouse for processing and marketing. So thank you, Gary. The Berkeley service fee is a very important precedent.
Jess Del Fiacco:
Thanks to all of you, this is… I feel like we had a lot of information crammed into the last five minutes or so. And unfortunately we are getting towards the end of our time, so we can’t keep digging into it. But I did want to ask, just to wrap up, how do you see the timeline for ARIP going forward? And then how can folks get involved, either with the plan itself, or with the Recycling is Infrastructure Too campaign, and how can they bring these ideas to their communities? So I guess I’ll throw it to Gary to start.
Gary Liss:
On September 28th, we’ll be having at 2:00 PM Eastern, another webinar, one of our monthly webinars, updating on what’s in the proposed infrastructure bills. And we’re inviting the lobbyists I mentioned earlier that we’ve been collaborating with, to highlight their understanding of what’s in. Then at the National Recycling Congress on November 3rd and 4th, we’ll be having a number of sessions on the Recycling is Infrastructure Too campaign. You can find out more about that National Recycling Congress at nrcrecycles.org. To connect with the Recycling is Infrastructure Too campaign, we’ve set up a Google group, a little old school for some of you, but works for a lot of us. And the Google group is [email protected].
Gary Liss:
And that would be a good place to get resources in the future. We hope to develop a website, but we don’t have a particular location yet for all the materials. But if you sign on with the Google group, we also have a link for getting campaign notices, to be a supporter of the plan, a supporter of the original letter to the president and Vice President Harris on the needs for pursuing this approach. So those are some of the best ways to connect. And Bob, for the American Recycling Infrastructure Plan, do we have a link that we can share with folks on that?
Bob Gedert:
We do.
Jess Del Fiacco:
If you go to archive.ilsr.org, you’ll find all these links there.
Neil Seldman:
I have a very appropriate way of ending this interview, and that is by using the phrase that Gary has made famous. If you’re not for zero waste, how much waste are you for? It’s a great question, and Gary’s been asking it quietly, as well as loudly, for many years. And Gary and Bob, it’s been a pleasure having this discussion. Of course, we’re going to keep this going on many, many different forums and venues. And just thank you so much for giving us this time as part of our Building Local Power programs.
Bob Gedert:
Thank you for this great conversation.
Jess Del Fiacco:
All right, thank you very much. Thanks for tuning into this episode of the Building Local Power podcast from the Institute for Local Self Reliance. You can find links to what we discussed today by going to archive.ilsr.org, and clicking on the show page for this episode. That’s archive.ilsr.org. While you’re there, you can sign up for one of our many newsletters, and connect with us on social media. We hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast, and supports the research and resources we make available for free on our website. Finally, we ask that you let us know how we’re doing with a rating or review on Apple Podcasts, or wherever you find your podcasts. The show is produced by me, Jess Del Fiacco, and edited by Drew Birschbach. Our theme music is Funk Interlude by Dysfunction_AL. We’re the Institute for Local Self Reliance, I’m Jess Del Fiacco, and I hope you’ll join us again in two weeks, for the next episode of Building Local Power.

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45 min
September 02, 2021Rethinking Rural Connectivity with Christopher Ali
On this episode of Building Local Power, host Jess Del Fiacco is joined by Ry Marcattilio-McCracken and Sean Gonsalves, Senior Researchers with ILSR’s Community Broadband initiative, as well as Christopher Ali, an Associate Professor in the Department of Media Studies at the University of Virginia. Christopher discusses his new book Farm Fresh Broadband: The Politics of Rural Connectivity and recent news in the broadband policy space.
Highlights of the conversation include:
The communities Christopher visited while writing his book, and some of the local success stories he heard.
Why the concept of “rural” deserves a more nuanced definition than it is usually afforded.
How high quality, affordable broadband access can revitalize rural economic development in direct and indirect ways.
Where (and why) federal efforts to improve rural broadband infrastructure have fallen short, and how local solutions have shown the way forward.
“Cooperatives to me are the unsung heroes of broadband, particularly in rural communities. They operate… on a different mindset, because they are not driven by quarterly profit returns to investors and shareholders. They can take a much longer view in terms of return on investment. I also think that because they’re local, the accountability is different. I mean, when you run into folks in the grocery store or walking your dog down the street, that level of accountability, when someone says, ‘Hey, why don’t I have broadband yet?’ Or ‘Why has my Internet been out for two days?’ Or ‘Why is my bill so high?’ That level of accountability is so different that you don’t see with Comcast or Charter, or Verizon, AT&T, Century Link. I mean, that’s accountability from afar. This local accountability, and community service mindset of the cooperative, has been so important. And I think this is why we’re seeing so many… electric cooperatives move into broadband, willing to take that long-term return on investment.”

Related Resources
Farm Fresh Broadband by Christopher Ali
Broadband Infrastructure Bill: The Good, The Bad & The Ugly by Sean Gonsalves
Transcript
Jess Del Fiacco:
Hello, and welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power, and communications manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. And hello, today I am joined by my colleagues, Ry Marcattilio-McCracken, and Sean Gonsalves who are senior researchers with LSR’s community broadband team. Welcome to the show guys.
Sean Gonsalves:
Thanks for having us.
Ry Marcattilio-…:
Thanks Jess, good to be here.
Jess Del Fiacco:
And Sean has been on the show before, but Ry is this your Building Local Power debut?
Ry Marcattilio-…:
It is, yep.
Jess Del Fiacco:
Very exciting. All right. That means we have to haze you just a little bit. And we are joined by Christopher Ali, who is an associate professor in the department of media studies at the university of Virginia. Welcome to the show, Chris.
Christopher Ali:
Thank you so much. Great to be here.
Jess Del Fiacco:
Listeners might remember you from an episode you were on earlier this year, where we did mention that you would have a book coming out in a little while, and the book is now here, it’s called Farm Fresh Broadband: The Politics of Rural Connectivity, which is very exciting. And I think we can just start there. So do you want to talk a little bit about the writing process for this book? How did you approach doing the research for it? Who did you talk to?
Christopher Ali:
Yeah, so this is a book about five years in the making. And when I started it, I mean, I think everyone on this podcast and probably all of the listeners know that when you start thinking and learning about broadband, that learning curve is huge. So I didn’t even tell anyone I was writing a book about broadband for about a year, so I could just kind of get myself up to speed with all of the technical and technological aspects of broadband deployment. I started off originally, this was going to be a book, well, the book is about policy. It’s about the failure of policy to provide broadband in rural America. So I did about two or three years of really deep policy dives, really wonky stuff, which is kind of the stuff I love doing, but in about 2018, I started realizing that maybe there’s a chance that not everyone thinks policy is as exciting as I think it is.
Christopher Ali:
So I might need to humanize my policy work. And, with the help of some amazing colleagues and some amazing organizations, my hound dog, Tuna, and I embarked on a 4,000 mile road trip across the United States, mainly in the Midwest, we called it the rural broadband road trip, to put a human face on rural broadband, both the kind of failure of policy to provide rural broadband, but then also how communities were connecting themselves in the absence of a lot of federal leadership in this space. And of course so much has changed since I began this book five years ago, and so much has changed since the rural broadband road trip. But really the book is a combination of policy analysis, and then also that human face, that human story, and those community stories that are so important to this conversation about broadband.
Jess Del Fiacco:
Thinking about the human face of broadband issues, could you just point to a couple of things you saw in communities that illustrate either what broadband has done to change people’s lives in that community or what the lack is and what could change if there was better connectivity for folks?
Christopher Ali:
Yeah. Chapter four of the book is entirely dedicated to a place called Rock County, Minnesota. I spent a bunch of time in Rock County located in the Southwest pocket of the state. Rock County has 99.93% fiber to the home pass-by, maybe not take right, but one of the most connected counties in Minnesota and certainly one of the least populated. So it was a really interesting case study for me. How did this happen? And some of the vital things that, I mean, they have this amazing county administrator named Kyle Oldre, who became this digital champion and he recruited members of his board, supervisors, they got together. And it also demonstrates how vital it is for communities to understand themselves. What the digital champions in Rock County wanted, was they realized everyone wanted fiber to the home and they weren’t going to compromise on maybe kind of a fiber to the tower situation or a fixed wireless network or kind of a ring.
Christopher Ali:
They really were invested in fiber to the home. So they actually passed up some opportunities that came their way early in 2009, 2010. And they were waiting for what I call them the look at dance partner who would actually provide the fiber to the home. They found that in a cooperative, a telephone cooperative out of South Dakota, Advanced Communications, and they got a $5 million grant from the state of Minnesota through the amazing broadband office that they all have in Minnesota. And then they actually also bonded themselves for a million dollars to their wind turbine tax, which allowed them to then offer up 6 million, then plus another 6 million from Advanced Communications. And now they are one of the most connected communities in Minnesota. And not only that, but it’s attracted businesses, it certainly lowered prices. I mean, I think we’ve all heard stories of folks who have to Jostle between various cell phone subscriptions and satellite subscriptions.
Christopher Ali:
I heard of one radio station there who is in Luverne which is the county seat, that was paying thousands of dollars a month for broadband. Now their bill is 80 bucks a month. There was talk of some major economic development going on there as well. And so I think Rock County really demonstrates both the importance of digital champions, the importance of communities kind of understanding for themselves their own needs, their own digital and communicatory needs, and then working with an amazing state like Minnesota and a cooperative to make it happen. So the importance of partnerships as well. So it really is this great story that I hope I do justice to in the fourth chapter of Farm Fresh Broadband.
Ry Marcattilio-…:
I lived in Marshall, Minnesota for about four years, which is just a little ways north east of Rock County. And we had wireline broadband from Vast and I think Charter, and it was expensive and it was slow and it was pretty unreliable. I would think it would go out relatively regularly. And I didn’t even know this project in Rock County existed. And it brings me to this question, which is one of the kind of high level arguments you have going on in the book, and this idea of the network effect and why it’s important, not only to connect everyone, but to connect everyone with equal service. And I’m wondering if you could speak to that a little bit.
Christopher Ali:
Yeah. I mean, I think this is one of the major struggles going on with federal policy right now, is it just about getting the unconnected and under connected something? Or is it about getting them where we’re at the place where we all take for granted? High performance, high speed broadband, ideally low cost, although my internet bill certainly is not low cost. The idea being that everybody deserves and that, in my opinion, in my research, high performance affordable broadband. I think we all agree with that on this call. Because we can’t start creating, and what we have right now is kind of the second class, second tier of digital connectivity, where maybe you’ve got geosynchronous satellite internet, or you’re working from an old DSL connection. You can’t possibly participate in what we all take for granted, a zoom call like this, or when I teach and my students go out to their rural homes, they can’t participate in class.
Christopher Ali:
They might have an internet connection. And I think something that I’ve been talking a lot about is that not all broadband is created equal. And despite the fact that in federal policy, it is all equal, right? Just as long as it can get you to 25-3 it’s considered broadband, which is a another major point of critique of the book. But this idea that we really need to think about what connectivity will be like 5, 10, 15, 20 years down the future and not what connectivity is now or what connectivity was 5, 6, 7 years ago when we created that 25-3 threshold. So, everybody needs the ability to participate in this digital world that we all take for granted. And the more people who are on the network, the better. That’s the network effect, right? The network improves when we’ve got people, when we’ve got everybody connected,
Sean Gonsalves:
You know, Chris, you mentioned satellite and, and, and the various technologies. And I think anyone that works in this space knows that fiber connectivity is the gold standard, but there’s all of this talk and hype about 5G. You talk about that in the book. And there’s been quite a bit of talk and hype and great marketing, I guess, around the Starlink, connecting rural America. And so I can imagine there’s folks out there that say, well, Starlink is here or is coming, so why worry about investing in broadband infrastructure in rural America, et cetera? So it Starlink the answer?
Christopher Ali:
Yes and no. And that was kind of the easy way out. But here’s my concern. I mean, you’re absolutely right. Both 5G and Starlink, and I think we can lump them together because the hype around 5G and Starlink. Two, three years ago when I was working with some counties, all I was hearing is well, maybe we’ll pause our connectivity plans because 5G is just around the corner. Now the conversation is, well, maybe we’ll pause our connectivity plans because Starlink is just around the corner. I think Starlink sounds like it’s a viable option, particularly for remote communities. And I’m learning more and more about how Elon Musk has kind of pivoted away from saying, we’re going to provide broadband for everybody. Then it became, we’re going to provide broadband for rural. And now it’s, we’re going to provide broadband for remote.
Christopher Ali:
So, either the eligibility or the goal of Starlink is shrinking. But I mean, you know what, quite frankly, if Starlink can provide the connectivity in rural Appalachia, that would be fantastic. But I think that Starlink is just one possibility in a spectrum of possibilities that we have now. What worries me is when counties and communities and municipalities pause their digital strategies, because they think Starlink is just around the corner because of the hype. And it may be, but it also may not be, I mean, they’re still in beta, right? They’re still rolling things out. They’re still application only. It is also still expensive. That initial customer outlay a couple of hundred dollars may not be feasible for a lot of folks. Again, I’m thinking rural Appalachian, or like the islands of Maine or in Washington, those was really hard to reach communities.
Christopher Ali:
And so I think Starlink should be considered as a possibility, but we can’t sacrifice all of this great planning that the communities are doing in the hopes of Starlink coming and being this great savior. In the book, I kind of likened it to the play Waiting For Godot. You might just end up waiting forever for nothing because Starlink may not be there. So, I think communities need to empower themselves to keep moving forward with their digital connectivity plans and maybe keeping Starlink in mind as a possibility.
Ry Marcattilio-…:
Yeah. One of the things I liked about the book is that it’s got a great high-level of history of federal policy and programs for anyone who’s interested.
Christopher Ali:
Thank you.
Ry Marcattilio-…:
And you say that federal dollars on rural broadband aren’t being spent either efficiently or democratically. And I’m wondering if you can speak to one or both of those things with an example of how that plays out?
Christopher Ali:
For sure. Part of the main kind of high-level question of the book is that how is it that we, the federal government has subsidized broadband for at least eight years at about $8 billion a year, between the FCCS high cost fund and the USDA money, and then even more, if you include the billions of dollars that the recovery act allocated for broadband through and BIP through NTIA’s work, and USDA’s work, so billions and billions and billions of dollars have been spent. And yet the digital divide still exists. It’s still worrisome. And in some cases might be growing as we kind of have some folks on DSL and satellite and others who are moving up to fiber. So we’ve got this greater divide here. So what I mean is that it hasn’t the money hasn’t been spent efficiently.
Christopher Ali:
And is that traditionally, particularly at the FCC, the money has just gone to the largest and the loudest providers, right? If you look at the connect America fund phase one and phase two, several billion dollars, I mean, it just went to the 10 largest companies. They just said, here, we trust you to connect to this country. That’s not efficient. That’s not an efficient way to deal with billions of dollars. Nor is it democratic, when we know, we know that local providers be, they co-ops be, they small regional providers, be they municipal broadband providers, are the ones who are actually doing the on the ground connecting way more than the Century Links, or the Verizons, or the AT&T. So that’s what I mean, that it hasn’t been efficient because it’s been just going to these 10 largest companies. It also hasn’t been efficient because the standards have been so low.
Christopher Ali:
I mean, this 25-3 threshold has basically allowed the existence of DSL. Why do we have so much copper in the ground? Why aren’t we incentivizing providers to rip up that copper and move to fiber, or at the very least fiber to the node? And we’re just not seeing that because these policy thresholds have been so low that we’ve kind of grandfathered in all of these inadequate technologies. So that’s where it hasn’t been efficient. Then it hasn’t been democratic because we just gave money to the 10 largest providers without really thinking, I think very carefully about who is actually doing a lot of the connecting. And a lot of the times, even back in 2015, it was municipal providers were working through and of course, cooperatives were working through this. And they’ve really been shut out up until 2018, they were shut out of a lot of federal money, particularly FCC universal service fund money. They were a little bit better at USDA, but yeah, really shut out of that process. So absolutely hasn’t been efficient. Hasn’t been democratic.
Ry Marcattilio-…:
Another of the consequences that you track throughout the book is that with these huge providers, Frontier, and Century Link, taking hundreds of millions of dollars in federal subsidies a year, and then years down the road, reporting that they have been unable to meet their broadband build out requirements, leaving those communities stranded for connectivity options for more years to come.
Christopher Ali:
Yeah. I mean, that to me is one of the more vexing things and is a lack of accountability of where so much of this money has gone. And again, Century Link kind of becomes one of the main antagonists, I guess you could say in the book, where they have received over $500 million a year through the Connect America Fund, 2018, 2019, possibly even 2020, they have reported to the FCC that they have not met their build out requirements. And not only have they not been punished or sanctioned, or even a slap on the wrist, they were still eligible for more money through RDOF. So where’s the accountability going here at the federal communications commission? And hopefully we’re seeing maybe some more accountability measures through RDOF, through asking winners to hand back some of their money, some other ways, so maybe we’re starting to see some of that accountability.
Christopher Ali:
But I’ve got to be honest, even if you read the broadband component of the infrastructure plan, there’s not a lot of accountability measures written in the law. So it’s really going to be up to FCC, NTAA, USDA to enforce very stringent requirements. Otherwise, again, we run the risk of companies gobbling up tons of money, and then just saying, well, listen, we can’t do what we promised. I’m sorry? Sorry about that. And then moving on.
Sean Gonsalves:
Actually you just said two things in the last few minutes that I wanted to hit on. One of the things you mentioned were cooperatives. And one of the things that I find fascinating about your book is you get into the history of the rural electrification act and how the federal government really intervened to bring electricity to rural America. And we’re sort of in this moment of, this question of the broadband-ification of rural America. And one of the things I think that both Ry and I have written quite a bit about and seen, are just how well positioned electric and telephone cooperatives are to tackle these issues just in terms of their experience of building and maintaining infrastructure. They’ve got the poles and the crews, but they also have a different motive than the private markets. Can you talk a little bit about the importance of electric and telephone co-ops in solving the digital divide?
Christopher Ali:
Sure thing. And I would thank you first of all, both for your writing, because I don’t know if you noticed in the work cited, but I cite you both a lot. So it’s great to have this conversation. I mean, the cooperatives to me are the unsung heroes of broadband, particularly in rural communities. They operate, Sean, just like you said, on a different mindset, because they are not driven by quarterly profit returns to investors and shareholders. They can take a much longer view in terms of return on investment. I also think that because they’re local, the accountability is different. I mean, when you run into folks in the grocery store or walking your dog down the street, that level of accountability, when someone says, Hey, why don’t I have broadband yet? Or why is my internet been out for two days?
Christopher Ali:
Or why is my bill so high? That that level of accountability is so different that you don’t see with Comcast or Charter or, Verizon, AT&T, Century Link. I mean, that’s accountability from afar. This local accountability, and community service mindset of the cooperative, has been so important. And I think this is why we’re seeing so many, I mean, telephone cooperatives were kind of a natural inclination into broadband, but we’re seeing also so many more electric cooperatives move into broadband, willing to take that long-term return on investment.
Christopher Ali:
And I don’t want to put words into their mouth, but thinking as an investment in the community, rather than necessarily investment just for shareholders or investors. And this is what makes me so excited about talking about cooperatives, because we’re really able to feel, and to see that long-term investment in rural communities play out in real time. Just like happened in the 1930s with electrification and cooperatives, the 1940s and 1950s telephone cooperatives. I mean, they got the job done when AT&T failed, when big power failed in the 1920s, ’30s, and ’40s. So again, unsung heroes of rural broadband. Absolutely.
Jess Del Fiacco:
All right, we’ll get to the next question in just a minute, but first we’re going to take a short break. Thanks for listening to Building Local Power. If you’re enjoying our conversation with Chris Ali, I hope you consider heading over to archive.ilsr.org/donate to help support us. Your donation makes this podcast possible, as well as all the work we do here at ILSR. You can visit archive.ilsr.org/donate to make a contribution today. Any amount is sincerely appreciated. I also want to take a moment to plug Chris’s new book. Farm Fresh Broadband, go check it out. And with that, let’s go back to the conversation.
Sean Gonsalves:
One other thing that you mentioned also is the infrastructure bill, bipartisan infrastructure bill that passed the Senate. It contains the $65 billion for the expansion of broadband access, I guess, because 42 billion of it is going to be, as it’s currently written, shipped to the states and for broadband networks, the deployment, and then there’s money in there for various other things, digital inclusion and what have you. I got to say that one of the things in your book is important because it makes the case for why connecting rural America is important. One of the disappointments, I think for myself and others, with the broadband infrastructure bill among other things, and there’s a lot in there, it’s a mixed bag. Well, that one of the good things is that instead of the FCC where there’s no accountability handing out the money, that it’s one step closer to the localities who have the best sense of where broadband needs exist.
Sean Gonsalves:
And so this money will be given to the states, but it talks about defining unserved as areas that lack access to 25-3. And the bill basically says, that this money should be exclusively spent on those areas, and only until you can prove that every area in your state has at least 25-3 only, then can you spend money on underserved areas, et cetera. And so it seems like it’s a major investment that’s going to focus most of the infrastructure investment in rural regions, because pretty much everybody has access to 25-3, theoretically, networks. And so I’m wondering what your thoughts are on the infrastructure bill, if you see this as a watershed moment for investing, particularly in rural America in infrastructure there?
Christopher Ali:
I think you hit it on the nose of when you said it’s a mixed bag. I’m certainly not going to stop at 65 billion. I was disappointed that there was compromise, the original promise, of course, being a hundred billion. I for one was kind of onboard with the SCC’s 2017 report that said we need 80 billion to connect the country with high-speed broadband. When I testified before the Senate, that’s what I said we needed. And that’s the best report I cited. I’m certainly not going to scoff at 42 billion for deployment. Couple of things, yeah, I was disappointed that unserved was defined as 25-3. I was also a little disappointed that underserved was 100-20. I think that asymmetry reflects or is potentially reflective of the cable lobby, because cable can’t provide symmetric coverage. I’m a big proponent of 100-100 as kind of baseline.
Jess Del Fiacco:
Sorry. I just want to jump in for a second to explain why symmetric is important to people just in case.
Christopher Ali:
Right. Yeah. So when we’re throwing out all these numbers, we’re talking about megabits per second. And right now we have an asymmetric definition of broadband with 25 megabits per second download, three megabits per second to upload. As it was described to me, and how I talk about it in the book, is that download is really about consumption. It’s about benching your Netflix, it’s about streaming, it’s about social media. All the things that we kind of do on a daily basis. Upload is about production. Upload is about business. At three megabits per second, you’re struggling for a zoom conversation, let alone if you need to update upload terabytes worth of data. Doctors, for instance, can’t upload high resolution x-rays at three megabits per second. So we really need to be thinking about a much higher upload speed.
Christopher Ali:
The 100-20 gets us there, but the question is not, what can we do today? It’s, what could we possibly in five or 10 years? What will upload speeds need? And if we’re kind of stuck at the asymmetric, this 100-20, what are we missing out on? And that’s one of the hard things to predict is what’s the future going to hold? But if we liken it to electricity, my mind is like, well, we didn’t just say, well, a house can have one light bulb. You’ve got electricity, you’ve got one light bulb. We connected a house. And the same thing here. It’s like, we’re not just saying, well, you can have one computer connected to just enough internet to get through your daily work, but we need that high-performance broadband.
Christopher Ali:
And that’s why I was a big proponent of 100-100. Back to the infrastructure package. I like the idea of that going to states. One of my, through NTIA, of course, but one of my concerns is not every state has a broadband office. Not every state has a robust broadband office. I would have loved to have seen language in there that says for states to get money, they need to establish a broadband office. I have found, I mean, Pew Foundation found this as well, the importance of state broadband offices, and y’all know this in Minnesota. I don’t think can be understated, the importance of state broadband offices well-funded, well-staffed state broadband office. So I would like to see that, is this a potential watershed moment for rural broadband? Yes. I don’t think we’re going to be able to connect everybody at 42 billion.
Christopher Ali:
It’s just not enough, but a lot of people will get connected with this. A lot of good will hopefully happen with this money. So I’m not going to let’s say expression to look a gift horse in the mouth, but we’re going to have to see when the rules come out because the allocation of the money was a little vague. There’s not a lot of rulemaking around there. So we got to see what NTAA is going to propose in terms of actual rulemaking. But again, I would love to see more robust state broadband offices that act as information clearing houses, that act as grants, because we’re going to have a lot of money coming down the pipe, so we need to make sure that money is spent well. The other thing I might add is in the recovery act when NTAA and USDA got those billions of dollars, one of the main concerns was do they actually have the staff at those offices to be able to administer such money?
Christopher Ali:
That was one of the major critiques, particularly of the rural utility service is that they just didn’t have the personnel. And so people were making super fast decisions and sometimes bad decisions. Sometimes money went to failed projects. We also need to make sure that NTAA is well staffed and well equipped to be able to handle $42 billion passing through its doors. I got a little nervous when I saw NTAA call for volunteers for program review. I’d love to see that staffed and staffed appropriately rather than relying on outside volunteers. So there’s a lot of good that can happen, but there’s a lot of scaffolding that needs to happen, I think, before this money gets out. And of course the other thing is mapping we need to improve.
Christopher Ali:
The other thing that I was glad to see, and yet disappointed at the same time, 14 billion for affordability is fantastic. I would have liked the subsidy number to remain at $50 a month, rather than the reduction to $30 a month. And maybe this is something the FCC can tackle if we bring back net neutrality or entitled to regulation, which is a, do we need to mandate that providers have a low cost option that meets the $30? So it was less than $30? To me it goes, if that should go hand in hand, whatever how much we’re going to subsidize should be the mandated low cost option. That’s a question for the FCC, of course, because it wasn’t in the legislation.
Sean Gonsalves:
We could spend hours on this. But one of the things too, that I thought was a bit disappointing about the Senate passing this bipartisan infrastructure bill, is that it has been quite watered down from what, we were initially excited when Biden announced that he wanted to do this, as it related to broadband, there was a lot of talk about how localities and municipalities and cooperatives were going to be given a funding preferences, and that is missing in this particular infrastructure bill. So that is a bit disappointing. I think Chris would probably agree.
Christopher Ali:
Definitely. I would definitely agree. I was just, I was so excited when it was that White House fact sheet, right on the American jobs plan. Holy smokes, local, nonprofit, cooperatives, a hundred billion dollars, future-proof. Yes. That’s the kind of ambition we need. And then we see it get kind of watered down through compromise political compromise into kind of 65 billion for nondescript entities. I mean, I certainly noted the language that has said municipalities were not excluded and cooperatives were not excluded, so that was good, but definitely it took a little wind out of my sales intentionally. It sounds like it took a little wind out of your sails to, to see the final text.
Sean Gonsalves:
Yes. Indeed.
Jess Del Fiacco:
It does seem like that’s a huge change to even see that kind of language coming from the White House in first place. I mean, obviously these federal politics things are going to get watered down, but do you feel like there has been a significant shift just in the sense that there’s a tension on these local projects and different ways of thinking about policy rather than just complete domination from the big monopolies? Has that actually shifted or are we still very much kind of in Comcast’s thrall?
Christopher Ali:
A little bit of column A, a little bit of column B. I think that you’re quite right, Jess, for the president to have included cooperatives, localities, non-profits even within its original messaging was a big win, it’s a big acknowledgment. I think time and time again, municipalities, nonprofits, cooperatives have proven that they can make the connections and the connectivity possible where the traditional private investor driven market has absolutely failed in doing it. So I think who’s ever advising the president on these matters has done a good job, but this is not a time for those of us who champion local, non-profit, cooperative to get complacent. There’s still a lot of work to do, particularly around the rules. Big telco, big cable has, has this kind of insidious way of gobbling up a lot of well-intentioned money yet. I think we need to make sure that that doesn’t happen.
Christopher Ali:
And again, going back to Ry, your question about efficiency and democratically distributed funding, this is where we really need to stay on top of things or else we’re just going to see big money go to big cable and big telco without that kind of accountability that we all that we all hope for. So I’m optimistic, maybe this is the Canadian in me, but I’m optimistic that we’re seeing a little bit of the tide change in terms of towards one part where alternative providers to the big players. But it’s definitely still going to be a fight. I also think that like MTCA, and the NRDC has done a great job in working with their members, particularly, I think they’ve also done a good job in instilling the value of retail broadband to maybe some electrical utility cooperatives that were hesitant at first. I’m seeing a lot more movement there and I think that’s great. And they’ve proven, like I’ve said time and time again, that they can get the job done. So now we just got to fight for their right for money.
Ry Marcattilio-…:
This is a book that’s about local success in the face of federal policy failures or shortcomings, when stakeholders get together and local officials roll up their sleeves and start getting to work. I’m wondering if you can just take a couple of minutes and tell us about Rock County and the cooperative and what happened with the county seat of Blue Vern and the results of that endeavor that started unfolding in the last 10 years?
Christopher Ali:
Yeah, for sure. So Rock County knew back in the late, is the expression ‘naughts’? 2008, 2009, that they understood again through the county administrator, Kyle Oldre, that broadband was kind of the way of the future for economic development, for education, for health in their county. They also had an opportunity to get on board with some recovery act money that didn’t work, unfortunately, and then they really pivoted to wanting fiber to the home and weren’t going to compromise on anything less that’s what their community said they wanted. And that’s what their digital champion said they needed. So they were going with that. The hardest thing for them was finding that provider to do it for them. And this is something I’m seeing time and time, again, particularly in Virginia, where there might be some money available and there’s certainly the will available, but the dance partner, finding that provider, was and remains incredibly difficult.
Christopher Ali:
And again, this is where cooperatives can step up and do that provision. So Rock County found Advanced Communications, which is in South Dakota, which was already operating in a couple of towns in the county, kind of just right on the border. And they created an entity known as Rock County Alliance. There’s literally a rock and engraved rock in the county seat of Luverne in the courthouse commemorating the Rock County Alliance, and there’s a picture of it in the book. And so they formed a Minnesota based company. And by doing that, they were able to tap into Minnesota grants. They won the largest grant, I think it might be ever awarded for broadband in Minnesota, $5 million. I think the riskiest thing, or at least when I was hearing the story, the riskiest thing they did was bond themselves for a million dollars. And this is a county of 10,000 people.
Christopher Ali:
So to bond yourself for a million dollars, that’s a huge gamble on your future. And then advanced communications put up the rest of the money. So I think the entire project cost 12 million. They came in right on budget and then, Luverne, because it was already served technically with two cable providers, it actually had to get left out of the provision. So Luverne kind of became this island in a sea of fiber, this island without fiber in the sea of fiber. And the last time I talked to general manager of Advanced Communications, they were going to roll out into Luverne on their own dime because of course they would be a competitor. So they can’t get a subsidy for that. I use the word competitor and not the word overbuilder because I hate the word overbuilder, but they were a competitor in Luverne. And so they’ve moved in now and are just offering retail as competition on kind of un-subsidized.
Christopher Ali:
And again, I think this is really great about cooperatives is that they saw, they didn’t wait for that subsidy. They knew they wouldn’t be able to get subsidized for Luverne, but they saw a need and they filled it kind of this wall to wall coverage. And again, now you’ve got Rock County being one of, it was when I was doing my research, the most connected county in the state of Minnesota, I haven’t looked at recent Minnesota maps. I don’t know if that’s still true, but back in 2019, 2020, they were absolutely the most connected county. And then they got a grant from the Blandin Foundation to do digital equity, digital inclusion work, and that was done through the library. So what an amazing local story here and everything about it was local from the local digital champions to the provider, to the people, to the library. I mean, it’s broadband localism at its finest.
Sean Gonsalves:
I know we’re probably running out of time. One of the things I’m just going to say, and you don’t necessarily need to speak on, I was totally fascinated by the part of your book that talks about precision agriculture and the various technologies that really require this kind of reliable high speed, high performing internet connectivity. It’s fascinating. But the other thing that I found really fascinating, and maybe this is maybe something that you want to speak to is you have a very nuanced discussion in the book about what is rural America and what isn’t rural America and the tendency to sort of romanticize certain things, et cetera. And just how important though it is to connect rural America, not the least of which, because of things like precision agriculture and things of that nature and the importance of these things to the rural economy.
Sean Gonsalves:
But just kind of maybe pulling that lens back. This book does focus on connecting rural America, but the analysis and the discussion that you have made me think so much about my own, made me question my own assumptions about what I considered to be rural America and who makes it up and the kind of issues that they’re dealing with in rural America. So I don’t know that might be, I guess just sort of invite you to maybe talk to us a little bit about what is rural America, who’s in it?
Christopher Ali:
Sure. And that’s such a great question, Sean, because I think so many of us who don’t live in rural American, I’m kind of like halfway, I live at a town of 40,000 people, but it is not that you call farm pasture, necessarily these open spaces, right? It is so much more diverse. It is so much more eclectic. It’s so much more dynamic. And I think by kind of reducing rural entirely, and that’s what I say in the book, if we reduce real entirely to like an agricultural community, we’re really doing it a disservice. It is a lot more diverse. It has a lot more unique challenges. It’s also, I will say, I think we also might have a tendency and this was certainly true I think during the Trump administration to reduce rural America to a place of whiteness, whereas rural America is in fact more diverse, the highest immigration rates were into rural communities.
Christopher Ali:
And so we’re seeing the changing face of rural America, literally the changing face of rural America and the diversification of rural America. I also think that it’s not a zero sum game to write a book, and I’m going on a tangent here, about rural America and about rural broadband does not negate the importance of urban broadband, tribal broadband, low cost broadband, broadband for education. I mean, this was just one piece of a much larger, broadband ecosystem that we need to tackle simultaneously. But I was really surprised in 2019, I wrote a piece for the New York times talking about the need for broadband in rural America, and amidst a bunch of emails of people who liked the piece also quite a lot of people complaining of why I would champion rural America, well aren’t they just, well, a bunch of Republicans, people who chose to live in rural America, it’s their fault for living in rural America.
Christopher Ali:
So I was getting a lot of complaints, a lot of criticism for you’re saying this, but again, if we reduce rural America to these kinds of false essential qualities we’re doing such a disservice to these really amazing communities. And so hopefully what the book does is kind of dispel some of these myths and maybe encourage people to go to rural America. We’ve certainly seen during the pandemic, people are moving outside of cities into more rural communities. But one thing they’re not thinking about asking about is broadband because we just assume there’s connectivity. I’m going a little all over the place here, but suffice it to say that the part of the point of the book is to dispel some of these myths and decentralization that we might have about rural communities. And hopefully it’s done that job at least a little bit maybe.
Jess Del Fiacco:
Thank you so much, Christopher. That’s really great. And I would encourage all listeners to check out the book again, it’s called Farm Fresh Broadband. Chris, if there’s anything else you want to say about the book, where can folks find it, or if there’s any other resources you want to point people towards?
Christopher Ali:
Yeah. I mean the book can be found online with most book retailers, including, Amazon, MIT press, Penguin, Random House, Barnes and Noble. I mean, they’ll all carry it. It probably won’t be found in a lot of local bookstores. Although if any local bookstores are listening to this podcast, they can certainly stock the book and people can also find me on Twitter or feel free to reach out on email. I love hearing people’s stories about broadband. I love it. I love getting emails. I love getting tweets about this. So who’s ever listening, please don’t be shy to share your story and we’d love to keep this conversation going.
Jess Del Fiacco:
Great. Thank you so much. Thank you to you, Christopher. And thanks Sean and Ry for joining us today.
Christopher Ali:
Thanks so much for having me here.
Ry Marcattilio-…:
Thank you.
Jess Del Fiacco:
Thank you for tuning into this episode of the Building Local Power podcast from the Institute for Local Self-Reliance. You can find links to everything discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That’s I-L-S-R-dot-org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. We hope they’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website. Finally, we ask that you let us know how we’re doing with a rating or review on Apple podcasts or wherever you find your podcasts. This show is produced by me, Jess Del Fiacco, and edited by Drew Birschbach. Our theme music is Funk Interlude by Dysfunction_AL. For the Institute for Local Self-Reliance I’m Jess Del Fiacco, and I hope you join us again in two weeks for the next episode of Building Local Power.

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39 min
August 19, 2021Main Street’s Missing Ingredient: Small Scale Manufacturing
Sanborn Fire Insurance Map from Baltimore, Md., 1936.
On this episode of Building Local Power, host Jess Del Fiacco, ILSR Co-Director Stacy Mitchell, and Senior Researcher Kennedy Smith are joined by Ilana Preuss, the founder of Recast City, a firm that works with city officials and local leaders to integrate space for small manufacturers into placed-based development projects. Ilana, Jess, Kennedy, and Stacy discuss how small, locally-scaled manufacturing fits into the broader small business landscape, and how it can contribute to vibrant downtowns and commercial districts.
Some highlights from their conversation include:
The history of manufacturing in America’s downtowns and how the modern small scale manufacturing movement compares.
How manufacturing can contribute to the vibrancy of downtowns and complement the benefits of retail shops, restaurants, and other businesses.
Small scale manufacturing’s role in equitable economic development.
Small scale manufacturing success stories from communities across the country and how funds from the American Rescue Plan Act have the potential to make a huge impact.
Purchase Ilana’s new book Recast Your City: How to Save Your Downtown With Small Scale Manufacturing at your local bookshop or through Island Press (enter the promo code RECAST at checkout for 20% off).
“One of the things that I find most exciting about working with small scale manufacturing business owners is they cut across every different part of our demographics. So when we’re working to build inclusive communities of business owners that really represent our demographic diversity, small scale manufacturing is a really exciting way to get there. It doesn’t matter what community divide we’re looking across, income, race, ethnicity, immigrant status, people make stuff. In fact, it’s the basis of a lot of people’s culture or heritage. And so the opportunity to teach entrepreneurship and to help build wealth in communities across the country across our demographics is really potent because so many people have this ability to make things and build wealth for themselves, their households and their communities because of it.”

“I think people are really at a moment where more people are open to what they deem new ideas even if they’re really old ideas like what you were describing. They want to do more good for more people in their community, which is great. They’re conscious or they’re aware of what they haven’t done for people in their community in their past. And so I do think we are at this really exciting transformational moment where communities can make these different decisions and say, we want to be not just a place that consumes but a place that produces. And how do we support that in all of the spending of the community and all of the ways, all of the decision-making that happens in the community can do this.”

Related Resources
Recast Your City: How to Save Your Downtown With Small Scale Manufacturing by Illana Preuss
Open Works Baltimore
Made in Baltimore’s Home-Run Accelerator
Scaling Up! South Bend
Bull Moose Music
Xometry
Saltbox
Sanborn Fire Insurance Maps
Ivy Bookshop in Baltimore
Transcript
Jess Del Fiacco:
Welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and Communications Manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands.
Jess Del Fiacco:
In today’s episode, we’re going to discuss how locally scaled manufacturing can fit into the broader small business landscape and how it can contribute to vibrant downtowns and commercial districts. I’m joined by my colleague, Stacy Mitchell and Kennedy Smith. Also joining us to talk about her work on small scale manufacturing in city design is Ilana Preuss. Ilana is the founder of Recast City, which is a firm that works with city officials and local leaders to integrate space for small manufacturers into place-based development projects. Her new book is called Recast Your City: How to Save Your Downtown with Small-Scale Manufacturing. Welcome to the show, Ilana.
Ilana Preuss:
Thank you so much, Jess. I’m really happy to be here.
Jess Del Fiacco:
And we’re here happy to have you and welcome to Kennedy and Stacy as well.
Stacy Mitchell:
Always fun to be here.
Kennedy Smith:
Thanks.
Jess Del Fiacco:
And I think Ilana, you can get us started. Maybe you could just tell our listeners a little bit about your background and what brought you to the point of seeing small, independent manufacturers as key to revitalizing our communities.
Ilana Preuss:
Sure, would be happy to talk about that. I come at all of this from a place perspective. My background’s in least formally is in city planning. I did a lot of policy work for a long time with different size communities all over the country, what I called the small P politics puzzle of how do you get decision-making to happen around housing choice and transportation choice, and really re-investing in downtowns before it was cool to invest in downtowns? And over the years, I realized that we kept talking about a jobs housing balance or local jobs or resilient economies but we never talked about what it took to create that and who played key roles in that.
Ilana Preuss:
And so a bunch of years ago now I went through this exploration to look at what kinds of local businesses and what kinds of small businesses can make a really big difference and landed on small scale manufacturing, which are these businesses that create products. They’re generally businesses with 20 or 50 employees maximum all the way down to individual business owners. And they make a product, a tangible product, I call it hot sauce, handbags or hardware. You can refer to it as artisans through advanced manufacturing but it’s all of the different kinds of businesses that are in our communities that make stuff. And I looked at the role that these businesses serve in our community not only to create better paying jobs, but to fill vacant store fronts to create more opportunity for more people and to really start addressing how are we bringing economic resilience to places and to people that have been left behind in our economy?
Stacy Mitchell:
I thought manufacturing was dead. I mean, that’s the conventional wisdom out there. So is that not true or did something change or is this like a particular segment of manufacturing?
Ilana Preuss:
That’s a great question. The truth is right over the ’80s and ’90s in particular, large manufacturing really left the country. We have a lot of offshoring. We know the history of North Carolina with the 2,000 person textile company that disappeared almost overnight leaving people unemployed. And we have a long history of that in a lot of parts of our country unfortunately. What happened though in the years since then really looking over the last 20 years that I don’t think honestly many people were paying attention to it because manufacturing almost became this thing that nobody wanted for a long time. We had people who had the skills to make stuff that started doing it at a smaller scale. So the same textile company in North Carolina, the guy who was the former manager started his own t-shirt manufacturing plates and a shop, and is now all organic and green manufacturing building and at 20 employees.
Ilana Preuss:
So we’re seeing it happen and succeed at a very different scale. And part of it is because of it’s very nimble, it’s able to respond to customization requests or quick requests where overseas is to at risk these days with supply chains. But we’re also seeing that because of online scales and the reach of any small business in our country, that it can be a successful and a positive revenue generating business anywhere in the country as well. And so small scale manufacturing really is seeing this. I don’t even think you can call it a resurgence because I don’t think we’ve seen it this way before. It’s so much a characteristic of having this online existence along with being placed in a lot of our communities. So it’s a new thing unto itself.
Ilana Preuss:
At the same time over the last 10 years, we have seen what they call reassuring. There is some large manufacturing coming back to the country, but it’s a different animal. It’s very different than what’s going on at the smaller scale and honestly has different needs. One of the really exciting things to me about small scale manufacturing is it fits into our neighborhoods. It can go into downtown, it’s modern manufacturing. You can walk up to a storefront window and look in and see something being made, and that’s honestly the coolest thing in the world to most people. And so they can have this dynamic contribution to our communities as well.
Kennedy Smith:
Ilana, who are the people who are starting these small scale manufacturing businesses, who are making the handbags, the hot sauce and the hardware?
Ilana Preuss:
They’re all different kinds of people. And one of the things that I find most exciting about working with small scale manufacturing business owners is they cut across every different part of our demographics. So when we’re working to build inclusive communities of business owners that really represent our demographic diversity, small scale manufacturing is a really exciting way to get there. It doesn’t matter what community divide we’re looking across, income, race, ethnicity, immigrant status, people make stuff. In fact, it’s the basis of a lot of people’s culture or heritage. And so the opportunity to teach entrepreneurship and to help build wealth in communities across the country across our demographics is really potent because so many people have this ability to make things and build wealth for themselves, their households and their communities because of it.
Ilana Preuss:
So they are all different kinds of businesses. The handbag maker in DC, the chocolate maker, I do find the chocolate maker in my travels as much as I can. The high end advanced manufacturing happening out of a small 1,000 square foot space because the tools are so efficient now. These kinds of businesses are tucked all over our communities.
Jess Del Fiacco:
So in your book, you categorize the differences between the small makers and producers and then retail shops, restaurants, other things you might find in a city’s downtown. Could you talk about what some of those distinctions are, the roles those different things play? And what does the small-scale manufacturing bring into a neighborhood into a community that these other kinds of small businesses don’t?
Ilana Preuss:
When we think about our main streets or our downtowns, people are in our storefronts. People are generally thinking about restaurants and bars or retail shops. It might be a mom and pop shop, it might be a retail chain, but a retail shop where somebody is walking in the door, buying something leaving, and that business is revenue is based on people walking into the door and buying something and leaving. What we’ve found, and this was true even before the pandemic, but even more so now with this need to think about our storefronts in a way of how do we disaster proof them in some way?
Ilana Preuss:
And our businesses, how do we disaster proof our businesses? Small scale manufacturing businesses often are both selling online already and can sell in person, especially if it’s a consumer product so that you can have them in a storefront where maybe there isn’t so much foot traffic yet, where traditional retail isn’t going to survive because there isn’t enough foot traffic, but small scale manufacturing will do fine there because they are selling online either direct to consumers or wholesale to other businesses.
Ilana Preuss:
And then they can be a draw for additional foot traffic not only because they fill the storefront, but because they are this dynamic experience of being able to look in the window and see things being made. And so they become almost an amenity for the downtown. So these businesses create all of these benefits for our community and they’re not dependent on only people coming in the front door. It’s a great benefit probably to the business but they’re not going to be solely dependent on that. And so there is this other type of business that most communities honestly haven’t really thought about and in our historic world of zoning, in land use planning, most places have said that they don’t permit this kind of use in downtown.
Ilana Preuss:
And so one of the things that we do is run around the country, promoting this idea of an artisan manufacturing land use definition, so that at least you can make it a permitted use. And one of the communities we worked with a couple of years ago, Columbia, Missouri, they had a brand new mixed-use zone for this old corridor north of downtown. The mixed-use zone was exactly what anybody would want to see with residential or offices in retail, in an area that really has a lot of road traffic right now, and very little building there, but it didn’t allow artisan manufacturing. And just north of this corridor is all light manufacturing.
Ilana Preuss:
And so it’s really a place where people come to do work and to create goods. And the community was really excited about being able to not only add to that as part of a place where people do business and create products, but really create a place where families can come together because in Columbia, Missouri downtown is really owned by the college students because that’s the base of Mizzou. So they wanted to create a neighborhood destination that is really for local families but also a place where small scale manufacturing businesses can come together. So they just recently in fact, got an artisan manufacturing land use definition approved as part of the addition to this neighborhood. And so it’s that kind of detailed stuff but also this broader question of how do we pull it all together from a storefront perspective?
Stacy Mitchell:
I got into a lot of skepticism around economic development around the idea that small, anything can matter, like it just seems really marginal, like see small businesses with… you’re talking about businesses that are starting out as a one-person business or a handful of people, that doesn’t seem like it’s going to move the needle at all. And that’s the response that we run into a lot with local officials. I’m curious what you think about that and how you respond to that.
Ilana Preuss:
It is something that I run into in a lot of places. I think that the winds of change has gotten stronger coming out of the pandemic, I don’t know if we can say coming out of the pandemic. Where we are in the pandemic, I think a lot of community leaders recognized how important their local small businesses are to just the identity of their community and the outcry of support that those small businesses got. So I think that’s an important first step. I think the other side of it is to realize that there are some places that focus solely on big business recruitment, we know that people throw money at that all over the country, but very few places win even if you… you can say it’s not actually winning but very few places win the recruitment bottles. And so the question then is, what does everybody else do? And that’s the vast majority of the country.
Ilana Preuss:
And so if I just focus on the vast majority of the country that isn’t going to focus on recruitment that does believe in their downtown, well, then if we can find five businesses that might have five employees and help them grow to 20 employees, all of a sudden that’s a significant impact. It’s going to start looking the same as recruiting 100 person business to the community but this one is rooted, has very deep roots in the community and is going to reinvest in the community as well.
Ilana Preuss:
And so starting to look at not just how do we help create more startups? We are a startup obsessed country I think in many ways, but finding these existing product businesses that are already there doing good business in the community, one person, two person, five person, 10 person, and helping them figure out how to be more resilient, increase their revenues, add staff if that’s what they’re interested in doing, all of those things are going to be benefits to the community and have ripple effects. Because the more that our small business community knows that we’re taking care of them as a team of local leaders or nonprofit and infrastructure around them, the more that we attract those kinds of people to our community and the more that people within the community are going to have mentors to be able to grow and scale their own businesses as well. So it builds its own feedback loop over time.
Kennedy Smith:
So when you think about all the billions of dollars that communities are throwing away chasing smokestacks or the modern equivalent of smokestacks these days, big businesses that are never going to come there and even if they do, they’re only there as long as the incentive lasts and they’re not creating that volume of jobs, you can take that money and use it to really nurture this local talent and help these businesses grow from five workers to 20 workers. What is it that we need? What’s going to make that happen? What if you… suddenly Ilana said you have all this money, make it work.
Ilana Preuss:
You mean just like everybody has all this American Rescue Plan money that they don’t know what to do?
Kennedy Smith:
We’re going to get to that too.
Ilana Preuss:
Sorry, I didn’t mean to jump to that. So there’s three major topics that I always come back to, that means that we’re building an infrastructure around this business sector that is robust like we’ve done for tech and like we’ve done for other sectors like biotech that we’ve deemed important. And I believe we are at a point now, and we’re starting to see venture capital get behind some of this infrastructure, which I think is a very interesting sort of winds of change thing to look at. So there’s three things that I always come back to. One is business development support. In some communities, we have incredibly robust business development training programs both for startups and scaling up businesses in the tech sector. We have existing models of those things for the small scale manufacturing sector, both for startup small scale manufacturers, artisan businesses, as well as those that are established and want to scale up.
Ilana Preuss:
So we need the business development infrastructure and make sure that we’re doing it in a way that is inclusive, that we’re reaching all the different parts of the demographics in our community, that we’re building the partnerships to make that possible. That’s the first bucket. The second bucket is real estate. What kind of space do these businesses need from micro retail, a 400 square foot storefront, to a scaling production space that might be focused on wholesale, which is 5,000 square feet? Well could have a small retail frontage that’s still part of downtown. Those kinds of models don’t exist in most communities and in fact when we look at a lot of our small towns, we have a ton of either legacy property owners or distant property owners that are sitting on buildings that have been vacant for the last 10 to 15 years.
Ilana Preuss:
And nobody has any idea how to bring them up to the current conditions and turn it into a welcoming place, the funding isn’t there in most of our small cities and towns to do it. And so creating the right kind of real estate for both small and growing small scale manufacturing businesses in our communities is going to be an important second bucket. And then the third bucket is capital. A lot of these businesses to go from five to 10 to 20 employees need to buy a really expensive piece of equipment, but it’s that catch 22 of I can’t afford the piece of equipment because I can’t make more of the product yet. And so if I can’t make more of a product yet, I can’t afford the piece of equipment. And so having financing that is friendly to small scale manufacturers and having people running that financing who understand small scale manufacturing is going to be an important part of it as well. So it’s those three buckets, business development support, real estate, and capital.
Jess Del Fiacco:
I just want to… Oh, go ahead.
Kennedy Smith:
Oh, go ahead. I have a related, a follow-on question I guess, and that is that, so we have these three buckets of things that we need but it seems to me like it’s going to take cities a little bit of rearranging their priorities. At the core of this, there needs to be a small business focused economic development strategy in place at certainly the local level and maybe at the state level and heaven forbid, the national level. Do you see that happening anywhere? Are you seeing communities retooling their economic development plans so that they’re focused more on small businesses and they are on the larger businesses they pursued in the past?
Ilana Preuss:
I would say right now, we’re at a yes and moment. I think if we can get… I feel like I’m working with a lot of communities that aren’t particularly working on big recruitment anymore, but they’re not exactly sure what to do if they’re only focusing on small businesses. So they’re at a point where they’re saying, yes and we’re ready to take on this topic of small scale manufacturing, but nobody is clear yet about how do you take that to scale at a city-wide basis. For a smaller town, I think it’s going to be a little bit easier to integrate it as the basis of an economic development strategy, but I think that we have so much… I don’t know what the right phrase is. It’s almost like legacy neglect. Nobody’s been paying attention to these small businesses for so long that to build this back up from scratch is really building up an infrastructure from whole cloth.
Ilana Preuss:
And so I find that when we can focus on a very tangible type of business in a very tangible kind of place, we show everybody how to do it and then you can replicate that model with a different business sector. And so obviously that’s the way I go about doing it. But I do think that if the cities look at things like procurement, the city, the local government and its spending and how much can it spend within the local economy to byproducts versus outside of it, working and creating matchmaking with anchor institutions about that, all of the ways that an economic development staff is doing work and focusing it on small business.
Ilana Preuss:
And a lot of cases, I think it means a lot of retraining or new training of economic development staff because people coming out of economic development programs are learning more about small business these days as far as I can tell, but still are focused a lot on recruitment financing. And so I think there’s an interesting question about how do we change the training that a lot of people are getting as they’re coming out of these programs as well as a part of it?
Jess Del Fiacco:
I was going to go back to a thing you mentioned briefly a couple of questions ago, which was talking about equity and how you see the role of small manufacturing in equitable economic development. If you could just expand on that.
Ilana Preuss:
Absolutely. We know that the economic development investments and the planning and community development decisions of the past many, many decades are baked with systemic racism. It’s not news to anybody at this point, well, I hope it’s not. I think when we are looking forward on economic development, I work with communities to think about two key steps first always. One is, what is the outcome we’re trying to achieve? And getting really, really specific about it, which makes everybody uncomfortable. And then two is, who should benefit from this investment that we’re making? And that makes them even more uncomfortable, which is fine, that’s part of my job. But I think we have to be really clear about what it means to want to create more equitable outcomes.
Ilana Preuss:
Equitable outcomes is going to mean something very different in each place potentially. And so when a community is looking at economic development strategies overall or small scale manufacturing specifically, I think we have a responsibility before we go into it to say, what is the major outcome we want to achieve? Is it that we want to fill the storefronts downtown no matter what? Is it that we want to fill the storefronts downtown with business owners that represent the demographic diversity of our community? And being really specific about who should benefit from the investments, because any work that the community does either within the local government or outside of it is an investment. It’s an investment of time, of money, of resources, of different kinds.
Ilana Preuss:
And so we have to be specific to make sure that we know if we’ve succeeded, we have to be specific about who should benefit from it and achieving equitable and more equitable outcomes to me is really a major part of that, of saying there are black and brown business owners that have really been denied the opportunities of other business owners for decades, we need to make a difference around that. There are rural communities that have been left behind very purposefully in fact, in certain ways in some states, and we need to make sure that they’re benefiting in other ways now.
Ilana Preuss:
And really thinking purposefully about the investments and the intention of what we’re doing and not just like we’ve done for decades, say oh, we want to create this loan fund, we’re just going to put it out there and just see what happens. Because we know that whoever was clued into that fund in the past and whoever benefited from it in the past is most likely the entity that will benefit from it in the future if we just put it out there. And if we go out and we build new partnerships with organizations or community leaders that are Connectors, I call them connectors with a capital C, if we find these Connectors into different parts of our demographics within the community, then we can purposefully get that information out there and we can purposefully learn about what that population needs and build programs specific to their needs so that we’re actually de-risking our investment when we know what they need and we’re building specifically to their needs.
Stacy Mitchell:
Are there particular cities or towns that have done that well or particular strategies that you’ve seen work? Can you give some examples?
Ilana Preuss:
Sure. Let me think. There’s a couple of different cities we can talk about. Baltimore is in fact my favorite poster child at the moment, they’ve done a whole bunch of stuff somewhat quietly and it’s all adding up to a lot more right now. Baltimore created the Made in Baltimore program five or six years ago originally in partnership between the city government and a federal grant from the U.S. Economic Development Administration. The person who led the program very purposefully reached out to a diversity of artisan community and cultural leaders and when they launched the Made in Baltimore brand, it was truly a party celebrating all that is Baltimore, diversity of Baltimore was in one room and really one of the most joyful events I think I’ve ever been to in a city.
Illana Preuss:
And since that launch, they’ve created all sorts of partnerships. The Makerspace that’s in Baltimore called Open Works has a number of different entrepreneurship programs and workforce development programs around the machines at the maker space, which is a space open to the public with access to shared tools through classes or membership. But more recently, Made in Baltimore launched a program called Home-Run Accelerator, where they competed assistance and identified a cohort of existing business owners who are all home-based right now who want to scale and go into store friends.
Ilana Preuss:
And so the business owners that qualified into this program went through about a 10 week training and at the end of the training, they qualify both for grant assistance to cover some of the costs of a space, but also the program makes matchmaking introductions to property owners who have space that is affordable, and who want to welcome small scale manufacturers.
Ilana Preuss:
So it means that Made in Baltimore is really walking these business owners through the entire structure, business development, real estate, and capital to help them set up in one location to succeed. There’s a program like that that was in South Bend, Indiana, called Scaling Up! South Bend that also identified existing product business owners in South Bend. South Bend when they went to build their list, had never with a big manufacturing history and that city never knew if they had any small scale manufacturing, thought they might have a little bit within a couple of weeks, had a list of 1,000 small scale manufacturers in the city.
Ilana Preuss:
It’s this hidden explosion, this hidden engine of the economy that was going on. And so they also competed assistance for this training program that was run by a business out of Chicago called 37 Oaks, which is run by a woman named Terrand Smith that is all specific to product businesses, pricing, e-commerce, distribution, the nuts and bolts of what it means to have a successful product business, and all geared towards existing product business owners that are interested in scaling.
Ilana Preuss:
It’s exactly that economic growth focus that we think about in other places. So they’ve both done interesting things with that. Columbia, Missouri, one of the things that we do with all the communities that we work with is we’ve got to interview small-scale manufacturing business owners. So in their own words, we find out what works or what doesn’t work within the community. And one of the gaps that we found in Columbia, Missouri was that people had food product businesses at home that were bursting at the scenes, that they were making products at home through the state’s cottage food law, but they had reached their capacity.
Ilana Preuss:
And so the need for a commercial shared kitchen, especially for women owned black and brown and business owners within the community was exploding and really important. And so the improvement district on this corridor that I called the loop partnered with the regional economic development authority to invest in a nonprofit mission-driven commercial shared kitchen in a space that was owned by the university. So it was this wonderful partnership and that’s all on the corridor that they were working on. So it was just this wonderful partnership. And it opened during the middle of the pandemic. And so this space has training for food product businesses, access to the commercial kitchen, and they rebranded the whole corridor about people who make things. And so it’s really creating this energy and this draw to this area for other businesses like this.
Kennedy Smith:
I really think you’ve heard me talk about some of these businesses before in my travels. These are my favorites when you come across these businesses that are making amazing things. And in the middle of nowhere, I think you’ve heard me talk before about a woman I met in Iowa once who had a storefront space in a downtown with an antique shop in the front of it. And it got a couple of customers every now and then, but then she had these swinging cafe doors about halfway deep the store, and I asked her what was going on behind there and she said, “Oh,” well, she had been having dinner with her brother-in-law who was a civil engineer and he was saying one of the problems these small towns have is that when you are putting in water pipes and sewer pipes, the diameter changes and you have to get a step up ring and a special washer of every size.
Kennedy Smith:
And in a small town, you might use five of those a year but you have to buy them as a gross. Then you have to buy them in every size and it’s expensive. And so she thought, hmm, there’s 24,000 small towns in the U.S., what if I buy a gross of all of these and when nobody is in my store which is most of the day, I’ll be back there with my shrink wrapping machine, putting together the fittings for just one step up or step down. And she had this booming, booming business.
Ilana Preuss:
I love that so much.
Kennedy Smith:
Yeah, the ingenuity is just amazing and I love them. I wondered if you’d come across any that you were particularly fond of that you think have done some pretty creative market research.
Ilana Preuss:
I met… it’s hard to remember where they were. Somewhere in Indiana I think, I met these really interesting guys who were graphic designers and created crazy funky t-shirts. They had a really specific opinion about the kinds of silk screen they wanted that wasn’t thick plastic, it was very malleable. That’s about as much as I can understand from what they were explaining to me now many years ago. And so they couldn’t find somebody who could do the kind of fabrication that they wanted, so they invented it, they created their own separate contract, so pre-screening business for their own business to be able to create the quality silkscreen of like this it’s really soft shirts with really thin dyes that don’t leave, they don’t break, they’re not brittle.
Ilana Preuss:
And they created enough capacity in the silk screening that they were then bringing in work from the entire region around them to use the silk screening capacity. So all of a sudden, these graphic designers created a silk screening business not just for their own production but with multiple revenue sources, which is one of the things I love about these businesses, so that they were now contract manufacturing silk screening for the broader region, and I think their staff at that point was up to 20 people just on the silk screening side. It was just this really exciting combination of pieces that you could see going on. The other favorite story I have is actually somebody who ended up buying the business, because I talked to them about this.
Ilana Preuss:
There’s also in Indiana… I know I’m talking about Indiana so much. There’s a region in Indiana that I’m working with a cohort of small cities, really small cities and towns that we’re working with, but the guy who runs the regional economic entity, I was first talking to him about what are these businesses and what do they do? Evidently the next month that he was around his town and saw that the local chocolate maker wanted to sell their business and he bought it. So now he’s a chocolate tier and he runs his regional economic development organization which I thought was really one of the best stories ever.
Kennedy Smith:
I love that, that’s great.
Stacy Mitchell:
I just found out there’s a great business here, they’re actually several locations called Bull Moose Music and they do originally CDs and they had a whole use CD market and they also started doing used movies and books and video games, I think it was a lot of what they do now. And I’ve wondered how they’ve managed to keep going, given the nature of those products and how everything is moving to streaming. And it’s because they created for themselves an inventory system that apparently is fantastic and they now sell that to all these other retailers. But it was again driven by their own needs and has become initially a secondary business and now more and more, I think a primary business of what they do.
Ilana Preuss:
The tech enabled side of the product business, I think is a really interesting one. One of the ones really exploded in that way is a business called Xometry that just went public a month or two ago. It’s IPO and it’s based in Maryland and they created two things. They created an AI software that is constantly figuring out how much to charge for additive or subtractive manufacturing product. So a business or an entity like NASA can upload its 3D specs and immediately get it price, which evidently was unheard of in the production world before that for high tech, very refined products. So they created the software around pricing it but then on the other side of it, they created a distributed production network across the country of small producers all over, which to me is a boon for small towns that go through a process with Xometry to make sure that they’re creating products at the really high quality level that’s needed.
Ilana Preuss:
And so they might be making a widget for NASA or an automobile industry, or they might be making a small run of something using all sorts of different additives or subtractive technologies, but they also have folks in their system that do stitch embroidery. It’s like all of this whole wide spectrum of stuff but it’s responsive pricing and distributed production network. So it’s this completely different way to think about how we’re getting pieces need and how we’re being responsive to that need as well.
Stacy Mitchell:
I am interested to go back to some of the policy questions and you’ve touched some on this in terms of some of the barriers. You talked a little bit about zoning, you mentioned capital and so on, but I wonder if we can unpack a little bit those because I wonder in thinking about small scale consumer product makers for example, like a world increasingly dominated by online retail where you have Amazon is a big gatekeeper to make much of the market. I’m also really struck by how difficult it is for small businesses even with great ideas or even a really proven track record to get capital in the way our capital markets, the way our banking system works. So I’m wondering if you could talk about both of those things a little bit and how you see them, how big of a barrier are they both the gatekeeper functions online and then the capital piece and how much should we be focusing on those things in terms of succeeding with the small scale manufacturing revitalization?
Ilana Preuss:
That’s a great question. There’s definitely parts of that policy world at the federal level that I’m not nearly well versed enough on to know where some of those barriers are. I think on the e-commerce side, it’s a double edged sword. We have the internet, you can create your own e-commerce site overnight. There are all of these websites like Squarespace where you can set it up, you have the products today, set it up tonight and sell them tomorrow. Or existing sites like Etsy or all of the other ones that Etsy keeps buying up now. There’s a whole bunch of different markets out there that you can tap into. And in many cases, the question then becomes a marketing challenge and an outreach challenge more than an e-commerce challenge. I think the distribution question is a really interesting one. How do you create more of an elastic fulfillment opportunity where Amazon has trained us all to want it and want to get it in two days even though Amazon doesn’t do that so much anymore either.
Ilana Preuss:
And so how do we create a more competitive environment? There’s a really interesting business I just learned about called Saltbox that is warehousing fulfillment for small product businesses. And so you can access staff onsite in five minute increments to be able to do fulfillment and distribution for your business and it’s growing, it just launched last year and it’s growing really fast and it’s basing itself generally in more urban locations, not out in industrial parks with the intention of saying that the small product businesses that we want to connect with, want to be near the coffee shop. They want to be in town, and so you cannot have access just to the fulfillment side, you can also have co-work space. They don’t have production space there but they have the other parts of the process.
Ilana Preuss:
And so I do think… and they are venture capital backed, they just closed their series A. So I do think it’s really interesting to see that the funding world is backing the infrastructure around these businesses. And so then my question is, when will local governments recognize that this is a sector they really need to get behind and when will federal government recognize it too? Which is a big question. I think from the funding side, I think it’s going to take a lot of work. I think we know that people fund the things that they’re familiar with and the people that they’re familiar with and that introduces so much implicit and explicit bias in the process that I don’t even know where you start counting.
Ilana Preuss:
And so I think there is enormous opportunity to educate the funding world, the finance world about what is the opportunity, but also potentially that we need other vehicles. What are the funding vehicles for a business who wants a $10,000 loan instead of $100,000 loan? Is there an investment option for a business at that scale that’s not just a loan where we have tech investments happening at all different scales because of the potential of it theoretically being that 1% unicorn where most of them obviously aren’t?
Ilana Preuss:
And so how do we create more of that opportunity where we’re supporting more of them at a smaller scale and we do have ways for them to get to the unicorn status if that’s where they want their business to go? So I think the funding question needs to look at those biases that are baked into the system, the underwriting. Why do funders look at product businesses as risk mostly because they don’t understand what the potential is there and what kind of education we need to bring into those sectors? I don’t know how much of the policy barrier versus a mindset barrier but I’m sure there’s policies in there too in terms of the underwriting side of it.
Ilana Preuss:
And then I think from a zoning and permitting perspective, we so carefully, we the royal we, so carefully separated all of our uses over time. And then over the last 30 years said okay, mixing certain uses is okay, but that people really need to understand that the vibrancy and the resilience really comes with having as many different options as we can in a place. And so having businesses like small scale manufacturers be able to be part of downtown or a neighborhood center or whatever it is, is going to be an important part of it but not just in a zoning decision, also in the permitting process so that you can get an occupancy permit quickly for any kind of small business, which is an enormous barrier to a lot of small businesses out there.
Kennedy Smith:
One of the things that I’ve spent a lot of time on over the years is looking at old Sanborn Fire Insurance Maps, which are these maps that were created by the Sanborn Fire Insurance Company to basically look at how inherently risky different types of construction work for the purposes of insuring buildings. So they have these maps that they update every few years of probably half of the towns and cities in the U.S. but there are this amazing history lesson because you can go back and you can see when this town was at its most economically vibrant and successful, maybe it was in 1940 or 1938 or something, what were the uses? Because they wrote in the name of every single business and use that was there. And so I’ve been looking at these because so many people seem to think that downtowns have always been primarily retail.
Kennedy Smith:
And in reality, they’ve been primarily small scale manufacturing, that’s been the dominant use. Retail only accounts for about 15 or 18%. It’s always been there, it’s always been there and it’s always been under everyone’s nose. And I think we’re at an amazing moment when it can really become this great untapped resource that we can grow in a way that we never have paid attention to before.
Ilana Preuss:
I completely agree. I think we’re at a really exciting opportunity. I think people are really at a moment where more people are open to what they deem new ideas even if they’re really old ideas like what you were describing. They want to do more good for more people in their community, which is great. They’re conscious or they’re aware of what they haven’t done for people in their community in their past. And so I do think we are at this really exciting transformational moment where communities can make these different decisions and say, we want to be not just a place that consumes but a place that produces. And how do we support that in all of the spending of the community and all of the ways, all of the decision-making that happens in the community can do this.
Ilana Preuss:
And the truth is the more that we can figure out how to support more successful small business owners from within our community, the more they’re likely to be able to afford that community as it rises again, as it improves again, as the prices of properties go up again. We want to include people not just through things like affordable housing, but because they’re building their own personal and household wealth as the community builds its wealth again as well.
Stacy Mitchell:
So cities and towns have a great opportunity to make some of those kinds of investments right now with all of the recovery funds that the federal government is giving out. Can you highlight some of the… as we close here, highlight some of the opportunities and what you think cities ought to do and how they should be thinking about those funds?
Ilana Preuss:
Absolutely. I think the American Rescue Plan Act, ARPA funds are some of the most exciting dollars that are out there. They’re so flexible, economic recovery is a huge part of how those funds can be spent and communities have an opportunity to be incredibly purposeful about how those dollars are spent and who should benefit from it. And I believe that we have this unique moment where communities can say, we want to invest in the business development programming specific to production, we want to invest in space and real estate and manage the affordability of space over time for product businesses. And we want to create capital funds for our own small businesses in a way that really does reach the population of business owners that maybe didn’t benefit from PPP or EIDL or other loan programs in the past, even there were community-based.
Ilana Preuss:
And I think that those funds can really be used to build a whole new infrastructure around local business, around small scale manufacturing so that the outcome of it is honestly this perpetual economic engine that is creating this feedback loop and reinvesting in the community and draws other people to it because the community is doing so well for itself, which I think is really exciting.
Jess Del Fiacco:
Yeah, that is very exciting and thank you so much for all those great examples, Ilana, and sharing your expertise with us. We are just about at the end of our time, so I wanted to make sure you had a chance if there’s anything we didn’t ask you about that you wanted to make sure we fit in, in this hour or Stacy or Kennedy, if there’s any last comments you want to add in, now’s the time.
Stacy Mitchell:
Well, the book is great. Just to make sure people hear, Recast Your City is the title and it’s new out just a couple of months ago, and it’s really terrific and available at everyone who sells books, including independent bookstores. And where else can they find you and find the work that you’re doing?
Ilana Preuss:
People can get the first chapter of the book for free at the book’s website, recastyourcity.com, very easy to remember if you remember the name of the book. You can go on there and you get the first chapter and get a hint into the whole story of the book and see it’s pretty bright yellow cover. If you want a signed copy of the book, look up Ivy Books in Baltimore, a wonderful independent bookstore in Baltimore that did an in-person event with me while we were still sitting in-person events and was really exciting to do and you can get it on bookshop.org, you can also order it directly from the publisher Island Press. And if you use the promo code Recast, you can get 20% off the price there as well.
Jess Del Fiacco:
Great. Thank you so much. Thank you Ilana, thank you Kennedy, and thank you Stacy, this was a great conversation and loved having you on.
Kennedy Smith:
Thanks so much.
Stacy Mitchell:
Thanks, Jess.
Ilana Preuss:
Thanks.
Jess Del Fiacco:
Thank you for tuning into this episode of the Building Local Power Podcast from the Institute for Local Self Reliance. You can find links to everything we discussed today by going to ILSR.org and clicking on the show page for this episode. That’s ILSR.org. While you’re there, you can sign up for our many newsletters and connect with us on social media. We hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website. Finally, we ask that you let us know how we’re doing with a rating or review on Apple Podcasts, or wherever you find your podcasts. The show is produced by me, Jess Del Fiacco and edited by Drew Birschbach. Our theme music is Funk Interlude by Dysfunction_Al. For the Institute for Local Self Reliance, I’m Jess Del Fiacco and I hope you’ll join us again in two weeks for the next episode of Building Local Power.

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
Featured Photo Credit: iStock.com
Map Credit: Sanborn Fire Insurance Map from Baltimore, Baltimore County, Maryland. Sanborn Map Company, Vol. 5a, 1936.
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45 min
August 05, 2021Rep. Seth Berry on the Movement for Publicly-Owned Power in Maine
On this episode of Building Local Power, John Farrell, Director of ILSR’s Energy Democracy initiative, speaks with Representative Seth Berry, House Chair of the Maine Legislature’s Joint Standing Committee on Energy, Utilities, and Technology. Farrell and Berry discuss how consumer ownership of the electricity system could prioritize service, reliability, and clean power. Their conversation also touches on:
Berry’s background in energy policy work.
Recent developments in Maine, including the legislature passing a bill which would have created a consumer-owned replacement for the private utility Central Maine Power / Versant. The bill was then vetoed by the governor.
Why the legislature felt compelled to take action regarding Central Maine Power, including the company’s high costs, poor customer service and reliability, lack of accountability, and absentee ownership.
How the fight for consumer ownership will continue in the state.

“Important concept here: the utilities profit more when they build more. That is the fundamental truth of the US investor owned regulatory system, the more you build the more you make.”

Related Resources
Our Power Maine
Maine House Bill 1708
Mainers Consider Putting Electricity, Internet in Local Hands (Episode 103)
Is Energy Still a “Natural Monopoly”? (Episode 104)
Should Big Utilities Pay for Their Bad Choices? — Episode 124 of Local Energy Rules
The Role of Antitrust Law in Creating Energy Justice — Episode 127 of Building Local Power
ILSR coverage of Green Mountain Power
A summary of the Bluefield and Hope SCOTUS decisions that laid the framework for utility regulation and compensation: Utility Rates: Fair, Just and Reasonable
A helpful chart of utility return on equity (ROE): Gearing Up for Grid Modernization
Transcript
Jess Del Fiacco:
Hello, and welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future.
Jess Del Fiacco:
I am Jess Del Fiacco, the host of Building Local Power and Communications Manager here at the Institute for Local Self Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities, more power, wealth and accountability remain in local hands. In this week’s episode, ILSR Co-director, John Farrell interviews Representative, Seth Berry of Main. Seth actually joined us on the show a few months ago, and today he’ll catch us up on the movement toward public power in Maine. With that, I’m going to hand it off to John and Seth.
John Farrell:
Well, welcome to another edition of Building Local Power, a podcast of the Institute for Local Self Reliance, where we confront the issues of corporate concentration and the solutions that allow communities to advance and control their future.
John Farrell:
Joining me today is Representative Seth Berry, he’s in the House Chair of the Legislature’s Joint Standing Committee on Utilities, Energy and Technology in Maine. He’s been working on some terrific legislation that we’ve been following and I’m so glad that he can join me today. Seth, welcome to the program.
Seth Berry:
It’s great to be with you, John. Big fan of all your work.
John Farrell:
Well, I often ask guests when I start our conversations, what has motivated them to be interested in the energy sector. I feel like the issue that you’re working on, which is around this concept of ownership of the transmission grid in Maine, was probably more thrust upon you from what I understand of the different challenges that have come up and the complaints that consumers have had. But did you have an interest or a history of working on energy issues before this became such a central issue in Maine?
Seth Berry:
I did, actually. I’m 52-years old, grew up in Maine, and came of age during the ’70s when energy was very much talked about for somewhat different reasons. Climate change was something that a few people were talking about, but relatively few. It was the time of peak oil and the OPEC embargo and there was a lot going on with renewables, as well as a lot of concern about nuclear. We had a power plant here very close to me, maybe 20 miles away as the crow flies, which there was an effort to shut down. I participated in that as a 10-year old.
Seth Berry:
I think other abiding interest from me that led me to this, and it really intersects with all three besides energy, I’m also very interested in social equality and economic equality, and spent 20 years in public education in a large part for that reason. Huge believer in the transformative value of education as well. And then closely related of course, democracy, and just having a very strong democracy. I spent some time as an intern in Congress as a young person and was very interested in the democratic process from an early age.
Seth Berry:
So for me, the issue of customer control, consumer control of our monopoly energy utilities is really a place where all three of those things intersect. I think for me the overriding concern is the climate catastrophe that is upon us and that we need to take immediate action to prevent, but right there with it is economic equality, how we make this transition and adjust in equitable fashion. And also democracy because these decisions will impact all of us and we should all have a say in them. So obviously this is all very closely related to your work, it’s been great to have ILSR as a partner in this effort so far. Looking forward to what comes next.
John Farrell:
So speaking of what comes next, or before we get to what comes next I should say, let’s talk about what’s been happening in the last few weeks. So it’s been, in a way, a little bit of a rollercoaster in Maine. So the legislature passed, and then the governor vetoed Bill Number 1708, which would’ve created the Pine Tree Power Company. So this is the consumer owned replacement, as you were alluding to, for the private utility Central Maine Power, or Versant, I guess, is also known. Could you explain why the legislature felt compelled to act and to intervene with the status quo here of the private ownership of the utility grid?
Seth Berry:
Sure. And we do have two utilities actually, two large investor run utilities. One, Central Maine Power, which is owned by Avangrid, which is self-owned by Iberdrola based in Spain, but a huge multinational. And the other, which is a mid sized utility, is Versant. Versant is recently formed, they purchased what was formally Emera Maine. Versant, interestingly, is owned by a company called ENMAX and ENMAX is owned by the City of Calgary in Canada. So we have in this case a municipal governmental owner who is owning and running this utility as a for profit, so fascinating kind of [inaudible 00:05:06]. But by far, the larger utility is Central Maine Power, 640000 customers, give or take, and Versant has another 160,000 or so. So these two utilities together, however, have really failed Maine. And Versant is a relatively new owner, so we can’t blame them entirely for it, but they’re not doing great so far. They’ve asked for a 25% rate hike most recently, really dragged their heels on solar in a number of ways. And we’ve seen that from both utilities. Central Maine Power’s been the name of the larger utility since the early 1900s, and the two together have really especially resisted efficiency and rooftop solar and other distributed renewables.
Seth Berry:
Now, I saw that when I first came into the legislature back in 2007, and we’ve been fighting them on that ever since. They’ve been the 800 pound gorilla. They almost successful repealed net meter, actually did successfully repeal net metering under a previous governor and then we managed to restore it when Governor Mills took office back in 2018. So, this constant battle over the efforts of folks to have a little bit of local control through things like rooftop solar and efficiency.
Seth Berry:
And then stepping back further, just an atrocious job of doing their job, the basic things that we expect of a utility. You keep the lights on, you keep the bills low, you answer the phone when a customer calls. They have failed to do any of those things well. In fact, we have, as a state, the worst reliability in the nation, bar none, that means the longest and most frequent outages, worst reliability. So they’re not keeping the lights on, we have the 10th highest rates in the nation, so they’re certainly not keeping the bills low. In fairness, we are restructured, so some of that is the competitive supply market and it’s hard to disaggregate the rates in comparing state to state. But more than half of our bill is simply the delivery, which is all that they were in charge of. And that portion of the bill has increased and increased. So 10th highest lowest reliability and satisfaction, are the customers happy? Absolutely not, worst customer satisfaction in the nation for CMP three years running, in fact. That’s on the JD Power Survey which is the industry recognized standard for customer satisfaction, it’s affiliated with consumer reports. And Versant, third worst in the nation.
Seth Berry:
So there’s 142 large and mid sized utilities across the country, consumer and investor owned, and we have the worst and the third worst in the nation. So there’s no question that the people of Maine are fed up with these utilities and their poor performance. And I believe the people of Maine also understand what’s really driving it, which is some larger economic and governance issues that we can talk about more.
John Farrell:
I’m just so fascinated by the problems that you’re having. And it’s easy as an outsider, but to have utilities with the worst reliability in the nation and they are competing with, for example, PG&E in California which has had wildfire induced outages, and still to come in last is really saying something about that achievement in terms of reliability with the competition that they have across the country with some other serious issues.
Seth Berry:
It’s impressive, to do worse than PG&E, which went bankrupt twice in the 20 years, plead guilty to killing 85 customers in Paradise, you really have to try to be worse than them, and yet they have succeeded.
John Farrell:
So let’s talk a little bit about the legislation, so as I eluded, the legislation passed both houses at the legislature, it went to the Governor, the Governor has vetoed it at this point, so there’s a bit of a stalemate there. Talk about what it would have accomplished though if this bill had passed and had been signed by the Governor, what changes would it have made? How would it have addressed these issues of reliability and customer satisfaction and cost? But maybe also some of these larger questions, larger battles that you’d been fighting around things like energy efficiency and rooftop solar.
Seth Berry:
Yeah, great. So I’ve been researching this for quite a while because I became interested in utility business models in large part through the example of Green Mountain Power in Vermont. They are, in fact, investor owned, but they’re a B corporation. And that got me thinking, what else is out there? So as a legislator just dipping my toe in those waters, I began to investigate further and became fascinated by the munis and the co-ops that are out there serving, together they serve one in three Americans. And munis have been since the dawn of the electric era, co-ops since the days of FDR, and they serve vast portions of the country. There are many that are quite large, the entire state of Nebraska, which by the way has the best reliability, but we have the worst. And the more I looked, the more I became fascinated and thought, “Why are we not doing this?”
Seth Berry:
We also had a small consumer utility here in Maine come forward, Kennebunk Light & Power. And they wanted to serve the rest of the town to Kennebunk, Maine. They serve most of it now, a couple other towns as well. They wanted to serve the rest of Kennebunk and they brought a bill to do that. And long story short, as hard as we tried in the legislature, we passed a bill, we thought we’d solved the problem, the problem wasn’t solved. Central Mine Power managed to shut that down, they wanted to protect their captive customers at all costs, or rather protect the captivity of those customers at all cost, and to this day Central Maine Power has prevented Kennebunk Light & Power from serving the people in town that want to be served by them.
Seth Berry:
These small consumer utilities in Maine are far more reliable, have for better customer satisfaction and far lower rates than or investor run utilities, and that same comparison holds true if you look across the country, especially at munis. Obviously co-ops are very, very rural and have some significant cost drivers, so it’s a little hard to compare there. But here in Maine, the two investor run utilities charge 58% more than our non consumer run utilities, which serve part or all of 97 towns. 58% more, that’s a very significant thing, especially for our lower income Mainers who pay one in four of their meager dollars on energy. Very significant for our industrial sector, we have businesses like paper mills are very traditional here. Our larger paper mills’ costs go up a penny per kilowatt hour, and they’re paying two million more per year. We have a large ship building facility here, Bass Ironworks, costs go up a penny per kilowatt hour, they’re paying a million dollars more per year.
Seth Berry:
So from the point of view of business prosperity and job creation and certainly from the point of view of economic inequality, we’ve got to get this right if we’re going to shift ourselves onto a total dependence on electricity. The plan is to electrify everything, that’s how we decarbonize, the only way we decarbonize really is we electrify everything. We switch to electric vehicles, we switch to heat pumps to heat and cooL our buildings, we switch to electricity to power our factories, and we make sure that that electricity is renewable. But the grid is a monopoly. The wires running down your streets have to be a monopoly, it’s the only safe way to get it to you. You can’t have two sets of wires on the street. So that monopoly can be owned and control for the customers and by the customers, or by and for someone else far away. And increasingly, we’ve seen that that someone else is farther and farther away and less and less caring about the needs of the customers.
Seth Berry:
So consumer ownership is proven nationally 13% lower rates, twice the reliability, far better customer satisfaction if you’re looking at munis in particular which is what we propose. And our proposal is to create the Pine Tree Power Company, which would be a large municipal hybrid serving the 800,000 customers here in Maine who are currently served by investor run utilities. We would buy them out, the bill proposed is a referendum component, so first it goes to the people and once the people have ratified the proposal, we move forward with the process. Then the first step after ratification is another election where we elect the board of the utility and that seven member elected board chooses some additional expert advisory members, they hire staff, they do some additional due diligence and business planning, and then they make their first move of course which is the initial offer to purchase the utility. That price is either negotiated, or if necessary litigated, we have a process for that. And then once the switch is made, a private operator, who is competitively contracted, takes over the operations of the grid.
Seth Berry:
So we’ve been working on this for three years. We’re very excited about the opportunity that it presents to really but Mainers in charge of our energy future, to have a democratic energy sector. That platform, that monopoly platform that delivers all of the solutions, whether they’re efficiency or demand reduction or aggregated demand reduction, which there’s some fascinating opportunities once you involved internet of things, clean energy future, obviously more generation, obviously more storage. We need all of that, we need a huge competitive, innovative set of solutions to bring that clean energy to us. And the grid stands between us and those solutions. So having it be noncompetitive, having it be not for profit, having it be democratically governed, it’s all incredibly important to making that democrat affordable clean energy future possible.
John Farrell:
So I’m so gad that you covered a little bit more of that background. A lot of the listeners of this ILSR podcast are not steeped in the energy system, so it’s great to give a little of background to them about the unique structure of the electric system, as you said, it doesn’t make sense to have multiple sets of wires strung to homes. So it was decades ago that most states made utilities into monopolies formally. But we’re at this really interesting moment in time right now where the US Congress has recently advanced legislation to break up big tech companies because of what they’re commonly calling this platform monopoly problem. So as you eluded to in the electricity sector with the grid if it’s privately controlled they’ve got to squeeze on what can be done with the grid, like rooftop solar or energy efficiency and other things. But the tech companies were talking about how these private companies, these big corporations have become sort of gatekeepers to the economy and roadblocks to competition and to better service. Do you see some similarities between the two of the tech monopoly problem that congress is trying to deal with at a federal level and what you’re dealing with with Central Maine Power and the other IOU that they’ve sort of become too big to be accountable?
Seth Berry:
Absolutely, yes, 100%. There are a few differences, but they’re relatively nuanced differences. The too big to fail problem absolutely exists in the energy utility sector as well, and the total dependency. If you’re a customer of Central Maine Power, you have zero choice. It’s not like where you can choose between Facebook and Twitter, you don’t even have that. You’ve got Central Maine Power or Central Maine Power or Central Maine Power, and they will be your provider. And by the way, Central Maine Power doesn’t really exist. It is a fiction created by a much larger company. It is owned by Avangrid, which is another fiction, it’s a holding company established primarily to access tax benefits from the US tax code, so it’s a US based company. But Avangrid is very purposefully 81.5% owned and wholly controlled by a larger company still called Iberdrola. Iberdrola, based in Spain, has many multinational shareholders, Black Rock is a big investor, the government of Qatar is a big investor through their oil based sovereign wealth fund. The Governor of Norway is another big investor through their oil based sovereign wealth fund. And there are many others as well, but truly it’s Iberdrola that holds 640,000 people in Maine and businesses in Maine hostage to their priorities, which of course is profit.
Seth Berry:
There is this state regulator thing, we do have state regulators and they can exercise some control over rates, so I want to be clear that this is not the kind of monopoly that can absolutely wreak havoc unrestrained, but let’s remember too that state regulators were actually established by the utility industry. It was in the early 1900s when Samuel Insull, the heir to the Edison empire, decided that he was going to pitch to all of his colleagues and competitors at the National Electric Lighting Association annual meeting the idea that they restrict themselves to fully monopoly territories and in order to justify that monopoly in the age of antitrust they said, “We’ll create state regulators. And we know that we will be able to work to do quite well within that model, we’ll have guaranteed profits, let’s go out and do it.” And they sure did. They went out and they convinced legislatures across the country to create public utility commissions and public service commissions to “regulate.” But for the last 120 years, they’ve basically rigged the regulatory system, and these state regulators are everyday more and more puny with respect to the massive multinational monopoly corporations which own and control these state by state utilities.
Seth Berry:
So Maine’s situation is very similar to the situation of others. Avangrid and Iberdrola own several other utilities here in the Northeast, for example. They’re looking to buy a utility in New Mexico right now, P&M, which is also in part of Texas. And they have some very big plans for that region. So yeah, there is an incredible consolidation that has happened in the industry. Maine is now less than 2% of Iberdrola’s holdings, and our regulators are really the mouse where Iberdrola is the cat. The tables have turned, if they ever were right side up to begin with, and the game of cat and mouse is inverted so that there’s so many ways that they can escape meaningful regulatory intervention, whether it’s by hiding the ball or by lawyering up and threatening to sue or clever engineering and clever work of the tax code. They’ve really got us right where they want us, and the only way we break free of that is to change the business model.
Jess Del Fiacco:
We’ll be back in just a minute, but first we’re going to take a short break. Thanks for listening to our show. If you’re enjoying this conversation, I hope you’ll consider heading over to ILSR.org/donate to help support us. Your donation makes this podcast and all the work we do here at ILSR possible. You can visit ILST.org/donate to make a contribution today. Any amount is sincerely appreciated. And while you’re at our website, you might want to check out the other shows in the ILSR podcast family. We’ve got shows that cover everything from broadband to [inaudible 00:21:08]. Thanks, back to our show.
John Farrell:
I wanted to ask you a little bit more about, when we talk about this idea of platform monopoly, because you kind of eluded to this earlier so I just want to drill down a little bit. In the case of Amazon, for example, so this is a company that ILSR has put a lot of scrutiny to, they control this marketplace which is open to third party sellers, so non Amazon sellers, but as we hae documented pretty well, Amazon has a lot of power over those sellers to compel them to use their own shipping services, their own warehousing services, et cetera. Because they can simply demote somebody’s listing and make it impossible for them to sell on their platform if they have control over it. One of the things you talked about earlier is the problem that we have in this era when we are trying to transform the grid system to address climate change, to take advantage of all these clean energy opportunities, is how utilities can act as a barrier to that. With the Pine Tree Company, with a consumer owned utility, is the idea that it will similarly exercise that kind of monopoly control, or is there an opportunity now where with this public utility it can be more like the road system where there’s lots of competitive deliver services, like UPS and FedEx and what not. Are we going to see more of that should this ever be successful to transform grid ownership?
Seth Berry:
That’s a great question, and it really does make an important point. There’s actually more free market competition, not less, in the Pine Tree Power Company as we propose it. Because as I mentioned earlier, the operations of the company will be contracted out. So right away you have a competitive bidding process where people are sharpening their pencil and competing. That contract would likely be between five and 10 years with perhaps an option to renew based on performance. But there you have competition where right now we have none. Central Mine Power has an indefinite monopoly privilege on our power, both for the operations and the ownership. The solutions that will deliver much of the clean energy onto that monopoly grid are incredibly complex, fast moving, there’s new technology coming along all the time to create opportunities to both reduce peak demand, which is where the dirties and most expensive resources come online, to provide efficiency, which is the cheapest and cleanest energy, and to obviously bring a whole lot more renewable energy onto the grid, much of that decentralized, such as your rooftop solar.
Seth Berry:
So how do we in this fast moving innovative space make sure that the utility, which everybody has to plug into, is not artificially creating roadblocks to certain kinds of resources which reduced its profits? Because, by the way, important concept here, the utilities profit more when they build more. That is the fundamental truth of the US investor owned regulatory system, the more you build the more you make. Because there was a couple supreme court decisions back in the 1920s and 1940s. The Bluefield Decision in the ’20s, the Hope Decision in the ’40s. Together they basically said, “Look, we must reward capital investment. We have to pay, if the utilities put in, if their shareholders put it X amount, then we’re going to give them 12% return on X and built that into the rates.” And that’s how we’ve operated ever since. So this isn’t something regulators can change, it’s not something that state legislators can change, even Congress can’t change a decision of the Supreme Court.
Seth Berry:
So we’re stuck and the utilities have perverse incentives just by virtue of doing their job, which is to maximize return to shareholders. They will say no or actively fight against certain innovative solutions, especially in the distributed space, especially those that reduce their ability to justify new overbuilding of the grid, new expenditures and big centralized systems, whether it’s transformers or very lucrative high voltage lines, sub stations. And in the case of utilities that own generation, big new centralized plants. That’s the traditional model they’re comfortable with. Some of it, of course, is just institutional inertia, where it’s the way we’ve always done it and we’re going to keep doing it that way. So we need to shake up the system for that reason as well, but a lot of it is this perverse incentive and lack of democratic governance that really leads to these kinds of behaviors to prejudice the utilities against the kinds of solutions that we’re going to need for a just and equitable transition.
John Farrell:
I want to pivot back to talking about the future of this legislation and this effort to have a consumer owned utility. So as I eluded to before, the legislation was vetoed by the Governor and the legislature was not able to override that veto. There’s a campaign called Our Power Maine that’s organized around this legislation that the governor has vetoed, but as I understand it, the effort really isn’t dead. And I should also just add as a way of disclosure that ILSR does have a fiscal agency relationship with Our Power Maine, which is to say our accounting department helps process their finances for a small fee. We’re not intellectually or substantially involved in the campaign, but we are supporting it in that way. But tell me about how does Our Power Maine, how do is the fight continuing for consumer ownership of this utility?
Seth Berry:
Yeah. Well, Our Power has really come a powerful group. It’s 30 statewide organizations, very grass roots. A lot of environmental interests, because I think the environmental community, uniquely, is focused on the next 30 to 50 years, not the next three to five, which a lot of businesses and politicians are more focused on. That’s been a huge source of support. But also, increasingly, those that are interested in governance reform and more democratic governance, those that are interested in economic equality and creating economic systems that are more equal. As we make this massive historic investment in our group, that is increasingly understood to be an opportunity to create a more equitable energy economy. So Our Power is going forward regardless. In Maine we are very fortunate to have the ability to take a question directly to the voters, who enact law by direct democracy. And we plan to do that. Maine has used this to good effect before in pioneering ranked choice voting, for example, first state in the nation to do that, and creating a clean election system way back in the 1990s which was a model for the nation, and leading on increasing the minimum wage. We’ve really used it well. The bottle bill way back in the ’70s, if you remember, we were the first state to put a five cent return on beverage containers.
Seth Berry:
So we believe Maine is an optimal place because of the frustration with our utilities, because of their historic resistance to renewables, because of their just incredibly lackadaisical attitude towards improvement and the frustration that’s palpable across the state of Maine. We believe that Mainers will see the need to take back our power and to have a say in this critical moment as we shift to clean energy and become dependent entirely on this monopoly grid. So we’ll be collecting signatures this fall, the Our Power Coaliltion is very interested in collaboration and support with others, but we are primarily just, entirely actually, just a Maine based coaliltion right now. We have a growing membership list of people signing up at this moment to circulate petitions and gather signatures this fall. We plan to bring it to the voters in November of 2020, and there’s a process that you have to go through leading up to that. You turn in the signatures, you get a hearing, and at the state house there’s an opportunity for the legislature to vote. But our plan would be to get it directly to the voters, and we’re very confident that that will be possible and that the outcome will be favorable.
John Farrell:
And you said November 2022, is that right?
Seth Berry:
That’s right, yep. And the bill that we worked in this year, which was a pretty historic achievement in itself, we got a 10 to two report by committee bipartisan strong majority vote out of committee. We got a majority in the House of Representatives with some republicans joining in with mostly democrats. A majority in the Senate with a similar kind of mix of bipartisan, but mostly democrats. And then the Governor, unfortunately, chose to veto the bill. And I appreciate this governor in many ways, but she was never really friendly to this, and even in her veto letter didn’t correctly name the bill, so it indicated to us a bit of lack of attention and just lack of commitment to the issue, unfortunately. But we’re hopeful that we can bring this forward, again, directly to the people. And that’s where often the biggest, boldest changes in Maine history at least have happened. And we want to be a proving ground for this concept nationally. We hope that we can help to pave the way for others.
Seth Berry:
Our goal, by the way, is really to make Maine the first state in the nation to get to 100% clean energy for all of our needs, that’s the larger overarching goal of Our Power. But we believe also that is has these other collateral benefits, democratic governance and economic equality. And by the way, broadband as well, which is easier to attach to poles, the cost drivers are a bit lower. So another huge need in our area. It’s been fun to work with you guys on broadband as well, I’m very passionate about that work and I think that these things really intersect around the ownership of the pole and wire networks.
John Farrell:
Yeah, you wanted to say, we’ve talked mostly about this bill and the struggle with the electrical utility around this, but broadband is in some ways very related that you have these larger private institutions, often cable companies, that are your service providers. Can you talk a little bit about how these two issues are going to intersect? You already kind of eluded to the fact that now if we own the poles and wires for the electric system we can use that to string fiber optic cable for broadband, but how else might they intersect?
Seth Berry:
Maine is one of the states that is most desperately in need of rural broadband, and even in the areas where cable is an option, for example, people are really being strangled by the prices and the lack of truly powerful modern speed. What we should have is affordable, symmetrical gigabit service for all, in my view. And that’s the kind of thing that will make a backwater economy like Maine’s into a real leader and innovator in a vigorous economy. So our poles and wires are not just for electricity, as you stated, broadband connects to those poles too. Fiber is really the technology of the future in my view, it is larger future proof. The capacity of the fiber is still being understood. They’re developing new ways to deploy even more of the capacity of a single strand of fiber optic cable using each of the individual strands, using the different colors of the spectrum within those fibers, and it all travels at the speed of light. So municipal fiber networks, in my view, are incredibly important to the future.
Seth Berry:
And this new entity, the Pine Tree Power Company, as a municipal, quasi municipal electric network, will be very friendly, almost genetically in its very makeup, to the concept of municipal ownership of broadband and can offer reduced cost for pole attachment, can be thoughtful about how we manage the poles and administer the poles. Attachment is a huge portion of the cost for any broadband provider, whether for profit or not for profit. If we can bring that pole attachment cost down, that will have a transformative effect. But we also really want to foster, as I mentioned, more municipal networks. And I’ve been working very hard as the co-chair of the broadband caucus to make that possible. We have a fund set up, we made some reforms to it, we recently got a lot of federal money. Communities across the country have received money, both at the municipal and the county level for which broadband is an eligible expenditure. So this is an incredibly opportune time to be talking about that.
Seth Berry:
And it’s not the same effort at this time, but these two efforts are really converging I think around what are the networks of our future going to look like? And they do come together, and I mentioned earlier the internet of things, they really come together there. There’s a need in managing an efficient and secure and environmentally sensitive energy network to have information flowing rapidly across the net so that dishwasher can come on when it’s advantageous for them to come on or not, so that heating and cooling systems can be controlled in an aggregated way. And there are massive implications around the security of our information, around the opportunity there to bring down cost add make for a more equitable transition around democratic governance and transparency and how those decisions are made. It is, I think, an uncertain future, but it’s clear where we’re heading, and we really need to make sure that that’s democratic governance as we do move in that direction.
Seth Berry:
One last thing I’ll say is, as I mentioned, the utilities need to have communications infrastructure themselves. They are already stringing fiber on their poles for their own purposes to manage their own grids, and those fiber lines, as I mentioned, have incredible spare capacity, so there’s no reason that some of that capacity couldn’t be shared much more than it is today for the purpose of municipal fiber networks or other locally owned broadband utilities. So I’m very excited about that opportunity and I think we haven’t fully even begun to understand just where all the opportunities are there, but we know that there’s gold in them there hills.
John Farrell:
Do you have any advice from the struggle to have a better electric utility in the legislation you’ve been working on, I was just thinking too about the way you were describing the history of the use of the ballot in Maine to bring about other progressive outcomes that are widely supported. And you mentioned a clean election bill, and as I was thinking about that, I was remembering recently that activists in Virginia and their advocacy work around clean energy had similarly used a pledge to get legislative candidates to pledge not to take money from the very utilities that they oversee through the legislature, these private companies. I guess one of the questions I have is just are you already insulated from that because of the kinds of election bill that you have? But then what other advice would you have for folks in other states how are probably confronting similar issues where they have these incumbent investor run utilities that are very large, they might be owned multi nationally, and maybe are not providing the best service or the best outcomes for their customers?
Seth Berry:
That’s a great question, and my answer might be a little selfish here. But first, let me say about clean elections, yes, absolutely yes. I would not have run for legislature without clean elections and I don’t think that I would have been as able to really focus on what was right for the people of the state as opposed to what I could get away with and still get reelected. We’re not for the existence of our nationally leading clean election system. So there’s no question that clean elections here in Maine has made, not just me, but other legislators as well, much more capable of doing the right thing. And I think you saw that in the votes. The legislature, the majority got elected through the clean election system. No governor of Maine has yet been elected through the clean election system, it tends to fall down a little bit there and I don’t think that the governor vetoed it simply because she was looking for campaign donations, but I do think the power of the lobby in the executive branch in Maine has continued to be stronger than it is at the legislative level. So yes, clean elections matters.
Seth Berry:
And Maine is in this incredibly unique place to prove the concept and to really change the game for the nation. I am absolutely convinced that if we can do it here in Maine, that it will be the shot heard around the world, that folks in other parts of the country will have a model that they can point to, as we did with rank choice voting, by pioneering that we’re now seeing many other parts of the country take that on and look to go in that direction. I think in general, there’s a perception right now, a misperception that consumer ownership of our utilities is impossible. In some cases, people have bought the idea that we can regulate our way to address transition. I don’t believe that’s true. In other cases, I think people are just tired and feel beaten down and feel like there’s not been a successful model where this is done.
Seth Berry:
And I want to offer some hope to folks that may feel that way. If you look at the six [inaudible 00:39:25] in the nation that arrived at 100% renewable electric first. Those six places were all served by consumer utilities. I can name them for you. Georgetown Texas, Greensburg Kansas, Burlington Vermont, Aspen Colorado, Kodiak Alaska and Rockport Missouri. Four of those, by the way, conservative areas, conservative communities that got to 100% renewable electricity first. And you know what John? This is going to blow your mind, all six of those are served by consumer owned utilities, all six. And what are the chances of that? As I mentioned COUs only serve one in three Americans, so the chances are pretty astronomical that all six of the first communities to get to 100% would be consumer run utilities. But there it is, those six were the first, all of them before 2016, by the way, before Trump was even elected.
Seth Berry:
And look at large utilities, look at the nation’s leading large utility in the race to 100% renewables. It’s SMUD, it’s the Sacramento Municipal Utility District. And don’t you love that name, SMUD? It just has a ring to it. SMUD has seven elected board members, it has a pretty large [inaudible 00:40:41] area, 1.5 million customers, many of them in rural parts outside of Sacramento, a couple different counties. They’re going to get to 100% renewables by 2030. And this isn’t a goal, this isn’t aspirational. They have a plan, they’re actually clear that they will get there. And that is the kind of game changing leadership that we need. Now, SMUD and those other six communities I mentioned, they already had consumer ownership, they didn’t have to fight for it like we do.
Seth Berry:
But if Maine can actually, first state since Nebraska in the 1930s, to actually change the whole business model of the state to 100% consumer owned utilities and through that to have democratic governance, to get to a just and rapid transition, we believe Maine can be the first state to get there with this business model, then I think that’s going to bring hope to others as well. We’re going down a path that is understood. These other communities have done it. But to do it with the change of a business model, to do it with an actual breakup of the rigged, regulatory monopoly system that we have now, and to take back our power, that is what we’re proposing to do here in Maine, we need support.
Seth Berry:
Because I’m going to tell you right now, the Edison electric empire, there’s a large trade association called EEI, they’re very concerned. They’re watching, they’re listening to this podcast, they’re getting ready to spend hundreds of millions of dollars to oppose our effort. And we believe we can stand up to that. We’ve seen communities stand up to that kind of pressure before. I mentioned Winter Park Florida, Jefferson County Washington. This can be done, but on this scale, at this time, for all the reasons we’ve talked about, the stakes could not be higher and we really would love to have support from other parts of the country. If folks want to get in touch, they can go to ourpowermaine.org and check it out. Sign up, donate. We’re going to need all of that and then some. Move to Maine, help us collect signatures. It’s a great place to live in the winter time. And what I hope for from others is that you can help us, yes, but also that we can help you. We really want to be an example and be, they talk about the states as the crucibles of democracy, opportunities to innovate and to try new policies and see what works. And we think that Maine can really be an important opportunity to learn and potentially to learn about a transformative path that more communities and states can take in the near future.
John Farrell:
Well Seth, thank you so much for coming on and sharing the work that you’ve been doing in Maine and the importance of it in the broader anti-monopoly movement, but especially in the electricity sector where we’re trying to confront this large and significant problem of climate change, which you might want to be advertising people should move to Maine to stay cool in the summer as well as to have a pleasant winter.
Seth Berry:
It’s warming up, it is definitely warming up. And I have to say, the pandemic has boosted Maine’s economy quite a bit, housing prices are through the roof, everybody’s moving out to the country. And Maine is seeing that in spades. But it really is a wonderful place all four seasons. I’m sure many of your listeners visited already, but I think it’s going to be a great place to keep on eye on in the months near to come.
John Farrell:
Well, we will be keeping our eye on it. And thank you again so much for joining us Seth.
Seth Berry:
All right John, thanks for all your great work.
Jess Del Fiacco:
Thank you for tuning into this episode of the Building Local Power Podcast from the Institute for Local Self Reliance. You can buy links to everything we discussed today by going to ILSR.org and clicking on the show page for this episode. That’s ILSR.org. While you’re there, you can sign up for more [inaudible 00:44:28] newsletters and connect with us on social media. We hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website. Finally, we ask that you let us know how we’re doing with a rating or review on Apple Podcasts, or wherever you find your podcasts. The show is produced by me, Jess Del Fiacco and edited by Drew Birschbach. Our theme music is Funk Interlude by [Dysfunctional 00:44:51]. For the Institute for Local Self Reliance, I’m Jess Del Fiacco and I hope you’ll join us again in two weeks for the next episode of Building Local Power.

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
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46 min
July 22, 2021Zero Waste Efforts Bring Benefits, Build Community in Gainesville
On this episode of Building Local Power, host Jess Del Fiacco and Neil Seldman, Director of ILSR’s Waste to Wealth initiative, interview three zero waste advocates from Gainesville, Fla. Amanda Waddle and Nina Bhattacharyya are the Co-Chairs of Zero Waste Gainesville, and Sarah Goff is the Cofounder and Executive Director of the Repurpose Project, where Amanda is also the director of Zero Waste.
Their discussion touches on:
The importance of pay-as-you-throw (PAYT) programs, and Zero Waste Gainesville’s campaign to keep PAYT in the city. (Update: The campaign was successful!)
How the Repurpose Project got started, how the pandemic impacted operations, and current efforts to expand into a new, larger space.
The relationship between the Repurpose Project and the city of Gainesville.
The impact the Repurpose Project has on the local economy, the community, and the environment.
The ties between environmental justice and reuse, and how to ensure reuse programs are equitable.

“And one of my favorite moments was at checkout. We had a line and it was just so diverse. It was almost like every single stereotype of a person was in line together. And they were talking to each other about what they were going to do with the items that they were buying. And it just felt so good. We were much more than a store. We were building this community, bringing people together, that maybe wouldn’t be brought together otherwise. For the common goal of just creating and salvaging and saving money… I just feel like there’s so much potential there on so many levels with expanding Reuse.”

Related Resources
Zero Waste Gainesville
The Repair Revolution by John Wachman and Elizabeth Knight
Webinar Recording: “Reuse & Repair: Creating New Jobs and Enterprises Through Zero Waste”
Wealth in Our Walls Report, City of San Antonio, Texas
Reuse Minnesota
Building Materials Reuse Alliance (BMRA)
Recycle Hawaii
Department of Resource Recovery, Austin, Texas
Cynthia Isenhour, University of Maine
Economic and sociological data on the reuse sector.
Contact: [email protected]
Second Chance Deconstruction, Baltimore
Contact: Mark Foster, [email protected]
The Reuse People
Contact: Ted Reiff, [email protected]
Clean Air Action Network, Glens Falls, NY
Contact: Tracy Frisch, [email protected]
Hawaii Island Zero Waste Summit
Contact: Jennifer Navarra, [email protected]
ReUse Corridor, Central Appalachian Regional Network
Contact: Jacob Hannah, [email protected]
Rural Action
Contact: Ed Newman, [email protected]
Transcript
Jess Del Fiacco:
Hello, and welcome to Building Local Power. A podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco the host of Building Local Power and Communications Manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving equitable communities where power, wealth and accountability and made in local hands.
Jess Del Fiacco:
And hello, today I’m here with my colleague Neil Seldman, who directs ILSR’s waste to wealth program. And we’re joined by a great group from Gainesville, Florida. Amanda Waddle and Nina Bhattacharyya are the Co-Chairs of Zero Waste Gainesville. And Sarah Goff is the Co-founder and Executive Director of the Repurpose Project, where Amanda is also the Director of Zero Waste. So welcome everybody.
Neil Seldman:
Howdy.
Sarah Goff:
Hello.
Nina Bhattacha…:
Thank you for having us.
Jess Del Fiacco:
Yeah, absolutely. I think a good place to start, would be if each of you could maybe talk very briefly about your organizations, your background and why you decided to get involved with Reuse. Let’s start with Sarah.
Sarah Goff:
Okay. I started the Repurpose Project 10 years ago. I had already been involved in Reuse, but when it came to Gainesville, I saw there was very little infrastructure for getting a lot of usable material, back into the hands of the public. First stories do a great job of certain materials, but there’s so many different types of materials that are overlooked in the Reuse market. So I decided to start a combination. It’s pretty much a creative reuse center and architectural salvage. Both big areas of the Ruse market that needed to see improvement and more reuse happen.
Jess Del Fiacco:
Amanda or Nina feel free to jump in.
Amanda Waddle:
I can jump in real quick. This is Amanda. So I’ve been doing a lot of Zero Waste work as a volunteer for years and years. I did it in Lafayette, Louisiana. And then when I moved back to Gainesville in 2017, I got on board with Nina to help out, to run Zero Waste Gainesville. And I really realized that Reuse is a big part of Zero Waste a while back and that we really need to emphasize that. So in 2019, I talked to Sarah about starting a Zero Waste department at the Repurpose Project, to burn what we do with Zero Waste through her creative Reuse store in the nonprofit. So between Zero Waste Gainesville and the Repurpose Project, we really hit on so many aspects, possibly all the aspects of Zero Waste in Gainesville, Florida. And that’s a pretty exciting thing.
Jess Del Fiacco:
Thanks. Nina.
Nina Bhattacha…:
I’m the Co-Chair of Zero Waste Gainesville with Amanda. And we got started with Zero Waste Gainesville in 2017 and our mission is really twofold. So we educate the community about things they can do to reduce waste in their lives. So lifestyle choices, but we advocate for Zero Waste policies at the local level, both at our city and county. And so we really try to focus on all those key elements of waste upstream and downstream, which of course Reuse is a really big part of that. In addition to just rejecting materials outright, repurposing them. And then we touch upon those downstream actions such as recycling and composting as well.
Neil Seldman:
Maybe I could just add at this time, that at the end of our broadcast, we will post references of reviews, activity, and technical reports on Reuse’s impact on local economies happening all over the country. So we’re highlighting Repurpose center in Gainesville, but it is typical of a lot of activity, making it a great economic as well as sociological impact on communities. And it is growing very, very rapidly stimulated by the COVID experience we’ve all gone through.
Jess Del Fiacco:
Yeah. Thanks, Neil. We’ll have that list of resources. We’ll talk about more later, but they’ll all be in the show notes for this episode. You can find them at archive.ilsr.org. So Nina, to go back to what you’re working on in Gainesville right now, could you talk about a campaign to keep Pay-As-You-Throw in Gainesville? What is Pay-As-You-Throw mean? And then what’s happening on the ground right now?
Nina Bhattacha…:
Sure. Yeah. So for listeners who are not as familiar with Pay-As-You-Throw, it’s a program which essentially allows people to pay for the amount of waste that they generate. And so what that means is that here in Gainesville, we have different trash cart sizes and people pay a lesser amount for a smaller trash cart size. And then that progressively gets larger with the size of their trash cart increasing.
Nina Bhattacha…:
And so this program has been in effect since 1994 in Gainesville. And it became an effect because we as a community, recognize the value of allowing people to really pay for that trash cart size. And that when people choose smaller trash cart sizes, they produce less waste, thus also helping us in our zero waste efforts. So just to give you a little bit of background about the issue. This program has been in effect, like I mentioned since 1994, with really little input. And it seemed to be going along very well and people use their different size cards.
Nina Bhattacha…:
The city of Gainesville recently established a office of equity and inclusion, which is a really important office to have and to have staffed. Where they basically look at program policies, they look at contracts that the city enters into, to evaluate those items and make sure that equity is considered. We’re not overly burdening our low income communities. And so the city’s office of equity and inclusion did an initial analysis of our waste management contract, which is going out to bid shortly.
Nina Bhattacha…:
And they had found that this program seemed to be inequitable because our low income communities, tended to have larger cart sizes and then were overly burdened with those increased costs for the cart sizes. So there was a really big concern there. And so as part of this analysis, they came forward with a recommendation that the city move to a flat rate system for cart sizes.
Nina Bhattacha…:
So everyone will be paying across the board the same price for their waste. And so based off this recommendation from the city’s office of equity and inclusion, the commission voted five two, to eliminate the Pay-As-You-Throw program and to instate a flat rate system. Well, Zero Waste Gainesville, was really frustrated with that decision. We again see the value completely in terms of the Pay-As-You-Throw system, it’s vital to our waste reduction efforts. And we also knew that the program could be tailored and made flexible, to address any issues or concerns about equity.
Nina Bhattacha…:
So that very same day, this vote took place, we convened. There was Amanda, myself and my husband’s also really involved locally on campaigns and activist issues. And we discussed what we needed to do, to bring forward the things that could be done to make the program equitable. And to encourage the city commission to reconsider this vote and reinstate the Pay-As-You-Throw program. So I’m happy to go into some of those details of the actions we took now if that works, or if you have any other questions.
Neil Seldman:
Yeah. First of all, this is a very important issue across the country. Cities like Baltimore and D.C. are considering, Pay-As-You-Throw. And there is deep concern for the impact on low income and moderate income families and households. So Nina, could you start with the status now. Was the new law repealed, or is it still a political battle going on?
Nina Bhattacha…:
So in our campaign efforts, we were successful in getting the City Commission to reconsider that vote. So after our outreach and education campaign, they reconsidered that unanimously. And they basically said that we would like to move forward again with the Pay-As-You-Throw system, but then come back to the table in the summer to discuss how we can look at ways to make it more equitable. So they repealed their original decision to basically eliminate the Pay-As-You-Throw program, but they want to have further conversations at this point.
Neil Seldman:
Well, first of all, I want to congratulate you on turning things around.
Nina Bhattacha…:
Thank you.
Neil Seldman:
In my experience with Pay-As-You-Throw, there are many different ways to protect low-income people, renters and or homeowners so the system can work. I will stay in touch with you because the results of how you modify your system to accommodate low-income people, will be very interesting to the rest of the country. So we’ll be staying in touch with you on that. And I congratulate you for accomplishing what you’ve done so far. Any information either now, or as you contemplate the new policies, we would appreciate those details.
Nina Bhattacha…:
Absolutely. So our role will definitely be and continues to be meeting with commissioners, educating our community as to the benefits of Pay-As-You-Throw and the ways to make it an equitable program. And so we will be putting forward recommendations and have been putting forward recommendations to the City Commission, as to how they can adopt different strategies to make it an equitable program.
Nina Bhattacha…:
For us, of course, education and outreach is always key. We know that there are plenty of people in our community, that don’t even know that there is a Pay-As-You-Throw system in place and that they can get a smaller trash cart and pay less. So that’s first and foremost in our minds, to really have a targeted campaign to do that. And that should be led by the city and their solid waste department.
Nina Bhattacha…:
And then also from there, there are other strategies such as waiver systems for those who really need help, to be able to pay for their waste. That could be potentially something that’s put forward. We’ve essentially put together a list of recommendations to the commission to consider at this point. I’m going to say goodbye actually, if you’re going to be kind of transitioned to Reuse, but I just thank you so much for having us.
Neil Seldman:
Terrific. And thank you for the information and for your work of course, Nina.
Nina Bhattacha…:
Absolutely. It’s nice meeting you all virtually.
Neil Seldman:
Okay. Thanks.
Jess Del Fiacco:
Thank you. All right. We’ll be back in just a minute with more about Zero Wast efforts in Gainesville from our other guests, Sarah and Amanda. But first we’re going to take a short break. Thanks for listening to our show. If you’re enjoying this conversation, I hope you consider heading over to archive.ilsr.org/donate to help support us. Your donation makes this podcast possible, as well as all the work that we do here at ILSR.
Jess Del Fiacco:
You can visit archive.ilsr.org/donate to make a contribution today. Any amount is sincerely appreciated. And while you’re there, you might want to check out the other shows in the ILSR podcast family. We’ve got shows that cover everything from broadband to composting. Thanks for listening. Now back to the show. Turning to Sarah and Amanda. So you both work on the Repurpose Project. Sarah, could you talk about what the Repurpose Project is and how did it get started?
Sarah Goff:
Yeah. So my background before starting the Repurpose Project was creative reuse, which is pretty much arts and crafts and the small little things that can be incorporated and repurposed into other things. So a lot of school supplies, art supplies, any sort of random thing that has value, that you don’t see in a traditional thrift store. And then I met a fellow that was already working in Gainesville doing deconstruction. And so he was really passionate about architectural salvage, which is a huge part of the waste stream, that isn’t getting reused.
Neil Seldman:
Excuse me, I must interrupt. I want a name the people you work with, the wonderful people, the Bearded Brothers deconstruction company of Gainesville. And Mike Myers, who I believe is now retired was one of the founders of that. A great zero waste person and a great deconstruction person. I just wanted to mention his name.
Sarah Goff:
Yeah. Thank you. Yeah. We met each other and were sort of a odd pair to start it, but it really did make a lot of sense with his background and my background and we just combined it. And I think the combination of architectural salvage with creative reuse, makes a lot of sense. Because creative reuse doesn’t bring in a lot of funds and architectural salvage does. So by combining them, we are able to make an organization that is self-funded.
Sarah Goff:
And I think that that’s important to consider, because there’s a lot of things that should be getting reused that don’t bring a lot of income in. And by having some reuse items that are revenue generating, they can also subsidize some of these other important things that are really useful for the community to reuse. And especially the supplies that teachers come in for and students come in for. We want to provide that service. And being able to have higher revenue items, help us be able to provide that service.
Jess Del Fiacco:
Yeah. Could you talk a little bit more about kind of your relationship with the local economy and your workforce and what impact that has?
Sarah Goff:
Yeah. We started small and we’ve just continued to grow and it seems exponential our growth. And that really shows that what we’re offering, is very needed and desired. When we started 10 years ago, it was all volunteer run and pretty quickly we realized we needed someone there full-time. So we hired me and now we’re at 22 people I believe.
Sarah Goff:
We have about a 100 to 200 sales per day. We’re open six days a week and our parking lot is constantly full. And our warehouse, our building right now is full. So we just purchased a second location. So we are expecting even quicker growth this year. I mean, I wouldn’t be surprised if we double all of our numbers within the next two years.
Neil Seldman:
Sarah, I’ve heard you speak before and I believe, you correct me if I’m wrong. You started with 1000 square feet, you moved to 3000 square feet, and now you’re jumping to this vast warehouse of 100,000 square feet. All of that happened in 10 years. Could you just give us a little bit of information on how you financed this purchase of your new warehouse?
Sarah Goff:
Yeah. Well, we originally thought that we had a bank loan. We talked to our bank that we’ve been banking with for 10 years and they gave us a loan amount, which was not enough for the building. So we launched a fundraising campaign. And we were absolutely blown away by the public support. We quickly raised $150,000 in 60 days. And during that time, the bank loan actually fell through, which was very hard to handle after raising so much money from so many people.
Sarah Goff:
We probably had over 500 individual donors for that $150,000. It really is an amazing story and it shows the power of our community and divesting and investing in local organizations. Because within a week of learning that our bank loan had fallen through, we were able to get seven private lenders to lend us money and make up the difference of the bank loan.
Sarah Goff:
And not only that, the lenders were really trying to work with us, to come up with favorable terms that would help us succeed in the long run. So whereas the bank was saying, “Prove to us that you’re not going to fail so that we don’t lose our investment.” These individual lenders were saying, “How can we structure this to make sure you succeed?” So they offered to delay payment for seven months so that we could have seven months to get the organization in the new building set up before we had to start paying.
Sarah Goff:
It was a big learning moment for me to see that we don’t necessarily have to rely on the big institutions for all our needs. We can really look to our community. There are people out there that have money, that are willing to invest. And actually were thanking us for being able to invest in a cause that they believed in. They didn’t want to put their money in big business and on Wall Street, but they saw that we were a good company that was making positive change in our community. And so they were willing to pull their money out of traditional lending situations and put it towards us.
Neil Seldman:
It’s a great story of community empowerment and it’s of course, it’s a great message to you guys that you’re doing the right thing. So I just wanted to make sure we had Sarah talk about the financing. Thanks for the interruption, Jess.
Jess Del Fiacco:
Oh yeah, of course. That was great. So this question might be for Amanda, or maybe for both of you. Curious, if you have a relationship with the city or the county, and if so has it evolved over the years?
Amanda Waddle:
We have been talking to the city and the county for awhile. We haven’t quite gotten there with them. Although I do think it’s around the corner. We actually just had a Zoom meeting with them today, to talk a possible pilot program, to assess the value of the bulk material on the curb. I mean, I think most of us know that anytime you drive around, you’re going to see stuff that’s valuable at the curb.
Amanda Waddle:
And so we’re talking about doing a pilot program with them, where we would drive ahead of the trash hauling trucks and pick up anything of value and actually give it a unique barcode and skew number, so that we can track all the way through sales. So we’ll have an exact dollar amount of the usable material that’s getting put at the curb. And I think that that’s really exciting, because there’s just so much value there. Something that I always talk about, is recycling of courses is an amazing thing, and we should definitely do that. But reuse is really overlooked as far as municipal services.
Amanda Waddle:
And it’s something that is a big part of our waste stream as far as bulk, but it’s also a valuable part of our waste stream and really beneficial to people in the community, especially like lower income members of the community, to have access to low cost material. And without a system in place to collect it, store it and resell it, we need that system. And I think it makes a lot of sense for it to be part of municipal waste hauling services.
Neil Seldman:
I’d like to comment on that two things. One, a study several years ago in Oregon, where Eugene Oregon Lane county, where there’s a very active reuse group. St. Vincent DePaul of Lane County. Their economic analysis showed that the existence of these 13 thrift stores in the county, reduced the cost of living for low-income people by 3%, which is of course, terrific. The other point is, if you succeed in having a pre pickup before the trucks come, that could enhance the people putting out valuable, not antiques, but the older things that if they put in the waste stream, of course would be destroyed.
Neil Seldman:
So it’s a great, innovative tactic. And I believe Gainesville years ago, didn’t they Gainesville do something with setups of electronic scrap, or separate pickup? It may have been a different city. I may be missing that. But the concept was that people would put out their east scrap separate from their waste. So it could be picked up by a sheltered workshop for refurbishing.
Jess Del Fiacco:
I actually had a kind of similar question. I was wondering if any other cities had … I’ve never heard of tracking the materials before, to track that dollar amount. So I’m curious if you’re looking to somewhere else for inspiration for that? Or if that’s just something that you’re innovating.
Sarah Goff:
I actually haven’t heard of that, but we started talking about it with our new building. It’s going to be mostly big, bulky items. So we were looking into bar coding systems for that. And at the same time, we just happened to be talking to the city about data collecting for this bulk material. So it just kind of, I don’t know. It might be out there, but I haven’t heard of it.
Neil Seldman:
It’s an excellent innovation and we’ll be following you.
Jess Del Fiacco:
I was wondering if you could talk a little bit about kind of what your customers and supporter base is like. If you have any particular great impact stories that you’ve had on the community, that you’ve seen or heard from customers.
Sarah Goff:
Yeah. And that’s actually one of my favorite things about our store, is that we have a very diverse customer base. And especially in the last few years, the political climate is so divided. It seems like Reuse is one of the few issues that isn’t divided. It’s really supported by everyone, because I think everyone can see the value in Reuse. There’s no reason not to have more reuse. It benefits all the upstream issues with manufacturing.
Sarah Goff:
Some people care about that, but also a lot of the downstream benefits of being able to access this material, it’s really, it feels like it’s bringing the community together. And one of my favorite moments, was at checkout. We had a line and it was just so diverse. It was almost like every single stereotype of a person was inline together. And they were talking to each other about what they were going to do with the items that they were buying.
Sarah Goff:
And it just felt so good. We were much more than a store. We were building this community, bringing people together, that maybe wouldn’t be brought together otherwise. For the common goal of just creating and salvaging and saving money. And I don’t know. I just feel like there’s so much potential there on so many levels with expanding Reuse.
Neil Seldman:
We had a Reuse a webinar a month ago. And Elizabeth Knight. K-N-I-G-H-T presented. She wrote the book, The Repair Revolution which I’ll mention later on in our resources. But she went into several anecdotes about the profound impact that not only people who brought things in through repair, but the repair people, the relationship between the repair people, teaching regular people how to fix their own things, it was an emotional psychological event, as well as the reuse of that. Your stories are being multiplied thousands of times across the country.
Sarah Goff:
Yeah. That kind of reminds me too. We recently picked up 100 washers and dryers stack units, that it was a remodel, a multi apartment complex remodel. So I mean, they were all in working condition. But that was also very touching because a lot of the people that were buying them, were low income families that were going to laundromats. So it goes beyond that. We’re improving people’s lives by making this stuff available.
Sarah Goff:
It’s not just like we started off maybe thinking it was more of an environmental and now we really see that it’s a social organization. It really is helping people and it’s helping animals, because there’s less habitat loss. And we’re also helping the environment.
Jess Del Fiacco:
It’s really kind of exemplifying environmental justice principles it sounds like. You’re covering all sides.
Sarah Goff:
Yeah. And that’s something, I guess I’ll touch on that Pay-As-You-Throw thing too, because they were really focusing on just the cost impact of the trash carts. But what I saw right away, is the environmental injustice that’s happening in upstream manufacturing. And then also the waste disposal. Landfills are pretty much always located in low-income communities that have, there’s a lot of equity issues as far as the manufacturing stuff and the disposal of our stuff. And I think that that’s really important to consider, looking at the whole picture of equity and the waste stream.
Neil Seldman:
This is independent verification, but when we interviewed people like the Reuse carter and Central Appalachia, the impact, the psychological impact on workers, on people in the community is just tremendous. And it really is needed at a time when community people need more resources and the waste stream is just overwhelming us across the country. The more reuse, the better off we all are economically environmentally and socially. Sarah, could you talk about your workforce. How you recruit your workers there, the wages, pay conditions, things like that. So people get a sense of what it’s like to work in a Reuse center.
Sarah Goff:
Yeah. We’re constantly trying to increase our wages. Right now, our average wage is $14 an hour. And for this area, that’s right at the living wage. And we’re considerably higher than most of the other big box retailers in our area. Definitely this new building and the types of material that we’re going to be able to resell, we’re hoping to be able to increase our wages. Florida passed a $15 minimum wage, which is a dollar increase every year for the next five years.
Sarah Goff:
And we’re hoping that we can get there this year, to starting wage $15 an hour. But we want it to be more, so we’re continuing to try to innovate and streamline and make things efficient. It’s definitely reuse is a hard job. It’s overwhelming the amount of stuff and the types of material that we get in. But people really like working with us because it is rewarding. It’s not a boring retail job. It’s never boring. There’s always something going on.
Sarah Goff:
And we also are a little different in that we’re as horizontal of a structure as we can be. So we have meetings every week. Everyone has a lot of say over what’s going on as far as making sure that the working conditions are good and everything’s collaborative. And we make sure to recognize people have different lives. They’re coming from different backgrounds and making arrangements. So that it’s a good place to work.
Neil Seldman:
I just again, want to relate what you’re doing in Gainesville to other places across the country. Urban Ore which is in Berkeley, California, they’ve got about 30 workers and they’ve been in business for quite a while. At least 30, 40 years. Dan Knapp and Mary Lou Van Deventure, who are the married couple that own the place, they are now selling the business to their workers. They’ve been negotiating for about a year.
Neil Seldman:
And the workers are very enthusiastic about being worker owners. And they also highly praise their staff. I wanted to tell one other story that’s related. Dan and Mary Lou came back East a couple of years ago. And we drove over to Community Forklift in Prince George’s county, outside of D.C. And I just stood there and watched these four, Nancy and Ruth from Community Forklift. These four professionals with years and years of experience, going over their different procedures and learning from each other.
Neil Seldman:
It was one of those exciting lessons, a class lessons I ever had. It was quite wonderful. As you said, people are so friendly and willing to share information. It really is a statement about the culture that the reuse industry is bringing to cities all across the country. Rural areas as well as urban areas. You mentioned basically how many people provided the support, monetary support for the new move.
Neil Seldman:
Is there a sense of how many different customers you have? Do you keep account? Obviously people come in more than one time. But is there a sense of how many people, or families you’re impacting in the Gainesville area? And related to that, do people come from outside of Gainesville to shop at your store, or bring donations?
Sarah Goff:
That’s an interesting question. I haven’t … You mean as far as unique visitors. Like how many unique visitors? I bet I could probably run a report on a square, but I haven’t done that. I’m not sure. I do know that we have a lot of regulars. We have a lot of people that are there almost every day and a lot of people that spend hours and hours and hours there.
Neil Seldman:
I remember outside of Pittsburgh, they have a very good reuse operation. And I sat in the parking lot and just saw all day long, people going in and out smiling because they’re bringing stuff in and smiling because they got a bargain. So it’s really, it’s a social. And it’s quite lovely to hang out at Urban Ore and I’m sure your place as well. One other factor that I’ve learned from other reuse operations all over the country, is that many of the, a good part of their sales, goes to other stores that are going to resell what they get.
Neil Seldman:
Like you’re supplying inventory for other restores. In fact, that a study just done by the University of Maine, they found out that sometimes 50 to 60% of sales from reuse stores, go to other stores that are going to resell it, either refurbish it a bit more and resell it. And I was wondering if you’ve kept data on that type of economic activity.
Sarah Goff:
We don’t either, but this is all good points that we should be tracking. I mean, I do know that we have a lot of resellers that come in. And we love that. We love that there’s people that are helping us get it back into use. And we’ve started doing a lot more eBay and Etsy, because it’s a lot easier to find the people who want this stuff online. Especially for the repair community. If we get broken sawing machine that parts are still useful for people who are looking for that specific part. And it’s a lot easier to find that specific part online for the person that needs it.
Neil Seldman:
Yes. I do know that St. Vincent’s out in Lane County, Oregon, they use the internet for selling high-end pocketbooks and textiles that they’ve refashioned. And so it’s a balance between using the internet and of course, having a physical store. Is there an overlap between people who donate to you and people who buy? In other words, do people come in and give you stuff and then walk out with purchases?
Sarah Goff:
Yeah. I would say the majority of the people.
Neil Seldman:
Really?
Sarah Goff:
Yep.
Neil Seldman:
Okay. And another related question, which I again, I picked this up, how important reuse is from talking to other people around the country. Urban Ore just told us that through COVID, their business has really, not doubled, but greatly increased because they’ve been … And I’m sure you have declared unnecessary in this store to keep up. This year, they’re going to pay about a quarter of a million dollars in sales tax. And I was wondering, I know you have to pay sales tax. But isn’t it a large contribution to the city and I imagine there’s a state sales tax as well?
Sarah Goff:
Yeah. That’s incredible. That’s incredible sales tax number. Yeah. We’re probably this year if without the new building, our sales tax for the year would be about 36,000 for the year.
Neil Seldman:
Well, clearly it’s one of the few forms of recycling that pays sales tax. And of course, reuse is much more valuable than recycling, because you’re getting a product, not a raw material. Nina’s not here now, but Amanda, did you have any comments about your work at the Repurpose Project?
Amanda Waddle:
Yeah. I can add in a little bit about when we started a zero waste department at Repurpose Project. So one of our goals when I set up this department and Sarah and I figured out what we wanted to do, is we wanted to work with schools. We wanted to create educational material. We wanted to work with small businesses and events. And so we really set up a program to tackle all of that. And working with the K through 12 schools pre COVID, we had to agree to work towards zero waste.
Amanda Waddle:
And part of that, was creating education for them. So they can learn about all the components of zero waste, including reuse and how important reuse is. And another component was getting school supplies to some of the classrooms that didn’t have a lot of school supplies. The families couldn’t bring them in, the families couldn’t provide them. So I would take school supplies from the aisles at the Repurpose Project and take them into these classrooms. So we were able to supply them. We needed supplies for the students and the teachers. So that was part of what we were doing.
Amanda Waddle:
We’re starting to pick that stuff back up now because it was on pause because of COVID. So I’m working with a middle school. And we’re making the plans this summer for how we’re going to start back in August. And part of that, is some curriculum that they’re going to use that I created. It’s a 10 part zero waste educational curriculum that I’m real excited that they want to use. Another aspect is that before COVID, we had piloted diverting the food scraps from the lunch in this middle school. And that got put on pause, but we’re going to start that back up in August.
Amanda Waddle:
So we’re lucky to have a community compositor here in Gainesville, that has agreed to pick up the food scraps weekly from this school. And since we already piloted, we kind of know that it can work. So we’re just going to have to start that back up again. So we think that actual practices of diverting food scraps, actual practices of recycling right. And then getting the education, overlapping all of that on why we work towards zero waste, why we do some reuse is so important, will really be valuable for these middle school students. So that’s one program that I’m really excited about.
Neil Seldman:
Well, you’re really turning into a, all around zero waste if you’re getting into composting. So you’re doing wonderful things there. I don’t have any more questions. I would just like to take three minutes to go through the references, for other resources that people might want to, who watch this, who read this podcast, might want to go through. I’m just going to mention a few. I think people should contact and we’ll provide this information. Professor Cynthia Isenhour. I-S-E-N-H-O-U-R at University of Maine.
Neil Seldman:
She’s developing a whole array with her students and other professors, data on the sociology and economics of reuse. There’s a wonderful book that’s been out for a year, The Repair Revolution by John Wackman and Elizabeth Knight. And again, there’re several many references listed. I just wanted to say, on building deconstruction, there’s a wonderful report out from the city of San Antonio, Texas called Waste Within our Walls. And it’s a technical manual and policy manual for building deconstruction.
Neil Seldman:
And the final thing I’ll mention and we’ll provide, that Jess will provide this on the podcast this list, there are numerous webinars featuring reuse people, just like we’re doing here with the Repurpose Project. But I would say that we have on video recording at least 15 businesses, much like the Repurpose Center. They’re all slightly different, but of course they’re all focused on zero waste and reuse.
Neil Seldman:
So to conclude, I want to thank all Sarah, Nina and Amanda for one, their hard work. Two, for sharing the details with us. And I hope you don’t mind if you get a lot of questions from around the country, when this podcast gets put up by Jess. Jess, did you have anything to conclude with?
Jess Del Fiacco:
That’s all I have. Sarah, Amanda, if there’s anything else you want to add before we sign off? Otherwise, thank you so much for joining us today.
Neil Seldman:
Be well. We’ll be in touch everybody. Keep up the good work as my dad would say. Thanks.
Jess Del Fiacco:
Thank you
Neil Seldman:
Yeah. Thank you.
Jess Del Fiacco:
Thank you for tuning into this episode of the Building Local Power Podcast from the Institute for Local Self-Reliance. You can find links to everything we discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That’s I-L-S-R.org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. We hope you also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website.
Jess Del Fiacco:
Finally, we ask that you let us know how we’re doing with a rating or review on Apple podcasts or wherever you find your podcasts. This show is produced by me, Jess Del Fiacco and edited by Drew Birschbach. Our theme music is Funk interlude by Dysfunctional. For the Institute for Local Self-Reliance, I’m Jess Del Fiacco and I hope you join us again in two weeks for the next episode of Building Local Power.

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
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38 min
July 08, 2021Growing a Regenerative Food System
On this episode of Building Local Power, host Jess Del Fiacco is joined by ILSR’s Linda Bilsens Brolis and Amanda Cather of the Million Acre Challenge. The Million Acre Challenge (MAC) views healthy soil as the foundation for regenerative agriculture and is working to achieve one million agricultural acres in Maryland using healthy soil techniques by 2030. Amanda, Linda, and Jess discuss:
The different approaches MAC is taking to advance their mission — including working groups focused on science, policy, farmer engagement, public outreach, and the business case for healthy soil practices.
What Amanda views as the biggest challenges facing MAC.
The ongoing trend of farm consolidation and the importance of working with farms of different sizes.
How the current regenerative agriculture movement fits within the long history of Indigenous American agricultural practices.
“The current agricultural system that we all buy into and participate in as consumers creates huge challenges for farmers to make change on their operations, and farmers are squeezed on both sides because consumers expect and sometimes need cheap food and input costs are rising.”
“I think that one of the downsides of the extreme productivity that we’ve managed to achieve… is that we now employ a very small portion of the population in farming. And so I think we really need to work on increasing the number of farmers on the land. So we really need more farmers, not fewer farmers, and to be always thinking about farm profitability and resilience and that balance of efficiency and resilience and increased food security and regional food systems along with, as you said, improving access to land financing and equity in those processes.”

Related Resources
Guidelight Strategies
Soul Fire Farm
A-dae Romero-Briones, Director of Programs at the First Nations Development Institute
English Pastoral by James Rebanks
Animal, Vegetable, Junk by Mark Bittman
Perilous Bounty by Tom Philpott
Compost: Carbon Sequestration & Climate Change, a webinar hosted by the Compost Research and Education Foundation.
Farming Honors the Past and Considers the Future by Kristyn Leach

Transcript
Jess Del Fiacco:
Hi, everyone. Welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and Communications Manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. Hello today we have some great guests. Joining me is ILSR’s Linda Bilsens Brolis who works with our composting program, and Amanda Cather, who’s the Project Director of the Million Acre Challenge. We’re going to talk a lot about Amanda’s work today with the Million Acre Challenge, which focuses on the importance of improving soil health on America’s farmland. So welcome to the show, both of you.
Linda Bilsens B…:
Thank you.
Amanda Cather:
Thanks. Excited to be here.
Linda Bilsens B…:
Great to be here.
Jess Del Fiacco:
Yeah. Linda, do you want to start us off with any further context before we jump into things?
Linda Bilsens B…:
Sure. Thanks, Jess. So great to be back on BLP and to have Amanda joining us. So for those of you out there who don’t know who I am, I am as Jess mentioned, part of the composting initiative and this Million Acre Challenge, which you’ll be hearing more about throughout this episode is something that’s really near and dear to me because it gets to why I got into composting to begin with, composting as a tool to support more resilient and sustainable food systems. And so the Million Acre Challenge is an initiative that ILSR has been part of the founding core team of organizations that have helped to launch this program over the last few years.
Linda Bilsens B…:
And really over the last year the rubber has been hitting the road, if you will, and due large part to Amanda’s great leadership. But just to give context for ILSR’s involvement in this collaborative. We represent the composting piece of the regenerative food system puzzle. The project is currently focused primarily on Maryland, but of course you can’t focus just on one state. It’s broader than that, which I’m sure Amanda we’ll get to, but our belief is that you can’t have a regenerative food system without closing the loop from farm to table and back to the farm again, which is where compost comes in and we’ll get into it. But there are lots of symptoms of a broken food system that I think focusing on generative agriculture really helps to remedy and composting is a tool for getting organic matter back into the soil and closing the loop.
Linda Bilsens B…:
We throw away so much food, but a good chunk of the food that is ever produced in the US doesn’t ever get consumed and there’s lots of other symptoms of a broken food system that I think we’re trying to remedy and soil health as a tool for building more resilient food systems is what I’m hoping that we’ll get at in more resilient communities as a result. So glad to have this conversation going. So maybe we could hear more about the Million Acre Challenge from, from Amanda’s perspective.
Amanda Cather:
Yeah. Great. Thank you, and really excited to be here. ILSR, as you mentioned, Linda’s one of the Million Acre Challenges founding partners. So it’s really a privilege to get to talk to your audience and be involved at this level. I really appreciate it. So again, as you mentioned, the Million Acre Challenge is a collaborative effort to advance soil health and regenerative agriculture on one million acres of agricultural land in Maryland and to catalyze change towards regenerative agriculture across the Chesapeake region and the goal is to do all of that by 2030.
Amanda Cather:
Our goal really is to challenge all kinds of producers that would be row crop, producers, livestock producers, diversified vegetable producers, urban, rural, suburban, peri-urban to start wherever they are and take the next right step for their operations to improve the health of their soils. The reason that we really focus on soil health is because we know that healthy soils are the foundation of regenerative agriculture. And we’re hearing a lot about regenerative agriculture lately. The way that we define it is there’s a definition that was published in a paper by Guidelight Strategies and sponsored by Patagonia that we really like. It’s a system of land stewardship rooted in centuries old indigenous wisdom that provides healthy nutrient rich food for all people while continuously restoring and nourishing the ecological, social and cultural systems unique to every place.
Amanda Cather:
So we really love that definition of regenerative agriculture and really see healthy soils as the foundation of that system, recognizing that they have all kinds of co-benefits including increased profitability and resilience for the farmer. And that can mean increased independence from reliance on purchased inputs, which is important, ecological improvements and ecosystem services, including enhanced biodiversity, reduced erosion, water quality improvements, and potentially reductions in emissions of carbon and other greenhouse gases and possibly even sequestration.
Amanda Cather:
We are really looking at emphasizing the four main principles of healthy soils management, which include keeping so covered, minimizing harmful chemical, biological, and physical disturbance, maximizing biodiversity, and keeping a living root in the soil year round. So there’s lots of practices that express these principles. So the route to help the soil is going to look different on every farm, but our goal is really to get every farm on the pathway to healthy soils and regenerative productions.
Jess Del Fiacco:
We have different working groups set up to tackle this mission in different ways. Could you talk about some of those different approaches?
Amanda Cather:
Yeah, and I think it’s important for me to point out that the Million Acre Challenge itself, isn’t just one organization. So it’s a movement that’s really bigger than any one organization, One farm, one person. It was founded by six founding partners, including ILSR, Chesapeake Bay Foundation, Future Harvest, Fair Farms, which is our project of Waterkeepers Chesapeake, the Institute for Energy and Environmental Research, and The Hatcher Group. It was founded as a result of a heroic futures grant from the Town Creek Foundation. So really looking at a vision for the food system that goes beyond one change, but really looks at the changing the food system and the agricultural production overall.
Amanda Cather:
We’ve also built partnerships with farmers and farm service organizations across the state and into the region. We’re lucky to also have an incredible board of soil stewards. That’s our boss, composer, farmers who are soil health leaders to help us guide and shape the challenge. So it’s a big collaborative effort to move us in that direction. And because soil health is complex, it’s an ecological system. So thinking about it requires holistic approach. So we’re approaching this goal of challenging farmers to build healthy soil from five viewpoints that you, as you mentioned, are represented in our five working groups.
Amanda Cather:
So our science working group, the idea right now, our main initiative is bringing the process of sustainable agriculture soil health benchmark study to Maryland. And we’re working there with 30 farms, including organic and conventional diversified veg farms, livestock farms, row crop farms using the Cornell Comprehensive Assessment of Soil Health to connect chemical, biological, and physical soil health indicators to farm management practice records. And the goal there is to really start to see the impacts of different types of management on soil health. So how does tillage really affects soil health? How does synthetic chemical use really affect soil health? How does the use of carbon amendments, including compost affects soil health.
Amanda Cather:
Looking at the long-term impact of management on those indicators and farms get their own results as well as comparisons to other farms in their cohort, and then process designs, these beautiful materials that help farmers market their products using their efforts towards soil health. So that’s one of the main focuses of our science working group. We’re also of course, looking at trying to assess the impact of those carbon soil amendments and especially compost on soil health, because that’s such a big question, especially in Maryland, where phosphorus is such an issue. How can we encourage more farms to use compost, to build soil health and close that loop. So to improve that food system cycling and not overload the system with phosphorus as well. I don’t know if you want to add to that, Linda.
Linda Bilsens B…:
We’ll be hosting a webinar series focused on on-farm composting and compost use in the coming months. So later this summer, and then into the fall, which I’m really excited about because we’re going to be tapping some experts in the field to help us answer these questions, but basically right now, which is probably the case in any watershed in the world, but you have some places where there’s too much of a good thing and other places that could use it, but there’s not really great connections between the places that have too much phosphorus in the places that need it, even within the state of Maryland.
Linda Bilsens B…:
And so things like poultry litter, in which we have a lot of on the Eastern shore of Maryland, there’s too much phosphorus already in the soils there. But then in the Western part of the state, you have places that farmers still have to buy amendments or make amendments themselves to increase their phosphorus and improve their soil in general. So the idea of closing the loop, but doing it sustainably and responsibly, so that water quality is not impacted is definitely a challenge that we are looking forward to helping to tease apart in Maryland working with farmers and policy makers to do that appropriately. But also we’re still working with farmers who are interested in composting as a way of managing materials that could become wastes on their own farms, but also working with the composting industry.
Linda Bilsens B…:
So much food waste is generated in cities and urban centers that we’re also seeing a huge need for creating high quality compost by composting facilities that specialize in that process to create a product for farming, getting it back into the soils. So we’re trying to approach it from both supporting farmers that want to compost as a way of managing waste and building their soils and supporting a system that recycles more broadly materials that otherwise get wasted. So yes, you’ll be hearing more about that this fall.
Amanda Cather:
Yeah, and Linda’s totally pointing to some of the work of another one of our working groups, which is Farmer Engagement working group, which focuses on helping farmers connect with the Million Acre Challenge and with each other and with resources that can help them take that next step for their farm. Since we know that farmers learn best from other farmers through farmer networks, demonstration days, speakers, educational events, like the ILSR webinars, bringing information that farmers want to see, and our approach to our farmer engagement work is really focusing on what do you want to learn and how do you want to learn it? This is kind of our mantra that we say over and over again, because it’s critical for us that we’re centering farmer voices and farmer needs across the project and what’s their experience, their wisdom, their needs, and their challenges.
Amanda Cather:
Those are the drivers for everything that we’re trying to do. So, yeah, so that science and farmer engagement and the third working group is our business case working group, which is looking into the profitability of some of these healthy soil practices. And that’s harder than you’d think because of course in agriculture, it’s really difficult to say this result comes from this cause because it’s ecological system. So it’s very challenging to tease apart the specific costs and benefits of every soil health practice and demonstrate to folks how does each one of these practices contribute to profitability in your whole system?
Amanda Cather:
So that’s the work of the business case working group and American Farmland Trust and Soil Health Institute have done some of this work very nicely looking at specific practices like tillage and cover crop use on row crop farms. And so we’re trying to see if we can expand that list of practices into a more systematic look at regenerative ag and incorporate livestock and diversify veg production as well. And that is not easy, but it is really important, especially as we’re looking at trying to figure out when farmers can start to see a return on their investment in regenerative production and think about the ways that they can be supported through any transitional period where they might lose yield, or they might have challenges until they start to see those benefits.
Amanda Cather:
So there’s other considerations in that business case too, like the ways that emerging ecosystem services markets might play into farm profitability and how we can try to ensure that those markets are going to benefit farms of all sizes, including small and mid-sized farmers and also reward early adopters and folks who are really out there innovating as well as farmers who might make a change to using one of these practices today or tomorrow. There are folks that have been doing this for 30 years and we feel like they should be rewarded as well.
Amanda Cather:
And then there’s some benefits you can’t put a price tag on in a partial budget analysis. Like how do we account for these as a society? So I think for decades, we’ve externalized a lot of the risk from farming onto the taxpayer and so reforming our crop insurance and subsidies and financing across the country to ensure that these systems are really rewarding good stewardship. That’s super important at the federal level, but not really what we’re working, we’re working on at the state level, but these are things that we really support. So our policy working group, which is number four, is aging state lawmakers to listen to farmer voices about the importance of soil health.
Amanda Cather:
That’s a really important framework for agricultural conservation and helping farmers get their messages across to policy makers, as well as helping policymakers connect the important issues of their day back to soil health and agriculture. We’re planning a series of in-person farm tours for our state lawmakers that are focused on soil health this summer. And we’re hoping to work over the next year or so to find funding for the state’s healthy soils program that was established in 2017, but it was never funded. So we’d really love to see some kind of consistent funding for that program.
Amanda Cather:
We also have seats on the state’s Soil Health Advisory Committee, and that includes farmers, nonprofits, ag retailers, extension, and other important players in the state. And the goal that committee right now is to figure out ways that farmers could be incentivized to work on improving their soils for all the reasons we’ve talked about before. So we’re also engaged with the National Healthy Soils Policy Network, and that is a great network that connects organizations from all over the country, doing soil health policy at the state level, and helps us learn from one another and share our experiences about advocating for farmers and healthy soils for healthy food systems. So that’s the work that we’re doing in policy right now. And again, we’re moving forward with that and Linda may have more to say about that as well.
Linda Bilsens B…:
At this point, we’re looking forward to the tours, right? I don’t know if you just mentioned that, but that will be the direct line connecting farmers with policymakers so that policymakers can understand what it is to farm in a holistic regenerative way. What does that actually look like in real terms, not like conceptually, but actually in Maryland on the ground, what are the real benefits of that? What are the real challenges and really being able to connect those two groups I think is critical. But then also of course, the consumer piece, which I know is the final working group is public outreach.
Linda Bilsens B…:
So I really respect the way that the Million Acre Challenge project is set up is to really try to tackle. It’s a huge undertaking to try to shift the way that we view agriculture, the way that we view farmers and taking on more broad than that, putting all of the responsibility of everything on the farmer’s shoulders, which I feel like farmers just have so much on their shoulders in terms of responsibility, but as consumers, we need to demand the products who need to be willing to pay for things that are produced sustainably and regenerative only if we want farmers to be producing things that way.
Linda Bilsens B…:
And then there’s the policies that need to be in place to support farmers, to be even able to make those choices. And then there’s also of course the financing and the financial support. So it’s all very intertwined and very complicated as Amanda’s already alluded to. I don’t know if there’s anything you want to add to how the public outreach group is helping to tackle that of consumer piece of the puzzle.
Amanda Cather:
Yeah, I think you said it really well, but I think it’s important to just reemphasize that public outreach, it includes farmers and consumers, and it’s all about creating demand. So building demand for healthy soils programming and technical assistance and policy among farmers themselves, and also demands for a product like raised and healthy soils among consumers and supply chain partners. So like you said, the key is helping build those incentives for farmers in the marketplace.
Amanda Cather:
So consumers who are willing to pay more when they’re buying directly from farmers who are farming direct regenerative and when they’re purchasing from a company that’s supporting farmers to use regenerative systems and then by extension companies that are willing to help farmers in their supply chain, build soil health and transition to regenerative production and that can take a number of different forms. It can be guaranteed contracts, innovative financing, increased prices paid directly to farmers and the policy makers themselves who are going to support that work.
Amanda Cather:
So public outreach is kind of focused on all of those things and we’ve been doing a lot of work on messaging to farmers and just beginning to work on our messaging to consumers and how to engage them directly in the project. Those are our five working groups.
Jess Del Fiacco:
Thank you. That’s you tackling a lot of them, different things. We’ll go to the next question in just a moment, but first we’re going to take a short break.
Jess Del Fiacco:
Thanks for listening to the show. If you’re enjoying this conversation, I hope you consider heading over to archive.ilsr.org/donate to help support our work. Your donation directly supports this podcast and all the work we do here at ILSR. Visit archive.ilsr.org/donate to make a contribution today. Any amount is sincerely appreciated.
Jess Del Fiacco:
I wanted to ask you about some of the challenges you face in this work, and this may or may not be the same question. I also just wanted to ask you, correct me if I’m wrong, but we’ve seen for decades a trend of consolidation in the agricultural world. I was wondering if that plays into the work you’re doing at all. I mean, do you see that as something we need to change? Do you often work with the big, big, big farms?
Amanda Cather:
Yeah, you’re totally right about consolidation. I think, well in Maryland, the average farm size about 160 acres. So there are a lot of very, very small farms in Maryland and a lot of large farms in Maryland and there’s some of those mid-sized farms as well. I think from my perspective, those farmers of the middle are really important. It’s very important to recognize that those farms have been left out of a lot of policy work and left out of a lot of consideration. Those are farms that can produce a lot of food and produce a lot of jobs and don’t have a lot of support.
Amanda Cather:
We have a lot of micro farms who are doing amazing work, maybe not producing enough to feed the region. Aggregation can help with that and then we have on the other end, these very large scale farms whose main goal is efficiency and those farmers in the middle, they are the ones that can really balance efficiency and resilience and production and ecological mindset. I think focusing on those and their real importance to the regions that they are in is critical. So I think you’re totally right. I think Linda touched on one of the biggest challenges, which is that there are so many barriers that farmers have to overcome in order for them to take that next right step, like to move in the direction.
Amanda Cather:
So it’s so easy for us to fill our garden with compost and say, “Oh, my garden is so healthy. It’s so full of worms. Why can’t farmers just do what I do and get the same results?” Or to say, “Well, the benefits of these practices are so clear and obvious. This should be an easy decision for any farmer to make to transition to this kind of production.” But I think what you touched on is that we all need to realize that the current agricultural system that we all buy into and participate in as consumers creates huge challenges for farmers to make change on their operations and farmers are squeezed on both sides because consumers expect and sometimes need cheap food and input costs are rising.
Amanda Cather:
So I think that our system right now views agriculture as an industry, right? Which it has efficiency at the top of the line in terms of importance, and rather than looking at it as an ecologically based business that needs to balance resilience and efficiency, because it’s necessarily interacting with natural systems, including ones that are seriously out of control of a lot of farmers right now because of climate change, which they are experiencing as extreme weather.
Amanda Cather:
So money is going to be the most important factor for decision making in agriculture because farms are businesses and farmers need to make a living and create jobs that provide a living for people. And most producers are operating on really thin margins and are what we like to say, they’re risk saturated. They’re dealing with so much risk every day. It can feel absolutely impossible to take another risk to make change. And so I think what we’re looking at is about half of farm households in recent years have negative farm income every year. So a lot of them are relying on off farm income to make ends meet and so it’s scary.
Amanda Cather:
It’s scary to make change. It’s scary to think about the fact that you might, if you adopt a whole system of new practices and you’re learning how to do that, you might have reduced farm revenues for an additional transition period. And if you’re coupling the prospective loss of revenue with this really tight financial position of most farmers, the risk is just going to be too great to realistically, change your practices unless you have access to capital or other incentives that are going to de-risk your transition. So I think that’s the biggest challenge is really getting folks to step out of the whole system, that’s really encouraging them to maintain the status quo, to really work towards production, production, production.
Amanda Cather:
It’s all about yields and maximizing yields, and instead think about profitability. Managing the balance of yields with resilience and income with expenses. That’s just a different framework. And so encouraging farmers to, oh, you’re already a systems thinker. The way in which you’re thinking about your farm as an ecological system. So it’s a mindset shift. So that’s another big challenge. So there’s a lot of barriers to overcome, but I think we’re fortunate as a project in having a lot of different ways in which we can approach these barriers and try to overcome them from all these different angles, if that makes sense.
Linda Bilsens B…:
Yeah. That’s a great answer. Again, just gets at the complexity of the challenge that faces us, but it’s obviously a very worthwhile because it has to do with literally our ability to continue to feed ourselves as a society and viewing farmers as allies and really recognizing the critical role that they play. They’re so undervalued and we really need to be supporting them and being able to make the choices that are going to be best for their long-term profitability, right? Not just year to year or season to season, what’s going to get them through. It’s I mean, what business really can function that way. It’s in everybody’s interest to think more long-term, but I think it’s also very interesting to think about where the power lies in making these decisions.
Linda Bilsens B…:
And right now it’s not really generally in the hand of the farmers and then who actually owns the land and then who has been pushed out of land ownership historically over the last hundreds of years. So you have the type of agriculture that maybe would have had more of an ecological priority through indigenous and people of color owning land, and the way that that was managed once. Now you have consolidation and really people who have to fit into the industrial structure of agriculture in order to really make ends meet. Amanda, if you have anything to say on the idea of regenerative farming and may be where that stems from.
Amanda Cather:
Yeah, I just was really lucky to hear A-dae Briones Romero talk about this. She’s Director of the First Nations Development Institute and she spoke so eloquently about the difference between the way we currently think about this expertise based or simplistic, transactional ways of managing land and the observational place-based relational cyclical, complex interconnected ways of knowing and understanding the natural world. That’s traditionally been the ways of knowing of indigenous folks and also under resource farmers, because that’s what they had to do.
Amanda Cather:
I think we’re just beginning to recognize that in our scientific ways of knowing. So the science of ecology is the very beginning of understanding that interconnectedness and looking at our farms that way, recognizing that we’re not separate from these systems, we’re not just the manager of these systems where we’re intimately part of them. So all of that is really key. And so then these are not new ideas. As you said, Linda they’re old traditional ideas and integrating them into the way we manage land more ecologically, no matter what scale we’re working at.
Amanda Cather:
Recognizing our relationship to that land, working to understand the cycles, relationships, the specific cycles and relationships that exist in your place. The complexities of non-living and living things beginning with the soil, that’s the foundation of regenerative agriculture. I think we can really work to re-imagine the fundamental goals of our agricultural systems and that they can be reflections and replications of natural systems with the goals of moving towards that balance of resilience and productivity born of those old traditional indigenous wisdom. But we can’t do it if we keep looking at things through this very reductionist lens that’s solely about production.
Linda Bilsens B…:
Right. It’s like putting the people who know the land, most intimately. Those people that have had to subsist off of the land. You figure out how to work with the system and not work against it and I think that the broader challenges we have with our food system is that you have people who don’t understand the land sort of making rules that make it much more difficult for people that do work the land for them to be able to do what they do best.
Amanda Cather:
Yeah, and I think that one of the downsides of the extreme productivity that we’ve managed to achieve, which the upside is that we’re feeding a lot of people, but the downside is that we now employ a very small portion of the population in farming. And so I think we really need to work on increasing the number of farmers on the land. So we really need more farmers, not fewer farmers, and to be always thinking about farm profitability and resilience and that balance of efficiency and resilience and increased food security and regional food systems along with, as you said, improving access to land financing and equity in those processes.
Amanda Cather:
I think we can do all of that while building a system that still produces, all lot of food while also producing all these co-benefits and reducing food waste is a huge part of that because we don’t need to be quite as productive as we’re being. If we reduce that waste of food we can have a little margin, I think.
Linda Bilsens B…:
Well, I think yes, in many ways we are producing a lot of food, but it’s not necessarily reaching the people that need it as we saw, which has been a problem for a long time. Millions of people in the United States are food insecure, but during the pandemic you saw people waiting in line for hours to get food. At the same time, farmers were having to throw away perfectly good milk and potatoes and produce. Just having to throw stuff away and that I think is a clear symptom of a broken food system and this is where I think the more locally-based regenerative model where you are building in local loops of food production and that reaching consumers in the immediate vicinity, so that you’re not thrown off when a big catastrophe of something like the pandemic hits, there’s more resilience built into the system.
Linda Bilsens B…:
Obviously, healthy soil is critical to resilience in our food system, but what are some of the other ideas that you think would help to shift us towards a more resilient system? Like what’s the vision that we’re aiming for? I know the map is focused on one thing, and we can only tackle so much, but some other concepts that get at the more resilience in the food system.
Amanda Cather:
Well, I think one thing when we start to talk to our Board of Soil Stewards, that immediately comes up as improved agricultural infrastructure. And that is about rebuilding regional aggregation and processing and distribution networks like you’re saying Linda. They’re not so one pathway, but that there’s loops and redundancy built in that it creates more resiliency. Particularly, we’re seeing that among our livestock producers in terms of small and mid-scale regional processing facilities for livestock, that is a huge, huge bottleneck even now. So that’s really important, but also aggregation facilities. So that smaller scale producers can sell into a broader network, can connect with larger scale buyers, including schools and hospitals and all of the folks that we would love to be able to get the healthy foods to. So that’s a huge piece of a regenerative food system.
Amanda Cather:
In addition to the waste management and waste recycling, enhanced and streamlined conservation programs. I think the USDA has a program called the Conservation Stewardship Program. That is a tremendous program and not widely used enough. So really building on what exists there at NRCS in order to support farmers to transition to more regenerative production practices. And again, that’s an on the ground practice, but I think building that into the system can help build the whole system more resiliently also, obviously at USDA and across the board programming that provides support for equity, community food sovereignty, and as I was saying that agriculture of the middle from the ground up, that’s going to help us. I think the other key piece is healthy soils are really the foundation and we do want regenerative agriculture to be a big tent movement that allows farms to opt in and start and make changes that they need.
Amanda Cather:
We also really believe that it can’t stop with the soil. So like we can talk about all the principles that we mentioned. We can talk about biodiversity and keeping the soil covered and all of that is great and you’re shifting to a holistic system of managing your farm and we can work on that all we want and we can create a healthy and functioning environment. But if we’re doing that using labor practices that aren’t equitable or just then that really isn’t regenerative and we can work on soil improvement, all we want, but if the results of that work aren’t addressing the social and economic challenges that farmers face. And as I said, especially those farmers of the middle, then we’re not working on fully regenerative agriculture.
Amanda Cather:
So it’s always about farm profitability, resilience, what’s going to work to keep farmers on the land and that includes all those things. It includes infrastructure, finance, incentive programs, and all of those other pieces that work to help improve our whole food system.
Jess Del Fiacco:
I was just thinking like it just stretches so far out, right? There’s this piece that one of our colleagues, Ron Knox published a few months ago early on in the pandemic about how consolidation in the meat processing industry has… Well, I mean, it was endangering worker’s lives during the pandemic because of those huge spikes of infection rates in big slaughterhouses. So many pieces that all fit together in the system and like improve one piece and then it goes out in so many ways.
Linda Bilsens B…:
It does. It’s a matter of… I mean, the Institute for Local Self-Reliance is focused on self-reliance and you can’t really have self-reliance without the ability to feed yourselves. And our system has just gotten so big and so centralized that it really makes it vulnerable to these catastrophes that we should be preparing for, but we can never predict exactly when they’re going to happen. And so another thing that I’m so excited about with this concept of building more localized food systems is the idea that it really creates an allyship between farmers and consumers, because they both need each other.
Linda Bilsens B…:
And so if you create smaller systems where you know the farmer or the community that’s being fed, that kind of builds relationships, but this concept empowers consumers in urban centers to participate in maintaining soil health and rebuilding soil health on farms as consumers, but also something like 80% of all food that’s produced ends up in urban centers, or well, sometime in the future. So that empowers people living in cities, we get to decide basically what food we’re purchasing, who we’re purchasing it from, and then what happens with the food that might get wasted. Ideally, we wouldn’t be wasting food, but if there is food waste, it should go back into the soil, continue growing food for ourselves. So I think when you chip away at this really huge system and make it more localized, this is where you create opportunities to participate and create participation on both sides of the loop.
Jess Del Fiacco:
Amanda, I don’t know if there’s anything else you wanted to add to that, but I see that we are running out of time. So I have a wrap up question for you if we want to do that.
Amanda Cather:
Yeah, sure.
Linda Bilsens B…:
Let’s do it.
Jess Del Fiacco:
I just wanted to ask if there’s any reading or resources generally that you Amanda or Linda too, that you want to point listeners toward.
Amanda Cather:
Yeah. I mean, I have so many and I’m so lucky to be able to read and listen to so much incredible stuff as part of my job. I just feel so fortunate in that way, but I would highlight reading about Soul Fire Farm. Anything that Soul Fire Farm is doing, it’s connecting African-Americans with traditional ways of farming and focusing on land access and food sovereignty and food justice and land justice. Such powerful work. Worth looking into for sure. Again, as I mentioned A-dae Briones Romero from the First Nations Development Institute, if you get a chance to listen to her do. The way she talks about interacting with land and different ways of knowing incredible wisdom, powerful wisdom there.
Amanda Cather:
I just also listened to Kristen Leech talk about seed sovereignty and the importance of diversity of seeds. That was incredibly powerful. I love Mark Bittman’s commentary on our food system. His new book, Animal, Vegetable, Junk is really a good one to start with. And Tom Philpott’s work his new book called Perilous Bounty, which is about how regenerative production can help sustain our American farming system and rebuild. I think those are really powerful. What else? Linda.
Linda Bilsens B…:
From that composting perspective, I just listened to a great webinar that was hosted by the Compost Research and Education Foundation, which is part of the U.S. Composting Council. And they hosted a discussion with Sally Brown from Washington University and the concept she’s been writing a lot about the role that exogenous organic matter, which is basically like food scraps, things that come from outside of a system that get added back into the soil to increase organic matter. The important role that that plays and she kind of breaks it down. I would definitely recommend that webinar and more of Sally’s writing on the topic, but definitely echo Soul Fire Farm. They’re doing some great work, inspiring work and training for anybody that’s interested in helping to dismantle the racism in our food system. So anybody that’s interested in that should definitely check out the resources.
Amanda Cather:
I’m also a huge fan of James Rebanks, who is a shepherd in Irish sheep. So he’s a shepherd in Britain and he’s written a book called English Pastoral about the ways that he has regenerated his family’s farm in Britain and gone against the trends towards consolidation and efficiency, and really seen the biodiversity on his farm and the productivity of his farm take off as a result. And he writes in a very poetic and emotional personal way and also brings in a lot of historical trends. I love James Rebanks. So he’s my personal recommendation.
Linda Bilsens B…:
We could go on. There’s so many great writers but I think that just touching on Amanda, Amanda is a farmer herself. So the right person to be leading this charge with the Million Acre Challenge and that didn’t get, I think, brought up earlier.
Amanda Cather:
Still very much working on my own soil health and regenerative journey though. So I should say that it’s really important to realize that you can’t snap your fingers and turn these systems on. It’s something that’s the journey of a lifetime and there’s always more you can do. And I think one of our farmers said it best, the only bad thing is not doing anything, and moving in the right direction as a farmer. That’s all we can ask for is folks being curious about what the next step is and trying to take that for their operations and trying to support them in every way we can.
Jess Del Fiacco:
Yeah. Thank you so much. This was a great conversation and I wish we could keep going.
Amanda Cather:
We’ll have to come back. We’ll do it again. Thanks, Jess.
Jess Del Fiacco:
Thank you for tuning into this episode of the Building Local Power podcast from the Institute for Local Self-Reliance, You can find links to everything we discussed today by going to archive.ilsr.org and click on the show page for this episode. That’s archive.ilsr.org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. We hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website.
Jess Del Fiacco:
Finally, we ask that you let us know how we’re doing with a rating or review on Apple Podcasts or wherever you find your podcasts. The show is produced by me, Jess Del Fiacco and edited by Drew Birschbach. Our theme music is Funk Interlude by Dysfunction_AL now. For the Institute for Local Self-Reliance, I’m Jess Del Fiacco, and I hope you join us again in two weeks for the next episode of Building Local Power.

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42 min
June 22, 2021Beyond Big Tech: Monopoly Power & Our Democracy
On this episode of Building Local Power, host Jess Del Fiacco is joined by ILSR’s John Farrell, Stacy Mitchell, and Christopher Mitchell. They discuss some of the exciting things happening in different sectors of ILSR’s work, including:
How rules established by the U.S. Department of the Treasury will affect how funds for broadband infrastructure are used by cities.
The ways in which the Emergency Connectivity Fund, which was established by the American Rescue Plan Act this spring, falls short when it comes to investing in long-term connectivity solutions.
How monopoly power drives energy decisions in Minnesota and other states — and how these decisions end up hurting communities and the climate.
The New York Senate’s approval of the 21st Century Antitrust Act, and what this means for the future of state-level antitrust enforcement.
The “Big Tech Bills,” a package of Congressional legislation that aims to rein in the monopoly power of tech giants (Amazon, Facebook, Google, and Apple). The bills include three key things:
Recognizing that break-ups are needed.
Stopping and preventing unfair discrimination.
Helping to end corporate consolidation.

“I think there are a lot of people who see these issues, the issues of monopoly, and the tech companies in particular, as being really fundamental to questions of democracy, questions of how our economy works, questions of equity and liberty.”

Related Resources
Heather McGee’s The Sum of Us
Barbara Freese’s Coal
In the Star Tribune: Wrong Incentives Drive Energy Decisions in Minnesota, Most States
Connecting Customers to Create a Virtual Power Plant — Episode 126 of Local Energy Rules
New York Bill Moving Through Senate Takes on Monopoly Power
FCC’s Emergency Connectivity Funds Ineligible for School and Library Self-Provisioned Networks
U.S. Treasury Clarifies American Rescue Plan Broadband Funding
The Antimonopoly Happy Hour
Community Broadband Bits
Small Business Rising
Athena Coalition
Transcript
Jess Del Fiacco:
Hello and welcome to Building Local Power, a podcast dedicated to thought-provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and communications manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth and accountability remain in local hands. And hello, today I am here, I’m joined by some familiar voices on this podcast. My colleague, Stacy Mitchell, John Farrell and Chris Mitchell. Welcome to the show everybody.
Chris Mitchell:
Hi.
Stacy Mitchell:
Really great to be here.
John Farrell:
Woo-hoo.
Jess Del Fiacco:
Woo, loving the enthusiastic opening. Thank you for the woo-hoos, John. So this conversation is going to touch on everyone’s work and recent events, but I think we’re going to start off with Chris. A few months ago, the Biden administration was hyping up, community broadband solutions, and yet where are we now? What’s happening? What went wrong?
Chris Mitchell:
Well, there are some things that went wrong, but the Biden administration still does seem to be very much in support of both municipal and cooperative solutions. The Biden administration came out and somewhat unexpectedly said that it felt that the solution for broadband across America was structural reform and adding new competition, breaking up the monopolies effectively, I mean, breaking up is a bit of an overstatement, but at least no longer blindly supporting the monopolies and supporting more local structures that would provide a better restraint in terms of price increases and things like that.
Chris Mitchell:
And they specifically cited municipal solutions and cooperative solutions. So that was tremendously exciting. And then a little bit more recently, the Biden administration’s Treasury department came out and-
Jess Del Fiacco:
Hey listeners, sorry to just jump in here, but this is Jess and I wanted to let you know that after we recorded this conversation that you are about to hear, the Treasury department updated its guidance around these rules in ways that address many of our concerns. The Biden administration has been listening to the concerns of cities and has more clearly given broad discretion to cities and how to interpret the requirement to focus on areas lacking reliable broadband. We welcome this guidance as a major improvement, but still have concerns about the lack of language around affordability and believe the critique you are about to hear is still valuable and understanding how we got here. Thanks, now back to the show.
Chris Mitchell:
And it had to rate rules around how the executive branch would be spending money under the American rescue plan that Congress had given the president to sign, which he did, which is 1.9 trillion includes a lot of money that could be spent on broadband. And unfortunately the Treasury department basically said, we’re going to let the cable companies heavily influence these rules and we are going to interpret them in a way that makes it much harder to spend in any area in which there’s a cable network currently.
Jess Del Fiacco:
And just to give us some perspective, that means, how much area is that, if there’s sort of coverage?
Chris Mitchell:
Oh, America. Yeah. 90% of America. Stacy, I want to give you a chance because you have a shocked look on your face.
Stacy Mitchell:
Oh, well, I mean, you’ve been hearing that the Biden administration has been making really good appointments. It seems to me a pretty fundamental shift, so I’m trying to understand how that happened.
Chris Mitchell:
I think the first thing to understand is that the Biden administration doesn’t really have a lot of people in it that are broadband experts. It has people that care about this, it recognizes it’s an important issue, but it hasn’t brought in, until more recently perhaps, people that really have a sense of how this whole industry works.
Chris Mitchell:
And I think when they wrote the rules, which broadly that they encouraged cities to spend the money in areas that do not have a wireline, 25 megabit down, three megabit up connection, they use the word reliably. And I think they felt like, oh, well that means that it will pretty much include a lot of places in the United States that are in the most need. And the problem is that now city attorneys don’t know anything about broadband, don’t know how to assess this, they’re going to try to decide whether or not they’re within the rules to spend money in areas and most cable companies in the United States would claim that they can offer 25/3 reliably, which is the minimum definition of broadband for the past six years.
Stacy Mitchell:
Using these little words, reliably, I mean, this is why this is the state of law and why you have to pay attention to all these little things, because you end up with things that are open to interpretation, you end up with a lot of layers on their side who can then exploit that. Yeah, it’s a really good illustration of why rules need to be clear and they also need to be very directive, not figure out if there’s a harm or figure out if there’s this. Because once you go down that road, then you have companies who are much better able to gain the system of those determinations than ordinary people are.
John Farrell:
I get surprised by this kind of thing, Chris, because I wonder, don’t people in the Treasury department have experienced dealing with the cable company and don’t they understand those are not the right people to listen to about how to deliver good customer service and speedy broadband at affordable prices?
Chris Mitchell:
Yeah. I mean, I am so with you on that, and at the same time understand that AT&T is a Republican company, right? It gives a lot of money to Republicans. Broadly would prefer to see Republicans in power. Comcast is a Democratic company, would broadly prefer to see Democrats in power. Joe Biden’s first fundraiser was at Comcast, top lobbyists.
Chris Mitchell:
So I don’t think they necessarily view them with the same kind of skepticism that we do. And ultimately, you have people in Treasury, no one who is making the rule in Treasury woke up the morning they found out they were going to be doing that and thought, “You know what I want to do today? Broadband.” And all of a sudden they have a hundred calendar requests from lobbyists they didn’t know existed, trying to talk to them about how to set these rules. And from their point of view, they’re like, “Ah, I just don’t want to do it.”
Chris Mitchell:
That’s that’s my understanding, but let’s be real about the impact here, right? The way they wrote the rules, it is, if you wanted to write a rule to make racial equity impossible, this is that rule. Because for instance, Baltimore, you have a city in which Comcast says it can deliver reliably a gigabit to every address, more or less. And yet when the pandemic hits, half of the kids in the school district do not have broadband in their homes.
Chris Mitchell:
Now you’re going to ask a city attorney to determine whether or not they have reliable access without any word about affordability or anything else. It’s just awful. And I mean, I don’t know what to say about it, except for the fact that they screwed this up, they screwed it up real bad. And we talked to some of the people who were involved and you get a sense that they really don’t want to change this rule. It is an interim final rule. So there is an opportunity for people to make comments about it throughout the month of June and early July. And in theory, they will be considering those comments and changing them.
Chris Mitchell:
But right now we’re looking at major cities that have massive numbers of people of color who do not have high quality internet access because they cannot afford it, or because it’s pretty clear that it’s not there. But you have a city attorney in these cases that has to decide whether or not they have 25/3 reliably and there’s no data set. I mean, Anna Eshoo, the representative from California who’s been a real champion of broadband, she wrote a letter to Treasury saying, the federal government for years has been trying to figure out where broadband is available in this country, and it has not been able to do that. The federal expert agency.
Chris Mitchell:
And now you’re going to have city attorneys trying to figure out where it’s available so they can determine where to make this spending? The practical result is that you have cities that could spend five times the amount of money that’s available to them on any number of things. And they’re considering 10 projects. They can only fund two of them. And so what happens is, you attach a lot of friction to the broadband project and that one just goes away.
Chris Mitchell:
And now where’s Baltimore in the future going to find tens of millions of dollars or a hundred million dollars to permanently solve this problem, to make sure that low-income communities have high quality access. It’s going to take them a heck of a lot longer. I mean, we’re hearing from small cities where they’re saying, “Yeah, we were going to invest it in our areas where there’s a lot of economic need, but instead it looks to us like we should spend it on the outskirts of town where we have million dollar homes that are far apart from each other and so the private sector hasn’t wanted to build to them.”
Chris Mitchell:
And you have a Biden administration, which claims it cares about racial equity and which it is encouraging cities to leave behind the core of the city where people have been historically marginalized and instead push the money on the outskirts. Now, they would say that I’m being uncharitable or even wrong. But this is the dynamic that we are seeing when we talk to cities.
Stacy Mitchell:
So just to understand this, what is the prospect that this is going to get changed? I understand they’re headed down this interim rule, final rule pathway and they don’t want to really reverse course, but this seems pretty serious.
Chris Mitchell:
I think it is really serious. And I mean, one of the problems is whether you talk to people in The White House, in Congress, or even in many cases in the city councils, many of them are looking at this and saying, “All right, well, maybe that’s not really what we want it to be, but there’s this infrastructure bill coming and that’s going to be great. We’re going to hit it out of the park with the American Jobs Act and that’s going to solve this issue. So let’s not worry about it. Let’s do the best we can with this money.”
Chris Mitchell:
And the thing I have to say is that, John, you and I are Minnesotans for a long time now, and Senator Franken was the 60th vote in the Senate and he didn’t get seated for many months into the Obama administration. And about two months after he did, Senator Kennedy died. And so I don’t want to hear any talk about what we’re going to do in the future, because one car accident means the Biden administration doesn’t pass another piece of legislation. And I just feel like there’s too many people, whether it’s on the local level, who are, I think, taking this quite seriously in many of the cities.
Chris Mitchell:
But in other cases, I am hearing local officials saying, “Well, we weren’t going to spend that money on broadband anyway, because we’re going to get so much money from the infrastructure bill.” I just feel people do not appreciate this money is here, this money is real, it could make a huge difference. And at the federal level, the state level and the local level, people just aren’t giving it the attention that it needs to get this rule right. And I’m worried that we’re going to miss this opportunity.
Chris Mitchell:
We’re still going to see some places. Like Brownsville, Texas, one of the cities in deepest poverty in the United States, they’re moving forward with an aggressive investment. They think they have the data to comport with the rule. And so I’m not saying we’re not going to see any investment, but we’re going to see half maybe of what we would have seen before. We’re going to see families, millions of families, I think, at least hundreds of thousands, potentially millions of families going without internet connections for years longer because of this screw up, unless somehow the infrastructure bill comes along.
Chris Mitchell:
But the dynamic that I expect with the infrastructure bill is the same thing we’ve seen before, which is that if Republicans come on board, who knows what happens in terms of their priorities of wanting to just put money into rural areas. Democrats, on the other hand, if they want to pass it with 50 votes, they have to be entirely united. And at that point that they need to be entirely united, the cable industry just has to pick off one person. And so again, you just see this political power of the cable companies setting the agenda.
Chris Mitchell:
And so I know to move this full circle to where just started us, I’m really hopeful that The White House is able to show its preferences for municipal networks and for cooperative networks. But I don’t see a politically realistic path right now, aside from getting this rule right and being able to spend the rescue plan funds in the correct way to actually achieving that, based on just the real hard politics that we’re facing.
John Farrell:
Chris, just to be clear about the interim rule, this language about reliably getting service for the federal definition of broadband, which has already, if I understand your work, a little bit weak by itself in terms of what constitutes adequate connection. But if you just got to edit it, they gave you the Word doc of the rule and they’re like, “Chris, just make the change.” Do you just strike this sentence about geographic restrictions and say, “Invest anywhere and let cities decide.” And even if that means there is a cable company incumbent that cities just invest because they know already where they need to make investments, or do you try to insert language about affordability or something else?
Chris Mitchell:
There’s a real issue that I think they were trying to get at, which is that if you have families that have a cable connection or some kind of broadband connection which is okay but not great, and then you have another family that has nothing, we do want to focus federal support to the family that has nothing to try to make sure that they have something.
Chris Mitchell:
And so the language that’s used in the rule kind of changes what we’ve seen states doing for many years. There was this language of unserved, which means that you don’t even have up to a basic level, and then there’s underserved, which means that you have something but it’s not good enough for what we would define to make sure that three kids at home can work on school while parents are also doing their work and that sort of a thing.
Chris Mitchell:
This actually uses both of those words, but it uses them as meaning the exact same thing. And so I would simply say that cities have to prioritize the unserved. People who don’t have that cable connection for the purposes of cities. And then the areas in which you may have an affordability metric or you may just say then in fact, anyone who doesn’t have what we expect to be the next definition of broadband would be considered underserved. And as long as you’re prioritizing unserved, you have authority to also build to the underserved. And that would allow broadly way for cities to make these investments.
Chris Mitchell:
We’re on track to spend more than $10 billion of federal dollars on broadband support for low-income families, practically none of it will be on anything that will be around to help families once that money runs out. This will be used in case studies of government failure for years, I think, in terms of spending a ton of money without making a structural change, so that we’re going to have all of these families who, as soon as this last federal dollar is spent, they go back to not having broadband to be able to connect their kids.
Chris Mitchell:
The Biden administration’s federal communications commission has chosen to interpret law to support kids getting connected in their homes, to mean that you basically have to give the money to AT&T and Verizon if they’re available. Cities can only do, and more accurately, school districts can only do what they call self-provisioning, where the school itself builds a network to connect kids. Even if that’s more cost effective, the schools are prohibited from doing that if there’s a private option available.
Chris Mitchell:
And that’s the thing where you give a school district several million dollars and you can tell them either, here, use this in a way that you give most of the money to AT&T, and as soon as that money runs out, all those kids are not connected anymore. Or build a network so that when the federal money runs out, you can keep running it, because you can build networks in that way in which you can use that money to build a high quality network, and then just keep it going, whether it’s philanthropy or some other source of funds at a much lower cost in. And we’ve just abandoned that line. And once again, we see the Biden administration choosing to interpret rules in ways that are very good for the big cable and telephone companies and are very bad for the low income families that desperately need this connectivity.
John Farrell:
Chris, I’m just really struck by the fact that I’ve just started reading Heather McGhee’s The Sum of Us and I’ve heard a couple of interviews about it, just really stunned by the analysis about the way that racial prejudice played into the way that we would make investments in public goods. And it strikes me in some ways that we’re seeing this play out in a similar way, even if it’s not necessarily race-driven specifically in broadband.
John Farrell:
The way that you described it, how there might be cheaper public options and that we’re prohibited from spending the money that way. Her story is so beautiful and drawing this picture of all of these grand public pools. They could hold thousands of people at a time in all of these communities across the country that were basically filled in once courts said that they had to integrate the pools and that the options for everybody became more expensive because you had to have private access.
John Farrell:
You might have a subdivision that had a pool or a country club or whatever, and it’s like we have this country club model of internet right now where it’s, we don’t allow public options to come in and make that broad provision of affordable access. We’ve privatized it and all these little domains and we even use the use our government to prop up those private fiefdoms rather than making public investments that might be more affordable. It’s just really stunning the way in which that racial prejudice ended up shifting the conversation to one where we are so reluctant to embrace public options, even when everybody would be better off if we did it, except for a few shareholders of these big corporations.
Chris Mitchell:
Yeah, no, I think that’s [inaudible 00:17:18] and there’s so much more that I would love to go in to follow up with that. But let me just say that we have spent tens of billions of dollars in rural areas to get people connected. And we have spent, it’s hard to even call it a fraction, it’s approaching zero, to connect low-income families in cities. It’s a major blind spot. I don’t think it’s outright racial animus, but it is an artifact of the government policy that created housing policy the way it is. It makes it very easy for the officials to ignore that when they decide where to put money like this, it has a very disparate racial impact.
Chris Mitchell:
And so we’ve made it permanent that spending money in a lot of areas has significant disparate racial impact even where none is intended, just because of the way we’ve constructed our cities over the years with our housing policy. And that’s where we absolutely need smarter policy to make sure we’re not continuing that history, which is awful.
Jess Del Fiacco:
Yeah. I was going to go back to what John was kind of getting at with his last section about kind of having the wrong priorities and policy, the wrong incentives to do things, and ask you John about your recent op-ed that was in the Star Tribune, which talked about the big energy companies in Minnesota and other states, which basically have none of the right incentives to make energy decisions in ways that would benefit our environment or their customers because they have no competition and how that shapes their investments. So you want to talk about what you said in that piece, what your argument was.
John Farrell:
Yeah. I’ll just flag that it was inspired in a way by this piece in Bloomberg News on May 21st, and it starts with the phrase, new gas plants threatened carbon hangovers. They’re talking about power plants, new power plants that have been proposed by a number of utilities, that these utilities have made commitments to reach low carbon energy goals, independent of any legislation or mandate.
John Farrell:
They’ve just said, “As a company, we think it’s going to be in our best interest to reduce carbon emissions because we have all these affordable, clean energy options.” And yet these utilities in places as diverse as Texas, Florida, Minnesota, Michigan, Los Angeles, municipal utility have these gas plants that they want to construct that have a lifespan far beyond those dates when they have said that they will be providing zero carbon electricity.
John Farrell:
And the challenge is really that most of these utilities, not all of them, but most of them are in states where the rules of the market or the rules of the system are set up so that they make a profit when they build a power plant, it’s called cost-plus regulation. About 35 states still use this largely as the way they regulate electric utilities, which are defacto monopoly, I shouldn’t say defacto monopolies, they are publicly approved monopolies. We as a government, a hundred years ago said, electric utilities should be monopolies because we thought it would be way more efficient than trying to have a bunch of competitors stringing wires to all the homes and businesses in our country.
John Farrell:
So these gas plants, they’re going to build these gas plants that are likely to not pay back. They’re not going to be able to operate according to the utilities own claims, but as well as plenty of private research that suggests that gas plants simply aren’t going to be competitive after the next decade or so. And the reason that they’re going to do this anyway, or that they want to do this anyway, is that they will spend a billion dollars on a gas plant and they get a state-guaranteed return on that investment, a profit of nine to 10%. So they’ll make a hundred million dollars for their shareholders and they’ll get that money for their shareholders long before these plants can’t operate anymore.
John Farrell:
And when they can’t operate anymore, they will close them down and likely the state public utilities commission will give them permission to collect any remaining profits from that plant operation that did not pay off in the end because there were cheaper options available. And meanwhile, the sad truth is that in most states we also allow these utilities to pass the fuel cost directly through to customers. So customers will be on the hook for whatever the fuel prices are. And I can talk a little bit more about that too.
Chris Mitchell:
John, I just got to say, I was thinking about this after I saw your op-ed, and that rate of return, it was one of those things that’s interesting if you think about it. When there’s an interest rate of 3%, 4%, a rate of return of nine or 10% is good, when there’s an interest rate of 0% and the rest of us aren’t getting anything from the money we put in the bank and stuff like that, and there’s a return guaranteed of nine or 10% is crazy. It’s just so high. It’s unbelievable to me that isn’t indexed in some way to make it at least a little bit more reasonable for the ripoff that we have to deal with.
John Farrell:
No, I mean, it is one of the greatest scandals that’s out in public view in the utility sector is that, these rates of return, these profits are negotiated with state utility commission, state regulators, as they have been for decades. And in the 1970s, as you say, in terms of rate of return, utilities rate of return, their profits were pretty comparable to things that you could get from other low-risk investments.
John Farrell:
And again, these are very low-risk investments, these are monopoly utilities. They have no competition. All they have to do is meet some basic standards for spending money well and the utility commission will allow them to collect their profits. 40 years ago, that you could get a Treasury bond, you could make other low-risk investments and make a similar amount, right? That was a time of high inflation so they were high interest rates.
John Farrell:
All of those other low-risk investments have decreased in their reward. A Treasury bond now might be two or 3% interest, for example, or lower. And so utilities now make three to four times what you could in other low-risk investments, even though they continue to be very low-risk because they are these monopoly companies. So you have that factor really playing into this of utilities are making far more than they ought to. And of course then why not? If you’re going to make a big handsome profit for doing something that’s very low-risk and you can assess all of the risk of that investment, as small as it is onto your customers, we’ve created unfortunately the system that encourages utilities to do this, even when it’s very clear that these investments will not pay off in the long run.
John Farrell:
And we’ve seen in others, this is one of the fascinating things, is that some sectors of the utility business are competitive, and what we’ve seen, what are called merchant power plant operators. So the people who don’t have captive customers and monopolies, they’ve basically given up building gas plants because they know they can’t make their money back doing it. It’s only the monopoly utilities that are still building gas plants, because they’re the ones that have this expectation that regulators will allow them to make dumb mistakes and to socialize the cost of their mistakes onto customers who have no other choice.
Stacy Mitchell:
It seems like we’ve just seen this, and this has been going on for years, not only the misguided power plant construction, but the full cost of nuclear… Just a bunch of other things where this whole business of a monopoly power plant that could pass along costs without actually having to have a moment where the rubber meets the road in terms of what the actual dynamics are. And you talked about in the piece, how there’s been analysis, the case of the Minnesota example that distributed approach actually makes much more sense and you could meet these future needs and so on. So what is the big picture shift that needs to happen in order to prevent this from continuing to go on forever?
John Farrell:
Well, at the margins, or the first thing we can do is to make sure that utility commissions are getting enough data independently to analyze alternatives to what utilities are proposing. So what we’ve seen in Minnesota and was one of the reasons why I wrote the op-ed here, is that there’s actually been robust analysis by several non-governmental organizations that are parties to this docket, to this discussion in front of regulators, that on their own dime have paid to do an alternatives analysis and found there’s no need for this gas plant. That it would be cheaper, more reliable, et cetera, for customers, lower carbon emissions, lower environmental impact, et cetera, all of these things, if the utilities didn’t build these gas plants and instead did solar and wind and batteries and other things like that.
John Farrell:
But in a lot of states there’s not that robust advocacy network that provides regulators with that information and regulators are often reactive and not proactive, and so they’re not going out there and asking those questions themselves, or it might be what they’ll say to the utility, you tell us if it’s the most cost-effective thing. And it’s really no surprise when you send the utility with that profit motive backed to doing analysis and they come back like, “Yeah, we looked at all the options and this one’s the best one.”
John Farrell:
And the irony really is, and to some degree here that, utilities can still make a lot of money doing clean energy at this point. And in fact, there are some that have kind of figured that out. You look at Green Mountain Power, you look at Consumers Energy in Michigan, NIPSCO in Indiana, there are quite a few utilities that have basically said, we’re going to get rid of most of the gas plants that we had proposed to build and instead invest in renewable energy.
John Farrell:
Renewable energy also has high capital costs, like a power plant from fossil fuels. And so we can make a profit doing that as well. And what we’re really looking at, and I think is probably even the most important thing is that there’s also now a lot of effective competition at the retail level, where customers can produce their own energy with things like rooftop solar, and have their own battery backup and things like that.
John Farrell:
And the dynamic that really needs to shift, if we could even just get utilities talking about, let’s do clean energy instead of dirty energy, that would be a step in the right direction. But the thing that would actually make it cheaper for everybody is if we made lots of investments or allowed more customers to make their own investments in clean energy and got utilities from blocking that in many ways they do, because unfortunately the utilities not only build and own the power plants, they also control and operate the electric grid, which is where all of this kind of commercial activity could happen.
John Farrell:
And so it’s very different than for example, packaged delivery, where we have public roads and lots of private competition on the roads. The electric grid, even though it’s a publicly granted monopoly, they’re controlled by private companies who are then very interested in keeping their competitors off the wires.
Jess Del Fiacco:
Chris, are there any commonalities between this and what happens in the broadband sector?
Chris Mitchell:
Well, I’m afraid that when I look at what John’s talking about, that some of the solutions that we see for how to fix the broadband problems we have will lead us down that path of, well, we just need more state regulation, more federal regulation, and maybe we do need to create broadband monopolies and make sure that everyone’s paying fair rates and things like that.
Chris Mitchell:
And I’m not going to sit here and say there’s no benefits to that approach, but ILSR strongly believes that what we need is more locally accountable networks and that we can solve this in many ways, with some smart federal regulation, there is a role for states, there’s a role for the federal government, but that broadly we can’t count on a all-knowing regulator to solve this problem. And instead we need local efforts to establish this. And so that’s one of the things for me that I look at constantly from John’s work, is these lessons of, let’s not try to fix this by just creating more powerful regulators alone.
John Farrell:
I think a great lesson, frankly, that I’ve taken from the work we’ve done in broadband is around things like open access networks. So this idea that you create public infrastructure that allows both public and private companies to compete with one another, and that’s something that’s really missing in the electricity sector.
John Farrell:
We have hardly any ways that at the local level you compete, we actually, 20 years ago, we took the high voltage wires. The ones that you might see along the highway or along the train tracks or whatever, they’re on the big steel towers, though there are competitive markets and access to those, that infrastructure among the many really big players in the industry who can build power plants, but we don’t have that at the local level. The poles and wires in our backyards and the ones that run under the streets, those are still all owned in monopoly structures.
John Farrell:
And even when we create laws to offer access to people to produce power on them, because the utility controls them and because they have a profit motive that is to build and own the things themselves, we often see really poor implementation or a really big delay. So Xcel Energy in Minnesota, which is one of the companies that wants to build this gas plant, has coincidentally been fined a million dollars by the public utilities commission, which is a terribly small sum of money, but at least as a really important thing and that they hardly ever find utilities for bad behavior, was fined a million dollars for stalling interconnection of customer-owned solar projects, because they are so slow at allowing other people access to the grid.
John Farrell:
There’s a connection between those two that most people don’t see. And so I think one of the goals that we have is, how do we break open access to the market in different ways? And we actually had someone on our podcast, Cisco DeVries in the Local Energy Rules Podcast. He’s the CEO of OhmConnect, and in the few states like Texas or California, where they will allow this, they’re pooling together homes and businesses that have solar, that have energy storage, and they’re able to compete with the big utilities in those markets in ways that saves everybody money.
John Farrell:
The people who participate get to get their bills lower because they’re getting paid to offer services to the grid. And the grid itself gets services at a lower price than it would if the monopoly utility was the one picking the way to solve the problems of the grid of the 21st century.
Stacy Mitchell:
I feel like all of this is such a good illustration and lesson about ideologically or philosophically this world we’ve been living in, where you have government on one side and markets on the other. And it’s just a linear thing. You either have completely markets and competition, or you just have government-run. And that framework is so misguided in so many ways, but one of the complete failures of it is the inability to recognize that government structures markets, and therefore the smart thing to do is to figure out, well, where is the public role and what is it that we need to do to get the benefits of the market piece and just being strategic about the nuances of how these things actually work, as opposed to living in this black and white world where it’s one or the other.
John Farrell:
I have to laugh and I hope this will provide a nice transition to some of what we want to talk about with you, Stacy. But we use this term platform monopolies a lot of times to talk about tech companies as though it’s something novel that happened because of technology in Silicon Valley. And it’s, no electric utilities are the original platform monopolies. They control the grid and there’s all this stuff now. This problem is that we have a hundred years ago, there really weren’t as many options and so the idea of a platform for the electric grid wasn’t as important.
John Farrell:
But these days with rooftop solar that is so affordable and so competitive with the kind of electricity that utilities can offer, it’s really a crime that we continue to allow the utilities to monopolize the electricity market. And this is one of the things I think of as we try to confront climate change, and there’s so much push in the environmental advocacy community to solve these problems.
John Farrell:
We often ignore the fact that the ones who caused the problem are the electric utilities and that even if it was as you said, Chris, even if we try to make their regulator bigger by getting the federal government more involved, we fundamentally don’t change the problem, which is that these utilities that exist and have monopolies have perverse incentives to not solve the problems that we want to solve.
John Farrell:
Whereas if we just broke them up and said, “No, your platform, you could still have power plants and you can still sell services, but you will have to compete with other people on a publicly run or a nonprofit network.” We could see a lot more solutions come to market much more quickly in a way that doesn’t require the government to do mandates for decarbonization because some of this stuff is already so much cheaper anyway.
Chris Mitchell:
I want to say regarding Stacy’s last comment, Mariana Mazzucato is just doing tremendous work about how the state and the market, there’s no bright line between them. And in fact, many of the best achievements of humankind show a blurring of that line in an intentional way. And I just can’t recommend her work enough. She’s got several books, she’s regularly doing presentations and speaking.
Jess Del Fiacco:
Yeah. Thanks Chris. Thanks John. We have to move on to Stacy so we can fit her in and our short amount of time left here. But first we’ll take a short break. Thanks for listening to our show. If you’re enjoying this conversation, I have two suggestions for you. The first is that you might enjoy hearing more from Chris, John and Stacy on some of our other ILSR podcasts. They include the Local Energy Rules Podcast, the Community Broadband Bits Podcast and the Antimonopoly Happy Hour, among others. You can find them all at archive.ilsr.org/podcasts.
Jess Del Fiacco:
And the second thing is that I hope you’ll consider making a donation to support our work. You can visit ilsr.work/donate to make a contribution today. Any amount is sincerely appreciated. So Stacy, it has been a hectic few weeks in the anti-monopoly world. I don’t know where you want to start, but I’m guessing the biggest piece of news we have to talk about is the new federal legislation that aims to reign in monopoly power. So do you want to start there and then give us a little background on the bills that just came up?
Stacy Mitchell:
Sure. It’s been so busy. I don’t actually know where to start. But the House Judiciary Committee has introduced five bills around big tech monopolies. And as people will recall, we’ve been watching this committee, and particularly the antitrust subcommittee, quite closely now for really more than two years. They’ve been leading the way and saying that Congress needs to act really to deal with monopoly power, to deal with both the big tech companies, but also just the fundamental problems that have crept into antitrust law that have made it ineffective because of some really bad decisions by judges over the years and the like.
Stacy Mitchell:
And so this is, I think part one, of what we’re hoping will be a two-part thing. Part one is deal with the tech companies and then part two will be, we hope and anticipate the broader reforms to antitrust policy. So on Friday we had these five bills drop. I think the big headline in the bills is that there’s a bill to break up the tech companies.
Stacy Mitchell:
And I know that that can sound glib, oh, we should just break them up. What does that really mean? But it is an absolutely integral part of the solution. And it really has to do with the fact that, if you are a platform, if you’re a dominant gatekeeper, by which people exchange information, sell goods and services, if you’re the gatekeeper, then you can’t also be selling and offering your own products through that gate, because it’s just, obviously there is a fundamental problem with that.
Stacy Mitchell:
And the ability to self deal, to advantage yourself, to undermine your smaller competitors is just so profound that there really isn’t a way to effectively police that, to create rules around it, to prevent bad behavior. So the solution ultimately has to be breakup. And so that’s been a real bottom line for us, and we were very pleased to see that that was part of the five bills. All five of these bills have Republican co-sponsors. And we’re expecting that the House Judiciary Committee very soon will be taking a vote on all five of them. So we’re hoping that they will come out of that committee with strong support.
Chris Mitchell:
I wanted to go back to, John made his point about history. I read in Barbara Freese’s book, Coal, which is a terrific history about coal, she’s a fascinating writer, that [inaudible 00:36:16] the [inaudible 00:36:17] canal, the time it was built, they outlawed the coal companies from operating the rails because they recognized that if you could extract coal and control the shipping, then you would destroy all your rivals. So the common carriage around this goes back well beyond that even. I always want to remind people, this is nothing new under the sun here.
Stacy Mitchell:
That’s absolutely right. And in fact, I’ve been brushing up on banking policy as part of this process, because we don’t allow banks to also engage in commercial and industrial activities. You’re a bank you’re not involved in other types of business, period. And it turns out the history of that is very old. I think it actually goes back to England, but it certainly goes back to the States.
Stacy Mitchell:
So there were some early banks that did not have those guardrails and states very quickly were like, no way, if you’re a bank, you play this crucial role for other businesses and for the whole economy and therefore that’s the only thing you get to do. And that was part of the National Bank Act in 1864, and then was subsequently reaffirmed with the Bank Holding Company Act in the 1950s. And so you’re absolutely right, Chris, we have long recognized that if you’re some critical infrastructure or you’re a critical input, you could say, for other businesses, you have a special obligation and you have really a different kind of ability to abuse your power and we have to watch out for that.
John Farrell:
It feels like if you’re bringing up railroads, Chris, I can tell my story really quick about Warren Buffet. But it’s so interesting how he portrays himself as somewhat of a progressive regulator, but he makes his money in monopolies. He owns utility companies and then he buys railroads and then he buys coal mines. And then he uses the railroads to raise the prices on the coal for his monopoly utilities and to make more money for his coal mines at the same time.
John Farrell:
And because the utilities are regulated, he knows that they’ll be able to pass the cost through their customers. It’s just an outrageous use of our regulatory system to do monopoly profiteering. It is really striking to think about as well. And this kind of also gets to the banking issue too and the utility sector has this overlap.
John Farrell:
So Tyson Slocum at Public Citizen has been doing a lot of digging on the owners of merchant power plants. And what he’s finding is that these private firms that are essentially subsidiaries of banks like JPMorgan, they have the same people, the same phone numbers are listed as contacts as the people who are in the banking, are owning power plants and they’re also involved in being on the boards of utility companies and financing the regulated utility companies.
John Farrell:
So this kind of issue of structural separation is also causing significant problems in the energy business, where it is allowing companies to double dip, to favor the each other’s businesses without some bright lines between who runs the marketplace and who owns the infrastructure and the platform.
Stacy Mitchell:
Yeah. That Warren Buffet thing, I mean, it’s not just that example, I think his entire investment strategy has been to figure out where there’s monopoly, gatekeeping and to get in on a piece of that.
Chris Mitchell:
[inaudible 00:39:25].
Stacy Mitchell:
Yeah. The journalist, David Dan has written a number of pieces on this and we can link to them on the show page, but the whole folksy persona, not at all the case.
Chris Mitchell:
Well, and what John was just saying about the private equity, we’re seeing this too, in that there’s a number of regional or even local companies that are doing very well competing with the cable companies. And they’re all getting bought up by these other companies that are backed by private equity, sometimes based in the US, sometimes global. Because there’s a sense that obviously people will pay a lot of money for internet access. The price is not regulated and the cable companies are weak and can be attacked. And so right now, one of the things we’re seeing is, there’s this threat of competition, but it’s a mirage because it’s all owned by the same people.
John Farrell:
Stacy, I’m kind of curious to come back to the federal legislation. What are the prospects for this? Tell us a little bit more about what’s going to develop here in the next few months.
Stacy Mitchell:
It’s going to be really interesting to see. I mean, I think we’ve certainly got a lot of activity in the Senate. I think there are a lot of people who see these issues, the issues of monopoly and the tech companies in particular, as being really fundamental to questions of democracy, questions of how our economy works, questions of equity and liberty. So I’m hopeful that, it feels like over the last couple of years, that the horizon of what’s possible just keeps getting more and more expansive. And so I’m hopeful on that front.
Stacy Mitchell:
I mentioned that one of the bottom lines for us with this package around big tech was making sure that there was a breakup bill, that we didn’t just have a bill to try to regulate say, Amazon’s treatment of third-party sellers, there’s also a bill that does that, but that we clearly had a structural solution. That had to be part of the mix. So that’s been a real bottom line.
Stacy Mitchell:
I think the other thing that we have been very much pushing for is that this legislation get away from an old, outdated and dysfunctional anti-trust paradigm, that has rested very heavily on outdated economic theories and economic analysis. And this really kind of brings us back to the top of the show when Chris was talking about this language around reliability.
Stacy Mitchell:
So the way that people tend to want to write these laws in the conventional sense and talk about antitrust is to say, well, if it’s harm to competition, if there are these things that you can prove in terms of outcomes from the bad behavior. And the problem with that is that then you have to define, well, what’s the market? Is there really competition? Is the outcome in some future state going to be bad? Who’s it going to be bad for? Is it going to be bad for consumers?
Stacy Mitchell:
So once you’re going into all of those questions, suddenly you’re doing just incredible economic analysis. So you’ve got all these economists coming into the courts and proving that, well, this is going to cause a 47 cent increase in this and blah, blah, blah, blah, blah. And of course the companies have all the resources in the world to have these economists. You’ve got judges who’ve built up this case law over the years through this total misguided approach that makes it very hard to prove these cases.
Stacy Mitchell:
And so we have been in this uphill losing fight against monopoly power because of this. And so with the drafting of these laws, one of the things, the bills in the House Antitrust Subcommittee, the Judiciary Committee, we’ve been really wanting to see a move away from that, to be clear. For Congress to be like, “If you’re one of these, you can’t do that.” That there is real market problems and not to leave wiggle room for that whole process to unfold.
Stacy Mitchell:
And looking at the drafts, you can see some of that new thinking, and then you can still see some of the old conventional way of thinking. And so I think we’re in a transition phase in terms of moving away from those bad frameworks.
Chris Mitchell:
One of the biggest criticisms that I hear from some of the folks that I take somewhat seriously, who don’t always agree with us, is that all this antitrust stuff is just made up and there really is no guideline. And I’m not talking about just the consumer welfare center, I’m talking about everything before that, and a lot of the stuff that we want to do. And there’s this argument that it’s all vulnerable to someone like Donald Trump coming in and just trying to screw the companies he doesn’t like in favor the ones he does like, and are we able to avoid that?
Stacy Mitchell:
Yeah. Absolutely. And I think we have multiple periods in our history where we can see that actually happening. I think you can see that in certain part of the 19th century, when a lot of this stuff was handled by the states, when business generally didn’t extend across state lines. And a lot of states set really hard and fast rules and were clear about the purposes, that the purpose was to decentralize power.
Stacy Mitchell:
And if you have that guiding direction, then the choices that flow out of that are much clearer. And that was true, I think for a lot of the 20th century, under both Republicans and Democrats, where you were bringing a framework that said, we’re deeply concerned about power, concentration of private power. And therefore we want to always err on the side of breaking it up, dispersing it, saying no to mergers. And very explicitly considering impacts on community and producers and on all of this in that context.
Stacy Mitchell:
I think the state of play now with this very economist-driven model, is very much available to be gamed, but it’s often gamed by the corporations and has created among other things, an incredibly costly enforcement system. And so you get enforcers who are unwilling to bring cases because you don’t have a clear path because of a bad case law and the cost of doing it is just extraordinary. And it’s impossible for there to be private cases brought. So I think that that has created a situation where it is much easier to kind of derail what policymakers intend.
Chris Mitchell:
I just hurt myself nodding so vigorously.
Stacy Mitchell:
I don’t know if I exactly answered your question, but I’m going to go with that. I’m sticking to it.
Chris Mitchell:
No, you did. Absolutely. And I think that’s a big piece of it. That cost, if you can only bring one or two cases per year to stop a merger, that’s a disaster. You can’t work under that scenario.
Stacy Mitchell:
No, no. I mentioned state law in the 19th century, helping to lay a foundation for this way of thinking, one of the really exciting things that’s happened in the last few weeks is that New York State, the Senate overwhelmingly approved an anti-trust bill. The session ran out and so we didn’t get it through the assembly in time, but it’ll come back next session. But that bill establishes a new approach. It’s called abuse of dominance.
Stacy Mitchell:
And here, you’re able to establish under this bill through direct evidence, that a company has power. You don’t have to do all of this market definition stuff and so on. All this economist-driven analysis. And that bill will enable the attorney general to set clear rules, that if you are dominant, you can’t abuse it. And it doesn’t matter what the impacts are. So again, we don’t have to go through a long process of saying someone was harmed, how much were they harmed and all these questions. It’s just, if you are dominant, you can’t do this, period. And so it’s really encouraging, I think that bottom up kind of generation of new ways of approaching these issues.
Jess Del Fiacco:
All right then. I think we’ll have to wrap up there. So thanks everybody.
Chris Mitchell:
Thank you.
Stacy Mitchell:
So nice to talk with you all. Thanks.
John Farrell:
Thanks Jess.
Jess Del Fiacco:
Thank you for tuning in to this episode of the Building Local Power Podcast from the Institute for Local Self-Reliance. You can find links to what we discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That’s archive.ilsr.org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. I hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website.
Jess Del Fiacco:
Finally, we ask that you let us know how we’re doing with a rating or review on Apple Podcasts or wherever you find your podcasts. The show is produced by me, Jess Del Fiacco, and edited by Drew [inaudible 00:47:40]. Our theme music is Funk Interlude by Dysfunction-Al. For the Institute for Local Self-Reliance, I’m Jess Del Fiacco, and I hope you join us again in two weeks for the next episode of Building Local Power.

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48 min
June 10, 2021Centering Racial Justice in the Antimonopoly Fight
In this episode of Building Local Power, host Jess Del Fiacco and ILSR Co-Director Stacy Mitchell are joined by Solana Rice and Jeremie Greer of Liberation in a Generation, an organization dedicated to achieving economic liberation for people of color. They discuss their recent publication Anti-Monopoly Activism: Reclaiming Power through Racial Justice, which argues that the fight against monopoly is intertwined with the fight for racial justice, and that organizers of color must be centered in the antimonopoly movement.
Their conversation touches on:
The harms communities of color experience due to extreme corporate concentration.
How Jeremie and Solana came to realize that corporate concentration and racial inequality needed to be more explicitly connected.
The impact of this report in the activist community.
The vision of a liberation economy, and what it will take to get there.

“When Amazon buys Ring and has this tool for surveillance, and police use it in Black communities to surveil Black people and arrest Black people, that is not accidental, that is not a disparate impact. That is an intentional action that has been taken. […] So my struggle with stating it as a disparate impact makes it seem as if this thing that kind of happens on accident. When what we know, and what we talk a bit of a lot about in the report, is that there are historic underpinnings for the type of racism that we see in our economy. And that what is being produced is being produced by a system that has intentionally put structures and systems in place to oppress Black and Brown communities and Black and Brown people.”

Related Resources
Anti-Monopoly Activism: Reclaiming Power through Racial Justice
Fighting Monopoly Power
Transcript
Jess Del Fiacco:
Hello, and welcome to Building Local Power. A podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future.
Jess Del Fiacco:
I’m Jess Del Fiacco, the host of Building Local Power, and communications manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. Today I’m with Stacy Mitchell, who’s the co-director of ILSR, and we are very excited to be joined by Jeremie Greer and Solana Rice. They are the co-founders and directors of an organization called Liberation in a Generation, which is normalization dedicated to dismantling the current oppression economy and in its place building a liberation economy where all people of color have their needs met, are safe from harm and are valued and belong.
Jess Del Fiacco:
So Jeremie and Solana, welcome to the show.
Solana Rice:
Thank you.
Jeremie Greer:
Hello. Thanks for having us.
Jess Del Fiacco:
Yeah. And so what we’re going to dig into today is a report that you recently released called anti monopoly activism, reclaiming power through racial justice. And it’s fantastic. And it’s so vitally important in this space right now. Stacy, I’m actually curious what your initial thoughts were when you read the report. And then maybe you can kick us off with the question for Jeremie or Solana.
Stacy Mitchell:
It’s a really great addition to the conversation about monopoly power and about racial justice, and really begins to aluminate the intersection between those two things. And I think the question that I’m curious about is to just learn more about the path that you took to examining the intersection of monopoly power and racial justice, and what it is that led you to feel like those two issues needed to be explored in conjunction and put out in a report like this.
Jeremie Greer:
Yeah, I’ll start. And I, for me, it’s something that, it’s one of those things that’s kind of always been a reoccurring theme for me, but though I didn’t know it that way all the time as I was going through my career. And I started off doing my work around racial justice, working as a community organizer in Columbia Heights. And that’s North of downtown Washington, DC. And I was doing that in early two thousands in a community that was traditional Black, Salvadorian community. Not a lot of investments. Most of the businesses were local, not a lot of big chains, things like that. And then overnight that all changed. And all of a sudden there was big box stores, like Target moved in and Best Buy moved in. And then there are all these buildings going up with like Wells Fargo on the marquee of the building, of the construction project. Bank of America, JP Morgan Chase, all these big banks.
Jeremie Greer:
And it was just a head-scratcher to me because when I started working in Columbia Heights there was one small credit union in the neighborhood, right? I was like, what is happening? And what happened was that community was gentrified. It was most of the people that lived there, a lot of people that lived there were displaced and pushed out into the suburbs or into other neighborhoods. And all of a sudden it was creating space for new entrance into the community that otherwise in the community that exists before wouldn’t even have walked through, let alone buy a condo in that community. So it was like, for me, it was this moment of like, wow, what is happening here? How is it that these big corporations are taking part in completely transforming a community, in what felt like overnight?
Jeremie Greer:
And it was having these really detrimental impacts on the people of color that lived there. And that was kind of my first introduction to it. And so what that got me into is like, through the rest of my career, started doing work around really digging into the financial service industry, and really realizing how concentrated it is. And it really hit a head of course in 2008 with the stock market crash, and then all of the devastation that that brought on communities.
Jeremie Greer:
And understanding that like, we’ll talk about this in a bit, but as we operate in this economy that is been set up and constructed to really harm Black and Brown communities and not allow Black and Brown communities to thrive. It is these mega corporations that are driving the ship. And for me, my introduction was into the financial service industry, and the consolidated kind of a companies that are operating in that industry and really bringing huge downstream harm to Black and Brown communities. So that’s what really kind of got me into this and really was the impetus for my experience in writing the report.
Solana Rice:
And I’ll just pick up in current day, just recently, when Jeremie and I were convening conversations about the policies that liberation in a generation should be working on. And we have been doing a series of round table conversations with a small group of folks. And we realized, when we got to the corporate power plank of our policies, we talked to folks at Community Change, we talked to folks at Color of Change, we talked to folks at Economic Security Project, and it started to become clear that the tools of anti-monopoly and antitrust that are typically meant to reign in corporate power, we’re not necessarily reaching into racial equity issues. And they weren’t being framed in a way that, I don’t know, as a Black person, I understood what my benefit would be if we really pursued antitrust and anti-monopoly tools. And so we felt like there might be a role in conversation and in cooperation and collaboration with groups like ILSR and the like, to figure this out. Like, what are the intersections? And it’s really just the first foray.
Stacy Mitchell:
Can you talk some about, we often hear this phrase, disparate impacts. That Black and Brown communities suffer more from the trends that we’ve seen in terms of consolidation of corporate power and inequality in terms of wages and income, that the effects are worse. But can you tease out a little bit more? Like, what is going on at that intersection? Did you find, or do you see, that in some ways monopoly power is actually being fueled by racial oppression? That it goes in both directions?
Solana Rice:
Yeah. I’ll just say that part of the thing that we found in the actual report was that there isn’t a lot of research on the direct correlation between disparate impact and corporate concentration. And so that was actually one of the recommendations that we have in the report, is that we know that there have been some studies about wage disparities for Black and Brown workers as a result of corporate concentration, but there’s so much more. Like, corporate concentration in housing markets. How does that affect renters and homeowners? Right? Corporate concentration in the financial sector. We know that if you only have a choice of five different companies to get a home loan from you’re probably not going to be able to really shop around. I don’t know a lot of Black and Brown folks that shop around for their home mortgage, right?
Solana Rice:
You get what you can, you try to get what you can. So we sort of think about corporate, when we thought about corporate concentration we really focused on the fact that there are multiple ways that people of color are impacted as consumers, as workers, as homeowners, as just residents in a community that the corporations have their hand in municipal budgets and the like. And so what we tried to do was make that connection between not only the control that corporations have, but the oppression that they’re able to wield. And I’ll stop there, I’ll turn it to Jeremie to say more about that.
Jeremie Greer:
Yeah. What bothers me the most about this, like talk about these things, is disparate impacts. I read research so I understand what it’s meant, but it makes it seem this stuff is accidental. Like there’s a crack in the sidewalk, I trip and fall and break my arm. What we know of this is that the way our economy is structures is that these outcomes are intentional and they’re by design. And that our racial caste system that we live with in this country was built and created at the same time that our economy was being built. And that they reinforce one another and operate in tandem in a sort of racial capitalism that produces the outcomes that we see. And they do so intentionally. So when Amazon buys Ring and has this tool for surveillance, and police use it in Black communities to surveil Black people and arrest Black people, that is not accidental, that is not a disparate impact.
Jeremie Greer:
That is an intentional action that has been taken. That this company that can accumulate the facial recognition data and all of that is facilitating. When you see the kind of stuff that we’ve seen on Facebook, around misinformation and using information to suppress Black voters, that is not by accident. It is an intentional design within our political system in tandem with a company like Facebook to suppress the Black vote. So my struggle with stating it as a disparate impact makes it seem as if this thing that kind of happens on accident. When what we know, and what we talk a bit of a lot about in the report, is that there are historic underpinnings for the type of racism that we see in our economy. And that what is being produced is being produced by a system that has intentionally put structures and systems in place to oppress Black and Brown communities and Black and Brown people.
Jess Del Fiacco:
In the report you used the phrase to describe all this, the oppression economy. I was wondering if you could talk a little bit more about that. And then I’d love to hear about your vision for a liberation economy.
Jeremie Greer:
So, but what it is is a bit of what I was just talking about. That we are currently operating in an economy that is driven by a form of racial capitalism that is historic in its roots and its underpinnings, and is currently driving the outcomes that we see today for Black and Brown communities. And it starts with a very fundamental, and though very uncomfortable premise, which is that we have to recognize is that racism is profitable. That the existence of our unequal racial caste system drives profit to a very small group of very wealthy, mostly male, individuals in this country that run very large companies and corporations. And that this has been the case, the entire existence of our country.
Jeremie Greer:
An example that we pull out in the report is before the civil war slaves were the largest asset class of any form of asset in our entire economy. So human beings who were in bondage were the largest asset class. And that the people that owned those slaves were the wealthiest individuals in the entire country. The per capita, the Mississippi Delta, had more millionaires, the equivalent of what we call billionaires today, per capita in the entire country. And that is the product of an intentionality around the racism baked into our economic system. Also, the accounting practices that they used on those slave plantations are still used today.
Jeremie Greer:
A good example is how you value an hour of labor. That accounting practice was used frequently on slave plantations and goes into how a company calculates how much they’re going to pay their workers per hour, their hourly workers. So we have to understand that these things cut through time. And the oppression economy, as we’ve defined it, really drives off of four kind of fundamental principles that we have to counter, that we have to deal with in order to dismantle it.
Jeremie Greer:
The first is that we have to end the criminalization of people of color. People of color are criminalized in this country so that they can be exploited. Exploited as workers. Exploited as consumers. And to drive and pull wealth out of their communities. We have to end the dual financial system. We have one financial system that builds wealth for people, another financial system that extracts wealth from people. And that we have to end that so that we’re all operating under a financial system that is helping us build wealth and be prosperous in our economy. If it’s not doing that, then what is it actually for? We have to curve corporate power. And this is where this conversation about monopoly comes in. And the way that we think about this, and we talk a bit about this in the report, is when you think about monopoly power it is really just corporate power magnified and maximized, right?
Jeremie Greer:
It is our structures in which we govern corporations in this country that are not doing the job that allows companies like Amazon, Facebook, Purdue in the agricultural place, Verizon in telecom, to have such an outsized impact on the communities and the people that they encounter. And then finally, the way to address all this is that we have to put more political power in the hands of people of color so that they can influence the governmental structures that are going to oversee all of this stuff. Whether it’s the criminalization of people, all the way to the governance of corporations. So that dismantling is something that we have to do in order to get to a place where we can begin to envision and see a liberation economy.
Solana Rice:
And what we’re seeing on the liberation economy side is really the conditions that we think have to exist in order for Black and Brown people to really live in economic liberation. And it starts, it’s also around for simple, but somehow really difficult to achieve thus far pillars, that all of our basic needs are met. And that we have things clean air and clean water and income. And I think in this sense, in this condition that we have our basic needs met, we see things, like corporations wielding their power around air, right, clean air. If a company has enough power locally, they can pollute as much as they want. I’m here in Northern California where there’s a whole bunch of wineries. Turns out that if these wineries are big enough they can be in the pockets of the local politicians, drain the water table for their lovely, lovely vineyards. Right?
Solana Rice:
So we see this over and over again in the basic and just basic needs. The safety insecurity that everyone, all people of color will have their safety and security needs met. Jeremie alluded and talked about the connection between Amazon Ring services and policing, right? So again, we can trace back the connections of undue corporate power in undermining our safety and security overall.
Solana Rice:
The third pillar is that we are all compensated and valued. We don’t have to say a ton here because we know over and over again that monopolies have undue power in setting wages, especially locally. If you live in a place where you have to work for Walmart, where have to work for Amazon, like my cousins do in Cleveland, Ohio, right? You are subject to whatever wages those companies are going to set.
Solana Rice:
And lastly that we have a principle and the condition that all people of color belong. And it is actually just the opposite of what Jeremie has stated. That we do not have theft exclusion and therefore exploitation in our economy. And that we’re looking at all of the ways that our identities intersect and we’re still upholding and holding on to oppressive regimes, thinking behaviors and policies. So it’s our way of thinking about, okay, in this new vision, are we still dragging with us any of these old systems of repression that we just need to get rid of? Because they could easily just creep in because it’s the water that we swim in.
Stacy Mitchell:
There’s so many things I want to ask right now. That was all really great. Let me start with this one. You all are thinking about anti-monopoly in a broad way as we at ILSR do as well. The notion that there are lots of different policies that structure how power operates in the economy and who has it. And that we need to look those policies from this lens of concentration versus democracy, equality versus concentration and so on. I’m curious within that, how much thinking you have done about antitrust, particularly as a part of that policy field, but just a part? But also, have a body of law that is particularly focused on competition and consolidation. Do you think that there are ways in which, as we’re moving towards antitrust reform legislation, that antitrust policy and enforcement needs to have a race lens brought into it, and what does that look like?
Jeremie Greer:
Yeah, I think we absolutely do, but you’re right. Like, so in the report, we really argue for broadening the definition of anti-monopoly. And we do so because it’s our belief that the reason it’s so narrowly focused, and we don’t need to get into the consumer standards, I’m sure your listeners are well versed in that. But the reason why it’s been narrowed in that way is intention. And it is purposeful. It is to protect the firms. Not to actually, in our belief, to protect all of the people that are impacted by monopoly. It also means that we can’t use antitrust as a tool to address workers fully. Like in the impact that monopoly power has on workers. We can’t use it as a tool to address the awful problems that happen in communities where companies pollute neighborhoods, and then they don’t have any recourse, at least to antitrust to remedy that.
Jeremie Greer:
It doesn’t talk about the way that corporations avoid taxes and don’t pay their fair share around what they pull out of communities. Companies drive trucks on roads that they’re basically not paying for, and get to use free of charge, and aren’t even paying for it through the taxes that they pay. So the definition as it’s defined is far too narrow for us to be able to have full accounting for the ways in which these large corporations, this corporate consolidation, is impacting communities of color. And I think one of the ways to get there is through a racial equity lens, and focusing on a racial equity lens. And that is one method of which to get there. And because people of color are all of these things. They are consumers. They are workers. They are people that live in communities. They are all of these things and we have to account for all of the ways in which companies are having disparate impact as we talked about are people of color.
Jeremie Greer:
The other thing that I think is important as it relates to people of color is that the impact that they, that these corporations have on them is not the same. So we pulled, in an example that you find in the book, in the paper, is around Cots foods or Cote foods. And it’s a chicken. So fifth largest chicken company distributor in the country. And they get their chickens from small farmers, some of which are Black farmers. And they have essentially replicated a sharecropping system with these Black farmers in which they are basically in control of all of the ways in which they do business. From how they treat their chickens, to what they feed their chickens, to the type of land that they grow their chickens on. All of that is controlled by this company, and in many cases have put these black farmers out of business.
Jeremie Greer:
Now that isn’t the same way that they deal with larger producers of chickens, right? So it’s important to note that there’s a different way in which these companies are interacting with people of color, and they’re using the existence of racial capitalism in order to extract as much profit out of folks in these systems. And there are examples across the board. For the way Amazon treats black businesses on its platform, to a whole lot of other spaces. So I think through a racial lens you can find a way to use antitrust as a much more powerful tool than it currently is being used.
Solana Rice:
And I’ll just add that I think that we should take this moment and the interest from the current acting chair of the Federal Trade Commission, Becca Slaughter, at her word that she’s pretty serious about an anti-racist antitrust. And is really open and interested in hearing from folks about what that looks like and what that looks for people of color in particular. Whether it’s what they’re taking on as cases, et cetera. But I do think that now is a great time to start engaging and getting our vision of what our remodeled antitrust looks like.
Jeremie Greer:
Solana I’m so glad you raised that because a great example is the way the FTC has partnered with the CFPB, the Consumer Financial Protection Bureau, around enforcing the eviction moratorium around the COVID-19 crisis that’s in place. And making sure that corporate, large corporate landlords, there are literally a hand full of these around the country, are giving tenants information about the eviction moratorium so that they know what their rights are in this time. So I think that’s an example of the way the FTC can play a more activist role in protecting, their in charge of protecting consumers.
Jess Del Fiacco:
We’ll go to the next question in just a moment, but first, we’re going to take a short break to thank you for listening to the show. If you’re enjoying the conversation I hope you’ll consider heading over to archive.ilsr.org/donate to help support our work. Your donation directly supports this podcast and helps us get great guests like Jeremie and Solana. You can visit archive.ilsr.org/donate to make a contribution today. Any amount is sincerely appreciated. Now, we’ll continue on with our conversation with Jeremie Greer and Solana Rice of Liberation in a Generation.
Stacy Mitchell:
I think that’s absolutely right. And for listeners who don’t know, Commissioner Becca Kelly Slaughter did a tweet thread about how antitrust enforcement decisions needed to have a racial justice lens in terms of how they look at questions around mergers, how they look at other questions around anti-competitive violations and the behavior of these big companies. And she subsequently, I think, talked about it some in a speech and has in a few other places, but it’s an idea that she’s been moving and she is currently the acting chair of the FTC as we await Biden’s additional appointment into those other seats.
Stacy Mitchell:
I wanted to ask you about the role of small business in Black communities in particular, both economically, but also in the life of communities and as well, I think, the importance of locally owned, Black owned institutions, businesses in terms of being a site for social justice movements throughout history, civil rights movements. Can you talk a little bit about that?
Jeremie Greer:
So the black business and one of the things about remembering the Greenwood neighborhood in Tulsa, and us looking back at that awful massacre that took place in Tulsa, Oklahoma over a hundred years ago, one of the things that we have to remember is that there was a thriving Black community with strong institutions. And some of the strongest institutions in that community were those businesses. Were black owned businesses that were not just barely rough for the people that own them, which they were, but there were also becoming the foundational base of institutions that really made that a thriving center of commerce, of community, of culture, of politics in that community. And during segregation across the country there was a lot of that in a lot of communities across the country, because capital from mainstream institutions wouldn’t go in so Black people had to create their own centers in which to basically govern and run their communities.
Jeremie Greer:
And we saw that across the country. And they became these institutions for these communities to help these communities thrive. And there are a lot of Black businesses like that today. We highlighted Loyalty Books in our paper, which is a bookstore in the Washington, DC area in Maryland. And that is exactly what they exist to do. Now, of course, the owner of Loyalty Books wants to make a profit. She wants to keep her business running. She wants to be a way to generate wealth for herself, but she also wants to be an institution where dialogue amongst black people. Where people can come and talk about books or talk about literature and talk about ideas in a space. And there are a lot of businesses that are that. There’s a lot of talk about the Black barbershop is that, right? People come together, they talk, they interact, it becomes a social hub for the community. Or the hair salon.
Jeremie Greer:
A lot of places like that. But when you are pushing down on Black businesses in the way that these mega corporations do, and become competition. You know, Black businesses start at a deficit, right? It’s hard to get capital out of mainstream businesses. And this has been documented more times than I can count, the difficulty of a Black businesses accessing capital. And when you’re climbing uphill against that, and at the same time you’re being consistently undercut by large corporations on price and competition for workers and competition for space in the community, it really can become an uphill climb that can’t be overcome.
Jeremie Greer:
And then in this new e-commerce space you have companies like Facebook with their marketplace. You have Amazon with their platform consistently, actively undermining those businesses by throwing out competitive products, by undercutting them on price. And they have all the data that allows them to do this. And it becomes, just for a lot of businesses, something that can’t be overcome. And when you lose that you’re a Black business, you’re losing an institution in the Black community that is helping to really create the power and strength that communities need to thrive.
Stacy Mitchell:
How has, you wrote this report, I think one of the things I really liked about it is it’s written for an activist community, for activists in particular, and for just the general public who are interested in these issues. It’s a very accessible report. But I’m curious how folks who’ve been working on, organizations who’ve been working on racial equity but maybe hadn’t been thinking about monopoly power in their work. I’m curious about the reaction that you’ve had from them to do the report and to the arguments that you’re making.
Solana Rice:
We’re seeing early glimmers of the ahas about the way, especially the way that we’re describing the barriers. I think folks are starting to see like, oh yeah, that is part of the reason why I can’t advance affordable housing. Or, I can’t make sure that small business owners in my community have access to capital. But this is just the beginning. The report is the first foray into this conversation. And I think that what we want to make sure is that the organizers, the folks that are building power and community, are actually starting to not only make the connections across their topics about corporate power and corporate concentration, but also being in community to develop the solutions that actually address that corporate power. And so what we hope to do is continue the conversation from the report to really launch thinking around a policy agenda, a research agenda, and also just collaboration in thought partnership so that we’re telling the story in a compelling way.
Solana Rice:
I think the folks at Athena, for example, have been doing a great job of that kind of work focusing on Amazon. And now I think there’s just really a broader field of folks that are like, yes, Amazon and all these other tick, tick, tick, tick, tick, all these other corporations. And we know how to take on individual corporations. And how do we take on the regulations and the rules that actually govern those corporations. And defining a new role for corporations. I think for a while, well, I think it’s a question for organizers. What I’ve heard frequently is that there’s no rule for corporations. Corporations are terrible, right? We need to take down corporations. I don’t think corporations are going away soon. And so if we are to redefine the role of corporations in our democracy and our economy, what role do we want and how do we measure that we’re moving it towards some kind of balance of power in the short term?
Jeremie Greer:
That was right on. Particularly that last point. And here’s the thing, antitrust activity in its historic roots were about that. Like, what is the role of corporations in our society, and how do we as the government and the people govern that? Corporations used to have to demonstrate that they were going to create some public good out of their existence. There’s no responsibility of that right now. It’s basically, can you make profits, is the ultimate question that’s asked. And the government says, well, if you’re going to make profits, you must be doing something good.
Jeremie Greer:
And then they back off, and they don’t have to answer these questions about what value they’re bringing. And they actually, in many of them as we talk about in the report, are extracting value out of communities and aren’t being held accountable for it. And that’s the stuff that I think community folks really want to get at. Like, how can we stop them from pulling this stuff out of communities and actually being of some use in our communities. And use to us, not to some shareholder living on the Upper East Side of New York.
Jess Del Fiacco:
Related to all that is, I guess, how do you see the future of the anti-monopoly movement? The movement itself, how should it evolve in order to build this kind of future?
Solana Rice:
The first point is really centering folks that are building power in communities that can actually organize, that can mobilize, that are directly impacted by the outflow in the existence of monopolies. And arming those organizers with the tools and the analysis that can clearly state why and how monopoly power is impacting their everyday lives. I personally, starting to get into this work, have read a lot about anti-monopoly and antitrust.
Solana Rice:
And honestly, I’m like, it’s really bureaucratic and it’s really jargony. And I think one of the first things is just, which is also what we’re trying to do with the report, is just help people navigate who’s making decisions about what, and what are the terms and language that folks use. Because we, at Liberation in a Generation fully agree and believe that the economy is not a mystery. That everybody operates in it and that we make it. And that the wonkiness, if you will, and the bureaucratic nature of things is really just to make things abstract and to hold close power. And that we just don’t have the liberty of maintaining that sort of exclusionary posture anymore. Especially as more people on the streets are recognizing the role of monopolies and corporate concentration in their communities, and will be demanding and are demanding new alternatives.
Jeremie Greer:
Yeah. I love all of that. And I just think that we’ve let the monopolists set the terms of the debate. And we’re arguing on a debate stage around questions that they’ve written and about it through a frame that they’ve created. And it is around these questions around why does the corporation exist in the first place? If it would exist to create shareholder returns, which is what we’ve come to understand is the role of business, then we know that that means that the corporation is there to benefit a shareholder community that is 90% white.
Jeremie Greer:
But like, that is what it is if we’re allowing it to be on those terms. What if we’re actually saying that the corporation needs to exist to okay, provide returns to your shareholders, but also to strengthen communities. To ensure that workers have a livable wage and a lifestyle that allows them to be a complete human being when they come to work. Meaning they get to have a bathroom break to go to the bathroom, right?
Jeremie Greer:
That basic level. All the way to have health benefits and paid time off and are earning a wage that allows them to live in the city of their choice, in the community of their choice. Right? Allows them to know that they’re not feeding the company unnecessarily through exploitation of the data that we provide as consumers. Right? There’s so much that if we redefine the bounds in which a corporation is supposed to serve the public good, then we’re getting to a place in now we can have a conversation about how are we, how a corporation is being actually advancing racial equity rather than being a forced to fight against racial equity.
Jeremie Greer:
I think that’s the confines of what I’d like to see the debate to go. Because if we stay where we are in the current debate as they defined it, there’s no room. There’s no way to expect that we will see racial equity. Because again, if they’re only accountable to a set of human beings that are 90% white, we’re never, never going to get there. And by the way, I didn’t make that number up it’s in the report. That’s not just me being flippant with the data it’s literally 90% of shareholders are white. So, no.
Stacy Mitchell:
Yeah. It’s one of the great, it’s one of the great tax. You have a number of illustrations too that like are, it’s just a really, it’s a really great report that kind of crystallizes a lot of those things in really clear terms. I really appreciated that. And I couldn’t agree more with both of the points you just made about how, it is how the conversation is framed, who’s framing it and what the boundaries of it are and what it’s oriented around that’s so crucial.
Stacy Mitchell:
And then also this point that Solana made about antitrust monopoly has been really turned into this highly technical conversation that only elite lawyers and economists working for corporations basically are allowed to have. And the doors by our enforcement agencies, they have shut their doors to the public. And I feel like that’s a big part of what has gone wrong. And I’m so appreciative of your work because it is really about widening that conversation and bringing everyone into it in a completely different way. So thanks so much for everything you do.
Jeremie Greer:
Well, thanks for having me. Thank you for what you do and for having this discussion because it’s so important to give this discussion space and platform. So thank you for that.
Solana Rice:
Yeah, thanks for this conversation.
Jess Del Fiacco:
Thank you guys. I just want to remind listeners that we’ll have that report, which is anti-monopoly activism, listed in the notes for this episode. So if you go to archive.ilsr.org you can read it there and you should check it out. With that, thank you guys so much.
Jeremie Greer:
Thanks for having us.
Stacy Mitchell:
It was great.
Jess Del Fiacco:
Thank you for tuning into this episode of the Building Local Power podcast from the Institute for Local Self-Reliance. You can find links to what we discussed today by going to archive.ilsr.org and clicking on the show page for this episode. That’s archive.ilsr.org. While you’re there you can sign up for one of our many newsletters and connect with us on social media.
Jess Del Fiacco:
We hope you also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources and made available for free on our website. Finally, we ask that you let us know how we’re doing with a rating or review on Apple Podcasts or wherever you find your podcasts. This show is produced by me, Jess Del Fiacco, and edited by Drew Birchbach. Our theme music is Funk Interlude by Dysfunctional. For the Institute for Local Self-Reliance, I’m Jess Del Fiacco and hope you join us again in two weeks for the next episode of Building Local Power.

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41 min
May 27, 2021The Role of Antitrust Law in Creating Energy Justice
On this episode of Building Local Power, ILSR Co-Director John Farrell interviews Jean Su, director of the Center for Biological Diversity’s Energy Justice program. Their conversation touches on:
The history of state-granted monopolies in the electricity sector, and whether this monopoly system still works.
A current antitrust case in Arizona, where a utility, the Salt River Project, is fighting competition from rooftop solar.
The energy violence inflicted upon communities of color and what a more just energy system might look like.
What we can do to build a just fossil-free future.
“Given that electricity is a human right, and that it is a life and death issue, why is it that we have given private corporations the ability to govern that access? Why is it that they solely, a private corporation, whose sole interest is to reward shareholders, why are they in charge of life and death in this country?”

Related Resources
Competition and Freedom at Stake – Episode 37 of Local Energy Rules Podcast
Should Big Utilities Pay for Their Bad Choices? — Episode 124 of Local Energy Rules
Is Energy Still a “Natural Monopoly”? — Episode 104 of Building Local Power
Why Utilities in Minnesota and Other States Need to Plan for More Competition
Transcript
Jess Del Fiacco:
Hello and welcome to Building Local Power, a podcast dedicated to thought-provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and communications manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands.
Jess Del Fiacco:
In this week’s episode, ILSR co-director John Farrell interviews Jean Su, director of the Center for Biological Diversity’s Energy Justice program. Their discussion focuses on the role of antitrust law in the US electricity sector, and in particular, how the law backs up advocates that are working to make these monopolies more accountable to their captive customers. With that, I’m going to turn it over to John Farrell.
John Farrell:
Here to talk to me about an interesting strategy to get these utilities to respect competitive markets is Jean Su from Center for Biological Diversity. Jean, welcome to building local power.
Jean Su:
Great. Thanks, John. And it’s an honor to be here.
John Farrell:
I like to start off my interviews with folks by just asking a little bit about their background, kind of like how they got into this kind of work. And I’m curious, how did you end up at the Center for Biological Diversity? Why are you motivated to be out here, doing legal work, and talking about antitrust in the electric utility sector?
Jean Su:
Yeah. So it’s a bit of a long story, but I guess to cut it pretty short, all my work, since I began after college, has been dedicated to climate and climate justice work. Then I actually start off as a micro-finance development worker in Madagascar. And it was there, actually in the early 2000’s, that a series of really horrific cyclones ended up hitting communities with hundreds of thousands of people, and it really was just, for the first time, a true understanding of what climate change actually looks like on a real basis. And what it looked like for those communities out there was completely wiping out any food source for the next year because the harvest was completely gone. It was ridiculous malaria rates that climbed up so high, that killed children ultimately. And it was just a wiping out of the economy in general, in a place that was already so fragile.
Jean Su:
And when I was there, people were saying in Malagasy, “The climate is changing. The climate is changing.” Like nobody had no idea what was going on. And it was really at that moment that I totally understood that if we were going to try to tackle extreme poverty issues and the wealth gap, internationally and nationally, that it would have to be through the lens of climate. So after Madagascar, I was really lucky to be able to work in both the private and public sector in different parts of Asia and Africa and Europe, and eventually came back to the States to try to be in the belly of the beast where so much policy work is going on that dictates so much around the world.
Jean Su:
So I ended up the Center. The Center for Biological Diversity, it’s a wonderful environmental organization that relies on really science and a sense of justice and equity to do the work that they do. I’m an attorney there, and I also direct our energy justice program. And we’re really birthed from the Keep It In The Ground movement, and our goal, essentially, is to ensure that elements of justice are absolutely centered in any type of renewable energy future that we’re looking at. And so I think what’s happened over this past year, it’s not surprising, but it is just so devastating and heartbreaking on a day-to-day basis to see the energy violence that has been perpetuated on communities of color in this country.
Jean Su:
And right now, we’re at an incredible, exciting inflection point where we have the ability with this new Biden administration to actually not only build back better, but I’d like to say build back justly, where a fossil-free future is absolutely central to that justness. And that’s where all the utility stuff comes in in terms of really pushing that industry to center justice and figure out how to change it so that we get an equitable outcome.
John Farrell:
That’s great. What a awesome story in coming into this space. I feel sort of like mundane by comparison having gone to public policy school, and then taken a class on energy policy. And then I’ve been at the ILSR now for 15 years. So I love hearing stories of how people bring so much more variety into their work, so many different perspectives. Let’s try to help people understand then, a little bit, about what’s going in the energy sector. So we have electric utilities. They’ve been around for over 100 years. In most places, we granted them a monopoly. We granted them freedom from competition through our state laws because we said, “Oh, in building an electric grid, it doesn’t really make sense to have 17 sets of wires going to every home.”
John Farrell:
So there was a legitimate reason for this 100 years ago. And also, it was not very common to generate electricity at a small scale. Well, I shouldn’t say that. At the beginning, it was small scale. Power plants only powered a few blocks. But it scaled up because there were huge economies of scale for fossil fuel generation for coal, for gas, for nuclear power. And we didn’t have a lot of competitive, small-scale power generation. And then solar energy came around. And ILSR’s been paying attention to this since we wrote a report in 1975 on solar cells. So we have, for a long time, been paying attention to solar. But in the last decade, it’s gotten super interesting, of course, because it’s now competitive. People can actually save money by generating their own electricity compared to buying it from the utility company.
John Farrell:
But these monopolies, whether it’s Xcel Energy in Minnesota, or Dominion Energy in Virginia, or Salt River Project in Arizona, to name just a few, they are used to the idea that they are the only game in town, that everybody has to buy stuff from them. And now, that exclusive franchise is challenged by the fact that we have technology, we have competition, we have lots of different ways we can generate electricity. So we’ve already seen utilities push back against customer-owned solar. And they’ve done it in a lot of ways. They’ve tried to roll back policies that help people get fair compensation, like net energy metering, or I get credits on my bill for producing solar. They’ve tried to reduce incentives for solar. They’ve tried to own their own rooftop solar. What are other ways that utilities are really trying to make it difficult for customers who want to own solar? And then let’s talk a little bit about why we have to address this problem.
Jean Su:
Absolutely. So I think you just touched on the real quagmire that utilities are in right now. I love that you began with the regulatory compact. We’re all Gretchen Bakke fans in that sense and I’ve totally read that history. And really, that history was grounded in this understanding that a monopoly can be given to a private corporation if it actually fulfills two things. And this was part of state laws generally. One is that it allowed for just and reasonable prices, which we can get into in a little bit. And two, fundamentally, it served the public interest.
Jean Su:
And I think that is where, fast forward 120 years, we’re in a really bad spot in terms of utilities meeting that goal. And it’s exactly for the reasons that you’re saying. We are in a climate emergency right now, and yet pumping out fossil fuels. And continuing to stifle true renewable energy sources are really not in the public interest and violate that fundamental regulatory compact. And so as, John, you were saying, there are so many different actions that have been taken by utilities to do this. And it’s essentially all for the purpose of not serving the public interest, but to maintain their monopoly and their status as the sole provider of energy in many of the territories that they were granted.
Jean Su:
We’ll talk about the Salt River Project case in a little bit, but essentially, there are fees that are put on rooftop solar customers. So it totally disincentivizes them to do it. There are lobbying and trade union dues, and all of these more direct ways of blocking policy and blocking laws that would allow for people to gain that energy freedom. And then we see less maybe upfront pieces. And I know, John, you’re working on this. We see how utilities stall, and stall the ability for people like you and me to get rooftop solar on by delaying interconnection, and having larger interconnection fees.
Jean Su:
So all of this is quite kind of rich and interesting. And I think that actually brings us to a place where I can start talking about antitrust, and actually how utilities have dealt with disruptive technologies in the past, which is really fascinating in how antitrust has kind of come in to address that.
John Farrell:
Let me just, since a lot of the listeners to this podcast are not deep in the energy sphere, I just want to kind of summarize for them. So think of it like right now, we have roads that are public, a publicly owned network that allow a lot of private companies to compete. So you have the Postal Service, you have UPS, you have FedEx for package delivery. You have Amazon doing its own thing now. But the infrastructure is owned by a public entity that is not involved in the delivery of services.
John Farrell:
What we have in the utility sector, generally speaking, is the opposite. We have private companies that have been given monopolies, or in some cases, we have member-owned co-ops, or we have public entities that can also be utilities. But the problem we’re seeing is largely with these private companies. And the issue is not just that we have a sort of threat to their long term monopoly over who generates electricity, but also the fact that because they own the infrastructure, they’re putting up all sorts of roadblocks. I mean, imagine if like UPS had to pay tolls to drive on the US Postal Service roads. I mean, this is the kind of odd and complex problem we have where the monopoly that we establish, as you said, there were these two principles, doesn’t really make a lot of sense anymore. So let’s bring that home to this case in Arizona.
John Farrell:
So Salt River Project is a utility in Arizona. They’ve got a monopoly service territory. Arizona is like ground zero for solar. Resource is awesome here. People can definitely pay their bills really well, generate lots of solar electricity on their homes. And Salt River Project’s not a fan. What have they done and what is the situation there for customers who are trying to do solar?
Jean Su:
So the Salt River Project case is fascinating. And what I’d say is that it is not necessarily unique. So Salt River Project is a … It’s quote/unquote a public utility in Arizona. But it actually, in legal cases, has been defined as a private corporation. And basically what they did is that for rooftop solar customers … So Arizona does allow for competition and people to put solar on their rooftops, which is great. But what Salt River Project did is that for any of its customers that wanted to install solar, they actually put on a 65% rate increase in any electricity that those customers would have to buy from SRP in the case that their solar on the rooftop didn’t generate 100% of their needs, which is often the case.
Jean Su:
And when that actually came down, it made solar, rooftop solar so prohibitively expensive. Your payback period was doubled, essentially, I think to around 15 years instead of 7 years. And so it just became economically unappetizing for households to invest in solar. And one of the most interesting economic metrics is that Solar City, which no longer exists, unfortunately, but they were a solar provider in the area. When this rate increase came down from SRP, their applications for solar systems fell by over 96%. So that pretty much decimated the market for rooftop solar just by this pretty egregious rate increase from Salt River Project.
Jean Su:
So the idea was definitely to decimate competition in a competing source of energy, and SRP succeeded in it, really well. Then the question became how do we fight back against this? So I kind of want to back up a little bit on antitrust history a little bit. But the first immediate response to what SRP was doing is that, as I said before, Solar City was a solar installer. And they were bought by Tesla during this period of litigating this case. And it’s really important to note that this case is a landmark case in our current, modern antitrust jurisprudence. Nobody had challenged any utility thus far on quashing rooftop solar in this modern period.
Jean Su:
So antitrust is a really expensive piece of litigation. It requires a ton of economic analysis and technical analysis, so that’s why you see … You don’t see normal mama papa shops bringing antitrust cases. It is extremely expensive. And so for solar companies that are all struggling to even make it, when we’ve talked to them, they have noted that antitrust is just so prohibitively expensive that they couldn’t bring these types of cases. But Solar City, because Tesla was their parent, was able to bring this case. And they brought antitrust claims against SRP.
Jean Su:
So what is antitrust? Essentially, what antitrust says is that having a monopoly in and of itself is not illegal in the sense that if you are such an awesome competitor, and by merit, you produce the best product out there, and customers loved it, and they wanted it, and they gobbled it up, and you are dominating 90% of the market, that’s not illegal because essentially you got there by merit. What is illegal is if you achieved or maintained that type of monopoly power by using anti-competitive conduct, conduct and behavior the specifically tries to decimate your competition.
Jean Su:
And the SRP case is really exemplary of that, of SRP coming out and swinging super hard against their solar competitors with a very egregious rate increase, as we just talked about. So what happened in the SRP case that Solar City originally brought is that it was brought to the district court, and the district court actually found that the merits of the case and the antitrust injury were proven, and that 96% drop in the applications for Solar City was key to this because it was just a clear economic effect of the cause of the rate increase. So it was like a fabulous, kind of simple antitrust fact pattern.
Jean Su:
But what happened, essentially, is that there was a pause because of a procedural issue. Sorry, this is really getting into the weeds. But it basically got up to the Supreme Court very quickly for a specific procedural issue. For all transparency purposes, ILSR, through John and us, we are actually amici in that original case. So at the Supreme Court level, the day before argument happened, Tesla ended up settling with the Salt River Project and basically closed the case. And they settled for a multi-billion dollar deal in battery that SRP would buy. And they allowed for that rate increase to stay intact. So that was kind of the first iteration of the SRP case. And unfortunately, it didn’t solve the issue of the discriminatory pricing that SRP had originally put in place.
John Farrell:
So I want to do a couple things here. One is just to help people understand. I think the explanation you gave of antitrust was great. But the idea that having a monopoly is not illegal, and that makes a lot of sense. I mean, in this case, the state governments are actually granting monopolies. So we know that it’s allowed. We also do have one complicating factor, I think, if I understand this correctly, which is that because a state has granted a monopoly to a utility, and because they are often overseen by a regulatory agency, in Arizona it’s the Arizona Corporation Commission. In other states, they call them public utilities or public service commissions. It kind of raises the bar on this antitrust thing right?
Jean Su:
Yes.
John Farrell:
It’s saying, “Oh, there’s already some public oversight here.” If these agencies are looking at the policies, at the practices of these utilities, it becomes that much harder to make this antitrust argument. So it’s kind of impressive that it already cleared that bar, that this particular case got that far because it’s even harder to bring an antitrust case against a utility than it might be against, for example, Amazon, where it’s saying to its sellers, “Oh, you have to use our distribution centers or we’ll punish you. Or we’re going to take the data and we’re going to introduce our own competing products and then place them higher in the listings.” That’s retail business. There’s no special protection. So we’ve got an interesting case here where the bar is higher. So Solar City settles, which is, of course, a bummer for everybody else because they’re already a big guy in town, owned by Tesla. They got themselves a nice deal, but everybody else is still screwed. What happens next?
Jean Su:
Everyone else is screwed. Well, actually, can I answer your previous question essentially?
John Farrell:
Yeah, please.
Jean Su:
Which is I think it might be helpful for me to unpack a little bit the history of antitrust law and actually the history of it in the utility space to actually help us situate the SRP case. This is me nerding out on antitrust law. I love antitrust laws. Basically, at the turn of the last century, so when we entered the 1900’s, there was a huge movement for monopolization. And what we saw at that point was US Steel, Standard Oil, the railroads, all of those industries had like hundreds of mama and papa shops at the turn of the century. And then within one decade, all of those industries had been consolidated to about one to two players in those industries that completely monopolized them.
Jean Su:
And in response to that, Congress essentially passed our first antitrust law, which was the Sherman Act. In the early 1900’s, a few more would pass, the Clinton Act as well. And the whole idea behind that was actually a really remarkable and beautiful understanding of what role antitrust was supposed to play. So the heart of antitrust law is really to stop the concentration of wealth and power by private industry. And the whole kind of concept and existential idea was to restrain unrestrained capitalism because what lawmakers found at the time was that if industry essentially could accumulate so much power, they would have greater influence over our lawmaking than ordinary citizens like you and me.
Jean Su:
So trusts and the accumulation of private power in private companies was viewed as a profound threat to our democracy itself. And so antitrust was really created, that whole kind of jurisprudence and law was created to have a check on private industry and their political power. And in a way, it was designed as a counterpart, and really sibling and sister to our exquisitely architected three branches of government, which were conceptually and theoretically designed to check each other, Congress, the president, and the judiciary.
Jean Su:
So antitrust laws was this final kind of fourth way to control private industry in this country. And so academics today will call this the Brandeisian vision of antitrust. It was Justice Brandeis who put forward this type of idea of protecting the public interest, essentially, through antitrust. What ended up happening, unfortunately, is that in the 70’s, 80’s, 90’s, till now, we had a new school of antitrust that really dominated the jurisprudence and kind of lost this original vision of what it was supposed to be. And this was really led by the Chicago School from the University of Chicago, and eventually really embraced by Bush administration, and the Obama administration, and the Trump administration.
Jean Su:
And they narrowed the scope of antitrust to be like very exclusively about consumer welfare, and that if a company was not raising the rates of the product that you were buying, so like Amazon driving these types of cheap prices, than we’re okay, like totally fine. Like if consumers are actually saving a buck, totally great. And we’re like all about economies of scale. I think this really tracks on to the general capitalist boom throughout these decades that we’ve seen, and unfortunately, antitrust law and the administrations behind it didn’t seek to police anything more, and kind of lost that original thrust of antitrust as a check on our democracy.
Jean Su:
And so what’s happening today in the Biden administration is that there is a new revival of that Brandeisian vision of antitrust. And this is where we see people like Lina Kahn come in, who is so brilliant, and basically brought antitrust theories, like the Brandeisian vision to big tech right now. And people like Professor Tim Wu, who was also at the Columbia University Law School with Lina Kahn, and basically are perpetuating this type of new theory of antitrust. So I think it’s really important to kind of view all of this within that lens of a fluctuation antitrust history for really understanding the nuts and bolts and the spirit, and the joie de vivre behind antitrust.
Jess Del Fiacco:
Sorry to interrupt the conversation. We’ll return to this in just a moment. But first, we’re going to take a short break. Thanks for listening to Building Local Power. If you’re enjoying John and Jean’s conversation, I hope you’ll consider heading over to ILSR.org/donate to help support our work. Your donation directly supports this podcast, and it supports the important work being done all across ILSR. You can visit ILSR.org/donate to make a contribution today. And any amount is sincerely appreciated. Now back to John Farrell and Jean Su.
John Farrell:
Before we pivot back to solar, I just want to say I think how important it is for people to understand the difference between these two. You’ve covered it really well. I don’t think I need to give anymore detail about it. But just to emphasize, the origins of antitrust were to say that market power is a threat to democracy. And what we’ve essentially said with this so-called consumer welfare standard is, “Democracy, we can sell our democracy for lower prices. If I can by that TV for cheaper, the price is really the weight of my vote.” Because these companies now have so many lobbyists, and so much political power.
John Farrell:
And we see that as soon as Apple and Amazon were sensing a threat from the government around antitrust, boy, they staffed up lobbyists in a hurry. Like there are so many more lobbyists for these tech companies in Washington now than there were before because they’ve recognized that the government is saying, essentially, “We think you’re too powerful.” And they’re right. So I just really appreciate the overview there. And I would love to see how you tie that back into this case with Salt River Project and with clean energy.
Jean Su:
I think this new school of this new Brandeisian school really kind of blames the administrations in the 1990s, the White House at that point, for not prosecuting big tech then. Tech, at that point, was at a point where it could have been prosecuted and we could have prevented the incredible monopolies that we see today. But essentially, the antitrust enforcement provisions have been pretty lame, just latent and not doing their job for the past 30 years. And so I think that’s why we’re seeing this type of scary place that we’re in right now.
Jean Su:
I will say, in the electric utility sector, this is a sector that has not quite yet been touched. And in fact, that’s why SRP is actually a pivotal case for this right now. What was touched back in the day was really interesting. I have to talk about this case, because it’s a beautiful case, and it opens this all up. In 1973, there was a case called Otter Tail V. US. And John, does Otter Tail still exist in Minnesota?
John Farrell:
They sure do.
Jean Su:
Great. Okay. So I would love to know what the current state of them. But let me tell you about this 1973 case because it will give you chills in terms of the parallels of today. The importance of Otter Tail V. US is that it established the principle that no electric utilities, even if they are in a regulated monopoly, are not immune from antitrust law. So this is the key case that shows you that electric utilities can totally be liable for antitrust violations. They are not protected because they have some regulatory compact.
Jean Su:
So Otter Tail, fascinating. They are a private electric utility. And what happened back in the day is that in Minnesota and North Dakota and South Dakota, there were a bunch of small municipalities that had granted franchises to Otter Tail to be their retail electricity provider. But those franchises were in contracts that ended after 20 years. And so when the contract was about to expire, a bunch of these municipalities said, “Hey, we actually want to become our own retail electric provider. We want to create public power.” Otter Tail, in response, did incredible things to stop that from happening.
Jean Su:
So the first thing they did was say, “Nope. We’re actually not going to sell you wholesale power. So actually, you can’t even … There’s no power for you to even sell on a municipal basis.” So what the munis did is then they talked to the Bureau of Land Reclamation and asked if the Bureau of Land Reclamation could sell them wholesale power, and then Bureau of Land Reclamation said, “Yes, we can.” So then those municipalities went back to Otter Tail and said, “Hey, we actually have wholesale providers. We just need use of your transmission lines.” And Otter Tail, again, said, “No. No way. Nope. We’re not going to give you use to our transmission lines. You still have to buy from us.”
Jean Su:
And then the third thing that Otter Tail did is that they litigated these poor small towns to death. They basically did a ton of litigation that was super expensive and bankrupted these small towns from basically escaping from their monopoly power. And so the Department of Justice stepped in and represented these municipalities, and basically took Otter Tail to task and said, “Everything that you just did, those three things, are absolutely anti-competitive, and therefore they are in violation antitrust law.” And Otter Tail said, “Well, we have a regulatory compact. We’re immune.” And the Supreme Court found that that was bullocks. That was not true, that antitrust law still persisted, regardless of what the state regulatory compacts are. And that private utilities have no right to do anything anti-competitive to maintain their monopoly. So that’s a really key case.
John Farrell:
I want to just share a little follow up from this. So we were working with the City of Minneapolis a few years back, and their franchise contract, which is very similar here, was expiring with Xcel Energy, which is a private owned utility. So Minneapolis, which had a climate action plan, and it was clear that it was going to be difficult to reach the goals in that climate action plan without controlling the utility companies that were responsible for so much of the emissions said, “We’re interested in exploring our options.” And it turns out that in 1973, the Minnesota state legislature added a poison pill to the municipalization statute to say that if you did want to take over from the private utility provider, you would have to pay 10 years of lost profits to that utility provider.
Jean Su:
Oh my goodness.
John Farrell:
So Otter Tail might have lost from the federal government, but I would imagine they were responsible for getting that law passed in exchange for some other kinds of like oversight from the state regulators, but it is now virtually impossible in Minnesota. There has not been a single city that has taken over its power system from the incumbent utility since that law passed in 1973. For good reason, because unlike any other competitive market, it’s like, “Oh, I’m going to McDonald’s for lunch. And now I want to go to Burger King. But I have to pay McDonald’s for my lunch for 10 more years before I can start going to Burger King.” It’s just unbelievable.
Jean Su:
Oh my goodness. I didn’t know the second part of that story. That is so horrific.
John Farrell:
So I mean this is fascinating because I never understood how that happened. And now this story makes me think, “Oh my gosh, there is such a great connection here.” Or I shouldn’t say a great connection, but there is such a logical, intellectual connection here between why that law passed in ’73 and how it made it so much harder for cities to take over their electric systems. It’s like, “Oh, they got slapped down trying to act like a monopoly.” And so they decided to see if the state government would give them a better chance, and they sure did.
Jean Su:
Oh my gosh. That is so upsetting. Okay. There you go. Oh my goodness. Wow. Wow. Horrible.
John Farrell:
You’ve established at least though that under federal law, this utility was held accountable, and that the Supreme Court established that all of these kinds of behaviors were anti-competitive and could still be litigated under antitrust, even for a utility that was given a state-granted monopoly.
Jean Su:
Yes, absolutely.
John Farrell:
So ignoring the fact that they then just ran to the state government and potentially lobbied them to get things to make the market less competitive, let’s get back to the focus that you had there. Sorry for that little thing, but I had never heard this story about Otter Tail before. And it just makes so much sense.
Jean Su:
Yeah, it makes total sense. Great. I mean, this is a really great insight into the utility playbook. We use everything we can to maintain our monopoly. Okay, so that happened in 1973. And there wasn’t much antitrust play really in the electric utility space until now, where we’re seeing new disruptive technologies from regular household owners who really pose a competitive threat to utilities. So the Salt River Project, as I said before, Tesla settled for a really sweet deal. Then what happened a couple of months later is that a group of normal, every day, rooftop solar citizens came together and sued SRP alone.
Jean Su:
And so that is a class action. And again, John and I are amici in that case, meaning we’re friends of the court and here to offer our thoughts and arguments against SRP for violating antitrust. So it’s obviously the same fact pattern that’s being sued upon. And these are rooftop solar owner for whom rooftop solar became economically un-viable, essentially because of these rates.
Jean Su:
It basically, where it is right now is that it is in the 9th circuit. And so we’re pending a decision right now. One thing to note is that there’s questions basically about proof of antitrust injury. And we think it’s pretty clear because of basically the penalization that rooftop solar owners are getting for having rooftop solar. The other issue that is really interesting at play is the one that you were talking about, John, about this idea of states and where states are in all of this in terms of antitrust law.
Jean Su:
So there’s generally an immunity that comes with state action. It’s actually called state action immunity. And the principle is that states are somewhat immune, or like actions, essentially, that are sanctioned by states are immune from antitrust law if you can prove that there is enough state supervision, or state permission of certain actions from happening. And the SRP case is actually really wonderful. We fully briefed this issue about state action. And essentially, the district court in both cases, on both Tesla and this new class action, both found that state action immunity did not apply here. It’s because, first of all, the state … Arizona as a state did not authorize the quashing of rooftop solar.
Jean Su:
In fact, all of their laws on the books very much emphasize and encourage competition. And it encourages rooftop solar. So there is no like Arizona state of approval to quash rooftop solar. That is like totally antithetical to the overall laws that are in that state. But the second prong of that test though is a question about active state supervision. Is the state actively supervising and saying yes to SRP doing these types of actions? What we brought forward, and this argument was accepted by the court, was that the Salt River Project, even though it is public, and even though it made all these arguments about how Arizona is somewhat supervising this, they actually are very much a private corporation, and past law cases have actually like adjudicated that explicitly that they are essentially a private corporation.
Jean Su:
Their sense of democracy in their system is actually a weighted voting system where only property owners are allowed to vote in anything with SRP. And on top of that, it’s weighted by how much property you have. So renters, like normal people in the Salt River Project territory don’t have any voting rights. And if you do have a voting right, it is weighted towards those who are rich and nothing else. So it essentially is private, and therefore, that other argument that the state supervises, it fails as well.
Jean Su:
So I think that’s where the SRP case is. And this essential question of state action immunity, though, is one of the biggest barriers to pursuing antitrust violations against normal, private utilities because a lot of what they’re doing is arguably state sanctioned because utility commissions may be approving things like rate increases and things like that on top of rooftop solar. But that actually is definitely an area of flux. There are cases, also from the 1970’s, that totally challenge that idea. And test have been created to try to measure how much state action was involved, how dominant was state action or approval in the things that is inherently challenged as anti-competitive.
Jean Su:
So I don’t think that it’s foreclosed at all that private utilities are somehow immunized from antitrust by putting up a state action immunity shield. That actually has to be seen on a case by case basis where we have to prove how state action is not dominating the actual anti-competitive behavior.
John Farrell:
So I wanted to take a step back now. We’ve gone way in the weeds on antitrust, which is amazing, and connected it to so many of the other things that are happening.
Jean Su:
Sorry.
John Farrell:
No, don’t be sorry. This is what this podcast is for is kind of helping people understand that we have this really strong legal tradition in this country that has been sort of unexercised, this like unexercised muscle that helps to protect our democracy. And we need to use it some more. And we have this … I mean, we’re ina unique situation here because you think about like Amazon and the retail sector, or even the tech companies. There’s certainly a threat to democracy and to economic competition, but in the utility sector, what we have at stake really is, like you said, the motivation for you being in this, and for many of us is that we have a climate crisis.
John Farrell:
And utility companies are the center of that because it is their decisions, ostensibly approved by public regulators, that have led us into this, because it is in our utility sector, and like building heating and cooling, gas utilities, electric utilities, what have you, that are generating all this climate pollution. And so I think one of the key questions that we have to have here is like is antitrust even enough? It gets us to challenging this question about are monopolies acting in anti-competitive ways, but I guess I would maybe go even further and say to what degree is having a monopoly utility even the right market structure anymore? We created this market structure. This didn’t arise out of random behaviors. The fact that Apple is a big company, or that Amazon is a big company, it’s through negligence to some degree, right?
Jean Su:
Yes. Yes.
John Farrell:
It’s through allowing Amazon never to charge sales taxes, or it’s through the lack of exercising this antitrust legal muscle. But we pass state laws in like every state basically establishing what utilities would serve certain customers. We have the option then to change that. And I guess my question for you is what is the right approach to this? How do we address the climate crisis? How do we address our crisis of racial inequality, which obviously shows up, whether it’s in the pollution impacts of the fossil fuel system, or the cost, the economic cost of fossil fuel system. When we still have these monopolies, we talk about the work equity, for example. Let me just frame it around this. Equity is both a financial term, in terms of who has the money, as well as a term that we use to describe broadly, like how do we distribute benefits? In the utility sector, we have concentrated equity and ownership into these private monopolies. Is that even sustainable when we’re trying to address these bigger issues?
Jean Su:
So, John, I totally, 4,000%, am on the same page as you. I think that this original idea that monopolies are here to serve the public interest has completely been undermined by everything we’re seeing today. I like think about it in a framework of energy violence essentially. And I see it come out in at least three ways that our current utility sector is doing that. The first is obviously the horrific pollution that is killing and poisoning communities, especially communities of color, across this country. The second, of course, is energy burdens, which not that many people talk about yet. And it’s not even a normal issue in rate cases. And that is essentially the burden of your energy bill over your entire income, and as our friends at ACEEE have really exposed, obviously black and brown communities suffer far higher energy burdens than their white counterparts.
Jean Su:
And then the third really important part of energy violence is the impacts that low wealth communities feel from climate disasters. They are actually disproportionately in flood zones and in hot spots, all because of public housing and other redlining and inherently racist property divisions that have been made across the country. So the point of this is that our energy system is racist. There is nothing in our country that is not racist. And I think that putting those two pieces together really should make people think about how do we change our energy system to be anti-racist, because inherently it is mired in that issue and the climate emergency issue at large.
Jean Su:
And so I think I absolutely agree with you. I don’t think antitrust is enough. I think we are in a moment where we really need to question the system. The foundational principles of monopoly utilities no longer makes sense because they are not serving the public interest. John and I, we also work on utility shutoffs. And I think that is actually a really incredible and heartbreaking issue to highlight this on. Electricity is a basic human right. That is actually … And I know, oh my gosh, how can you put this as a human right? It is a human right because people die if they do not have electricity. Texas was key to showing that.
Jean Su:
But more so than Texas, during this entire COVID period, millions of families have been shut off because they could not afford it. And because of that, they did not have access to medicines that they needed. They did not have access to air conditioning that was life saving, or heat that was life saving in all of these places. And mind you, they’re in bad housing as well, that is not energy efficient and does not protect people against these forces.
Jean Su:
So given that electricity is a human right, and that it is a life and death issue, why is it that we have given private corporations the ability to govern that access? Why is it that they solely, a private corporation, whose sole interest is to reward shareholders, why are they in charge of life and death in this country? They are in charge, and that is a huge problem. So that particular area of law makes it very clear that utilities need to change, and that we need an entirely new system. I do not think that corporations whose sole mission is to generate shareholder profits is acceptable anymore for delivering a basic human right.
Jean Su:
And one of the really shocking things that we’ve seen from the financials coming out throughout COVID was that all the top 20 electric utilities increased their shareholder dividends, some as high as 17% over 2020. Every single one of those electric utilities also increased their executive compensation packages. And when we look at the average CEO compensation package to average employee salary, we have ratios that are up to 200 to 1. Right now, AES itself has a ratio of 178 to 1. That means the average employee at AES is making 1/178th of their CEO’s salary. So when you think about antitrust and this idea about guarding against the concentration of power and wealth, and really protecting democracy and everyday citizens, the utility sector has completely exemplified why it is such a problem that private corporations are the way they are in the electricity sector right now.
John Farrell:
I just want to give you one last thing to react to around this, which is I think what’s fascinating about the arc of antitrust, and to arc of the utility sector is that we have fundamentally, whether it’s in the regular economy, the broader economy with the consumer welfare standard of antitrust, or in the utility sector with public regulatory commissions in different states, we’ve essentially said that letting private companies accumulate a lot of wealth and power is okay as long as we have some public, government run oversight.
John Farrell:
And I think it’s really ironic because it’s on the one hand, the evidence, as you just laid out, suggests that it’s insufficient. So for a progressive, you would look at that and say our government is not strong enough to do this, or it has been insufficient, and we need a different path. But also, for a conservative, you should look at this and say why do we want the government to have to be even bigger, or more powerful in order to confront this when we have strategies like antitrust that allow market forces, competition, to help to reduce the market and political power of these giant entities. So I just think it’s really interesting in terms of where we’ve gotten, where we have established this system that if you said, as you’ve illustrated so vividly, does energy violence on people through this private monopoly ownership. And I don’t think folks from any section of the political spectrum could look at it and say, “Yeah, we’re getting the outcomes that we want from this.”
Jean Su:
Right, exactly. And I think the question becomes, and this is what ILSR specializes in, what does that new electricity system look like if we do want to deliver on equity and anti-racist outcomes and climate solutions. What does that exactly look like? And I think the … And I’d love to be in dialogue with you right now on this. You and I are also supporting a resolution that’s coming out next week from Cory Bush that emphasizes and encourages public power. And I think public power has … I think its greatest argument against public power is that we’re not really seeing great outcomes necessarily in current iterations of public power. But I think the question becomes we’re not looking to replicate bad models. Actually, we’re looking to create an accountable democratic system of public power that could help us achieve the outcomes that we want.
Jean Su:
And so I don’t know if the answer is necessarily the federal government takes over everything, or munis, or communities and community ownership, which is so beautifully articulated by ILSR every single week. And I think there’s different iterations of it. And I think the important part is to figure out what is it that we need out of our energy system to feel that it is working? And how do we design the systems to get us there? And I think maybe one thing that a lot of people can accept is that private corporations are not that path. But what are your views on what is our ideal system?
John Farrell:
That seems to be the topic for an entirely different podcast.
Jean Su:
Yes.
John Farrell:
I’d love to have that conversation, but I think ultimately, to take us back to that analogy I provided earlier about the roads, that the problem really is that the way that we’ve set up the market structure is that it’s currently a privatized system, and we could make it a commons. We could still have lots of private companies generating electricity, coming up with clever services, aggregating customers like OhmConnect does, building power plants that are big, or building small power plants on homes and businesses. But the problem is that the system upon which we build all that is not a commons, which is really different from most of the rest of the way that our markets work.
John Farrell:
On the internet, I can go and find anybody and buy something. I have choices in the grocery stores that I go to and the kinds of brands of butter that I buy. And none of those distributions systems is controlled all by one single entity that has a perverse and self-interest in doing it in a particular way. So I don’t know, I think antitrust, as you’ve outlined here, could be a really important tool to get us there. But I think that ultimately, the problem is that we have these companies who are controlling the way that the system operates, not just running a business.
Jean Su:
Yeah, absolutely. And I think also these kind of seemingly like God-given monopolies actually is very anti-capitalist spirit in the American spirit itself. These franchises are granted for 100 years. They’ve been there for 120 years. So we actually don’t have corporations that are competing on merit. There’s actually like no good competitor to actually get them into good shape. So I actually think it’s super ironic that essentially I think these God-given monopolies actually are very anti-capitalist in the way that America likes to compete. So yeah, they’re not winning because of merit. They’re winning and they’re lazy. And they got there because we gave them a territory to rule over.
John Farrell:
For sure. Well, jean, thank you so much for joining me to talk about the role of antitrust in the energy sector, and thank you for your work standing up for more competitive markets and a more just and equitable energy system. Really appreciate you taking the time.
Jean Su:
Great. And thank you, John. And I will say one thing that my team wanted me to tell you and relay to you is that our team actually, we birthed ourselves, our energy justice team at the Center, about a year and a half ago. And in our strategy planning, one of our main missions was literally, quote, to be more like John Farrell, and to just be a voice of justice and firmness in this space. And we really deeply appreciate your work on everything you’re doing every day. So thank you.
John Farrell:
Well, thank you so much. I really appreciate it. And the feeling is mutual. It’s been great to partner with you on so much of this work. So thanks again, Jean.
Jean Su:
Thank you, John.
Jess Del Fiacco:
Thank you for tuning in to this episode of the Building Local Power podcast from the Institute for Local Self-Reliance. You can find links to what we discussed today by going to ILSR.org and clicking on the show page for this episode. That’s ILSR.org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. We hope you’ll also take the opportunity to help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website. Finally, we’d ask that you let us know how we’re doing with a rating or review on Apple Podcasts, or wherever you find your podcasts. This show is produced by me, Jess Del Fiacco, and edited by Drew Birschbach. Our theme music is Funk Interlude by [Dysfunctionalle 00:49:04]. For the Institute for Local Self-Reliance, I’m Jess Del Fiacco, and I hope you’ll join us again in two weeks for the next episode of Building Local Power.

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50 min
May 13, 2021A Make or Break Moment for Local Solutions
In this episode of Building Local Power, host Jess Del Fiacco is joined by Maren Machles, Senior Researcher and Multimedia Producer for ILSR’s Community Broadband initiative; Ron Knox, Senior Researcher for ILSR’s Independent Business initiative; and Neil Seldman, Director of ILSR’s Waste to Wealth initiative. They discuss recent news as it relates to each of their programs, and how upcoming policy decisions could have major ramifications on local-level solutions.
Highlights include:
How local efforts in Franklin County, Ohio to close the digital divide could be used as a model by other communities.
The ongoing debate around Extended Producer Responsibility in recycling legislation, and why we must localize recycling and reuse programs in order to make real progress.
Lina Khan’s nomination to the Federal Trade Commission and what it means for the future of that federal antitrust enforcement.
What we can expect from antitrust bills that will be introduced by Congressman David Cicilline, Chair of the House Judiciary’s Antitrust Subcommittee.

“The American public and businesses, and governments, are in the middle between one set of monopolies that produces everything we eat and use, et cetera, and on the other side is a big set of monopolies that takes the stuff away and we pay both times. So, as we all know, the Institute is fighting the monopolies on both ends of the scale.”

“It feels like a precipice; things could go well or things could not go well, so we’ll see what happens. But the two questions that were really on the mind of antitrust and anti-monopoly folks going into the new year and going into the new administration was, one, who would the Biden administration appoint to lead the antitrust agencies… And then what legislation was going to get introduced in the house and the senate to amend, strengthen, reinforce the antitrust laws… We have a little bit of clarity now I think, on both of those points.”

Related Resources
Liberty from All Masters by Barry Lynn
Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age by Amy Klobuchar
Small Business Rising
MuniNetworks.org
Letter to Biden-Harris Administration: Recycling is Infrastructure Too
Commentary: Cities and Counties Need Recycling Infrastructure Investment, But Is The “Breaking Free From Plastic” Bill The Answer?
Department of Resource Recovery in Austin, Texas

Transcript
Jessica Del Fia…:
Hello and welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and communications manager here at the Institute for Local Self-Reliance. For more than 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. So today, if you remember a few months ago, we did a prediction episode where we were looking at what might come in 2021 for federal policy and local policy, as it relates to our different program areas and antitrust in general. So I am joined by a few of my colleagues, Maren, who works on our Broadband team, Ron, who works on our Independent Business team and Neil who works on our Waste Wealth team. We’re all going to share what they’ve seen happening so far this year, and any changes that they see coming down the line. So with that, welcome everybody.
Neil Seldman:
Thank you. Nice to be here.
Ron Knox:
Hey Jess, thanks.
Jessica Del Fia…:
And Marin, maybe you can start us off by just giving us a brief overview of what’s happening with broadband right now at the federal level. Biden’s been talking about it a lot, so what’s happening?
Maren Machles:
Yeah. There’s a lot going on. There’s a lot of money currently that’s being talked about being invested in broadband, especially community networks across the country. The one thing that I think our team and a number of other people in this space are trying to stress is that, the conversation generally around broadband access tends to be more focused in rural areas, but there’s a huge need in urban areas. Maybe not as much with access, but actually affordability; if something’s there, but you can’t afford it, it’s still not accessible. So really trying to address that. And I think that’s what we’re trying to work on right now.
Jessica Del Fia…:
Do you see that present in conversations that are already happening in the policy world, or is that something that we’re trying to push into those conversations?
Maren Machles:
I mean, I’m not as much of an expert about what’s happening nationally, but I would say that in general, cities are trying to express what they need to feed legislators and federally, I think that there is an interest in talking about it, but the conversation always goes back to who doesn’t have appropriate broadband? So I think it’s trying to balance those two things, because there is still need in rural areas, and there’s still need in smaller towns that maybe actually have broadband, but they’re not getting the service that the incumbents are advertising.
Jessica Del Fia…:
Yeah. And I’m sure, I mean, the last year obviously made that more clear for everyone, if it’s not good enough, it’s not good enough. I know you’ve been tracking what’s happening in a county in Ohio, which is some really interesting stuff. And I’m sure you’ve seen things happening other places where cities have in the last year just been like, “We’re fed up, we’re going to do something about it,” and now they have a chance to get a little bit more funding. Could you talk about what’s happening in Ohio and maybe any other stories you want to lift up?
Maren Machles:
Yeah. I mean, I think what’s happening in Ohio is particularly really interesting. So Franklin County, which is in central Ohio, and is the county that Columbus sits in, which is the capital of the state, has put together, basically this digital equity coalition where they’ve come up with a number of different pilot programs to get broadband access to different communities in the county through a variety of different ways. But the one that’s really interesting to me, and I think is this newer model, is these two pilot programs that they’re trying to do in Columbus. And they are actually in two neighborhoods that have been historically redlined. And they’ve had the impacts of the Highway Act back in the 60s and a number of different economic waves of oppression to be honest, that have led to broadband being inaccessible to them and not affordable.
Maren Machles:
So the two programs actually are pilot programs to potentially scale up and be something that could go throughout the county, and even, an example for other cities across the country. And it’s $15 a month for, I think it’s 50 symmetrical, I’m not totally sure. But $15 a month, that is doable. I think a lot of people would assume that $50 a month, that’s a standard price for internet access, but a lot of families can’t afford to do that, especially when there’s an option to just use mobile devices. But mobile devices don’t work for homework, for working remotely, so this is actually a chance for people especially during the pandemic, to be able to access distance learning, and access working remotely.
Jessica Del Fia…:
And it’s not at the lowest possible tier of service too, right? We’re not talking about, maybe you can join a video call if no one else is in your household, right? This is actually functional and usable for the everyday things you need to do with it.
Maren Machles:
Exactly, multiple users in the same household can do things at the same time. So families can do this. And what’s really interesting about this program is that they actually overlaid Columbus Public School data with where the city already had its own fiber network, and the public school maps showed the students who weren’t logging on to classes as often. So they’re actually trying to access the students that don’t have access. They’re trying to reach the students that don’t have access and give them internet service. And so that means that they’re families. So these are people that live in households with multiple people using devices, and have multiple needs.
Jessica Del Fia…:
So I’m just curious, because I assume this is a model that other communities could learn from and use themselves, but is there any particular ingredients that made it happen here? Was it just especially passionate community leaders or electeds who were listening and willing to put money behind it, what got it off the ground?
Maren Machles:
So there have been different stakeholders in Ohio that have been interested in trying to address this issue for a while, but many communities that we’ve been reporting on or we’ve been covering, the pandemic had a huge role in pushing things off the ground a little bit more. But the thing that made them successful was that the Mid-Ohio Regional Planning Commission, which ended up being a co-chair for the coalition, had already started making all of these connections and networking with other people that were trying to be focused on digital equity in Ohio and in the region in the county. And so when the pandemic hit, they were able to really create this coalition within a matter of months to act and come up with ideas for how to solve this distributing hotspots and distributing Chromebooks. Come up with all of these different ways to make sure not only that people could access the internet, but that they had digital literacy. And so I think they have 30 different organizations that are in this coalition and they’re all helping with different aspects of it, really is what makes it as strong as it is.
Jessica Del Fia…:
Very cool. So it sounds like a lot of exciting things are happening in the broadband space right now.
Maren Machles:
Yeah. It’s crazy.
Jessica Del Fia…:
Thanks. We’re going to go on to Neil, and I know Neil things are a little bit more complicated policy-wise for you right now. So what I wanted to start with was asking you about the Break Free From Plastic Pollution Act, and what’s good about it, and then what are your concerns with this particular piece of policy?
Neil Seldman:
Let me start by saying how Marin started, that is, a lot of money is at stake here at the federal level. And things are coming to a head as to how this money is going to be spent. I want to mention that the Institute along with several allies, including Zero Waste USA and the National Recycling Coalition have put together a sign-on letter to the administration entitled Recycling is Infrastructure Too, T-O-O, in which we are making the point that the dollars should be set aside for solid waste recycling composting infrastructure. And there are several bills that have a good deal of potential investment in infrastructure; there’s a jobs bill, an infrastructure bill, even the clean seas bill has aspects dealing with solid waste management.
Neil Seldman:
Now, to get back to the breaking free from plastic bill, it’s very controversial. In some ways the bill would undermine the last 50 years of grassroots recycling because it would turn over the recycling system, the entire industry to the big players, mostly the big soda companies; Pepsi Coke, and also Nestle’s, the water company, as well as the Fortune 500 packaging companies. And their argument is that recycling has failed, cities don’t know what to do, if they did know what to do, they didn’t have the money to do it. And the only way to salvation is to give us everything, and we’ll take care of everything for you. It reminds me of my history class, Ben Franklin, “Anyone who exchanges freedom for security deserves either one of them.” And I think that’s what we’re seeing, where the grassroots movement has moved the country to 35% recycling up until the turn of the century in the 2000s or so.
Neil Seldman:
Then the big waste systems took over and we’d stagnated at 35% ever since. We took a dip to 32% in 2019, mainly because the big waste would not listen to China. China kept telling them that they’re going to stop taking their stuff because it’s so contaminated from their single stream processing, and they said that in 2013. By 2018, they said, “We’re serious,” and they cut off American imports which led to a very big decline in recycling. It’s funny because that bill that threatens the last 50 years of grassroots organizing is also a bill that has the necessary ingredients to pick up where we left off in the year 2000. In fact, I just completed an article, which I’ll forward to everyone, in which I list out the sources of revenue to move from 35% recycling to 70% recycling, and the new rules that need to be implemented to shore up the decision-making at the local level.
Neil Seldman:
And the irony is that the breaking free from plastic bill which threatens to turn everything over to the industry, also has clauses that are very acceptable to grassroots recycling, and that is, tax the companies but the money doesn’t stay with them, the money goes to cities and counties where citizens and local government have determined how to do the recycling and economic development. In other words, extended producer responsibility is a polluter-pays system, whereas big industry is trying to turn it into a polluter-controlled system. And that’s the battle. And it’s a basic democratic issue because, we have recycling today because grassroots people organized very effectively, started their own recycling systems, and then when they got big enough, petitioned cities to take over, which they did. But as I said around the year 2000, they fell victim to the big companies and changed their systems.
Neil Seldman:
The key items that we would like to see survive in the breaking free from plastic bill, there’s a moratorium on virgin plastic manufacturing. There’s a national bottle bill, well, there’s a danger there because there are privatized bottle bills that favor industry, and there are government bottle bills that favor inclusiveness. But there were other technical things; minimum content, banning of single use plastics, et cetera. But the best parts of the bill, is that it recognizes that environmental justice and racial justice are a core policy determinant, and that policies have to take into account those incredibly important issues in order to move forward. And in fact, we say at the Institute, as well as many other groups in this field, that if you don’t have environmental and racial justice, you can never achieve zero waste, which is our ultimate goal. We define zero waste as diverting 90% or more from the current waste stream into useful materials, products, et cetera, compost, as well.
Neil Seldman:
As is always, it’s the best of times and the worst of times for recyclers, we’re on a precipice of moving forward, we’re also on a precipice of falling back. So it’s fascinating times. The Institute is working with a whole number of groups across the country to get our point across. The country is being subjected to a very sophisticated and well-financed lobbying campaign on behalf of the big corporations. Oddly enough, there are many environmental organizations that are going along with them, which makes the debate both interesting and more than interesting, it’s a flection point on recycling in the United States. I’ll end the segment by pointing out that I will forward an article with a detailed graphic that institute staff has been helping me with, it shows both the history up until 2021, and then our projections through 2050 on what would happen if the investment we’ve just been talking about is made in the proper manner.
Jessica Del Fia…:
All right. We’ll definitely link to that in the show notes for this episode. I don’t know, this might be too big of a question, but I’m wondering, why exactly the big waste monopolies are such an attractive option for other environmental groups. I mean, is it this perception that cities don’t want to deal with recycling, or that the local scale solutions aren’t as efficient. What is it? Or is it just that they’re there and they have powerful lobbyists, those people are like, “Well, sounds good.”
Neil Seldman:
This gets very complicated because the big waste companies are not for EPR. And that’s because EPR would require a whole new set of organizations, negotiations, contracts with the Fortune 500 big soda companies. Big waste controls the system, they don’t want to see any change. They love what’s going on, and they look at their stock prices, they’re soaring, the world is made for them. It’s nice to be a monopolist in the US economy. So they like what’s going on, they don’t mind extended producer responsibility for hard to recycle materials, mattresses, batteries, mercury switches, et cetera, but when it comes to the traditional recyclables, big waste does not want anyone to touch the system. So that’s another dynamic, if you will. The American public and businesses, and governments, are in the middle between one set of monopolies that produces everything we eat and use, et cetera, and on the other side is a big set of monopolies that takes the stuff away and we pay both times. So, as we all know, the Institute is fighting the monopolies on both ends of the scale.
Neil Seldman:
It is complicated. And in fact, it’s strange to have the Institute and the big waste companies agreeing on what to do, but in fact, believe it or not, these monopolies complain about other monopolies. I mean, this is Kafkaesque and phantasmagoric if you want to go back to an old word from the 1800s. The bottom line is that everything is up in the air now, I just heard an optimistic analysis from one of our close allies, Ruth Abbe, from Zero Waste USA who pointed out that the positive outcome would be that the breaking free from plastic bill does not go anywhere in this congress, which is very possible given the confusion at the congress. And that the better parts of the bill will be broken out and added to other good bills, like the jobs bill, the infrastructure bill, et cetera, and that the grassroots recyclers and local governments will get the steady flow of revenue that they need from a municipal reimbursement. But we will retain the right to vote to determine how you recycle at the local level, which has carried recycling, as I said, for the past 50 years. It’s interesting times in the recycling sector, within the interesting times of what’s going on in the national economy and the national politics, which is unprecedented for all of us, no one’s ever gone through this before.
Jessica Del Fia…:
We’ll continue on with this conversation in just a minute, but first we’re going to take a short break. Thank you for listening to Building Local Power. If you’re enjoying this conversation, I hope we you’ll consider heading over to archive.ilsr.org/donate to help support our work. Any donation you make there directly supports this podcast, and it makes possible the amazing work happening thanks to folks like Neil, Ron, and Marin throughout our programs. You can visit archive.ilsr.org/donate to make a contribution today. Any amount is sincerely appreciated. Yeah. So it does feel, I think the theme of this conversation is that we are on a bit of a precipice, could go either way. Now we can turn to Ron who has a long list of news from the anti-monopoly world I’m sure that he could share, that all fits within that. So Ron, I don’t know what you want to start with, maybe talking about Lina Khan’s recent nomination?
Ron Knox:
Yeah, that sounds great. And yes, I mean, I completely agree that as we get into the new administration, and things begin to change one way or the other, it feels like a precipice; things could go well or things could not go well, so we’ll see what happens. But the two questions that were really on the mind of antitrust and anti-monopoly folks going into the new year and going into the new administration was, one, who would the Biden administration appoint to lead the antitrust agencies, that’s the Federal Trade Commission and the Department of Justice. And then what legislation was going to get introduced in the house and the senate to amend, strengthen, reinforce the antitrust laws, what that legislation was going to look like, and ultimately what would it accomplish? So those were the big questions. We have a little bit of clarity now I think, on both of those points, not complete clarity, but a little bit. The main thing is we know now that the Biden administration has nominated Lina Khan to become a commissioner on the FTC. She had her confirmation hearing before the Senate Commerce Committee, ILSR supported Lina’s nomination, and we continue to support her confirmation process by the senate. And we do expect that’s ultimately going to happen.
Ron Knox:
Lina’s nomination and ultimately her confirmation to the FTC is a crucial step really towards rebuilding that agency, towards rebuilding the FTC. It’s an agency with unbelievable power to really reign in monopolies across the economy, to create a more equitable economy, to deconcentrate markets. It’s never quite lived up to that potential for various reasons, right? The closest it got was in the 1970s, when it brought a bunch of really interesting cases that would have, for example, broken up the three or four big cereal companies, that would have broken up the oil companies that collectively dominate the market. But all that was washed away by the Carter administration, ultimately the Reagan administration, as they embarked on this neo-liberal program, embraced the consumer welfare standard, as we say, in the anti-trust world, and so on.
Ron Knox:
So Lina’s nomination to the FTC is huge because it really signals that we are finally going to put that air behind us. And we’re going to now re-embrace our really vibrant anti-monopoly history and traditions, and we’re going to actually enforce the laws. So you watch her hearing and you see a few things, a few things were made extraordinarily clear, at least to me. One, her expertise, right? So there have been a few critiques of her experience, right? She would be the youngest FTC commissioner in history, okay? So you hear from pro-monopoly folks, from corporate lawyers, they say, “She’s too young, she’s too inexperienced.” Here’s the reality, here’s her actual resume, right? She’s a Columbia University law professor. She’s a former commission official, worked in the office of current Commissioner Rohit Chopra. She was counseled to the antitrust house subcommittee, the subcommittee that did the big tech investigation and released the report in the fall last year. She was the driving force behind that really blockbuster report that exposed the monopoly abuses of all the big tech companies. And she’s the author of arguably the most important antitrust paper in the last half century or more. Okay. So she’s important, and she’s more than qualified for this.
Ron Knox:
So then during her hearing, you could also see her vision for what the agency should be, and what it could do. So her nuanced understanding of both the issues that affect the economy right now, the monopoly power that courses through the economy and that distorts our markets, and the FTC’s authority to combat those issues, she made all of that really, really clear. The other thing I want to point out real quickly about the hearing, is how there was this really incredible moment in the hearing where a Republican senator asked her about a concurrent ruling written by supreme court Justice Clarence Thomas. Who I think by some objective standard, is the most conservative Justice on the court. And Clarence Thomas was writing about social media companies, and about whether our big social media monopolies should be governed by common carrier rules. So that there’s no discrimination, they can’t discriminate against… It was nominally about speech, but there was a really interesting quote from Clarence Thomas and it said, “We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure, such as digital platforms.”
Ron Knox:
That’s a huge quote, and it’s, again, the most conservative justice on the court. Lina Khan gets asked about this and she agrees. She says, “I think that’s probably right. I think that’s part of the suite of things that we’re going to have to use in order to reign in the monopoly power of the big tech companies.” It’s just this incredible moment of bipartisanship and the way that these monopoly issues and the monopoly power in our economy really cuts through politics, and it gets to the core of the democracy, and what we want the country and the economy to look like. So anyway, very, very interesting moment in there, so we’re excited about Lina Khan. And we’re supporting her confirmation, which we think is going to happen. Real quick legislation update, there are bills now that have been introduced in the senate. I want to talk about a couple, there are more than two, but I think two are interesting. One was introduced by Senator Amy Klobuchar, the other introduced by Senator Josh Hawley. And they’re different, and the differences are interesting, at least they’re interesting to me.
Ron Knox:
So Amy Klobuchar’s bill, what does it do? It’s a huge bill. It’s the kind of sweeping, I don’t want to use the term omnibus because there’s some stuff it doesn’t quite cover, but it’s a sweeping bill, certainly. And one of the main things it does is to change the language of our antitrust laws surrounding mergers. And when and why we, we as in the people, should permit mergers to happen when they risk harm to competition. So right now the statutory language says that a merger should be blocked if it’s substantially lessens competition. Okay. So for the past half century, judges have used that language to justify an incredibly high bar for the government or for other plaintiffs to prove that a merger should be blocked because it could harm competition, because it can harm the market. And that’s obviously been bad, I’m sure the listeners of this podcast understand, but there are highly concentrated markets all over the economy and they’re very bad and there are bad outcomes, okay, and a lot of it has to do with these mergers. Her bill would change the language to say, “An appreciable risk.” So a merger could be stopped if there was an appreciable risk that it would harm competition, or that it would substantially lessen competition.
Jessica Del Fia…:
So that difference there, okay, it’s just that tiny, it’ll do much harm versus some harm, right?
Ron Knox:
Well, it’s like, you don’t have to prove that it’s going to harm, because how can you prove a future thing? I mean, that’s where the hang up has been. You don’t have to prove the harm, you just have to show that there is an appreciable risk that that harm can happen. Okay. So that language is supposed to be a big waving red flag to judges to say like, “You cannot permit these merge. If there’s a chance that it’s going to harm competition. You’ve just got to say no, and you have to rule in favor of the plaintiffs in this case.” So it’s interesting, but that’s not structural and it’s not bright lined, you’re still leaving it up to judges to figure this out. And as we know, judges and federal courts across the country, have by in large bought into the consumer welfare standard. And so it’s interesting.
Ron Knox:
The other thing it would do which is really interesting, is that it would shift the burden of proof for mergers. So any buyer in a merger, so you have an acquirer and the acquired company. So the acquiring company, if it’s worth more than $100 billion, that’s like market cap, it would have to prove that the merger is pro-competitive rather than what happens now, which is that the government or the plaintiff has to prove that the deal would hurt competition. So it’s this shift in these scales, this tilting of the scales where it puts all of the burden on the merging companies to show that this is going to be okay. Again, it leaves the ultimate decisions about these things in the hands of judges, but it changes things.
Ron Knox:
Josh Hawley’s bill, let’s move on to that, it’s called Trust-Busting for the Twenty-First Century. It’s also, not omnibus, but it’s a big, robust bill. And it treats these issues a little bit differently. So rather than shifting the burden of proof in a merger case onto the companies, it just says you can’t do it. So it would put in place an outright ban on any merger in which the acquiring company, the buyer has a market cap of more than $100 billion. And we’re talking about more or less the 150 biggest companies in the S&P 500. Certainly, it includes all the tech companies that are right at the top of that list. That’s a structural bright line, you cannot do this no longer, you can’t buy a candy bar without filing with the government and the government now, according to the law just says, “No.”
Neil Seldman:
Can I ask a question?
Ron Knox:
Yeah.
Neil Seldman:
I could wait if you want to keep going but-
Ron Knox:
No, go on.
Neil Seldman:
This guy Hawley is a Conservative, right?
Ron Knox:
Yeah.
Neil Seldman:
Yeah. Okay. I know I’m on his-
Ron Knox:
He is a Conservative, he’s extraordinarily controversial for good reason. And I don’t want to go too far down-
Neil Seldman:
I don’t want to talk about that at all but-
Ron Knox:
Yeah, I don’t want to go deeper down there, but it does bring into question the likelihood that his bill goes anywhere.
Neil Seldman:
Yeah. My point is that it seems as if the Conservative bill, Hawley, is more radical or more forceful than the other bill which I presume comes from a Democrat, is that a correct takeaway from this?
Ron Knox:
Yeah. I mean, I think that’s correct. Hawley’s bill does taken in a silo without all of the baggage associated with Josh Hawley attached to it. It is a forceful bill, it is very forceful. And it would create what I think, a lot of judges will have to have in order to reinvigorate an antitrust enforcement, which is bright line clear rules.
Neil Seldman:
Very helpful.
Ron Knox:
Yeah, no problem. So it leaves a lot out, there are lots of big names that don’t fall into that 100 billion dollar cap threshold; GlaxoSmithKline, Uber, General Motors. All these companies would still have their day in court so to speak, to get mergers done, but it creates this bright line rule. The other interesting thing it does is for any company found guilty of breaking the monopoly laws, the actual clause’s section two of the Sherman Antitrust Act, which is the one that governs monopoly conduct, any company found guilty of that would be forced to disgorge all of its profits that stemmed from the violation, right? I mean, look, let’s say that Google is found to have broken the law, because it’s being sued right now for breaking a monopoly law. And let’s say it’s found to have broken the law, and let’s say it’s violation stemmed from self-preferencing in its core search product. The bar that we put words into every single day, and everyone does all over the world, and it’s like the money printer for Google, and you have to disgorge those profits? What are we talking about? I mean, what’s the number that could be attached to that. So I don’t know the answer, but someone with a really big calculator is going to have to figure that thing out, you know what I mean?
Ron Knox:
So it’s very, very interesting. I don’t know that that bill will go anywhere, but I think that the actual material of the bill, the stuff that’s included in it, is fascinating and really, really good to think about. And to think about, not only, the way that it could help with law enforcement, but the way that it could potentially help dissuade companies from breaking the law in the first place, because you wouldn’t want to have to go through that. Just a little bit of a future spin, the thing we’re looking for now are bills on the house side. And we know that Congressman David Cicilline, who is the chair of the House Judiciary’s Antitrust Subcommittee, is planning to introduce several bills. I don’t know how many, but several bills that would each individually amend various parts of the antitrust laws pertaining to mergers, to dominant behavior, to big tech platforms, and so on.
Ron Knox:
We’re expecting those anytime now. It’s going to be a flurry, they’re going to be introduced one after the other. And it’ll be fascinating to see what those contain, where they go, and how those end up dovetailing with what’s going on. on the senate side to hopefully get to the place where there’s some legislation that can actually be passed and reach the president’s desk. So we’re all waiting. And also we don’t know who is going to be the other… There’s one more opening on the Federal Trade Commission, we don’t know who that’s going to be yet. And we don’t know who’s going to be in charge of antitrust enforcement over at the Department of Justice, so plenty of stuff remaining to be seen.
Jessica Del Fia…:
So do you have any… I mean, I know you don’t know what will be in the bills, but do you have any thoughts on particular things they might contain just based on what was in the findings in their report, or conversations that have been happening?
Neil Seldman:
Yeah, really good question. So the Big Tech antitrust report that came out in October last year, 450 page major report, contained a lot of recommendations for how the law could be changed or what should happen basically to reign in the monopoly power, both of those companies and then, I think, in general in the economy. One of the main recommendations in that report was structural separation to end conflicts of interest among the Big Tech companies. So the big example of that is Amazon, right? And the idea is that Amazon controls the monopoly online retail marketplace, where small businesses are forced to go in order to reach customers, they have to sell there. But then Amazon is also a retailer itself, it sells its own products. So it built the playing field, it wrote the rule book, and then it also plays the game, and that’s not fair. There’s some inherent conflicts of interest there. So the idea is that if you separate the company along those business lines, that you’re going to ultimately solve the problem without a bunch of regulation, without a lot of government monitoring or things like that.
Neil Seldman:
So that was the big recommendation in the report. I think you could easily see that kind of thing included in one of these bills. There were other recommendations around this idea of abuse of dominance, which would essentially broaden the anti-monopoly statute to include other kinds of behavior. And to set, again, some bright line threshold limits on market power and on market share of certain markets, you could certainly see something around there. And then I would imagine bills that would match or in some ways mirror what’s already been introduced in the senate, including structural limits on some kinds of mergers and so on.
Jessica Del Fia…:
Also exciting stuff. Thank you. I’m really curious to see what our conversation might look like if we do another one of these episodes in three months or six months, since all these things are kind of like, lots of things are happening, what direction will they go? I think we are running out of time, but I did want to ask you guys, well, first of all, is there anything else that anyone else wants to say that you wanted to fit into this conversation?
Neil Seldman:
I want to thank you for doing this because I like the idea that three different programs are basically addressing the same issue. Oddly enough, we are coming to the same conclusion in each of our fields, it’s going to be touch and go for the next six months or so, probably longer than that. So my response is, thank you for doing this.
Jessica Del Fia…:
Of course. And then my last question was, do any of you have any reading recommendations for our listeners?
Neil Seldman:
Yeah. Very briefly I would recommend that the institute Zero Waste USA-NRC infrastructure letter to President Biden. It’s a good summary of what we’re asking for, and I would recommend that, and it’s only two pages so it shouldn’t burden people.
Ron Knox:
I’ll give some, first of all, reading recommendations. I’m currently reading Barry Lynn’s new book. Barry Lynn is the, I believe executive director is the title, over at Open Markets Institute. And his book is called Liberty from All Masters, which sounds like the name of a heavy metal album, but it is instead the name of an extremely good book that I’m enjoying very much. And then I know our listeners can’t see this, we’re on a zoom call, I’m just going to hold it up so everyone on the call can see it. I’ve got Amy Klobuchar’s new book in my hands, it’s called, Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age. And I’ve cracked that open already and it’s very good and quite the accomplishment for Senator Klobuchar, really, really nice. The other thing I’ll tell people to do, if you’re listening, you’re a small business owner and you’re not already involved in Small Business Rising, you should do so because we’re fighting for small businesses and independent businesses. And we’re fighting to democratize the economy and break monopoly power. Go to smallbusinessrising.net, N-E-T, that’s the website and sign up, and get our email blasts, and get involved.
Jessica Del Fia…:
Thanks. Marin?
Maren Machles:
I would do another plug for one of our things as well. I would say, please visit muninetworks.org. And it’s there that we’re documenting all of the different networks that have been popping up throughout the pandemic. If you’re a community that is considering trying to build your own network, we have documented basically everything. And so there’s lots of stories for you to check out and people to get in contact with. So I would definitely say that’s the place to go, if you want to read about this.
Neil Seldman:
Jess, I’m going to add two items. One, is a shout out to the Department of Resource Recovery in Austin, Texas, they’ve been coming up with dynamite reports. One is called Wealth in the Walls, it’s about the economic development potential of building deconstruction. And the other is a report on their 10 year investment into zero waste projects. I’ll get you the sites for both reports. But the second report documents over a billion dollars worth of economic payback and 6,000 new jobs, so these are the dynamite reports that people will benefit from. There were also sample ordinances that of course people can use in their campaigns. And finally a shout out to our own Brenda Platt and Sophia and Linda, and their compost work, which is remarkable. And composting is critical for breaking up monopolies because it takes away one third of the waste that these companies would handle. And their page is archive.ilsr.org/compost, and you’ll get the latest and greatest on what’s going on in that subfield.
Jessica Del Fia…:
All right. Thanks everybody. This was a great conversation.
Neil Seldman:
Thank you.
Maren Machles:
Thank you Jess.
Ron Knox:
Bye everybody.
Jessica Del Fia…:
Thank you for tuning into this episode of the Building Local Power podcast from the Institute for Local Self-Reliance. You can find links to what we’ve discussed today by going to archive.ilsr.org and clicking on the show page for this episode, that’s archive.ilsr.org. You heard Ron mention smallbusinessrising.net, you should check that one out too, especially if you’re a small business owner. And Marin talked about muninetworks.org, where you can find all of our research and reporting on community broadband solutions. You can also sign up for one of our many newsletters, and connect with us on social media. And hope you’ll also take the opportunity to help us out with the gift that helps produce this very podcast, and supports the research and resources we make available for free on our website. Finally, we ask you let us know how we’re doing with a rating or review on Apple podcasts or wherever you find your podcasts. This show is produced by me, Jess Del Fiacco, and edited by Drew Birschbach. Our theme music is Funk Interlude by Dysfunction_AL. For the Institute for Local Self-Reliance, I’m Jess Del Fiacco, and I hope you’ll join us again in two weeks for the next episode of Building Local Power.

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41 min

About Building Local Power

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Building Local Power brings you thought-provoking stories and new ideas for breaking the hold of corporate monopolies and expanding the power of communities to chart their own futures. We deliver insights from trailblazing lawmakers, scholars, business leaders, and advocates. Plus, conversations with in-house experts at the Institute for Local Self-Reliance help reveal the patterns and policies that shape our economy and communities. These stories and conversations help map solutions that distribute power to everyday people.