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Companies, Government and Community Fiber Rollouts
hype7 writes "Wired is running an interesting article about a number of communities which are dissatisfied with the present communications infrastructure that they are being offered, and are deciding to do something about it. However, many of the corporates who had previously been offering services to these communities have resisted this, with Pennsylvania going so far as to draft law to prevent competition for the communications providers. What is most interesting is that in the communities where the roll outs have taken place, the incumbent providers have "dropped prices to be more competitive ... while not changing rates in areas where it continues to have a monopoly". What I don't understand is why can't a public utilities company provide a public utility if their rate payers want it? What's wrong with additional competition? And why should legislative bodies protect telecommunications monopolies?"
for granting Congress the power to legislate trade between the States. That little crack has widened to an enormous breach, to the point where these days, in America, the Soviet Russia jokes troll you. As the Oracle said in the Matrix "What do all men with power want? More power." As long as State and Federal legislatures exist, they will continue to pass laws. They're never "done". So of course they'll step up and slap down communities for doing this, its legally their perogative, and this is what they DO, they make laws. Not to mention the fact that they're probably all in the pockets of the telecom companies (Valenti, anyone?)
I want to delete my account but Slashdot doesn't allow it.
"What's wrong with additional competition? And why should legislative bodies protect telecommunications monopolies?" Because additional competition means less profit for the existing monopolies. Because telecommunication monopolies protect legislative bodies when it comes to election funds. It may sound like paranoi, but it's also the real world.
They care about the consumer. As long as the consumer is willing to put money into their pockets they can continue to provide the lowest denominator of service.
People are willing to pay Comcast $100+/mo for Internet and Cable (and sometimes telephone). It's probably not worth that much but people say "hey, look, it's a good deal." completely unaware that there could/should be better offers available.
Monopolies and how we are affected by them go unnoticed by most of the public. Look at ClearChannel. They are fucking everywhere. Billboards, radio, football... Do people know? No. You know why? Because they don't care.
Until people start caring things won't change much. I have a feel people will never start caring (as monopolies control the medium in which we get informed).
You don't want 50 seperate startup companies all laying their own custom fiber or coax networks through your city redundantly, when you know that when it all shakes out, at best 3 will survive. Because physical infrastructure is involved, typically communities award a contract to a single player, who will provide said infrastructure - and they tend to keep that contract going because of the infrastructure (there would be financial issues switching to a new provider and possibly having to pay for them to buy the old infrastructure from the previous company).
The government's answer to these competitive problems to date in the electric and telecomm markets is to enforce a really stupid form of competition, and require incumbent telcos and power providers to share their physical network with startups (where "share" means basically resell). So now You can choose Traditional Company A, or one of A's 50 crappy resellers who have no physical infrastructure of their own.
The Right Thing, IMHO, is that municipalities (or states, or whatever) should be putting out bids and taking contracts to build physical cabling infrastructure of various types for the area, and also contracts (perhaps from the same provider, but not neccesarily) to maintain said cabling infrastructure. The cabling infrastructure is then owned by the municipality itself, and it terminates at certain wire-centers where competitive providers can hook in with their own real equipment (much like internet NAPs in some ways - a shared facility where people co-loc edge equipment).
11*43+456^2
Local governments shouldn't be allowed to compete for local telecom services because they have an unfair advantage in the ability to acquire capital. They just tax you! Cities that claim that they can provide services cheaper than a nationwide telecom are playing a shell game with their funding.
They most often have no clue what it really takes to provide services. They are sold on an idea, they implement it, they realize it is going to cost more than they thought, they subsidize the project, you get the service a rock bottom price, and later your taxes go up because the city is running short on cash.
What has this accomplished? You raised taxes for everyone, even those that don't what the service, you put a legitimate company out of business in you area, and as technology progresses you are left behind because no one will want to serve your area after you the way your city treated the last competitor.
You also mention that the local telecom providers lower rates once a community telecom comes in. You have to understand that the incumbent provider has spent millions and millions of dollars to provide service in the area. They are forced to lower prices to levels that are below the cost of providing service just to survive. Local telecoms are regulated; they have to provide service to anyone who wants it. They can't just pack up there bags and leave. So, its either sell service at below cost or be left with a multimillion dollar network that no on is using.