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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?"
Thats like asking the RIAA to allow us to continue to have Fair Use of our CDs and such.
It just wont happen, businesses do not care about anything other then profit, and stock price. What we think does not matter.
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.
Excellent! I think the only way we are going to get decent, scalable telecomms to our door is by paying for it ourselves. Can't rely on the government to roll out this infrastructure. It's the same as traffic problems, it costs a heap of money to fix, and won't usually be fixed in the 4 years a politician is in office, and they won't see any return from it, therefore it's not even worth them doing it. Unless we do it ourselves, we'll never get it.
Corporations don't care about the consumer. They never have, and they likely never will. Corporations care about the consumer's money. As long as they can provide the bare minimum required to keep the money flowing into their coffers, that's all they'll do.
Pessimistic, yes. But show me a wildly successful corporation that lavishes it's customers with their every desire. Yeah. Right.
"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.
Whenever our normally capitalist system grants somebody a monopoly, it's usally because two of that kind of business would lead to mutual destruction, and we need that business to exist because it makes other businesses possible.
Netflix would not be able to operate if not for the United States Postal Service, for example. The same goes for most magazine subscriptions. Sure, FedEx, UPS and Airborne Express all compete with the USPS express and priority line of services, but everybody else is prohibited by law from making a daily stop at every address without a pre-existing relationship.
Cities control the local water and sewage systems as well for obvious reasons. We can't afford these services becoming unavailable for any length of time for any reason.
POTS used to be an essential utility as it was the only commonly deployed realtime communnication tech. Now, it's not so much the only game in town, but it still is the only communication lifeline for some elderly people who don't want a cell phone. Because of this, the local Ma Bell company is not allowed to close up shop, and that's why they're basically granted a monopoly to soak the customers the can soak so that the company can afford to give below-cost service to those who can't.
"And why should legislative bodies protect telecommunications monopolies?"
Campaign donations... It's all about money, if telco's are going to rollout fiber they want to be the only ones to use it. I thought the FCC already ruled on this, and was 'giving' telcos a monopoly nationwide? (Being that if they roll the fiber, they don't 'have' to sell it to competition?)
Regardless, these telcos have deeper pockets and connections then the **AA's do - with the US so far behind in the communications area, I think it has to become painfully obvious there is more at play then just the difficulty and expense of rolling out the glass. IMHO, the telcos are refusing to do it waiting on the government to pay for it AND let them control it. Telcos don't want glass everywhere because once things go digital they don't know how to play anymore. And God knows people are itching to drop telcos like a bad habbit. And after years and years of dog poor service (IE, got a problem? Call support, wait 2 hours on hold - get transferred twice with additional hour of wait time per transfer, then get disconnected. Rinse, repeat. - Then you switch to cable instead of DSL - have a problem - call support - on hold for 10 minutes...)
There's nothing wrong with additional competition. It's good for the economy, and it's good for you and me. It's just bad for telecom giants who are used to lobbying for (and in many cases) getting their way.
Americans have become so used to looking first to giant corporations that we've in many ways lost the ability to come up with our own local solutions. The fact that more and more localities are bucking this trend is a good thing indeed, but at the state and federal level telecom giants hold much more power.
Whether you're a Democrat or a Republican, giving breaks to big players and shutting out small players seems anti-competitive, doesn't it?
Read the EFF's Fair Use FAQ
TelCos and Cable operators don't move into these communities because they can't make a profit on running the cable there because they would charge unreasonable rates. So when a community forms a group that doesn't have to worry about profits, the TelCos and cable companies get mad because they can't compete against someone who doesn't have to make a profit, or waste that profit giving money to shareholders and executives with multi-million-dollar salaries.
I'm in the hole of the broadband donut.
Clearly The best solution is to have a public utility and a private company offering the same services for a community. This way you force them to compete and since they are different animals they will be very unlikely to make some kind of alliance to hike prices.
I've got answers:
"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?"
Because governmental entities do not give money to political causes. Also, government businesss do not raise taxes.
Accordingly, if a legislature is faced with helping and protecting a private business versus a government business, the legislature will ALWAYS support the private business.
If someone says he and his monkey have nothing to hide, they almost certainly do.
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
To answer the OP's question about why the government allows these monopolies to exist:
Economically, the incumbent firm would not sink the cash required to build the initial infrastructure unless it was guaranteed years and years of profit to recoup the cost. It's not the efficient solution, but it was common decades ago to do this. Regulation prohibited competition so that the incumbent could recoup its costs and profit from its venture. It's unfortunate that legislators still believe the telecommunications giants still need this sort of protection, though. The efficient solution is to allow competition, because lets face it, the incumbents have made their money back and then a lot more.
I just wanted to shed some light on why this happens in the first place. Why it's still happening is that old habits die hard, especially with the lobbying dollars that the telecom firms have!
Lots of people are pointing out the obvious connection between money and politics. But there is a historical connection that needs to be pointed out.
Many moons ago, most places in the US didn't have power, or phone service. So the US made deals with private companies, wherein the utility company would provide a service (such as phone lines) in areas where building the infrastructure would ordinarily be cost prohibitive. In exchange, they got monopoly guarantees for long periods of time on those areas.
Telco's are used to getting their way (I worked for Bellsouth Internet for a few years). After all, BellSouth makes a profit even if you get Earthlink DSL in the South, because BellSouth has a monopoly on the network, provided by the federal government. There is a long history in the USA of enforcing monopolies for utility companies, that in many cases has far outlived it's consumer benefit
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.
I'm not trying to sell anything here, but maybe some cities could look at what Frankfort Kentucky did as a case study. Cable Modems 128/128 at $14 per month. 256/128 at $18 and 512 at $24. (higher services available) VOIP telephone at something like $13 per month. Plus long distance calling at good rates. Plus they provide they provide electricity, water, cable tv, and security monitoring at good rates. Everything comes on one bill. Perfect? -NO. A monopoly? -pretty much. but a good service at comparatively low rates? absolutley. http://www.fewpb2.com (too lazy to do html. sorry)
Your point about those in power wanting more power is all well and good, but history is replete with cases of federal and state governments relinquishing power when forced to do so by the electorate (or even against the wishes of the electorate). The deregulation enacted by the Reagan Administration in the 1980s is a good example of this, while Margaret Thatcher had to ram de-socialization down the throats of skeptical Brits.
But the point is that government won't inevitably continue to grow and grow and grow. It is only inevitable if the electorate lets it be.
Read the EFF's Fair Use FAQ
What I don't understand is why can't a public utilities company provide a public utility if their rate payers want it?
Your terminology is a bit off. A public utility is a "company that performs a public service; subject to government regulation." It need not be owned by a gov't.
That said, there are examples of systems where distribution is owned by the gov't or by a local cooperative. Many communities, particulary small towns or rural areas in the US, have electrical coops that handle distribution of power to individual homes. I'm not sure why politicians believe internet service should not also be handled like this.
FreeSpeech.org
Wireless should change this - because the provider does not have to make an investment in hardware (even if just wiring) to each destination location, it will be easier for players to enter and exit the market. Until then, you can't use the word capitalism with a straight face when describing the telco markets.
Say, if everybody just roll out the cable to their nearest 4 neighbours, wouldn't the grid be constructed by a cooperative effort?
:(
I don't know how it'd work though, does seem a bit too idealistic
Online backup with Mozy, sounds like Ozzie, but more!
What's wrong with additional competition? And why should legislative bodies protect telecommunications monopolies?
Do you have any idea what the profit margin is on $50/month internet access? A non-profit can provide this service for less than half the cost.
Legislative bodies do whatever their corporate masters (read: big donors) tell them to do. The public good is never a concern. Welcome to the wonderful world of representative "democracy".
do some basic math. This UTOPIA project, the largest and most ambitios, will cost some 340million to deliver service to 140,000 consumers. That's a cost of $2,500 per customer! That's static start up cost, assuming that it all comes in on budget, on time, and you still haven't considered coninuing maintenance and upgrade!
No wonder their are no companies leaping to do this. Someone has to pay for this. You really think your going to get 1.5Mb fiber to your house for $40 a month?
Look I think it's a sleazy as it gets bribeing the gov't to keep competition out of the market. But one does have to ask the questions:
Q:Why isn't their more free market competition to start with?
A:Telecom is a nasty, expensive, buisness. And now that it's been wrapped up with the computer industry it's a moving target. If your crystal ball get's foggy for just a little bit, your out of buisness.
These services will get to consumers, when they can be practically and effectively deployed.
I would rather be ashes than dust!
I agree with the comments in spirit - here's the argument that kind-of makes sense against allowing non-telecoms to compete in telecommunications. Telecommunications are basically socialized in the US, with subscribers in urban areas subsidizing subscribers in rural areas. People in Hawaii and Alaska don't pay anywhere near what their service costs, while people in the suburbs get soaked. If you let the communities pay only what it actually costs to serve them, then the economics change. Official telecommunications companies have regulations that can make them provide service that would otherwise be against their interest.
This is the same problem that the Postal Service has with UPS and FedEx - they have charges that are related to actual costs, and tend to get used more for people in urban areas than rural areas because of that. In doing so, they take away the customers that the Postal Service counts on to subsidize the rural routes. The result is that they lose money.
Is this trade-off worth the loss of competition that it brings, in exchange for allowing people in Montana to have phones? I'll leave that to the combined wisdom of Slashdot.
Law is whatever is boldly asserted and plausibly maintained. -- Aaron Burr
Tuxter is right. The government shouldn't be rolling out our new communications lines unless they're going to be free (as in roads), maintained by the governmet...
I hate the goddamn monopolies in my area. I have a cable company (Cox) that blocks my school's (UF) football games on channels that I already pay for in order to put them on pay per view. People in nearby cities get all the games for free. I have a phone company that says 'all circuits are full' half the time I pick up my phone to dial out. My utilities company (power and water in one) charged me a $200 fee because I paid my bill late one month. They said they will give me back my $200 when I quit using their service.
Where competition opens up, rates go down. We need less legislation protecting monopolies. If a company cannot survive on its own, then it deserves to die. In the same way it's unnatural to keep a total human vegetable alive on life support for years, it's unnatural to prop a company that our laws treat as a person once it's already proven to be dying.
--- We need more Ron Paul!
Does anyone happen to have a link to the legislation (or at least some info on it, who's behind it, etc?) that's mentioned in the OP? I live in PA, and would like to take a look at it and send my congresscritters some feedback.
Thanks!
IANAL so the terms may be off, but some functions are a vital service that impacts general community health (i.e. water and sanitary services). In some areas power and telephones are considered vital services that are too important to trust to a private industry. For those areas, a public utility is the way to go.
Otherwise it turns into a government vs. industry situation and the gov't will always be able to legislate the industry out of the picture. For this reason, government operated services have to be declared a vital service where there are already market providers. I believe the rules are different where there is no existing market and no private entities have indicated a desire to enter the market.
The solution is to use a hybrid solution; the public co-op. The legal definition meanders about from place to place, but a co-op is generally a not-for-profit/non-profit organization that provides a service to its owners (i.e. the community). Not being a profit-focused organization, the local gov't can usually provide some form of special concessions to "stimulate" the local reinvestment of capital.
There are two problems from my experience is when a co-op (or any competitor) enters a market with an existing monopolist provider.
1) In things like telco, the first person on site spent a fortune to build the infrastructure; ordering them to share with their competitors tends to make them feel like a J.C. Penny's being ordered to allow Sears Roebuck to take over floor space for free. This really does have a sense of unfairness to it, though I agree that an entrenched carrier is in many cases taking advantage of public right-of-ways and thus is required to share.
2) The original service provider is a a real $**thead and is screaming "unfair competition" with no real basis. Where I live the local cable provider threatened lawsuits, failed to provide upgrades, and basically threw temper tantrums as long as the city did not give them an exclusive contract, excluding other carriers from using the right-of-ways even though those other carriers would be forced to build their own network.
Case number 1 is a real fairness issue. The groundbreaker could be taken advantage of by acruing massive debt his competitors don't have to deal with, alternately the system could be well amortized and the carrier just doesn't want competition. #2, IMO, deserves to be beaten with a big publicly-driven cluebat until rationality or cessation of bodily functions happens.
I've been on slashdot so long I'm starting to get out of touch with the cool stuff if it ain't on slashdot.
My point isn't that deregulation per se solves the problem of unchecked government growth. It was merely a broad example, and it is questionable whether the S&L scandal was caused by intent or by execution.
Deregulation of trucking and oil began under Carter.
True, but it was the Reagan Administration that made deregulation a cornerstone of its economic policy. I'm not arguing that as an economic policy the Reagan approach was all good, partially good, or even good at all. I was really more interested in this as an example of elected officials relinquishing government control.
Read the EFF's Fair Use FAQ
SBC got really nasty and start bombing the postal mailboxes of all of the residents with FUD mailings about how the new initiative would cost every homeowner a fortune in new taxes. The only indication as to the source of the FUD mailings was "SBC" written in tiny six point font in the corner. There were plenty of similar mailings over the month before the referendum, and it failed (narrowly) in a non-presidential election year. Generally, these tend to be smaller turnouts with mostly older voters.
This year, they got it back on the ballot again, and I hope that it goes through, if not for the "fiber", at least to stick it to SBC. I'm voting for it again.
(Side note: we already have power over leased ComEd lines, but bought from nearby Wisconsin, and our electric rates are relatively low.)
Basically, the approach is to minimize the monopoly. They do the monopoly from the block level greenbox to the house. That's it. They also allow up to a hundred different providers into the greenbox.
The interesting thing about this approach, is that a company like Disney could use it to get into the cable industry and break the monopoly. Since the FCC allowed the merger of Comcast/ATT, my prices have shot up (1.5 with another hike coming that will double it), and service has plummeted (I had an out about every 6 months, now it is weekly). I would love to get off them. But the alternative is qwest dsl. Both Comcast and Qwest vie for the distinction of being the 2 worse companies out of all bandwidth providers.
I prefer the "u" in honour as it seems to be missing these days.
Not that this is the case all the time, but the state does have an obligation to protect utilities from unfair competition. It has to do with the fact that corporations would only serve profitable areas if they had a choice.
Start with the consideration that utilities are regulated heavily to start with, and that this has always been the case.
States like PA have urban, suburban, and rural areas. If an unregulated company came in to provide a new service, it would only provide the service in areas where it would be profitable -- probably urban and suburban neighborhoods. People in the boondocks would be left without the service, or would have to pay much higher fees for the service.
But utilities, which can be considered more necessary than luxury, are offered statewide because the state has controls over the system.
It is a matter of the greater good... and if a corporation wants to offer a utility service in a state, then it agrees to be regulated by the state. If you don't want to be regulated so heavily, find another business.
Some people always consider regulation to be evil, and ignore the fact that there may be legitimate reasons for regulation. Besides, we do have a system where people can get regulations reduced -- it is called an election. Regulations aren't enacted in a vacuum - they are put in place by elected representatives.
While the idea of public broadband has always been an attractive one for slashdotters, the incursion into this arena by Grant County PUD in central Washington State stands as an example of why we don't want bureaucrats meddling in business.
In this state the PUDs are treated as municipalities under the law and are given a set of rules under which they can operate. Broadband and electrical power are different services so it took an act of the Legislature to allow them to enter the market. The legislature, under some pressure from the big telecoms who were afraid that the PUDs would "cherry pick" the larger communities and leave the rural people to fend for themselves, allowed the PUDs to be "wholesale" only. The first thing Grant County PUD did was ignore that law.
Grant County PUD had first partnered up with two local ISPs which charged $20 to $25 per month for the broadband servoces back at the inception of the project in 1999. But at the same time the Manager of that PUD was trying to attract an outside competitor, also a utility provider, to enter the market in this county at a subsidized rate of $8 per month.
The PUD did attract that utility but only by entering into secret (and illegal) agreements to subsidize the program at cost plus 10%. So the new provider would risk nothing and could make 10% on the rate-payer's money even if they gave away their services for free. Then the PUD employees threw as many of the new customers to this new competitor as possible while their managers used their position as investors to pressure prices to a point where the commercial ISPs could no longer compete profitably.
It was only after the PUD had spent several million dollars propping up this outside provider that the story became known. Meanwhile, the PUD had raised the electrical rates to cover the $100 Million cost of fibering only 1/3 of the County but lied when asked about it. The Commissioners and Managers claimed that the rate increases were due to other factors. However their own emails, obtained under the State's public disclosure act, showed this to be untrue.
Agricultural interests were incensed because they use a lot of that electrical power. A large farm might have a $500k yearly power bill for their irrigation pumps. While 4% isn't much for my house, it's a chunk of money on a half-million dollars.
It took almost a year after the discovery of the secret contracts and a State Auditor's report which also found illegal and improper actions, to rid ourselves of the management team that led us into this debacle. The largest ISPs in the area, including the first two to partner up with the PUD, went out of business and were gobbled up by another outside competitor; costing jobs and an economic drain on the communities' resources. The Commissioners who were supposed to keep a rein on the PUD managers are now up for re-election and facing some tough questions.
The problem with bureaucrats going into business is that, essentially, they don't understand profit and loss. It's all other people's money and if they make a mistake they just raise the rates to cover it. We could have fibered this County up for the money they spent, had they spent that money wisely. Instead they created a NOC they thought they could make profitable (not at $3 million a year to operate they couldn't), they installed fiber to the areas where their managers lived regardless of population density (it turns out the telecoms fears of "cherry picking" were well-founded, but the managers weren't smart enough to do it that way), and they drove jobs and money out of the area.
Had they simply created the infrastructure for the product instead of getting involved in creating subsidies for favored businesses we would have been ok. But that's the problem. Bureaucrats don't make good business people.
So if you don't want to see jobs go away, money disappear and your power rates rise, treat the entrance of government into business with caution. These things are run by politicians, not business people. And it's not their money.
No one ever had to evacuate a city because the solar panels broke!
Hell. No. Infrastructure is what allows business to thrive, and the Internet is part of that infrastructure. If a community is dying, and the only way to save it is for the local government to create a fiber-to-the-home network, they should be able to. Why should a community sit back and wait for Verizon or Comcast or Service Electric or AT&T to decide they're worth saving?
And if you RTFB, you'll see that infrastructure is *part* of the things they're allowed to do. They specifically omit internet access from things the government is allowed to provide. Should the Information Superhighway be Private?
I'm in the hole of the broadband donut.
What I don't understand is why can't a public utilities company provide a public utility if their rate payers want it?
Why? Its my opinion that McCarthyism has so cripled American Public Discourse that the very THOUGHT of community owned co-operative behaviour is tanamount to treason.
McCarthyism did such a fine job of identifying those nasty 'co-operators' (communists) as UnAmerican that today, even the rabble will reflexively defend the 'rights' of their plutocracy to rule.
American People will not consider -- wont even discuss it without flaming liberal/socalist/communist-label throwing -- that maybe, just MAYBE a non-profit, community owned utility can deliver a service better, more cheaply and more uniformly than a for-profit.
Even such public goods utilities, like HEALTH CARE is a for profit venture in the USA. This is UNHEARD of outside the USA. Universal Public Healthcare is the norm in almost all the rest of the worlds' wealthy nations (canada, europe, aus., nz, ?,?,?). Hell, 45million USofAmericans dont have health insurance. In any nation, let alone the self-declared 'most wealthy' this would be a national scandal and shame. In the USA, the discussion isnt even entertained -- why would the for-proift media care to question the for-profit health-industry? They sit on one-another's boards. They are co-invested, and cross-linked. Maybe the Publicly-funded, independant national broadcaster would like to discuss the matter -- oh, dont have one of those either (see cbc.ca; bbc.co.uk; abc.net.au).
If the community considers telecommunications is a universal public good, why dont they mandate the creation of a utility? Instead, in USofAmerica, the plutocracy will use McCarthy's specter to assure that all that effort runs through their private, for-profit structures. Private banks. Private accounting. Private Advertising. Private Broadcasting. These for-profit sectors collude to assure their is no chance of cooperation amoungst citizens.
The person is a Consumer First, never an empowered citizen. That is why, the public need is not being met. If you are a rich consumer, you might be able to convince the for-profits there is enough meat in the market to give you what they want, but forget organizing your community to provide for the community's need... what are you? Some kind of communist?
Want to make political change? Forget it, you cant even get on the ballot... sorry. Ask Mr. Nader.
Take Australia, where Telstra is the monopoly supplier. They were charter bound to provide Telecommunications to outback [rural and remote] farming communities. Now that Telstra is being privatised, part of the legal restraints is a continuation of the same services. The government and the opinion forming people [voters at large] find it easier to think of this long standing monopoly as being reponsible for this service provision.
I see a lot of talk here on slashdot on the burden of providing 911 [000 in Oz, 999 in UK] access on VOIP. How would these startups feel about having to provide physical remote farm access 10000 KM away from the nearest city?
Part of the sweetener for carrying this loss making enterprise is a bit of fat on the other more lucrative sections.
2) When we put in fibre at a previous work, part of the road had to be torn up to lay it.
This inconvenienced motorists and the public. Sub-letting/dividing existing monopoly resource makes sense in this context. Fair access to this resource is a separate battlefield, along the same lines as this argument
[% slash_sig_val.text %]
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This concludes our transmission to Oceania.
I live in Chelan, Washington. Our PUD has put in fiber to Chelan, and many of the other towns and cities in the county. These fiber services deliver ATM-based telephone and data services, and may eventually deliver digital TV.
For my 2Mb/s down 640Kb/s up connection and a telephone line, I pay about $53 per month. The telephone line is not Voice over IP, but is circuit-switched. ATM provides the means to transmit both the voice and data channels down the fiber.
Now, our PUD doesn't offer these services directly. They only run the fiber network. My actual telephone and internet bill come from my provider of these services (Localtel). What the PUD has actually done is open competition by allowing the customer to choose any of a number of service providers using their network. If I don't like Localtel, I can go to NW Telephone, or Panda Computers, or Modern Networking...... The list goes on.
Now, it is actually interesting. Verizon services here suck, to put it mildly. Ok. Their residential services are OK. But they don't offer any reasonable business services. No fractional T1, no PRI.... So if I am implimenting a phone switch for a customer, I am stuck with analog lines. This means I have to deal with echo cancellation and other artifacts of 4 to 2 wire conversion.
Now, if I have my customer go to fiber, some of the service providers *do* offer fractional T1, PRI, etc. services over the fiber. Now everything works great and the phone switch is cheaper, more robust, etc.
Competition is a wonderful thing.
The problem is, from a telecommunications company perspective, that they are used to being monopolies because of the fact that they own the lines. Community-owned fiber networks are a good solution to this problem, but they need to be used to stimulate competition by allowing choice of service providers.....
LedgerSMB: Open source Accounting/ERP
Darn, why did I have to blow mod points on garbage last Friday when I could have used them here?
Parent poster has nailed this concept perfectly. It is impossible to have a pure, free market on services delivered to our homes via cable. Why? Because we limit the number of cables that can be pulled to the home. Even if a second company can pull cable, would you want your street torn up for the 3rd? The 4th? The 10th? No, if we let every company that wants to provide a home cable service the opportunity to pull their own wires, then the public would scream for regulation.
Instead, the cables going into the home have to be limited. This can be done by a private company, who might then open the lines to others. (Aka the electric grid in Texas after deregulation.) Or, it can be done by the community, if it feels that this is a necessary infrastructure for public funds.
The only problems occur when the community tries to provide services over the lines. Then, competition can be stifled. But if the lines are pulled and maintained by the city, and any company can offer services over those lines (paying the city for use of the lines, which covers the cost of maintenance and nothing more) then the best, realistic free market services are available.
It doesn't hurt to be nice.
Sure. Look at the ARPANET which evolved into the communications medium we are using right now. Look at the history of the Tennessee Valley Authority and rural electricification. Look at the Interstate Highway network.
Look at all the pissed off customers in areas where local governments are running fiber to the home, who are getting better and cheaper broadband Internet access and frequently, cable TV access than ever before.
How dare governments act against monopolies!
Fact is, there are some things the government frequently does do better than the private sector. We don't contract out the operation of our military to Microsoft.
The non-Libertarian fanatic simply figures that there are some things the government does best, some things best done by the private sector, and tries to make sure that each does what it does best.
Tech Public Policy stuff