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US ISPs Using Push Polling To Stop Cheap Internet
An anonymous reader writes "What happens when a new ISP is started somewhere in the United States that completely blows out of the water all the other ISPs in the area, in terms of price and performance? Apparently, that question is being answered in North Carolina, where Greenlight Inc., a company started by a city government, is trying to offer faster, more reliable, and cheaper Internet service to the local residents. Time Warner and Embarq can't compete. So they are not only lobbying the state government to destroy the upstart competition, but are now using push polling methods to gain support, across the two cities that could benefit from the new ISP, for the 'Level the playing field' legislation they got introduced in the legislature." A local news outlet provides coverage more friendly to the incumbents' point of view.
The reason that nobody has done that is actually very simple. The initial investment in infrastructure is at a minimum in the tens of millions of dollars, and too make that even worse the credit markets are currently frozen so good luck getting a loan.
"The Market" was rejected by the monopoly players in this case. If you had been following the story, the local government requested better service and lower prices and they simply refused. There are times when "the market" (aka, "the people") need to push ahead instead of "waiting for the leaders."
This story is quite similar to others where these players in the ISP game quite frequently refuse the requests of municipalities resulting in the municipalities building their own infrastructures which then results in the communications companies filing legal actions against it. I find it most profound when it happens that a given company doesn't want to offer ANY service to an area and yet will fight tooth and nail when a local government wants to build its own.
Hmmmm...here's some food for thought: city governments already run trash collection services, schools, snow removal services, real estate brokerages, electrical services, cable TV services, electric utilities, water utilities, etc. There are private equivalents for all these services (and more) that city governments provide. (Yes, including water utilities and trash removal. If you don't believe me, I will show you my water bill and trash removal bill) and in some instances these even compete in the same community.
I don't see anybody fighting over that. How is running an Internet service provider any different?
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My (admittedly thin) understanding is that the people of the town were fed up with TWC, got together, and made something happen. That's what government is for: By the people and for the people. Of course it has its limitations, but when corporations have a stranglehold it is actually refreshing to me to see that the government is still a way for people to take a stand, even at a tiny local level.
I think the precedent is a great one. If it shoes people that they really can do something, rather than being squashed by a big corp, then great.
Also, the all-or-nothing argument seems a bit much. Do you just propose that people continue to live under the current oppression?
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You should understand two things here.
1) The government is NOT using taxpayer money to fund this.
2) They are PROFITABLE
It's not like their selling low, and then subsidizing the costs with taxpayer money. They're selling the service at the price they sell it, and STILL MAKING MONEY.
I think that's the bottom line here.
I see Broadband as no different an essential service to live these days. I certainly couldn't live without it, my job depends on it.
If public companies refuse to provide this, then it should be the governments responsibility to step in and provide this service.
It is only a non level playing field if the government *loses* money in their own ISP but keeps it afloat anyway. If the government ISP company *makes* money using the same business processes that the industry would (or could or should), how can you talk about a non level playing field?
If the governemnt ISP makes a fair and honest profit, then the ISPs have no right to complain. But of course it makes business sense for them to complain anyway.
Those notions had occurred to me. But "authorities" have always had access to my traffic... some of it quite secretly.
"Not sufficient demand" arguments are great reasons for these telecoms to NOT CARE and yet they do. The reality is that these ISPs are trying to protect their over-sized profit model as municipalities are going to learn how expensive it is to operate and install these services versus how much they pay for them and begin to realize that the consumer is NOT getting a good deal at all. Exposing that kind of truth is a big deal and threatens their million-dollar annual bonuses.
And given that this service is paying for itself and ultimately will be quite profitable negates the argument that it wouldn't have been profitable... it wouldn't be profitable ENOUGH.
The fact of the matter is that internet service is quickly becoming a necessary utility just as telephone and electric power services are today. (They were once fancy options as well!) It is a utility that has yet to fall under regulation and as we can see throughout history, unregulated necessary utilities tend to drive prices higher and burden consumers painfully to the detriment of local economies. (more money being drained from local economies by high utility prices and less money available for local spending which ALSO means less taxed income for local government) Texas and California deregulated electric power and we experience rolling blackouts, the highest prices for power in the nation and even more complaints about their profitability. Meanwhile, in states where power utilities are regulated, no such problems exist for power, no one is going out of business and the citizenry is less burdened.
Government regulation over various aspects of commercial activity are not bad by definition. A guest on the Daily Show put is ever so simply when she explained that since the beginning of the U.S., we have had financial crisis cycles until we emerged from the great depression with strict regulations and government backing. Following that was more than 50 years of relative stability and prosperity and a defeat of the financial crisis cycle. But when regulation was pulled back on S&Ls, an S&L crisis soon followed. Some said the answer was "less regulation" and so more regulations were removed and even more crises occurred.
Here's a truth that EVERY parent knows:
Unregulated kids are going to do dumb, crazy and bad things. They WILL burn your house down if you are not careful.
I find that this truth is not just restricted to children includes adults and the adults who run businesses as well. And this is especially true when these adults who run businesses are as arrogant and narcissistic as they are demonstrating themselves to be... and they demonstrate that they don't feel at all responsible or accountable for the mess they created.
The funny thing is that almost all of these ISP's (cable providers, telco's) already HAVE government-granted monopolies themselves. Time-Warner has certainly never objected when a city has granted them an exclusive monopoly to provide cable service to a city (such agreements cover close to 100% of their market), nor has AT&T ever been shy about their monopoly. If these companies were so serious about "leveling the playing field" how about they agree to lease those cable and phone lines to competitors and forgo those exclusive agreements with cities and counties?
SJW: Someone who has run out of real oppression, and has to fake it.
I don't see how this bill is unfair at all.
I guess you missed this bit:
Establish a separate enterprise fund for communications service and shall
use this fund to separately account for revenues, expenses, property, and
source of investment dollars associated with the provision of
communications service.
Is a telco or cable company required to keep separate accounts for their internet service? Why are they not required to keep their internet and other services separate? Why is a cable company allowed to leverage it's existing monopoly by subsidizing it's internet service (like it might do to drive it's internet competition out of business), but a city isn't?
If it was *REALLY* about "leveling" the playing field, I would assume that the bill would say that *ALL* internet providers would be subject to these rules, not just cities.
You would run into a situation where the rich can send their kids to better schools, and they get better jobs, and then they make more money, and send their kids to better schools, who make more money. Later on you run into a situation where poor people won't be able to afford school. Two more or less permanent classes. The death of the American dream.
So in a Capitalist system Johnny gets his jumprope, and a new playground set besides, and we all get 100MB service to our homes.
In a capitalist system Johnny gets his jumprope and playground if his daddy is rich. Most kids would get to play with sticks and rocks.
We don't all get 100MB service to our homes. Rich people get 100MB service to their homes.
Of course, in that system the local government would NOT be allowed to limit the number of ISPs servicing an area, so there would be real competition for service in that last mile.
I don't think the government does limit the number of ISP's. I think the free market does. As long as ISP's keep their prices under the cost of implementation of new infrastructure there will never be any competition.
There might be a few more wires strung and/or tunnels dug to run the lines, but there would be more service, more competition, and CHEAPER PRICES.
This is a fantasy. In reality we would end up with 1 really cheap ISP who puts the others out of business, at which point they would either buy out or purchase the equipment from the other companies. The new monopoly would languor just as much as they currently do and could charge as much as they want for their service.
It never fails to amaze me how many people don't understand that most of the major socio-political and economic problems we have today are directly due to the application of too much socialistic GMI and not enough application of Capitalistic Federalism. It would be funny if it wasn't so sick and sad.
I agree there is too much socialism in some cases, but it is usually a failure of implementation or corruption manifesting itself. I should be able to take the money for my education and apply it to any school. But to take away public education and turn it completely over to the private sector is not only ludicrous, its downright evil.
Small suppliers simply couldn't afford to lay the cable, and you would never have very many suppliers because that would dilute the market and even big players wouldn't be able to recover the cable costs.
Which is where the local government could step in, take out a loan, and run the cable to get a connection, then lease use to private companies equally. Free markets are a good idea -- but you do not have to go 100% free market and 0% government, you can find a happy medium. The problem is that right now we are like 10% free market and 90% government, with the big corporations running the government. I could go on about that, but that would be (-1) off topic.
Others have already pointed out the problems with this arrangement. It rarely serves the poor, people in out of the way places, or generally anyone it is not as profitable to serve very well. There's any number of reasons that someone might not be profitable to serve, but for some essential services (Electricity, telephone, education, garbage collection, and arguably Internet among many others) we as a society have decided that everyone SHOULD be served. So the government either serves them (public utility) or forces a company to do so as part of its contract (regulated monopoly). Others have gone into more detail on this above me, so instead I'll add something else.
For a good look at how things run when something close to "pure capitalism" is practiced, look at the US (or indeed most industrialized nations) in the mid to late 19th and early 20th centuries. Monopolies and trusts dominated the business landscape, the majority of people worked 6-7 days a week for 12 or more hours a day often for near slave wages. Abuses like the "Company Store System" all but indentured workers in mining, fishing, and other industries that require some level of isolation from urban centers. Illiteracy rates ran into the 50 or 60% range (some of this was due to high illiteracy rates in new immigrants, true, but they represented on a fraction of the literacy problem).
Pure capitalism has been tried, and it generally produced a level of suffering on par with feudalism. Remember that when ideas like Socialism and even Communism were initially proposed, the "suffering of the workers" was not that they had smaller TV's than the well off, or that they had crappy or limited health insurance; it was that they worked like dogs from sun up to sundown (luckily electric lights hadn't caught on yet for most of this period) 6 days a week for (hopefully) just enough money to pay the rent and feed the kids. I'm often floored when people present pure capitalism as if it will usher in some new Utopian or semi-Utopian world where competition drives down prices and increases services without any apparent consideration for the fact that it's been tried. It may have driven down prices (for the rich and middle class), and increased services (for the rich and middle class), but it did so at the expense of significant suffering for the working class
I don't need a million points of light, just two points of multi-mode fiber and a 10 Gig-E router.
As was proved during the Reagan era, the rich AND poor BOTH get richer when Government gets out of the way (i.e., fetters to productivity are removed).
8 years is a dreadfully short time to 'prove' an economic method. For all you know what is happening right now is a direct result of Reagan era policies, so I am going to call bullshit on that, but if you can actually provide some reasonable backup for your opinion then maybe you can change my mind!
I am not going to pretend that there isn't bad regulation (goddamn there is tons of it), and it should be gotten rid of, but people who say that all regulation is bad regulation are just crazies. Should we take out anti-trust legislation? Was it smart of us to remove the investment bank regulation? What about safety regulation? What about anti-discrimination legislation?
There are 'fetters to productivity' and there is 'good legislation' but to say that all legislation that fetters productivity cannot be good is wrong.