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Major Carriers Shun Broadband Stimulus
jmcharry sends word that as the deadline looms for requesting broadband grants from the $4.7 billion available in stimulus funding, Comcast, Verizon, and AT&T are conspicuously absent from the list of applicants. Quoting the Washington Post: "Their reasons are varied. All three say they are flush with cash, enough to upgrade and expand their broadband networks on their own. Some say taking money could draw unwanted scrutiny of business practices and compensation, as seen with automakers and banks that have taken government bailouts. And privately, some companies are griping about conditions attached to the money, including a net-neutrality rule that they say would prevent them from managing traffic on their networks in the way they want. ... Yet those firms might be the best positioned to achieve the goal of spreading Internet access to underserved areas, some experts say." Reader Michael_Curator notes that while the major carriers may be holding back, there were still enough applications to slow government servers to a crawl, resulting in a deadline extension.
"All three say they are flush with cash, enough to upgrade and expand their broadband networks on their own."
I don't know what their real reasoning is, but you can be assured that it is not because they want to be responsible and expand with their own money.
No. Among other things they don't like the idea of Net Neutrality which is one stipulation of taking the money.
I think they meant to say "we already scam consumers enough to not need the cash" . I hope to see some disruptive technology to circumvent the stranglehold these dinosaurs have.
they don't want real broadband... they only want to offer crappy 256kbps, and pander it off as broadband. which btw isn't broadband anywhere outside the US. time for the US government to start their own broadband service.
This has a simple explaination.
Money is power; simple as that. If you have money, you can get people to do things- it's power. There are other forms of power but money's the most common (and, in many but not all cases, the most powerful).
Restrictions on how you can spend your money devales that money. $1,000 is a nice sum of money for (almost) anyone to receive, but if it can only be spent on peanuts only you can eat? Can you eat a grand's worth of peanuts? What if you're allergic? In this case the money is basically worthless, because it has no power.
Almost all ISPs want the power to restrict the usage of their clientbase. In some cases this is benign- stopping spammers from throwing out millions of spam e-mails a day, for example. In other cases, not so (blocking/disconnecting high usage users then dramatically overselling their network). But want of power isn't a problem; everyone wants power. Everyone. Every individual, every corporation... everyone. So that's okay.
The reason why they are rejecting the money is because it has external factors. It has a stigma of being 'government bailout money'. It can only be used for certain things, and it has strings (a'la net neutrality). The ISPs have evaluated their money, decided that the restrictions limit its power too greatly and that it would be a net power loss for them.
It's as simple as that.
Check out my sci-fi book "Lacuna" at http://goo.gl/MVxX8
I don't know what their real reasoning is, but you can be assured that it is not because they want to be responsible and expand with their own money.
The real reason is because these grants are a Faustian Bargain: there are never-ending strings attached to government money. And it's not just the net neutrality issue. If you take that money, there's a whole host of demands the government can make. I work in aviation, and have seen some of this stuff in action with FAA grants, where you accept money for a project, and then there are costly consequences years down the road.
Life is hard, and the world is cruel
The big carriers will ignore the stimulus.
Small Start-ups will take the money and build into new markets.
the start-ups will then sell out to the big ISP's
the start ups get rich from tax money
the big ISP get expansion paid for by the government with no regulations attached.
We get screwed and pay for the privilege
They just working out a plan for converting the money into bonuses. It's hard work!
Sleep your way to a whiter smile...date a dentist!
Telecom companies are regulated monopolies. Regulations can changed with a change in law. You don't need to entice them to change with a big gob of money as a carrot. The truth of the matter is that it is easier politically and procedurally to do these changes with telecom cooperation.
It's all about the regional monopolies. With regional monopolies, they are able to control prices within certain regions since there are no other options. Why would they want to spend money expanding/improving service in regional markets where they have no competition?
Those net neutrality rules would possibly threaten those regional monopolies... so they're like "F THAT! I want my control!"
For example, consider the recent obscenely low bandwidth caps in rural areas where there is no other option. That's a prime example of the power regional monopoly gives these companies.
Also as a side note, I find it hilarious that they think they can justify instating bandwidth caps when they apparently have more then enough capital. Wow, where did the argument that they were losing money due to excessive users go?
Some say taking money could draw unwanted scrutiny of business practices and compensation, as seen with automakers and banks that have taken government bailouts.
Ha! You mean like finding out how profitable broadband really is and how that caps and traffic shaping would be largely unnecessary if the carriers spent the money doing the upgrade? Money we all know they have. Or would that be finding out how a few people at the top of the corporate pile are enriching themselves at the expense of everyone else? Extracting revenue without adding any real value and justifying it by saying their compensation packages are "in line" with industry norms?
Hard to figure out which one of those topics they're not interested in having become public knowledge. It would probably be wise to select "All of the above". And probably a couple more we don't know about.
Maybe we need a public broadband option? The our Congresscritters could start raking in millions of lobbyist money from the major carriers. It would give those hordes of fat, old people screaming at public health care meetings a new opportunity to get free bus rides and box lunches. And then they could accuse Obama of trying to take over the internets.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Remember when the telcos claimed that net-neutrality would harm the industry by preventing them from collecting enough money to upgrade the infrastructure in the US?
This proves their previous anti-net-neutrality arguments were BS.
From http://news.zdnet.com/2100-9588_22-148385.html
"Republican backers, along with broadband providers such as Verizon and AT&T, say it has sufficient Net neutrality protections for consumers, and more extensive rules would discourage investment in wiring American homes with higher-speed connections."
From http://www.freedomworks.org/publications/the-problem-with-network-neutrality
"By contrast, mandatory network neutrality is bad for business. Unlike the narrowband phone lines of the twentieth century, broadband pipes are being built with billions of dollars of unsubsidized investment in a competitive environment. ISPs make this investment on the assumption they can recover the costs and profit. As such, broadband lines are not the "public resource" that monopoly networks were in the past. Companies that own high-speed lines have a right to recover the costs that other parties impose when they wish to use those lines to transmit high-bandwidth, revenue-rich services of their own. If network neutrality is enacted, ISPs will have no incentive to build new pipes. Consumers will therefore get less choice."
They looked at what happened to the banks that took money and wanted no parts of it. Taking the money won't protect them against net neutrality being enshrined into law. This Administration has shown a tendency to spring new conditions on recipients of government largess after they have it (not that this is an unusual tendency for politicians, just that most are more subtle).
The truth is that all men having power ought to be mistrusted. James Madison
Does it even matter why they aren't taking the money? If the application system is being flooded, that means that the market will potentially be flooded with companies that are required to respect net neutrality. Since they will by default provide a service that is better than the incumbent monopoly, then assuming that it is not a true natural monopoly the market place will become competitive. That can only be good news for consumers and companies that rely on ubiquitous broadband.
Perhaps we have a communication problem here. From TFA, "And privately, some companies are griping about conditions attached to the money, including a net-neutrality rule " From the summar, "And privately, some companies are griping about conditions attached to the money, including a net-neutrality rule "
It seems pretty clear, from that, as well as a myriad other articles on the intartubez, the monopolies aren't even slightly interested in implementing net neutrality. They want one thing only, and that is as much money as possible for the use of the tubez, on top of extravagant rates attached to the infrastructure underlying the tubez. (cable, telephone, satellite, fiber - you name it, they want us to pay for it a few hundred times over)
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
that all of that stimulus money goes to local governments, and small companies. (not necessarily "small business" per se, but small companies) The government shouldn't be rewarding monopolies. Let's see real competition for a change.
I hated to see multi-billion dollar banks being bailed out, I hated seeing the big 3 automakers being bailed out - but I will actually LIKE seeing 20 million homes in America finally getting that "last mile" of real broadband. My 256k for $75/month sucks almost as much as 56k did. Latency is just as bad as 56k, and, of course, I seldom actually SEE 256k - generally, it's somewhere between 170 and 230.
Broadband? God, I'd LOVE to be able to watch a Youtube video about a new Linux operating system, and not hear the son yealling "LAG!" at the top of his lungs!
Stimulate me, Congress!!
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
Perhaps we have a communication problem here. From TFA, "And privately, some companies are griping about conditions attached to the money, including a net-neutrality rule " From the summar, "And privately, some companies are griping about conditions attached to the money, including a net-neutrality rule "
I would say we do have a communication problem. I think. Either you're being sarcastic or I am, I sincerely thought it was me.
By taking government money, they will have less control over what they do. There are contentions about net neutrality, about uneven deployments of broadband and all manner of things. However, the various states are the government entities that should be writing more mandates related to uneven deployments while the federal government should be mandating network neutrality.
Seriously, the problem of "cherry picking" the broadband deployments was really bad 10 years ago. It is beyond that now. They don't want to build infrastructure that doesn't yield really good returns. That makes perfect sense for them. But it doesn't make sense for the public, however. It is the public utilities commissions that set the standards for deployments of the infrastructure, however, and they have been bought off pretty well so far and haven't been requiring broadband everywhere as they should have been. I hope no one is confused about the role and responsibility of the public utilities commissions. It is precisely the unwillingness of the PUCs and the utilities themselves that have led to municipalities deploying broadband themselves. Some serious reforms need to get put into place and most of it should be in the form of cleaning up the corruption in the PUCs and to put people in place with some backbone.
Either give us municipal broadband (not my preference) or give us wider deployments from the cherry-picking utilities.
Oh yeah, and lest I forget, we need ISPs to be officially considered to be "common carriers" as other communications providers are. The fact that they aren't is a huge part of the problem with enforcement and regulation.
Nice rant, man, +5 "right on, preach it"!
If these big telco skunks were really interested in running something decent out here in rural land, instead of milking 100 year old repurposed telegraph wires or whatever that chintzy stuff hanging on the poles is, they could and would have done it years ago. They ain't interested, low hanging fruit only. And even the chintzy stuff they had to get ordered to provide, they sure were never going to do it on their own. And because they took all that loot in the 90s and burned everyone, they should have their big fat pipes seized immediately and nationalized.
I am not in favor of too much government or that sort of action as a general rule, but it is obvious as all get out we will as you say fall further and further behind the rest of the planet if we let things sit as they are with those companies, so a lesser of two evils approach is needed in their collective cases. The internet now is a utility, like roads, water, sewage, electricity delivery etc, and should be treated as such. I would prefer it to be run like a big public non profit co-op.