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How Big Telecom Smothers Municipal Broadband

Posted by Soulskill on from the can't-even-trust-the-huge-soulless-corporations-anymore dept.

Rick Zeman writes: The Center for Public Integrity has a comprehensive article showing how Big Telecom (aka, AT&T, Comcast, Charter, Time Warner) use lobbyists, paid-for politicians, and lawsuits (both actual and the threat thereof) in their efforts to kill municipal broadband. From the article: "The companies have also used traditional campaign tactics such as newspaper ads, push polls, direct mail and door-to-door canvassing to block municipal networks. And they've tried to undermine the appetite for municipal broadband by paying for research from think tanks and front groups to portray the networks as unreliable and costly."

31 of 111 comments (clear)

  1. This Just In! by pwnyxpress · · Score: 5, Insightful

    Group in power tries to maintain power...story at 11.

    1. Re:This Just In! by Jason+Levine · · Score: 5, Interesting

      It's even worse when the big ISPs are trying to kill municipal broadband in an area they don't serve. Because you can't have the government competing with them in an area that they might, someday, begin to consider serving. Until then, the residents should grovel (over dial-up) at the big ISPs' feet for broadband Internet service.

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    2. Re:This Just In! by sabri · · Score: 3, Insightful

      Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.

      There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.

      --
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    3. Re:This Just In! by i+kan+reed · · Score: 4, Insightful

      There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.

      Given a few common, yet unproven, assumptions about how markets operate. ISPs operate a lot like utilities in terms of fundamental market behaviors, and the prevalence of natural monopolies. Organizing the structure of the market to allow smaller competitors, to me, is one way a government could help. Not the only way.

    4. Re:This Just In! by Anonymous Coward · · Score: 3, Interesting

      In most municipalities, it is impossible to start a small ISP because the city government didn't want to have to talk to more than one supplier of each kind of service. Competition is annoying for bureaucrats, they get two sides making claims and showing evidence, it actually requires work. So much easier to assign a monopoly and approve or reject their requests entirely on personal and political grounds.

    5. Re:This Just In! by Anonymous Coward · · Score: 5, Insightful

      There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.

      No, there is only one real reason for the government to step in: To serve the interests of its citizens.

      You may argue that smaller ISPs are in the interests of the citizenry, that's certainly reasonable enough to assert.

      But never forget why it's done.

    6. Re:This Just In! by fustakrakich · · Score: 2

      Oh no no no.. The real story that should be addressed is how people are so easily swayed by propaganda. This is the issue to attack.

      --
      “He’s not deformed, he’s just drunk!”
    7. Re:This Just In! by Mr+D+from+63 · · Score: 3, Insightful

      Unfortunately, the major news outlets have long since lost the ability to explain anything of this nature in a factual manner. And since the telecom wield influence over them as well, they aren't likely to help on this one.

    8. Re:This Just In! by Penguinisto · · Score: 4, Informative

      "people"? You misspelled "legislators" - in 2003/4, Qwest (now CenturyStink) and Comcast went nuts and brib^M convinced Utah legislators to abandon the UTOPIA multi-city municipal broadband project, then they began slathering on lawsuits and threats thereof.

      --
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    9. Re:This Just In! by fustakrakich · · Score: 3, Interesting

      I don't give a damn about any of that. I only care that these politicians are being reelected over and over. That is a problem of the people.

      --
      “He’s not deformed, he’s just drunk!”
    10. Re:This Just In! by nine-times · · Score: 4, Insightful

      Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.

      That's not why. It's because they're afraid of getting shown up.

      If you have a bunch of people out in the country getting gigabit internet for $25/month while the city folk are still paying $50/month for 1mbps DSL, it makes AT&T/Verizon look either corrupt or incompetent. It also destroys their argument that they can't provide good Internet in the US because of the low population density.

  2. I don't know what's scarier about this article by timrod · · Score: 5, Insightful

    The fact that a 67-year-old grandmother from Tennessee has more progressive views on municipal internet than a large portion of the rest of the country, or that AT&T stepped in and threatened a 67-year-old grandmother over her attempt to provide municipal internet to her community.

    1. Re:I don't know what's scarier about this article by AnontheDestroyer · · Score: 5, Insightful

      She doesn't have more progressive views than most in the country. This is yet another issue that proves the country is an plutocracy rather than a democracy. In this instance, a few corporations (who Republicans will have you believe are, "people") are buying up politicians and subverting the will of the masses.

      It just happens to be one of the more glaring flaws with our campaign finance and electoral systems. And it still can't be fixed.

    2. Re:I don't know what's scarier about this article by bughunter · · Score: 2

      What's truly scary, is that in the US some people consider Public Integrity (both the nonprofit and the concept) to be "far left."

      From the site's "about" page:

      Our mission: To serve democracy by revealing abuses of power, corruption and betrayal of public trust by powerful public and private institutions, using the tools of investigative journalism.

      Yep. Anarcho-communist FUDmongers, the lot of 'em.

      --
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  3. Stakeholders vs. Customers by SpzToid · · Score: 2, Interesting

    Seems to me that stakeholders in municipal broadband are a more satisfied lot than the customers of the Telcos (with their paid lobbyists so nicely donating money to the boy/girls scouts to enlist their 'support' for crazy-ass mergers and what-not; nevermind that The Public has Clearly Told The 3 (is it?) commissioners at the FCC to take a flying leap).

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  4. Crowding Out Effect by digsbo · · Score: 4, Insightful

    It's funny that when a free-market proponent says government monopolization of some good or service "crowds out" for-profit competition we get called names. It's also funny that when we point out that these companies with government sanctioned monopolies aren't really operating in a free-market environment we get accused of using the "no true scotsman" fallacy.

    1. Re:Crowding Out Effect by i+kan+reed · · Score: 4, Insightful

      It comes from the fallacious belief that non-government created monopolies leveraging their position will face competitors who can "do it for less". The truth is that infrastructure just isn't that conducive to competition. Who'd want 3 different water/sewer systems connected to their house?

    2. Re:Crowding Out Effect by _Sharp'r_ · · Score: 2

      Who'd want 3 different water/sewer systems connected to their house?

      Ummm... me?

      I'm currently forced to buy water from only the local government-granted monopoly water provider, who has decided not to provide one type of water I want to purchase (greywater) to residential customers. They sell it to commercial customers at1/10th the cost of their potable water lines, but despite the fact that the pipes and infrastructure supporting it are literally 2 feet from my property, I'm classified as residential, so no using greywater for landscaping for me.

      There's another potential water provider less than a mile away in a different political jurisdiction who I could purchase from... if it was legally allowed for them to compete here, which it isn't.

      The truth is that taking a government-created monopoly and saying that's proof that a market wouldn't support a non-monopoly setup is really saying that the legal framework creating the monopoly in the first place isn't really needed. So let's get rid of the government enforcing monopolies and see what's really a persistent natural monopoly vs what's actually a favor for buddies of the local politicians instead?

      --
      The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
  5. Re:Republican? by Shatrat · · Score: 2

    The one that doesn't conform to the group-think stereotypes of online forums.

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  6. Why can't taxpayers decide for themselves? by sjbe · · Score: 5, Informative

    There is only one reason for the government to step in: make it easier for smaller ISPs to start shop.

    So you don't think the government should step in if the big guys are abusing their monopoly? You don't think the voters in a municipality should be allowed to decide for themselves if they want the government to establish broadband services for their own use? I know it's a popular meme to presume that governments are nothing but incompetent but the reality is that sometimes the government is the best way to get something done. If the existing ISPs find it not worthwhile to serve a population I see no credible argument why the local government couldn't fill that role if the taxpayers want them to. Might not be economically ideal but sometimes perfect is the enemy of good enough.

    I'd love to start a small ISP in my area, but it is practically impossible.

    Out of curiosity, why? It's a pretty tough way to make a buck. The margins in being an ISP are pretty thin unless you are able to obtain some form of monopoly. If there is any competition the margins plummet but costs don't. Huge fixed costs, lots of customer service, maintenance, etc. Maybe it's your passion but I've started a number of businesses and that is a seriously difficult business to get into. I can introduce you to several people who have actually tried to start an ISP and failed in spite of being well funded.

    1. Re:Why can't taxpayers decide for themselves? by Frobnicator · · Score: 5, Informative

      So you don't think the government should step in if the big guys are abusing their monopoly? You don't think the voters in a municipality should be allowed to decide for themselves if they want the government to establish broadband services for their own use? I know it's a popular meme to presume that governments are nothing but incompetent but the reality is that sometimes the government is the best way to get something done. If the existing ISPs find it not worthwhile to serve a population I see no credible argument why the local government couldn't fill that role if the taxpayers want them to. Might not be economically ideal but sometimes perfect is the enemy of good enough.

      My region (the 2M people metro area) is going through municipal broadband fights. They started the fights back in 2002.

      The group got an initial rollout in a few of the smaller cities, roughly 11,000 people got hooked up. Then the entrenched monopolies kicked in. Some highlights:

      * Lawsuits from both the incumbent megacorps on cable-based and phone-based Internet on the claim that it was unlawful and anti-competitive for a state agency to compete with an established business. The lawsuits took several years and cost millions. The judges and the appeals court found that government is allowed to provide services, similar to how they provide municipal trash services and still businesses compete; nothing prevents the cable and phone companies from competing if they want.

      * Every year state legislators keep introducing new bills prohibiting government agencies from competing with existing businesses, or requiring that governments cannot provide information services to the public without high fees and those fees should go to education, or that any group providing Internet services have so many billions in assets to mitigate risk of disaster, and other variations. Invariably a little research shows the legislators get money from the phone and cable companies, and the company lobbyists vocally support them. The municipal fiber groups have needed to spend several million dollars to fight these as well.

      * In a few cities installation was unexpectedly stopped again when some of the smaller cities discovered their own contracts with the megacorps demanded that they couldn't build their own systems until after a multi-year vetting process with the megacorps plus giving them another multi-year opportunity for megacorps to adjust prices and to improve their infrastructure. Basically the smaller city and town governments signed deals for their own cheap Internet that block municipal fiber within their limits for a decade or more. Since then the FCC and other groups have urged cities to be more careful in the contracts they sign.

      * Incumbents even got the federal government to drop contracts. In one case they had a contract with the federal government for a $66M under the RUS. After the municipal system had invested and contracted based on that contract it was unexpectedly cancelled. Investigation showed the federal contract was cancelled because the federal RUS system was threatened by the megacorps. A chain of 'smoking gun' emails were discovered where Comcast and CenturyLink demanded the RUS cancel the contract or the two megacorps would act against it; a lawsuit on tortious interference is ongoing, but the cost will be several more million before any ruling will follow, in the mean time the municipal system is out the $66M plus all the interest they need to pay on the emergency loan they had to take out to avoid defaulting on the expenses.

      * Because the megacorps have forced the municipal fiber system to spend hundreds of millions on lawsuits and illegally-broken contracts, and because the redirected money has resulted in higher interest rates and longer-term loans costing over $500M to date, they are leveraging it and constantly sponsoring print ads, billboards, and TV ads (on their own cable networks) making nonspecific claims about how the municipal fiber has collected so m

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  7. Re:Municipal Broadband is Socialism! by towermac · · Score: 2

    It's not socialism. Unless you expand the definition of socialism all the way down to include two people talking...

  8. Eliminate municipal monopolies by BobandMax · · Score: 5, Informative

    The answer is pretty easy. Eliminate the ability of cities, counties or states to create monopolies. In jurisdictions where there is no monopoly and multiple offerings exist; prices are lower, service is better and customers are more satisfied.
    http://www.pcworld.com/article...
    http://cbpp.georgetown.edu/wp-...
    http://www.uspirg.org/reports/...

    --

    "Computers are useless. They can only give you answers."
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    1. Re:Eliminate municipal monopolies by BobandMax · · Score: 2

      The subject under discussion is broadband. Try to pay attention. And, yes, municipalities do prohibit competition through sleazy deals with all-too-eager providers. In those areas where there are no contractual monopolies, lower rates, better service and higher consumer satisfaction are the norm. The reason why there is only one choice in so many locations, like mine, is because local government has sold the monopoly rights.
      http://www.wired.com/2013/07/w...

      --

      "Computers are useless. They can only give you answers."
      -- Pablo Picasso
  9. Government subsidy vs government monopoly by A+nonymous+Coward · · Score: 2

    What galls me the most is the panty-wetting over a government-granted monopoly trying to maintain its government granted monopoly when that very same government tries to compete using taxpayer dollars as a subsidy.

    The outrage should be against government involvement period. If governments didn't grant local monopolies, there would be real competition among the real companies, and no perceived need for the government competition which is only competitive because it has the taxpayer subsidy.

    --
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  10. Terrible idea by Dega704 · · Score: 4, Funny

    Municipalities providing a critical infrastructure? What Lunacy! That will never work! What other crazy ideas do these municipalities have in store for us? Electricity? Running water and sewage? Gas heating? Paved roads? Balderdash! Best to leave these things to the large corporations and eliminate all of the regulations since they have nothing but the public's best interests at heart. To the free market fairy we pray for forgiveness. Amen.

  11. Huh! by DaMattster · · Score: 3, Insightful

    With all of the money they spend lobbying politicians and rallying people against municipal broadband, they could've built out their networks and made them even better. Utter stupidity!

  12. "monopolies" by Anonymous Coward · · Score: 2, Informative

    Given a few common, yet unproven, assumptions about how markets operate. ISPs operate a lot like utilities in terms of fundamental market behaviors, and the prevalence of natural monopolies. Organizing the structure of the market to allow smaller competitors, to me, is one way a government could help. Not the only way.

    Close, but not quite IMHO.

    The ISP component does not have to be a monopoly: and by "ISP" I mean the routing of packets. What tends to be monopolistic in practice is the cabling, whether fibre, twisted pair, or co-ax.

    I think that separating the part of current incumbent telcos and cablecos into separate entities, one which runs the physical stuff and the other which runs the packet routing (and telephone and television signals) would go a long way to improving things. At the very least forcing the incumbents to provide access like they have to do in Canada would be the very minimum for a proper functioning ISP market.

    Ideally the company that runs the ISO Layer 1 and 2 stuff would completely separate and a nonprofit. Whether that entity is publicly owned or a private company is a minor point.

    But separating physical access and network service (even by a "Chinese wall" with-in the current mega-corps) is the key point that needs to happen. Everything else is shuffling deck chairs.

  13. Re:um by sam_nead · · Score: 4, Informative

    Soros hasn't funded them in the last decade. http://en.wikipedia.org/wiki/C... "They are not journalists" - they won a Pulitzer...

  14. Re:um by Anonymous Coward · · Score: 2, Informative

    Ah yes, the age-old "if you can't attack the message then attack the messenger". The article was well researched and correct. Deal with it.

  15. Re:um by mvdwege · · Score: 4, Funny

    You forgot to mention Al Gore, Hillary Clinton and Nancy Pelosi.

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