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Big Telecoms Strangling Municipal Broadband, FCC Intervention May Provide Relief
MojoKid writes: With limited choice and often dismal upstream speeds, it's no wonder many people are excited to hear that newcomers like Google Fiber are expanding super-fast gigabit internet across the country. But some Americans also have access to other high-speed fiber internet options that compete with the big guys like Comcast and Time Warner Cable: municipal internet. In the case of the small town of Wilson, NC, town officials first approached Time Warner Cable and Embarq, requesting faster Internet access for their residents and businesses. Both companies, likely not seeing a need to "waste" resources on a town of just 47,000 residents, rebuffed their demands. So what did Wilson do? It spent $28 million dollars to build its own high-speed Internet network, Greenlight, for its residents, offering faster speeds and lower prices than what the big guys could offer. And wouldn't you know it; that finally got the big telecoms to respond.
However, the response wasn't to build-out infrastructure in Wilson or compete on price; it was to try and kill municipal broadband efforts altogether in NC, citing unfair competition. NC's governor at the time, Bev Perdue, had the opportunity to veto the House bill that was introduced, but instead allowed it to become law. However, a new report indicates that the FCC is prepared to side with these smaller towns that ran into roadblocks deploying and maintaining their own high-speed Internet networks. The two towns in question include aforementioned Wilson, and Chattanooga, TN. Action by the FCC would effectively strike down the laws — like those that strangle Greenlight in Wilson — which prevent cities from undercutting established players on price. The FCC is also expected to propose regulating internet service as a utility later this week.
However, the response wasn't to build-out infrastructure in Wilson or compete on price; it was to try and kill municipal broadband efforts altogether in NC, citing unfair competition. NC's governor at the time, Bev Perdue, had the opportunity to veto the House bill that was introduced, but instead allowed it to become law. However, a new report indicates that the FCC is prepared to side with these smaller towns that ran into roadblocks deploying and maintaining their own high-speed Internet networks. The two towns in question include aforementioned Wilson, and Chattanooga, TN. Action by the FCC would effectively strike down the laws — like those that strangle Greenlight in Wilson — which prevent cities from undercutting established players on price. The FCC is also expected to propose regulating internet service as a utility later this week.
The $28 million was the original estimate. The cost at the moment is about $38 million.
There are about 5,400 subscribers of the broadband service giving a debt of about $6,300 per subscriber.
Wow! $6,300 per subscriber is a lot!
That's... let's see here... $525 per subscriber per month.
Yikes! That's Huuuuuuge!
That's... let's see here... $52.50 per month for 10 years.
That's... not unreasonable.
Okay, internet access is more than the build-out cost, let's suppose it's equally distributed 50% amortization and 50% ongoing costs (bandwidth, maintenance, power, &c).
That's... let's see here... roughly $100 per month for 10 years.
How long is the system expected to last? Amortization is usually over a 20 year period.
That's... let's see here... roughly $50 per month for 20 years.
That's... not unreasonable.
And doing this will bring employment for a couple of people in the town, and having fast internet access might bring a business or two to the town to generate more tax revenue.
[...] giving a debt of about $6,300 per subscriber.
I love emotionally framed arguments. It forces me to stop and analyze the real situation.
Dude, at least RTFS.
That's what Wilson NC did. They asked the inumbents to build out and give a quote.
The big boys told them to go to hell. At which point, they decided to build out their own.
General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
The act is "Broadband Network Companies Act 2011" so you can't really blame it for the ageing infrastructure. If you want to blame anyone for the ageing infrastructure blame the ISP's that failed to invest in new technologies.
This two decade old paper shows Telstra's plans for FTTH in 1994 INT94b.PDF. Telstra failed to act on this for two decades. The introduction of the NBN is a reaction to that failure to act and a recognition that the costs are such that you needed a longer term outlook than next quarter's earnings. The NBN also got caught up in partisan politics which hasn't helped.
For somebody making such a claim, you offer surprisingly few citations. Zero to be precise.
During the Enron Induced Electricity Crisis in southern California I lived in the City of Pasadena. Pasadena has its own municipal water and power service, and did a very good job of managing costs so that I didn't see rate increases at all, while customers of SoCal Edison were paying enormous amounts of money for power when they had it, and had plenty of brownouts/rolling blackouts while I had stable service. The City of Los Angeles did even better - DWP had done a very good job of planning and prepurchasing power and had excess available that they could sell at a profit, lowering the cost for their own municipal subscribers. Most municipal systems did similarly well during the summer of Enron, while private electricity was a disaster.
I now live in unincorporated LA county and am served by SoCal Edison. When we had a huge windstorm that took out power for about 1 million households across multiple power providers, Pasadena had nearly everybody back up in a day (they've spent a great deal of effort moving a lot of the supply underground and on reliability in general). I was driving across LA during the first full day after the storm and every hour or so the radio would report that another 100,000 of LA DWP customers were back up, but no change in SCE. Nearly all of about 400K City of LA customers were back up in 2 days, while SCE took as long as a week for many customers (they had something like 500K customers out), and was essentially incapable of even estimating how much they had to fix or when they could do it. SCE has had absolutely terrible service for most of the time that I've been in their service area, and I would gladly pay Pasadena prices for their reliability.
The ILEC's (Incumbent Local Exchange Carrier) need competition. I work in an area only a few thousand feet from fiber. After Frontier bought that piece of Verizon land (many years ago) they stopped all FiOS deployments. The only landline access available to my main office is T1, currently $650/mo. That's 1.5Mbps up/down to the lowest bidder with Frontier providing the local loop. I was paying $2,600/mo for four T1's to get 6Mbps. The lines went down continuously. Customer service was a joke. I lived in this hell for almost ten years until the neighboring city started providing internet access. We were able to get a point-to-point 5.8GHz solution for less than $1,000 setup and 400/month that provides 30Mbps up/down and has near 100% uptime, better than anything provided by the the local telephone (err, data transport) companies.