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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.
We the Government of the corporations, by the corporations, for the corporations, will not allow the democratic process to interfere with the rights of business to dictate monopolistic and oligopolistic solutions to citize ... erh, customers.
In particular, you have no right to competition nor to form any "more perfect union" that reeks of socialism or even just consumers rights.
Business must be allowed perfect freedom. All other freedoms are coincidental.
Signed.
Your governor.
I am anarch of all I survey.
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.
Wait, towns that protect incumbents, then want to throw those incumbents out to run their own service...huh?
How about this: government is the provider of last resort (it kinda works this way already for a bunch of other services). If the local telcos or ISPs thought it was profitable, then they would have already done it. But they didn't. So it's up to the local government to step in and work to improve their community. One of the reasons we're in the house (and town) we're in now was because back in 1998 there was Cable Internet service available. These days I'm fairly certain that a house without access to high speed Internet service will sell for far less than a house that does have access to it. Higher house prices equals higher taxes. It's in their interest to make the tax base as wide and high as possible.
I know that if and when I move next, one of my primary considerations will be "What kind of internet access is available here, and who is the provider". When I last did in 2008, that was a major consideration in buying in the current town (Cox/Fios both available) as opposed to the next county (Comcast only).
I wonder why the city council thought they were so much better qualified to make these projections than the people who run ISPs for a living.
Their reasons are irrelevant. The decision to employ public funds to this end was made by the people. If the ISPs insist the weight of their opinion must be greater than that of the people those ISPs should be dismantled as they're a threat to democracy.
Probably because the people at the ISP's don't give a shit what services the people there need/want?
I briefly tried to take a blog on technology issues into the domain of a youtube channel. However my internet is a 20/1 connection, at 1 mbps it takes me 3-4 hours to upload one ~40 minute segment. While I'm uploading I can't even use the internet for anything else. I need much faster up, but those big companies don't give a rats ass what I need. My best option for internet is what I have now. No business options even exist beyond what I have for residential service (a 3x bill just gets me 24/7 support and a change of name to 'business service').
These companies want to milk existing infrastructure for their own profit with no benefit to their customers. The other big businesses and financial services who own their stock get a good return though.
we are all invisible unless we choose otherwise
Look at the comparison between people in the US who have electricity provided by a commercial for-profit entity and those who have it provided by a co-op/municipal entity. All the evidence I can find suggests that the municipal systems are better for the community than the commercial operators.
I cant find any suggestions that people living in areas where the electricity is provided by a municipal monopoly are unhappy with the service or wish they had a commercial operator running things.
And there is nothing to suggest that municipal broadband is going to be anywhere near as crap as the current offerings. Its likely to be high speed fiber links (so already it will be faster in the real world than the crappy speeds most cable and DSL operators currently give you) and there is no real reason for the municipality to try and pull tricks to protect TV revenues (since the municipalities generally dont have skin in the TV game in the way the current monopolies do)
Qualification is not the issue, goals are. The city council has a different set of priorities than outside ISPs. It still might have been a bad idea, but looking to the calculations run by people with different objectives in mind is of limited utility.
I don't see this as that different from a municipal water system. The town, through it's elected officials, chose to implement this plan. Perhaps the citizens voted for this system knowing that initially it wouldn't break even but think that it was good for the town as a whole. Much as I might vote for a municipal water system even though I get my water from a well and don't want to subscribe to the water system. I realize that it's good for the town and therefore good for me indirectly even if I don't directly take advantage of it. I support bond measures for schools even though I don't have children and don't plan too and so do some who send their children to private schools. Who are we, not part of the town, to question their wisdom and judgement from afar. Perhaps the town made the judgement that as the internet grows and government services migrate to the net, more people will sign up and it will be revenue neutral or even make them money down the road. I support the idea the local government is the best and I see no reason to over turn their judgement here.
I've been wondering how long it would be before internet access began to be regarded as a utility. It has a lot in common with water and electricity in the 21st century - important to everyday life, high capital investment to put in infrastructure, commoditized once that infrastructure is in place. The parallel with electricity is especially close - different providers all use (or in theory can use) the same wires.
Of course, internet access is not as important as electricity and water in a fundamental survival sense, but the key is whether access to it is regarded as a norm of civilized life. 150 years ago access to electricity was rare and not part of day to day life - arguably, electrical infrastructure is not critical for survival or even for civilized living. Yet, today, living without electricity is not something most of us would care to contemplate. I suspect over the next 50 years "information infrastructure" will come to be regarded much the same way - theoretically we could make do without it, but the normal functioning of society and people's interactions with that society will require it.
Whether tha'ts a good thing is of course another question, but to me regulating the internet as a utility is in 2015 a no brainer.
If they borrowed money in the form of municipal bonds to get this done and it doesn't pay off and they default or declare bankruptcy why should the state bail them out? The creditors who bought the bonds should take a haircut for making a bad investment. Why should the state bail out those investors? Isn't that how municipal bond markets are suppose to work? Isn't that why they're private, won't private investors look at what the bonds are for and make a judgement if it's a good investment of their money or not? Who are you to tell the bond holders how to invest their money?
Sure. And a pink elephant could materialize out of thin air. Fortunately, we don't need to guess — the City of Brotherly Love tried municipal WiFi (much cheaper than running actual cables) years ago. By 2008 the system was shut down. Earthlink actually wanted to hand it off to the city's government, but found no interest...
Seattle's municipal WiFi went dark in 2012. Other examples abound.
Yes, not only is government competing with private sector illegal — it is also a bad idea.
In Soviet Washington the swamp drains you.
If the majority can decide to force me at gunpoint to pay for something I did not want, then the "democracy" must be dismantled as not a mere threat, but actual impediment to freedom.
As a white person I have to say only another white boy would say something this ridiculous.
Every government ever has forced people to pay for things they didn't want. Pacifists funded the revolution at the exact same rate as Patriots. You couldn't get out of paying for the war that conquered the Indians of Ohio by claiming you had a principled disagreement with the policy of Indian Removal to West of the Mississippi.
BTW, the policy of Indian Removal probably would not have worked if the Native Americans had real governments that could do things like insist that the Oglala Lakota of what is now South Dakota send 1,500 number of warriors to a rally point in Green Bay to join the Unified Native Resistance Army. Since they didn't we got to fight each nation thirteen-on-one, with some very rare exceptions (i.e.: Tecumseh), and even those exceptions typically didn't have the political power to enforce taxation or military service. Which meant that when they lost a battle they lost the war.
Give this "AT GUNPOINT!" thing a rest. Yes we know that if you do not pay your taxes you will face sanctions (though it is highly unlikely guns will be drawn unless you draw first) This is entirely different from the government going door to door extorting the helpless residents. If you don't want the local government spending money on anything except cops then find a locale where the other residents share your view and you can all exercise your civil rights to elect a local government that will do only that. What you cannot do is ignore the government that your neighbors democratically elected because you don't like it.
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.
Cables must be buried underground, but, facing no competition the local utility is not in any hurry to do that.
Fine. Then vote to spend 10x - 100x (depending on terrain) as much to run the cables, and raise the rates to pay for the ***HUGE*** bond issue required to implement it.
If the local telcos or ISPs thought it was profitable, then they would have already done it.
This is a common fallacy, if the ISPs thought they could make a higher return on their investment providing crappy service (particularly if they have no competition) then there is no incentive for them to provide good service (particularly if it means they will have competition).
The town (presumably) would not be profit focused and therefore be more concerned with the quality of the service than the return on investment. There are some things socialism does better than capitalism, and vice-versa.
"Grab them by the pussy" -- President of the United States of America
Since corporate-owned Internet was provably no obstacle to government surveillance, your question is irrelevant.
"I know I will be modded down for this": where's the option '-1, Asking for it'?
There are 47,000 people in the city (who are on the hook for the bill).
Of those 47,000, only 5,400 have chosen to get the service.
47K people may be only 9K to 15K households. If all the households have 2 adults and 2.2 kids, 5400 is about half the households in the city. It may very easily be that while there's insufficient profit available for a large providers to come in, it's more than worth it for the residents to have what's become a rather important utility for much or most of the developed world.
I remember back when my GF and I first got broadband in our house. Some of our friends who had it before we did had gotten in trouble with the cable company for using their own router. The cable company was able to detect this because the modem would report the MAC address of the connected device to the cable company. Our friends were forced to rent and use a supplied router, then charged based on the number of PCs that router reported (or for 2, if the router reported
When our subscription started, after getting the service working using a PC directly connected to the modem, we then set our router's "up stream" MAC address to the same as the PC we used for setup. We still keep that PC for when there is a problem. Just before calling the cable company, we disconnect the router and connect that PC. Otherwise, the person at the cable company will just say "The problem is that you have Windows Firewall turned on. Turn that off and the problem will go away."
Don't try to out wierd me, three-eyes. I get stranger things than you, free with my breakfast cereal. --Zaphod Beeblebr