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Trump's FCC Votes To Allow Broadband Rate Hikes Will Deprive More Public Schools From Getting Internet Access (theoutline.com)
The FCC voted on Thursday to approve a controversial plan to deregulate the $45 billion market for business-to-business broadband, also known as Business Data Services (BDS), by eliminating price caps that make internet access more affordable for thousands of small businesses, schools, libraries and hospitals. The Outline adds: The price caps were designed to keep phone and, later, broadband, access cheap for community institutions like schools, hospitals, libraries, and small businesses. Now, there will be no limit. A spokesperson for the trade association Incompas, which advocates for competition among communications providers, told The Outline that the increase is expected to be at least 25 percent across the board. Low-income schools already don't have enough money; according to a report last year in The Atlantic, schools in high-poverty districts, where the property taxes are lower, spend 15.6 percent less per student than schools in low-poverty districts. If internet costs go up by 25 percent, it may make more sense to cut that budget item, or, for schools that still don't have internet, never add it at all. Add it to the list of things that well-funded schools in already-rich neighborhoods get that schools in low-income neighborhoods don't. New textbooks. Gyms. Advanced Placement classes that let students earn college credits. Computers. Internet access.
I can feel America returning to greatness at breakneck pace...
Trump is very consistent and clear in whom he serves and it's not the working class. Once again, making money for his friends at the expense of us all. Wonder what's next in his mad run to basically allow infinite inflation of essential services. (And yes, the Internet is basically an essential service, like electricity: you can "live" without it, but getting what we consider essential services because a challenge without it)
"Imagination is more important than knowledge" - Einstein
Most schools give lip service to spending money on reducing class sizes and getting Internet access. But when it comes to replacing the football field, the money can always be found for new football fields. When my parents retired to Sacramento in the mid-1990's, my father drove me around the county. He pointed out all the schools that didn't have money to reduce class sizes (the Internet was still "new" back then) but had the money to build a new football field. If one school was replacing their football field, all the schools had to replace their football field. Can't have schools lagging in important priorities.
President Trump is right to reevaluate, and clean up where necessary, regulation that has caused disruptions to economic markets.
It's well known at this point that price caps cause market distortions, which directly lead to a non-optimal allocation of resources.
When I hear about things like "high-poverty districts", these are usually formed because of price caps (on the price of rent) or some other market-distorting regulation that has prevented the investment that would otherwise take place from taking place in these areas.
Let's take rent control as a simple example. Imposing these distortions removes the incentive for landlords to maintain and improve their properties. When this happens, the wealthier people eventually move away to better properties, leaving only the impoverished who can't move. They often can't, or don't, pay rent, which again hurts the landlords. The landlords who do remain will become slumlords. Others will just abandon their properties, or worse, destroy them to collect at least some insurance reimbursement. The end result is that "high-poverty districts" form, and stay like that until the economic distortion that caused them to be formed is removed.
Another example is minimum wage floors. These make it prohibitive for businesses to start, and make it harder for existing businesses to continue remaining viable. These also help create "high-poverty districts", because there are fewer jobs than there naturally would be if labor didn't need to be paid artificially high wages.
Given how we universally see price caps and wage floors causing severe and disruptive economic distortions everywhere else, there's no reason to expect broadband Internet to be any different. Price caps there are no doubt leading to all sorts of market inefficiencies, and these can't be cleared up overnight. The pain being felt in the short term would be thanks to imposing these caps in the first place, and causing the economic distortions that now have to be undone.
its going up by a 25%, not a quarter.
Example (I can't speak for all schools).. but in NY, a medium sized HS pays approx. 210K annually for Internet access and support. (based on today's rates.. that number should be, based on market rate, closer to 300-350K). (smaller schools will pay less (depending on region and bandwidth), and larger schools pay more.).
210,000 x 25% = 262,500 (or 52K more).. Now in the grand scheme of things... that may not SOUND like a lot, but 52K on a small (and increasingly smaller) budget means schools have some very hard choices.. (drop it in favour of other programs which may make it less effective for today's student, etc...). And keep in mind, with no cap, prices CAN go as high as they want (of course there is a point of you "kill the host").. but making them bleed to death is not going to benefit anyone either (but remember, they don't like public schools.. so none of this is really surprising)..
Put in charge of education, someone that wants to see public education gone.
Deprive it of federal funds
Use the FCC to remove pricing caps which allow for more expense (notice, available funds have gone down).
Use the decline in quality as "proof" of why public schools should be abandoned..
Rinse and repeat until the problem goes away on its own.. or parents (en mass) vote to eliminate it.
God made the Idiot for practice, and then He made the School Board -- Mark Twain Look for http://Thebar.steelbeachca
As a technology director for a public K-12 school, I'm very concerned about what I'm reading in the headline. But the "article" is an extremely biased report, citing just as equally biased an article, and neither article really gives me a clue as to what's going on here.
So, let's start at the source: Here is the actual FCC draft order specific to this change. Now, in the course of working on and completing E-Rate filings with the USAC to receive reimbursement for internet and network services for our school district, I've read a few 60-70 page FCC reports before. They're not fun, but they're necessary. That being said, I'm about 20 pages in, and already I'm disturbed. Here's why:
FCC reports that I've read in the past are boring, dry reads, but at least they're factual and unbiased. Not so with this one. Three sentences in, and we get this: "The FCC has historically subjected the provision of business data services by incumbent local exchange carriers (LECs) to price regulations." And the spin continues..."eases the regulatory burdens"; "spur entry, innovation and competition in the vibrant business data services market"; "competition is robust and vigorous in the markets." And this is still just the first page. The draft order is littered with biased political spin, something that has not been present in my reading of previous FCC draft orders. Because of this, I can't even depend on a government document to give me an unbiased report of the rationale behind the decision, nor can I depend on it to help me determine what the consequences of the decision will be. So, I'll have to create my own... here goes.
Local Exchange Carrier (LEC) price regulations have been there historically specifically to protect subscribers from LECs that had monopoly or near-monopoly controls over their service regions. Most regions throughout the United States historically were not served by competitive broadband providers. Recently, this has begun to change, where some communities now have competitive service providers come in, giving subscribers a choice. The FCC began to look into this issue back in 2012, before Trump. According to the report, "In December 2012, the Commission released the Data Collection Order FNPRM, to collect data, analyze how competition, “whether actual or potential, affects prices, controlling for all other factors that affect prices,” and “determine what barriers inhibit investment and delay competition, including regulatory barriers." By not controlling pricing, the FCC claims in its report that LECs will no longer be limited entry into a potential market, where capped rates would not allow for a sufficient recovery of the investment necessary to build into a new market area.
But, here's the flaw in their reasoning: trenching fiber costs a lot of money. A lot. If service provider A already has fiber, service provider B is not going to install fiber if it does not believe that it can earn back their investment in a reasonable amount of time. Even if prices are artificially inflated by provider A, just because they can, if provider B tries to compete and trenches their own fiber network, both A and B know that A can lower its rates to a competitive level to drive out provider B. So, B has no incentive to trench, leaving A with the monopoly.
The easiest solution: make internet a utility. It's silly to think that it's a smart idea to run multiple fiber lines to a building. (I should know; our school has two of them, and both are dark.) It would be just as silly to have multiple electric taps, or multiple water pipes. But, that's not happening anytime
I'm just going to point out that the public schools in poor districts who supposedly "never got Internet yet" OR are supposedly in real need of reduced cost Internet broadband because they can't afford to pay the "going rate" for it are, indeed, PUBLIC schools.
When you hear about our failing school systems and those pushing to allow tax dollars to fund sending their kids to private alternatives via a voucher system of some sort -- this is a good example of why. Any government run public school that's so bad off, it still hasn't even obtained Internet access is a FAILURE. It doesn't need subsidized broadband to fix it. It need to be completely gutted and overhauled! Tax dollars pay for everything it does already. If that's not sufficient to pay its bills for things like its Internet connection, then it's not really viable.
Installing fiber isn't that expensive. I live in a semi-rural area several miles outside of the nearest small town, and 25 miles from the nearest big town, ~50 miles from a city, and ~100 miles from a major metro area. And I have three fiber pedestals near my house, from two different cable companies.
Nice anecdote. By the way, have you ever trenched fiber for a local telecom? It's not cheap. Two minutes of Google searching gave me this neat data. A couple installs in Florida ran about $10,000 per mile back in 2013. Let's use that as a base cost. Wikipedia then tells me that Google needed 4,000 miles of fiber to setup in San Antonio. So, $40 million dollars, just for one city. And if there already was one or two other providers there offering services, able to price-cut their services to maintain their subscriber base, that would give me even less reason to start breaking ground.
I've spoken with two different telecoms about their fiber install over the last five years. Both of them say that there's a substantial initial investment, just to develop a core community of subscribers, which then provides the profits necessary to branch out into neighboring territories, especially in rural areas. (Both teleco's said that rural areas don't turn a profit. The urban areas subsidize the costs.)
No, it is expensive.