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Time Warner Cable Won't Compete, Seeks Legislation
Posted by
Soulskill
on Thu Apr 23, 2009 10:35 AM
from the they-sure-seem-to-like-bad-publicity dept.
from the they-sure-seem-to-like-bad-publicity dept.
narramissic writes "The good people of Wilson, NC pay $99/month for 10/10 Mbps internet service, 81 TV channels and telephone service. How'd they manage that, you ask? Well, the city-owned and operated cable service called Greenlight came into being when the City of Wilson approached TWC and local DSL provider Embarq and requested faster service for the area. 'TWC refused the request. And so Greenlight was born,' says blogger Peter Smith. 'Now Time Warner Cable and Embarq are upset that they've got competition, and rather than try to go head to head with Greenlight on price and service, they've instead been lobbying the state government of NC to pass laws to put Greenlight out of business. Apparently they're having some success, as the NC State Senate has proposed bills that would do TWC's bidding.'"
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US ISPs Using Push Polling To Stop Cheap Internet 417 comments
An anonymous reader writes "What happens when a new ISP is started somewhere in the United States that completely blows out of the water all the other ISPs in the area, in terms of price and performance? Apparently, that question is being answered in North Carolina, where Greenlight Inc., a company started by a city government, is trying to offer faster, more reliable, and cheaper Internet service to the local residents. Time Warner and Embarq can't compete. So they are not only lobbying the state government to destroy the upstart competition, but are now using push polling methods to gain support, across the two cities that could benefit from the new ISP, for the 'Level the playing field' legislation they got introduced in the legislature." A local news outlet provides coverage more friendly to the incumbents' point of view.
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Convert? (Score:5, Interesting)
I am not a legal eagle on NC law, but I would think it wouldn't be that difficult to convert to a citizen run profit/nonprofit corporation and then TWC is effectively screwed.
Re:Convert? (Score:5, Informative)
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Re:Convert? (Score:5, Funny)
go fornicate with goat and our lawyers took care of it
Now THAT's money well spent!
captcha: shocker
shocker [wikipedia.org]
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Re: Convert? (Score:5, Funny)
we told them to go fornicate with goat and our lawyers
How rude!
we told them to go fornicate with goat[,] and our lawyers took care of it.
Oh. I liked the first one better.
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Re: Convert? (Score:5, Insightful)
This is ridiculous when a private company is stifling competition.
The benefits of competition are only of interest to companies as a mantra for getting government regulations eliminated. No company actually wants it.
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Re: Convert? (Score:5, Insightful)
Exactly, especially when the regulations are not beneficial. In the case though, TWC is looking for regs that harm their competition, and that they are ok with. The same goes for bailouts, which are a form of regulation. Real companies have never behaved as though they want real, fair markets with free access. They just want to win, and are happy to have that win handed to them by the government.
This should all be plainly obvious at this point, and anyone who thinks that mantra has any meaning beyond a marketing ploy to fool citizens into working against their own interests, well, there are some painful conclusions to draw about those people.
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Re:Convert? (Score:5, Insightful)
If anything should be done it might be the privatization of the newly created service provider. The city should retain a minority controlling share, impose oversight and fair rules; and then let the company exist as a competitor. If TWC want to gain back their customers they should perhaps try to actually provide the services people want, at fair prices and with good service. Instead of using resources that could be better spent trying to hinder and punish citizens who's example should be honoured, respected and emulated.
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Re:Convert? (Score:5, Insightful)
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Re:Convert? (Score:5, Insightful)
But I wonder how many people who are criticizing Time Warner over this really understand what they're arguing in favor of. They're arguing in favor of an economic system that is designed to be anti-competitive and to provide services for less than a private company ever could.
This is conjecture. Just because people are critical of the way TWC have handled this case, and just because they took matters into their own hand to find one solution (temporary or permanent}; does not mean that it have to lead to the implementation of a socialistic economic variation. Even if you accept that the solution they adopted here is moving into one of the fundamental concepts upon which the numerous variations of socialistic philosophy is based.
I would urge you, and others, to keep in mind that reality is not easily put into one category or another. Socialistic and Capitalistic concepts and ideas are not all Either Or; one or the other. What matters is practical implementation of ideas; something that makes no distinction between the various ideologies behind the implementations chosen or attempted.
While they people in question here might have taken the path the did because of perceived flaws in the system in place; does not mean anyone is advocating a total replacement of the system; or that following up on what they did with Greenlight will necessarily lead to the total implementation of a variant of a socialistic economical model; or that all socialistic economical models are hostile to all sorts of competition.
Of course on the last point I will agree; very few seem to understand this; or that reality is not easily divided into ideological camps. Few things are black and white, one or the other. Our society and government(s) are what we make them, shaped by our ideas and actions.
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Re:Convert? (Score:5, Insightful)
Excuse me, english is my fourth language, so, pardon my french, but what the fuck are you talking about?
TWC was invited to come in and provide the service. They refused. So the city built its own. And now you're saying TWC can't "compete" with that? Well, too bloody bad. The government offered it to TWC, and TWC turned it down. And now they want to cry "bad city"? Well, I'd like a pony with that too.
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Re:Convert? (Score:4, Interesting)
The idea is to use tax dollars for the initial costs of infrastructure and then convert to a private entity once established for operational costs and maintenance. Not a terrible idea at all. Makes me wish I lived in a smaller town, actually.
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Re:Convert? (Score:5, Insightful)
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Re:Convert? (Score:5, Informative)
Why convert it to a private entity? Just run it as a city utility. I have city power, water, AND fiber triple play. The service and quality is much better then anything I've ever gotten form private companies.
Let the government own and operate the lines, and let others offer services over those lines.
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Re:Convert? (Score:5, Interesting)
I live in Provo, UT (for the next week, anyway). Provo used tax money to build a fiber infrastructure, then leased it out to two companies who provided tv/internet/phone.
Provo lost money every month. Know why? Provo wasn't legally allowed to advertise service on their own network, precisely because it was city-owned; the majority of Provo-dwellers I've spoken with didn't even know about it. (For unknown reasons, the companies who the city leased the networks to weren't advertising either. I heard about it from my neighbor who had service from them. I have no idea how he found out about them.)
Eventually, Provo simply sold the fiber network to some company in Salt Lake City at a huge loss.
This is why Sandy (where my parents live) refused to join Utopia (a loose coalition of cities in Salt Lake Valley building fiber networks) - they felt it would be a waste of taxpayer money, since they felt they would inevitably lose a lot of money on the project in the long run.
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Re:Convert? (Score:5, Informative)
Utopia will fail because of the predatory pricing of competitors. If you live where you can get utopia you can get Comcast internet for $24.99 without having to be a cable subscriber. Everywhere you can't get Utopia the price is $54.99 and requires that you get a cable subscription or pay $64.99 a month
Utopia's model is a great system, it takes the last mile out of the hands of the providers and opens it up to competition. The problem is the ILEC's aren't going to compete fairly to ensure their death they are going to use every monopolies favorite tactic to eliminate competition, under price the competitors below what they can offer.
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Re:Convert? (Score:5, Interesting)
You make it a co-op that is owned by the customers...
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Re:Convert? (Score:5, Insightful)
So?
Seriously, if the people choose to provide the services themselves, why should they be prohibited from doing so?
I know, it's anathema to free-market idealists, but the end result is... better, cheaper service.
TWC does not have a right to make a profit. No entity does. If they can't compete with government-provided service, then they should rightly have no presence in the market.
Unless of course, you choose to ignore the economics of the issue... please recall from Econ 101 that in an ideal free market, profits will approach zero anyway. TWCs profit is a sign of market inefficiency. The ideal outcome is for both (or more) competitors to fight over minimal profit.
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Re:Convert? (Score:5, Insightful)
I know, it's anathema to free-market idealists, but the end result is... better, cheaper service.
I would suggest that this is completely in line with free-market idealism. They found a better solution and decided to go with it. The only thing anathema to a free market is coercion (i.e., punishment). For example, if they found a better solution but were prevented by law. In that case the punishment is fines or imprisonment. And that is exactly what TWC is doing: using the government to punish the free-marketers who found a better solution.
The only thing anathema to a free market is coercion.
(repeated for emphasis)
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Re:Convert? (Score:5, Interesting)
Perhaps a more efficient way of doing things would be for the city to maintain the physical infrastructure, whereas smaller ISPs like yourself would lease bandwidth on the public lines.
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Re:Convert? (Score:5, Insightful)
Except, if Time Warner is like most cable companies, they are not operating on a level playing field either. Most cable companies get a tax break on personal property taxes, often have subsidized costs on rights-of-way (because they are using municipally-owned RoW for their cables), and often had many of the startup costs subsidized by municipal and regional governments as part of the franchise agreements.
You, as a business owner, don't have a right to make money. For a group of citizens to invest their tax money to build infrastructure, it means the broadband providers have failed as business people.
TWC had a chance to provide the service, they declined. At that point, their moral right to complain disappeared.
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Re:Convert? (Score:5, Insightful)
But a government-run business charging break-even prices is not fair competition for any business. But a government-run business charging break-even prices is not fair competition for any business.
It's not fair competition because it's not competition: time warner refused to give them fast service, THEN greenlight was born. Furthermore, TFA points out that tax money is NOT used!
What is happening here is TWC offering B, the community wanting A and making it themselves, so TWC is trying to ban A so everyone has to buy their B.
Anyway, even if this were not the case, who cares? Maybe my pink roots are showing, but if the people of Wilson are getting a better deal, so what if it's not strict capitalism? I don't think most of us are capitalist because we think that's what God wants us to be. The only reason to go with capitalism is because it's generally more efficient. In cases of monopoly, like this basically is, it apperantly isn't more efficient. So why not do this?
And it's not like government goliath vs david TWC. TWC has way more money to invest, they have much more of an advantage than this grassroots organization. That they're unable to compete is all their failure and they should eat it.
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Re:Convert? (Score:5, Insightful)
I work for a government and I think you've been drinking too much Limbaugh kool-aid...
I am always amazed how industry has been yelling "big bad inefficient government; privatize now and we'll do it better cheaper quicker!"
Now that government is actually competing, they're yelling "big bad unfair government; they can do it cheaper than us and we need protection!"
So what is it? If government is so "inefficient" why does industry need protection? If privatizing is so much better, why worry about government getting into your business niche?
In other words, government all too often does do things "better cheaper quicker" - we may pay a lot for a consultant, but our CEOs earn $100K/year, and not $100M/year. You can buy a lot of consultants for what one private industry CEO gets in a year.
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Re:Convert? (Score:5, Insightful)
I think most complaints are about the Federal Government. State governments can be bad as well, but when you get down to the municipal level, things can get a lot more efficient.
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Re:Convert? (Score:5, Insightful)
still...UPS/Fedex can't compete with the Post Office. Ask managers in those companies and they'll tell you how much they hate it and think they can do a better job than the Post Office.
I think they'd have a hard time providing both the coverage and all services of the USPS. When you actually talk to the managers, they really only want to provide service to high-density/volume areas. The hinterlands, not so much. So, as usual, private enterprise wants to cherry-pick the public service, letting the rest of us pick up the now increased costs for the problematic customers.
BTW, FedEx can't get a package to my (notably small) hometown in less than two days. The USPS can get me 24-hour priority delivery. Why is that? Somehow I think it has something to do with the fact that FedEx doesn't find it profitable to do so.
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Re:Convert? (Score:5, Insightful)
Wasn't your tax money used in the first place when TWC and almost every other utility, private or otherwise), got subsidies and rights of way to run their initial coax/fiber lines in the first place.
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What crap... (Score:5, Informative)
It's mostly because of the competition among the providers.
What's the matter TWC, afraid that your archaic bloated business model couldn't compete?
Re:What crap... (Score:5, Insightful)
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Re:What crap... (Score:5, Insightful)
What's happening at the state level where TWC is manipulating the law to prevent this is actually a perfect example of how broken government is the higher up you get.
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Total BS (Score:4, Funny)
So is this proof that the Gov't is run by Corporations? Like we really didn't already know but come on...
If all lobbying was eliminated, we might have a semi-fair and equal system but that won't be happening while the politicos keep getting free vacations and money to line their bentleys.
Re:Total BS (Score:4, Insightful)
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Re:Total BS (Score:5, Funny)
You may be sarcastic, but it does beg the question: Isn't that what we pay those people for? Isn't it their damn job to investigate what to do and what laws to pass? Isn't that basically their only reason to exist, to find out what's "best" for what is considered the common good and act in this manner?
If they cannot act that way, fire them. Yes, fire them. Out of a cannon if necessary, but they are essentially our employees. If I'm not satisfied with the performance of an employee, I send him packing and hire someone who can do his job.
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They need to be put in check (Score:5, Interesting)
Re:They need to be put in check (Score:4, Informative)
That's because TWC and Embarq believe in "Corporatism"
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Sickening (Score:5, Insightful)
Re:Sickening (Score:5, Insightful)
We let that sort of thing happen every time we concede more and more to the government in terms of providing services for us. With all of the extra money and the ability to represent everyone, you suddenly realize that corps don't have to care what individuals want any more, they only have to care what the government wants.
And the advantage from their perspective is that unlike in the market, where they have to serve millions, when you play to the government, you only have to satisfy a few hundred legislators and bureaucrats. And bribing/lobbying a few hundred people is honestly a lot cheaper than bringing a quality product to market.
So, if you were a corp, what would you do?
Government regulation and lobbying controls aren't going to do diddly until people realize the problem isn't with the lobbyists, per se. It's due to the fact that we've created the perfect customer for these corporations. It has incredible amounts of money to spend, not very high standards, a preference for a centralized and monolithic "low bid" sorts of vendors, and of course, it is easily and efficiently manipulated by controlling just a few key people.
The only question is whether the multinationals need the bloated government or if they can someday discard its bloated corpse and operate like the dystopian sovereign megacorps that you refer to.
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Re:Sickening (Score:5, Insightful)
Hogwash. We let that sort of thing happen every time we concede more and more to the corporations in terms of regulation and oversight.
The problem is not big government providing services. The problem is failure of public (government) oversight and regulation. And the reason this has happened is because the public has handed control of their government to the big corporations, by failure to exercise due diligence in electing officials, and the failure to practice due diligence in overseeing the actions of their elected officials. Largely this is an issue of scale -- on average, a US Representative is responsible for something like 560,000 constituents. There is no way to have personal accountability. Even on the state level, it's impossible. NC, the state in question here, has 50 assembly members for a pop of 8 MM -- that's 160,000 constituents per Assemblyman.
No, my fried, the problem is not allowing the government to provide services. The problem is allowing the government to NOT oversee and regulate monolithic corporate entities.
Even if we had a small government that didn't get involved so much, we'd still have the problem of the government being bought by corporations... it would be even worse than now, since in some cases the government can and does provide cheaper and better service than private entities would.
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Re:Sickening (Score:5, Insightful)
It's sickening to watch massive corporations give up on the ideals of commercialism (competing for the consumer's dollars on the basis of quality, service, and price) and instead simply doing business through legislation (make it illegal for your competition to exist...). I feel like I'm watching someone's Cyberpunk or Shadowrun campaign come together as megacorps take control of governments... It's all sickening...
A corporation that exists to make profit will use any means available to make those profits. If lobbying and back-room deals pay better than R&D, then that's where the corporation will put its efforts.
I don't like that any more than you, but we have to face the facts: that's how it works.
If you want corporations to compete on value (i.e., cost/benefit for the consumer), then you need a system where R&D gives better returns than lobbying.
This kind of stuff has been going on for ever. In feudal times, there were monopolies, guilds, charters; in the renaissance there monopolies, guilds were less influential, but there were still charters; in the 18th century, businessmen like Boulton and Wedgwood would petition parliament for extensions of patents in order to corner markets and build monopolies... TWC is behaving somewhat like the Dutch or British East India Companies... just taking care of business in the most efficient way that the system allows, and if that means using political influence then so be it.
You can't wish it away. If you want to think of TWC as the enemy and defeat it, you need to understand the strategy and tactics available to your enemy and adapt your own strategy and tactics in consequence. If TWC has access to those who write and enact bills, then get access for yourself, or block TWC's access to that resource.
K.
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So they have two Cables running in parallel? (Score:5, Insightful)
They have Greenlight and Time-Warner cables running in parallel to one another? Good!!! I wish more communities would do stuff like that. If every city had TW, Comcast, Cox running 3-4 cables in parallel, then the power would be in the hands of the People to choose which one they like best.
Re:So they have two Cables running in parallel? (Score:5, Interesting)
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Businesses cry "free market capitalism!" (Score:5, Insightful)
But only when it is convenient. When it isn't convenient, they expect the government to prop up their business model in order to ensure that their profits are maximized and that their competition is none.
This is an extremely ugly an hypocritical face of modern business today. People want lower prices and more affordable services and if they have to build it themselves to get it, they should be allowed to do it.
This is not an entirely new story as other communications/media companies have sued municipalities to prevent them from making competitive progress in areas where they otherwise did not want to compete or operate. And these companies won. I am a little lost on what legal justification was used in winning their cases though... anyone have any insight?
Old Practice (Score:5, Informative)
ISPs and cable companies have a history of trying to avoid competition like this. A similar municipal wi-fi initiative was stifled in Pennsylvania a few years ago [wired.com].
Amen to that.
best goverment money can buy (Score:4, Insightful)
Bubububbut I thought the market decided these things! I guess I didn't realize that the legislature was on the market as well.
And why has this suprised anyone? (Score:5, Insightful)
Corporations have always used the power of government to stifle their competition. It has been this way especially since the advent of mercantilism 400+ years ago.
It was this way when the East India company was importing tea to England. It was this way with the railroads in the 1800's. It was this way under FDRs New Deal (which had the gove help big corps and put policies in place to screw over smaller ones). Its that way now.
The product may change over time but the methods used to bury your competition are ancient.
So... publicly owned infrastructe do work, eh? (Score:4, Interesting)
It does seems like it from the few working experiences that we have around the world [1,2]. I hope this is realized that we do need to guarentee a public network, maybe along the private one but nonetheless a good public network!
We need ISP agnostic fiber to the homes, now!
For those in Canada (note the "eh" in the title :P), give your voice below, the CRTC is asking for advise (for what it's worth...):
http://isppractices.econsultation.ca/ [econsultation.ca] (english)
http://pratiquesfsi.econsultation.ca/ [econsultation.ca] (franÃais)
[1]. http://cis471.blogspot.com/2009/04/why-is-connectivty-in-stockholm-so-much.html [blogspot.com]
[2]. http://arstechnica.com/tech-policy/news/2009/04/shocker-aussies-to-build-own-open-access-fiber-backbone.ars [arstechnica.com]
Another fine example of "free market capitalism" (Score:4, Insightful)
That's so AWESOME! (Score:5, Insightful)
But for the residents of Wilson, NC, the city to offer cable, internet, and telephone services too on a voluntary subscription base. That's FREAKING AWESOME! That's not only money well invested into the city infrastructure, but money the city can use after the initial investment has been paid for for other city services.
I might be a federal and state Republican, but I'm a local Democrat.
Utter BS (Score:5, Informative)
here is the link to the actual bill: http://www.ncga.state.nc.us/Sessions/2009/Bills/Senate/PDF/S1004v0.pdf [state.nc.us]
In essence, what the bill is saying is that a govt provided internet service should be self-sufficient, unsubsidized and be applicable to all costs and taxes that a private organization is. It is not trying to establish a monoply but instead trying to take the unfair advantage away from a govt sponsored organization.
Here is the text from actual bill:
Requirements. â" A city that operates a public enterprise under G.S. 160A-311 that provides communications services to the public for a fee over a communications network that is directly or indirectly owned or operated by or provides a financial benefit to the city or another city shall meet the following conditions with respect to the provision of communications service:
(1) Comply with all local, State, and federal laws, regulations, or other requirements that would apply to the communications services if provided by a private communications service provider.
(2) Establish a separate enterprise fund for communications service and shall use this fund to separately account for revenues, expenses, property, and source of investment dollars associated with the provision of communications service.
(3) Shall not subsidize the cost of providing communications service with funds from any other noncommunications service, operation, or other revenue source, including any funds or revenue generated from electric, gas, water, sewer, or garbage services. In complying with this requirement, a city owned communications service provider shall not price any communications service below the cost of providing the service.
(4) Shall, in calculating the cost incurred and in the rates to be charged for the provision of communications services, impute: (i) the cost of the capital component that is equivalent to the cost of capital available to private communications service providers in the same locality; and (ii) an amount equal to all taxes, including property taxes, licenses, fees, and other assessments that would apply to a private communications service provider including federal, state, and local taxes; rights-of-way, franchise, consent, or administrative fees; and pole attachment fees.
(5) Shall annually remit to the general fund of the city an amount equivalent to all taxes or fees a private communications service provider would be required to pay the city or county in which the city is located, including any applicable tax refunds received by the city owned communications service provider because of its government status and a sum equal to the amount of property tax that would have been due if the city owned communications service provider were a private communications service provider.
(6) Shall prepare and publish an independent annual audit in accordance with generally accepted accounting principles that reflect the fully allocated cost of providing the communications service, including all direct and indirect costs. The indirect costs shall include amounts for rights-of-way, franchise, consent, or administrative fees, regulatory fees, occupation taxes, pole attachment fees, and ad valorem taxes. The annual accounting shall reflect any direct or indirect subsidies received by the city owned communications service provider, and any buildings, equipment, vehicles, and personnel that
32 are jointly used with other city departments shall be fully allocated to the city owned communications service. The North Carolina Utilities Commission may adopt rules and regulations to ensure compliance with the provisions of this subdivision, and all records demonstrating compliance shall be filed with the North Carolina Utilities Commission and made available for public inspection and copying.
Re:Surprised? (Score:4, Insightful)
This is insanely stupid from TWC's point of view. If I can't charge a little bit extra for my muni broadband to pay for extra police (or a new SUV for myself, or whatever), then I'll just lower my rates to breakeven.
Which will just make it harder for TWC to compete, since they have to make a profit, and I'm forbidden to make a profit.
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Re:$99 per month ain't cheap!!!! (Score:5, Informative)
FTFA:
A comparable plan from Time Warner Inc., with six fewer channels (no Cartoon Network, Disney, The Science Channel, ESPNU, ESPN News, or ESPN Classic) and lower upload speeds costs $137.95, for an introductory rate, which lasts a few months and then will likely be ratcheted up.
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Re:Government should not be a competitor to indust (Score:5, Interesting)
This situation is similar to the people forming a co-op to provide themselves with network connectivity, only corporations are crying foul because instead of forming a co-op to get things done, the citizens (not subjects in this case) went through existing channels (local government).
This is precisely the kind of grassroots involvement that I LIKE to see because if people believe they can change the local government, they might believe that they don't have to lie down when corporations make their state and federal government steamroll them.
A government should, ideally, stand back and let private citizens do their own thing, but thats not happening, not at the state level, not at the federal level. TWC has lobbyists, the township citizens did not. Until the township has the same pull as TWC, the local government needs to step up and fight fire with fire.
We are well beyond a free market economy, and while its nice to think about what government would look like without the past 233 years of corporate influence, that's not the world we live in. The only way to get a free market economy would be to abolish corporations, abolish the current government, demolish the infrastructure, and start from scratch. Why? Because for every email, vote, and action taken by a citizen, a corporation will pay X dollars to a lobbyist to drip honey in senator's ears. To get a free market economy, you'd have to get rid of lobbying, all of the laws influenced by lobbying, the lobbyists, and all of the senators who were put in place by campaign contributions from corporations.
Besides, as long as there is a system to game, people will game it, why shouldn't the local government game it for the direct benefit of its citizens?
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