Telecoms Suing Municipalities That Plan Broadband Access

Law.com has up a review of ongoing and historical cases of telecoms suing municipalities that plan broadband networks. In many cases those same telecoms have spent years ignoring as potential customers the cities and towns now undertaking Net infrastructure projects, only to turn around and sue them. One lawyer who has defended many municipalities in this position says, "This is similar to electrification a century ago when small towns and rural areas were left behind, so they formed their own authorities." Bob Frankston has been writing for years about the financial model of artificial scarcity that underlies the telecoms businss plans. This post gives some of the background to the telecoms' fear of abundance.

The government?

The government? Providing necessary infrastructure companies can't or won't? How dare they!

Re:The government?

Yeah, cause its not like these municipalities are trying to say who can use the fiber that they want to build to connect their citizens to the Internet. Oh wait, yes they are. This would be like building a nice new highway, and getting Ford to pay part of the cost, and only allowing people with Fords to drive on it. [Slashdot car analogy at its finest].

Not all of them

The power districts I know of that are doing this don't sell retail. They'll open their network to any shmuck with a decent router. I could be an ISP. If comcast and AOL want to play on a level field, they're welcome to. They don't. The thought terrifies them. Hence the lawyers.

In Tacoma WA they have muni broadband, and they're more particular. OTOH their quality of service is stunning. You call, and get actual local people who know the area and the network and get someone out to you right away if you need it. Click Network is great stuff, even if it's only 10mbps over cable instead of 100mbps over fiber.

Re:The government?

At one point in our history, electricity wasn't necessary infrastructure either.

Hence the TVA [wikipedia.org].

I argue that high-speed telecommunications infrastructure is necessary for a 21st-century economy. I'd like to hear your thoughts as to why you believe differently.

Re:The government?

The only thing you stated was circular logic. You did not state why you think it's not a necessity. You only made a generic statement about private industry competing with government.

I think it's pretty easy to make a case that the 21st century economy should include Internet access as a necessity.

In this day and age all my bills are paid online, the yellow pages on paper is a thing of the past and calling internationally is no longer prohibitively expensive. Looking for a new job is next to impossible without being online even.

Yes people can live without the Internet, people can live without phone service and electricity too. How exactly is it not a necessity?

Re:The government?

Internet access is not "necessary infrastructure"

Then get the fuck off it and stop clogging our tubes, Ebeneezer!

Re:The government?

Internet access is not "necessary infrastructure".

Isn't it? I think that, with services such as local phone running over the Internet (eg. Vonage), there is a very strong argument that it is a necessary infrastructure. We think of electricity as a necessary infrastructure, yet in the early days many people were without it.

Re:The government?

We think of electricity as a necessary infrastructure, yet in the early days many people were without it.

Right. For every kind of infrastructure we have, there has been a time when we lived without it. Telephones, electricity, indoor plumbing, roads. In the hunter/gatherer sense of the word "necessary", none of these things are necessary.

However, they're all vital to our economy, and an important factor in the development of our civilization. Having a couple big companies exercise complete control over all allowed infrastructure, and that infrastructure's use, is unacceptable.

Would we hand over construction of our roads to a single private company, allow them to build roads where they want and not build roads elsewhere, and then allow them to arbitrarily decide what kind of traffic is allowed, based solely on what they believe would be most profitable?

Re:The government?

Internet access is not "necessary infrastructure". Isn't it? I think that, with services such as local phone running over the Internet (eg. Vonage), there is a very strong argument that it is a necessary infrastructure. We think of electricity as a necessary infrastructure, yet in the early days many people were without it.

Vonage? Are you serious? Yeah, let's consider Vonage, one of the most unreliable VoIP providers on the planet, to be a necessary service.

No thanks. I'd rather stick with my switched circuits for reliable service.

Your opinion on the reliability of Vonage has nothing to do with the discussion. Vonage (and other VOIP providers -- I cited Vonage only as an example) provide a local phone service. It is not possible for them to provide this essential service without Internet access.

I notice that elsewhere you responded to another poster with a clear ad-hominem.

And if you think that you get a switched circuit from your local phone provider for anything except perhaps a call to your neighbor, you are just showing your ignorance.

Re:The government?

That may have been true 10 years ago, but now? It's the 21st century equivalent of the printing press or TV.

Obviously it's not a required service to survive, but the generation of kids in school right now are building their lives around the existence of the internet, and if those of us in power now don't think it's "necessary", I guarantee you their generation will.

May as well get a jump start on it and make my life easier as well. ;)

The internet is the modern post road

Many government services are provided by Internet. The internet is for many people the only access to modern markets. Internet is essential infrastructure.

These companies have no desire to compete for these markets. Their objective is the prevention of information services to these people. The people are right to be angry. They're also more used to fixing these things themselves.

fsck the telcos

I was on a course in Oulu, a smallish city slightly up north here in Finland, and was delighted that across the whole city there is unrestricted free WLAN access to their PanOulu network. It was a grand week - I was cycling around a lot (excellent city for cyclists, BTW) and once a bit tired, sit down and whip out my Eee PC and check my e-mails. When I returned to Helsinki, I felt like I was in a stupid backwater, and can't wait for the day Helsinki, too, introduces such a wonderful, free service. As for the telcos, well, they "don't have a God-given right" to profits. If I were one of the telcos, I'd try to actually be the one supporting such an initiative, and try to get what I can from the municipality, in terms of revenue.

By the way, before the Helsinkiläinen lynch me: I love the city, but dudes, Oulu beats Helsinki in this particular instance, sorry.

New business model

Just like the RIAA and MPAA, the Telcos would rather sue, then to actually WORK for their money.

World Class Land Grab, oops Fiber and Services

The telcos are running scared. They may no longer be able to bribe (oops, sorry, I meant lobby and give campaign contributions) to Congress and the White House, so it's time to grab all available opportunity to extend and destroy-- I mean deploy.

The thought of public utility as a concept is just about over in many areas, and communications is a de facto utlity concept. So, if you can't woo them, like Verizon did to Ft Wayne Indiana, then simply sue and use the legal funds to drive municipalities broke.

This so begs for a reexamination of competition in the communications markets, but it's unlikely to happen after the last two legislative fiascos (this after Judge Greene).

To extend the parallel...

"This is similar to electrification a century ago when small towns and rural areas were left behind, so they formed their own authorities."

And yet (as is painfully aware to me every month when I pay my power bill), the big power companies still survived and thrived. So will the telecoms.

It amazes me how they say it isn't profitable to for them to serve a certain market, municipality, or region, then suddenly covet those same populations when someone else tries to serve them. If you want them, serve them. If you don't want to serve them, don't go crying to court when someone else does.

Re:open access

Municipalities want to pay for fiber to connect them to the metropolis? Fine. But that fiber has to be open for everyone. They don't get to play favorites with the telcos.

Maybe you're confused.

Municipalities want to build out broadband networks and make them the 5th utility, alongside natural gas, heating oil, water, and electricity. The Telcos are suing to prevent Municipalities from doing this.

Problem with the telcos

Here is the problem I see with ISPs in general.

You tend to get internet, phone, and TV services from a single provider. Unfortunately, phone services will go away as a revenue stream as people move to VOIP. I know plenty of people who have also canceled their tv service because they only watch a few shows and they prefer to get them online at their convenience. This means that providers loose the revenue attached to phone and tv services right off the bat. Then you have to consider how many big ISPs are also media industry giants and have a vested interest in ensuring you continue to consume media through premium channels and channels laden with advertising. They don't necessarily want you watching things over the net at your convenience. So we have ISPs fighting against P2P claiming "conjestion", while refusing to upgrade their backbone, killing their newsgroup services, and imposing bandwidth caps with costly per gigabyte charges for subscribers who exceed them.

Of course, the ISPs can't afford to lose even these "undesirable" users to a municipality, because as soon as they do they can no longer impose p2p throttling and bandwidth caps as a measure to slow people moving away from their established channels and services, and their content is harder to monetize. So IMHO they're going to fight to keep people locked into a service that they're also working feverishly to lock down to their benefit and the detriment of consumers.

But that's just my $0.02 ..

I won't move to VOIP.

When the power goes out, so does VIOP. Eventually a mobile also has to be charged, and murphy's law states the power will go out on the evening it's due to be charged.

The redundancy offered by self-powered land lines is something which cannot be so readily ignored, at least to me.

Re:open access

The Municipalities are cutting deals with Telcos. They are playing favorites.

Okay, maybe I'm confused... Are you talking about the status quo, which is Munis playing favorites with the Telcos?

Or are you saying that the Munis are cutting deals with Telcos w/regards to Municipal broadband? Because if that's what you're saying, you should do a little more explaining, rather than decry the lack of information in TFA.

Yes, and the bits will get from their fiber to the Internet via MAGIC.

Building out a Municipal broadband network and purchasing bandwidth directly from a Tier 1/2 ISP is not the same thing as giving [Telco] a monopoly to build out their own network.

Or am I missing something?

Re:open access

Yes, and the bits will get from their fiber to the Internet via MAGIC.

No, no, they don't. Those bits would travel to the internet via Peering Agreements [wikipedia.org] with Tier 1 ISP's. [wikipedia.org] Bandwidth that is effectively paid for by the bit. Tier 1 ISP's don't pay eachother to swap data, because each considers traffic from the other to be just as important as its own.

Interestingly enough, if municipalities were to bond together to form a network large and important enough (maybe they could buy a couple /8's from Ford or whoever) to contain enough traffic to meet the absurd "settlement free" peering agreement requirements [atdn.net] put forth by the cartel we know as Tier 1 ISP's... now that would be interesting.

Re:open access

Actually if it wasn't for competitive water and sewer districts in London we probably wouldn't have come about with germ theory nearly as early as we did. You see on of the best pieces of evidence for germ theory came from a actuary working for a London insurance company, he mapped the outbreaks of various fatal diseases and eventually realized that while the deaths often seemed random that given enough outbreaks patterns emerged. When he investigated further the reason that one side of the street had an outbreak and the other not was what water district they were serviced by. This in turn led him to discover that water districts that obtained their water further downstream (and hence downstream from other districts sewer discharge) were more likely to have outbreaks.

Re:open access

I was in the trial program for Google TiSP.

Long story short: the speed was crap.

That's the point

These areas have no current broadband business serving them and they aren't going to because the margins are higher providing 5mbps to city folk than dragging fiber out to farmer John. That's why rural areas to get broadband at all have to do it themselves.

The thing is in places like sleepy Ephrata, WA they can sell 100mbps broadband for $50/mo through the power district and still make a profit - just not as big of a margin as the telcos are getting.

There is no business there to destroy and there never will be. Comcast and Ma Bell have no intention of serving these folks ever. They just sue to keep other people from doing it to prop up the myth that bandwidth is evpensive. Yeah sure it's expensive if the guy dragging the fiber has to take every corner, valley and river by force from a defending battalion of lawyers.

Re:We're screwed

Thanks, you have illustrated my point well. The day may well come when someone with no understanding of today's internet potential will say, "People have download only accounts (or accounts with tiny upload caps) because they have little desire to upload. Oddly enough, most people who want an uploading account can just go buy one (they may have to fiddle about a little to legally use it)."

Re:Bad Idea

Letting a local government run your Internet is a stupid-bad idea.

I agree.

What isn't a stupid idea is letting a local government build networking infrastructure and then allowing access to anyone who wishes to provide services over the infrastructure.