How Big Telecom Smothers Municipal Broadband 111
Rick Zeman writes: The Center for Public Integrity has a comprehensive article showing how Big Telecom (aka, AT&T, Comcast, Charter, Time Warner) use lobbyists, paid-for politicians, and lawsuits (both actual and the threat thereof) in their efforts to kill municipal broadband. From the article: "The companies have also used traditional campaign tactics such as newspaper ads, push polls, direct mail and door-to-door canvassing to block municipal networks. And they've tried to undermine the appetite for municipal broadband by paying for research from think tanks and front groups to portray the networks as unreliable and costly."
This Just In! (Score:5, Insightful)
Re:This Just In! (Score:5, Interesting)
It's even worse when the big ISPs are trying to kill municipal broadband in an area they don't serve. Because you can't have the government competing with them in an area that they might, someday, begin to consider serving. Until then, the residents should grovel (over dial-up) at the big ISPs' feet for broadband Internet service.
Re:This Just In! (Score:4, Insightful)
Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.
There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.
Re:This Just In! (Score:5, Insightful)
There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.
Given a few common, yet unproven, assumptions about how markets operate. ISPs operate a lot like utilities in terms of fundamental market behaviors, and the prevalence of natural monopolies. Organizing the structure of the market to allow smaller competitors, to me, is one way a government could help. Not the only way.
"monopolies" (Score:2, Informative)
Given a few common, yet unproven, assumptions about how markets operate. ISPs operate a lot like utilities in terms of fundamental market behaviors, and the prevalence of natural monopolies. Organizing the structure of the market to allow smaller competitors, to me, is one way a government could help. Not the only way.
Close, but not quite IMHO.
The ISP component does not have to be a monopoly: and by "ISP" I mean the routing of packets. What tends to be monopolistic in practice is the cabling, whether fibre, twisted pair, or co-ax.
I think that separating the part of current incumbent telcos and cablecos into separate entities, one which runs the physical stuff and the other which runs the packet routing (and telephone and television signals) would go a long way to improving things. At the very least forcing the incumbent
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At the very least forcing the incumbents to provide access like they have to do in Canada would be the very minimum for a proper functioning ISP market.
Mod parent up!
I'm a Canadian. Right now I use Bell because my GF wants to keep her Sympatico address. But I miss the days when I had an ISP called TekSavvy, which delivered DSL service via the Bell phone lines, while the phone service on those same lines was provided by Bell.
I wasn't totally satisfied with the service, (though I felt it was way better than Bell's had been), and was about to switch to another ISP when I ended up moving. But that was the beauty of it - I could choose from among several ISP's
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In most municipalities, it is impossible to start a small ISP because the city government didn't want to have to talk to more than one supplier of each kind of service. Competition is annoying for bureaucrats, they get two sides making claims and showing evidence, it actually requires work. So much easier to assign a monopoly and approve or reject their requests entirely on personal and political grounds.
Re:This Just In! (Score:5, Insightful)
There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.
No, there is only one real reason for the government to step in: To serve the interests of its citizens.
You may argue that smaller ISPs are in the interests of the citizenry, that's certainly reasonable enough to assert.
But never forget why it's done.
Why can't taxpayers decide for themselves? (Score:5, Informative)
There is only one reason for the government to step in: make it easier for smaller ISPs to start shop.
So you don't think the government should step in if the big guys are abusing their monopoly? You don't think the voters in a municipality should be allowed to decide for themselves if they want the government to establish broadband services for their own use? I know it's a popular meme to presume that governments are nothing but incompetent but the reality is that sometimes the government is the best way to get something done. If the existing ISPs find it not worthwhile to serve a population I see no credible argument why the local government couldn't fill that role if the taxpayers want them to. Might not be economically ideal but sometimes perfect is the enemy of good enough.
I'd love to start a small ISP in my area, but it is practically impossible.
Out of curiosity, why? It's a pretty tough way to make a buck. The margins in being an ISP are pretty thin unless you are able to obtain some form of monopoly. If there is any competition the margins plummet but costs don't. Huge fixed costs, lots of customer service, maintenance, etc. Maybe it's your passion but I've started a number of businesses and that is a seriously difficult business to get into. I can introduce you to several people who have actually tried to start an ISP and failed in spite of being well funded.
Re:Why can't taxpayers decide for themselves? (Score:5, Informative)
So you don't think the government should step in if the big guys are abusing their monopoly? You don't think the voters in a municipality should be allowed to decide for themselves if they want the government to establish broadband services for their own use? I know it's a popular meme to presume that governments are nothing but incompetent but the reality is that sometimes the government is the best way to get something done. If the existing ISPs find it not worthwhile to serve a population I see no credible argument why the local government couldn't fill that role if the taxpayers want them to. Might not be economically ideal but sometimes perfect is the enemy of good enough.
My region (the 2M people metro area) is going through municipal broadband fights. They started the fights back in 2002.
The group got an initial rollout in a few of the smaller cities, roughly 11,000 people got hooked up. Then the entrenched monopolies kicked in. Some highlights:
* Lawsuits from both the incumbent megacorps on cable-based and phone-based Internet on the claim that it was unlawful and anti-competitive for a state agency to compete with an established business. The lawsuits took several years and cost millions. The judges and the appeals court found that government is allowed to provide services, similar to how they provide municipal trash services and still businesses compete; nothing prevents the cable and phone companies from competing if they want.
* Every year state legislators keep introducing new bills prohibiting government agencies from competing with existing businesses, or requiring that governments cannot provide information services to the public without high fees and those fees should go to education, or that any group providing Internet services have so many billions in assets to mitigate risk of disaster, and other variations. Invariably a little research shows the legislators get money from the phone and cable companies, and the company lobbyists vocally support them. The municipal fiber groups have needed to spend several million dollars to fight these as well.
* In a few cities installation was unexpectedly stopped again when some of the smaller cities discovered their own contracts with the megacorps demanded that they couldn't build their own systems until after a multi-year vetting process with the megacorps plus giving them another multi-year opportunity for megacorps to adjust prices and to improve their infrastructure. Basically the smaller city and town governments signed deals for their own cheap Internet that block municipal fiber within their limits for a decade or more. Since then the FCC and other groups have urged cities to be more careful in the contracts they sign.
* Incumbents even got the federal government to drop contracts. In one case they had a contract with the federal government for a $66M under the RUS. After the municipal system had invested and contracted based on that contract it was unexpectedly cancelled. Investigation showed the federal contract was cancelled because the federal RUS system was threatened by the megacorps. A chain of 'smoking gun' emails were discovered where Comcast and CenturyLink demanded the RUS cancel the contract or the two megacorps would act against it; a lawsuit on tortious interference is ongoing, but the cost will be several more million before any ruling will follow, in the mean time the municipal system is out the $66M plus all the interest they need to pay on the emergency loan they had to take out to avoid defaulting on the expenses.
* Because the megacorps have forced the municipal fiber system to spend hundreds of millions on lawsuits and illegally-broken contracts, and because the redirected money has resulted in higher interest rates and longer-term loans costing over $500M to date, they are leveraging it and constantly sponsoring print ads, billboards, and TV ads (on their own cable networks) making nonspecific claims about how the municipal fiber has collected so m
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Out of curiosity, why? It's a pretty tough way to make a buck...
Especially if you don't own the political clout to protect your interests. Case in point, the Telecommunications Reform Act of 1996 and the littered graveyard of start-up broadband firms (well funded based on the rules set down by TRA 96.) The big firms lawyer-ed up and quietly, litigiously fleeced the consumer by crushing upstart competition... There was a time long ago when corporations were distrusted by our elected leaders and corporate charters were limited to ensure they were benefiting the citizen
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Municipal broadband = BAD, (the government doesn't have the incentive to succeed that small business must.)
Co-Op internet: not a bad idea, but really a form of small business.
Giant corporate Broadband = No Competition....
We need smaller providers like WISPs and small FTH providers like golightspeed.com to have some competition.
And what does the government actually do? They give out grants to the big corporate providers at nearly $1000 per home to expand into areas that they don't make money in. Po
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Politicians don't understand the last mile delivery of internet service.
I would say that they don't understand anything of internet service. At least the elected officials (in general of course). Otherwise I agree fully.
Re:This Just In! (Score:5, Insightful)
Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.
That's not why. It's because they're afraid of getting shown up.
If you have a bunch of people out in the country getting gigabit internet for $25/month while the city folk are still paying $50/month for 1mbps DSL, it makes AT&T/Verizon look either corrupt or incompetent. It also destroys their argument that they can't provide good Internet in the US because of the low population density.
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It would reduce the overhead and risk for the ISPs to move into more rural areas if the municipality was footing the bill..... I'm surprised they are not trying to bid on the work of building the infrastructure, operation, and maintenance.
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That might be the real reason, but the public reason the big ISPs offer up is "unfair competition" from government - even when the "competition" would be serving an area that the ISP isn't serving. And yet, Comcast and Time Warner Cable claim they aren't competing with each other because they serve different areas.
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It also destroys their argument that they can't provide good Internet in the US because of the low population density.
No, it just shows that when you remove the requirement for prices to cover costs and yield a profit, governments can do what private companies cannot. If the existing telecom could cover any operating losses by just dipping into the taxpayer general fund, you'd see prices go way down -- covered by taxes, of course.
And that is what makes government competing with existing private companies wrong. It isn't fair in any sense of the word, and the private companies, even if the courts say they are free to comp
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Around here it usually works the opposite, the government delivers cheaper service including running at a lose in some rural places that private business would never service and puts money into the general fund. This is the danger with government infrastructure, they discover they can cut taxes and make up the shortfall by raising prices and pretty soon you're paying almost as much (or in the case of monopoly, more) then private business would charge.
If big cable company can charge X, pretty soon some gover
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No, it just shows that when you remove the requirement for prices to cover costs and yield a profit, governments can do what private companies cannot.
Funny, because that's also a pretty solid argument as to why the government should be building Internet infrastructure. Private industry is saying, "We can't build the infrastructure necessary for this country to move forward, because it's too expensive." Well, the government can do it then.
But honestly, I'm not even sure that's true. Private industry can waste money like nobody's business with far less oversight, especially when they're providing a service as a monopoly, or part of a cartel.
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Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.
Yeah, so ... don't let them hear this too loudly ... one way to get Comcast into a town (where that's the only neighboring monopoly) is to lay out plans on paper to have a market competitor build out a WISP to serve the town. It doesn't even have to be a great-coverage plan and you don't have to have affordable backhaul, but have some public hearings and make sure the papers cover it tho
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Just to burn some Karma i'm going to offer an opposing argument.
My biggest objection to municipality run ISP's is the rural factor; There is no laws that says a municipality has to provide service to those just outside.
I'm on Verizon DSL where I live, 3/4 mile outside of town limits but in a non-dense area. In college town there are thousands of apartments in high density areas, and also served by Verizon.
Now say the town decides to run it's own fiber to all these apartments. Now Verizon loses all that cust
Subsidy for the win (Score:2)
So you are saying that you have no problem with the city folk subsidizing you. Sounds like that's what you are saying.
Privatize sewage too. (Score:2)
Think of the profits from monthly "bowel data caps".
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I think that the free market should attempt to try to compete with what they call 'inefficient big government'. I think it would be awesome to see if government or business can manage better.
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I would love a free market for broadband Internet. The big companies that offer broadband Internet, though, don't want one and will use all of their power and influence to keep one from emerging.
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I would love a free market for broadband Internet. The big companies that offer broadband Internet, though, don't want one and will use all of their power and influence to keep one from emerging.
You're really trying to argue that government run competition is how you create a "free market"? Really?
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No, I'm saying that we don't have one and won't have one if the big ISPs get their way. Municipal broadband won't turn a monopoly market into a free market, but towns should be free to decide to do it if they want.
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Oh no no no.. The real story that should be addressed is how people are so easily swayed by propaganda. This is the issue to attack.
Re:This Just In! (Score:4, Insightful)
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And we shouldn't be depending on their help to spoon feed us every little tidbit. If anything, we need to learn to tune them out.
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us - we... we are "the masses"
Hey, look, I'm cool with however you want to run it. I'm just asking if you have a plan for implementation of whatever changes you want made, or are we just expected to slog along, and keep voting for salesmen, and watch the next 10 or 12 years become a little worse than the last, and hope to be rescued by Harry Potter?
There's no other way to put it. What you have is what you voted for, under the veneer of charisma.
Re:This Just In! (Score:5, Informative)
"people"? You misspelled "legislators" - in 2003/4, Qwest (now CenturyStink) and Comcast went nuts and brib^M convinced Utah legislators to abandon the UTOPIA multi-city municipal broadband project, then they began slathering on lawsuits and threats thereof [freeutopia.org].
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I don't give a damn about any of that. I only care that these politicians are being reelected over and over. That is a problem of the people.
I don't know what's scarier about this article (Score:5, Insightful)
The fact that a 67-year-old grandmother from Tennessee has more progressive views on municipal internet than a large portion of the rest of the country, or that AT&T stepped in and threatened a 67-year-old grandmother over her attempt to provide municipal internet to her community.
Re:I don't know what's scarier about this article (Score:5, Insightful)
She doesn't have more progressive views than most in the country. This is yet another issue that proves the country is an plutocracy rather than a democracy. In this instance, a few corporations (who Republicans will have you believe are, "people") are buying up politicians and subverting the will of the masses.
It just happens to be one of the more glaring flaws with our campaign finance and electoral systems. And it still can't be fixed.
Simle fix (Score:2)
If you can't vote in the election, you can't contribute to the candidates in the elections. Eliminates outside money.
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Being that in most area we have the choice of only one broadband provider. So we are reliant on taking what we can get. If we can have Broadband internet at the Local Town level, vs. State or Federal level. We can have internet and still be close enough to local government to control what goes on.
MaBell on the other hand was just what everyone used in the US. So we had to suck it up and pay for a monopoly.
The thing is with a municipal Internet. the carriers can still dominate the market, as they could the
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What's truly scary, is that in the US some people consider Public Integrity (both the nonprofit and the concept) to be "far left."
From the site's "about" page:
Yep. Anarcho-communist FUDmongers, the lot of 'em.
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Well democracy itself is pretty left wing, at least by the original definition where the left was the common people and the right was the aristocracy. It's just a shame that currently a quote like
Our mission: To serve democracy by revealing abuses of power, corruption and betrayal of public trust by powerful public and private institutions, using the tools of investigative journalism
has become an insult.
Stakeholders vs. Customers (Score:3, Interesting)
Seems to me that stakeholders in municipal broadband are a more satisfied lot than the customers of the Telcos (with their paid lobbyists so nicely donating money to the boy/girls scouts to enlist their 'support' for crazy-ass mergers and what-not; nevermind that The Public has Clearly Told The 3 (is it?) commissioners at the FCC to take a flying leap).
Costly and Unreliable (Score:1, Interesting)
"And they've tried to undermine the appetite for municipal broadband by paying for research from think tanks and front groups to portray the networks as unreliable and costly."
So let me get this straight, per the broadband industry municipal broadband is costly and unreliable, but they, meaning AT&T, ComCast, CenturyLink, cannot compete with "Costly and Unreliable". I think this says more about broadband industry than it does about municipal broadband.
Republican? (Score:1)
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The one that doesn't conform to the group-think stereotypes of online forums.
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Yes. Back when democrats were social conservatives and republicans were progressives.
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There's two in New York, but I only counted those within range of my wifi.
Crowding Out Effect (Score:5, Insightful)
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No one I know says this. It should pretty cleanse that telecoms, cable, are not functioning in any Market. As you correctly say they are local government monopolies whic are further protected by the states, for stupid and nonsensical reasons.
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No one I know says this.
You hang out with people who have more than typical insight, then. I hear a lot of this kind of thing from people. Mostly, but not exclusively, who are left-leaning, and who also blame the banking crisis on "the free market".
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I did public finance and Econ in grad school...post Keynesian bent. :)
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I didn't hear of any government officials putting guns to the heads of investment bankers to package up bad loans and sell them as AAA securities. Got any cites for that?
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Right, so the banks, of their own free will, package up bad loans and sell them as AAA securities, and it's the government's fault.
I give up, you're in incorrigible libertard.
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I don't get the context of your comment. What are you commenting on?
Re:Crowding Out Effect (Score:5, Insightful)
It comes from the fallacious belief that non-government created monopolies leveraging their position will face competitors who can "do it for less". The truth is that infrastructure just isn't that conducive to competition. Who'd want 3 different water/sewer systems connected to their house?
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The truth is that infrastructure just isn't that conducive to competition.
Heh, just ten years ago I heard people saying that - shortly before Comcast offered phone service and before Verizon offered TV service. Both cable TV and telephone were "natural monopolies" before they weren't. To offer that Verizon had to replace their entire cable plant and Comcast had to replace much of it. What they didn't have to do was go through an extremely expensive political and regulatory process to get access to pole
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Yeah, but we know from relatively basic studies of economics, (varying) on the exact elasticity of demand, that any sort of sane monopoly tends to price somewhere in the range of double to triple what a competitive market would.
Not the fantastical 20x you just proposed.
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Oh yeah. Bring up phones. Those land-lines have REALLY gotten more reliable and useful in the last 60 years haven't they? I mean, look at the horrible phone track records for emergency service and reliability in 1954 after all.
> It's exactly the same calculation for anything anybody calls a 'natural monopoly'. Absent an interfering government, the money flows to the best service provider.
I suppose that's why municipal water is so expensive, unreliable and horrible in the US, whereas such an "incredibl
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Ummm... me?
I'm currently forced to buy water from only the local government-granted monopoly water provider, who has decided not to provide one type of water I want to purchase (greywater) to residential customers. They sell it to commercial customers at1/10th the cost of their potable water lines, but despite the fact that the pipes and infrastructure supporting it are literally 2 feet from my property, I'm classified as residential, so n
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Hey, it says right in TFS "lobbyists, paid-for politicians, and lawsuits" - what part of the Free Market doesn't have "lobbyists, paid-for politicians, and lawsuits"?
Can't you see how this is a problem with voluntary trade and not fascism [econlib.org]?
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Municipal Broadband is Socialism! (Score:1)
You can't allow it. If it works well, people might think socialism isn't always a bad thing. Who knows what other crazy, un-American ideas would then catch on?
Seriously, this isn't just to eliminate municipal broadband as an Internet delivery mechanism, it is to stamp out the idea that municipally owned utilities are possible and sometimes desirable.
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It's not socialism. Unless you expand the definition of socialism all the way down to include two people talking...
Eliminate municipal monopolies (Score:5, Informative)
http://www.pcworld.com/article... [pcworld.com]
http://cbpp.georgetown.edu/wp-... [georgetown.edu]
http://www.uspirg.org/reports/... [uspirg.org]
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http://www.wired.com/2013/07/w... [wired.com]
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Such as all the universal health care systems paying less(public + private) as a percentage of GDP the the US government spends on health?
Government subsidy vs government monopoly (Score:3)
What galls me the most is the panty-wetting over a government-granted monopoly trying to maintain its government granted monopoly when that very same government tries to compete using taxpayer dollars as a subsidy.
The outrage should be against government involvement period. If governments didn't grant local monopolies, there would be real competition among the real companies, and no perceived need for the government competition which is only competitive because it has the taxpayer subsidy.
Terrible idea (Score:5, Funny)
Huh! (Score:4, Insightful)
Free wi-fi municipal networks (Score:1)
Costly and Unreliable? (Score:2)
to portray the networks as unreliable and costly
I wasn't sure to which networks this was referring.
It's not black or white (Score:1)
We all keep getting sold this crap, that it's black or white, it's either communism or capitalism and there is nothing in between.
Born and died in London, 1748 till 1838, we have Jeremy Bentham, he did come up with something in-between, he called it utilitarianism.
Capitalism is 'every man for himself', screw you, me first. And communism is, 'my way or the highway', so can't we do anything better than those two opposing systems?
Basically utilitarianism translates to, 'the maximum amount of good for the maxim
Re:um (Score:5, Informative)
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"They are not journalists" - they won a Pulitzer..
Obama won a Nobel.
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Ah yes, the age-old "if you can't attack the message then attack the messenger". The article was well researched and correct. Deal with it.
Re:um (Score:5, Funny)
You forgot to mention Al Gore, Hillary Clinton and Nancy Pelosi.