Who wants competition? Big cable tries outlawing municipal broadband in Kansas
arstechnica.com
arstechnica.com
Cheering on the municipalities is boneheaded. The municipalities and their franchising agreements are a major part of the reason we're in this mess to begin with: http://www.cato.org/pubs/pas/pa034.html (note the article is from 1984).
ISPs aren't identical, but I don't see a strong reason a competitive ISP market couldn't follow the deregulated market that states like Texas use for electricity. Have the last-mile infrastructure owned by some boring regulated entity, and then let ISPs compete to provide connectivity over the pipe, like generators compete to provide electricity over the wires.
Side note: I bet splashing out sketchy comparisons to Orwell's 1984 was a lot more fun back when it was actually 1984. On balance it was a good piece but the whole first section can be safely skipped.
I can see why everyone is bitching about that.
Also, generally speaking, running big telco networks is hard, capital intensive, and requires a lot of expertise that municipalities don't really have. I've never used a municipal internet service that was any good.
Private companies are consistently making bad decisions as to infrastructure. For one thing, they've wasted money building high-cost fiber-to-the-node and hybrid-fiber-coax networks.
Yes, the initial cost of FTTH is more than the alternatives, but the running costs of FTTH are much less and if you consider a time span of five years or more, FTTH comes out ahead.
In places like Austin where carriers have wasted money on xDSL deployments, they find they have to go to FTTH once a competitor goes to FTTH. Why? Since the running costs of FTTH are so low, an FTTH provider is the low cost provider and will win the value segment, not just the high-end segments.
The main problem is that rich people are full of themselves and think they deserve credit card interest rates for their investments rather than the low market rates that capital markets provide (which are telling them that they've got too much money and nobody needs them.)
They know they can build expensive (to run) networks because they can make their customers pay the operating costs, rather than putting some more money up front to produce something that will produce more profits in the long term.
I'm not sure exactly what you're trying to say, but I think that means you agree with me that competition between telcos leads to better/cheaper product for consumers?
To your last point, that telcos don't invest in infrastructure basically because they're greedy (is that even what you're saying?), I think that fits into H. L. Mencken's idea that "for every complex problem there is an answer that is clear, simple, and wrong." I have worked at the periphery of a big telco and from what I saw there are many challenges to controlling costs. To name a few: inefficient internal bureaucracies (ugh), strong unions (not a criticism, just pointing out that union labor is more expensive than nonunion labor), and mainly the fact that the network is enormously huge (like, physically huge) and it's extremely expensive to refresh the technology every few years.
> running big telco networks is hard, capital intensive, and requires a lot of expertise that municipalities don't really have
Capital-intensive, expertise-intensive things is exactly what municipalities do well. They do water, sewer, utilities, police, fire, EMS, etc. My city spent just over $3b last year, meanwhile Time Warner Cable spent roughly $3b on capital expenses in the entire United States.
My city spent just over $3b last year, meanwhile Time Warner Cable spent roughly $3b on capital expenses in the entire United States.
This is about as apples to oranges as it gets, but if your city spent $3B just maintaining water and sewer, and time warner spent $3B over the entire country then TW is winning in my book.
It is a 400x increase when measured by the yardstick of a software developer, but by the yardstick of "how much money does it cost to connect Joe Schmoe to a network that meets his expectations" the business has not appreciably changed in 20 years. What changes is the model number on the Cisco switch and the type of cable in the ground, but "what is the maintenance cycle on this electrical cable and power transformer" is a problem that municipalities have been successfully solving for well over a century.
I think you are confusing the practice of actual dataspeed innovation (e.g. what Cisco, Juniper, Alcatel-Lucent, Qualcomm etc., do) with ISPs like AT&T or TWC who merely buy and install equipment and service cable runs. AT&T, Time Warner, Verizon, et al do not appreciably contribute to the number of packets it is possible to send in 10 seconds, except insofar as they buy products from those companies that actually do. That role (of buying Cisco products) can easily be shifted to a municipality with no downside to Cisco. In fact, from Cisco's perspective, large nationwide ISPs operate more or less as a consolidated union of individual markets and have a lot of bargaining power, so a more diversified customerbase that doesn't cooperate as tightly means Cisco can make more money, and since they are actually the ones who make the internet fast, that seems like a positive outcome to me.
> but if your city spent $3B just maintaining water and sewer, and time warner spent $3B over the entire country then TW is winning in my book.
Of course not. $3b is the total budget for the whole city, which is mostly public safety (police, fire, EMS, etc.) The capital spending on energy is only about $200m/year, which is about 50% production and 50% distribution. If you imagine that it is probably easier to run fiber than it is to run 110,000V powerlines everywhere, the ongoing capital expenditure to run the actual fiber lines themselves would be less than $100m.
Competition will drive down prices, increase speed and result in the best possible customer service!
Except that in markets with expensive outlays to get started that rarely happens because the expenses put a natural limiter on the amount of people that can actually mount competition making that number low enough that the competitors can essentially carve up the market, price fix and then all suck approximately equally, indefinitely. Just like ISPs and cell phone carriers do now (and will continue to do so until the government steps in and forces them to fix their shit).
In regulated markets. After all, things like anti-cartel laws are regulations, and we absolutely do need those.
Not to mention that municipalities compete with one another; it is actually easier in most places in the United States to move to a neighboring municipality than it is to switch to a better ISP. For example I would have to move over a hundred miles to get better internet access than the large, regional ISP that serves my area, and meanwhile I could move about five miles and "technically" live in a different city in the same metro area.
Finally, I am not advocating municipal control instead of private ISPs, I am arguing municipal offerings in addition to private ISPs. It is tautologically impossible for the introduction of new entrants into the market to itself constitute a reduction in competition.
TW is winning, but their customers certainly aren't. If we actually had free markets in data connection, consumers would have other providers to choose, and TW would have to spend a great deal more on their aged creaky networks in order to stay in business.
Why did we defer to the judgment of local government when they wanted to shackle residents to one provider in exchange for big bribes through franchise agreements, but now that they want to encourage that same provider to get off its ass and provide decent service they're enemies of capitalism?
If cities can do that, they can run some cable.
(So for example in a city like Seattle where we have tons of dark fiber owned by the government, the city would be prohibited from leasing that fiber out to private enterprise under this bill.)
Though I also disagree with the sentiment of your post, even if the bill were more narrow.
Naperville, Illinois, while being a loathsome, sprawling mess in many respects, has pretty snappy municipal internet. And, in fairness, a semi-charming waterfront path.
I think we need to work a little harder on this chain of logic...
Not sure where you're located, but I'd encourage you to make a trip & try out the fiber optic internet service (gigabit available) that is offered by Chattanooga's municipal power utility, EPB. I've never experienced anything better. I can now honestly say, after being a customer for 3+ years, that I've never used a commercial internet service that was any good.
There's a big difference between running a municipal telco network and a 'big' telco network. Focusing on delivering excellent service to a municipal area is very attainable.
Well then corporations have nothing to worry about.
Is the sort of choice that has been available in markets going back as long as governments and markets have existed though, so given there has never been a complete market that fulfils your definition of a healthy market, can we just look at whether there is some general economic benefit here rather than worrying about whether it is healthy, as if it is sick, it has managed fine so far for a good few thousand years, so it can't be too bad.
Technically I have two choices, Time Warner Cable or AT&T DSL. Realistically I only have one choice because Time Warner Cable has proved that they are unable to keep an internet connection between my modem and their headend working for more than 6 hours at a stretch, so I'm stuck with 6mbps AT&T DSL, which is slow and overpriced relative to speed/caps but at least mostly reliable.
Did you miss the part where you can't avoid paying the fee? If you hate your provider that much, you can always cancel, which is not the case here.
Is not having internet service really a viable choice in modern America?
(Your logic)
They gave many of these companies near-monopolies by blocking competition from laying cable or accessing the telephone poles.
Now the government has decided to crush the telco's industry by running their own service at prices impossible to compete with because they are tax payer subsidized.
Live by the sword. Die by the sword. Personally, I'd rather shrink the sword down to around a steak knife.
Here's the relevant section from the Kansas Handbook of Legislative Procedure (http://www.kslegislature.org/li/m/pdf/kansas_legislative_pro...):
16. Who May Introduce a Bill.
Any member or any standing committee, an interim committee of either house, and certain statutory committees may introduce a bill. Sometimes bills are introduced by two or more members (of the same house) as joint sponsors. All regular appropriation bills are introduced by the Appropriations/Ways and Means Committees. Bills sometimes are introduced by a member or committee at the request of a constituent with the notation “By Request” appearing after the author’s name on the printed bill and in the journal. A “By Request” designation often suggests that the member or committee who introduced the bill is not necessarily an advocate for it.
I doubt it really works like that in practice anymore, if it ever did (my guess is that, if you aren't important, your chances of having a bill you send be seriously considered are pretty small), but I can see why it was an attractive idea.
Yeah TFA makes pretty clear that in this case the bill was written by the greasiest lobbyist in Kansas.
https://en.wikipedia.org/wiki/American_Legislative_Exchange_...
But you know, it was for the good of the people.
The ISPs will have to pay the town a flat fee per subscriber for using the municipal fiber optics network, or they could roll out (or keep) their own (existing) infrastructure. This way companies will still be able to compete, but the "last mile" will become an utility like the sewage system.
http://www.fiercetelecom.com/story/att-centurylink-face-1-gb...
If anything, their existing infrastructure, from the age of the telegraph, gives them a huge competitive advantage over anyone coming in, with or without municipal involvement...
IMO government's role should not be the protection of some specific business, it should be about improving the lives of the citizens, partly through improving infrastructure. If big company X goes broke while this happens why should we care? So billionaire Y will make more while billionaire Z makes less?
Did I get that right?
Public enterprise, as we all know, is of course highly inefficient, massively expensive and badly organised. Which is why it is absolutely vital to ban it from entering industry as it would be unfair competition.