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story category Greed, Lies, and 'Progress'
Corporations and American broadband
(old news - 12:10PM Tuesday Nov 02 2004)
tags: Politics · municipal
If you thought dirty tricks were reserved for presidential politics, you should try wiring your town with fiber optic cable. As several communities prepare to vote on such home-grown broadband networks today, they face disinformation campaigns, bogus think tank studies, and an uphill battle against deep pocketed corporate adversaries who'll go to any lengths to avoid competition.

Several years ago a community effort in Illinois to build a triple-play fiber network failed, primarily because voters there were concerned that the project would result in higher taxes. They believed that not based on any fiscal reality, but because SBC and Comcast spent a considerable sum on disinformation campaigns that used push polls (which we exclusively received a copy of) with questions like: "Should tax money be allowed to provide pornographic movies for residents?"

Fast forward to 2004, and the the community group behind the effort (Fiber for our future) switched from public to private funding to alleviate those concerns in a second effort. SBC and Comcast have tripled their ad output this time, Comcast going so far as to send locals Hallmark cards just to let them know they care.

This sudden good-neighbor vibe stems from the fact that Comcast and SBC both know that once a decent municipal alternative emerges, they've got legitimate competition and will be forced to lower rates. Competition harms the bottom line; it also forces them to work harder to improve their product and keep you happy - or lose you. There is no scientific mystery here.

Yet corporate funded front-groups have spent the week espousing the imaginary evils of small towns wiring themselves for broadband. Tom Giovanetti is president of the Institute for Policy Innovation, a "non-partisan" group founded by lifelong Republican Dick Armey to toe the industry line on everything from regulation to fighting open-source software (they've frequently been accused of slamming open-source while being funded by Microsoft).

Reading Giovanetti's piece in the Chicago Sun Times, you'd think municipal broadband was as morally reckless as using puppies for pavement. In his article, Tom says what he's indirectly paid to say: namely that deregulation will cure cancer and wash dishes, and that municipal broadband operations are as financially sound as Vegas Roulette.

The IPI is just one of several organizations who are indirectly paid to say what corporations are afraid to. These are the types of organizations from which this election's 527 groups received their inspiration. You feign objectivity, and spew rhetoric while (insert company) remains polite and friendly in the public eye.

Concerned about upcoming community votes, another "Non-Partisan" pro-industry think tank named the Heartland Institute also came out firing at the behest of their corporate masters. Their report makes such claims as:

Virtually everyone who wants broadband services can get Digital Subscriber Line (DSL) service from their telephone company or cable modem service from their cable company.

Which is news to the rural users in our forums who battle tooth and nail to get their cable company to run coaxial up their road or their local telco to greenlight their central office for DSL.

Most broadband platforms operate at speeds dramatically faster than two years ago, making superfluous the "fiber to the home" (FTTH) networks envisioned by advocates of municipalization.

So 3Mbps (if you're lucky) is fast enough for HDTV over IP? Fiber being "superfluous" is probably news to hundreds of companies that believe fiber is the very cornerstone of America's broadband future.

Consultants often try to sell the idea of building municipal broadband networks by claiming they are essential to economic development efforts, but they invariably present no evidence of a link between broadband and economic growth.

Gentlemen meet the Strategic Networks Group of Ottawa, who issued a recent report on the Township of South Dundas, which spent $975,000 to build and maintain a fiber network. As a result the town witnessed 62.5 new jobs, $2.1 million in commercial expansion in the region, and $105,000 in increased regional revenues and cost-savings.

Another example? Municipally operated Click! network's entry into the municipal arena: they run in the black (despite Comcast ads claiming otherwise), and their entry into the Portland, Washington market has created the lowest cable rates in the nation. How about the success of Scottsburg, Indiana? Schools there save $6000 per month in telecommunications costs alone.

A well managed plan is a well managed plan. Funded by bake sales or bonds, who are you (or Tom Giovanetti) to suggest a community can't try? The bottom line: there are far more success stories than failures, and corporations wouldn't oppose these operations if they - as they claim - collapse under their own weight. They'd save the ad money and just let them burn.

This is not complicated. A well planned and properly funded muni-network is not going to turn Podunk, Nebraska into SOHO. But it is a way for communities to wire the dark corners of America the incumbents refuse to serve, or regions with sub-par service. If they service those communities properly, muni-operations don't emerge. Instead of improving their service, incumbent providers have resorted to despicable tactics and legal efforts to completely ban community based broadband nationally.

Consumers in those markets are being pitched choreographed garbage by mega-corporations who feign concern for what's right, but are motivated by pure greed. Consumers facing votes in such markets should ask questions and inform themselves; not be swayed by well funded industry shills, greeting cards, or fiscal fear-mongering.

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Forums » Greed, Lies, and 'Progress'
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neosolace
Stay In It

join:2003-08-25
Verbena, AL

edit:
November 2nd, @11:57AM

interesting

This makes me wonder what Bellsouth would do if anyone tried that here....

Karl Bode
News Guy
join:2000-03-02

Host:
Road Runner
PC gaming GAMES
PC gaming Tech

Re: interesting

You need only look at what BellSouth is doing in Lafayette, Louisiana, (where they're trying to build a fiber network) to get your answer:

»You Don't Want Fiber

»"Experts" Slam Munis

amenite
The Soylent - It's People
Premium
join:2002-11-21
Ridgewood, NJ
clubs:

The more I see these things happen...

...the more I believe that the big guys are no more than a wretched hive of scum and villany. I can think of no better description. I guess when you're facing being "outed" by a real competitor you'll go to great lengths.
--
Time is an abstract concept invented by carbon based life forms to monitor their constant decay.-Thunderclese

MxxCon

join:1999-11-19
Brooklyn, NY
clubs:

Re: The more I see these things happen...

said by amenite See Profile:

The more I see these things happen the more I believe that the big guys are no more than a wretched hive of scum and villany. I can think of no better description.
and you just now started seeing this?:o

corporate whores are everywhere:(
--
[Sig removed by Administrator: Signature can not exceed 20GB]

amenite
The Soylent - It's People
Premium
join:2002-11-21
Ridgewood, NJ
clubs:

Re: The more I see these things happen...

It's now a matter of constant reinforcment rather than a new awakening to corporate weaseldom. I've been aware of the situation for too long already.
--
Time is an abstract concept invented by carbon based life forms to monitor their constant decay.-Thunderclese
mooty

join:2001-01-28
Riverdale, GA

And then, there are some....

Would you trust sending or receiving your package via USPS everytime?

They are cheap, they get the job done, they are insurable.

The USPS, even though they are a FED. GOV'T branch - are NOT the only alternative around, but that DOES NOT mean anyone will suffer to HAVE to use them. It is a choice, but you don't see other companies trying to stiffle the USPS out of doing its job.

Comcast, other incumbent broadband providers...get a clue from your customers ' demands - How many times do you see private money lenders wearing masks, holding up federal reserve banks ? -
--
Alright, BIG MAN! So You Want To Make the BIG BUCK$, Eh??!!. . . . . . Do You Know How To Handle a Machine-gun?

Octopussy2
Premium
join:2003-03-30
Batavia, IL

Re: And then, there are some....

It is unbelievable the attacks we have been under the past week! www.tricitybroadband.com We shall see how much of an affect SBC and Comcast's mighty marketing flurry had on this campaign in the end, along with the releasing of the Heartland Institute's piece of trash. This battle was much worse than the last referendum in terms of how vicious the two mega corps were...I can't wait until they disclose how much they spent on this.
--
It's muni-licious! »www.tricitybroadband.com

J D McDorce
Premium
join:2001-12-29
Westland, MI

Re: And then, there are some....

said by Octopussy2 See Profile:

I can't wait until they disclose how much they spent on this.
You'll probably be waiting quite a while. Even though Comcast and SBC are both publicly traded corporations, this type of information is nearly impossible to obtain (unless, of course, they choose to voluntarily disclose it).

Octopussy2
Premium
join:2003-03-30
Batavia, IL

Re: And then, there are some....

There is a new campaign finance law on the books in IL and SBC and Comcast must comply this year. Anything over $3,000 they must report!
--
It's muni-licious! »www.tricitybroadband.com

TechSponge

join:2001-05-14
Hillside, NJ

Thank the FCC

Be sure to send them a Thank You letter. This is all possible because of their ineptitude.
Who needs to play a cardboard board-game with cute little die-cast pieces when you can be an un-witting participant of the Real-Life game of Monopoly?

richk_1957
If ..Then..Else
Premium
join:2001-04-11
Minas Tirith

This does not suprise me at all

It's just another case of the ones with deeper pockets wins. Many communities have no broadband, while the nearest outlet maybe very close [1 mile] and they're told that to wire broadband would be $10,000+. So they try to wire themselves [I don't think it's very hard] and the same people have given them a huge price tag is now very cozy, buddy-buddy with them.
They'll come up with studies from places nobody has heard of, depicting the evils of broadband. And the actual people who want to set up the local network can't fight the PR campaign because that takes money. And while companies, like Comcast, can afford to do this, local government & groups just don't have the $$$.

And of course the big companies don't want competition. Why? They'll have to spend money on 1)lowering their rates to be competitive and 2)doing a better job, because now their will be someone else to go to if they don't like the service they get.

People should think of the advantages of broadband [especially if they want to install fiber]. Some companies are in the urban areas because of convenience. But if you have fiber run, you have the option of video teleconferencing and other high bandwidth applications, which is becoming more & more necessary these days.

thongsai

join:2002-07-04
Santa Rosa, CA

competition kills profits

well have u guys seen shawshank redemption? that warden had prisoners run a lumber business. since prisoners dont get paid , he can lower prices to kill all other people's business. i think thats wat cable and telco is afraid of. how can u compete with little or non profit municipal business? I would do the exact same thing, save my business
--
»thongsai-roms.shorturl.com/

hurleyp

join:2000-06-20
Ottawa, ON

We're from the government, and we're here to help

Of course we all know that when the government steps in things become much, much better.

The Beer
I Love It When A Plan Comes Together
Premium
join:2001-07-24
Omaha, NE
clubs:
·ViaTalk

Podunk, Nebraska

Karl,

I realize you use the term Podunk, NE to describe the wasteland that must me this state however your missing the boat on our need to be wired.

Even towns such as Herman, NE population 300 are served by DSL here. »www.city-data.com/city/Herman-Nebraska.html

In Herman, you can get 512 Symmetrical SDSL for $39/mo
»www.greatplainsnetlink.net/actionserv.cfm

I'm not advocating for the Telco's or Cable Co's
I'm just saying if Herman, NE is wired your Podunk theory is a little off.

In Omaha, NE (The Birthplace of Level 3) you can get service from 2 different cable providers in places IN ADDITION to DSL.

Are some areas lacking coverage of High Speed? Yes.
Should they build their own if they want? Yes.

Is rural America (Or Nebraska in this example) a wasteland of no High Speed? No.

justncredible

@rr.com

the study cited sucks

what a pile of crap this story is. Read the study cited as a example of the small city fiber working. 1.2 million$$ invested 24 businesses served, not one single resident, all business. $2,200.00 to get the service and up to $711.00 a month for it. The study is incomplete and data is missing, what type of comapnys use the service? and what did they hire the "new" employees for? Why is a study that only services businesses used? IS this the ONLY single case that has ever shown that this crappy plan works?

If small town fiber is such a good idea let investors flip the bill, why make tax payers pay for it? In the study it clearly says it never intended to make money and it does not make money, it is a tax payers money pit. What a bad plan, tax payers supporting business fiber. The city concils should be inprisoned for wasteing so much tax money for a plan that never had a chance to show profit or even pay for itself. Whoever wrote this should have read the study first before putting it up. You have totally shown that muni fiber plans waste tax money.

The Beer
I Love It When A Plan Comes Together
Premium
join:2001-07-24
Omaha, NE
clubs:
·ViaTalk

Re: the study cited sucks

$2200 Install
$711/mo

The company I would for would pay double that to get on a 10MBPS network, no questions asked.

And we could get on a 3mbps network for $1400/mo if we wanted (I have fiber in my building) Just the best I can do for the office I want to connect to is 768 so it would be pointless.

Karl Bode
News Guy
join:2000-03-02

Host:
Road Runner
PC gaming GAMES
PC gaming Tech

edit:
November 2nd, @01:58PM

How about Click! network? They entered the market in Tacoma Washington, and now the area has the lowest cable rates in the nation. They also run in the black.

How about Scottsburg, Indiana? Their school system saves roughly $6,000 per month on telecom costs thanks to a community built network.

A good plan is a good plan. A bad plan is a bad plan. You don't ban all muni operations, many of which are funded without taxpayer funds, based on some idiotic half-assed notion that they're all evil....or that government involvement results in chaos.

If the town wants to create a plan, votes for it, and wants to move forward, who the hell are you - in some other town - to say otherwise?

And think about this. If muni operations were all economically impossible and collapsed under their own weight, do you think the SBC's and Comcast's of the world would fight so hard against them?

No, they'd simply let them fail and save the money spent on lobbyists, ads, and push polls.

justncredible

@rr.com

Re: the study cited sucks

your a piece of work there karl. Show one single case where muni works? You linked a cable/isp company, and a report of a city BUYING into the electric companys fiber to provide wireless, after the study for fiber showed it is NOT cost effective. ESTIMATED $6,000.00 in savings, if it is not documented then it ain't true. The Canadain study linked says as clear as day that it never intended to make money and it never will, not one single resident user a whooping 24 subscribers, is that even considered a rollout of fiber? I guess it falls into the dslreports agenda of socialism, higher taxes for all, less choice, down with businesses. Good job comrade karl!

Karl Bode
News Guy
join:2000-03-02

Host:
Road Runner
PC gaming GAMES
PC gaming Tech

Re: the study cited sucks

quote:
Show one single case where muni works? You linked a cable/isp company
Click! is a municipal operation. Read, then babble:

»old.tribnet.com/business/story/3···75c.html
»www.wired.com/news/business/0,13···,00.html

Or you know, keep spewing pro-corporation anti-competitive rhetoric anonymously.

justncredible

@rr.com

Re: the study cited sucks

babble? Ok then, 2 more links that no where does it say click makes a penny. Tax subsidized internet for the few, while taxing the many. How is that a good idea? $1.2 million spent to make the network, $10,000+ a month to maintain, and it only serves 24 businesses, is that a good plan? A good way to spend tax dollars? Show the facts and figures for click. I wonder how they cook the books to say they even break even.

I am not a fanboy for corps either, but they are not useing my hard earned tax dollars. I sweat and bleed for my money so excuse me if I feel providing others with cheap internet is not worth my sweat and blood.

Oh and karl, you see my IP what more unanon can I be? If you feel I am not debating the issue then delete the post. Everything I have seen so far says this is a very bad idea. It is not even a glimmer of hope for those without BB. The only real hope for viable BB is the Texas model, where they LOAN money to the providers to get the DSL or fiber out to the rural areas. Oh wait you guys said that was a bad thing. I don't get it, a loan to get a private company to rollout is bad, but a goverment ran ISP is good??? umm, wake me up please!!!

Karl Bode
News Guy
join:2000-03-02

Host:
Road Runner
PC gaming GAMES
PC gaming Tech

edit:
November 2nd, @03:30PM

Re: the study cited sucks

You're getting silly. If you don't believe me that they're running in the black, call them yourself. it's true, and they're in the book.

quote:
I wonder how they cook the books to say they even break even.
So even if you had their annual report in front of you showing a profit, you assume they're lying?

quote:
I am not a fanboy for corps either, but they are not useing my hard earned tax dollars.
Not all Munis use tax dollars. I still think you need to read more. Maybe start with this interview with Jim Baller. There's many financial models, not all result in higher taxes or use taxes at all.

quote:
Everything I have seen so far says this is a very bad idea.
Please, show me what you "have seen" that warrants banning all municipal broadband operations nationally. Show me anti-municipal facts and figures that don't come from a corporation competing with them or a corporate front-group with a cute name.
BosstonesOwn

join:2002-12-15
Everett, MA
clubs:
·Comcast
·Comcast Formerly ..

Re: the study cited sucks

Karl Don't feed the trolls.

This person probably works for one of the companies being affected by the choices and is po'ed it works and take away from his paychecks.
--
"It's always funny until someone gets hurt......and then it's absolutely friggin' hysterical!"

MUNI

@207.1.x.x

If you don't believe me that they're running in the black, call them yourself. it's true, and they're in the book.
Excellent debate technique. You can't prove your assertion so you try to get your opponent to disprove it. I've yet to see a government agency that runs in the black so unless YOU can prove that it runs in the black I'll assume it doesn't.

That being said, your confidence in municipalities in general to create coherent broadband plans is laughable. The mayor of San Francisco wants to rollout wireless to the entire city. A city with one of the highest penetration of broadband in the country and he wants a government run wirelss network. He's not talking about FTTH. This guy is the rule and Click! is at best the exception.

The Jim Baller interview you sight even has him saying, "For some services, however, the private enterprise system does not work particularly well, at least in the short term." And that's what you get from government agencies short term fixes that placate the electorate and lead to bloated bureaucracies and massive government spending. The idea of the Tennessee Valley Authority was just to provide power to rural areas in the 30's. 70+ years later it still exists and is a fiscal mess.

Karl Bode
News Guy
join:2000-03-02

Re: the study cited sucks

You keep ignoring my questions, champ. I'm afraid we can't keep playing patty cake if you don't actually read what I write....

MUNI

@207.1.x.x

Re: the study cited sucks

You want it, you got it. And the sweetest part is that it's from your own site:
»A Municipal Failure

The TVA is a fact. SF mayor wanting to rollout wireless is a fact. LA power authority gauging during the rolling blackouts 5 years ago is a fact. Do you believe FTTH is immune to government largese? Every government program failure is a specific example. It doesn't have to be broadband to be related.

batageek
Slave To The Duopoly
Premium
join:2003-01-25
Batavia, IL

Re: the study cited sucks

Let's talk about Marietta......

1. Never offered residentital services
2. Only offered data services
3. Spent most of its money outside of its on borders - a carrier's carrier.
4. Did not have to sell - chose to. They either had to invest in the local market or get out.

When Comcast calls Marietta out as a failure, watch how they spin it...like it was an "apples to apples" comparison to their services. Absolute deceit - »www.tricitybroadband.com/PDF%20f···4ad2.pdf .

In addition, how about this patronizing garbage - »www.tricitybroadband.com/PDF%20f···cks5.pdf ?

If I was a woman in the TriCities, I'd vote for the referendum just because of this.

Scum.
AuroraJock

join:2003-04-02
Chicago, IL

Re: the study cited sucks

What's patronizing about using your own citizens against your cause?

I've looked at the early returns for your group batageek - doesn't look too good for you. Same results so far as last time - 60% NO. This time around, no excuses. It's on the ballot - "prohibited from using taxes". You and group don't know the community wants and needs as well as you advertise. Tomorrow morning, when you and your small group are done crying in your oatmeal, it'll be the same sour grapes until next election.

Better luck next time, or build it yourself.
Eye4got

join:2004-06-02
Lancaster, PA

said by justncredible:

I am not a fanboy for corps either, but they are not useing my hard earned tax dollars. I sweat and bleed for my money so excuse me if I feel providing others with cheap internet is not worth my sweat and blood.

Oh and karl, you see my IP what more unanon can I be? If you feel I am not debating the issue then delete the post.
For the record, I am quite upset that our government uses my tax dollars to do things that I am ethically against. I accept that some of the tax money will subsidise services that I don't use by choice or aren't available to me. This is what makes our system (which is not purely capitalistic) work. Just imagine how things would be for us if we had no socialist programs and unchecked capitalism.

If my municipality was to build a broadband network, I would own part of it. I would be one of the employers of the people designing and building it. Also, the people who maintain it would also be my employees.

I believe that I would fare better taking a chance on my own employees, and having a say in how the project progresses, than I would taking a chance on the large corporation. The municipality answers to me and my community, the corporation answers to investors.

With the muni, I am an investor as well as a consumer. In the end, I trust that I hold myself in higher regard than does the large corporation.

I can see why a large ISP would feel threatened by a start-up municipal ISP.

Ask someone in Pennsylvania how they feel about having quite a bit of their tax dollars taken by their government, and given to a private corporation expressly for the purpose of building a network for the state's citizens, only to have the corporation break their promise and keep the cash.

I don't hear the investors bitching about that.

Anonymity? Oh, OK. You are *the* person in Wisconsin who has internet. Just funnin' ya I don't care, be as anonymous as you like. It doesn't change the debate.

The only reason a privately held corporation would object to anything, is because they see a threat. If it wasn't financially feasible for them to serve an area, they would be paying zero attention to that area. No threat.

Attention paid = threat. Threat = incentive. What does incentive imply?

My comprehension is fairly decent, so maybe someone here could explain to me why a corporation would spend hard earned money to fight where there is no threat. They would generate interest where there is no stake? I believe that where there is a fight, the participants have a stake in the outcome. Investors wouldn't be happy paying for a fight, just for the fighting.

Do you believe what corporations choose to disclose to you, without question? I don't, so I question things.

If you are debating the issue, I'm having a difficult time seeing your point of view.

said by Karl Bode See Profile:

Please, show me what you "have seen" that warrants banning all municipal broadband operations nationally. Show me anti-municipal facts and figures that don't come from a corporation competing with them or a corporate front-group with a cute name.
That seems like a reasonable challenge. Maybe someone will come up with some facts. Then, we can learn more about what doesn't work, and fix it. This seems like a worthy cause to me. Break the digital divide.

nixen
Rockin' the Boxen
Premium
join:2002-10-04
Alexandria, VA
·Cox HSI
·Speakeasy

said by justncredible:

If small town fiber is such a good idea let investors flip the bill, why make tax payers pay for it? In the study it clearly says it never intended to make money and it does not make money, it is a tax payers money pit. What a bad plan, tax payers supporting business fiber. The city concils should be inprisoned for wasteing so much tax money for a plan that never had a chance to show profit or even pay for itself. Whoever wrote this should have read the study first before putting it up. You have totally shown that muni fiber plans waste tax money.
Hmm... Anonymous posting. Anyone else smell a shill (and a bad one at that)?

-tom
--
"Some people have morals, standards and ideals about quality, but I'm an American: I couldn't care less." --Tony Pierce (paraphrased)

Karl Bode
News Guy
join:2000-03-02

Re: Podunk, Nebraska

Sorry Zobo. I just pulled the name out of a hat. No slight intended toward Nebraska, I swear. Simply trying to make the point that small towns can't expect to become gods of economy just by running fiber.....

The Beer
I Love It When A Plan Comes Together
Premium
join:2001-07-24
Omaha, NE
clubs:
·ViaTalk

Re: Podunk, Nebraska

I know you just did the Podunk,NE before

I would have to drive at least an hour from where I am at to find a cow.

Last time I relocated an office, NOT being serviceable via fiber eliminated them from the hunt.

Fiber will definately be a plus when looking to locate a business, even for a small town.
flushls

join:2004-11-02
Joyce, WA

This is a Shame

This is a complete shame I have been trying to bring in some kind of real broadband service to our village for over 2 years, and yet good old Qwest fights me every step of the way.

Yet they have told me they have no intentions to deploy anything other than POTS before '09.

Mr Green

@olympus.net

Re: This is a Shame

Since this is about Joyce, Washington: What response do you get from the good folks at Clallam PUD (which has some fibre installations)?
flushls

join:2004-11-02
Joyce, WA

Re: This is a Shame

They took quite a brow beating from Qwest on the last go around in sequim so I think they might sit this one out.
Any how any fibre deployments are for their network use selling access to noanet is a side benifit.
The stupid thing is Qwest CO in Joyce is wired for DSL it would just take a bunch of TR's to get it going which is why they won't deploy.
Sarge_0321

join:2002-06-27
San Diego, CA

It's a great idea!

We don't have corporations in charge of building streets and roads to rural communities. If they did the roads wouldn't be built. From an argument that the people out in the sticks can't provide enough tax revenue to pay for the roads.

So the companies will refrain from building out the broadband pipeline because of lack of profitability. So why not have it as a part of a city service? What's the big deal? You know they are going to outsource the cable laying to third party companies anyways! But it has to be municiply run.

My only fear would be the 'authorities' would readily tap the lines to sniff around. More easily than they can do with individual companies.

My thoughts.

happi thakkar

@uu.net

muni is bad

Its kind of dissapointing to see so many americans put faith in this kind of bullshit. Yes, companies will say what they have to to defend their profits, and yes, we all hat comcast, SBC, etc.- but they're not wrong.

Municipal broadband would destroy the private market for broadband in the city, and heres why: cities can take money out of the general tax pool to fund the projects. SO, for examople, A city could afford to spend $20M to install fiber throughout the town, and then charge residents $30/month for access, not caring whether it will be profitable. People have to realize that nothing is free. Even tho muni broadband might look good up front, you have to realize that come tax day, you'll be paying for everything.

A free market provides better service at a lower price then any other avenue. New technologies are constantly being introduced and tweaked. For example, wireless broadband and VoIP services just started becoming popular about a year ago. Now, WiMAX is about to be introduced, which should improve coverage and speeds to millions of americans. Also, the cost of fiber tech is constanstly decreasing to the point where Verizon is already making a massive outlay.

Nothing is free. Muni is innefficient and forces taxpayers to pay for a system that they may not use/support.

nixen
Rockin' the Boxen
Premium
join:2002-10-04
Alexandria, VA
·Cox HSI
·Speakeasy

Re: muni is bad

said by happi thakkar:

Municipal broadband would destroy the private market for broadband in the city,
[...]
A free market provides better service at a lower price then any other avenue.
So what private/free market are you talking about. These are efforts to provide a service where your free market forces have decided not to even bother to provide services in the first damn place. If there WAS a real service offering, you wouldn't see the governments rushing to step in. It's a freaking service vacuum that the muni's are seeking to fill. There is no market to damage.

-tom
--
"Some people have morals, standards and ideals about quality, but I'm an American: I couldn't care less." --Tony Pierce (paraphrased)
MarcVoIP

join:2004-01-26
New York, NY

Re: muni is bad

As most people know, broadband Internet is qualitatively different than dial-up. It changes usage patterns, and enables new applications (such as VoIP). Most people (and most businesses) are willing to pay more for broadband than dial-up, but since few people are truly dependent on the Internet, they are not willing to pay too much more. Over time, I expect Internet dependency to increase, and willingness to pay increase as well. But for now, most people seem willing to pay $25 to $45 per month ($300 to $540 per year) for broadband Internet.

Depending on the source, and cost, of their capital, most companies look to break even on their investments within 5 years (but in down economies, where capital is scarce, it is often much shorter). If, for example, it costs $10 million to install a fiber network to serve a town of 10,000 homes, the construction costs would be $1000 per home. Typically, construction costs represent about 40% of the 5 year costs of operating an IP network, so the overall expense of operating the network is $25 million. Therefore, with 100% participation, 10,000 homes paying $500 per year, would generate $5 million per year, allowing a 5 year breakeven (amazing how the math works so well in this example!).

The telcos and cable companies always act in their own self interest. They are deploying fiber as rapidly as they can afford to (still have to meet Wall Street's financial ratios), and are prioritizing their deployments based on ROI calculations, and strategic responses to competitors. ROI calculations are obviously much better where there are greater concentrations of users (and revenue) because the construction cost per user is lower. At current construction costs, rural areas may not break even for more than 10 years (or ever!).

As to why telcos and cable companyies try to block efforts by local municipalities to build their own networks, there are two main reasons: one - they are afraid of precendents, where larger municipalities may also construct networks, posing serious competition; and two - network construction costs are expected to fall, and they don't want to lose future opportunities.

Most companies will not set up an office or facility in a town where they cannot get broadband, so the municipalities must ensure broadband to attract new jobs. If the telcos and cable companies don't have compelling ROIs, the municipalities must consider building their own. One of the downsides to that is becoming a network operator.

I would like to hear ideas on how municipalities can get broadband for their businesses and residents, but avoid the long term commitment of being network operators. One idea might be to lease the network facilities (or some of the capacity) to various IP carriers, who actually provide and bill for services.

Thoughts??

wilbilt
Pronto Resurrected
Premium
join:2004-01-11
Oroville, CA
·Pacific Bell - SBC

said by nixen See Profile:

If there WAS a real service offering, you wouldn't see the governments rushing to step in. It's a freaking service vacuum that the muni's are seeking to fill. There is no market to damage.

-tom
Exactly.

I live in Podunk, CA...population about 200. No DSL (20 miles from the CO...which is in a different county. If I call the city that the USPS says I live in, it's out-of-area long distance).

No cable (Comcast is about 10 miles away with no plans for this area). There is a local wireless provider that has also reached about 10 miles from here....but again, no plans for us. All of the providers have said that we are not important ($$$$) enough.....so there's no market to hurt.

I am currently paying $85/mo for unreliable slow ISDN + ISP fees.

If the county wants to run fiber, I'll help them hang it!

Will
-121.5 39.3

gheezer
Compooters R Us
Premium
join:2002-12-20
Henrietta, NY

Muni Ownership raises security questions

In Richmond KY, a committee was formed to explore this issue in depth, they recommended buying out Adelphia's existing franshise, cable plant and all, taking it over and running the cable system themselves.

here's the link to the Lexington (KY) Herald:

»www.kentucky.com/mld/kentucky/9816663.htm

The primary cause for disgruntlement?

According to the news story, it wasn't poor service, or lack of geographic coverage, Adelphia made adult programming available without informing the municipality...(mind you, the franshise agreement did NOT prohibit adult programming either).

So, clearly, in smaller municipalities, which DO tend to be more conservative, availabi;ity of adult programming would be an issue.

AND....I made this same argument in the News Story posted here at DSLReports...»COMMITTEE RECOMMENDS CITY PURCHASE ADELPHIA FRANCHISE

When the Government is charged with maintaining the data, that data inevitably leaks out. If John Q., a member of the school board, buy's a skin flick on pay per view, that transaction is recorded. Next election year, John Q gets slammed as a porn addict because the records of this transaction can VERY EASILY be made public...

I'm a stern believer in private enterprise, I don't believe an elected official(s) can provide ME with competetive services without paying for it in some loss of choice or risk to privacy. My home is MY castle, and I DO NOT WANT MY GOVERNMENT in ANY FORM, IN MY CASTLE without my knowledge or consent, which is exactly what's gonna happen if they own the link to my Cable Modem or Digital receiver, NOR do I want my Government telling me what I can and cannot choose as entertainment in the privacy of my own home.

This concept of Governemnt ownerhsip of the entertainment delivery system scares the living crap out of me, both as a consumer, and as a private citizen and taxpayer. My Government does NOT belong in the entertainment business.....period.
--
Join the NAVY, see the world....It's mostly water!

ZenWorx

@63.170.x.x

Destined to repeat the past...

Telcos shouldn't be forcing our local governments to allow them to provide lackadaisical efforts in supplying broadband to less than profitable areas, while preventing any competition either government or private from competing against them. Sound's similar to the steps that the robber barons of the railroad industry took to keep competitors off their tracks in the late 19th century. Again it goes to the adage those who do not learn from history are destined to repeat it.

»www.zenworx.com/cms/content.php?article.5
Forums » Greed, Lies, and 'Progress'


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