It's almost like the regulatory capture of the FCC has been undone. Is there even a political term for that? Regulatory release?
How did this happen? Was it just the 4 million request for comment responses? Is there something else at play?
Also the quote from the congresswoman is quite brilliant how she uses tea party rhetoric to defend laws that lock in regional broadband monopolies. Her spin is artfully magnificent. Boldly rising to the defense of crony capitalism.
I only wish everyone saw it for the utter bullshit it is.
> Also the quote from the congresswoman is quite brilliant how she uses tea party rhetoric to defend laws that lock in regional broadband monopolies. Her spin is artfully magnificent. Boldly rising to the defense of crony capitalism.
> I only wish everyone saw it for the utter bullshit it is.
The inability to agree with "opposing" parties on some issues while still disagreeing on other issues is a symptom of a much larger issue in American politics.
I'm confused as to how this is "BS" as that is the actually one of the main stances of the tea party. If they're inconsistent about enforcing it, then call them out when they do that (or when they're doing it solely to back huge corps) and if you don't like their focus on regulating personal behavior (which is inconsistent in their idea of limiting government involvement in personal lives), but it seems like an odd to criticize them when they do something that's actually helpful.
That is, unless someone who disagrees with you is incapable of even potentially having a useful point every now and then. If that's the case, then that speaks volumes more about you than it does them.
I'm confused as to how this is "BS" as
that is the actually one of the main
stances of the tea party.
As I understand it, in some parts of America a single broadband provider is granted a monopoly on profitable urban areas on the condition they extend service to unprofitable rural areas.
If a politician says they oppose government imposition in the marketplace because of the benefits of private-sector competition, as an argument to support retaining a government-imposed monopoly that wipes out competition in the private sector? It's hard to take such an argument seriously.
With that said, despite the title about "State imposed internet monopolies" the article seems to be about municipal broadband, rather than state-imposed broadband monopolies.
I don't know whether that is consistent with tea party politics, but it's still fascinating contortionism to argue for states rights in order to safeguard the use of those rights to take away local governments ability to do what they want, in order to try to safeguard uncompetitive monopolies.
Not when you understand how local governments are chartered. In every state I'm familiar with, the state government grants local governments a charter to exit. Local governments are essentially organs of the state and have no sovereignty.
Illinois could end Chicago's existence if it were so inclined.
So telling a state that it can't regulate it's local government is an actual and serious violation of state's rights.
I don't doubt it can be seen a violation of state's rights. But the call for state's rights is generally to bring government closer to the people. In this case it is (attempted) used to pull government further away from the people.
The article title is misleading. This measure isn't about state imposed Internet monopolies, but overturning state bans on municipal broadband. On the substance: this is an excellent decision, but needs to go further. The FCC should act to ban anti-competition municipal measures like build-out requirements.
Right now, if you're an ISP startup and you identify some neighborhoods where it would make sense to build fiber, most cities won't let you. Instead, to build anywhere, you have to build everywhere. This is a huge missed opportunity, because competition in even a limited service area could cause change in incumbent behavior if that area is full of lucrative accounts.
Google is leading the way on this as part of it's Fiber deployment, but the FCC has the opportunity to make it national.
> The FCC should act to ban anti-competition municipal measures like build-out requirements.
I'm not sure it would be a good idea for the FCC to ban buildout requirements across the board. That seems really heavy-handed.
Buildout requirements can be bad, in that they hold back an entire region to the least common denominator, but they can also be used as a bargaining chip to force service to regions that otherwise would never receive service at all.
Remember that local politicians are much more beholden to the needs of their constituents than the FCC is[0], so if an entire neighborhood is being technologically blighted, it may make sense for the city council or town to use build-out requirements to ensure that those neighbourhoods don't get remain stuck in the 20th century.
I think it makes far more sense to let cities and states negotiate these requirements than to disallow them across the board. Over time, it'll be clear that cities that don't impose all-or-nothing build requirements get much better service in wealthier and denser neighbourhoods (like Google Fiber), and other cities will either follow suit or not.
[0] and this is a good thing; they should be attuned to what their constituents need
> so if an entire neighborhood is being technologically blighted, it may make sense for the city council or town to use build-out requirements to ensure that those neighbourhoods don't get remain stuck in the 20th century.
But that's not what happens. In all but the wealthiest cities, this just becomes a focus point for class warfare, where municipal representatives for poor neighborhoods torpedo fiber build-out across the whole city.
> where municipal representatives for poor neighborhoods torpedo fiber build-out across the whole city.
But that's an issue for the city government to address internally, perhaps by means of negotiating a deal involving some other issue that those representatives also care about. That's how city government works.
This isn't exactly the only case in which neighbourhoods within a city or town have conflicting interests in local government[0]. I don't see yet why this one in particular should be special-cased (by allowing the FCC to bypass city/town governance).
[0] Arguably, that describes all of local government.
What deal could representatives make that fixes the problem? Someone has to pay to service those poor neighborhoods, and it'll be the ISP's shareholders only if they can make outrageous amounts of money on the remaining subscribers. Otherwise, the options are public money, or no fiber. Most cities are broke, so the former option is off the table, so in practice the result is no fiber for anyone.
If Internet access is an essential utility, and the city can't reach an agreement with ISPs, then the city itself should pay. This is what many cities are already doing, and the state laws prohibiting municipal networks are the issue addressed by the FCC.
How are they supposed to pay for Internet buildout when they're running 8-9 figure deficits servicing 9-10 figure debt loads, watching their municipal bonds downgraded, and scrambling to figure out how to pay down defined-benefit pension plans to firefighters, police officers, and teachers?
Name a major US city in a strong position to build out fiber Internet at their own expense and we can drill into the numbers.
Before I wrote, I pulled up the general fund numbers (debt load and deficit) for the 5 biggest US cities, and a couple random cities down around #15. I was going to write up a little table, but got pulled into a meeting.
This is one of those discussions where we have the benefit of actual numbers to work from. They're just a Google search away. If you're right, this should be an easy debate for you to win.
Slightly later
Figuring that the top 10 cities might put your argument at a disadvantage (it's harder to run a giant city than a smaller one and obviously more expensive to roll fiber out in one), I checked the next 10 cities on the list (by population). Quick observations:
* San Jose - huge deficits, pension crisis, closing police stations.
* Austin - like all the cities in Texas they seem to be doing OK.
* Indianapolis - 8 figure deficit, funding the city from reserves.
* Jacksonville - small deficit, service and pay cuts to keep the budget balanced.
* San Francisco - mid-high 8 figure deficits.
* Columbus - hard to find figures, probably doing OK.
It's interesting that the major cities in Texas are doing OK. Even for those that aren't doing OK, I'd propose that adding fiber rollout to the city's utility maintenance budget is the right thing to do in the absence of a better alternative.
Now that there's Title II categorization, maybe it'll be addressed the way telephone roll-out was, was a "universal access" tax added to broadband bills to fund extending the infrastructure to less profitable areas.
Because: expensive, no money to spend on it, and a suboptimal use of funds. It might be hard for high-income message board nerds like us to see this, but cities are straining to provide basic city services: making sure roads are drivable, clearing alleys and policing vacant lots and condemned apartment buildings, getting kids to school safely, keeping the heat on at those schools.
There is probably not in fact a huge demand for fiber Internet in North Lawndale or Fountain Park or Joyland.
That's actually part of Rayiner's argument. Build-out requirements are seized on by activists and politicians as chits, not because residents want fiber Internet (they won't get it regardless!), but as a political weapon to wield against rich neighborhoods whose residents want to pay premium rates for fiber Internet.
> Right now, if you're an ISP startup and you identify some neighborhoods where it would make sense to build fiber, most cities won't let you. Instead, to build anywhere, you have to build everywhere.
Which is a good thing, because otherwise you wind up with communities which are further disadvantaged in access to information, education and work.
The solution is for the Government (federal, state, or municipal) to provide funding to build out into poor/remote areas (but still require it), not to throw your hands up and suggest that it is OK to exclude entire communities from what is quite possibly the most important technical development of the past couple of decades.
There is no free lunch. People in more expensive neighborhoods aren't willing to pay more just because the city requires build-out to poor neighborhoods. All build-out requirements do is make the economic case for building fiber even worse, and the end result is that nobody gets fiber.
The digital divide issue is much more cheaply solved by subsidizing wireless service for poor people. You don't need fiber to access Wikipedia, submit job applications, etc.
> You don't need fiber to access Wikipedia, submit job applications, etc.
You do need a decent, reliable connection to access video-based educational materials (which form the bulk of many MOOCs), and more so to watch livestreamed conferences and tutorials. Do you plan to force mobile phone networks to provide virtually-unlimited bandwidth on top of supporting tethering when they're already struggling with physical bandwidth issues as it stands?
The rest of the developed world manages to provide high-speed (>50Mbps) Internet to at least almost the full population of their major cities (ignoring rural areas for now), with plenty of competition, so I don't really see why the US can't.
> The bandwidth used by a whiteboard + audio stream is minimal.
Might be the case in theory, but I've yet to get a WebEx or Youtube live stream working reliably over 3G from my own home.
Paying market rates doesn't help when the infrastructure is already struggling to deal with current, unsubsidised load. 3G/4G based Internet is a dead end in reality, barring huge technical leaps.
Existing 4G networks are plenty fast for educational streaming, and the additional load from a few subsidized users watching MOOCs isn't going to break the bank. Take a place like downtown Wilmington, DE, the kind of city that would be a key target for such a program. On T-Mobile, I'd regularly get 8-15 mbps.
Your argument ignores a key demographic statistic: 80% of people below the poverty level already have cell phones, while under 60% have computers.[1] Given trends in PC-use, that disparity is going to increase, not decrease. Subsidizing cell phones is a much better fit for the social trends in poor communities.
> People in more expensive neighborhoods aren't willing to pay more just because the city requires build-out to poor neighborhoods.
They may very well be in some cities/towns; this isn't fundamentally different from them paying more in taxes to subsidize other services that are used equally by all residents.
There's so much regional variability on this that it makes more sense for the FCC to allow cities and towns the right to determine this for themselves. If constituents are unhappy with the results, they can raise the issue at a town hall or with the city council, which is a far lower bar than trying to change FCC policy.
The problem is they already have cable internet incumbents who can price below the new fiber with you make the fiber more expensive.
And the fiber companies know this and do the math.
This sort of subsidy for poor areas worked when there as a telephone monopoly. Well there isn't a monopoly anymore so you can't just make customer eat your price no matter what.
It seems like a duopoly is about the worst possible market you can have. Monopolies basically have to be regulated (or government operated, or broken up), but at least monopolies have economics of scale and can justify research spending like Bell Labs. A duopoly doesn't give you any kind of vigorous competition but it still doubles all the fixed costs by requiring two networks to be built and maintained and then gives each provider a disincentive to invest in anything its competitor could benefit from.
> The digital divide issue is much more cheaply solved by subsidizing wireless service for poor people.
That is completely wrong. Wireless is completely useless in its current form. I burn through 4-5 TB of traffic per month. Nothing beats wire to the home.
Municipal owned last miles funded with property taxes is very nice way to redistribute some income, create work and provide ISPs with incentive to do their stuff. And ISPs just hook to them. I think that last miles connections should not be owned by other than the connected property's owner or society.
> Wireless is completely useless in its current form.
We're talking about subsidies to the poor to access the informational content of the internet. The vast majority of that is text or low-resolution video. I don't think it's a good use of public money to subsidize high-bandwidth games and entertainment.
> Municipal owned last miles funded with property taxes is very nice way to redistribute some income
Municipalities are already facing the prospect of having to hike property taxes to pay for existing obligations. Shit, e.g. Chicago won't even pay to replace all the lead pipes it put in decades ago which are leaching poison into peoples' drinking water! There's so many higher priorities that are underfunded before "multiple Netflix streams for everyone."
> We're talking about subsidies to the poor to access the informational content of the internet. I don't think it's a good use of public money to subsidize high-bandwidth games and entertainment.
Have you seen the size of Visual Studio lately. Or photo shop. Or Linux installs. Or their ability to have a normal cloud backup.
So...it takes longer to download? Who is in such a rush to download an IDE that they will be significantly disadvantaged of they can't do it in under 15 minutes?
VS Express 2010 is a 800 meg download. So 15-20 minute download on LTE, for something you'll use for months or years. Even 2013 is only a one-to-two hour download over LTE. It'd be far cheaper for the government to just pay for the LTE bandwidth for the small number of people who will avail themselves of these things than to build fiber out to everyone hoping a few will do so.
You're an edge case, even in my home which has 7+ users who stream and torrent we rarely hit 1tb.
(What I'm about to say is gonna be unpopular, but:)
Most importantly, there is no reason why the rich should subsidize the poor's porn and movie addiction. If you want those types of amenities make more money and make it lucrative for a company to bring you the services that they require.
I know it's popular to suggest there are no differences between the two parties. Obviously, this is the case for some issues that many people here are passionate about (privacy, to an extent, foreign policy). However, I'll be pretty sad when there's a Republican president and a Republican FCC chair and these 3-2 votes start going the other way.
Here's one undeniable difference between the two parties.
Stuff like this makes me mad, because it seems to do more to reinforce the "2-party" system which automatically means that the "other" party is the "bad" party.
Not sure that not having it would be any better though.
As a resident of Chattanooga, and EPB customer, I wholeheartedly support this move. Some of the things quoted in this article from politicians and ISP spokespeople strike me as laughably outlandish distortions of reality.
I know the folks at EPB quite well, and used to work with them--first as the primary developer in town who built nearly all their online software for nearly 4 years, then as an employee running their internal development department/team. Then again as a vendor when I left the company to consult full-time. They are insanely committed internally to providing the best possible service, speed, and prices they can. They're also serious about providing excellent customer service (more on that in a moment).
Moreover, at least where EPB is concerned, the bullshit posturing of big ISPs alleging these small companies would cherry-pick bigger markets falls completely flat. Come on, now. Isn't that exactly what FiOS did when it chose years ago to stop expanding? Isn't that the primary attitude we see displayed by the big telcos? Have they connected every last mile in America yet, in 2015?
Almost as soon as they'd barely proven the concept of providing insanely fast internet to a few choice, small areas of the city, EPB embarked on blanketing their entire power service area with connectivity. IIRC, it took them a couple years to pull it off--I know roughly because I built the integrated online services customers used to find out if EPB had service at their homes yet, and it was a big deal when we finally got to rip out a bunch of code that handled when the backend services couldn't return a "Yes! We're in your area!". They didn't leave out the poorer areas of the city. They didn't only put it where the highest populations are. They were installing connectivity at an incredible pace--so much so, that there was actually a bit of a local stir when some residents started raising a fuss over not asking for the connectivity and having it installed in their neighborhoods (and having the upgraded power boxes installed on their houses (at no charge) that also housed the fiber-ready connections should they decide to become a customer). There's only one place they failed to be able to offer service that, afaik, may still remain to this day--MDUs[1] that have contracts with Comcast.
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A brief(ish) anecdote on the dedication a small municipal company has to providing top-notch customer service:
I was sitting in a meeting one day with two of the senior VPs and one VP of engineering, who reported directly to the President. We were waiting for others to join for whatever we were actually supposed to be discussing, and the VPs were discussing a host of troubles they had when they send field techs out to customer's home for installation, upgrade, and troubleshooting jobs. At the time, whenever the techs were on location and had to have something handled by the tech ops center--this is a smart grid, so they could just flip switches and make shit happen once they knew what a problem was--they had to call into a customer service line that went to tech support to get the situation resolved. That means all the techs are calling in throughout the day just like customers would call in, so they wind up spending a lot of time on hold. They were estimating it was at least a 15-minute wait at each site. Bemoaning the lack of any easy way to fix it, and the lack of any off-the-shelf third-party software they could contract in to help solve it, they expressed feeling stuck. As a customer, I'd experienced this very problem a couple of times myself. I had a great team of devs who worked for me, and they were itching for a problem to solve. So, I spoke up. I asked if it was true that all the techs had laptops in their trucks. It was. I asked if they were all connected to the network via VPN. They were. I then gave them a quick 5-minute pitch right out of my ass, saying that my team had just completed what we were doing, and we could build and launch an app on the intranet that would allow the techs to go to their trucks, answer about 3 questions telling customer's acct, the problem, and their phone number, and submit a help request. Then we'd make that pop up in real-time on tech support's displays, and anyone in tech support could immediately call the tech back as they were flipping switches and pressing buttons to verify the problem was corrected. There were some surprised and questioning looks shot back at me across the table--I was new, they didn't know me, and they definitely didn't expect me to speak up, I think. One of them, seasoned veteran of the company's many forays into having custom software built for them, said they'd looked into some things like that before and it would take months to complete something like that. When he asked how long we'd need, I told them to give us a week. The looks turned into comical disbelief--they were new to having a dedicated internal team of developers, and my department was brand new, full of devs and a designer I'd hand-picked. There was all the usual "there's no way you can do this," and my typical over-confident assurances we could.
It took us 10 days and one meeting halfway through to get all the requirements and launch the app. By the end of the first month, our little project had taken in a bit over 2,000 real-time support tickets, and we'd cut average wait time at customer's homes from a rough estimate of 25 minutes down to an exactly timed 12 minutes from ticket open to ticket closed. The VPs called us all into a room at the end of the month. They were beaming. My team felt like badasses. They were showered with praise. The VPs said they couldn't believe it, and couldn't argue with the results. Next thing on the agenda? "We've got about 5 more departments we want to roll this out to right now and get everyone doing this stuff in real-time. We can kill all the time customers are waiting on us in so many ways with this."
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All that to say that a small, municipal telecom has some characteristics and features the likes of Comcast don't--a personal stake in the local community, a desire to take care of the local community because it's themselves, and a willingness to do whatever it takes to make their community better. I don't think Comcast gives two shits about any of its customer areas. EPB, on the other hand, not only provides a service at crazy speed and fair prices, but they continue to invest time, money, guidance, and other resources into all kinds of things that matter to the local community--all the gig business stuff, tech councils, etc. Their internal corporate structure tends in a number of ways toward stupid political bullshit, like any other company (it's why my whole team and I eventually stopped being employees, and went back to being vendors). But it doesn't get too much or too often in the way of everyone at the company trying to constantly find any and every feasible way to make their services better than the big ISPs, take care of their customers better because they are family and friends, and take pride in finding more ways to play a part in making Chattanooga a better place[2].
Excellent salient story, thank you. I'm a former public servant, and it's really nice to see someone share a story here showing that the 'nameless government bureaucrats', so often derided by the programmer community, can actually care a whole hell of a lot about their jobs when they feel like they're making a difference.
As I said, I felt kind of weird offering such seemingly over-the-top praise. I have a number of issues with CHA in general, and even with EPB in particular. But none of the latter issues have ever had anything to do with doubting that anyone actually cared a whole hell of a lot about their jobs. It always had more to do with philosophical differences in implementation details. Well, that and I'm just no good at playing politics. I like to see needs and solve them, not debate them or structure solving them in such a way that my horses win the internal and/or community accolades.
Apologies for the delayed response. Unfortunately (?), I do not have a blog about CHA. I've never considered there being that much to write about (as much as I sometimes would love to regularly write about something). I appreciate the compliment and interest, though. Perhaps I'll contemplate the idea in the future.
I'm torn. Do these state bodies (Chattanooga power utility) have a state mandated monopoly or protection? Do they use those protected profits to build a network which they then sell to consumers? I would be upset if my competitor had that advantage and I didn't (note I'm wondering not certain that that's the case here)
No. Chattanooga has a slight competitive advantage because they needed the network in place for running a smart grid anyway, so it made sense to just roll out fiber at the same time as they rolled out electric lines, and become an ISP. Of course, I say that tongue in cheek, because there was no real competition in the area; all the big ISP players were indicating they had no plans to fully cover Chattanooga any time soon (they did, of course, immediately start lobbying against EPB).
The incumbent ISPs, on the other hand, have (well, had) state mandated protection against non-profit municipal ISPs, -and- had a huge amount of governmental funding to roll out broadband initially (using the 90s definition) giving them, effectively, a huge leg up against any would be competitors.
Competitive advantage or not, there is absolutely no reason municipalities or states should be prevented from running fiber throughout their own communities.
> Do they use those protected profits to build a network which they then sell to consumers?
I don't understand this argument at all. Having access to capital isn't an "unfair advantage" -- it's a hard prerequisite to building a network. Nobody can do it without that.
And sources of money are never unfair. If somebody has easier access to capital than you, that isn't an "unfair" advantage, it's a completely reasonable advantage. It isn't unreasonable for large entities to invest in things they want to just because they have more money than you.
The only way it would be unfair is if they were operating below cost in the long term, which has nothing to do with where they get the money and which they aren't doing and have no reason to do.
Hmmm. Let's say people in your state love bananas and the average price of a banana is $1 with a profit of 20 cents. And your friend who is married to the daughter of the governor suddenly has an exclusive license to sell bananas in your state. What do you think will happen to the price of bananas and subsequently what do you think happens to profits your friend starts accruing? Ok, so far so good you don't really care because you don't like bananas. You are your 10 friends sell apples and you all compete hard against each other and sell an Apple for between 95 cents and $1.05 cents. One day your friend thinks the Apple business looks interesting. He's raised the price of bananas to $1.20 and is now making 40 cents a banana. Now he starts selling Apples. At 70 cents each. 10 cents below cost. He's losing 10 cents on every apple but he doesn't care because he makes 40 cents on every banana he's selling. Naturally in 9 months you and your 10 friends are out of business. You can't sell Apples at a loss. Once you leave he raises the price of Apples to $1.10. Feel tempted to jump back in? No way, he'll just drop them to 70 cents each for a while and crush you a second time.
All of this happens because your friend has an unfair advantage in terms of his access to capital. Power utilities (and cable and internet too) are great examples of law mandated monopolies who generate protected profits. Taking that protected revenue stream to subsidize your entrance into a competitive marketplace isn't fair.
You're talking about antitrust, which is ugly and complicated, and you're making several mistakes.
But this is the fundamental one:
> All of this happens because your friend has an unfair advantage in terms of his access to capital.
It really has nothing to do with that at all. A dollar is a dollar. If it takes a billion dollars to sell below cost for long enough that all your competitors to leave the market permanently, it doesn't make any difference where you got the money.
Which is why the thing you're describing is illegal regardless of the source of the money. The banana monopolist is not allowed to do it and neither is Warren Buffet or Bank of America or anybody else.
This may be helpful, but seems to miss the point. Municipalities are the ones who created the monopolies.
The wired networks were conceived as utilities during their initial buildout, thus the monopoly. It takes years of lobbying and dealmaking for a new ISP to enter a municipality (see Google). That's unrelated to the state, in most cases.
Good. It's really bizarre that some parties are so openly opposed to it, while pretending they are pro competition. Do they not care, or they simply think that public will eat that nonsense without second thought?
In the case of Chattanooga, one of the cities that petitioned for this, there was little or no business to compete with. They want to expand their network to outside the city limits, largely two areas that currently have either no broadband at all, or only have low speed broadband.
This causes problems for the people in those areas. Schools assume students have access to the Internet at home, and assign homework that requires Internet for research. Parents have to frequently drive their kids to McDonalds or church or someplace else with public Wi-Fi so the kids can do their homework.
Tennessee does allow for a municipal electric company to offer municipal broadband, which is how it works in Chattanooga, but it can only serve areas where it offers electricity service which was why they could not expand the broadband to the neighboring communities.
Pro business is too ambiguous of a definition. Do you mean pro monopoly business? Because that's what it looks like here. Being pro monopoly business means being anti competing business. Being pro competition however is being pro business in general. So I'd argue they are actually anti business generally speaking.
How did this happen? Was it just the 4 million request for comment responses? Is there something else at play?
Also the quote from the congresswoman is quite brilliant how she uses tea party rhetoric to defend laws that lock in regional broadband monopolies. Her spin is artfully magnificent. Boldly rising to the defense of crony capitalism.
I only wish everyone saw it for the utter bullshit it is.