Paradoxically, the incumbents argue that public sector broadband is both an unfair competitor and obviously an inferior service doomed to failure in the market.
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In a reminder of the power embodied in massive corporations like Comcast, Seattle Mayor Mike McGinn is facing a challenger buoyed with sizeable contributions from the nation's largest cable and Internet company.
Why is Comcast so interested in defeating Seattle's mayor? Payback and a warning to others. Lest any other big city mayors think it would be wise to help create competition to Comcast's effective monopoly, know that Comcast will finance your opposition.
We have covered Seattle's various attempts at improving Internet access though we have admittedly not written much on its public-private partnership with Gigabit Squared. Gigabit Squared is a new firm that is starting to work with cities that have fiber assets to deliver services to residents and businesses.
The plan in Seattle is to create a large pilot project in at least 12 neighborhoods offering Internet service at speeds far faster than Comcast but at a lower price. Gigabit Squared is using city owned fiber to build its backbone network and working with the City to expand that network.
However, little has happened in the past 10 months since it was announced except some signs that Gigabit Squared was still trying to raise the necessary capital. We understand that some will start to get services early in 2014.
In the meantime, Comcast has donated heavily to Mayor McGinn's rival Ed Murray at a time when many expected the Mayor to already have a challenging race. From the Washington Post story:
Comcast's donations to political action committees (PACs) suggest Comcast has poured dramatically more resources into defeating McGinn. The Broadband Communications Association of Washington PAC, which received 94 percent of its 2013 contributions from Comcast, donated $5,000 to the group People for Ed Murray less than a month after Gigabit Squared's pricing announcement. That was the PAC's largest single donation. Unsurprisingly, People for Ed Murray has made significant expenditures supporting Murray's candidacy. The Web site of the Broadband Communications Association of Washington also lists [Comcast Executive] Janet Turpen as president-elect.
Comcast also donated $5,000 to the PAC called the "Civic Alliance for a Sound Economy," or CASE, whose largest expenditures were donations to People for Ed Murray, to the tune of $52,500 -- over half of the money spent by the group according to the most recent disclosures online. Their second largest expenditures was $10,000 to People for a New Seattle Mayor, a group opposing McGinn's reelection.
This is nothing new for Comcast and if anything, suggests a more modest approach than we have seen elsewhere. We have long covered the fight in Longmont where Comcast first broke records by spending $240,000 to defeat a referendum restoring local authority to build a network. Comcast then doubled down two years later for the same question, spending over $400,000 in the final tally and getting crushed in the process. That led to this great ad in the local paper. Now Longmont is building one of the most impressive fiber networks in the nation.
Seattle mayoral challenger Ed Murray's spokesperson has said he will continue to honor any agreement with Gigabit Squared though he has not made broadband policy an issue in the race and has no discussion about this important policy matter on his web site.
This issue goes well beyond Seattle, as Andrea Peterson rightly examines in her concluding words:
A loss for McGinn on Tuesday probably won't mean the end of Gigabit Squared's work in the Seattle metro area, though it could curtail Gigabit Squared's plans to expand to other parts of Seattle. More importantly, though, if Comcast's donations help Murray defeat McGinn, it will send a powerful message to mayors in other American cities considering initiatives to increase broadband competition.
For decades we have experimented by allowing a few firms to amass greater and greater market power without antimonopoly laws (often called antitrust) to protect the public interest. That experiment has failed. It is past time to recognize the danger than massive corporations pose to both our economy and republic.
Addendum: One thing is certain - those who want to claim that cities should embrace "public private partnerships" because they are less risky or somehow less controversial should pay close attention to this situation. Communities should do what is right for them, not what they think will be acceptable to a powerful giant like Comcast. Either way, Comcast will fight to preserve its monopoly.