On November 29, 2010, MPR published our commentary about community broadband. The Twin Cities has slower and more expensive broadband Internet than the nearby town of Monticello. The Twin Cities metro area has a population of 2.8 million and the highest density of people and businesses in the state. So why is our broadband Internet slower and more expensive than that enjoyed by Monticello, population 12,000? Several years ago, the city of Monticello (45 miles northwest of Minneapolis) recognized the increasing importance of reliable, high speed, low cost broadband. After the incumbent telephone and cable companies declined to build the network city leaders had in mind, the community decided to build one itself. Now, FiberNet Monticello offers some of the best broadband packages available in the country, while the Twin Cities is lagging. A new analysis by the Institute for Local Self-Reliance compares the available broadband speeds in Monticello to those available in the Twin Cities metro. In the metro, as in most of the United States, broadband subscribers choose between DSL from the incumbent telephone company (Qwest) and cable broadband from the incumbent cable company (Comcast). Monticello's offerings are faster at every price point, but Comcast appears to offer comparable downstream speeds in the highest tier of service. This apparent equivalence, however, is like comparing dirt roads with interstates. Both are roads that allow you to travel from point A to B, but they have fundamentally different characteristics in carrying capacity and reliability. For a variety of reasons, DSL and cable almost always fall short (and often, well short) of the advertised "up to" speeds, whereas full fiber networks regularly achieve the speeds they promise. In the metro, cable offers most residents the fastest option for broadband, but only one choice of provider. The Monticello network not only created a new choice for its residents, it induced the incumbent telephone company to greatly upgrade its network to remain competitive. Now, Monticello residents can choose between two extremely fast broadband providers, as well as a cable internet connection. The community-owned network may have only been the third broadband option, but it fundamentally changed the market. Prior to Monticello's investment, residents and small businesses had access only to asymmetrical broadband...Read more
So Comcast and Level 3 are in a peering dispute following the Netflix partnership with Level 3 to distribute their streaming movie service. Studies suggest Netflix movie streaming has become a significant chunk of Internet traffic, particularly at peak times.
A quick primer on peering: the Internet is comprised of a bunch of networks that exchange traffic. Sometimes one has to pay another network for transit and sometimes (commonly with big carriers like Comcast and Level 3) networks have an agreement to exchange traffic without charging (one reason: the costs of monitoring the amount of traffic can be greater than the prices that would be charged). (Update: Read the Ars Technica story for a longer explanation of peering and this conflict.)
Comcast claims that Level 3 is sending Comcast 5x as much traffic as Comcast sends to Level 3 and therefore wants to charge Level 3 for access to Comcast customers. Of course, as Comcast only offers radically asymmetrical services to subscribers, one wonders how Level 3 could be 1:1 with Comcast…
At Public Knowledge, Harold Feld ties the dispute to network neutrality:
On its face, this is the sort of toll booth between residential subscribers and the content of their choice that a Net Neutrality rule is supposed to prohibit. In addition, this is exactly the sort of anticompetitive harm that opponents of Comcast’s merger with NBC-Universal have warned would happen — that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers.
Susan Crawford wrote a lengthier piece about Comcast, Netflix, network neutrality, set-top boxes and NBC that is well worth reading (as is just about anything she writes).
However, for the purposes of this post, we will assume the 5x traffic imbalance is true (and unique and...Read more
One of the key differences between community owned networks and those driven by profit is customer service. Community-driven providers spend more and create more jobs in the community to ensure subscribers' needs are met. The massive private companies instead choose to outsource the jobs to call centers (sometimes in the U.S., sometimes outside) in order to cut costs (and jobs - see the report from the Media and Democracy Coalition).
We've seen a few examples of the big carrier approach in this arena - as when Cablevision billed apartment residents $500 after a fire for the DVR that was consumed in the blaze... stay classy, Cablevision.
Another difference between community networks and the big carriers is that big carriers see little reason to upgrade their anemic networks to ensure communities remain competitive in the digital age. As Free Press has long documented [pdf] big companies like AT&T have been investing less in recent years as the U.S. has continued falling in international broadband rankings.
Up here in Minnesota, Qwest has invested in FTTN - what they call fiber-to-the-node. We call it Fiber-to-the-Nowhere. For those who happen to live very close to the node, they get slightly faster DSL speeds that are still vastly asymmetrical. Meanwhile, Qwest has branded this modest improvement for some as "fiber-optic fast" and "heavy duty (HD)" Internet, misleading customers into thinking they are actually going to get faster speeds than Comcast's DOCSIS 3.
Much as I hate to praise the middling DOCSIS 3 upgrade, it certainly offers a better experience than any real results we have seen with Qwest. But as we carefully documented in this report, community networks offer more for less.
Two friends recently moved to Qwest. One, J, was convinced by a Qwest salesperson that Qwest would be much faster so he signed up for a 20Mbps down package. Fortunately, he didn't cancel the cable immediately because he was back on it quickly - he says Qwest dropped out 4 times in...Read more
Yet another town has decided to take responsibility for their broadband future: a small Florida community has secured financing and is moving forward with their publicly owned FTTH network.
The City Council voted unanimously Monday night to approve the $7.3 million in funding with Regions Bank in Orlando. City Manager Lisa Algiere told the council members the city would be doing most of its business with the local Regions Bank.
The funding will come in the form of three bonds: a series 2010A Bond, which is good for 20 years and has an interest rate of 3.61 percent; the second bond is a Series 2010B Bond and is for five years with an annual interest rate of 3.20 percent; while the third bond is a Series 2010C Bond and is good for one year. The funding secured by the city is a drawdown loan, meaning it will only take what it needs and only repay that portion.
The network has been branded Greenlight (though the website is not yet fully functional). Greenlight is also the name used by the Community Fiber Network in Wilson, North Carolina.
Light Reading interviewed a network employee, shedding more details than have been released elsewhere.
He says they are passing 7,000 premises, but Wikipedia only notes a population of 2,000 in 2004, so there is more than meets the eye at first glance. They financed the network without using general obligation bonds, working with a nearby bank (Regions is a big bank, headquartered out of state).
Local competitors are AT&T and Comcast, though both offer extremely slow services; the fastest downstream speed available from Comcast is 6Mbps. The new network, as do nearly all recent community fiber networks, will offer much faster connections, the slowest being 10Mbps.
This is a good sign that communities in Florida can still move forward despite the many...Read more
Today, we at MuniNetworks.org have released the first of a series of regional broadband comparisons examining the benefits of community networks. We decided to start with the Minneapolis / St Paul area, where we live and work. Read the Analysis [pdf]
Read the Press Release Our analysis, "Twin Cities Broadband No Match For Community Network," compares the available broadband plans in Minneapolis and St. Paul to small town Monticello, located 45 miles NW of Minneapolis. Monticello, as we have frequently discussed, has built a publicly owned FTTH network (which then pushed its telco incumbent to invest in much faster connections as well). Despite Comcast's much touted DOCSIS 3 upgrades and Qwest's "Heavy Duty" DSL, neither comes close to the value of Monticello's services. These companies have continued to use last-generation DSL and cable technologies with significant downfalls, including much slower upstream speeds than downstream -- a limitation particularly damaging to small businesses and people attempting to work from home. Qwest advertises "fiber-optic fast" but its speeds come nowhere near Monticello's actual fiber-optic network. Further, Qwest's actual speeds are often far below their claims due to limitations with DSL technologies. Comcast offers faster speeds than Qwest, even advertising a 50 Mbps downstream speed that appears to rival Monticello's until you consider the Comcast cable architecture rarely delivers promised speeds because entire neighborhoods have to share bandwidth. Both providers struggle to deliver fast upstream speeds, whereas Monticello's network services all include upstream speeds just as fast as the downstream speeds. When it comes to prices, Monticello's are lower, despite the faster speeds they offer. Minneapolis residents have access to a low-cost Wi-Fi network, but in that case, the low cost reflects the slower available speeds and significantly lower reliability. Our analysis also includes Clear, a new Wi-Max provider, to discredit any claims that 4G wireless will somehow change the fundamental dynamic at work in the Twin Cities: Comcast and Qwest are content to deliver 2nd rate speeds at inflated prices. Wireless provider have...
Two cities, located on opposite coasts, have recently cried out for cable competition in their communities.
A few weeks ago, SunBreak ran a story under "Why Comcast Needs Competition...Badly." The post describes a significant outage in Seattle and Comcast's slow response to fix the problem.
You may think to yourself, Hey, come on, it's 90 minutes out of your day. But what I think about is how much time cumulatively was wasted in Seattle this morning, much of it simply because people would not have been sure where the problem was. An early, all-hands-on-deck announcement from Comcast would have been a big help. It seems slightly insane that a company that provides internet service isn't very good at using the internet.
The folks at Sunbreak apparently were not aware that the City is still slowly considering building a network to ensure everyone in the community has affordable high speed broadband access (which would likely be far more reliable than Comcast's network). After I noted this in the comments, they reprinted one of my posts about Seattle's deliberations.
Meanwhile, the folks in Scranton, Pennsylvania, (immortalized in the television show The Office) have been asking when they get the faster broadband now available in Philly, Pittsburgh, and parts of the Lehigh Valley. The answer came bluntly from Stop the Cap: Sorry Scranton, You’re Stuck With Comcast Cable… Indefinitely
"Offering out television service is expensive, too expensive for most smaller telephone companies," said telecom industry analyst Jeff Kagan. "So many are reselling satellite service to keep customers who want one bundle and one bill."
Because of that, satellite television providers, who were never a formidable challenge to conventional cable...
In all the talk of the need for competition in broadband (or in the mobile space), there is remarkably little attention paid to the difficulties in actually creating competition. A common refrain from the self-interested industry titans (and their many paid flacks) is: "keep the government out of it and let the market decide."
Unfortunately, an unregulated market in telecom tends toward consolidation at best, monopolization at worse. Practicioners of Chicago economics may dispute this, but their theories occur in reality about as frequently as unicorn observations. In our regulatory environment, big incumbents have nearly all the advantages, allowing them to use their advantages of scale to maintain market power (most notably the ability to use cross-subsidization from non-competitive markets to maintain predatory pricing wherever they face even the threat of competition).
The de-regulatory approach of telecom policy over the past 10 or more years has resulted in far less competition among ISPs, something Earthlink hopes to change with a condition of the seeming inevitable NBC-Comcast merger. Requiring incumbents to share their lines with independent ISPs is one policy that would greatly increase competition - but the FCC has refused to even entertain the notion because big companies like AT&T and Comcast are too intimidating for the current Administration to confront.
In the Midwest, Windstream is cutting 146 jobs as part of its acquisition of Iowa Telecom. When these companies consolidate, they can cut jobs to lower their costs... but do subscribers ever see the savings? Not hardly. The result is less competition, which leads to higher prices. Consider that Comcast is the largest cable company, but they are known better for their poor record of customer service than low prices enabled by economies of scale.
We need broadband networks that are structurally accountable to the community, not private shareholders located far outside the community. The solution is not more private companies owning broadband infrastructure, but more private companies offering competing services over next-generation infrastructure that is community owned by coops, non-profits, or local governments.
Photo by...Read more
A few weeks ago, the Herald Tribune ran a number of articles about broadband by Michael Pollick and Doug Sword that discussed some community fiber networks and efforts by Counties in Florida to build their own fiber-optic networks.
The first, "Martin County opting to put lines place," covers the familiar story of a local government that decides to stop getting fleeced by an incumbent (in this case, Comcast) and instead build their own network to ensure higher capacity at lower prices and often much greater reliability.
"We decided for the kind of money these people are asking us, we would be better off doing this on our own," said Kevin Kryzda, the county's chief information officer. "That is different from anybody else. And then we said we would like to do a loose association to provide broadband to the community while we are spending the money to build this network anyway. That was unique, too."
The new project will use a contractor to build a fiber network throughout the county and a tiny rural phone company willing to foot part of the bill in return for permission to use the network to grab customers of broadband service. The combined public-private network would not only connect the sheriff's office, county administration, schools and hospitals, but also would use existing rights of ways along major highways to run through Martin's commercial corridors.
Michael Pollick correctly notes that Florida is one of the 18 states that preempt local authority to build broadband maps.
However, they incorrectly believe that Martin County is unique in its approach. As we have covered in the past, a number of counties are building various types of broadband networks.
This is also not the first time we have seen a local government decided to build a broadband network after it saw a potential employer choose a different community because of the difference in broadband access.
From there, Michael Pollick and Doug Sword...Read more
Though this article may appear on first glance to be unrelated to broadband networks that put community needs first, Susan Crawford discusses the damaging effects of large scale companies like Comcast using market power to prevent competition. Scale is a very important part of any discussion about competition and broadband policy.
The Comcast/NBCU merger is aimed right at competition — avoiding any series of steps that might result in having dumb (but big) pipes serving the areas where Comcast now has dominion, and avoiding having Comcast’s pipe itself made dumb. If the merger goes through as Comcast proposes, the new NBCU will have the power in Comcast’s market areas (where it routinely has a 60 percent-plus share of local pay-TV customers) to raise other pay-TV providers’ (satellite, small cable, telephone, nascent online distributors) costs of doing business substantially.
This will mean, among other things, that competing aggregators of online video who don’t have reasonable access to crucial NBCU content (particularly sports) won’t have the power to constrain Comcast’s prices. Comcast ties access to online video content it controls to a cable subscription, and Time Warner does the same thing with its content. Many of the other pay TV providers will cooperate in this plan, which goes by the nickname “TV Everywhere”. This means that independent online aggregators don’t stand a chance — because consumers will be used to getting highly-branded online video for “free” as part of their bundle from their ISP, they won’t be willing to pay for an independent service.
For those who hope that technological change will unseat the market power of an even larger Comcast, think again:
Wireless? Well, the laws of physics tell us that wireless just doesn’t have the capacity of a fast wired cable connection. It will be a complementary service, not a substitute. Wireless is much less efficient in its use of spectrum and faces much harsher signal environments than signals do inside a controlled cable environment, and so the overall number of bits that can be conveyed in a given amount of time in a mobile environment is much lower than that possible in cable systems. We love mobility, but for watching live video, we’ll still prefer wired cable.
The giant cable operators generally do not compete with each other in major metropolitan areas in the US. (The one exception is New York City, which is so...
Southwest Review News covered discussions to build a publicly owned fiber I-Net in West St. Paul (a city located, oddly enough, due south of Saint Paul, MN). The estimated cost is $143,000 and will be undertaken in partnership with Dakota County.
Current I-Net services come from Comcast, which recently tried to grossly overcharge Palo Alto for such services.
They are contemplating offering connections to the private sector as well as public institutions:
The infrastructure would put the city in the position of providing connectivity as it would any other utility. Businesses could pay to install connecting lines on their property to the city's fiber, similiar to how sewer and water systems operate.