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A Closer Look at FiberNet Monticello
Monticello has been all over the muni broadband news lately, in the wake of a letter it sent to bondholders [pdf] alerting them that the City would no longer make up the difference between the revenues produced by the system and the debt payments. This came shortly after the company managing the network decided to step down.
Over the next year, the reserve fund will make up the difference while the City and bondholders come to some sort of an agreement.
The Star Tribune today published a good synopsis of the situation:
We also noted that Charter was almost certainly engaging in predatory pricing. After talking with other networks, we would guess that Charter is losing between $30 and $50 (conservatively) per subscriber per month.
City administrator Jeff O'Neill said that the city has no intention of abandoning FiberNet's 1,700 customers, including about 130 businesses. "This system isn't going anywhere," he said. "We're not going out of business." Despite the problems, he said the city has one of the fastest Internet systems in the country that has driven down prices and improved services by providing competition.The article also notes that prior to the City-owned network, the telephone company (TDS) provided very poor DSL service that was harming area businesses with slow and very unreliabile phone and broadband services. Without FiberNet Monticello, we don't know how many businesses would have been forced to relocate to be competitive in the digital economy. We decided to dig a little deeper to get a sense of what Monticello has received for its investment and difficulty. We previously examined the prices charged by Charter cable in town and found that households taking that deal were saving $1000/year.
We also noted that Charter was almost certainly engaging in predatory pricing. After talking with other networks, we would guess that Charter is losing between $30 and $50 (conservatively) per subscriber per month.Five Cities Denounce Verizon/Comcast Spectrum Deal
If you live in Boston, Baltimore, Albany, Syracuse, or Buffalo, you won't be getting FiOS from Verizon. Absent any public investment, you will likely be stuck with DSL and cable... like 80% of the rest of us.
Not long after Verizon announced it would cease expanding FiOS, we learned that Verizon was coming to an arrangement with the cable companies that would essentially divide the broadband market. Verizon won't challenge cable companies with FiOS and the cable companies won't challenge Verizon's "Rule the Air" wireless domain.
For a while now, the FCC has reviewed a potential deal for a Verizon purchase of Comcast's wireless spectrum. The possible deal involves multi-layered questions of anti-competitive behavior, collusion, and corporate responsibility.
Along with many other interested parties, such as the Communications Workers of America, Free Press, Public Knowledge, and the five towns are publicly opposing the deal. They have expressed their derision to the FCC but whether or not they will influence the result remains to be seen.
From a FierceTelecom article by Sean Buckley:
Curt Anderson, chair of the Baltimore City Delegation to the Maryland House of Delegates, expressed...outrage on the agreement the telco made.
"Under this transaction, Baltimore will never get a fiber-optic network, and the city will be at a disadvantage," he said. "The direct job loss will be the hundreds of technicians that would be employed building, installing and maintaining FiOS in the area. The indirect costs of this deal are even higher: the lack of competition in telecommunications will raise prices and reduce service quality.
And:
The deal, said Albany Common Council President Carolyn McLaughlin, "is not in the best interest of those who need to get and stay connected the most and is "a step backwards in bridging the digital divide."
Senator Franken Calls on FCC to Actually Enforce Its Rules
One of the reasons we so strongly support local, community owned broadband networks over European-like regulations on private companies is that large institutions regularly game the rules. We wrote about this last year, when Free Press called on the FCC to stop Verizon from ignoring the rules it agreed to for using certain spectrum.
Senator Franken, who has taken a strong interest in preserving the open Internet, has just reminded the FCC that creating rules does no one any good if it refuses to enforce them.
Not only has Comcast announced that its own Netflix-like service does not count against its bandwidth caps, some researchers found evidence that Comcast was prioritizing its own content to be higher quality than rivals could deliver. Comcast has denied this charge and proving it is difficult. Who do you believe? After all, Comcast spent years lying to its own subscribers about the very existence of its bandwidth caps.
The vast majority of the network neutrality debate centers around whether Comcast should be allowed to use its monopoly status as an onramp to the Internet dominate other markets, like delivering movies (as pioneered by Netflix). Comcast and many economists from Chicago say "Heck yes - they can do whatever they like." But the vast majority of us and the FCC have recognized that this is market-destroying behavior, not pro-market behavior.
So when Comcast was allowed to take over NBC Universal, it agreed to certain conditions imposed by the FCC to encourage competition. But the FCC has a long history of not wanting to enforce its own rules because it can be inconvenient to upset some of the most powerful corporations on the planet.
Tornado Destroys Homes, Cable Companies Charge Homeowners
When a tornado rips your town apart and destroys your home, should you have to pay extra fees to your cable provider? Of course not. But we continue to see these news stories about massive cable companies ripping off people who are just trying to find the energy to get by day to day.
Last year, we saw reports about Charter Cable telling Alabama tornado victims they had to "find" their cable boxes or pay for them.
According to the friend, Glenda Dillashaw, a Charter representative told her that Spain would need to find his cable box or be charged $212 for its loss.Fortunately, when Spain followed up with Charter after receiving another bill, the representative told him not to worry about it, suggesting that either Charter has an ambiguous policy to deal with it or Spain found a customer support person who's heart had not yet been crushed by soul-numbing job of being a customer support representative for a massive cable company. At least one other company has a formal policy in place for these situations:
Bright House Networks, whose service area includes hard-hit Pratt City, also expects its customers to file claims under homeowners' or renters' insurance to pay for lost or destroyed cable boxes. "That's how we normally handle it," spokesman Robert L. Smith said.Fascinatingly, an article in Michigan claims Comcast does not have a policy in place for these situations. Following recent tornados in Michigan, Comcast customers who lost their homes were given the option of paying a cancellation fee or paying a reduced "vacation" rate for a service they could not use.
Katherine Pfeiffer and Kathy Crawford soon found that residents were being told that they would be responsible for damaged or lost cable boxes and modems. Initially residents were told their accounts with Comcast would be put on “vacation” status, where a monthly fee of between $15 and $20 would be charged.Comcast is supposedly "working on a solution" for these people. The hubris of this massive companies is unreal. People who are waiting to hear if their home is repairable or has to be destroyed should not be confronted by the cable company with exorbitant fees.
In Chattanooga, EPB Customers Rave, Comcast Customers Livid
Chattanooga's community owned EPB Fiber Network continues to get positive reviews from subscribers in the local paper. And Comcast's customers continue to complain. The Times Free Press Chattanoogan presents a tale of two providers.
The longer letter details the frustration in dealing with Comcast following the failure of their on-demand service. After Comcast didn't resolve the problem over the course of several phone calls, the subscriber was told she would have to pay $30 for a Comcast technician to come to their house, even if the problem was entirely caused by Comcast's network and/or equipment.
The second letter, from Leah, notes that she too suffered at the hands of Comcast's customer service but became EPB customers after a long absence from their home due to damage from the tornadoes of 2011. When they returned home, they went with the community network rather than Comcast.
This is how she reflects on her experience with EPB:
We have had one instance where we needed to contact customer service, and the problem was fixed quickly and easily by the most polite customer service rep I’ve ever dealt with. Comcast came by recently to offer us a “substantial savings” if we’d make the switch back to them. My question was, why now? I was a customer for years and treated poorly as rates increased exponentially. Now the offer the discount? No thanks. For the $5 extra per month that we pay for EPB, we receive better features, prompt and polite customer service, and an all around trouble free experience. Thanks EPB!
DC Revolving Door, Comcast, and Campaign Finance Reform
One of the reasons community broadband networks face so many unique hurdles (often created deliberately by states in response to cable/dsl lobbying) is because of the many ways in which campaign finance corrupts our national and state governments.
Community broadband networks are focused on meeting community needs, not sending lobbyist armies into Washington, DC, and state capitals (though one of things we do at the Institute for Local Self-Reliance is offer help to those that do push pro-community agendas in these areas).
To understand why DC is so focused on furthering the corporate agendas of AT&T, Comcast, Time Warner Cable, and others, is to understand the revolving door. (Also, understanding capture -- which we have explained previously.)
In short, many of the people who make decisions about telecommunications policy in DC have worked, will work, or are presently working for the massive companies that effectively control access to the Internet in most of America's communities.
The good folks at Geke.US have created the following Comcast Venn Diagram illustrating a small piece of the DC revolving door.
Reforming this system is a deep, seemingly intractable problem. But for those looking for answers, a good place to start is with the work of Lawrence Lessig. I just finished his Republic, Lost, which offers a grand tour of the problems resulting from the present system of campaign finance.
You can also see a number of his presentations here.
His organization, the Rootstrikers aim to get to the root of problems rather than being distracted by trying to fix symptoms of deeper problems. This is precisely what we do with our focus on community networks.
Many focus solely on resolving digital divide issues, improving rural access to the Internet, lowering the cost of broadband, or the various other problems that result from narrowly-focused private corporations owning and controlling essential communications infrastructure with inadequate regulations.
Reforming this system is a deep, seemingly intractable problem. But for those looking for answers, a good place to start is with the work of Lawrence Lessig. I just finished his Republic, Lost, which offers a grand tour of the problems resulting from the present system of campaign finance.
You can also see a number of his presentations here.
His organization, the Rootstrikers aim to get to the root of problems rather than being distracted by trying to fix symptoms of deeper problems. This is precisely what we do with our focus on community networks.
Many focus solely on resolving digital divide issues, improving rural access to the Internet, lowering the cost of broadband, or the various other problems that result from narrowly-focused private corporations owning and controlling essential communications infrastructure with inadequate regulations.New Year, Same Lame Cable and DSL Monopolies
It's a new year, but most of us are still stuck with the same old DSL and cable monopolies. Though many communities have built their own networks to create competition and numerous other benefits, nearly half of the 50 states have enacted legislation to make it harder for communities to build their own networks.
Fortunately, this practice has increasingly come under scrutiny. Unfortunately, we expect to see massive cable and telephone corporations use their unrivaled lobbying power to pass more laws in 2012 like the North Carolina law pushed by Time Warner Cable to essentially stop new community broadband networks.
The FCC's National Broadband Plan calls for all local governments to be free of state barriers (created by big cable and phone companies trying to limit competition). Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks.
But modern day railroad barons like Time Warner Cable, AT&T, etc., have a stranglehold on a Congress that depends on their campaign contributions and a national capital built on the lobbying largesse of dominant industries that want to throttle any threats to their businesses. (Hat tip to the Rootstrikers that are trying to fix that mess.)
We occasionally put together a list of notable achievements of these few companies that dominate access to the Internet across the United States. The last one is available here.
As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations.
As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations.Comedian Louis CK Takes Internet Seriously
Louis CK, the comedian responsible for the FX show "Louie" and for making people laugh at his brutally candid assessment of how much his young daughter's opinion about anything matters, has bypassed the major studios, channels, and cable distribution systems to sell one of his concerts directly to his fans.
For $5, they can easily download it and can then put it on any medium they choose. Some have put it up on pirate sites so others can use it without paying. But more than enough have paid to make it well worth his while -- as explored by the NY Times media critic, David Carr:
While I was talking with him on the phone Thursday night, he checked his Web site and about 175,000 people had bought his special through PayPal. He expected 200,000 total downloads by the weekend, which meant he would have grossed $1 million. After covering costs of about $250,000 for the live production and the Web site, that’s a $750,000 profit. And he owns the rights, and the long tail of buyers, in perpetuity. The transparency of the enterprise, including its cost in relation to how many people bought in, was the subject of media coverage all last week. ... “O.K., so NBC is this huge company and they have all these studios and these satellites to beam stuff out,” he said, “but on the Web, both NBC.com and LouisCK.com have the same amount of bandwidth. We are equals and there are things you can do with that. This has been a fun little experiment.”His "fun little experiment" demonstrates the threat posed by the Internet to the old business models of cable companies and content owners like Viacom and Disney. And this is why Comcast's purchase of NBC is worrisome. Comcast is still fighting for the authority to prioritize some sites over others - it wants to violate the historic principle of network neutrality that prevents a service provider from interfering with what sites a subscriber visits.
Despite Delays, Dunnellon Builds Muni Fiber in Florida
Dunnellon, a small town in Marion County south of Gainesville, decided to invest in a community fiber network to spur growth and diversify its income stream. Though citizens did not want to cut government services, they have not been pleased at property tax increases.
364 days ago, we published a story discussing their financing.
The town itself is quite small, with 1,733 residents but the network will be serving areas in the County as well. Though AT&T and Comcast offer services in the area, they have big gaps in coverage and apparently the cable television packages are antiquated (only 50 channels???).
An article last year noted Dunnellon's Internet connections will range from 10Mbps to 125Mbps. They hope to sign up 1,647 subscribers within 6 months of launch -- the network is named Greenlight (not sure if they were aware that the city of Wilson, NC, already operates a triple-play FTTH network called Greenlight).
They hoped to launch 6 months ago. Bill Thompson's "Dunnellon dreams of a connectied future," offers a comprehensive look at the promise and the challenges Dunnellon faces.
Dunnellon's city manager comes from Valparaiso, which had a city-owned cable network that upgraded to FTTH. Unfortunately, Dunnellon is in the hard position of building a network from scratch.
Building a new network requires a massive up-front capital investment - in this case the city will have spent $4.4 million to connect the first connection. Good thing they aren't all that expensive!
The article identifies two main sources of the delays: difficulty in getting on the poles owned by Progress Energy and long delays in receiving the fiber-optic cable they ordered (stimulus projects have hogged the supply). Rather than taking 12 weeks, they had to wait 30. Delays cause problems:
Building a new network requires a massive up-front capital investment - in this case the city will have spent $4.4 million to connect the first connection. Good thing they aren't all that expensive!
The article identifies two main sources of the delays: difficulty in getting on the poles owned by Progress Energy and long delays in receiving the fiber-optic cable they ordered (stimulus projects have hogged the supply). Rather than taking 12 weeks, they had to wait 30. Delays cause problems:
The installation delay has put the city in a pinch with its lender, Regions Bank.