Tag: "incumbent"

Posted October 6, 2009 by christopher

The Minnesota Independent took Pawlenty's Administration to task last week for its decision to give more money to the telecom company front group Connected Nation. To be clear, this is not the money for infrastructure (yet - time will tell how the state encourages the feds to allocate the grants). This was the mapping money.

Peter Fleck, of PF Hyper blog, put it well:

“My understanding is that we have allowed the companies that have not provided the needed broadband coverage in our state to steer the broadband mapping process itself because of a stated need for confidentiality. That need is questionable,” said Fleck.

“And it puts the state in a position where if the maps show there is no problem with broadband coverage, then we won’t need legislation, regulation, or any other policies and it creates the risk that the telecom industry can continue to provide inadequate coverage to underserved areas — usually areas of low-density and low-income. And because of the inadequacy of these maps, eventually we will have to undertake broadband mapping again at taxpayer expense. To me, this is an irresponsible use of public money.”

The story also quotes me and links back to our story on Connected Nation in Minnesota.

I want to note that states and federal agencies can demand more in terms of better maps and data transparency. It is somewhat disingenuous to lay the blame solely at the doorstep of this telecom-front organization when elected officials refuse to demand more from an industry that has long retained legions of lobbyists. Make no mistake, Connected Nation's conflict of interest is a serious problem, but we need our elected officials to stand up to the telecommunications companies and demand better mapping data. We had higher hopes from the NTIA, but clearly that was misplaced.

More recently, Sharon Schmickle of MinnPost wrote about plans for a publicly owned network in Cook County, Minnesota. It touches on the major issues that many communities face when deciding whether to build...

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Posted September 9, 2009 by christopher

The FCC recently asked for comments about how broadband should be defined. There was a marked difference between those who put community needs first and those who put profits first. Companies like AT&T and Comcast were quick to argue that the FCC should not change the definition of broadband for reasons ranging from too much paperwork to the suggestion that rural people have no need for VoIP. The honest approach would have been for these companies to say they do not want a higher definition because it will change their business plans, likely requiring them to invest in better networks for communities, and that will hurt their short term profits.

On the other side were groups that argued for a more robust definition of broadband - something considerably less ambitious than our international peers but an improvement over the current FCC definition.
NATOA's comments [pdf] focused on issues like the need for measurements based on actual speeds rather than advertised and symmetrical connections (or at least "robust upstream speeds to facilitate interactivity" - which we think captures the importance of symmetric connections without getting lost in debates about absolutely symmetric connections).

The key metric for broadband should be the applications and needs that drive consumer requirements and choices. In this way, broadband should be understood as a connection that is sufficient in speed and capacity such that it does not limit a user’s required application.

Their magic broadband number is a reasonable and doable 10Mbps symmetric connection for residential and small businesses as well as a 1Gbps level for enterprise users. Importantly, they note that a single broadband connection supports far more than a single computer or use - these connections are shared, often among many wired and wireless devices.

Compare these comments to those of the NCTA [pdf] (lobbying organization for cable companies) that argue broadband is nothing more than an "always on" connection regardless of the speeds or user experience. This is how they justify maintaining the international laughingstock definition of 768kbps/200kbps.

It is this basic “...

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Posted September 1, 2009 by christopher

Minnesota is now in poor company, along with several other states that have chosen to use telecom industry-backed Connected Nation (if unfamiliar with CN, read this report) to supply data from Minnesota to the federal government as part of the national broadband map that is being constructed.

Just how this came about explains why a group like Connected Nation thrives in the current telecommunications arena.

Mike O'Connor, the urban users' representative on the Minnesota Governor's Broadband Task Force, explains that the Minnesota Department of Commerce and Department of Employment and Economic Development (DEED) chose Connected Nation absent any public discussion or even consultation of the broadband task force.

Mike is not one to mince words about the deal (which got him picked up by MinnPost):

I'm pretty cranky about this process.  Nice n'cozy.  Nice n'closed.  Nice bypass of the Task Force.  No public input at all as far as I can see.  Looks like there was lots of opportunity for providers to provide input about their confidentiality needs, not too much input about what consumers need.  Look forward to more sub-par optimistic maps, and impossible to use/verify data, peepul.

He references the ample opportunity for providers to express their preferences, this comes from the letter from the two commissioners to the governor:

The other primary reason that we are recommending Connected Nation is that in conversations with and letters from the broadband provider community (including the Minnesota Telecom Association, the Minnesota Cable COmmunications Association, Qwest and Comcast), they have noted their satisfaction with the work Connected Nation as done, the professionalism displayed. Most important, the providers have confidence in Connected Nation's ability to protect their sensitive, nonpublic infrastructure information.

The letter goes on to discuss the other possible mapping entity - the University of Minnesota:

First, the University indicates that it has entered into...

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Posted August 27, 2009 by christopher

Folks who are mostly interested in broadband are probably unfamiliar with video franchising laws. Many people still apparently believe that cable companies are able to get exclusive franchises from the city (granting them a monopoly on providing cable television). However, that is not true and has not been true for many years.

Most cable companies still have a de facto monopoly because it is extremely difficult to overbuild an existing cable company - the incumbent has most of the advantages and building a citywide network is extremely expensive. This is not a naturally competitive market; it is actually a natural monopoly.

However, most people want a choice in providers (something that goes beyond a single cable company and a satellite option or two depending on whether you rent/own and your geographic location. In talking with many local officials and the National Association of Telecommunications Officers and Advisers (NATOA), it seems that almost every local government wants more competition in its community too.

This is where telephone and cable company lobbyists have stepped in - more successfully at the state level than at the federal level. They have convinced legislators that the barrier to more competition is local authority over the franchise (the rules a company agrees to in return for the right to use the community's Right-of-Way in deploying their network). These rules include red-line prohibition (you cannot refuse to serve poor neighborhoods), an affordable "basic" tier of service, local public access channels, broadband connections at public buildings, etc.

Some states have listened to the lobbyists and enacted statewide franchising - where local communities are stripped of the authority to manage their Right-of-Way and companies can offer video services anywhere in the state by getting a state franchise from the state government. Every year, we gather more data that this practice has hurt communities, raised prices, and barely spurred any competition. Most of the competition it is credited with spurring came from Verizon's FiOS deployments, which would have occurred regardless of state-wide franchise enactment.

This touches directly on broadband because the statewide franchises often give greater power to companies like Verizon to cherry-pick who gets next generation broadband. Wealthier neighborhoods will increasingly get access to faster...

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Posted August 18, 2009 by christopher

Cecilia Kang, telecom writer for the Washington Post, recently looked into why major carriers are not applying to the broadband stimulus program.

The implication of the title - "Major Carriers Shun Broadband Stimulus: Funds would come with tighter rules" is because of the rules. I'm sure she didn't write the title or sub, that usually goes to the editor. But it would appear whoever wrote the title did not read the piece because she shows that the rules are a minor factor at best.

Unfortunately, Kang also makes a significant error in not appearing to have read the stimulus legislation because she seems surprised that major carriers are not interested in the stimulus. The stimulus was emphatically not targeted at those carriers. As I detailed here previously, Congress intended the stimulus to boost public and nonprofit investments though private carriers could apply if they met a public interest requirement - an intention that NTIA ignored when making the rules. Reading the legislation, it was never aimed at the large carriers so their lack of interest is no surprise -- unless you are Robert Atkinson of the Information Technology and Innovation Foundation...

"If you want to get broadband out, you have to do it with [those] who brought you to the dance in the first place, and in this case it is the incumbent cable and telephone carriers who have 85 percent of lines in the country," said Robert Atkinson, president of the Information Technology and Innovation Foundation, a Washington tech policy think tank.

Mr. Atkinson appears to educate himself solely with the press releases and reports of incumbent-financed think tanks. He has systematically ignored the potential for publicly owned networks - as we have shown, these networks are some of the fastest and most affordable networks in the country. Instead, he opines about the need for incumbents to build more of their super slow DSL networks - as though that is what the country needs to remain competitive in the 21st century.

The real reason the major carriers are staying away from the stimulus funds is because they do not want to invest in low density areas that do not offer fast, high returns for their shareholders.

"It's not cost-effective for the big network operators to...

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Posted August 17, 2009 by christopher

When it comes to the National Broadband Plan that the FCC is tasked with developing, we at muninetworks.org have a red line. No matter what the federal policy, all communities must reserve the right to invest in and own their own networks. These networks are essential infrastructure; no community must be left incapable of securing its future prosperity.

FDR recognized this important community right:

I therefore lay down the following principle: That where a community--a city or county or a district--is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up, after a fair referendum to its voters has been had, its own governmentally owned and operated service.

That right has been recognized in a good many of the States of the Union. Its general recognition by every State will hasten the day of better service and lower rates. It is perfectly clear to me, and to every thinking citizen, that no community which is sure that it is now being served well, and at reasonable rates by a private utility company, will seek to build or operate its own plant. But on the other hand the very fact that a community can, by vote of the electorate, create a yardstick of its own, will, in most cases, guarantee good service and low rates to its population. I might call the right of the people to own and operate their own utility something like this: a "birch rod" in the cupboard to be taken out and used only when the "child" gets beyond the point where a mere scolding does no good.

We believe a national broadband policy could go much farther to strengthen communities by spurring fast networks everywhere, but we also recognize a political reality: incumbents providers have little to gain from a national broadband plan (especially one that goes so far as to encourage actual competition) and while their networks fall behind the times, they are able to pump all kinds of money into DC (and state legislatures around the country).

Therefore, we stand by our red line. We will hope for more, but early signs are not good. Karl Bode offers 5 signs the broadband plan is already in trouble. I want to highlight one, but the whole post is a must-...

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Posted August 14, 2009 by christopher

FairPoint's lobbyists in Maine have gone on the offensive, arguing that another group attempting to get stimulus funds is competing unfairly. FairPoint, you may remember, has already accomplished the improbable: it took over the dilapidated networks in New England from Verizon and made them worse. The charge of unfair competition, even if it were true, would be silly because FairPoint has proven it cannot provide these important services.

Karl Bode put Fairpoint in its place:

Even if the company was competing directly with UMS, at least Maine residents could be certain the University will even exist a year from now. But as it stands, Fairpoint isn't competing with the University of Maine. They're competing with a public private partnership of which the University is only a member. Applications for Federal funds are open to public entities and private companies. Given recent history, giving taxpayer dollars to somebody other than the regional dysfunctional incumbent might not be the worst idea in the world.

Bangor Daily News argues that rural Maine cannot afford to fight over who will expand broadband access. Unfortunately, Bangor Daily News' why-can't-we-all-just-get-along approach ignores the very real damage Fairpoint has already done to the state. Their suggestion that these competing networks just "be merged" seems like a call for open access but ignores the need for Fairpoint to maximize profits (right after it gets out of bankruptcy) rather than invest in communities.

The larger point is ominous: the idea that large institutions should suffer with whatever crummy service Fairpoint provides (at the high prices they will provide it) in order that Fairpoint can expand its poor DSL service to rural areas, misses the important point that Fairpoint cannot and will not offer the services that Maine needs. As Mayor Joey Durel of Lafayette suggested, maybe Maine should just send its jobs down to Lafayette, where they are building the necessary infrastructure for the future.

...

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Posted August 13, 2009 by christopher

Folks in the Isle of Wight County in Virginia are looking to Wilson, NC, (which runs its own FTTH network called Greenlight) for inspiration as Charter will not expand broadband access locally. Interestingly, industry-backed Connected Nation would not consider these people to be unserved because they could buy wireless broadband cards that offer slow speeds at expensive prices and are still often capped at a monthly transfer of 5 Gigabytes ... which is to say not really a broadband option.

Charter will not expand their cable networks because

Charter requires that an area have a density of at least 30 rooftops per square mile in order to offer service, which leaves large swaths of the county, especially southern and western areas, without access.

Sounds like a good opportunity to investigate a publicly owned network.

Posted August 7, 2009 by christopher
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Posted July 31, 2009 by christopher

The American Recovery and Reinvestment Act of 2009 directed the Federal Communications Commission (FCC) to develop a national broadband strategy. FCC invited comments and then invited replies to those comments in summer 2009. The Free Press Reply Comments deserve to be singled out for revealing some of the lies of large telecommunications companies like Verizon, AT&T, Comcast, Qwest, and others. It also describes many of the ways that these companies harm the communities that are dependent on them for essential services. I've highlighted some passages below that show the ways in which these companies put profit above all else. These companies claim that regulation discourages investment and deregulation (allowing a higher degree of concentration or larger monopolies) encourages increased investment in better networks - an incredibly self-serving claim that Free Press shows to be false on pages 13-29.

Competition -- meaningful and real competition -- and not regulation is the primary driver behind investment decisions. Where meaningful competition exists, incumbents are compelled to innovate and invest in order to maintain marketshare and future growth. Where competition is lacking -- such as it is in our broadband duopoly -- incumbents will delay investment, knowing full well they can pad their profits on the backs of captured customers who have no viable alternatives. (Page 14)

Regulations like open access and non-discrimination encourage competition and should be strengthened. Free Press offers an in-depth explanation of how Verizon has dumped millions of customers on other companies that clearly could not handle the burden.

Verizon began the purging of less lucrative areas with the sale of Verizon Hawaii to the Carlyle Group in 2005, a company that had no previous experience in operating telecommunications services. By Dec. 2008, the company, now called Hawaii Telecom, had lost 21% of customers and filed for bankruptcy. (Page 26)

Verizon then sold most of their New England lines to Fairpoint, which is currently heading for bankruptcy. Fairpoint's customers are not the only ones suffering - the independent companies that resell services over that infrastructure are also suffering because Fairpoint is utterly unable to meet its obligations.

Most recently, Verizon announced that it intends to sell-off mostly rural areas in...

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