Tag: "incumbent"

Posted January 30, 2011 by christopher

In 2006, this short documentary helped to stop a push from incumbent providers to gut local authority over telecommunications and cable.  Unfortunately, several states then gutted that same local authority, leading to higher prices for consumers and, surprise surprise, no real increase in competition.  

Posted January 26, 2011 by christopher

The fiber-to-the-farm initiative in Sibley County, Minnesota, has completed the feasibility study and the towns involved are discussing a Joint Powers Agreement. One of the impacted incumbent providers -- Frontier Communications, a rural telco famous for slow DSL) -- has started to spread the usual FUD (fear, uncertainty, and doubt) that is common whenever a massive company is about to face competition.

Though I am tempted to comment directly on Frontier's letter, I'll let the community's response stand on its own. The way they misrepresent the record of Windom should be instructive - this same misinformation strategy is used around the country.  We believe publishing these scare tactics and responses to them is helpful to everyone -- so if your project has received one, please let us know.

Frontier's Letter:

Dear Commissioners:

As a provider of telephone, internet, and video services to our customers in the Green Isle, Arlington, and Henderson areas, Frontier Communications is obviously interested in the "fiber to the home" proposal that has been presented. As a nationwide provider, Frontier is aware of other efforts by municipalities of various types to build and operate their own telecommunications network. While these proposals are always painted in rosy tones, it is important for officials to carefully review the underlying assumptions and projections that consultants make when presenting these projects. Unfortunately, history tells us that the actual performance of most of these projects is significantly less positive than the promises. Often times, these projects end up costing municipalities huge amounts of money, and negatively impact their financial status and credit ratings.

A nearby example would be WindomNet, the city-owned network in Windom, Minnesota. That network, which provides telephone, internet, and video service, began in 2005. The financial results to date have been poor; operating losses of $662,000 in 2006, $1,257,000 in 2007, $326,000 in 2008, and $93,000 in 2009. Additional borrowing by the city was required to make up those losses.

Another example is the city-owned network in Burlington, Vermont. Burlington Telecom was begun with high hopes in 2003, to offer...

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Posted January 24, 2011 by christopher

It's 2011 and time for Qwest to renew a push to gut local authority in a number of states - Idaho and Colorado to start. An article for the Denver Post explains the argument:

Phone companies say state-level oversight of video franchising fosters competition because it is less cumbersome for new entrants to secure the right to offer services.

Many states have also eliminated the condition that new video competitors must eventually offer service to every home in a given municipality, a requirement placed on incumbent cable-TV providers.

Gutting local authority is the best way to increase the disparities between those who have broadband and those who do not. Qwest and others are only interested in building out in the most profitable areas -- which then leaves those unserved even more difficult to serve because the costs of serving them cannot be balanced with those who can be served at a lower cost.

The only reason that just about every American living in a city has access to broadband is because franchise requirements forced companies to build out everyone. Without these requirements, cable buildouts would almost certainly have mirrored the early private company efforts to wire towns for electricity -- wealthier areas of town had a number of choices and low-income areas of town had none.

In Idaho, those fighting back against this attempt to limit local authority are worried that statewide franchising will kill their local public access channels - a reality that others face across the nation where these laws have passed.

The channels, which are also used to publicize community events, provide complete coverage of Pocatello City Council, Planning and Zoning and School District 25 board meetings, as well as candidate forums before elections.

Without these local channels, how could people stay informed about what is happening in the community? Local newspapers are increasingly hard to find. In many communities, these channels are the last bastion of local news. 

This fight over statewide franchising goes back a number of years, but the general theme is that massive incumbent phone companies promise that communities would have much more competition among triple-play networks if only the public...

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Posted January 21, 2011 by Mitch Shapiro

 

In late 2007 I wrote an essay [pdf] for FTTH Prism arguing that it makes increasing sense for municipalities and incumbent local exchange carriers (ILECs) to cooperate in bringing open-access fiber-to-the-home (FTTH) service to America’s small towns and rural areas.

As readers of this web site well know, such a cooperative model stands in sharp contrast to the typical reality faced by poorly-served communities wanting to connect their businesses and households to a community-owned fiber network. In virtually all such cases, the ILEC, though refusing to deploy its own FTTH network--or even provide high-speed DSL service to the entire community—will fight tooth and nail to stop construction of a community-owned fiber network.

In my essay I acknowledged that ILECs had yet to show any signs of shifting from their “kill all muni-nets” attitude to one that views open-access municipal FTTH networks as a means to better compete with cable without taking on the substantial capital investment associated with a FTTH upgrade. But I added that:

“it remains to be seen whether these [anti-muni-net] attitudes will withstand the mounting competitive pressures facing ILECs in the large number of markets in which they are not planning to deploy fiber-rich, video-capable networks. In these markets, the combination of cable VoIP and triple-play bundles, wireless replacement, and low-cost web-based services will increasingly turn what were once “high-margin” copper customers into either low-margin copper customers, or negative-margin non-customers.”

Among the trends I cited as pushing ILECs to reconsider their staunch resistance to muni-nets was the fact that, in markets where they don’t deploy their own FTTH networks, they will fall farther and farther behind in terms of broadband speeds, especially as cable operators ramp up their deployment of next-generation DOCSIS 3.0 technology.

In the face of this increasingly threatening competitive trend, I suggested that ILECs seriously consider leveraging their existing customer base and expertise to become retail providers on state-of-the-art muni FTTH networks, which can deliver much faster (and more symmetrical) speeds and better service quality than cable—even after the latter deploys DOCSIS 3....

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Posted January 13, 2011 by christopher

The trend of more people subscribing to broadband as well as cable incumbents (also AT&T with U-Verse) wage war on local public access television stations, some have been questioning whether we even need PEG channels on the television anymore. We do. If anything, the increase in capacity of networks should translate into greater opportunities for local shows to find a local audience.

Rob McCausland, a champion for community media, recently wrote about the the vast majority of communities that cablecast one or more public meetings - a trend that must be expanded.

Of the 254 largest cities cablecasting their government meetings, 197 of them (78%) do so on channels that they themselves manage. Nonprofit organizations manage those channels in 20 of those cities, while the cable companies manage them in 28.

These channels provide a crucial public service -- allowing the public to oversee their local government. If anything, we should not be considering decreasing access to this content, we should be finding ways to deliver it on-demand on the television. Ultimately, this programming should be available on all devices -- mobile, computer, television, and should be available as streaming and downloadable podcasts.

Posted January 5, 2011 by christopher

Though it is rarely, if ever, the top motivation for a community to build its own broadband network, the idea of local customer service that is actually responsive to the community ranks usually among the top 5 motivations. We love the idea of a "strangle effect" -- coined by folks at Wilson's Greenlight in North Carolina. If something goes wrong, you can find someone nearby to strangle.

Compare that to these three stories.

First - a coworker of mine had to return a Comcast set-top box after cutting back on services. When he drove to the Comcast storefront, the outside drop box was full of gear, so he stepped inside to a room packed with Comcastic homicidal folks who had waited too long for attention from the overworked counter folk. He asked to just drop his box but they said he would have to take a number and wait... so he could set his Comcast box on the counter because no one had emptied the box outside where it should have been placed.

Another Comcast story comes to us from the Consumerist: where Comcast tries to repossess a cable modem is does not own.

Finally, David Pogue recently recounted the story of Qwest demanding that a customer call a specific phone number to report that his phone was not working. Rachel, the person who experienced the terrible service, writes:

Do you suppose all communications giants are like this? “We are abjectly sorry and have instructed our employees to grovel at your feet, but we are simply unable help you, value you though we do. Yes, we’re helpless. You know, we’re only a giant corporation. You can’t really expect us to help you, can you? We’re sure you understand. Please visit our Web site again to order more products!” Is it truly impossible to debug a VoIP modem problem via e-mail for some technical or philosophical reason?

Yes, Rachel, those massive communications giant are all like that. They have no obligation to any community they serve and while they employ good people who may genuinely want to help, they are structured to benefit shareholders, not subscribers.

A lesson for community broadband networks: focus on providing great customer service and making sure the community knows it.

...

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Posted December 23, 2010 by christopher

The Comcast/NBCU merger poses a real threat to the future of innovation, competition, and the open Internet. Put simply: size matters. The larger Comcast gets, the more market power it has and the more all other markets that depend on broadband and media will be distorted.

Susan Crawford knows this better than most and explains why everyone should be concerned about it.

As we've harped on time and time again:

The crucial thing to understand is that high-speed Internet access to the home really is a crushingly-expensive natural monopoly service to install. The telephone companies haven’t found a way to make this work, because it’s so much more expensive to dig up the streets to install fiber than it is to upgrade cable electronics to DOCSIS 3.0. So they have backed off. The cable industry has made its investment, and is ready to reap its rewards of scale and high fixed costs - secure in the knowledge that no competition is coming after it, and having divided up the country neatly among its members. Meanwhile, the telcos are steadly losing fistfuls of money.

As Morgan once said of railroads, “The American public seems to be unwilling to admit . . . that it has a choice between regulated legal agreements and unregulated extralegal agreements. We should have cast away more than 50 years ago the impossible doctrine of protection of the public by railway competition.” In the cable world, we are deep into unregulated extralegal agreements, and competition is not going to rescue us.

The longer communities wait to build this important infrastructure, the harder it will be. It is hard to imagine national candidate speaking more stridently about the important of the open Internet than did Obama and even he bowed to the pressure of the private Internet access providers. While we should pressure the federal government to regulate in the public interest, we must take responsibility for our future at the local level with smart investments.

Posted December 4, 2010 by christopher

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...

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Posted November 21, 2010 by christopher

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...

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Posted November 18, 2010 by christopher

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...

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