Something for other communities to learn from!

After a few days of false hope, the Time Warner Cable Monopoly Protection Act, H129, passed the House Finance Committee after being stripped of the amendments that would have allowed communities without access to real broadband to build their own networks.

As usual, Stop the Cap! offered the first recap of yesterday's fiasco.

Faison’s amendment was designed to open the door to someone — anyone – to bring broadband into rural areas of the state.  While Time Warner Cable, AT&T, and CenturyLink dawdle, large numbers of rural residents simply go without any broadband service.  Faison’s amendment was simple and reasonable — if at least half of an area is not served with 4/1Mbps service, provisions should be made to allow local communities, if they wish, to establish service themselves to get the job done.

Last week, when Faison’s amendment appeared to be headed for incorporation into the bill, industry lobbyists blanched and fled the room, raising vocal objections and demanding a week timeout before a vote was taken.  After winning their reprieve, they managed to get the Republican majority in line to throw rural North Carolina under the bus, uniformly opposing Faison’s amendment.  Two Democrats, one representing the city where Time Warner Cable’s regional division is headquartered, joined them.

In its place, they substituted a new amendment which defined broadband in the state of North Carolina as any service occasionally capable of achieving 768kbps downstream and 200kbps upstream.  That represents “well-served” among these industry-friendly legislators.

This came after an excellent exposé showing Representatives annoyed to be asked why they are pushing Time Warner Cable's bill (to the detriment of every other business and citizen of North Carolina) after taking large contributions from telecommunications companies.

This video is no longer available.

Others have taken notice as well - see this political cartoon...

I continue to find it odd that more communities with publicly owned networks do not create official videos or other promotional material that is readily accessible on the Internet.  Videos discussing fiber-optic investments continue to be the exception to the rule. 

But it was a video promoting Chanute's fiber-to-the-business network that I stumbled across in a search for something else.  It turns out that Chanute has built a network with a variety of current and planned uses:

• Smart Grid
• Energy Management
• Utility SCADA Systems
• Interactive Distance Learning (IDL)
• Free WiFi Hotspots
• Telemedicine
• College – using broadband for testing, building partnerships
• City – meeting broadcasts, pool construction, public awareness, accounting, record-keeping, collaborations with other entities, security, emergency communications, and back up to the county 911 emergency operation center.
• Real-time video surveillance of public assets – Chanute currently monitors over 40 high resolution video cameras connected to its community network. These cameras provide improved public safety and enhance security for the community’s public assets. The cameras can be configured individually for viewing by the City from various display terminals within the City’s emergency operations center, and at governmental, utility and public safety department offices. Video surveillance images from the school district and the local community college can be viewed by government officials.

They have also made significant wireless investments for redundancy:

We have a City-owned Broadband Wireless Network which also provides back up to the fiber system for critical facilities in the community. Most of the broadband wireless links are dedicated to the private use of the City to support its utility operations, video surveillance, and provide wireless backup in the event of a fiber segment failure. There is one commercial customer that uses this as a primary source for Internet connectivity. Chanute views these wireless assets as a mechanism to provide immediate access to the community’s network to support the short-term commercial needs of businesses in Chanute. The wireless links can be deployed rapidly, sometimes in less than 24 hours, until such time as the fiber infrastructure can be extended to...

As the North Carolina Legislature considers HB129 and S87 to greatly limit community broadband networks (we analyzed the bill here), it is worth taking a step back to understand why companies like Time Warner Cable provide broadband that is unreliable and comparatively both slow and costly without having other companies come in to offer a better product. The problem is basic economics: the problem of natural monopoly.

Ever wonder why you generally don't have a choice between two major operators like Comcast and Time Warner Cable? They have carved up the market due to the costs and difficulty of directly competing with one another.

Some folks have a choice of cable companies -- RCN and Knology, for instance, have been successful overbuilders in a few regions (though they went through troubles far worse than most public networks that have been termed "failures").

But for the most part, overbuilding an incumbent cable company is all but impossible -- especially for a private sector company looking for a solid return on investment inside a few years. In the face of a new cable entrant, massive companies like TWC start lowering prices, offering cash or other enticements, and lock both residents and businesses into contracts to deny the entrant any subscribers.

Companies like TWC can do this because they have lower costs (through volume discounts for gear, content, and even marketing synergies as well as because they long ago amortized the network construction costs) and can take losses in one community that are cross-subsidized by profits from non-competitive areas. New entrants, both private and public, have higher costs as well as a learning curve.

This is why we have so little broadband competition. Without competition, the few providers we have invest less and charge more, which is other countries are rapidly surpassing us (not because we have large rural areas, nonetheless a popular straw man).

In the face of this reality, communities have built their own networks for a variety of benefits, including creating competition or changing the dynamic of a duopolistic "market." Massive incumbent providers responded by claiming competition from communities was unfair and using their lobbying power to...