Tag: "competition"

Posted October 21, 2013 by lgonzalez

We have followed happenings in Opelika, Alabama, for three years as the community investigated the benefits of a fiber network. They contended with a Charter misinformation campaign and voted yes on a referendum. Construction began in 2012, Opelika Power Services (OPS) tested the network, and recently the Opelika City Council approved proposed rates. 

OANow.com now reports that the FTTH network and smart grid project is ever-so-close to offering triple play services to the city's 28,000 residents and local businesses. 

OPS offers three standard bundled plans, but customers can also customize. All three include voice:

  • Essential - $99.95 - 75 channels, 10/5 Mbps data
  • Choice - $139.95 - 132 HD & SD channels, 30/30 Mbps data
  • Ultra - $154.95 - 207 HD & SD channels, 30/30 Mbps data

Data offerings for customized plans range from 10/5 Mbps for $34.95 to 1 Gbps symmetrical for $499.95.

Voters approved the plan for the $41 million network in 2010. The project included a $3.7 million network hub that houses all OPS offices. The smart grid will help approximately 12,000 OPS electric customers save with efficient electric usage.June Owens, manager of marketing at OPS said it well in an August OANow.com article:

“Fiber is going to put Opelika on the map like never before,” Owens said. “Opelika should be very proud. Nobody in the state is doing a project like this. And there is not much outside the state of Alabama like this. This is 100 percent fiber to the home. Fiber to the house doesn’t require the electronics in the field – this eliminates problems in the field that you might have with other types of...
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Posted October 16, 2013 by christopher

This is an older column, but the introduction is so dead-on, I wanted to draw more attention to it:

If Dwight Eisenhower had General Motors and George W. Bush had Halliburton, Barack Obama arguably has Comcast. US presidents are often linked to one or two corporations that donate a lot of money to them and then benefit from their actions. Comcast, which is America’s largest cable television and internet provider and is a near monopoly in most of its largest cities, is no exception.

The company’s meteoric rise in the past decade parallels the relative decline of internet service in the US.

It comes from an Edward Luce column in the Financial Times from February. He goes on to note the strong ties between the FCC and Comcast and between Comcast and President Obama. Remember that President Obama has golfed with Comcast CEO Brian Roberts and the CEO is on the President's Council on Jobs and Competitiveness.

Susan Crawford's Captive Audience offers a good examination of Comcast, the threat it (and other massive cable corporations) poses to our communities, and just how savvy it is in lobbying.

Don't be shocked as this Adminstration continues to push wireless and other telecommunications "solutions" that don't threaten Comcast's market domination of cable. Between a dysfunctional Congress and an inevitably interest-group-compromised Executive Branch, communities are on their own.

Posted September 24, 2013 by christopher

For my money, the best headline of last week was "The U.S.'s crap infrastructure threatens the cloud." The rant goes on to explain just how crummy our access to the Internet is.

As a patriotic American, I find the current political atmosphere where telecom lobbyists set the agenda to be a nightmare. All over the world, high-end fiber is being deployed while powerful monopolies in the United States work to prevent it from coming here. Some of those monopolies are even drafting "model legislation" to protect themselves from both community broadband and commercial competition.

He nails a number of important points, including the absurdity of allowing de facto monopolies to write the legislation that governs them. However, Andew Oliver's article is a bit muddled on the issue of "monopoly." I have argued with several people that the term "monopoly" has historically meant firms with large market power, not the more stringent definition of "the only seller" of a good. It is not clear how Oliver is using the term.

Because of this confusion, you can come away from his piece with the firm idea that it is primarily government's fault we have a duopoly of crap DSL and less crappy cable. He repeatedly says "state-sponsored monopolies." However, no local or state government may offer exclusive franchises for cable or telecom services and the federal government hasn't officially backed monopolies for decades.

This is a key point that many still fail to understand - a majority seem to believe that local governments bless monopolies when local governments actually are desperate for more choices. This is why they fall all over themselves to beg Google to invest in their community or they build they own networks (over 400 communities have wired telecom networks that offer services to some local businesses and/or residents).

Poor laws and regulations have helped the massive cable and telephone companies to maintain their status - that is why they spend so much on lobbying and political contributions at all levels of government. They want to and have successfully corrupted the process, neutralizing the power of government to protect consumer interests and prevent a few firms from dominating the market.

...

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Posted September 19, 2013 by christopher

Monticello Minnesota may be located 40 miles outside Minneapolis, but it is the center of the planet when it comes to FTTH competition. We have tried and cannot identify another community localed on planet earth with two separate FTTH networks going head to head across the entire community.

We have long written about Monticello, most recently to look at hypocritical criticism of the project (which gives me an opportunity to note a similar dynamic in Lafayette, Louisiana). And we have covered the disappointing news that the network has not produced enough revenue to make full bond payments.

Short explanation for how Monticello came to be unique in having two FTTH networks: Monticello had poor Internet access from Charter and telephone company TDS. Each refused to invest after local businesses and elected officials implored for better networks. Monticello started building its own FTTH network (Monticello FiberNet) and TDS sued to stop the project while suddenly decided to upgrade its slow DSL to fiber. Lawsuit was tossed out and Monticello finished its network.

In most community fiber networks, the DSL provider seems to fade away because it cannot offer the fast speeds of fiber or cable, so the market basically remains a duopoly with the community network replacing the telephone company (which continues to offer cheap, slow DSL to a small number of customers). But in Monticello, Charter and TDS engaged in a price war, which has really hurt the City's ability to generate enough revenue to pay its debt.

Price wars are very hard on new market entrants because they have to amoritze the cost of their investment whereas the incumbents often have already done so. This means incumbents can almost always offer lower prices if they are determined to do so.

In many communities, we have lacked clear evidence of predatory pricing - that is pricing below the actual cost of service to run competitors out of business. This would violate federal law (if any agency bothered to enforce it)....

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Posted September 18, 2013 by christopher

Chattanooga's EPB Fiber, a municipal FTTH system owned by the city's electric power board, has dramatically lowered its prices for the gigabit connection and increased all Internet speed tiers.

The slowest connection you can get from EPB Fiber is 100 Mbps symmetrical - and it comes at the same price that most cable tiers start at for much slower connections - $58/month. Want a gig? That is now $70/month. Here is the announcement:

Video streaming by Ustream

The Washington Post covered the story, including several quotes from me.

DePriest tells me that EPB's fiber network is "a great profit center." In the four years the service has been active, the utility company has increased its mid-tier speeds three times — from 15 Mbps to 30 Mbps, from 30 Mbps to 50 Mbps and now from 50 Mbps to 100 Mbps. About 2,500 elite users will enjoy 1-gig speeds by the beginning of October.

Phil Dampier has more coverage at StoptheCap.com, including an analysis of AT&T and Comcast competition.

AT&T charges $65 a month for 24/3Mbps service — its fastest — with a 250GB monthly usage cap, currently not enforced. For $5 more, EPB customers get 1,000/1,000Mbps with no usage limits or overlimit fees.

A recent article in the Chattanoogan noted that Chattanooga had surpassed 50,000 subscribers and was on path to surpass Comcast in subscriber base locally.

Mr. DePriest said Comcast had some 122,000 customers on the EPB grid when EPB launched its rival program. He said Comcast is down to around 75,000 and will likely drop to around 60,000 next year....

Posted September 3, 2013 by christopher

Lisa Gonzalez and I are back with another back and forth reaction to some of the crazy claims made by opponents of community owned Internet networks. This is something we started with Episode 50 and continued in Episode 55.

For volume 3 of our Crazy Talk series, we address some recent claims made in opinion pieces, including the obviously-written-by-a-lobbyists op-ed in the Baltimore Sun and signed by Maryland State Senator Pugh.

We talk about claims that Chattanooga has failed (in which we recommend you go back to listen to episode 59 - our conversation with Chattanooga.

We dissect the claims that the US already has robust competition and that having several 4G wireless networks in any way impacts the wireline cable and DSL the vast majority of Americans are stuck with it.

And finally, we talk about Provo and why it is suddenly the most cited network by those opposing community owned networks.

Read the transcript here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 20 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to ...

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Posted August 30, 2013 by lgonzalez

The sale of iProvo to Google Fiber means that Comcast now gets to compete against Google's gig - Time Warner Cable is the incumbent cable company in Kansas City and Austin. Comcast wasted little time and has improved its bundle in Provo long before any new customers are turned on. The Free UTOPIA blog recently reported that Comcast, in response to the incoming competition, is increasing speeds. Jesse writes:

Competition is good, and Comcast is just now proving it. I spoke with one of their sales guys who confirmed that Comcast will be offering a package of 250Mbps/50Mbps for $70 starting in September, but only in Provo. (Sorry, everywhere else.) This is in direct response to Google Fiber coming to town and will include a new modem with a built-in 802.11ac router to take advantage of the speed bump. It’s unknown if this speed tier will land in any other cities in the future.

This is yet another story proving that having a fiber network in your town benefits everyone, not just subscribers.

This is compelling evidence that markets with only choices between DSL and cable are not sufficiently competitive, regardless of what wireless options are available. When threatened with a competitor that it cannot harm with its legions of lobbyists in the state capital or the threat of predatory pricing, Comcast responds with investment and lower prices. Regulators should take note.

Posted August 23, 2013 by lgonzalez

In 2011, Comcast commenced its Internet Essentials program with great fanfare from then FCC Chairman Julius Genachowski. We looked at the program in detail and described Comcast's decision to withhold the program for two years to use as a carrot in a bid to secure the NBC merger. In addition to acquiring NBC, Comcast received great public relations press.

The Roosevelt Institute's Next New Deal Blog, recently ran an article by John Randall in which he examined the program in depth. He concludes that the program is an effective distraction from the real problem - lack of competition. In addition to placating policy makers to prevent meaningful changes, the program turns a hefty profit for Comcast and efficiently mines for new customers.

The program, touted as a way to reduce the digital divide, established onerous criteria to qualify for the $9.95 monthly service. Children in the household must qualify for the National School Lunch Program, there cannot be any unfinished business between the household and Comcast, participants must be new customers, and households must be located in an area served by Comcast.

I have had my own experience with the Internet Essentials program. My small family qualified and we now receive up to 3/1 Mbps from Comcast; prior to the program, we paid twice as much for 1 Mbps Wi-Fi. Randall is correct when he describes the program as a "customer acquisition program." A common expression goes "The slowest speed you will accept is the fastest speed you've experienced." So true. As more of my kids' homework depends on a usable Internet connection, we will need to sacrifice somewhere else to keep our 3 Mbps and we will do it. Our choices are limited because competition is scarce, even though we live in a major metropolitan area. Comcast, you have us. Nicely played!

If Comcast really wanted to help close the digital divide, it would make Internet Essentials a permanent program and ease the restrictions. I qualify because my kids qualify but there are millions of other people, including single adults and seniors, who do not and they need the Internet just as much as I do.

As Randall points out, Comcast is still turning a profit - $18 million per year on...

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Posted August 20, 2013 by christopher

The Spanish Fork Community Fiber Network (SFCN) is an incredibly successful HFC cable network in Utah. It delivers television, telephone, and Internet access at incredibly low rates to most of the community despite competition from Comcast. Located south of Provo, Spanish Fork has a population of 35,000.

Director of Information Systems and SFCN Director John Bowcut joins us for episode 60 of the Community Broadband Bits podcast. We discuss why they built the network in 2000. Funded with 15 year bonds, the network mortgage is nearly retired.

In the meantime, the network generates an extra million in revenue for the local government and keeps over $2 million in the community each year with its low rates that force competitors to keep rates lower than they otherwise would.

Read the transcript of this show here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 27 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to Break the Bans for the music, licensed using Creative Commons.

Posted July 26, 2013 by lgonzalez

Though we often discuss some of the ways European nations have surpassed the U.S. in Internet network investment, they also have some counter-productive rules that limit investment. The Manchester Evening News recently published an article about a plan to bring high speed Internet to a deprived area of 30,000 homes where access is either slow or absent. From the article:

European rules ban public subsidy being used to fund infrastructure where – in theory – a company could roll it out instead.

The Manchester Council planned to use public funding to bring the homes into the 21st century, but the European Commission blocked the plan. Because Internet providers say there is not enough demand for broadband access in the areas, they are not compelled to build there.

Sound familiar?

“Part of this involves trying to address the digital divide which means that some parts of Manchester have little or no high speed broadband coverage because commercial internet service providers, such as BT, Virgin and Talk Talk and others, claim there is not enough demand. We have tried hard to address this but it has become clear that Europe-wide regulations mean our hands our tied and we cannot help provide connections where the private sector is able, but not willing, to do so," [said Manchester Coun Nigel Murphy].

This serves as a reminder that Europe also has a variety of bad policy approaches that privilege massive corporations over local authority. We hope to see people there step to defend their rights to be locally self-reliant.

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