Tag: "competition"

Posted August 30, 2013 by Lisa Gonzalez

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 Lisa Gonzalez

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 Mitchell

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 Lisa Gonzalez

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.

Posted July 16, 2013 by Christopher Mitchell

Following up on our first "Responding to Crazy Talk" episode last month, we decided to publish a second edition this week. Again, Lisa Gonzalez and I respond to real arguments made by those who oppose community owned Internet networks.

Today, we used three arguments from a debate in 2011 that included myself, Jim Baller, Jeff Eisenach, and Rob Atkinson. We chose three arguments from Rob Atkinson for this audio show but strongly recommend watching the entire debate as it examines these issues from more perspectives.

We deal with the term "overbuilding" and competition more generally to discuss how these arguments are quite detrimental to the best solutions for expanding access in rural areas.

The second argument is the classic one that it is simply harder to build networks in the U.S. because we are such a large, spacious country and that statistics from other countries are misleading merely because they are smaller or more dense.

And the final claim is that subscribers are generally happy with what they have and do not need faster connections.

Read the transcript here.

Let us know if you like this format and what questions we should consider the next time we do it. 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. Search for us in iTunes and leave a positive comment!

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

Find more episodes in our podcast index....

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Posted July 2, 2013 by Christopher Mitchell

I was troubled to see Broadband Communities publish an odd and misleading story about Palo Alto in the May-June issue [pdf]. Authored by Stephen Blum of Tellus Venture Associates, a consultant that has been hired by Palo Alto in the past, it showed a remarkable level of ignorance about community owned fiber networks and broadband more generally.

The title alone, "Can FTTP Work in Palo Alto?" is just odd. Why exactly would FTTP not work in Palo Alto? It works in hundreds of other cities and towns, most of whom are less well positioned than Palo Alto for such a venture. A more honest title would have been "Consultant Argues Never Used Financing Mechanism Also Won't Work in Palo Alto." Blum made a very good case for that narrow argument but fails to lay out any convincing evidence that a variety of other models are doomed.

Parts of the article can only be called cable and DSL boosterism - such as repeating the talking point that AT&T's U-Verse and Comcast already offer "high levels of service at competitive rates." Competitive to what? Neither can deliver the speeds offered by modern fiber networks and are only "competitive" if one ignores the much slower upstream speeds, higher prices, lesser reliability, problems of oversubscription, and poor customer service one gets from those providers.

Reminds me of "Slick Sam" from Lafayette and the "functional equivalence" between DSL and FTTH.

Blum apparently knows better - that Palo Alto residents are "happy" with the existing services because they have not spontaneously marched down El Camino Real demanding faster speeds at lower prices. This is the wrong measure - reminiscent of the now oft-quoted Henry Ford line that if he asked people what they wanted, they would have said "faster horses."

The number of specific errors in this piece are many, and have been well documented by those familiar with the history of Palo Alto's studies. I want to focus on just a few. Let's start here:

Overall, 79 percent of households would have to pay $3,000 apiece to fully fund FTTP construction costs.

YIKES! Cue the foreboding music! Palo Alto...

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Posted April 2, 2013 by Christopher Mitchell

Opelika Mayor Gary Fuller and Jennifer McCain, partner of the Motive Group discuss why this Alabama town is the first to build its own fiber optic network in the state.

In short, Opelika had long been fed up with the services offered by Charter Cable and Charter was not amenable to meeting the community's needs. They decided to build a FTTH network that would meet Smart Grid needs as well as delivering telephone, television, and Internet access. Due to state law, they had to hold a referendum to offer television services. Despite a misinformation campaign, the community overwhelmingly supported building a community owned network.

Toward the end of our discussion, Mayor Fuller offers some thoughts on what it takes for an elected official to commit to an expensive investment where one has to pay all the costs and stand for re-election before the benefits start to accrue. In short, it takes courage. And having the unanimous support of the City Council is helpful also!

Read the transcript from our conversation 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 30 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

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

Find more episodes in our podcast index.

Thanks to D. Charles Speer & the Helix for the music, licensed using Creative Commons.

Posted March 21, 2013 by Lisa Gonzalez

Mount Vernon, Washington, started building their own fiber optic network in 1995 and over the past 18 years have continued to add incrementally. While the network started as a way to connect a few municipal facilities, it has since expanded to nearby Burlington and the Port of Skagit. The network now serves government, schools, hospitals and clinics, and a broad range of businesses in the area.

We spoke with community leaders from Mount Vernon for our 38th episode of the Broadband Bits podcast. Mount Vernon owns the network and operates it out of the Information Systems office.

The network required no borrowing or bonding because initial funding came from a state Community and Economic Revitalization Board (CERB) grant. Since then, Mount Vernon has used revenue from the network and creative cost sharing with partners to expand throughout the city. When expanding into Burlington and the Port of Skagit in 2008, city leaders received a county sales tax grant to fund deployment.

The Mount Vernon School District became a partner early in the evolution of the network. According to Kim Kleppe, Information Services Director, K-12 schools do not pay a monthly fee to receive up to 1 gig of capacity for their 10 facilities. He estimates the current costs of a dark fiber connection for one facility at $700 per month. Total savings are astronomical, allowing the schools to dedicate significant dollars toward other expenses.

Mount Vernon city government saves over $100,000 per year and nearby Burlington saves over $52,000. The network has never been in debt and maintains a reserve.

Mount Vernon's network is an open access model on which ISPs serve customers via the city's infrastructure. Subscribers pay a one time fee to the city to be connected. Onging revenue comes from the ISPs, who pay to the city a percentage of what they collect in customer connectivity fees. Currently, eight different providers offer services via the Mount Vernon network, providing ample competition.

Like other communities we see that choose the open access model, Mount Vernon...

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Posted March 19, 2013 by Christopher Mitchell

Nearly 20 years ago, a small community between Seattle and Bellingham, Washington, began building a fiber optic network to connect key municipal facilities. In the years since, Mt Vernon has expanded the network to many community anchor institutions and businesses locally, including in two nearby towns.

Information Systems Director Kim Kleppe and Community & Economic Development Director Jana Hansen join me to explain how they began the network and what benefits they have seen from the investment.

They did not borrow or bond for the network and they don't have a municipal electric department, which makes them particularly interesting in this space. They also run an open access network that allows eight providers to compete in delivering the best services to subscribers. The network has encouraged several businesses to move to the community.

Our interview begins with an introduction from Mayor Jill Boudreau.

Read the transcript from this episode 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 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

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

Find more episodes in our podcast index.

Thanks to D. Charles Speer & the Helix for the music, licensed using Creative Commons.

Posted March 12, 2013 by Christopher Mitchell

Blair Levin is Executive Director of Gig.U. Prior to that, he was in charge of developing the National Broadband Plan and long before that was Chief of Staff for the FCC during the Clinton Presidency. He's had a lot of experience in telecommunications policy but here we focus on what can be done to move America's communities forward.

I asked Blair to join us for the show so I could ask him some hard questions about the Gig.U initiative, including the difficulty of achieving universal service and the tradeoffs around allowing entities not rooted in the community to own (and set the rules for) essential infrastructure. I also challenge Blair's preference for "private sector" investment, asking him what exactly that means.

I hope our discussion is helpful in understanding the tradeoffs communities must make in choosing exactly how to improve Internet access locally. Though Blair and I disagree in some ways, I think we clearly illuminate why we disagree so the listener can make up his/her own mind.

If you have some questions left unanswered or points you wish were made, note them in the comments below and we'll ask him to join us again.

Read the transcript from our discussion 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 35 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

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

Find more episodes in our podcast index.

Thanks to D. Charles Speer & the...

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