Tag: "competition"

Posted November 12, 2011 by christopher

Dane Jasper, the CEO of Sonic.net, one of the few ISPs to survive the death of broadband competition over the past ten years, wrote about "America's Intentional Broadband Duopoly."  It is a short history of how the FCC's flawed analysis (helped along by incredible amounts of lobbying dollars, no doubt).

He starts by asking when the last time anyone offered to sell you broadband over power lines (BPL).  The FCC decided that cable and telephone companies shouldn't have to share their wires (which are a natural monopoly) with competitors (creating an actual marketplace for services) because BPL, satellite, and wireless would put so much competitive pressure on DSL and cable.  FAIL.

Then, in the Brand X decision, they ruled that Cable would not be required to allow competitors to lease their lines either. The FCC did this by reclassifying broadband Internet access as an “information service”, rather than a “telecommunications service”. As a result, common carriage rules could be set aside, allowing for an incumbent Cable monopoly. This decision was challenged all the way to the supreme court, who ruled in 2005 that the FCC had the jurisdiction to make this decision.

To close out Powell’s near-complete dismantling of competitive services in the U.S., the FCC took up the issue of ISPs resale of DSL using the incumbent’s equipment, also known as wholesale “bitstream” access. If Cable is an information service under Brand X, why shouldn’t Telco have the same “regulatory relief”? The result: the FCC granted forbearance (in other words, declined to enforce its rules) from the common carriage requirements for telco DSL services.

For those who are thinking that wireless is finally competitive with cable and DSL, don't forget that while 4G appears much faster (because so few people are using it presently), it still comes with a 2GB monthly cap. So if you want to do something with your connection aside from watching one movie a month, 4G is not competitive with a landline connection.

Posted November 7, 2011 by christopher

An excellent article drawing wide lessons from the referendum battle in Longmont between the community and Comcast.

The city of Longmont, Colo., built its own 17-mile, million dollar fiber-optic loop in the mid-1990s. The infrastructure was paid for by the local city-owned electric utility, though it offered promise for bringing broadband to local businesses, government offices and residents, too.

For years, though, the network has been sitting largely unused. In 2005, Colorado passed a state law preventing local governments from essentially building and operating their own telecommunications infrastructure.

Behind the law was, not surprisingly, the telecom lobby, which has approached the threat of municipal broadband all across the country with deep suspicion and even deeper pockets. Companies like Comcast understandably want to protect their corner on the market from competition with city-run non-profits. What’s less understandable is the route their interests have taken: Residents and state legislators from Colorado to North Carolina have been voting away the rights of cities to build their own broadband, with their own money, for the benefit of their own communities.

Posted October 28, 2011 by christopher

A common misconception is that local governments award exclusive (or monopolistic) franchises to cable companies and that is why the US has so little cable competition.  However, no local government has done this since the 1996 Telecommunications Act 1992 Cable Act made the practice illegal.

But even before the '96 Telecom Act '92 Cable Act, local governments tended to award non-exclusive contracts to cable companies because they wanted more competition, not less -- as illustrated in this article about Cox preparing to renew its franchise agreement with New Orleans.

Federal laws and Federal Communications Commission decisions also have sharply curtailed the city's negotiating ability.

Even if other companies were seeking permission to provide cable to local customers, said William Aaron, a legal adviser to the council on telecommunications issues, council members could not arbitrarily refuse to renew the Cox franchise. The council could do that only on the basis of certain limited criteria, such as that the company has not lived up to the terms of the 1995 agreement.

Cox has had a nonexclusive franchise to operate in Orleans Parish since 1981, meaning that other companies also can apply to provide cable services, though none has done so. The franchise was renewed in 1995.

For years, state and federal policies have limited local authority to require just compensation for access to the valuable right-of-way because the cable and telephone companies pretended that they would invest more and create competition if local authority were preempted.

Local authority has been significantly preempted in many communities without any real increase in competition or lowering of prices. No surprise there - another victory for companies better at lobbying than providing essential services.

Posted October 26, 2011 by christopher

Below, you'll find a commentary I just posted on the Huffington Post.

Longmont, Colorado has become ground zero for the battle over the future of access to the Internet. Because big cable and telephone companies have stopped us from having a real choice in Internet Service Providers and failed to invest in adequate networks, a number of communities have built their own networks.

Chattanooga boasts the nation's best citywide broadband network, offering the fastest speeds available in the nation -- and the community owns it. That means much more of the money spent by subscribers stays in town, supporting local jobs.

Longmont, a town near Boulder with 80,000 people, offers a glimpse at how difficult it can be for communities to make any level of broadband investment -- the big cable and phone companies hate any potential competition, no matter how limited.

Longmont's elected officials all agree they need better broadband options to spur economic development. That's why they put a referendum on the ballot that will allow the city to use its existing assets to improve local broadband access. Not only are the mayor and city council unanimous in support of the referendum (2A) necessary for this, their opponents in the city election overwhelmingly agree also! And the local paper just editorialized in favor of it as well.

Who then, is spending hundreds of thousands of dollars to derail it? Comcast and its allies, of course. And this isn't the first time.

Back in the 1990s, the municipality-owned electric utility built a fiber ring to modernize its electrical grid. They took the opportunity to lay more fiber-optic cables than they would need, knowing that they could later be used by the city or partners to expand broadband access for all businesses and resident.

Over several years, the City worked with a ...

Read more
Posted October 12, 2011 by christopher

We have been closely following the referendum in Longmont, Colorado, that will allow the local government to use an existing fiber loop to sell telecommunications services to the private sector and residents.

Comcast and CenturyLink are opposed because local businesses would have more choices for broadband services -- which would require Comcast and CenturyLink to actually invest in their offerings rather than simply collecting the benefits of a de facto monopoly. It is more profitable for them to invest in astroturf opposition to the referendum than in their physical infrastructure.

When this came up previously, Comcast and its allies spent an unprecedented $245,000 to defeat it by confusing and lying to voters. This time around, big cable may outdo itself. It looks like Comcast and anti-competition allies in the Colorado Cable Telecommunications Association have already spent some $239,000 [pdf] in glossy mailers and phone calls and door knockers to scare Longmont's voters into defeating the 2A ballot initiative.

The Comcast-sponsored Vote No group is called "Look Before We Leap and has already been busted for lying about the Mayor's position on the referendum, claiming he supported their position when he has been emphatically on the record in support of 2A. In fact, his challenger in the Mayoral race also supports 2A, as detailed here in the statements from both candidates on the issue.

Public Persuasion Logo

So who exactly is "Look Before We Leap?" They cannot point to any real local support in the community. The web site is registered to "Melisa Kotecki Schlote" of a PR firm, Public Persuasion that lists both Comcast and the Colorado Cable and Telecommunications...

Read more
Posted October 11, 2011 by christopher

Harold Feld details "double speak" from Deutsche Telekom in the matter of the AT&T takeover of T-Mobile. They have admitted it will kill jobs and is in no an essential outcome for either company.

Two weeks ago, Deutsche Telekom (DT) Chief Technology Officer Olivier Baujard accidentally spoke truth about T-Mobile to an audience of German investment analysts. After running through the usual company talking points about the effort to sell T-Mobile to AT&T (e.g., it will happen, DoJ is just playing hardball with negotiations, etc.), Baujard said at a public presentation at a Paris broadband conference that: “any rational company had a Plan B and that Deutsche Telekom had other opportunities for its U.S. operations should the U.S. Department of Justice succeed in terminating the deal.”

This is vitally important because, after accidentally shooting the “this is the only way to bring 4G to rural America” argument in the foot by accidentally leaking documents proving AT&T could bring 4G to rural America whenever it wants, and T-Mobile killed the ‘this will create jobs’ argument by confirming that it was preparing pink slips for more than 20,000 employees after the acquisition gets approved, the “T-Mobile is a sickly gazelle” argument is about all AT&T and it supporters have left. Unfortunately for AT&T, this is not the first time Deutsche Telekom has screwed up the “sickly gazelle” storyline by revealing inconvenient truths about its other options. And while there is usually a rule in Washington that “we totally ignore what you say to investors when it contradicts your chosen story,” this deal is sufficiently high profile and has sufficient problems that eventually someone may notice if AT&T’s “Sickly Gazelle Chorus” keeps getting thrown off key by Deutsche Telekom’s “We Have Lots of Other Options Counterpoint.”

Harold offers much more on this job killing merger in his excellent Tales of the Sausage Factory blog.

Coincidentally, the...

Read more
Posted October 6, 2011 by christopher

Just one day after getting busted for lying about its supporters, a group funded by self-interested groups outside the community is accusing the City of distributing propaganda regarding an upcoming referendum over whether the City should have the authority to use an existing fiber-loop to spur economic development.

We developed a comic that explored the ways cable and phone companies use dirty tricks to fool people into voting against more competition in broadband (such as this "Look Before We Leap" Vote no group).

As if to prove our point for us, that group was busted for outrageously claiming the Mayor wanted people to vote no when the Mayor has been explicit in not just supporting the referendum but in condemning outsider groups like theirs from coming into the community to do the dirty work of anti-competitive incumbents.

Bryan Baum has appeared at several forums in support of 2A, including a Longmont Area Chamber of Commerce forum in which he urged out-of-town opponents of the ballot question to "get out of town" and let Longmont settle its own issues.

The group said "This is obviously a mistake," Merritt said. "We'll get that fixed." Yeah sure. Whoops. We accidentally claimed a prominent figure as a supporter. Their response? They took his name off that list but left his wife's name on their site!

Comcast's front group has zero credibility

This is a group with absolutely zero credibility. But they have tons of funding -- likely from Comcast and incumbent trade groups that fight these initiatives everywhere to preserve what is essentially a monopoly for the cable and telephone companies. We just republished an op-ed outlining some these tactics from 2009.

Now the "Look Before We Leap" group is accusing the City of distributing propaganda.

Longmont'...

Read more
Posted September 29, 2011 by christopher

As we previously noted, the city of Longmont, Colorado, is preparing for a referendum to allow the City to offer telecommunications services to local businesses and residents using a fiber ring it built long ago. This is due to a 2005 law (the "Qwest" law) that was pushed through the Colorado Legislature by incumbents seeking to prevent competition.

That law has succeeded -- most Colorado communities can only choose between slow DSL from the incumbent telephone company and comparatively faster services from the incumbent cable company. And when Longmont last attempted to pass a referendum to share its fiber infrastructure with local businesses, Comcast and Qwest swamped the town with unprecedented sums to confuse residents -- leading to the referendum failure with 44% voting yes.

But after the referendum passed and people had time to better understand the issue, many who voted against it realized they had been duped. We have seen the same dynamic elsewhere -- in Windom, MN, for example, where the second referendum succeeded. WindomNet has since saved a number of jobs and is expanding to eight other underserved rural communities around it.

Longmont built its fiber ring in the late 90's but it still has a lot of unused capacity that could be used to attract economic development if the publicly owned power utility were authorized to offer services to businesses. Without this authority, the community has a valuable asset that they are forced to leave unused -- even as local businesses could benefit greatly from it.

The Longmont Times-Call outlined the situation in July:

Without that vote, the city can't let homes or businesses use that fiber without a vote, thanks to a 2005 state law. It's a fight the city's lost once before in 2009, when opponents -- including the Colorado Cable Telecommunications Association -- spent $245,513 to urge the measure's defeat.

This time out, there's a different tack. The city has been underlining in discussions that the measure would "restore its rights" to provide telecommunications service. And it's stressing that no high-dollar project is on the table -- the first words of the ballot measure now read "...

Read more
Posted August 15, 2011 by christopher

Chattanooga, with the nation's most impressive broadband network (stretching into rural areas even outside the metro), is spending $30 million to put a Wi-Fi wireless network on top of it. At present, it is primarily for municipal uses:

For now, city government plans to retain exclusive use of the network for municipal agencies as it tests it with applications including Navy SEAL-esque head-mounted cameras that feed live video to police headquarters, traffic lights that can be automatically adjusted at rush hour, and even water contamination sensors that call home if there’s a problem beneath the surface of the Tennessee River.

Much of the wireless network is being funded by state and federal grants -- Chattanooga is turning itself into a test bed for the future city, at least for communities that recognize the benefits of owning their own infrastructure. Chattanooga can do what it wants to, it does not have to ask permission from Comcast or AT&T.

The goal for the city’s wireless network is to make the entire city more efficient and sustainable, said David Crockett, director of Chattanooga’s Office of Sustainability.

As Bernie Arnason notes at Telecompetitor, Wi-Fi is increasingly needed by smartphones because the big cellular networks cannot handle the load. The future has wireless components, but without Wi-Fi backhauled by fiber-optics, the future will be extremely slow and unreliable -- traffic jams for smartphones.

A more recent story from the Times Free Press notes that Chattanooga is wrestling with how to handle opening the network to residential and business use.

Wireless symbol

“I want to be innovative,” he said. “I want to do more than just turn it on in the parks.”

It’s a popular idea with technologists, tourism officials and the general public, who would gain the ability to surf around the city at speeds greater than typical cellular speeds.

Bob Doak, president and CEO of...

Read more
Posted July 29, 2011 by christopher

I was just reminded of an excellent presentation given by Andrea Casselton back on October 17, 2007, after the Saint Paul Broadband Advisory Committee developed this report. Unfortunately, the city of Saint Paul has not followed through on the fine recommendations of the Committee. As in so many other places, the economic downturn has made public investments more difficult. But not impossible.

Good afternoon, I am Andrea Casselton, the Director of the Office of Technology and Communications for the City of Saint Paul. Thank you for holding this important hearing. On behalf of the City of Saint Paul, I would like to present some thoughts on the role of government in broadband policy.

As part of my role for the City I acted as chair for the Saint Paul Broadband Advisory Committee which met from August 2006 to July 2007. The committee was comprised of 20 representatives from the community, government, a labor union, non-profits, education, and business associations. Some of the representatives on the BAC were also experts in the field of broadband and wireless technology.

Several weeks ago the Committee’s recommendations report was published. My comments borrow heavily from that report.

In my opinion, in order to decide whether there is a role for local and state government in the deployment of broadband in the state of Minnesota, we must first decide if we consider broadband to be infrastructure.

The American Heritage Dictionary defines infrastructure as: “The basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, post offices, and prisons.”

For cities, towns and counties to successfully compete in the global economy they must be connected to the world. From harbors to railroads, from highways to airports, infrastructure has historically enabled the exchange of commerce, information, and people. Whether it is a rural town or a major metropolitan city, to remain economically competitive in the 21st century, they must be connected to a new infrastructure – affordable, high-capacity broadband telecommunications.

Broadband, viewed ever increasingly as a utility, provides this new connection to employment, educational opportunities, accessible healthcare, public...

Read more

Pages

Subscribe to competition