Tag: "competition"

Posted April 13, 2011 by christopher

South Carolina has been quietly debating a bill to further erode the right of communities to decide locally whether they want to build broadband networks. South Carolina already restricts the rights of communities to build these networks but HB 3508 / SB 483 will effectively make any local government ownership of telecommunications facilities impossible.

Unsurprisingly, this bill is opposed by the South Carolina Association of Counties and the Municipal Association of South Carolina. But the lead opposition to it has come from Bill Clark, an Administrator from rural Orangeburg County. On the other side is AT&T, the nation's 10th largest company.

The bill is blatantly protectionist for AT&T interests, throwing South Carolina's communities under the bus. But as usual, these decisions about a "level playing field" are made by legislators solely "educated" by big telco lobbyists and who are dependent on companies like AT&T for campaign funds. Even if AT&T's campaign cash were not involved, their lobbyists talk to these legislators every day whereas local communities and advocates for broadband subscribers simply cannot match that influence.

We see the same unlevel playing field, tilted toward massive companies like AT&T, in legislatures as we do locally when communities compete against big incumbents with their own networks. Despite having almost all the advantages, they use their tremendous power and create even more by pushing laws to effectively strip communities of the sole tool they possess to ensure the digital economy does not pass them by.

South Carolina's access to broadband is quite poor -- 8th worst in the nation in access to the the kinds of connections that allow one to take advantage of the full Internet according to a recent FCC report [pdf].

A letter from Bill Clark to Senators notes that their county has an industrial park with over 1 million sq ft of developed facilities housing two Fortune 500 companies that private companies have not served [pdf].

This comes as no surprise given the facts:

  • South Carolina is served predominately by massive private providers...
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Posted March 25, 2011 by christopher

Stacey Higginbotham at GigaOm has explained the entire reason Time Warner Cable and CenturyLink are trying to prohibit communities from building their own networks: North Carolina has some of the worst broadband in America! TWC and CenturyLink know how uncompetitive their services are! The story covers a new broadband map launched by bandwidth.com.

nc-bbchart.png

Look at these numbers!!

North Carolina has SEVEN of the worst 10 places to get broadband in the US. And these are the places in North Carolina that actually have broadband! Imagine how bad it is in the rural areas. Stunning to see the North Carolina Legislators conspiring to limit the ability of communities to invest in themselves when the private sector has no interest in next-generation networks, choosing instead to reap profits off of systems that barely meet the FCC's definition of broadband.

With such terribly uncompetitive services, of course Time Warner Cable and CenturyLink have run to the Legislature to ban the community networks that have stepped in to prevent lazy incumbents from killing the future of entire communities in the digital age. As we have been detailing (most recently here), the public is overwhelmingly opposed to Raleigh telling communities they cannot build the networks TWC and CenturyLink will not.

What more proof is necessary that the Legislators pushing H129 in North Carolina have sold out the citizens for a few massive companies that just happen to make large donations to their campaigns.

We previously charted the superiority of the community fiber networks in North Carolina, but this chart shows just how much the existing cable and DSL companies have left North Carolina communities behind.

Posted March 24, 2011 by christopher

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...

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Posted March 23, 2011 by christopher

The Institute for Local Self-Reliance is pleased to release the Community Broadband Map and report, Publicly Owned Broadband Networks: Averting the Looming Broadband Monopoly. The map plots the 54 cities, big and small, that own citywide fiber networks and another 79 own citywide cable networks. Over 3 million people have access to telecommunications networks whose objective is to maximize value to the community in which they are located rather than to distant stockholders and corporate executives.

ILSR has been tracking telecommunications developments at the local and state level, working with citizens and businesses to preserve their self-determination in the digital age.

View the Community Broadband Map
Download the Report [pdf]
Read the Press Release [pdf]

Executive Summary

Quietly, virtually unreported on, a new player has emerged in the United States telecommunications sector: publicly owned networks. Today over 54 cities, big and small, own citywide fiber networks while another 79 own citywide cable networks. Over 3 million people have access to telecommunications networks whose objective is to maximize value to the community in which they are located rather than to distant stockholders and corporate executives.

Even as we grow ever more dependent on the Internet for an expanding part of our lives, our choices for gaining access at a reasonable price, for both consumers and producers, are dwindling. Tragically, the Federal Communications Commission has all but abdicated its role in protecting open and competitive access to the Internet.

Now more than ever we need to know about the potential of public ownership. To serve that need the Institute for Local Self-Reliance has published an interactive Community Broadband Map that gives the location and basic information for existing city owned cable and fiber networks.

The communities featured on the Community Broadband Map have overcome many formidable obstacles to build their networks.  The results are impressive: millions of dollars of community savings; some of the best broadband networks in the country offering a real choice to residents...

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Posted March 22, 2011 by christopher

On Wednesday morning, March 22, the House Finance Committee will again consider H 129, a bill from Time Warner Cable to make it all but impossible for communities to build their own broadband networks. But now, as noted by Craig Settles, the momentum is shifting.

Last week, advocates had a big victory when Representatives Faison and Warren successfully amended the bill (each with his own amendment) to make it less deleterious to communities. Unlike the sham voice vote in the Public Utility Committee, Chairman Setzer of the Finance Committee had a recorded vote, allowing citizens to hold their representatives accountable.

After these amendments passed, the TWC lobbyist signaled for an aide. Shortly thereafter, the committee decided to table the matter until this week -- when TWC will undoubtedly try to remove or nullify those amendments.

In the meantime, AT&T has announced bandwidth caps, yet another reason the state is foolish to pin its broadband future on cable and DSL companies.

Compare AT&T's movement to less-broadband with Wilson Greenlight's recent dramatic price decreases in its ridiculously fast broadband network, causing at least one couple to move there! Greenlight is owned and operated by the public power company owned by the city.

Greenlight has signed up its first residential customers with the highest Internet speed available in Wilson.

Vince and Linda Worthington, former Johnston County residents, moved to Wilson after finding out that they could have access to 40 Megabits per second Internet speeds at a lower cost than what they were previously paying.

"We always wanted the 100Mbps service," she said. "When the price came down, we jumped on it." Greenlight, the city of Wilson's fiber-optic...

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Posted March 9, 2011 by christopher

The continuing saga of H129/S87 in North Carolina has proved at least one thing, Time Warner Cable knows how to pull the puppet strings. The bill was written by Time Warner Cable and pretends to be about creating a level playing field while it effectively outlaws community networks (and some public safety networks) -- much to Time Warner Cable's financial benefits.

It remains unclear whether Representative Avila, who is championing this TWC power grab, truly knows what she is doing or is simply ignorant and blindly trusts the TWC lobbyists actually running the show.

After Legislators received a torrent of phone calls opposing TWC's bill, Rep Avila promised to negotiate with communities to find some middle ground and ensure the legislation at least grandfathered existing community networks. Instead, she turned the meetings over to TWC to run -- rather than negotiating, they set their terms. She has made multiple public claims about being reasonable but in private, she has made it clear that this is Time Warner Cable's bill.

Communities are dead set against this bill, noting the many ways in which it creates unique barriers for their networks while giving a free pass to TWC. Hardly shocking as TWC wrote the bill and is calling the shots via Rep. Avila (whose own district opposes the bill).

Now Asheville has passed a resolution against the bill [pdf], fearing its passage would derail their public safety network. The staff report explains why:

The stated purpose of the bills is to protect jobs and promote investment in North Carolina. The mechanism for protection is structured as restrictions on local government on engaging in what governing boards deem to be public-purpose communication and/or broadband projects. While one might assume that the bill’s target of...

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Posted March 7, 2011 by christopher

Rockingham County has joined Raleigh in officially passing a resolution against legislation to cripple community networks in the state.

 

RESOLUTION
BY THE ROCKINGHAM COUNTY BOARD OF COMMISSIONERS
AGAINST SENATE BILL 87 and HOUSE BILL 129

WHEREAS, Senate Bill 87 and House Bill 129 have been introduced in the 2011-2012 Session of the General Assembly of North Carolina; and

WHEREAS, these bills do not provide a level playing field to cities, towns and counties, but greatly hinder local governments from providing needed communications services, especially advanced high-speed broadband services, in unserved and underserved areas; and

WHEREAS, these bills impose numerous obligations on cities and towns that private broadband companies do not have to meet; and

WHEREAS, private companies, despite having received favorable regulatory and tax treatment to enable broadband investment, have chosen to avoid the financial commitment necessary to provide top quality services to all residents and businesses; and

WHEREAS, while private companies declare top quality service is cost-prohibitive in our country, the United States continues to lose ground to other nations in broadband access, user cost and growth in number of users, falling behind the United Kingdom, Korea, France, Japan and Canada to name a few, and Japan has Internet access that is at least 500 times faster than what is considered high-speed in the United States and at less cost; and

WHEREAS, the bills would prohibit North Carolina cities and towns from using federal grant funds to 

deploy or operate locally-owned or operated broadband systems, thereby denying N.C. residents access to federal assistance available to the rest of the country and hindering employment opportunities; and

WHEREAS, deployment of high-speed Internet is a new public utility vital to the future economic development, educational outreach and community growth in North Carolina necessary to replace lost textile, tobacco, furniture and manufacturing jobs; and

WHEREAS, the General...

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Posted March 4, 2011 by christopher

On Wednesday, the bill to effectively ban community networks in North Carolina was passed out of the House Public Utilities Committee and will likely be heard by the Finance committee next week.

The audio is available here from the Wednesday meeting [mp3, 45 min].

It never fails to shock me how cavalierly some Committees refuse to discuss the bill, agreeing to let another Committee fundamentally change the bill. There is practically no discussion of what this bill does and very little discussion about the actual pros and cons of different approaches to providing broadband.

Listening to the discussion, one gets the distinct impression that a household either has "broadband" or doesn't. There is no discussion of the known failure of the private sector to invest in next-generation networks. If I were a Representative in North Carolina, I would be sure to ask why no private sector provider is building next-generation fiber-optic networks like those in Wilson, Salisbury, and hundreds of communities served by Verizon's FiOS outside the state. There is no discussion of the wisdom of relying on last-century cable and copper networks.

Horse and buggy

Those pushing this bill have no idea what they are doing. They may gut the potential for full fiber-optic networks in the state as the rest of the world charges forward building these networks. They are defending the horse-and-buggy industry in the age of automobiles.

Listen for the North Carolina Chamber of Commerce weighing in against community networks, the only entities investing in the next-generation networks needed for the digital economy. The Chamber cares more about its high profile members (cable and phone companies) than the 99% of businesses in North Carolina that need the kind of broadband available in Wilson and Salisbury. These organizations should not be allowed to get away with pretending to represent business interests in the state. They represent the...

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Posted March 1, 2011 by christopher

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...

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