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.

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.

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.

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

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.