Tag: "scale"

Posted May 17, 2016 by christopher

The American Cable Association (ACA) represents over 800 small and medium-sized cable companies around the United States, including many municipal cable and fiber-optic networks. This week, we talk with ACA President and CEO Matt Polka about what they do and how small cable companies are vastly different from the big companies like Comcast and Charter.

We spoke after it was clear Charter's merger with Time Warner Cable would be approved, but before this article in Ars Technica effectively missed the point of Matt Polka's objection to the competition requirement in the merger. In our interview, we discuss the larger problem - that the federal government consistently puts its thumb on the scale to benefit the biggest cable companies at the expense of smaller ones. Forcing Charter to compete with Comcast would be a far bigger benefit to communities than having it take over small cable networks.

We wrap up with a discussion about how smaller companies, which includes all municipal networks, are disproportionately impacted by regulations that do not distinguish between the biggest providers (that tend to cause the majority of problems) and the smaller providers (that bear the brunt of regulations designed for reigning in the problems caused by the big carriers).

Read the transcript from this show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 29 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to... Read more

Posted May 19, 2015 by christopher

Back in March, I spoke at the Iowa Association of Municipal Utilities Telecom conference, which is always an event with interesting people. While there, I met Doug Hammer and Krista Allen of Harlan Utilities. With just over 5,000 people, Harlan is small but they actually have better Internet and cable choices than most of us, in large part due to the municipal utility.

Doug is the Director of Marketing and Krista the Director of Finance & Customer Service. We spoke again for this week's show about the challenge small ISPs have in just completing the paperwork required of ISPs by the federal government. Though small utilities like Harlan have only a few staff people, they are subject to many of the same forms as much larger companies.

We talk about the paperwork, but also some of the benefits that Harlan's municipal utility brings to the community.

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.

This show is 22 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to other episodes here or view all episodes in our index. You can can download this Mp3 file directly from here.

Thanks to Persson for the music, licensed using Creative Commons. The song is "Blues walk."

Posted April 3, 2015 by lgonzalez

Tacoma's Click! network raised prices in 2010 in order to cover increases in retransmission fees for its television feeds. Fees have continually risen for Click! and other networks and, according to Tacoma's News Tribune, will continue to rise. The market is fundamentally broken, with small providers struggling to keep up as sports programming shoots through the roof and companies like Comcast merge with content owners.

In Tacoma, the situation was so bad it led to a fee dispute between KOMO and Click! network that resulted in a channel blackout on the network. The News Tribune pursued document requests early in 2014 to obtain copies of the retransmission agreements at the center of the dispute between the network and KOMO. The documents revealed that agreements with several broadcasters rewarded broadcasters significant increases in retransmission fees. Over a six year period, KOMO's rate increased 416 percent.

In a recent update, the News Tribune reports that the new contracts include yet another significant increase:

New contracts that took effect Jan. 1 show the broadcasters’ fees are rising far faster than inflation.

No fee has increased over the years more than that of Seattle broadcaster KOMO. In 2009, the broadcaster received only 31 cents per month per home from Click. That amount has soared this year to $2.43 — a 684 percent increase.

Had the broadcaster’s fee risen equal to inflation, KOMO would earn only 34 cents per subscriber — or approximately $78,000 for all of 2015.

Instead, the new fee structure will mean Click pays about $561,000 this year. That cost is likely to be passed down to the utility’s 19,250 subscribers.

Chris Gleason, speaking on behalf of Tacoma Public Utilities, said the utility board will now have to consider a 17.5 percent rate increase for 2015. The original plan was to incorporate a 10 percent increase in 2015 and a similar increase in 2016. Four other channels are instituting similar increases:

“We don’t really have a lot of bargaining power with these broadcasters,” Gleason said. “... We do negotiate with them but... Read more

Posted April 28, 2014 by christopher

Netflix has continued to publish monthly rankings of ISPs average speed in delivering Netflix video content to subscribers. Though they first published data about the largest, national ISPs like Comcast, AT&T, and the link, they have an expanded list with many more ISPs.

I recognize two municipal networks on the expanded list of 60 ISPs. For March 2014, the Chattanooga EPB network is ranked 4th and CDE Lightband of Clarksville, Tennessee, is ranked 7th.

With the exception of Google Fiber and Cablevision, the top 10 are regional or somewhat smaller ISPs. Combined with the significant spread across the rankings of the biggest ISP, we see no empirical evidence for any kind of benefits to subscribers from scale. That is to say, Netflix data shows that bigger ISPs do not deliver better customer experience.

We do see more evidence that fiber networks deliver faster speeds on average, with cable following, and DSL trailing distantly. This is why DSL networks are losing customers where people have a choice and cable is gaining (most often where there is no fiber option).

Any claims by Comcast that allowing it to merge with Time Warner Cable would result in better service should be subject to extreme skepticism. Many much smaller networks deliver faster connections and raise rates far less often that Comcast, which is at the high end of frequency in rate hikes.

The problem with the biggest companies is that they focus on generating the highest returns for Wall Street, not delivering the best experience to Main Street.

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.

... Read more

Posted August 2, 2013 by lgonzalez

Since the story broke about the NSA domestic spying practices, debate among concerned citizens has revolved around the Big Brother surveillance model. Most of us shudder at the thought of our federal agencies from DC watching, noting, and recording our actions. However, there is another type of Internet surveillance that largely escapes notice and likewise threatens our liberty. 

Both types of surveillance are perversely encouraged by a poorly regularly market that allows big corporations to profit from violating our privacy.

We have long known that our online habits are being recorded and combined with other personal data that allows companies to show us personalized ads. But Free Press recently offering a compelling explanation for how this model can harm us. From the Dana Floberg article:

And about those “personalized ads” — this isn’t about Facebook learning you prefer Coke over Pepsi. This is about corporations targeting us where we’re vulnerable. This is about your Latina neighbor who sees ads for risky high-interest credit cards. This is about your cousin who just got laid off and now sees ad after ad selling him dangerous fast-cash offers and subprime mortgages. This is about your friend who lives in a rougher part of town and sees higher prices whenever he shops online. This is about all of us.

These ads aren’t personalized — they’re predatory.

Floberg goes on to describe how shopping sites alter prices based on income and location so more affluent shoppers can access better prices and coupons. These sites both use and reinforce stereotypes as they take advantage of the most vulnerable in our society.

Without laws to protect consumers, there is little we can do to stop this predatory behavior. Just as the market encourages corporations to violate our privacy to sell its goods, big corporations are also profiting in their work with law enforcement at all levels.

An AP article by Anne Flaherty notes that AT&T charges $325 to activate a wiretap and $10 per day to maintain it. Verizon charges the government $775 for the first month and $500 per month after that to continue it. It is hard to believe these charges are in line with actual costs. 

Meanwhile, the other... Read more

Posted July 20, 2013 by lgonzalez

We have not wirtten much on the NSA spying scandal but encountered a recent article in the Guardian that our readers can appreciate. Rory Carroll reports that Xmission, one of the local Internet service providers working with UTOPIA, has long refused to turn over private data to local, state and federal officials absent a proper warrant.

"I would tell them I didn't need to respond if they didn't have a warrant, that (to do so) wouldn't be constitutional," the founder and chief executive, Pete Ashdown, said in an interview at his Salt Lake City headquarters.

Since 1998 he rejected dozens of law enforcement requests, including Department of Justice subpoenas, on the grounds they violated the US constitution and state law. "I would tell them, please send us a warrant, and then they'd just drop it."

Xmission recently published a transparency report, which the Electronic Freedom Foundation referred to as "one of the most transparent we've seen."

We spoke with Pete Ashdown of Xmission last year in the third episode of our podcast and hold him and his firm in high esteem.

Unlike large, distant corporate providers focused on short term profit, local providers like Xmission understand the value of accountability and character. Big corporations are generally more interested in winning big government contracts than protecting the rights of their subscribers.

[Insertion by editor Christopher:] After all, what does Comcast care if I hate its assistance in shredding the Constitution, it isn't like I have another choice for high speed Internet access in my home.[end Insertion]

According to Ashdown:

The agency's online snooping betrayed public trust, he said. "Post 9/11 paranoia has turned this into a surveillance state. It's not healthy."

This is an important reason to build an... Read more

Posted March 10, 2013 by christopher

If this merger is approved, I have little doubt that Comcast-NBCU will retain hundreds of attorneys and lobbyists to exploit gaps and loopholes in any conditions and regulations. Once we allow companies to become this powerful, the FCC does not regulate them. They regulate the FCC.

Posted November 27, 2012 by christopher

Our colleague at the Institute for Local Self-Reliance, Stacy Mitchell (too brilliant to be a relation of mine), recently gave an incredible presentation that focuses on some of the threats to our economy and how we can build stronger, more resilient communities.

She doesn't discuss broadband explicitly, but much of her critique of the largest corporations in banking and the food system applies to the big cable and telephone companies. Highly recommended.

Posted September 29, 2012 by lgonzalez

A  recent book by David Cay Johnston, The Fine Print, examines specifically how big companies have found ways to take advantage of the tax and regulatory systems to their benefit and to the detriment of consumers. The sad part - we don't even realize it.

Johnston discusses how big companies and their leaders exploit tax rules to re-distribute wealth upwards. Johnston also examines how this exploitation is almost never covered in the media, encouraging big companies to stoop to new lows in ripping off consumers. Telecommunications is one of the industries he covers in the new book.

In the first chapter (read the first chapter via Democracy Now!), Johnston describes how friend and journalist, Bruce Kushnick, came across twenty years' worth of telephone bills in his elderly aunt's possessions. Kushnick tracked the changes in her bills, systematically reviewing and comparing every charge. Kushnick found an array of confusing and cryptic "fees," "charges," and "taxes." The end result:

When he cross-checked his aunt’s telephone bills over the years, he could hardly believe the numbers. His aunt paid $9.51 for her local phone service in 1984. By 2003 her bill had swollen fourfold to $38.90. In the two decades since the breakup of the AT&T monopoly, even after adjusting for inflation, his aunt’s telephone cost $2.30 for each dollar paid in 1984. And that was without any charges for long-distance calls.

Johnston notes the method used by telecoms to increase prices over time:

Bit by bit, the line items grew, and others were added. It was easy to miss the escalating prices because they came... Read more

Pages

Subscribe to scale