Tag: "scale"

Posted March 29, 2012 by lgonzalez

MPR News recently ran two stories on the trials and tribulations of new and prospective broadband networks. Conrad Wilson's story about the continuing Monticello drama and Jennifer Vogel's account of factors affecting the American Reinvestment and Recovery Act (ARRA) projects give us a good idea of the many hurdles in the way of building new fiber-optic networks.

We have reported many times on the drama that has unfolded in Monticello. The municipally owned fiber-optic network has faced some withering challenges and yet perseveres.

Monticello asked for a modern communications network but the existing service providers, the cable and phone companies, insisted the city was "sufficiently wired." Conrad's reporting suggests otherwise:

Bill Tapper, who owns a cabinet company with clients around the world, recalls a time just a few years ago when the Internet was so slow it hurt business.

"The service we had in Monticello was horrible," he said. "My employees would sometimes take the data home where they had a better Internet connection than we did and do their uploads at night."

Tapper said he lost out on business, but at the time the established Internet service providers like phone and cable TV companies told Tapper and other frustrated business owners in town that the city was wired sufficiently.

Fibernet Monticello

After the community voted in favor of a publicly owned fiber-optic network, the incumbent provider, TDS, filed a lawsuit. The lawsuit strategically succeeded in stalling the development of the new network but did not destroy the project. Even though the incumbent provider describes pre-network status as "just fine before the city got involved," TDS took advantage of the delay they caused to began building their own fiber network.

Currently, subscribers in Monticello are benefitting from their high-speed fiber in ways beyond expanded and improved access. Because of the threat of competition, Charter is...

Read more
Posted July 28, 2011 by christopher

Public Knowledge recently had me as a guest on their "In the Know" weekly podcast. Our interview is the last half of the show. The videos we reference in the discussion are embedded below.

Posted April 10, 2011 by christopher

Several days at the National Conference for Media Reform in Boston gave me time to reflect on the importance of protecting local authority to build, own, and operate their own networks connecting people and businesses to the Internet. Multiple presentations focused on the importance of and strategies for ensuring access to the Internet is not controlled by a few companies -- and most of these strategies are focused at federal government agencies and Congress.

While we support these efforts, the Institute for Local Self-Reliance is not a DC-centric organization. We try to help folks in DC learn about what is happening outside the beltway, but our passion and work focuses directly on helping local communities invest in themselves and preserve their self-determination. 

Access to the Internet will likely be the key infrastructure investment that determines how well communities fare in the coming years. Unfortunately, they have very little control over how those investments are made when the networks are owned by private, absentee companies. Efforts like Universal Service Fund reform, fixing the FCC, re-writing the telecom act, and ensuring network neutrality depend on overcoming incredibly powerful (due to their scale and lobbying power) interests in Washington, DC. But local communities have very little power outside their borders... with some in state capitals and practically none in the nation's capital.

Attacks at the state level on the fundamental right of communities to build this essential infrastructure are intended to eliminate their one means of gaining some control over their digital future. Too many states already ban or limit local authority to build these networks -- and with the Time Warner Cable bill to crush community networks in North Carolina picking up steam and South Carolina's similar attack even on broadband stimulus projects, we will see hundreds more communities with no power to ensure their citizens and businesses have access to fast, reliable, and affordable access to the Internet.

This is deeply concerning.  Taking away the one tool...

Read more
Posted January 29, 2011 by christopher

Ars Technica takes an inside look at a small fiber network in a subdivision in Washington State: "Tale of the Trench: What if your Subdivision laid its own Fiber?"  The author makes a valid point in noting that not all community fiber networks offer the best speeds in the country.  However, I do take issue with any suggestion that these experiences are reflective of most community networks.  The scale of this network is tiny -- resulting both in unique problems and common problems greatly exacerbated.  

Issaquah Highlands is a planned community east of Seattle that offers FTTH to residents while essentially assessing them for it whether they use it or not.  In this neighborhood, broadband is treated like water service, with the exception that residents can pay their FTTH fee but also pay to get service from a cable or telephone company instead.  

The cost of implementing a community-owned network prevents most neighborhoods from building their own networks, and it's the main reason why all Issaquah Highlands residents are required to subscribe to the service. The cost of initial buildout was in the millions of dollars and was financed to be paid off over several decades. Once the network is paid off, ownership will be transferred from the builder, Port Blakely, to the community association. However, the community has a strong leadership position on the HFN board even while the builder owns the fiber.

Port Blakely at first contracted with a small Internet provider to build and operate the network, but this ISP quickly collapsed due to financial issues. Port Blakely then contracted with a Seattle-area ISP to operate the network and provide Internet service over the physical infrastructure. This step can be harder than one might expect; there aren’t many options left when it comes to standalone ISPs. Back in the days of dial-up, we had a thriving market in the US, but the proliferation of DSL and cable Internet service provided by whoever owns the wires means that most smaller ISPs have folded. While serving on the HFN board, I always knew that we would have problems replacing our local ISP if that became necessary.

The author was on the advisory board of the network and offers frank assessments of their difficulties - despite...

Read more
Posted January 27, 2011 by christopher

For years, I have heard Graham Richards, former mayor of Fort Wayne Indiana, brag about this "beg, borrow, buy, build" [pdf] philosophy as Mayor.  I am not insulting him -- his brash style is quite likable, but it is bragging.  He was somewhat of a celebrity among the broadband folks because he both understood the importance of broadband and had convinced Verizon to roll out FiOS in Fort Wayne when they had no plans to.  His philosophy is to first beg, then borrow, then buy, and finally build the network if necessary -- a similar approach of many local governments.  This is also often the path of least resistance (which, Utah Phillips reminds us, is what makes the river crooked).  

Graham is a terrific guy and a great evangelist for broadband (though he never jumped into a frozen Lake Superior) -- but we have long argued that his priorities were wrong in the long term.  Not owning the network means the network is unlikely to care about what the community needs.  Unfortunately, our philosophy has proven prescient.

When we last discussed Frontier's radical price increases for the FiOS subscribers they bought from Verizon, we failed to note that Fort Wayne was one of the transferred communities.  They begged for the network and they have no voice in how it is run.  So when Frontier jacks up its FiOS prices and glibly encourages people to drop their high quality FiOS cable for lesser quality DirectTV (with a long contract), the folks in Fort Wayne have little choice but to shrug their shoulders.

Serfs may occasion upon a good Lord of the Manor, but mostly they didn't.  Ownership of essential infrastructure offers long term benefits.

Photo used under Creative Commons, courtesy of Jenn Raynes

Posted January 6, 2011 by christopher

Frontier has been bitten by the same disadvantage many communities face when building their own networks -- little market power means having to overpay for everything. When Frontier bought millions of Verizon rural lines, it bought a few FiOS connections as well. But not enough to gain any bargaining power with channel owners. So Frontier had to raise the costs of its video services up for 46%. Lest anyone feel too sorry for Frontier, they are doing just fine. It is their customers who suffer. But it is a reminder that the issue of scale and market power are barriers to all competition, not just community networks. If we want to have real competition in this country, the Congress and the FCC need to stop ignoring the problems caused by massive players distorting the market. This unregulated market is an invitation for big players to join together and screw everyone else.

Posted December 30, 2010 by christopher

Excellent lecture.

Posted December 23, 2010 by christopher

The Comcast/NBCU merger poses a real threat to the future of innovation, competition, and the open Internet. Put simply: size matters. The larger Comcast gets, the more market power it has and the more all other markets that depend on broadband and media will be distorted.

Susan Crawford knows this better than most and explains why everyone should be concerned about it.

As we've harped on time and time again:

The crucial thing to understand is that high-speed Internet access to the home really is a crushingly-expensive natural monopoly service to install. The telephone companies haven’t found a way to make this work, because it’s so much more expensive to dig up the streets to install fiber than it is to upgrade cable electronics to DOCSIS 3.0. So they have backed off. The cable industry has made its investment, and is ready to reap its rewards of scale and high fixed costs - secure in the knowledge that no competition is coming after it, and having divided up the country neatly among its members. Meanwhile, the telcos are steadly losing fistfuls of money.

As Morgan once said of railroads, “The American public seems to be unwilling to admit . . . that it has a choice between regulated legal agreements and unregulated extralegal agreements. We should have cast away more than 50 years ago the impossible doctrine of protection of the public by railway competition.” In the cable world, we are deep into unregulated extralegal agreements, and competition is not going to rescue us.

The longer communities wait to build this important infrastructure, the harder it will be. It is hard to imagine national candidate speaking more stridently about the important of the open Internet than did Obama and even he bowed to the pressure of the private Internet access providers. While we should pressure the federal government to regulate in the public interest, we must take responsibility for our future at the local level with smart investments.

Posted November 30, 2010 by christopher

So Comcast and Level 3 are in a peering dispute following the Netflix partnership with Level 3 to distribute their streaming movie service. Studies suggest Netflix movie streaming has become a significant chunk of Internet traffic, particularly at peak times.

A quick primer on peering: the Internet is comprised of a bunch of networks that exchange traffic. Sometimes one has to pay another network for transit and sometimes (commonly with big carriers like Comcast and Level 3) networks have an agreement to exchange traffic without charging (one reason: the costs of monitoring the amount of traffic can be greater than the prices that would be charged). (Update: Read the Ars Technica story for a longer explanation of peering and this conflict.)

Comcast claims that Level 3 is sending Comcast 5x as much traffic as Comcast sends to Level 3 and therefore wants to charge Level 3 for access to Comcast customers. Of course, as Comcast only offers radically asymmetrical services to subscribers, one wonders how Level 3 could be 1:1 with Comcast…

At Public Knowledge, Harold Feld ties the dispute to network neutrality:

On its face, this is the sort of toll booth between residential subscribers and the content of their choice that a Net Neutrality rule is supposed to prohibit.  In addition, this is exactly the sort of anticompetitive harm that opponents of Comcast’s merger with NBC-Universal have warned would happen — that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers.

Susan Crawford

Susan Crawford wrote a lengthier piece about Comcast, Netflix, network neutrality, set-top boxes and NBC that is well worth reading (as is just about anything she writes).

However, for the purposes of this post, we will assume the 5x traffic imbalance is true (and unique and...

Read more
Posted November 11, 2010 by christopher

The Media and Democracy Coalition has released a short paper detailing the many ways in which cable and phone companies have failed America. These companies use their market power to gouge residents and businesses, putting a drag on our economy. Meanwhile, the biggest ones are massively profitable and refuse to invest in the networks necessary to keep America competitive with peer nations.

We recently wrote about how privately owned networks tend to consolidate and reduce competition rather than reducing prices. The lesson is as clear as it has always been throughout human history: allowing a select few to control essential infrastructure is a recipe for economic calamity.

From the paper:

It’s good for our economy when companies make money and hire workers. But while small businesses continue to struggle in this economy, the cable and phone companies achieved extremely healthy profit margins. If the Great Recession didn’t stop these ISPs from making big profits, how could they be hurt by sensible consumer protections to keep the net operating just like it always has?

Well, seeing as how seat belts destroyed the automobile industry... and then air bags also destroyed the automobile industry... and CAFE standards destroyed the automobile industry.... wait -- all of these predictions were false. Perhaps we should not base important policy decisions upon the dire predictions of self-interested parties who are obligated to put self-interest ahead of the public interest.

I was saddened to see that the paper suggest "we need" the private companies to build these networks. Point of fact, not only do we not "need" them to do it, we "need" to wake up to the fact that even when they do the best they can, it is second best to networks built by those who put the public interest first. Compare the networks of communities like Salisbury, NC; Monticello, MN; Lafayette, LA; and Chattanooga, TN, to the joke AT&T calls U-Verse and the stronger offers of FiOS. The private sector cannot be trusted to build the infrastructure we need.

Addendum: I should note that while infrastructure must be managed in the public interest, I do believe the private sector should have a strong role as service providers operating on top of...

Read more

Pages

Subscribe to scale