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[ NNSquad ] Re: Fight over municipal broadband rules in North na
On Tue, 15 Mar 2011, Richard Bennett <email@example.com> wrote:
Interesting comment, Bob. The rural broadband issue actually has more to do with cable TV-type services than with Internet services, actually. Muni broadband networks have copied the triple play revenue model from cable, and always have substantially more cable TV customers than Internet customers. There's a huge element of bad faith bargaining on the part of the towns that operate their own triple play networks in competition with the cable company. Towns previously granted the cable company an exclusive license to offer cable TV, which encouraged the cable companies to invest in a community network on the expectation that their investments would ultimately pay back the investment and earn a profit.
It seems to me that communities should be able to operate their own networks, but before they go into the cable business they need to compensate the cable company for their investment, preferably by buying them out. They're obviously not going to do that, of course.
How much money have the one or two cable companies made under their formal government granted mono/duopoly?
Who owes whom?
Why should we not simply end the mono/duopoly by allowing others to offer Net connection service?
ad general principle: Of course we need not "compensate" companies that exist only because we have granted them a government enforced mono/duopoly. The cable companies do not have a right to a government mono/duopoly. No right whatsoever.
The larger issue is that demand for broadband Internet simply isn't very high in rural communities, so when you carve up the demand among two wireline providers and the two satellite TV providers, it's hard for the wireline networks to break even. The ultimate solution to this problem is government-funded demand creation programs that enable people to get cheap PCs and education in the benefits of the Internet.
There's already a lot more broadband Internet deployed in the US than there is demand for it; something like 95% of Americans can get broadband if they want it, but only 65% actually sign up. You don't solve that problem by building more networks.
The numbers are that the cable companies are making a fortune because they have been granted either a monopoly or a duopoly.
According to the theorists of the free market, of course you solve the problem: competition drives down price. Why should we continue to protect cable companies? Companies which by their own admission cannot compete?
On 3/15/2011 1:39 PM, Bob Frankston wrote:
While the cable companies have a visited interest in limiting competition we need to be more concerned about framing the debate on the presumption that the only funding model is "cable".
There's the implicit assumption that simply having a city create its own broadband network is automatically a good thing. But as I keep pointing out the business model of expecting people buy services in order to fund infrastructure is problematic, even more so when it is competing with commercial providers with deep funding. As we've seen in Burlington VT, if a city borrows from bondholders it is in hock to them but doesn't have the scale and deep pockets a company like Comcast has to cover the debt even if the particular cable system is not profitable.
Think of the 911 example -- why does the emergency respond system depend on people making enough phone calls to fund it. If the model makes sense we'd use it to fund fire and police services. But it doesn't make sense and we fund the fire and police services. So why do we fund the emergency signaling system by taxing phone calls. Even worse, we then use this funding model abused <http://www.alternet.org/news/150132/how_politicians_are_using_911_emergency_services_to_scam_millions_of_consumers/?page=1> and used as a way to make some VoIP services illegal by demanding they pay for 911 service in an arbitrary location.
What cities need to do is change the framing and build a common infrastructure as an asset for the city that they pay for once and own. They can then use it all purposes ranging from police and traffic lights to exchanging bits for consumer applications like video and medical monitoring and home fire detection.
We need to assure the legislation doesn't prevent a city from investing in new fiber or Wi-Fi or using existing copper as infrastructure completely distinct from services be they "cable" or simply exchanging bits (sometimes called "Internet").
Too bad some of the loudest voices are the most conservative -- advocating that cities emulate the old line cable companies rather than embracing the future by creating new infrastructure and opportunity.
The cable companies would still oppose funding infrastructure but we’d have to explain the wires are like sidewalks and not like television. I’d welcome a real debate.
From: firstname.lastname@example.org [mailto:email@example.com] On Behalf Of Lauren Weinstein
Sent: Tuesday, March 15, 2011 14:48
Subject: [ NNSquad ] Fight over municipal broadband rules in North Carolina
Fight over municipal broadband rules in North Carolina
http://j.mp/fGNZe9 (Innovation Policy Blog)
-- Richard Bennett