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[ NNSquad ] Re: Fight over municipal broadband rules in North Carolina

Is the ITIF willing to support and encourage an infrastructure approach as
an alternative to broadband triple-plays?

Personally I don't see the need for legislation since the triple-plays no
longer make fiscal sense.

But rather than fight over the past I would welcome support for communities
building infrastructure that doesn't have to be a profit center. The cable
companies should once they get past their short-sighted effort to profit
from control over the transport as a means of preventing effective
competition as they go over the top and stand to gain more from using the
infrastructure than limiting it.

Infrastructure creates a level playing field and the cities would have no
reason to compete in the content business though they might provide
fee-based services for their own community and others. But it wouldn't be
tied to the "cable".

Is ITIF onboard for infrastructure?

-----Original Message-----
From: nnsquad-bounces+nnsquad=bobf.frankston.com@nnsquad.org
[mailto:nnsquad-bounces+nnsquad=bobf.frankston.com@nnsquad.org] On Behalf Of
Richard Bennett
Sent: Tuesday, March 15, 2011 19:11
To: nnsquad@nnsquad.org
Subject: [ NNSquad ] Re: Fight over municipal broadband rules in North

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.

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.


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
> 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.
> -----Original Message-----
> From: nnsquad-bounces+nnsquad=bobf.frankston.com@nnsquad.org
> [mailto:nnsquad-bounces+nnsquad=bobf.frankston.com@nnsquad.org] On
> Behalf Of Lauren Weinstein
> Sent: Tuesday, March 15, 2011 14:48
> To: nnsquad@nnsquad.org
> 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)
> --Lauren--
> NNSquad Moderator

Richard Bennett