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A comparison of services from various providers. The local service, Greenlight, both provides the most affordable bundle option for its speed, and offers an unmatched 100 Mbps option. The success has cable providers trying to outlaw the service.  (Source: IndyWeek)

Brian Bowman, the Director of Public Affairs for the city of Wilson, N.C., which runs the service, is fighting to keep state government from killing the competition in the area.  (Source: IndyWeek)

Time Warner Inc., headed by CEO Jeff Bewkes, is lobbying hard to outlaw community cable solutions clearing his company's way for deeper market penetration.  (Source: Brendan Smialowski for The Wall Street Journal)
The cable companies aren't happy that they've been one-upped in both price and quality of service

Time Warner Inc., after finally dropping its plans for metered internet services for the time being, appears to be back to its old ways.  This story begins in Wilson, North Carolina.  Wilson is a small city of about 47,000 residents located in the middle of North Carolina, roughly 45 minutes east of Raleigh, the state's capital.

The city's residents, like many, long complained over high internet, cable, and telephone prices.  So the city launched an ambitious $28M USD program to deliver these services basically at cost, at much lower rates than local service providers Time Warner Inc. and Embarq.

For example, the city offers an expanded basic cable (81 channels), 10 Mbps (download and upload), and a digital phone plan with unlimited long distance to the U.S. and Canada, all for $99.95.  A comparable plan from Time Warner Inc., with six fewer channels (no Cartoon Network, Disney, The Science Channel, ESPNU, ESPN News, or ESPN Classic) and lower upload speeds costs $137.95, for an introductory rate, which lasts a few months and then will likely be ratcheted up.

The city service, named Greenlight Inc., also offers a premium package with 20 Mbps (download and upload), faster than any service provider in the area (Time Warner Inc. and Embarq's "Turbo" plans top out at 15 Mbps download).  And Greenlight also offers a stunning 100 Mbps (download and upload) local service as well, though it is not listed on their website in the basic packages.

Rather than admit defeat to the pesky local service and go quietly, Time Warner Inc. and Embarq decided to take the fight to the state government, lobbying for several years to get the state government to pass laws to try to destroy the local effort.  And sure enough, thanks to a lot of hard work (and money), the cable companies are close to getting their wish -- North Carolina's State Senate have proposed bills to not only effectively crippling or banning the local service, but also to prevent such services from getting funds under the broadband portion of the national Stimulus law.

The city, has blasted the move, launching a new blog and urging the state government to reject the initiative.  Writes Brian Bowman, the city's Public Affairs Manager, "I have a 10Mbps up/down connection at my house. Can’t get half that from the cable company. I buy it directly from the City of Wilson. After less than a year of residential service, almost 3,000 Wilson citizens are subscribing to Wilson’s fiber optic network. Local businesses can get up to one Gbps."

He continues, "If the cable/phone companies really want a level playing field, they’d open their books just like we do in the spirit of open meetings and open records law. They don’t want a level playing field. They want to be the only team on the field."

"Bottom line, these companies are using your state lawmakers to protect monopolies. It was wrong in 2007 when a similar bill died in the house and it’s wrong today."

The real irony, of the situation is that a recent report, by local newspaper IndyWeek indicates that the city first approached Time Warner Inc. and Embarq with a request for faster internet for residents and local businesses.  The cable companies refused, unwilling to cut into their profit margins.  So the city took it upon itself, and in the end found out it could sell the service to citizens at a fraction of the cost.

Local provider Embarq still defends its decision, saying it has the right to make money (which it argues Greenlight Inc. does not).  The company's spokesperson states, "We would love to deploy DSL everywhere.  We try to make smart financial decisions not only for shareholders but customers. In the very rural areas, sometimes it would take two, three or more years to even pay for the investment."

The issue is very non-partisan, in that the anti-competition bills are supported by a mix of Republicans and Democrats (a previous similar bill had been proposed by Rep. Drew Saunders (D-Mecklenburg) and Vice Chairman Rep. Harold Brubaker (R-Randolph)).  Opposition to the measure is equally mixed.



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Free Market
By Judguh on 4/22/2009 9:22:20 AM , Rating: 5
What ever happened to that in America? If you don't like competition... complain to the government! Good solution TW/Embarq!!

/sarcasm




RE: Free Market
By Sleazell on 4/22/2009 9:32:24 AM , Rating: 5
Yeah this is as crooked as it gets. How can you say you have the right to make a profit but when a local government sets up a company to do so it's a problem? I can't see how politician can be against the local government without there being some money trail from their office to Embarq's and TW's offices. This is U.S. capitalism at its finest. If you can't beat them lobby against them!!!!! Damn our government is f’ed up.


RE: Free Market
By KentState on 4/22/09, Rating: -1
RE: Free Market
By rune66 on 4/22/2009 10:21:54 AM , Rating: 5
Ahm - And what is exactly do you think is wrong about that? Do you think that there should be a law against companies that don't exist to obtain a profit? Rather absurd when you think about it isn't it?


RE: Free Market
By NEOCortex on 4/22/09, Rating: -1
RE: Free Market
By Sleazell on 4/22/2009 12:18:25 PM , Rating: 5
I understand that they need profits to grow. However, they grow by buying other cable/telcos and do little upgrades. That's why they want to do tiered pricing instead of upgrading their network (they get extra cash and they don't have to updgrade). As tthe public affairs guy said, open up your books and show that you can't run your business by lowering your prices. Also, although the local government headed the project they can't say they used tax payers money as I think the project was funded by bonds.


RE: Free Market
By dever on 4/22/09, Rating: -1
RE: Free Market
By MadMan007 on 4/22/2009 2:07:27 PM , Rating: 5
Aren't municipal bonds usually voted upon by the population that will bear the tax burden which will ultimately repay them? In that sense the population willingly agreed to pay for it, if not at least municipal governments are a lot 'closer' and more responsive to their smaller constituency.


RE: Free Market
By MadMan007 on 4/22/2009 2:18:26 PM , Rating: 5
*add: also in this case the bonds are being repaid by selling the service, just over a longer term (omg 2-3 years!) than the telcos are willing to wait.


RE: Free Market
By ianken on 4/22/2009 7:05:46 PM , Rating: 5
Exactly. The people vote (bond measure). Bonds are floated. The service is deployed. The bonds are paid off by the users of the service. That is called democracy and someone has to lose.

In this case we have the big guys lobbying at the state level to dictate how a city spends its own money and using the threat of witholding federal money to boot. Now THAT is wrong.

In this case difference here is the govt is willing to make a long term investment. The net providers are not. AFAIK the only ISP doing any kind of real investment is Verizon and their FIOS service build out. Everyone else is just ratcheting up prices and slashing service.

Finally, this is not the first city to do this. Tacoma WA has had a FTTH setup for years. And they will not be the last. The time will come when net connectivity is not a luxury but a necessity and when private providers cannot meet the bar users expect the public utilities will step in.

This is no different from a city providing power, sewer and toher utilities at cost.


RE: Free Market
By dever on 4/25/09, Rating: -1
RE: Free Market
By Darkskypoet on 4/26/2009 9:28:45 PM , Rating: 5
Funny thing about the concept of a perfectly competitive free market is that in the long run there is no economic profit.

I say again for those who think a profit is somehow magically related to a free market, learn something about the ethereal perfectly competitive market that all classical economists parade about as the utmost in absolute efficiency.

So, no. No company has a right to make a profit in a market system. Firms have the right to compete, and if another firm decides to overly capitalize relative to you, chances are in the long run they will kick your whinning ass all over the street. ESPECIALLY in something so capital intensive as fibre to the curb.

So for those market apologists cum monopolists; NYET, themarket doesn't give anyone a profit if its working correctly, there is only long term profit due to inefficiencies in the market.

Added to this, if these other firms were given the choice to 'compete' prior to the municipal roll out and chose not to. They really ought to give their heads a shake. Honestly, the physical connections to the home, the distribution network is a perfect case of a natural monopoly. Such a monopoly should be run by one firm at cost. Seeing as this is the most efficient way to run it, as the market is unable to effect efficiency in a case where economies of scale and density outweigh the effects of competition.

Suck it up Time Warner... maybe you'll jump faster in other markets.

DsP


RE: Free Market
By dever on 4/29/2009 2:20:23 PM , Rating: 2
Who mentioned perfect markets? The reason markets work is because of individual risk and the feedback of loss or profit. There is the potential (and often reality) of failure and the associated loss. The loss is part of the equation that offsets profits and benefits consumers.

When government steps in, there is no profit/loss feedback. Losses are absorbed by the entire population, willing or not, instead of by risk-taking entrepreneurs. In the end, the consumer loses.


RE: Free Market
By Avitar on 4/30/2009 6:50:32 PM , Rating: 2
In Free Markets in practice, not in the perfect the profit regulates to the cost of money.

I would like 100 MPS Internet service. I am an engineer who has done this sort of network for the DOD. The costs centers today are, in order are, first, the Right-of-way, second, the fiber installation, third, material costs of the fiber and installation hardware, fourth the cost of network electronics. The cost of administration, maintenance and repair of the network will run about 10% of the capital costs per year. The country as whole the average capital costs will come to about $2000. Built with 6% money and paid off the initial investment in three years, is monthly payment of about $60 + $16 =$76/mo for a brand new build and run from scratch a 100basef nationwide network. Do the urban areas first and you are looking at $14 per month. This is the physical plant and maintenance costs if you maintain three-year depreciation.

Content, software add-ons like the fan, webhosting, and marketing are all extra.

I use three years because that is Moore’s Law cycle. After the first three years and upgrade to 200Mbps would require upgrading the electronics but that is not one of the big cost centers. After three years, if single mode fiber is used $14/mo is $6 or 40% profits. The $76 rural rate would be $50/mo profit when the higher capital costs are paid but I would recommend dropping the rate to $35 dollars/mo for 34% profit.
This budget includes bandwidth doubling ever four years.

Time Warner is just trying to keep bandwidth a scarce and costly commodity.


RE: Free Market
By FITCamaro on 4/22/2009 2:59:58 PM , Rating: 2
I don't believe they used the existing lines. Because yes then Time Warner would have a valid case. I believe they installed their own fiber optic network in the ground to the community alongside Time Warner's lines.

Just as they and anyone else who wants to pay to do so should have the right to do.

As far as using tax dollars on this kind of project, yes there you have a point. Those who don't have it and don't want it shouldn't subsidize the rest. Now I don't know all the details, but what should have happened is that the city should have held a vote on building the network. If everyone agreed to build it, use tax dollars to do so. Then charge enough for the service so that the money can be repaid to the tax payers and maintain the service. After that, if they wanted it to break even, lower the service fees.


RE: Free Market
By RandallMoore on 4/22/2009 3:05:41 PM , Rating: 5
Yes, they laid down entirely new and separate fiber lines.

and also, yes they (as a city) voted and approved of the project. How do I know all this? I live 10 miles away from Wilson, NC.


RE: Free Market
By FITCamaro on 4/22/2009 3:53:40 PM , Rating: 2
Good to hear.


RE: Free Market
By NEOCortex on 4/22/09, Rating: -1
RE: Free Market
By FITCamaro on 4/22/09, Rating: -1
RE: Free Market
By MadMan007 on 4/22/2009 6:59:28 PM , Rating: 2
Or even if they could they would have a hard time finding investors to start up. TW complains that it would take a whole 2 to 3 years just to update their network which tells me they see it as a bad investment, how would a newcomer be able to convince investors to spend more for an even longer time horizon?


RE: Free Market
By Fallen Kell on 4/23/2009 2:06:49 AM , Rating: 5
Actually if you read what they said, they said that they couldn't remake the investment for 2-3 years (in other words, it will take 2-3 years for that investment to pay itself off).

Now I don't know about you, but in my mind, 2-3 years seems extremely reasonable to ask for from a company to pay off an investment such as infrastructure upgrades. Why does everything that they do have to pay out in a year? Oh, that's right, no CEO, CIO, CFO that implemented the initive expects to still be there after a year and thus will just see a big "red" for their time spent in the position while someone else down the line will reap all the rewards. This is one of the biggest problems now in business. The things that should be done don't get done because the people who do them either won't get the credit or the benefits go to some other part of the company (i.e. by replacing inefficient servers and consolidating equipment, the IT department could save the company 100k a year in power bill, but don't bother because that savings will not be reflected in their budget, but in the facility's budget, which is another part of the company).

Business has become too short-sighted for their own good. The guys in charge only want to do things that will happen on their "watch" so to speak, even if it is the right thing for the company to do, they won't do it unless they will see the bonus go to themselves. And since the people in those upper level management positions change jobs/companies almost every year or two, anything that takes more than a year to do is never even considered, just like this case here. You really don't think there will still be people in the city in 2-3 years from now still wanting to use the internet? I call serious BS for anyone who says no (well, maybe now that the city has its own network, that might be the case, but they gave the current companies fair chance to do the upgrades themselves and the companies said nope... so they have no one to blame but themselves for not offering what the customer wanted, especially when that customer said, if you don't do this, we will and followed through with that promise). Take this as a reminder, once your customers realize they are not getting exactly what they want, they will find a way to get what they do want from someone else.


RE: Free Market
By emoser96 on 4/22/2009 9:47:41 PM , Rating: 5
Not to pick on FIT because I've already read a ton of comments about using gov't funds to drop the fiber line to the homes, but the Telcos have been taking gov't money for years to pay for "improvement" without actually providing the improvements they promised. It's actually common practice for, when a project is too large for an individual corp to take the risk, the government to step in and float the bill, selling the asset to a corporation, essentially creating a monopoly with the promise of not hosing the consumer. This probably would have happened here except for the fact that Time Warner/Embarq refused to offer the reasonable prices the local gov't demanded if it was going to fund such a project. As such, they decided to run it themselves, which is still producing enough money to maintain the networks (which telcos hate doing) and, I suspect, provide for future growth as well as providing additional income (if they throw it back into the general coffers) to complete additional projects at a lower initial (and probably total) cost to the citizens.


RE: Free Market
By RandallMoore on 4/22/2009 10:00:15 PM , Rating: 2
Right on.


RE: Free Market
By JediJeb on 4/23/2009 7:24:40 PM , Rating: 2
I was going to mention this if I hadn't saw you did. The telco's received funds many years ago to build an advanced internet system, but never did. We by now should have the equivilent of at least 100Mbit lan in all urban areas and many rural areas, much like South Korea has already. So, where did that money go, and why wasn't there any oversite as to why the money was handed out and never used for it's intended purpose? Sounds a lot like what has happened with the bank bailout, funds go out and never get used for the intended purpose.


RE: Free Market
By meski on 4/24/2009 12:03:53 AM , Rating: 2
Who says government can't fund fibre?

quote:
The Australian Federal Government's $43 billion National Broadband Fibre to the Premises Broadband Plans are to connect 90% of Australia's population with lighting fast 100Mbps Broadband within 8 years. A very ambitious target considering it's going to cost a whopping $43 billion, however, most industry experts agree that this latest FTTP announcement is a master stroke and if it becomes fruition, will push Australia up the OECD (Organisation for Economic Co-operation and Development) rankings as a front runner in World Class fixed line and wireless Broadband Internet technology.


RE: Free Market
By dxf2891 on 4/22/2009 3:04:21 PM , Rating: 5
I think this has very little to do with whether it was government backed or not. A few years back when there was true competition in the broadband market, the telco and cableco eith bought up the competition, or used lobbyist to get the government to regulate them out of business. Even if this was a small company offering the same service at the same price, the larger, wealthier companies would still complain and lobby to have their compitition terminated. This is a matter of the rich wanting to stay rich or get richer still. The thing that gets me is the telco and cableco are stating that they are unable to increase service, and the local government who is new to the game is able to do it with very little effort. Here's a message for the telephone companies and cable companies: STOP THE GREED OR LOSE YOUR CUSTOMERS!!!


RE: Free Market
By eldakka on 4/22/2009 9:51:31 PM , Rating: 3
quote:
Companies make profits because that's how they grow, that's how the upgrade their equipment, and that's how they weather hard times (not bailouts).


Money spent on upgrading equipment and put aside for the hard times is, by definition, NOT profit. It is operating/capital/business EXPENSES.

Again, money spent 'growing' is NOT profit.

Profit is money that basically exits the company for no benefit to the company itself. It is, in effect, 'given away' AFTER expenses (buying new equipment, purchasing other companies, wages, bonuses, advertising campaigns, extending into new regions, infrastructure, etc)


RE: Free Market
By tastyratz on 4/23/2009 10:10:02 AM , Rating: 2
agreed

all of those things are rolled into "operating costs"


RE: Free Market
By rudy on 4/22/2009 11:06:52 PM , Rating: 1
Ya the city did profit actually the people of the town paid the city through taxes. Government is no different then a company. They have to collect taxes and fees for the services they offer. If the companies are failing and the government can do better for less then I do not care where the competition comes from it is still competition. The problem would be if the City council then denied TW an operating license.

People should not think of governments and companies or anything else they should just think of them all as organizations.


RE: Free Market
By mikeyD95125 on 4/23/2009 12:15:39 AM , Rating: 3
Well if a company can't turn a profit they should find a way to provide better service that people will pay for or TW should leave the market because they can't compete.

The whole situation started because TW got greedy and refused upgrade service. Which is fine, but they got bit in the ass by capitalism. Sounds right to me.


RE: Free Market
By KentState on 4/22/2009 3:01:38 PM , Rating: 1
I don't feel that the government should be able to run it's own business in a manor that competition can't exist. Since they do not require to make a profit, they can operate at cost or a loss and make up the difference through increased tax revenue. A public company does not have the advantage of covering their losses in that manor (unless they get a bailout, but that's another ball of wax).


RE: Free Market
By djc208 on 4/22/2009 7:12:15 PM , Rating: 3
I might agree, but no one has said that's the case here. The existing providers are claiming that to be true, but I have trouble believing it. The local cable and telephone companies have existing infrastructure as opposed to the city having to install all new lines. Due to their size the cable and phone company should be able to get better deals on programming and other content, as well as being able to offer more of it, but again it doesn't look like that's the case here either.

No, I'd bet the cable company is hoping to get the city to shut down their system so the cable company can buy it up cheap and move their own service onto it. They won't reduce prices or improve service, even though they just purchased a complete and mature high-tech network, that would cut into their profit margin.


RE: Free Market
By feraltoad on 4/24/2009 4:03:13 AM , Rating: 2
Yeah, screw public goods! Who needs 'em!


RE: Free Market
By Avitar on 4/30/2009 5:45:21 PM , Rating: 2
There is a law called anti-trust that Teddy Roosevelt got passed but it outlaws Time Warner not the local townhall.


RE: Free Market
By randomposter on 4/22/2009 10:28:18 AM , Rating: 4
But I thought the free-market mantra was that only private business is capable of running services efficiently, and that government is inherently wasteful and uncompetitive. Shouldn't TW be walking all over this little hick village and blowing them out of the water on efficiency, competitiveness, and service?

Please don't tell me the neocon talking points have been wrong all this time.


RE: Free Market
By AEvangel on 4/22/2009 10:40:11 AM , Rating: 5
The free market would work if there was not the state or federal government being lobbied by big business to pass laws to protect them from any competition.

If not for the law that TW/Embarq are seeking to get passed other companies would have come in and offered the service for a lower price but since they lobby to get 5-10 year no compete contracts for an entire geographic area they can do what they want and sell the service for what they want.

That is not free market that is government supported monopolies and it what has existed for the last 50 years in the Tel-com industry.


RE: Free Market
By DigitalFreak on 4/22/2009 10:39:13 AM , Rating: 5
Depends on who's running the government (the people, not the party). In my experience, the goverment of smaller cities tends to be quite efficient. The bigger the city, the more politcal BS and waste.


RE: Free Market
By SignoR on 4/22/2009 12:58:58 PM , Rating: 5
This is absolutely correct. The constitution had small a amount of power with the national government with more power in the hands of local and state governments for a reason.

What I would have vouched for would to be to sell bonds in order to fund the initial production of network infrastructure. Once the network is usable create a new company (or find an existing one, or both) to operate it and charge rent until the initial investment is paid off in full including interest.

Theoretically this would not prevent price hiking unless you leased/rented the network to more than one company. In this case competition would put a downward pressure on prices and increase the standard of living of everyone who opted to use the system. By charging rent/leasing the network until it was fully paid off, the initial burden of production has not been placed on those local tax payer who opt not to use it. win-win?

The only problem I see here is that if the network is leased to multiple suppliers it becomes unclear who should retain ownership after it is paid off. The locality could keep control of it, but I am weary of even local governments ability to take good care of and upgrade infrastructure(think of all the pot holes in a small town near you). Perhaps the another private company should be created to be the network keeper who charges rent to the ISP's and the holding company would be responsible to the payments to the locality?


RE: Free Market
By epobirs on 4/24/2009 12:40:16 PM , Rating: 2
Hard to imagine how you can conflate this as a 'neocon' thing, since the people who identified themselves as such were primarily concerned with foreign policy and defense. But it appears you don't understand the broader tenets of conservatism in general.

Adam Smith long ago observed that it was always a problem that incumbents in a market would conspire to lock out new players and decrease competition. The most frequent method is to appeal to authorities to create new legal stricture that affect smaller players, especially newcomers, more than the established operations. This is why keeping government small is one of the requirements of maintaining a truly free market. Any attempt to create a new bureaucracy to regulate a market should always be resisted as it is nearly always more tot he benefit of incumbents than the consumer.

One example is the states creating licensing requirements, with a set of of government employees to manage the process, for interior decorators. That's right, there are actually place where you need to jump through government hoops to do business as an interior decorator. As if aesthetics need to be regulated.

The problem of service like cable and telephone landlines is that cost of entry for new companies is very high, making for a very limited pool of competitors to vie for customers. We have legal structures that try to simulate competition by forcing companies to share their infrastructure with other service providers who have physical connections to the consumers homes or businesses. Thus you have companies like Earthlink selling DSL even though they must rely on the telcos to build the needed infrastructure. So far, this has been a very unsatisfactory solution.

Part of keeping government small is exercising good judgment in what things government should and should not do. They should not do stuff that is done well by business. When you have a situation that does not lend it self to genuine open competition, such as operating data lines to homes and businesses, a good argument can be made for government taking on a role in creating and managing the infrastructure.


RE: Free Market
By Denithor on 4/22/2009 10:32:58 AM , Rating: 5
Thing is - the local government wouldn't have taken this rather drastic (and laudable) step if TW etc didn't gouge so badly & refuse to open up their bandwidth limits.


RE: Free Market
By FingerMeElmo87 on 4/22/2009 3:59:28 PM , Rating: 4
TW and Embarq are just bitches that are mad at the fact that some one cooler is playing in the same sandbox as them.

if the local government can manage to give customers that type of service and manage that service at that price, whats stopping a large Telecom from offering the same level of performance? Economy of scale is in there favor. More equipment, more customers, more overall resources compared to the local government means that they should be offering something comparable or even cheaper and better then what they can. TW, Embarq, stop being bitches.


RE: Free Market
By nah on 4/22/2009 10:38:40 AM , Rating: 5
This is a classic case of market failure--monopolies trying to make supernormal profits http://en.wikipedia.org/wiki/Monopoly_profit in the long-run, and the government trying to fight back for its citizens by upping the level of consumer surplus http://en.wikipedia.org/wiki/Consumer_surplus


RE: Free Market
By nayy on 4/22/2009 10:54:51 AM , Rating: 5
The whole reason for the government not to provide services is becasue in theory the free market will always provide a better cheaper alternative.

Profit is an incentive for companies to be sucessful, efficient and innovative. It is NOT a right. If the free market is not doing its job I don't see why the goverment can't provide the service like they provide education, security, etc.


RE: Free Market
By Kougar on 4/22/2009 11:46:11 AM , Rating: 4
When the public government is able to provide a better service at a better cost with better customer service than a private business, you know something must be wrong.

There are plenty of ways for TWC to still compete in this market, they just have to be willing to eat a little into their profit margins. Obviously they are not.

Other businesses do this and survive just fine with community or public services by method of product differentiation. TWC's cable division alone has the ability to provide far more than 81 channels, and more services such as perhaps On Demand that their local municipal competition cannot. They can also upgrade their internet service to DOCSIS 3.0 to attain higher speeds that are more on par... right now TWC is still using DOCSIS 1.1/2.0 unlike some other US cable ISPs.

Product differentiantion by adding 40GB bandwidth caps to their flagship 15/1Mbps tier "turbo" service is an example of what they could also do, if they wished to only make their service less competitive than it already is.


RE: Free Market
By MozeeToby on 4/22/2009 2:53:15 PM , Rating: 5
I'm on Mediacom cable and have a package almost identical to the one being offered by the city: basic cable (with HD and a DVR), unlimited phone, and unlimited 10 mps Internet. My bill each month is $98, including all taxes and fees; again almost identical to what is being charged by the city.

So why does TW need to charge almost 50% more than that? The only reason they get away with it is because they have a government sponsored monopoly is most areas. Get rid of the limits on competition and prices will drop accordingly. Until then, kudos to the city for listening to its citizens and taking matters into their own hands.


RE: Free Market
By MozeeToby on 4/22/2009 2:53:17 PM , Rating: 3
I'm on Mediacom cable and have a package almost identical to the one being offered by the city: basic cable (with HD and a DVR), unlimited phone, and unlimited 10 mps Internet. My bill each month is $98, including all taxes and fees; again almost identical to what is being charged by the city.

So why does TW need to charge almost 50% more than that? The only reason they get away with it is because they have a government sponsored monopoly is most areas. Get rid of the limits on competition and prices will drop accordingly. Until then, kudos to the city for listening to its citizens and taking matters into their own hands.


RE: Free Market
By omnicronx on 4/22/2009 2:56:58 PM , Rating: 5
You speak of 'at cost' as though it is a fixed cost that is the same everyone. At cost for the municipality is going to cost more than it would have been for TW. They have to pay for a bunch of things TW already pays for such as linkage to other networks.

TW should still be able to offer a service for the exact same cost and still make money off it, its just the margins will be too low compared to pretty much anywhere else around the country.

That being said, they would still make a profit. More interesting is this report that was recently unvailed. Rising bandwidth use is a mere fraction of TW total yearly fees. In fact apparently their bandwidth costs are actually lowering even with a 40-50% spike in usage. Of course TW is nowhere to be found to comment.

http://arstechnica.com/tech-policy/news/2009/04/tw...


RE: Free Market
By Yawgm0th on 4/22/2009 3:09:01 PM , Rating: 1
How can we make technological progress if there is no business incentive for telecommunications companies to provide better service? ISPs and telecoms in the US are essentially government-sanctioned monopolies, duopolies, and cartels. There is no incentive to roll out faster, better service unless the competition reduces costs or improves their service. There is either little or no room for competition amongst ISPs, depending on the location.

I'd just assume have a government-run monopoly (which this city's service is not) if it's going to be government-sanctioned and inherently non-competitive.

I think the free market is perfectly capable of getting ISPs to do well and compete with each other, but they aren't. They had their chances.


RE: Free Market
By Carl B on 4/22/2009 4:12:24 PM , Rating: 5
That thinking is completely warped, because across the globe you have some of the most connected countries also being some of the most highly regulated; they create infrastructures that benefit the consumer, and they do so proactively. In this country you have companies fighting tooth and nail to avoid anything that forces them to compete - aka encourage capital expenditures - in lieu of running as much legacy hardware/equipment as possible.

Yes, the cable companies are monopolies, but there is such a thing as "natural" monopolies. Back in the day, it wouldn't have made sense to have multiple companies laying multiples of redundant phone line, cable line, etc. That would be hugely wasteful; real estate and natural resources are still finite quantities after all. As technology has advanced, we've trudged along to the hodge-podge we have today of lobbyists, companies wishing rights to the lines they laid of old, new companies wanting to use said infrastructure, and government frozen between 'free market' talk and consumer advocacy.

Bottom line is, government IMO can be as if not more efficient/effective than private industry in many a sector. Free market advocates aren't around here asking for the FDA to be abolished and the industry to self-regulate after all. That's because when they perceive a real risk that greed might have to their own health and safety, they wake up to reality. The fact is the government is like anything else - it can be good, and it can be bad. But it is not the opposite of free markets (there is no real such thing in a civilized society anyway), and it is not mutually exclusive to them.

This town is providing a superior service to what the market can (seemingly) provide. Am I some idealogue that follows a certain philosophy to the grave, or am I someone that can judge each situation on its own merits?

If this town in NC has performed a good the majority of its citizenry is in favor of and benefits from - and certainly I myself can't see the ill in the effort - then I say kudos. Why does everything have to be a battle between philosophies around here? Why can't it just be as simple as Time Warner vs this town, and we judge *that* situation on its own merits.


RE: Free Market
By BailoutBenny on 4/22/09, Rating: 0
RE: Free Market
By MadMan007 on 4/22/2009 7:17:36 PM , Rating: 3
Funny seeing a reply that is based on theoretical ideology as a reply to a post that said dogged adherance to theoretical ideologies is silly.


RE: Free Market
By BailoutBenny on 4/23/2009 9:20:38 PM , Rating: 2
The reply is meant to address the fallacious thought that the US has a free market. It does not. What is sadly amusing is that many people will acknowledge this explicitly or implicitly yet still say the US has a free market. It is insanely frustrating when people make the statement "The free market failed." They are speaking of an ideology that isn't followed in the US which they know nothing about. The only way to counter it is to explain the theory; but then one just gets labeled an ideologue or worse, an extremist nutjob.

The way the terms capitalism and free market are bandied about with no knowledge of what they actually mean is disheartening. It's like a Catholic telling a Muslim what Islam encompasses. These people have no idea what they are saying and they perpetrate lie after lie. The disinformation is relentless.

I see nothing wrong with adhering to an ideology of personal freedom, personal choice, the sanctity of contracts and well defined personal and property rights. Too many people seem to rely on the government for too much. These people shout that everyone should comply with what they want or what they think is a good idea but the moment some other group out-lobbies them, they turn into free market, limited government advocates. The hypocrisy is appalling.

I'll take the label of being an ideologue. Although used connotatively, it is a very good word. It means I stick to my principles and that my principles are well defined. Disappointingly, not too many other people really care about their own principles. The Austrian school of economics saw the current financial meltdown coming and all the previous ones as well yet still no one listens to the Austrian economists. It is still dogmatic to spend your way out of debt. The real libertarians have been preaching about the steady encroachment of big government on personal liberties for as long as this country has been around. One arrives in 2009 with the Patriot Act, the president about to receive almost unlimited power over "critical infrastructure" with the Cybersecurity Act of 2009, numerous undeclared wars because the president acts as a de facto military dictator, a proposed bill for the children of this country to serve in militarily inspired GIVE Act volunteer organizations, the annihilation of Posse Comitatus, the president unaccountable to the people or congress using the guise of "national security" to classify everything, the view of the constitution as "just a damned piece of paper," etc., etc. What is funny is that every prediction made, every vision of the future preached has sooner or later come true.

So again I will reiterate, it is time to actually allow a free market to exist so that the natural forces of competition can solve this situation. Government intervention obviously didn't and doesn't work so how about removing the government from the equation?


RE: Free Market
By Yawgm0th on 4/22/2009 6:27:27 PM , Rating: 3
quote:
That thinking is completely warped, because across the globe you have some of the most connected countries also being some of the most highly regulated; they create infrastructures that benefit the consumer, and they do so proactively.
I think you misunderstood my post. If you think I'm advocating against government regulation, intervention, or even control of this industry or any industry in particular, then I clearly have misled you. I'm not a communist, but I'm sure not an extremist free-market ideologue, either.
quote:
In this country you have companies fighting tooth and nail to avoid anything that forces them to compete - aka encourage capital expenditures - in lieu of running as much legacy hardware/equipment as possible.
That is exactly my point -- we have de facto monopolies because ISPs do everything they can to avoid having to compete. They do this through lobbying, legislation, and exclusivity deals with local and state governments -- and cartel-like behavior.

Even having to have different companies lay different lines (which is what fiber ISPs are doing now -- laying different lines than cable and phone companies) there is still return on investment for those lines. However, the other ISPs lose out when another one offers a similar service. So, they get aforementioned exclusivity deals so that only they can provide a certain type of line or service -- alternatively, they behave in the cartel like practices by getting other ISPs to stay out of their area.

I'm not saying that the free market hasn't failed in this sector -- it clearly has. I am saying it can succeed, but I won't deny that in many situations it makes more sense for the government to just handle it in the first place. I prefer that over the status quo of government-mandated monopolies, duopolies, and cartels. We already have government-mandated monopolies with the major utilities, and those would frequently be better off run by the government.

quote:
This town is providing a superior service to what the market can (seemingly) provide. Am I some idealogue that follows a certain philosophy to the grave, or am I someone that can judge each situation on its own merits?
I'm with you here. If the free market makes sense, that’s great. If it doesn't, that's good, too. I’ve always advocated for what makes sense economically – I don’t think ideology should have anything to do with it. I think the municipal government has done an excellent job in this case – hopefully ISPs will change their behavior or other local governments will take after this one.


RE: Free Market
By BailoutBenny on 4/22/2009 6:34:05 PM , Rating: 2
Just what are you saying. On one hand you seem to argue for free markets and against government intervention. On the other you seem to think the free market has failed, but you have already made the point that the market wasn't free to begin with. Either you are for competition and a free market or against competition and for government enforced monopolies.


RE: Free Market
By MadMan007 on 4/22/2009 7:19:55 PM , Rating: 3
So it's all black and white eh? You must enjoy TV shows from the 50s :)


RE: Free Market
By Eri Hyva on 4/22/2009 7:26:48 PM , Rating: 2
The US is B&W, rest of the world see things more in grayish tones.

Your belief system put us all down. I blame it on you.

Could you please try to concentrate on believing on Sundays in your churches? Please? Not during weekdays in the government and banks.

Before we all are bankrupt.


RE: Free Market
By RandallMoore on 4/22/2009 10:10:24 PM , Rating: 2
Is that post some sort of bad joke or are you really that big of a troll?


RE: Free Market
By Oregonian2 on 4/24/2009 1:02:04 AM , Rating: 2
Yup, Monday through Friday at 12 noon, Perry Mason is on a local channel and has been for more than 40 years I think (continuously). Episodes repeat at most about once per year.

Quite excellent (even on a 58" 1080p Plasma!).

:-)


RE: Free Market
By Yawgm0th on 4/23/2009 12:41:37 PM , Rating: 2
quote:
Just what are you saying. On one hand you seem to argue for free markets and against government intervention. On the other you seem to think the free market has failed, but you have already made the point that the market wasn't free to begin with.
The ISP market isn't free because the government didn't prevent and in many cases aided the monopolization of the market. But even before the government-mandated monopolies of today, telcos and ISPs found themselves working their way into monopolies and cartels. Read up on the history of what we now call AT&T for an understanding of what I'm referring to.

quote:
Either you are for competition and a free market or against competition and for government enforced monopolies.
This thinking exactly what I'm arguing against. I'm for the free market when it works and I'm for government intervention when it works. I don't have to pick a side. In the case of ISPs the government in general is intervening poorly and the free market is doing poorly. This particular municipal government has found an effective way to intervene.


RE: Free Market
By BailoutBenny on 4/23/2009 9:39:04 PM , Rating: 2
Again you fail to understand how the free market works. I know the history of Ma Bell very well and YOU need to read up on the history of utilities in this country in order to understand the regulations and circumstances which allowed Ma Bell to become a government sanctioned monopoly in 1913 overseen by the FCC. Every monopoly can ONLY exist with government backing. They cannot exist in a free market.

I understand that many people do not have the time to do the research required to follow the money. Also, the history of legislation in this country is very complex and vague. It is purposely done that way. Take financial regulation for instance. It would be stupid to think, although many do because the media makes the claim all the time, that one provision in the Gramm Leach Bliley act repealing one provision in the Glass Steagall act caused the entire mess we see today in the financial sector of the US. Rather it was a buildup of complex and questionable regulations followed by nonsense economics that caused the problem. The same with regulating utilities. You cannot cover all the bases at once with regulation without being totalitarian. The people don't want a totalitarian regime either. So we have pathwork of regulations, some contradictory and many others unknown or misunderstood and state granted monopolies that do not work.


RE: Free Market
By inperfectdarkness on 4/22/2009 4:56:24 PM , Rating: 2
the community is running a CO-OP. thus, a legitimate business. epic fail on your part.


RE: Free Market
By foolsgambit11 on 4/22/2009 8:16:44 PM , Rating: 3
UPS and FedEx both get along just fine. Waste Management seems to be doing well by contracting to provide a service for communities at a profit. Besides, government is supposed to be so inefficient, shouldn't the private sector be much better at providing these services?

Of course, the fallacy with that is that these communications packages aren't offered in a free-market system normally. Comcast isn't used to having to compete, and if they reduce their prices in this town to compete, the public outcry would force them to offer the same prices everywhere. That's what they're afraid of. Losing their long-cherished local monopoly.


RE: Free Market
By Jellodyne on 4/27/2009 11:59:13 AM , Rating: 2
How about the private companies that could own and operate the roads and the sewers, and they can't because local government insists on selling the service at cost. Terrible!


RE: Free Market
By FITCamaro on 4/22/2009 2:56:16 PM , Rating: 2
This is against capitalism. Not an example of it.

In capitalism, the government doesn't do anything to stop competition to businesses from springing up. It is here. And Time Warner and Embarq is pushing for them to do more.


RE: Free Market
By jconan on 4/22/2009 9:24:35 PM , Rating: 2
that's called corrupt politics or politicians being bought by lobbyist or special interest groups... isn't there a law in washington banning this kind of activity?


RE: Free Market
By atlmann10 on 4/24/2009 3:49:16 PM , Rating: 2
This is the definition of a politician, pay close attention to point 2 and 6 for what a politician does. We let flying carpet salesman run our country. They are controlled by money whether it is companies that Lobby(pay) them or wealthy individuals who lobby(pay them to accomplish something for themselves or their organization. You pay them to do so! Both the Republican party and the Democratic party do it equally, and they run our country.

1. a person who is active in party politics.
2. a seeker or holder of public office, who is more concerned about winning favor or retaining power than about maintaining principles.
3. a person who holds a political office.
4. a person skilled in political government or administration; statesman or stateswoman.
5. an expert in politics or political government.
6. a person who seeks to gain power or advancement within an organization in ways that are generally disapproved.


RE: Free Market
By Avitar on 4/30/2009 5:42:40 PM , Rating: 2
Time Magazine was set up in New York to help control the image of the New York Governor FDR and to promote his leftist agenda. Ever since the corporation has carried water for the liberal establishment and in turn has received access and preferencial treatment.

The broadband portion of the Stimulus Bill is not to generally improve network access the country but to subsidize the cherry picking of profitable markets to distroy independent network service startups.

Ronald Reagan threw the Internet open to comercial development. It had gone only baby steps from its development in 1969 until IPV 4. If the WWW had not gone online in September of 1992 five months before Clinton took office the establishment effert to control the Internet might have still have us with the limited network activities shown in the movie Hackers.

Thank You for our shot at freedom World Wide Web Consortium!


RE: Free Market
By Proteusza on 4/22/2009 9:35:20 AM , Rating: 4
Exactly - there is no "free market" in America, its an oligarchy. Same thing with the banks - they made stupid financial decisions, and in the spirit of capitalism should have gone down. But no, its not right for them to fail, lets get the taxpayers to help them out. But heaven help you if you, a taxpayer, come short in your house repayments, it will be yanked from you faster than you can blink.


RE: Free Market
By torahtrance on 4/23/2009 11:43:41 AM , Rating: 2
This is a good point to inject what I have to say:
Being someone from Canada, who now lives in Israel, I must say the US is very very corrupt and just the policies there are not really good for the people.

From being outside your position as Americans...to watch you guys talk back and forth about capitalism and communism, free markets etc... Its a huge joke. The system you guys are taught is disgustingly horrible - it breeds selfish "ME!" mentalities.

The truth is, and I'm sad but sure no one will agree: America is beyond fixing, it has to fail now. The system is too corrupt and too convoluted to be saved.

BTW I have plenty of American colleagues, and most of them have this chip on their shoulders, thinking they are better then everyone else. It is very sad, since they are mostly just arrogant and think the world is 'below' them. (Yes I know many Americans who are smart and don't fit in this catagory.

To sum it up, this whole story just shows you the truth. America is totally not what it was, and has reached corruption to epic proportions. How can America, the country of wealth be soooo behind in technology for its citizens?? Because It is held back by its system. Lets not nitpick it.


RE: Free Market
By Yawgm0th on 4/23/2009 12:57:14 PM , Rating: 2
quote:
Being someone from Canada, who now lives in Israel, I must say the US is very very corrupt
I think the irony of this statement must be lost on you.
quote:
From being outside your position as Americans...to watch you guys talk back and forth about capitalism and communism, free markets etc... Its a huge joke. The system you guys are taught is disgustingly horrible - it breeds selfish "ME!" mentalities.
Any economic ideology breeds this mentality. Economics, on any scale, are always about "me". You're kidding yourself if you think other countries are any different on this level.

quote:
The truth is, and I'm sad but sure no one will agree: America is beyond fixing, it has to fail now. The system is too corrupt and too convoluted to be saved.
Again, with Israel and Canada as the points of comparison, this is a pretty tough point to sell.

quote:
BTW I have plenty of American colleagues, and most of them have this chip on their shoulders, thinking they are better then everyone else. It is very sad, since they are mostly just arrogant and think the world is 'below' them. (Yes I know many Americans who are smart and don't fit in this catagory.
I actually haven't spoken to many Canadians who aren't major nationalists that think the Canadian Way of Doing Things isn't vastly superior. Do you really think a national superiority complex is an intrinsically American trait? Even poor countries' denizens have it.

quote:

To sum it up, this whole story just shows you the truth. America is totally not what it was, and has reached corruption to epic proportions.
Please. Your native country recently had a monarch's appointee throw a wrench in major legislation. Don't lecture us on corruption. We can at least claim to be a republic.

quote:
How can America, the country of wealth be soooo behind in technology for its citizens?? Because It is held back by its system. Lets not nitpick it.
I actually don't disagree with this statement -- except nitpicking it is the only way to fix it. We need to criticize the system and come up with solutions.


RE: Free Market
By Moishe on 4/22/2009 11:19:30 AM , Rating: 5
quote:
Local provider Embarq still defends its decision, saying it has the right to make money (which it argues Greenlight Inc. does not). The company's spokesperson states, "We would love to deploy DSL everywhere. We try to make smart financial decisions not only for shareholders but customers. In the very rural areas, sometimes it would take two, three or more years to even pay for the investment ."


OMG... what a bunch of whiney-@$$ babies. 2-3 years? wow... what a horrid time to wait for the cash to flow! Freakin' babies.

The government has no business stopping citizens from banding together to provide a service at a reasonable price. The reason TW/Embarq didn't respond to the previous request for better broadband was because they thought they were in the position of power and would have the final say.

I hope this kind of end-run around business happens more often and teaches the companies that they have to play ball with the consumer.


RE: Free Market
By MadMan007 on 4/22/2009 12:54:58 PM , Rating: 5
The bolded words jumped out at me as well. 2 to 3 years is nothing but there is way too much focus on 'now now now' short-term profits. Got to keep those quarterly numbers up and growing all the time every time. That despite the fact that there is nothing about the companies that is actually growing so they can only decrease costs or increase prices. Costs have been decreasing with cheaper technology and cheaper bandwidth costs for the providers but that's not enough so they have to increase prices as well.

Broadband [i]needs[/i] to be seen as a utility with low but consistent profits delivering a commodity and not as a high growth industry. The dot.com bubble era is long gone. Municipal broadband is probably the best way to advance broadband in the US because it's clear the existing telcos aren't interested. http://www.lus.org


RE: Free Market
By mmcdonalataocdotgov on 4/22/09, Rating: 0
RE: Free Market
By RandomUsername3463 on 4/22/2009 11:43:53 AM , Rating: 5
Yeah it's a good thing the government doesn't interfere with other utilities...oh wait, the DO!

Taken from the NC Utilities Commission Home Page: "the Commission regulates electric, telephone (including payphone service and shared tenant service), natural gas, water, wastewater, water resale, household goods transportation, busses, brokers, and ferryboats."

Most people agree that an internet connection is becoming more of a necessity, or utility, than a luxury. If corporations aren't getting the job done, I have no problem with the local government stepping in to help.


RE: Free Market
By dxf2891 on 4/22/2009 3:22:52 PM , Rating: 4
So are you saying that if the municipality charged an additional $5 a month to generate a profit and say after a few years started to offer free hot-spots around town, that this would be okay? The reason government doesn't compete is because usually its corporate counterpart offers a cheaper, better service than it can. In this instance, TW's and Embarq's greed are preventing them from doing so. "If they can't stand the heat, it's time to get out of the kitchen." Maybe some of these struggling municipalities in this country can take this model and run with it. One of two things will happen. The tel-comm companies will either lower their prices and raise their service, or they'll go out of business.


RE: Free Market
By Murloc on 4/22/09, Rating: 0
RE: Free Market
By BailoutBenny on 4/22/2009 5:55:18 PM , Rating: 2
No corporate fascism sponsored by corrupt politicians did. The lack of resistance from the population only emboldened them.


RE: Free Market
By LoweredExpectations on 4/23/2009 12:57:06 AM , Rating: 2
Exactly! Politicians, those who determine what is and isn't legal, don't represent the people, they represent those with money. Free markets require strict regulation to be truly serve the greater good rather than benefitting the few. In an economy where money always gets what it wants, the little guy always gets screwed. Unregulated free markets inevitably lead to monopolies that gouge the consumer and stiffle competition.

In a political system where laws are made by elected politicians, the control of information is where the true battles are fought. Unfortunately, a democratic system necessarily gives rise to lies and spin - anything to convince the voter to support a candidate whose true motives and character are nowhere to be seen in an election.


RE: Free Market
By BailoutBenny on 4/23/2009 9:50:42 PM , Rating: 2
Regulations cause the problems, they are not the solutions. Companies lobby for or against regulations. These regulations are usually written by said companies or their competitors, sometimes with the input of both. These regulations restrict companies from entering the market because they usually induce very high entry and startup costs. This restriction reduces competition. Since the companies that were large already when the regulations were created can afford these costs, they stick around and market share is divvied up amongst them. This allows them to manipulate prices to further prevent new competition in the market. And the cycle continues with more regulation further restricting the market and who is able to enter into it, companies growing even larger because of the reduction in competition until finally you get into a situation like today where the fatcats get fat and stay fat and the only loser is the consumer. Take away the regulations and you have a system where anyone can compete, driving prices down and increasing quality because that's how you win customers.


RE: Free Market
By LoweredExpectations on 4/25/2009 4:26:18 PM , Rating: 2
Remove all regulation and money and power inevitably become concentrated in fewer and fewer hands that act with greater and greater impunity. Anti-monopoly laws were passed based on the experience of what unregulated markets lead to. (Even fiscal conservatives now agree that the finacial markets need to be re-regulated.) There is no free (much less 'fair') market without strict regulation; but your point is well taken: regulation has to be drawn up with the greater good in mind, not written by bought-and-paid-for politicians so as to benefit those with the deepest pockets. Health insurance in many European contries, for instance, is mandated not-for-profit and the result is that far less money is squandered on what is euphemistically called "administrative" costs, and the insurance providers have far less say in who gets what treatment.


RE: Free Market
By BailoutBenny on 4/30/2009 11:07:47 AM , Rating: 2
Again I will disagree with you here. Anti-monopoly laws were lobbied for by the monopolistic entities around at the time they were written. Though on the surface they appear to harm the monopolies, they actually help them. I suggest you read up on a site like http://www.mises.org or if you would like some suggested authors I would say F.A. Hayek, who won the Nobel Prize for proving that government intervention hinders a economy, Murray Rothbard, whose historical knowledge of regulation in this country is unsurpassed by anyone else I have ever read, or contemporary authors like Hans Hoppe and Robert Higgs.

Here are a few more links to help show you how the government stifles competition and helps monopolies:

http://www.quebecoislibre.org/000219-13.htm

http://www.campaignforliberty.com/blog.php?view=15...

http://mises.org/rothbard/mes/chap10a.asp


RE: Free Market
By BailoutBenny on 4/30/2009 11:21:48 AM , Rating: 2
Healthcare in European countries is nothing to be jealous over by people living in the US. It is administratively inefficient, not as technically advanced, more physically intrusive, less personal, and subject to violent political struggles.

Instead of insurance companies determining who gets what treatment, the government gets that honor. For example, Britain was debating whether to deny or deprioritize health treatments for the elderly since it could be considered wasteful(implying "So what, they are almost dead?"). Here in the US at least, the elderly can still pay to get treatment, even if it is what others would consider "a waste."

There is no "fair" market with strict regulation or in general. There is a much higher likelihood of your so called "fair" market if the free market is left untampered with. Money and power will concentrate to a degree, but when the population at large controls the survival of a company because it directs the flow of capital, and not the goons in Washington DC, then you have a higher likelihood of a market that benefits both the consumer and the business. Since it is impossible to guarantee that all regulation will not be written by corrupt politicians and that all regulation will always benefit everyone then why not just deregulate?

Whatever so called current "fiscal conservatives" say, and I am going to assume you mean fiscal conservatives of the Bush/Limbaugh type, is meaningless because at their core they are really for corporate fascism, which requires extensive regulation.

If you mean fiscal conservatives of the Ron Paul/Chuck Baldwin type then they are vehemently against any and all regulations.


Similiar town in Ohio
By KentState on 4/22/2009 9:46:47 AM , Rating: 1
The city of Lebanon had a similar approach. They built their own service for internet, cable, and phone and offered it along side Time Warner. The biggest difference was that TW lowered to prices to compete. Just like this article stated, I got everything for under $100/month which was cheaper than the surrounding communities.

The other thing to consider is that the city is running at cost with is anti-competitive. How can any business compete with the government if the aren't taking a profit.

It should also be pointed out that the $28M came from somewhere to fund this. More than likely, the income tax will go to pay it. Yeah, everyone gets a great deal on services, but they are paying for it over the next X amount of years plus interest. Going back to the town I lived in, we spent around $15M, and now the debt is still on the books.




RE: Similiar town in Ohio
By JasonMick (blog) on 4/22/2009 9:55:33 AM , Rating: 5
quote:
The other thing to consider is that the city is running at cost with is anti-competitive. How can any business compete with the government if the aren't taking a profit.


So you're basically saying citizens should enjoy a lower quality of living so someone not in the community can profit off them?

Obviously the citizens are shouldering the cost of the networks, so this is an example of small scale socialism (probably the smartest kind of socialism because it doesnt get mucked up by big gov't). And before you blast, think about this -- if the citizens don't want to buy the service, they don't have to buy it. If the quality drops, due to it being gov't-run, TWC and Embarq will score new business. But if it can deliver high quality service at the lowest cost to area's citzens, how is that anticompetitive or unfair?? Isn't competition seeing who can give the best for the least or at least convince customers to jump aboard?


RE: Similiar town in Ohio
By Bender 123 on 4/22/2009 10:13:21 AM , Rating: 4
This type of thing is exactly what I have been thinking for years...

Like water/sewer/garbage pickup/electricity, internet service is becoming a utility. It is almost needed on a day to day basis for any working adult or school age child. I am all for free market, but the free market has stalled and is unwilling/unable to expand and provide competitive service. Due to cable and local phone franchising, they have no reason to compete.

Hooray for a town which gets it...


RE: Similiar town in Ohio
By jcbond on 4/22/2009 10:25:13 AM , Rating: 1
I think the point is this:
The entire town is forced to subsidize the service. Whether they use it or not.
Also, "utilities" don't need to be monopolies.
My uses a private company for trash pickup. They usually bid out the service periodically. Residents pay the service directly. With a setup like this and a few competing companies, we can save quite a bit of money vs. just having the city do it.
What if the city had a bond issue to install the physical network and then allowed multiple companies to access the physical plant and provide uplinks to their services - content, internet, etc.? You could probably set up billing or something to cover an appropriate share of maintenance.


RE: Similiar town in Ohio
By DigitalFreak on 4/22/2009 10:34:16 AM , Rating: 4
If you read the FAQ on their site, they sold bonds to cover the cost of the build-out. They are repaying those bonds with the money they get from the subscribers to the service.

In the end, this is no different from someone setting up a non-profit company and doing the exact same thing (aside from getting a loan instead of selling bonds).


RE: Similiar town in Ohio
By Fritzr on 4/22/2009 12:08:01 PM , Rating: 2
A private non-profit is allowed to sell bonds for financing. No loans needed. I know of a square dance hall that was paid for by bonds purchased by the square dancers. Everyone gained. The dancers got a very large high quality dance floor and the people who bought the bonds got a nice return on their investment paid by the rental fees charged to dance clubs.


RE: Similiar town in Ohio
By Slim934 on 4/22/09, Rating: -1
RE: Similiar town in Ohio
By Starcub on 4/22/2009 8:20:01 PM , Rating: 2
This is what happens when businesses lose focus on their customers. The purpose of business isn't simply to make a profit, but to serve their customers. In a free market customers are free to do whatever they want with their money. It's your job as a business person to make a compelling case to sell your product.

It just so happens that we all operate (theoretically at least) under a democratic form of government. Your prospective customers are also citizens. Both your right as a business to market your goods, and the governments right to exercise it's authority for the general welfare, are dervived from the same source: the people.

If the people decide that they want the governement to provide a particular service for them, then as a business you have no right to tell them they can't. However, you do have the right to provide an alternative provided that you can convince the people that your alternative is prefferable. In this, the market has failed, and the people are taking corrective action themselves.


RE: Similiar town in Ohio
By Elementalism on 4/23/2009 10:05:09 AM , Rating: 2
6 years ago I had a 1.5Mbps cable line. Today it is 10Mbps and rising. In 6 years I have need a 6 fold increase in bandwidth. That is stalling in your book?


RE: Similiar town in Ohio
By 13Gigatons on 4/23/2009 11:45:15 PM , Rating: 2
Seems pretty good but most countries have move forward with next gen broadband between 100 and 1000 megabits.

America is becoming the third world country compared with Asia and Europe.


RE: Similiar town in Ohio
By Hieyeck on 4/28/2009 1:21:08 AM , Rating: 1
6 years ago, China was on 56kbps dial-up.
Now they're deploying FTTH at 100mbps.

In 6 years, they got a ~1785 fold increase in bandwidth.

Damn skippy we're stalling. Those commies have a more open market than we do.

Oh, and bullshit about infrastructure. Wiki up DOCSIS 3.0 - same old cable infrastructure, massive speed increases. While you're at it, look up Dark Fiber as well.


RE: Similiar town in Ohio
By jcbond on 4/22/2009 10:14:35 AM , Rating: 2
I believe that his point was that the citizens of the city were paying a significantly higher price than just the published price.


RE: Similiar town in Ohio
By omnicronx on 4/22/2009 11:19:51 AM , Rating: 2
How do you figure? They are paying back the debt with service fees, which are lower than that of TW. Even in his case (although this is not how this town did it) you still pay income tax anyways, i.e the exact same amount of money would have been taken from your pocket regardless.

The only reason the citizens will end up paying more is if the service should fail.


RE: Similiar town in Ohio
By KentState on 4/22/09, Rating: 0
RE: Similiar town in Ohio
By Yawgm0th on 4/22/2009 3:23:46 PM , Rating: 5
No, you're not getting it. The service fee pays for the cost of the network. The city probably didn't have $28M sitting in the bank to burn on a massive infrastructure project. I'd imagine it was paid for with loans, which will be paid off by the service fee. The operating costs of that network (as good as it is) aren't close to $100/site/month. At 3,000 users, they are looking at $3.6 million/year (more since it's tiered), which will certainly go up since it is such a good service.

They'll easily pull in $50 to $100 million over the next decade, which should cover operational costs, the initial investment, and the upgrades they'll want to do at that point in time (ten years from now 10mbps up/down will be like 1.5m DSL is today).

No, taxes don't come into play.


RE: Similiar town in Ohio
By metasin on 4/22/2009 12:30:24 PM , Rating: 2
quote:
if the citizens don't want to buy the service, they don't have to buy it


Technically they all are paying for it through taxes or some other fee. Governments can only take money from others. This issue is very misleading. It is not "Free Market" vs. small scale socialism. What you have is a sector distorted by government interference in the first place. If all companies were permitted to compete the quality of the services would certainly go up and the costs come down. There would be no need for a government option. Happens in just about every market sector where there is decent competition.
I have no principled disagreement with a local government supplying a service. I just believe that if left to true competition on an OPEN market there would be no way a public venture could compete and the populace would likely not tolerate the increase in taxes or fees paid by everyone to maintain the service.


RE: Similiar town in Ohio
By MadMan007 on 4/22/2009 1:21:07 PM , Rating: 2
Just speculating a little here but there may be one issue with trying to make telecom 'free market' and that is the time terms of the monopolies which companies are granted. Even a short 5 or 10 year term is ages in the technology world. Think about it, 10 years ago the Internet was just coming on strong to now when it's become an integral part of many people's and businesses daily operations. Now what if those terms are for more than 10 years, maybe 20 or more? If those monopoly grants cannot be altered, broken, or renegotiated all that happens is the provider companies will drag their feet until they are forced to do something. In other words, I'm not supporting or disputing free market ideas but rather wondering if it's possible to suddenly introduce a free market considering the legacy of telecoms. That's not to mention barriers to entry for new companies.


RE: Similiar town in Ohio
By metasin on 4/22/2009 1:39:26 PM , Rating: 3
Very good points. However if the contracts are to be honored explicitly then the local public entity in this case should not be permitted either. This would just be unfair entry into the market based on the contracts.

My problem is with the government creating non-competitive contracts then screaming "see the free market does not work."


RE: Similiar town in Ohio
By MadMan007 on 4/22/2009 2:17:02 PM , Rating: 2
Yeah that is a problem. I wrote this elsewhere: the telecoms would say that without such contracts rolling out the infrastructure and services would not have been done because there wouldn't have been enough profit motive.

That's one thing that I wonder when reading about Austrian economics and places like mises.org. One assumption is that capital will naturally be deployed in the best way in a free market which sounds fair enough until you consider low profit/low return necessity services. By that assumption those will end up undercapitalized if there's a better return elsewhere, I know the theory is that supply and demand will perfectly balance it out but that doesn't seem to be the way it works in the real world (in general, not wrt just this topic.) I think at some point that's where government, preferably the lowest level one possible, can step in.


RE: Similiar town in Ohio
By superunknown98 on 4/22/2009 2:25:30 PM , Rating: 3
quote:
Governments can only take money from others.


While most of your local government's revenue comes from taxes, it is not there only source. Where do you think the money goes after thjey collect it? A CD or some sort of interest bearing account. Does you town provide daycare to citizens for a price?

In fact that is a good example. do you think all the other day care centers lobbied the state becasue local govenment is also running a daycare at reduced price?


RE: Similiar town in Ohio
By Yawgm0th on 4/23/2009 12:45:30 PM , Rating: 2
quote:
Technically they all are paying for it through taxes or some other fee.
No. See my post that currently appears above yours. They will have to reduce the service fee to not profit on it. Currently it will more than pay for itself in five to ten years -- less if it gets the kind of adoption rate it ought to.

quote:
There would be no need for a government option. Happens in just about every market sector where there is decent competition.
Agreed, but there is almost no competition with ISPs.


RE: Similiar town in Ohio
By BailoutBenny on 4/22/2009 5:58:10 PM , Rating: 2
Except all citizens subsidize the service, regardless of want or need. Just like public school, garbage collection, other utilities, etc. If the service starts to suck, they have to pay double, the tax subsidy for the service and also for a private company to provide the service.


Let me get this straight...
By Motoman on 4/22/2009 9:55:36 AM , Rating: 4
...a municipality decides to invest public dollars into a public project that provides a wonderful benefit to the public...

...and private companies are poised to get the state government to make that illegal?

This illustrates not only the evil inherent in companies like these, but also the corruption present in modern governments. What in the hell could ANY elected official use as an excuse to support a bill that unabashedly sacrifices the good of the people for the coffers of 2 private-sector companies?

If that bill gets passed, I encourage all of NC to rise up and secede from your state. Or, just riot uncontrollably and burn things. Whichever.




RE: Let me get this straight...
By SignoR on 4/22/2009 10:43:30 AM , Rating: 4
quote:
What in the hell could ANY elected official use as an excuse to support a bill that unabashedly sacrifices the good of the people for the coffers of 2 private-sector companies?


Campaign financing... But I feel that wouldn't go over well with the public.


RE: Let me get this straight...
By Motoman on 4/22/2009 10:57:53 AM , Rating: 2
...and what, would you guess, is the chance that the public would re-elect those officials in their next campaign anyway?


RE: Let me get this straight...
By metasin on 4/22/2009 1:12:39 PM , Rating: 4
If the government did not have any influence on the specific market there would be no need for the "evil" companies to lobby for special treatment or favors.


RE: Let me get this straight...
By MadMan007 on 4/22/2009 1:28:43 PM , Rating: 2
But the companies supposedly wouldn't have been able to rollout services at all in the first place without the monopolies they were granted. Round and round we go...


RE: Let me get this straight...
By FITCamaro on 4/22/2009 3:56:33 PM , Rating: 2
Sure they would have. Maybe not as quickly, but someone eventually would have. Because where this is profit to be made, there is a company looking to exploit it. And once there's one, when the market is allowed to thrive without interference, there will be others looking to take their customers away and make a profit themselves.


RE: Let me get this straight...
By Uncle on 4/22/2009 1:58:37 PM , Rating: 2
Would it really matter, some officials are in it for the benefits promised after their booted out.


Summing up the Lobbyist's argument...
By WoWCow on 4/22/2009 9:20:21 AM , Rating: 4
quote:
"We would love to deploy DSL everywhere. We try to make smart financial decisions not only for shareholders but customers. In the very rural areas, sometimes it would take two, three or more years to even pay for the investment."


Fail: Openly admitting you can't and will not provide service until a competition beats you to it. Then lobbying the lawmakers to make it your way *COUGH* Monopoly?.

Honestly, if there were more initiatives on local government rather than state/federal progression people will be seeing immediate improvements in their lives. And shame on the state government for even considering to reduce the quality of life people are enjoying.




RE: Summing up the Lobbyist's argument...
By Ryanman on 4/22/2009 9:33:52 AM , Rating: 4
We started the ball rolling with government sponsored monopolies. It's why Japan has 100mbs service and my family is still spending $150 on 5mb/s service and cable. My upstream is 25 kb/s.

We went through the same thing with phone lines. When is government going to allow the free market to take care of itself? I'm TIRED of paying just because there's no competition.
It's a vicious cycle where we're giving telcom companies huge amounts of money. Enough money to lobby and keep their position. It needs to stop.


By JasonMick (blog) on 4/22/2009 9:44:20 AM , Rating: 1
Welcome to the U.S. of the twenty-first century.

While some branches of the market are free, the U.S. is a wild hodgepodge of business. Some sectors are government controlled or approaching gov't control (i.e. socialist leaning) and others are "capitalist" in that they're a monopoly or small group of elite companies that have lobbied the government for special rights (oil, telecoms, etc.). And the citizens suffer.

The U.S. is far from a free market, sadly. There's way to many special privileges which big businesses using to squelch competition.

And before anyone goes and makes this into a partisan issue, people from both parties are equally to blame for this. I guess the only real option is try to educate the public that this kind of stuff is happening.


RE: Summing up the Lobbyist's argument...
By nayy on 4/22/2009 10:19:20 AM , Rating: 5
One the reasonable side of the argument, it is a lot cheaper to deploy networks over a small and densely populated country like Japan (127 million people in an are twice that of California).

Now the real reason is greed, the big ISP have effectively created an oligopoly by geographically dividing the country, that is way in many places you only have one choice for broadband, allowing them to charge whatever they want.

A three year payback on an investment is a pretty good deal, and it allows you to renew your infrastructure every 4 to 5 year which would make a lot of difference in the service provided.

Strategically speaking they turned internet services in to a cash cow (low growth, low investment, high margin) and they are just milking it. I bet that their staff meetings are a lot like does DirectTV commercials


By MadMan007 on 4/22/2009 7:25:10 PM , Rating: 2
And yet equally dense locales in the US don't have similar service yet. Hmm...


By Ryanman on 4/23/2009 9:27:20 AM , Rating: 2
As Madman said, similarly dense population centers have no such service.
And laying down this cable in open space can't be that much more expensive if you think about it. Sure, there's some digging involved, but the cable itself is relatively cheap. I would assume that in superdense urban areas, getting the permits and paying a social engineer to design your cabling layout would get close to outstripping the cost of just running a straight line a couple miles from a routing center.

ISP's continue to whine about hard it is to wire America. But I just don't see where their cost figures are coming from.


Help me with the math please
By CatfishKhan on 4/22/2009 11:30:05 AM , Rating: 2
"So the city launched an ambitious $28M USD program to deliver these services basically at cost..."

"For example, the city offers an expanded basic cable (81 channels), 10 Mbps (download and upload), and a digital phone plan with unlimited long distance to the U.S. and Canada, all for $99.95."

"After less than a year of residential service, almost 3,000 Wilson citizens are subscribing to Wilson’s fiber optic network"

28 million / 3000 customers = $9,3333 per customer

Is this supposed to be at cost after the 28 million initial investment or are they planning on getting that initial investment back and after how much time?




RE: Help me with the math please
By Slim934 on 4/22/2009 12:07:16 PM , Rating: 2
Frederic Bastiat said it best.

A good economist sees the seen and unseen.


By ZachDontScare on 4/22/2009 2:27:10 PM , Rating: 2
A Bastiat reference? Thats something you dont see every day :-)


RE: Help me with the math please
By Fritzr on 4/22/2009 12:21:24 PM , Rating: 2
28,000,000/36(3yr)/3000=$259.56

So to recover their investment capital over a 3yr period, assuming NO one else signs up they need $259.56 per month per subsciber.

Assuming there will be no new subscibers is a ridiculous assumption especially when the media fight over banning the service gets going good :)

Double the number of subscribers to 6000 and the cost per subscriber drops to approx $130 per month to repay the capital. If it reaches 12000 subscibers then the cost drops to $65 a month.

The interest will stretch out the repayment period and operating costs will eat up some of the subscription revenues, but it won't be long before the subscriber base is paying 100% of the monthly expenses.


RE: Help me with the math please
By gucio69 on 4/22/2009 12:57:52 PM , Rating: 2
quote:
Double the number of subscribers to 6000 and the cost per subscriber drops to approx $130 per month to repay the capital. If it reaches 12000 subscibers then the cost drops to $65 a month.


Rather hard to do in a town of 4000.


RE: Help me with the math please
By metasin on 4/22/2009 1:17:06 PM , Rating: 2
And if the town were larger the initial investment would certainly be greater.


RE: Help me with the math please
By RandallMoore on 4/22/2009 1:45:43 PM , Rating: 2
quote:
Rather hard to do in a town of 4000.


Yeah it is. Especially when you speak before knowing the facts. The city of Wilson, North Carolina has over 50,000 residents.


RE: Help me with the math please
By gucio69 on 4/22/2009 6:07:25 PM , Rating: 2
quote:
Yeah it is. Especially when you speak before knowing the facts. The city of Wilson, North Carolina has over 50,000 residents.


Lol, you got me there. I was going off what was in the article which seems to have been corrected now. But a good way to make an a** off of myself none the less.


By RandallMoore on 4/22/2009 8:13:52 PM , Rating: 2
haha, my apologies for being so blunt if the article had an error. I didn't notice that it did. But yeah, that's pretty funny


By callmeroy on 4/22/2009 9:27:03 AM , Rating: 2
This article reads as perfect example how governments attribute to empowering monopolies, which in turn, effectively attributes to wasteful spending and increase costs to the consumer. Just one example of many of how governments (in this case a state government, but certainly our federal government as well) are more often the PROBLEM and not the SOLUTION.....yet they keep crying for more money and come election season they whine about how poor the state and/or country is right now... Well gee guys....um....DUH!




By callmeroy on 4/22/2009 9:30:34 AM , Rating: 2
Oh forgot to mention, btw Embarq -- they are horrible. We support clients across the nation and some of them have Embarq as the provider....their support is the only thing that is more pathetic than their reliability.


By StevoLincolnite on 4/22/2009 10:55:49 AM , Rating: 2
Here our Government created a Telecommunications provider, which owned our entire country's copper/POTS network, and DSLAMS which house ADSL equipment, they then privatized the company, and the end result? High Prices, Poor service, Small download limits.

However the government not wanting a monopoly in the country decided to channel Billions upon Billions of dollars into the second largest Telecommunications provider, which was to stimulate competition, that failed.

They then decided to create another 3rd party company to start rolling our Satalite and Wireless networks across the country, which failed as well with little take-up and billions wasted.

The solution? Create a 3rd company that is government owned, shove 50 Billion dollars at it, and set a goal to provide 90% of the country with 100mbps symmetrical Fiber internet, and the remaining 10% get stuck with Satellite/Wireless with 10mbps speeds.

A better way for all this to occur at less expense of our country's tax payers was simply to make the Monopoly Telecommunications provider separated, in that the Broadband and Phone Lines are separate entity's, creating more competition, such instances have worked over seas rather well.

The government just tries to do things that will make people happy, usually it only makes people who have very little knowledge of the current state of play happy, but in the end, it ends up in a miss half the time. (Not all the time).


By Jellodyne on 4/27/2009 5:59:38 PM , Rating: 2
The problem with the Cable Company and the Phone Company is they have a near monopoly over access to the home which means free market economics don't work. Internet access is too important to allow one or two companies to monopolize the infrastructure.

The solution is not for the city to estabish is own closed cable internet and phone franchise and force out free enterprise, though that may be more favorable than the city granting TWC a monoply fiefdom through back room dealings.

The solution is that the city (ie the people) own the infrastructure (in this case the fiber to the curb) and allow any number of third parties to connect through it. So sure, have the city offer broadband access. But allow local ISPs to patch in at the core and sell their internet services to the residents. And allow Verizon, or Time Warner or Bell Atlantic or whoever to patch in and sell content through it -- cable, phone, or internet access, without worrying about the infrastructure. Let 'em use Internet protocols to connect their boxes to their systems. Ensure they have a fixed level of QoS. And let them compete. Just let them pay an access fee to get to the infrastructure. Run that part as close to cost as you can.

OK, so this is not going to be happening for just one small town. The big guys have no interest whatsoever in competing with each other. But if you get 100 small towns, or 1000, all the sudden you'll find that the big companies will find a way to compete with each other, and you may get new, lean, efficient companies overturning the dinosaurs.

Making the first provider on the public infrastructure city owned may be the way to jump start the process. But they should make sure the communications protocols are open and documented, that other providers are allowed to serve on the infrastructure should they care to jump in.


By descendency on 4/22/2009 9:55:00 AM , Rating: 2
Why don't they just go and fall apart as a company, please.

They are scared that someone might force them to come out with 100Mb/s+ internet and do it cheaply.

I live in Raleigh, so I know where Wilson is... and this is making me sick to my stomach that NC is even considering behaving like this. As a state, we find the biggest idiots we can and we elect them to office and now it's apparent.




By Silver2k7 on 4/22/2009 11:01:33 AM , Rating: 2
Well its Warner part of a movie company.. so I guess they are scared of symetric connections ??

A symetric connection means you can download and upload at the same speed.. usually DSL connections are asymetric with things like 10/1, 24/1 (upload speed 1/10th or even less than the download speed).

This is pure speculation but im guessing movie companies are afraid that they will open the floodgates for filesharing with symetric connections, even thought the single user low upload bandwith is partly solved with torrents anyway.


By rudolphna on 4/27/2009 2:05:03 PM , Rating: 2
Im pretty sure Time Warner and Warner Bros. arent even close to the same company....


Article in local paper
By CatfishKhan on 4/22/2009 11:07:22 AM , Rating: 2
I strongly suggest reading this (particularly the 'What the Bill Says' and comments section:

http://www.wilsondaily.com/MostPopular/Story/More-...

You might come away with a very different impression than after reading this article here.




By RandomUsername3463 on 4/22/2009 11:49:20 AM , Rating: 2
Yeah I like this quote especially: "The importance of municipal broadband service was illustrated by a recent series of Time Warner Cable rate increases, Rice said. The company raised its rates by more than 5 percent in all its N.C. communities -- except Wilson and in one community near Charlotte that also has a municipal service ."


RE: Article in local paper
By blafrisch on 4/22/2009 12:59:27 PM , Rating: 2
I did come away with a different impression than from this article. Sounds like Time Warner and Embarq are trying to make sure Greenlight isn't fudging their numbers by taking funds from something other than Greenlight's intake (IE taxes). Sounds good to me actually.

I would gladly buy bonds my city to implement a similar plan too. Even if the end product cost close to Time Warner's then it'd still be more competition. Right now there really isn't any.


OMGZ!!!
By FITCamaro on 4/22/2009 2:54:36 PM , Rating: 2
quote:
In the very rural areas, sometimes it would take two, three or more years to even pay for the investment."


2-3 years to pay for something that will make you money for 50+ years!?!?! How horrible!!

Could they have a weaker arguement? I agree with their statement that they have the right to make money. But just as government shouldn't be able to tell a business that they don't have the right to make money, neither should other businesses. Of course in the end, had the government not gotten involved to start with, the problem wouldn't exist.




RE: OMGZ!!!
By Eri Hyva on 4/22/2009 7:44:51 PM , Rating: 2
Government created it, so it has to fix it.

Or the Government of the US is so weak that it has no power to fix broken things anymore.

This is the result of weakening government for tens of years.

Continue this way and you can shut down the government and elections as useless and end up with the top20 companies running the country.
Of course you can enjoy the ride with a merger of a top20 company or working as an exec for them.

Or are you there already?


RE: OMGZ!!!
By FITCamaro on 4/23/2009 8:27:54 AM , Rating: 2
Yes by getting out of the way. Not with more government.


natural monopolies, utilities, and public health
By armulyman on 4/22/2009 4:39:24 PM , Rating: 2
Lets not limit this discussion to nonprofit vs profit based service providers. The controversial "natural monopoly", public necessity, and laws concerning the data being carried must also be discussed.

A "Natural Monopoly" is a:

quote:
"Situation where one firm (because of a unique raw material, technology, or other factors) can supply a market's entire demand for a good or service at a price lower than two or more firms can."
http://www.businessdictionary.com/definition/natur...

In other words it is necessary, because of the expansive area of land the US rests on, to not be required to have any more than the set of lines necessary to operate. It would make no sense for 3 companies to run 3 sets of cable to each and every home.

In this spirit, a for-profit business is obviously more desirable. When it comes time to upgrade these lines, due to newer technology or what have you, the business will be the one footing the bill. A non-profit business would have to rely on donations, or would have to budget for these upgrades well in advance.

Realistically though, the for-profit business will always be concerned with its profits, and will put off costly upgrades for as long as it can.

The ideal solution would be a non-profit business that charged $134 for its services, and gave $99 in service, then put the extra $35 away for future upgrades. (This may already be budgeted for, but it wasn't mentioned in the article.)

From a more epistemological standpoint, a tool used by the public to share information should be considered a necessity. A democratic belief requires that everyone have their say. In that sense, the wide area network (internet) is the most democratic system of argument we have ever used, simply because there are no governing rules, it is pure anarchy.

So out of public necessity, and public good, the best answer is a well budgeted non-profit.

BUT

When you consider the capitalist system of politics governing the US, (and many other countries) you have wonder, what sort of lawmaking will our system be subject to?

http://www.dailytech.com/France+Rejects+AntiPiracy...

Personally, I believe that recording should not be an industry, radio should not be commercialized, and music should be shared not charged for. If a group of people want to make money from their music, they should go on tour, and make money from concerts (as if that's not how it really works anyway). To be frank, no matter what theological standpoint you follow, you cannot argue that nobody else could have ever created the same piece of art that you have.
Even Hendrix can be equaled.

In the wake of special interest though, theological arguments will never hold up in court. If the telecoms you support, don't have the money to fight lobbyists then the system will lose its democracy to business and capitalism. (Net Neutrality concerns more than just telecoms.)

So in this spirit, until we can hang every lobbyist (briber) in Washington, it might be best for us to stick with the for-profit telecoms. As hindering as they may be, they are still supporting our interests, and are still heavily fortified.




By Eri Hyva on 4/22/2009 6:24:11 PM , Rating: 2
Is it unheard of you in the US to learn from other countries successes and failures? All different ISP options and methods are already tested in some other part of the world.

Fiber changed everything, because same fiber line can run connections of several ISP:s simultaneously with unlimited bandwidth.

Change you laws so that when a town or city lays down fiber under the streets, all ISP:s can rent that fiber to get access to potential customers. Even those crappy Time Warner Inc.:s and Embarq:s can use the fiber, if they so wish. And all the other more modern ISP:s, of course.

Fiber is like water lines or electricity lines running to you house, an utility line.

No need to stick old laws that apply to cable or phone line period from last century.

Case: country of Sweden, population 9.2 million.
Dozens of competing ISP:s available to customers, 100/100 connection $30 per month, no caps. Real competition is good :)

You can consider Sweden as a very large Wilson.


By armulyman on 4/22/2009 9:47:10 PM , Rating: 2
The problem with Gov't owned lines though isn't simply one law, and the current state of technology. Our lawmaking system is based on capitalism, put simply:

Congressman A gets paid $400,000 to vote yes on bill 18340-2a, he gets paid $2,000 to vote no. As any good American would, he chooses to vote yes.

Bill 18340-2a is a bill that forces all ISPs using gov't owned data lines to kick any user that uses tcp port 6881,
6882,6883, and port 8080, which has now been made obsolete in favor of NSA monitored port 8081.

The bill is passed by the house 382 to 47, the bill is then voted on by the senate, passing 86-14, the bill is signed by the president and becomes law.

In order for a website to operate, they must now pay gov't access fees, and be monitored and scrutinized, the MPAA gets its way, the RIAA gets its way, and there are more lawsuits than ever.

Because of the gov't control now your favorite blogging site (*cough cough DailyTech*) can't operate because of these free speech restrictions, all because the data carriers don't control their data lines.

The problem isn't our laws, its our system of making laws. Our laws are business decisions made by corporations, companies, lawyers, and the all mighty dollar. Until you throw out the lobbyists(who all protect special interests RIAA MPAA etc.), gov't owned data lines will never be safe.

In Sweden there would be public upheaval, Americans don't even know the meaning of the word riot.


List of email addresses
By RandallMoore on 4/22/2009 10:53:58 AM , Rating: 5
Here is the list of email address for the senators and representatives. This could be a big win for everyone around the country, or a bad loss for consumers. This isn't just Wilson NC we are talking about. This case will form a presidence for future projects like this.

David.Hoyle@ncleg.net; Debbie.Clary@ncleg.net; Ty.Harrell@ncleg.net; Earl.Jones@ncleg.net; Marilyn.Avila@ncleg.net; Thom.Tillis@ncleg.net; Larry.Bell@ncleg.net; Nelson.Cole@ncleg.net; Jim.Crawford@ncleg.net; Nelson.Dollar@ncleg.net; Beverly.Earle@ncleg.net; David.Guice@ncleg.net; Jim.Gulley@ncleg.net; Mark.Hilton@ncleg.net; Hugh.Holliman@ncleg.net; Linda.Johnson2@ncleg.net; Carolyn.Justus@ncleg.net; Marvin.Lucas@ncleg.net; Wil.Neumann@ncleg.net; Efton.Sager@ncleg.net; Fred.Steen@ncleg.net

Senate bill - http://www.ncga.state.nc.us/gascripts/BillLookUp/B...

House bill - http://www.ncga.state.nc.us/gascripts/BillLookUp/B...

If you hate how telco and ISP geographical monopolies have taken over this country then do your part! The more pressure we put on them, the better our chance.




My $0.02
By AahzNotOz on 4/22/2009 12:53:59 PM , Rating: 3
I think that the local cities should put up the lines, fiber to the home, heck even fiber IN the home, all the way to the boxes.

The city then performs the maintenance and upgrades on the system and leases out the lines to companies to provide the services, basically making them ISPs, and they pay the lease to the city, which pays for the maintenance and upgrades on the lines.

This way the consumer has a choice of multiple providers and better prices because the providers will have to compete on price to get a customer base.

With this model, customer service should improve, prices should lower and quality of service should increase and choice will definately increase.

Dan




RE: My $0.02
By Mathos on 4/22/2009 3:20:14 PM , Rating: 2
Yup thats what I'd say too. The city or municipality builds the infrastructure for the network and maintains it. And leases access to the infrastructure to companies that want to come in and actually compete for customers. This would also create more local IT jobs to support said networks and keep the lines working. When it comes down to it, wires a simply that, just wires, anyone can plug into them, and offer service. Most coax cable lines have more bandwidth than is actually ever used. Fiber optics lines have more. Not to mention if some municipalities wanted to they could even go RF Wireless. One of the local broadband companies around where I live uses RF Radio boxes that transmit and receive in the 900ish Mhz range, and offer 3mbs speeds easy.

And as to the question how are these cable companies like TWC and others to compete??? Lets see, use the municipalities offered service as a base line, and then offer something faster or with more features for a competitive price??? There's some logic for ya.


Victory in Virginia
By Octoberblue on 4/22/2009 1:11:49 PM , Rating: 3
I live in south-western Virginia. The city of Bristol, VA started a service like this back in the late 90's. Bristol Virginia Utility - BVU Optinet - They run fiber-optic lines directly to your house. Very similar packages/pricing as this story outlines.

It caused a huge fight in the state house in Virginia. For about 3 years Embarq and Comcast Cable fought like crazy against it. But BVU won out in the end. The cable company and embarq both survived, just no longer with monopolies.

BVU has become so substantial that they were able to run miles of fiber optic all the way from Bristol to Lebanon, Virginia to provide enterprise class service to the farm-shoring efforts of IT giants Northrop Grumman and CGI.

Keep fighting Wilson County!




RE: Victory in Virginia
By MadMan007 on 4/22/2009 1:32:12 PM , Rating: 2
Funny...it ended up being better for everyone, aside from maybe the provider companies who had to compete. Lawmakers need to see that services like this encourage business and economic growth over the long term so everyone wins. The only way I can see companies threatening lawmakers is withholding campaign funds but that's a whole other mess.


Failure of internet service providers
By jeffbui on 4/22/2009 11:08:53 AM , Rating: 2
This is exactly why broadband just sucks in the United States. I live about an hour away from Wilson in Greenville.

I have two choices for broadband:
1) Suddenlink 8mbps cable $45 a month, disconnects multiple times a day, tech has been out here 5 times
2) Embarq DSL: 1.5mbps $55, must get phone unnecessary phone service

I have absolutely no other options. Both companies don't even plan to up the speed here because they have no financial incentive to. The prices are ridiculous and the service is terrible.




By Pabel on 4/27/2009 4:22:49 PM , Rating: 2
I'm with Suddenlink at Corp. HQ. More on who I am here: http://www.suddenlink.com/about/executives/abel/. Perhaps I can help address the issues you've experienced. Since I don't check this forum regularly, you can email me at pete-DOT-abel-AT-suddenlink-DOT-com. Thanks.


Sure, this is how it begins, but....
By bubba551 on 4/22/2009 11:33:44 AM , Rating: 2
Soon the public effort will drive out the competition. Next, it will become a univeral entitlement that is tacked onto the taxes. In the absence of competition, mismanagement and prices will skyrocket, but competition will still be locked out, since payment is involutary.

Only those willing to pay twice will then have an alternative.




By Belard on 4/23/2009 5:50:32 AM , Rating: 2
Obviously there isn't competition in that town.

The service and pricing is high. And so what, it was the people's choice to pay for city provided services for less.

Nothing keeps TWC/etc from provideing better services.

Funny thou... if Electric companies were NOT business (always making record profits year after year), we would ALL be paying less for power. In some parts of the USA, utilties are PUBLIC. Quality of service was fine, the bills are so much less. Hmmmm.

But if you are a stock-holder in a utility company, obviously you'd scream "Socialism!" while charging a disabled woman $150~200 a month for power... whereas it would be $50 a month for a non-profit service. And guess what... that $100~150 differences goes to who? Oh yeah, the rich, again (utility company/stock holders) rather than perhaps her health, home or food.

geez.


By Roy2001 on 4/22/2009 11:53:27 AM , Rating: 2
Cable companies are all rip off, DSL companies are marginly better. They both intend to keep price high and limit bandwidth. Nowadays many countries provides 10Mb while we still call 768k/128k broadband.

Will they call 768k/128k boradband forever and charge 100Mbs/1Mbs for $1000? Well, at least they want to.




By Yawgm0th on 4/22/2009 3:55:12 PM , Rating: 2
quote:
Cable companies are all rip off, DSL companies are marginly better.
I tend to find the opposite true. When Qwest offers me 7mbps/896kbps for $45/month and Comcast provides 8m/2m (16m/4m with PowerBoost) for $43/month, why is Comcast the ripoff? Comcast actually provides more bandwidth than I pay for consistently while at the six business sites I managed for work Qwest fails to provide more than 80% of the advertised bandwidth.

I'm not saying cable is a great deal, but I can't see how one could come to the conclusion that DSL companies are in any way better.

Of course, that is for Comcast's cheapest service and Qwest's most expensive (in my area). For the most part, DSL and Cable companies aren't competitors. People who can afford more bandwidth and want it have cable or fiber optic. Everyone else has DSL. But if you break it down to mbps/dollars, Cable wins every time.


TW's Greediness at its finest
By obiwankenobi on 4/22/2009 1:27:37 PM , Rating: 2
Time Warner's classic when you can't beat them, banned them! these ISPs makes me puke, providing the worst service at the highest price possible to maximize profits.




RE: TW's Greediness at its finest
By TO on 4/22/2009 1:51:37 PM , Rating: 2
Time Warner blows! There a bunch of f@ck up's. Sooner or later it will catch up to them, and then they'll need a bail out because there too big to fail... something has to been on about these massive non competitive conglomerates, in my opinion I believe there hurting the economy in the long run because there holding our nation in a competitive disadvantage by not experimenting and implementing new technologies compared to other parts of the world. They will cause the USA to follow rather than lead at the expense of their bonuses. Mark my words!


lol at amerika
By Beno on 4/22/2009 3:31:24 PM , Rating: 2
im not from usa but from what im reading, the people of this city built their own network right?, because of the garbage of cable co's hmmm ok.
now this isp that they built is ftth right? what THA FUK IS HAPPENNING TO AMERIKA? as i see it, the cable ppl should either upgrade their garbage or gtfo.

and the cable co's have the balls bcoz they have the lawmakers in their pockets????
and i thought america is tha mother of democracy :)




RE: lol at amerika
By Makaveli on 4/22/2009 4:47:53 PM , Rating: 2
Every thing you see about america in the movies is false!
Its not the land of the free, its the land of the corporation!


Wow
By toyotabedzrock on 4/23/2009 12:04:03 AM , Rating: 2
I wish my local government had a plan like that!




RE: Wow
By euczechguy on 4/23/2009 5:24:03 AM , Rating: 2
Actually, our govt does...
If there wasn't for the damn "crysis" and our outstanding debt, it could be operational by 2012...
Our Departement of IT and Technology pushed a bill which prioritizes all of the "social communities projects and services"...You might think - "Damn comunist!" But think deeper. Private companies are in vast majority ruled and lead by hypocrites with no respect for anything, let alone custumers, other then money...But when the local people gather together in order to cooperate, synchronize and establish a service, like FTTH, this is the true definition of many aspects by how we look at democracy - from Greek Demos (the people) kratein (reign) - The reign of the People...
Sadly, the companies are the People as well, but they do not think like real, not incorporated peoples...
They want money.
On the other hand, population of a small town with such service want to serve its own midst...
I fully support projects like this one...
I know I shouldn't be complaining in any way here. Still, I got installed UPC cable T2 line 10Mbit/s/1Mbit/s for measly $25/month...
But there are entire towns here connected to International backbone with their own lines, tiers ranging from 50Mbit/s/50Mbit/s to 100Mbit/s/100Mbit/s paying only the cost of running the service...I could get a piece of that action, I tell ya!!!


By HeroicLife on 4/24/2009 2:35:57 AM , Rating: 2
It's wrong for the government to give telcos like Time Warner and AT&T monopolies. It's equally wrong for governments to force some people to pay for the services of others (this service is subsidized by taxpayers.)

This is what happens in a democracy - groups use the government's guns to create coercive monopolies, whether by banning competition like the telcos, or providing "cheap" services (like city internet) by robbing taxpayers.

The morally and economically proper response to all forms of interventionism is to remove force from the situation and let the best entrepreneur win.




By wempa on 4/28/2009 12:40:42 PM , Rating: 2
quote:
It's equally wrong for governments to force some people to pay for the services of others (this service is subsidized by taxpayers.)


OK, so then please explain to me why schools are funded by local taxes ? Not all people living in a town have school aged kids. When I lived at my last house, I was single and had no kids attending the public schools. However, I was paying the same ridiculous amount of taxes that everybody else was. By your logic, I shouldn't have to pay for that since I'm not using it.


THIS is why.....
By SpaceRanger on 4/22/2009 9:27:51 AM , Rating: 1
This is why we're never going to see REAL broadband in the US. I feel for the city residents. We can't have something SUPERIOR interfere with a lesser products profit!

Also, on a side note.

Rather than admit defeat to the pesky local service and go quietly, Time Warner Inc. and Embarq decided to take the fight to the state government, lobbying for several years to get the state government to pass loss to try to destroy the local effort.

Shouldn't that be LAW?




RE: THIS is why.....
By Brandon Hill (blog) on 4/22/2009 9:27:50 AM , Rating: 2
Already fixed ;)


I'm not...
By cscpianoman on 4/22/2009 9:38:07 AM , Rating: 1
I'm not accustomed to swearing, but this gets me really close. Talk about a blatant disregard for the country "for the people, by the people." We have now become the country for business, hose the people.

So, our gov't sends Microsoft to the anti-monopoly table and threatens to break them up and gets pretty close to doing just that. Microsoft backs down and slowly and surely competition is being thrown into the mix ala Apple and Linux. And here we have a monopoly, gov't mandated none the less and we are on the verge of legislation and will keep it in place. Ouch!!

TWC needs to fail in a very epic manner, maybe if we're lucky a tornado will rip through the corporate headquarters in the middle of the night (no one gets hurt)




RE: I'm not...
By gucio69 on 4/22/2009 1:03:28 PM , Rating: 2
quote:
TWC needs to fail in a very epic manner, maybe if we're lucky a tornado will rip through the corporate headquarters in the middle of the night (no one gets hurt)


All that would happen is they would raise their rates to pay for the rebuilding. People behind these ideas will still be there.


By Bateluer on 4/22/2009 9:52:09 AM , Rating: 2
Will their connection to a fiber backbone be cut off? Or will Time Warner simply whine?

I am very glad I don't have to deal with Time Warner, there's always been to much BS surrounding them.




Another Example
By cheinonen on 4/22/2009 7:31:26 PM , Rating: 2
This town could also go the route of the town I went to school in (Ashland, OR). We were being served by an ISP (Charter) that seemed to have no interest in providing better service to us, so the town built it's own fiber network. The town sells cable TV and phone over the fiber, and they lease the lines to ISP's so that people can choose from multiple providers (9 currently, for a town of under 30,000 people). Everyone gets cheaper rates, you still get competition, and Charter didn't go try to change the law that I know of. Perhaps the city of Wilson (close to where I live now) can open up the internet access to any ISP that wants to compete, and Time Warner won't have a complaint, unless they still refuse to meet them on price, of course.




By jbreezy on 4/22/2009 8:13:01 PM , Rating: 2
This entire dilemna can be solved by proper regulation by the FCC. 60 years ago the FCC allowed AT&T/Bell to run wild until the US DOJ finally stepped in and broke them up. The scenario today isn't much different, and the cycle will continue to repeat itself unless we change the FCC's [non]regulation model. The government should own the bandwith and lease or commoditize it, which would turn the Comcast's and TW's of the world into nothing more than retail service providers.

I'd be happy to see them go. I don't see the argument behind keeping a government endorsed monopoly in-place that offers worse service at a higher price to the consumer, rather than creating a transparent and independent government enterprise/co-op to provide better service at low cost.




Costs
By DFSolley on 4/23/2009 12:11:53 PM , Rating: 2
One benefit that the government has over the private competition is that the government won't tax itself. At each level of investment and production, the private company must worry about taxes and regulations that the government can ignore (or pass costs to another government entity to hide the true costs). It would have cost much more for the private corporations to make this investment DUE to the government. The government as a business has the ability to both hide its own costs as well as increase the costs of its competitors.
We worry about monopolies because they have too much control of the market. The government has much more control than even a monopoly, and yet many don't see danger.




Surewest VS TW
By overlandpark4me on 4/23/2009 11:01:35 PM , Rating: 2
TW had pricing at 129 bucks for just internet and basic cable. This was before the digital phone availability. When Surewest announced they were going into my neighborhood, a TW rep came to my door to give me the good news that my rates were going down to "only" 69 bucks. I ask why and he never mentioned Surewest, just that they were repricing their plans. Now a city gives them some of their own medicine, fair or not, and they cry foul. When a friend tried to get the same pricing in an area without Surewest, he was told the pricing wasn't available in "his area". A whole 5 miles away btw.




Wow
By ablecluster on 4/24/2009 8:20:56 AM , Rating: 2
Isnt that just downright ANNOYING or what. Bunch of Whine Babies, Sad part is, the Kangaroo courts are in their back pockets so they will side with them!

RT
www.anonymity.es.tc




unrelated
By droplets on 4/24/2009 11:24:22 AM , Rating: 2
If I may raise a very important issue...

The comma use in this article is horrid.




By miffedone on 4/24/2009 4:26:42 PM , Rating: 2
This is exactly what happened to the electric industry when they maintained high prices and denied service to customers to keep their profits up. It cost them money to string wires to outlying areas, so they didn't.

People finally got fed up with the high price and/or no service and took matters into their own hands by creating "municipal electric companies." Thousands of them, and drove the profiteers out of business - or eventually absorbed them. The industry consolidated later, after it was shown than they could be profitable AND serve outlying areas AND charge a modest rate.

The cable companies might want to take a note. Lawmakers, too.




Woah. Woah. Woah.
By donjuancarlos on 4/22/09, Rating: -1
RE: Woah. Woah. Woah.
By RandallMoore on 4/22/2009 11:12:05 AM , Rating: 3
quote:
The bill is not a pro-monopoly bill as much as it is an equal-playing-field bill.


It does not matter. Think of it this way... If you live inside of a city, then you pay city taxes right? Well... those taxes go to things like parks, gyms, library, sewer and water, electric utilities and other public structures. What can anyone by any means justify that internet is not a utility? You can't. If TWC and EMBARQ cannot compete, then something is wrong with their policy. Maybe you haven’t had the chance to deal with either of them to know firsthand, but let me tell you: they don't give a rat’s ass about customer satisfaction. They only care about one word. Profit.

TWC sucks, EMBARQ sucks. Hell, I am surrounded on all 4 sides by broadband availability! I only live 3 miles from the city limits!! That is a joke!! Being outside the range is beyond the point though because EMBARQ and TWC have both flat out LIED to me for more than 6 years about expanding their service to my area. When that happens, cities like Wilson should step in a takeover. Boo hoo, we can't compete because we sh&% on the customer and can't take care of our customers.

Answer me this: Why should anyone "level the playing field" when this is what the TAX PAYING CITIZEN WANT. Read it again. The citizens of Wilson ABSOLUTELY LOVE their new city wide amenity. Can anyone say that we the people of America don't know what's best for us? If you can, then you need to run for congress or president, because all of them think they know what’s best for us.


RE: Woah. Woah. Woah.
By DarkElfa on 4/22/2009 11:45:59 AM , Rating: 3
Sorry, it comes down to this: Fucking cry babies. Everyone is yacking about the non profit thing, but what about the fact that they're also being out performed? A telecom giant is being out performed at a lower price by a city. Now, putting prices aside, shouldn't a company like TW at least be able to provide an equally performing solution to the city?


RE: Woah. Woah. Woah.
By donjuancarlos on 4/22/2009 3:56:54 PM , Rating: 2
They CAN!!!!! Nobody is going to get shut down if this legislation passes.

They are not being stopped. Read the proposed legislation. This is one heck of a misleading article by Anandtech.


RE: Woah. Woah. Woah.
By RandallMoore on 4/22/2009 4:58:24 PM , Rating: 2
What about this article is misleading?

Do you work of TWC or EMBARQ? Sure sounds like you do.
Maybe you should read the article from DT, and also read the mentioned blog by the city http://savencbb.wordpress.com/about/

Are you in favor of TWC and EMBARQ's stranglehold or something? Evidently you have no idea of what is going on here. The PEOPLE of the city of Wilson decided to build their own fiber network. Why should they be denied of this?

Looks like you are spreading FUD


RE: Woah. Woah. Woah.
By mmnno on 4/25/2009 5:54:11 PM , Rating: 1
Why shouldn't municipalities be able to subsidize their operations with tax revenue. Identical question: why shouldn't residents of a city be able to pay for their own data services?

If for-profit corporations cannot compete with the public, then they are wasteful and should not exist.


RE: Woah. Woah. Woah.
By unprofor on 5/3/2009 10:57:01 PM , Rating: 2
The reason Time Warner was crying and tried to shut this down is simple: They can't compete against reasonable investments.
Sooner or later, having too many > $100k per year employees comes back to bite you in the...


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