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.