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.
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.
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).
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.
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.
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?
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.
quote: Either you are for competition and a free market or against competition and for government enforced monopolies.
quote: Being someone from Canada, who now lives in Israel, I must say the US is very very corrupt
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.
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.
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.
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.
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.
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 ."
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.
quote: if the citizens don't want to buy the service, they don't have to buy it
quote: Governments can only take money from others.
quote: Technically they all are paying for it through taxes or some other fee.
quote: There would be no need for a government option. Happens in just about every market sector where there is decent competition.
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?
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."
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.
quote: Rather hard to do in a town of 4000.
quote: Yeah it is. Especially when you speak before knowing the facts. The city of Wilson, North Carolina has over 50,000 residents.
quote: In the very rural areas, sometimes it would take two, three or more years to even pay for the investment."
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."
quote: Cable companies are all rip off, DSL companies are marginly better.
quote: It's equally wrong for governments to force some people to pay for the services of others (this service is subsidized by taxpayers.)
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)
quote: The bill is not a pro-monopoly bill as much as it is an equal-playing-field bill.