You Too Can Finally Join the Modern Broadband Era For the Rock Bottom Price of $20,000

from the pay-and-pay-and-pay-some-more dept

Thu, Nov 13th 2014 9:08am — Karl Bode

When the cable industry started laying coaxial cable and TV deployments were just beginning, local franchise agreements often required that the cable operators evenly build out networks so that as many people as possible could get service. Those requirements are one of the only reasons millions of people outside of the biggest metropolitan areas even have the cable and DSL duopoly or monopoly they so enjoy today.

When the phone companies entered the TV business back around 2006, AT&T and Verizon lobbyists went state-by-state convincing state lawmakers to pass franchise "reform." While some reform was absolutely needed (thanks largely to a smattering of greedy local governments abusing their authority in order to get paid), the telcos' version of reform involved not only gutting most even build out requirements -- but in places like Wisconsin gutting all consumer protections (and even in some cases eminent domain rights) entirely. Obviously making state regulators toothless benefited cable companies too.

Fast forward a few years and there's obviously more than a few TV and broadband landline connection gaps, despite tens of billions in entirely-unaccountable subsidies thrown at cable and phone companies to ensure these gaps didn't exist. Combined with the rise of Google Fiber and the somewhat theatrical industry fiber to the press release response, suddenly cherry picking your broadband deployments has become fashionable, creating a huge new chasm between broadband haves and broadband have-nots, especially when it comes to faster services (three quarters of the country has no competitive choice at speeds faster than 25 Mbps).

While both politicians and industry pay a lot of lip service to shoring up these gaps, the reality is that nobody really wants to fix them, and nobody wants to audit the carriers' deep history of subsidies. When many broadband have-nots then decide that they'd like to join the modern era and get wired, they often wind up being told they have to foot the often over-inflated bill. As Ars Technica recently explored, that bill can be almost comical -- such as $20,000 to run coax a third of a mile:

"Time Warner Cable’s (TWC) lines are a third of a mile from Walser’s house, and the company has received more than $10 million in state funding to bring broadband to underserved portions of New York over the past two years. But the company (which will be purchased by Comcast if the government approves the merger) told Walser they won’t do the construction unless he pays more than $20,000. That’s just to reimburse TWC for its troubles—the monthly access bill would be on top of that."

Because Time Warner Cable has no competition at those locations, the company will simply abuse their monopoly position and charge an obscene monthly rate for service on top of that. Considering the billions that telecom companies received to shore up service over the last twenty years (and again, nobody in the history of telecom regulation has ever bothered to do an audit), that's painfully obscene -- and it's a story I've personally seen repeated thousands of times over. Worse perhaps, Time Warner Cable, like so many of these companies, has worked tirelessly to pass state level laws that restrict these communities from building their own broadband -- even in locations they refuse to connect.

In other words, taxpayers got to pay billions in subsidies, then get to pay an arm and a leg a second time just to be held hostage by a company that repeatedly makes it very clear it hates their guts. When they decide to do something about it themselves, they run into state laws prohibiting their right to improve their own area's infrastructure. Yet we're told time and time again by the broadband industry that it's not only immensely competitive, but is a shining beacon to the rest of the world for technology innovation, creativity and government policy.

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Filed Under: broadband, build out, fees, installation, universal service
Companies: time warner cable

26 Comments

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Anonymous Coward, 13 Nov 2014 @ 9:14am

No wonder cable companies are having this bright idea to charge both the customer and the content provider. They're used to charging the state and the customer to lay cable.
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- Anonymous Coward, 13 Nov 2014 @ 10:01am
  
  Re: laying cable
  The cablecos have been "laying cable" on all of us for too long.
  
  http://onlineslangdictionary.com/meaning-definition-of/lay-cable
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John Fenderson (profile), 13 Nov 2014 @ 9:19am

Not just cable
I once set up a home office in a small town and needed an additional phone line. The phone company told me that they didn't have enough trunk lines going to the local drop to support that (these are the lines going to those green posts, not the lines going to my house) and had no intention of adding more within the next decade. However, they'd do it if I wanted to pay them $10,000 for the work.
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- Anonymous Coward, 13 Nov 2014 @ 10:02am
  
  Re: Not just cable
  That's interesting, because in past decades, telephone lines were run to remote, ultra-low-population-density rural areas that must have been prohibitively expensive per user, but the work was done for free (actually subsidized).
  
  So today most rural areas in the US and Canada have telephone lines, but few have broadband (and quite possibly never will)
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  - Adam (profile), 13 Nov 2014 @ 10:25am
    
    Re: Re: Not just cable
    That's done because phone lines have been multiplexed. Meant it is to run lines to a central location, convert the analog to digital across one line to the destination area and convert the digital to analog back and run it to the termination. This allowed utilities to run one line for long runs instead of 1+ per consumer location. The throat-cut for them was when DSL was taking off there were entire communities that had been multiplexed were unable to receive the service because DSL required individual lines. I lived in a city when DSL was humming and my cable provider didn't offer broadband and my telco couldn't give me the DSL because of multiplexing... the solution was iDSL which is essentially "DSL over ISDN" since the iDSL signal was only 14.4k and could be multiplexed. Applying to what your saying. Those runs to remote areas required 1 long with a single pair or 1 fiber line... the cost was minimal in comparison. I have seen as well that a provider would do the work for free if the run was under 300 feet. Unfortunately my run was 1800 feet and they wanted 3500 bucks with no ability for me to run or have the line run myself.
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    - any moose cow word, 14 Nov 2014 @ 9:24am
      
      Re: Re: Re: Not just cable
      I grew up in a very rural neighborhood with crappy phone lines. After the company gave me a runaround about their caller ID service, I insisted that an engineer go out to the CO and actually check the line. Surprisingly, I did get a call back from an engineer confirming that the line didn't have caller ID. He asked if I had a fax machine or modem, I told him that my 33.6K modem usually got between 24-28 kbps over the line. He was surprised that I got anything at all through the digital multiplexer!
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That Anonymous Coward (profile), 13 Nov 2014 @ 9:34am

Perhaps it is time we audit what we gave them and how fscking little we got for it.
Then lets look at how much of their obligations they failed to meet before getting the law changed.
Then we could hold them to what they still owe, have promised and not delivered.
Hell if you look at the little sums it takes for them to buy the laws they want, they could have totally wired up more areas.

It is unconscionable that they have been given so much and not had to live up to a single promise and no one with power gives a shit beyond pay me my "donation" so I can rubber stamp what you want to screw the people who's interests I am supposed to protect.

I'm unhappy with what we paid for, how do we get a refund for services not rendered... that is a reason to void agreements.
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- Michael, 13 Nov 2014 @ 9:41am
  
  Re:
  It is unconscionable that they have been given so much and not had to live up to a single promise and no one with power gives a shit beyond pay me my "donation" so I can rubber stamp what you want to screw the people who's interests I am supposed to protect.
  
  It's like they think they are politicians.
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Rob, 13 Nov 2014 @ 9:41am

I have a similar issue. BrightHouse networks offered the low price of $103,785 to offer service to our small community...

-Rob
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Anonymous Coward, 13 Nov 2014 @ 9:42am

Costs
I wonder how much it costs TWC to purchase the land rights to run that coax if they have no existing rights on that path? Land can be pretty expensive in some areas. Maybe Walser could first purchase the land and then donate it to TWC?
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- Anonymous Coward, 13 Nov 2014 @ 9:46am
  
  Re: Costs
  What, to run any service you obtain right of way agreement, you do not buy land, except for where you wish to install major plant, or place a building.
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  - Anonymous Coward, 13 Nov 2014 @ 10:16am
    
    Re: Re: Costs
    "What, to run any service you obtain right of way agreement, you do not buy land, except for where you wish to install major plant, or place a building."
    
    Absent government involvement, land owners are not required to provide rights of way and demand any price they desire, including purchase of the land. You can't just waltz up and demand a right of way.
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    - Zonker, 13 Nov 2014 @ 4:27pm
      
      Re: Re: Re: Costs
      Every building that has a power line already has a right of way for utility service. If they didn't have right of way, they wouldn't have power, and if they don't have power then they couldn't use cable service anyway.
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      - Anonymous Coward, 13 Nov 2014 @ 4:47pm
        
        Re: Re: Re: Re: Costs
        "Every building that has a power line already has a right of way for utility service."
        
        Which is either a form of government involvement or it's because private landowners are granting these rights of ways.
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- Anonymous Coward, 13 Nov 2014 @ 10:34am
  
  Re: Costs
  They don't need to purchase any land rights; to be entirely fair, this was to service the village as a whole under the NY State Brodband rollout.
  
  What I took great issue with was the fact that the likely charge for the service would likely have been $200/mo for each individual, rather than including the first year's service as part of that charge for what isn't actually considered broadband by the FCC.
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  - Anonymous Coward, 13 Nov 2014 @ 10:42am
    
    Re: Re: Costs
    "They don't need to purchase any land rights; to be entirely fair, this was to service the village as a whole under the NY State Brodband rollout."...
    
    That's a little different that the story above makes it seem.
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    - Anonymous Coward, 13 Nov 2014 @ 12:05pm
      
      Re: Re: Re: Costs
      It is, and it';s not a fun story, because really, TWC should have done this under NY State's scheme for rolling out broadband, rather than charging the $20k sum, which smacks of a cashgrab when the rollout is already subsidised.
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ECA (profile), 13 Nov 2014 @ 9:46am

Iv heard this before.
I wish there was a Price break down on this..
$20k..

As a friend of mine, had this problem..THEN install his OWN POLES for electrical..and told Cable to use them..
Think he paid extra to get it in, dont know how much.. but it was LESS then the $20k..
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- Anonymous Coward, 13 Nov 2014 @ 10:19am
  
  Re: Iv heard this before.
  Depending on the area, actual costs can easily exceed this amount.
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- Anonymous Coward, 13 Nov 2014 @ 10:45pm
  
  Re: Iv heard this before.
  There was: from the Ars article, there was around half the costs involved in labor and equipment hire to 'connect' the village, and the other half was for 'administrative' costs, if I recall correctly.
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Adam (profile), 13 Nov 2014 @ 11:17am

Seems 20K is a normal price
I work for mid-sized business with 12 physical locations across three states so I get to deal with a number of providers and $20,000 seems to be a pretty common price.

In one city there was a local provider that had a franchise agreement with the town so nobody could provide cable but them. I wanted to replace our existing T1 for $950/month with something faster and cheaper. The local cable company with wanted $23,000 and a five year agreement to provide service.

The interesting part about their price is a different ISP that was in the neighboring town was willing to dig us private dedicated fiber for $21,100 and a five year contract.

I have many stories about annoying ISPs and only a few stories about ISPs I like to deal with and don't seem to be trying to rip you off.
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Jeffrey Nonken (profile), 13 Nov 2014 @ 5:12pm

Comcast wants $32k to hook up my employer. We're a few blocks away from their nearest coverage. The area is zoned commercial/industrial, so it's not like it's just us. Our choices are: AT&T or two Dixie cups and a string. We chose AT&T.

Some days I think we made the wrong choice.
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CharlieBrown, 13 Nov 2014 @ 10:09pm

Oh You Wouldn't Want To Be In Australia At The Moment!
Well, first is the National Broadband Network debacle which has resulted in a few suburbs of the city of Wollongong having 100Mb internet whilst other parts are lucky to have 1.5Mb. In fact most of the area surrounding where I live can only get 56kb.

There is the possibility to install your own fibre from your house to the nearest telephone exchange. There are no laws preventing it from being done, other than the fact that you have to hire a qualified technician to install it. The only catch is, you have to foot the entire bill. And that is from a house to a telephone exchange. The telephone exchange I am connected to is about 4km away (approx 2.5 miles).

Broadband in Australia is a joke. We are actually jealous of American broadband! A good connection in Australia is 24Mb. The average connection in Australia is under 6Mb. Around 25% of Australians can only get dial up. A few areas can get 100Mb but this is around 2% of the population. And I'm being generous with that estimate.
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Anonymous Coward, 14 Nov 2014 @ 6:07am

I did not realize that landline (cable, DSL) were the only means by which to deliver broadband internet service to customers. HughesNet does a pretty good job and does not require the incursion of all the types of costs typically associated with laying or stringing wires. No easements to be negotiated, no trenching for buried cable, no having to fix all the other utility wires and pipes that are routinely broken during installation, no poles being set and wires strung, etc.

Certainly there are other options as well that do not involve the high costs associated with installing physical conduits.
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- any moose cow word, 14 Nov 2014 @ 9:48am
  
  Re:
  I know someone who has Hughes. He got a big runaround over the price of the service. And sure, it can reach speeds over 10Mb, but only in burst. It's good enough for email and browsing, and the occasional download, but the long ping times and burst make it hard to do much else that most people can do with wired broadband. Internet phone service is out because of the pings, and so is online gaming. Only some video steaming services will work. Some don't set the buffers big enough to compensate for the slow gaps between the burst. Others try to automatically set the quality based on your connection speed, but get tricked into setting it too high by the burst and then constantly stall because the connection can't sustain anything close to that.
  
  It's useful for those who can't get anything else, but it's pricy and limited.
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