Huntsville, Alabama Is Suddenly Awash In Broadband Competition, Showing Why Comcast Is So Afraid Of Municipal Broadband
from the build-it-and-they-will-definitely-come dept
For years, we'ved noted how incumbent ISPs have waged a not-so-subtle war on towns and cities looking to escape from the high prices and abysmal service of the country's broadband duopoly (which is actually quietly becoming more of a cable monopoly without many noticing). Many of these cities have taken to either building fiber networks themselves -- or striking public/private partnerships with companies like Google Fiber or Ting/Tucows -- because the private sector has failed to deliver the service and connectivity they want at prices they can afford.
This kind of grassroots revolution is precisely why large ISPs like Charter, Comcast and AT&T have spent the last decade lobbying for (and in most instances directly writing) protectionist bills across twenty different states banning local citizens from making these kinds of decisions for themselves. If you want to see precisely why these regional monopolists are so afraid, you need look no further than Huntsville, Alabama.
City-owned Huntsville Utilities has been building a fiber broadband network that should service the lion's share of the city's homes and businesses over the next few years. What's more, the network will be open access -- meaning that ISPs can come in and compete with each other over the regional infrastructure. Google Fiber has already signed up to be one of at least three ISPs taking advantage of the build, and should begin offering service there by the middle of this year.
FCC data has long noted that the open access model provides consumers with better service at lower prices, thanks to the miracle of competition. Obviously that's a nightmare for large ISPs used to doing the bare minimum while charging captive subscribers the absolute maximum. As such, the federal government consistently has treated open access networks like a plague, given that regulators and lawmakers are consistently terrified of upsetting some of the biggest campaign contributors in the country. For what it's worth, Google Fiber also walked back its original promise to run its network under the open access model.
But you only need to look to what's happening in Huntsville to understand why ISPs have spent so much time and money demonizing municipal broadband. With competition looming, incumbent ISPs have miraculously wasted no time in finally delivering the speeds locals have been clamoring for. Comcast this week announced that it will soon bring its cable-based gigabit broadband service to Huntsville, the company breathlessly insisting this deployment reflects Comcast's unwavering dedication to being, well, awesome:
"This launch reflects Comcast’s ongoing commitment to offering the fastest speeds to the most homes and businesses in Huntsville,” said Comcast Regional senior VP Doug Guthrie, also in a statement. “Soon, customers will leverage a new gigabit internet service that will deliver a truly unparalleled online experience."
Yes, only coincidentally inspired by the kind of community broadband networks Comcast has spent billions trying to kill in places like Chattanooga and elsewhere. Another regional incumbent, Mediacom, this week also miraculously began offering gigabit broadband service it claims simply reflects its unwavering dedication to the consumer:
"Since 1996, Mediacom has invested over $8 billion of private capital in its national network to ensure that hard-working families throughout the smaller markets we serve receive the same advanced communications services as America’s largest cities,” said Mediacom’s Senior Manager of Area Operations, Lee Beck. “As a result of these investments, we are extremely proud to add the cities and towns we serve in the Huntsville area to Mediacom’s rapidly expanding list of true gigabit communities."
And while that's great and all, again there's no mention of why they're suddenly interested in actually giving Huntsville-area residents what they want. It's important to note that competition isn't just improving speeds and prices. Both Comcast and Mediacom have consistently (ab)used the lack of last-mile competition to impose arbitrary and unnecessary usage caps and overage fees, which you can be sure will be nowhere to be found once they're forced to keep pace with uncapped ISPs like WOW! and Google Fiber riding over the Huntsville-area network.
ISPs and the consultants, think tankers, lobbyists, and politicians who love them have spent fifteen years demonizing municipal broadband as some kind of vile socialist evil straight from the maw of hell; usually focusing on claims that these networks are inevitable fiscal disasters that need to be thwarted before the big, bad government begins monitoring your porn consumption. The focus from these folks is that they're just worried about local taxpayers. Less of a concern, apparently, is the fact that we're quite literally letting giant companies write shitty state telecom law.
But claiming that municipal broadband is spend-crazy government run amok is a violent misread of what's actually happening in these towns and cities. Municipal broadband business plans are like any other business plan; some are good, some aren't. Ideally that should be up to the locals to decide, not billionaire CEOs and grumpy armchair partisans sitting half a world away in judgement. Municipal broadband isn't the devil, it's a genuine, grassroots, local reaction to market failure; one that can be avoided by ISPs doing one thing: actually delivering the kinds of services, prices and features locals have spent fifteen years clamoring for.
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Filed Under: alabama, competition, huntsville, muni broadband, municipal broadband
Companies: comcast, google, huntsville utilities, mediacom
Reader Comments
The First Word
“Re: Re: Re: Open Access FTW
find out how much it really costs to provide broadband
From my personal knowledge:
Given cost of capital, labor, materials, licenses, permits, fees, taxes, incremental and operations costs, compliance costs, and given a SLA of 25 megabits down, 5 megabits up with 500 percent bandwidth over-subscription[1], while providing no other services such at television, radio, or corporate deployable VOiP (something a consumer would buy and use is not factored in), total cost of providing service over 15 years is around $11 per month per subscriber for 2,000 to 15,000 subscribers in 2015 dollars with fixed rate financing, assuming a network deployment backbone of coaxial cable, and not factoring in losses due to non-payment, vandalism, or acts of God (which are covered by insurance for the most part) but excluding costs for IPv4 address allocation (which is a yearly fee).
The highest recurring expense is cost of capital, labor, and maintenance, again excluding IP allocation costs. One could get the per subscriber costs down about thirty percent through the use of second tier equipment (eg: don't buy name brands) and having the subscriber buy the termination equipment. No network service infrastructure would be built out. (Eg: No network news, time, chat, web, or other self generated services, only what's on the internet.)
Much more than 15,000 subscribers and you run in to higher centralization costs (eg, what your aggregation/demarcation ratio is.)
If you consider that the cost is around $11 and the average bill is around $60, if you are feeling ripped off, well, it's because you are.
[1] Most companies oversubscribe by 1,000 percent or more - in other words, selling 1 megabit bandwidth to 10 different subscribers. It's mostly never noticed due to the packet nature of networks and given most folks don't all use the internet at the exact same instant.
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Open Access FTW
Personally, that is what should have been done from the start with fiber, rather than letting a single private entity own the entire pipe...
...Hindsight and all that....
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Re: Open Access FTW
Quite frankly I think this Open Network thing should be done everywhere. You see what happens when there's real competition. Magically prices drop. Service gets better and the dumb CAP goes away. Funny how that works.
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Re: Re: Open Access FTW
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Re: Re: Open Access FTW
You can't say that here on TD, Government Regulation is a Religion here despite repeated claims to the contrary. Everything that is wrong is because of Capitalism PERIOD. No one cares that they don't know what they are talking about, they just care because it is the politically correct thing to do!
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Re: Re: Re: Open Access FTW
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Re: Re: Re: Open Access FTW
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Re: Re: Re: Re: Open Access FTW
That is about all I have to say about that...
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Re: Re: Re: Re: Re: Open Access FTW
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Re: Re: Re: Open Access FTW
There are few better examples of what Capitalism is NOT, than the US broadband industry. It's an industry that better serves as a cautionary tale as to what devastation befalls a country that allows industry to "self-regulate" too much and then fails to enforces meaningful consequences to those organizations whose belligerent pursuit of profit delivers ever increasing degrees of harm to the public good.
"Government Regulation" per se, should never be the crux of the discussion. The meaningful discussion concerns itself with 'good/effective-in-promoting-healthy-markets' versus 'bad/effective-in-promoting-rigged-markets' regulation.
Our contemporary problem with "regulation" in the US/Western markets is that big business and their wealthy benefactors have corrupted/gamed the regulatory process and the end result is that a boat load of very bad (i.e., nonsensical - unless it happened to be your lobbyist who wrote it up and bribed the politicians to pass it) regulation exists.
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Re: Re: Re: Re: Open Access FTW
Who are you, and how did you survive the ninny brain washing that most people receive? I absolutely agree with you here. A lot of people have difficulty understand things like this.
Now, regarding that regulation. My problem is when Government uses the regulation bludgeon to tell a business what it WILL do instead of what it CANNOT do. The FTC already has regulations for anti-trust and monopoly problems, but they rarely enforce them.
There is a reason for that... they have long ago figured out, that if you don't do your job, they will give you more tools with which to do it. This means when citizens 'ignorantly but understandably' ask for regulation, what the government really hears, are calls to create a 'regulatory capture' environment. Despite this obvious 'to some' occurrence many people still clamor for that regulation in a vain attempt to obtain relief.
The only tools "A People" should allow their governments to wield are ones of destruction with very specific and narrow focus, because they are damn good at it and never those of construction, because they suck absolute donkey balls at it!
That laws the command what a business will do can only lead to regulatory capture, and nothing else.
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Re: Re: Re: Re: Open Access FTW
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Re: Re: Re: Re: Re: Open Access FTW
I mean, isn't their time better spent reading some more Breibart so they'll have talking points to yell back at their libtard equals when they start repeating back the propaganda they just got dumbed down with watching CNN? For non-sheeple, it's like watching the Special Olympics of political discussion. You find yourself inspired that, as ill-equipped as they are, they're at least trying to participate. But it's also sad.
Anyone still buying into that whole Republican vs Democrat, Socialist vs Capitalist, Liberal vs Conservative, wedge-issue, plutocrat perpetrated confidence scam, so deserve each other.
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Re: Re: Re: Re: Re: Re: Open Access FTW
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Re: Re: Re: Open Access FTW
Have you ever considered entering any strong-man contests, or other contests of bodily strength? You spend so much time beating up on strawmen your arms have got to be seriously bulky at this point, might as well put it to good use.
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Re: Re: Re: Open Access FTW
Everything that is wrong is because of Capitalism PERIOD
How is a government granted and government enforced monopoly capitalism?
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Re: Re: Re: Re: Open Access FTW
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Re: Re: Re: Re: Re: Open Access FTW
There are many forms of capitalism.
I can't tell if you're being serious or if that is sarcasm.
In my view, a monopoly is basically the government saying "You can only get X from Y. No one else is allowed to compete." That is antithetical to capitalism in my view. If you are not being sarcastic, please expand on your thoughts, because you left me five miles back, eating dust, scratching my ... er, head.
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Re: Re: Re: Re: Re: Re: Open Access FTW
Nothing about competition there. Capitalism doesn't mean free markets, just private ownership.
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Re: Re: Re: Re: Open Access FTW
How is it not? A monopoly is merely the result all good capitalists strive for. Besides, it's only a monopoly on one level. Anyone who wants to can lobby the government.
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Re: Re: Re: Re: Open Access FTW
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Re: Re: Open Access FTW
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Re: Re: Re: Open Access FTW
find out how much it really costs to provide broadband
From my personal knowledge:
Given cost of capital, labor, materials, licenses, permits, fees, taxes, incremental and operations costs, compliance costs, and given a SLA of 25 megabits down, 5 megabits up with 500 percent bandwidth over-subscription[1], while providing no other services such at television, radio, or corporate deployable VOiP (something a consumer would buy and use is not factored in), total cost of providing service over 15 years is around $11 per month per subscriber for 2,000 to 15,000 subscribers in 2015 dollars with fixed rate financing, assuming a network deployment backbone of coaxial cable, and not factoring in losses due to non-payment, vandalism, or acts of God (which are covered by insurance for the most part) but excluding costs for IPv4 address allocation (which is a yearly fee).
The highest recurring expense is cost of capital, labor, and maintenance, again excluding IP allocation costs. One could get the per subscriber costs down about thirty percent through the use of second tier equipment (eg: don't buy name brands) and having the subscriber buy the termination equipment. No network service infrastructure would be built out. (Eg: No network news, time, chat, web, or other self generated services, only what's on the internet.)
Much more than 15,000 subscribers and you run in to higher centralization costs (eg, what your aggregation/demarcation ratio is.)
If you consider that the cost is around $11 and the average bill is around $60, if you are feeling ripped off, well, it's because you are.
[1] Most companies oversubscribe by 1,000 percent or more - in other words, selling 1 megabit bandwidth to 10 different subscribers. It's mostly never noticed due to the packet nature of networks and given most folks don't all use the internet at the exact same instant.
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Re: Re: Re: Re: Open Access FTW
It called "profit". Go look it up, Mr. Socialist. There is no such thing as too much profit.
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Re: Re: Re: Re: Re: Open Access FTW
I don't want to say when there is "too much" profit or not but there are circumstances where the consumer pays premiums for market inefficiencies. Excessive profits are a sign that a particular has forces in that result is prices not being able to reach long term average cost. In a mature competitive markets, prices will trend towards long term average costs and the markets that look more like this are the ones the "free marketers" like to example.
Of course some markets don't look very much like this. In our Broadband example, very high barriers to entry and very high fixed costs work against competition. There are other reasons too like right of way rights, but these two biggies get the ball rolling. Because this, it must be realized that without some technical disruptions that changes this dynamic, these markets will naturally want to trend towards a monopolistic model rather than one of pure competition. Of course what we do with this from the consumer's point of view is where the arguments lies.
With that said, my opinion is that these socialist vs. capitalist arguments are just a distraction from realizing the economic forces at play.
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what'sTheproblem?
Who is "we" , Kimosabe ?
Government-politicians-for-hire did this (... not you or me)
Your real beef is with the 'government' ( that acts against the interests of the citizenry). These "giant companies" can not monopolize cable markets without the government backing them.
Municipal-Broadband is just 'more-government' into the current mess--- eventually these government-municipalities will be bought off & neutered by the giant cable companies.
If you can't correctly diagnose the problem -- you cant fix it !
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Re: what'sTheproblem?
Unless you can correctly diagnose the problem, but despite your idealism have realized that true solutions are beyond the realm of your power to enact. And you've rightly decided to go with pragmatism to get something done to make things just a little bit better instead of waiting for some utopia where you can rewrite all of the laws just as they should be.
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Bravo
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umm...
I wouldn't say they failed at all. In order to fail, one must try to accomplish it in the first place.
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Serving a need
Municipal broadband is developing for the exact same reason CATV did - to serve a need for the community that's not being met. Remember, CATV originally stood for Community Antenna TV.
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Re: Serving a need
Municipal broadband depends a lot on how you do it. But digging holes in the ground is generally done better in coordination with other public investment, like water, electricity and other tubes. also, having private companies do it is likely too expensive because of the risks over a 30 year period of service.
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How to Get It
Don't kevetch here! Get out and actually do something.
Everywhere you live (in the U.S.) there are at least two political parties and a horde of politicians who will do what you want (for a reasonable amount of money). So get out there and buy them! They are extremely cheap. Really. Yes. Cheap. Cheap. Cheap.
How to buy a (local) politician.
1. Call them up. Tell them what you want (nicely). Tell them why it s a good idea for their voters/city/county/state. Tell them why it will make all of their voters rich and the weather perfect (mostly). Communicate! Offer to give them a cheat sheet so they can pursuade other politicians. Incredibly, as a class politicians, especially local politicians, are capable of listening to actual human beings. Most of them actually like to do so.
2. Offer they money. a) Yes. Actual U.S Currency. No, DON'T CALL IT A BRIBE; its a 'campaign contribution'. Yes its really legal (consult your lawyers for legal advice). Don't condition it on how the politician votes (explicity), he/she/it is not dumb.
b) How much? They are incredibly cheap to rent/lease on an annual basis. Got 50 bucks? Go big, make it $100. Too much? OK, how about 1 month's cable bill? See below for your neighbor's checkbooks.
3. Talk to your neighbors. If you have any friends, talk to them. Get them to call said politician, or even other local pols. If you really want to motivate the local political establishment, get your neighbors/friends to make campaign contributions to whomever is most responsive to your/their pitch.
4. THE ULTIMATE PERSUADER: Free labor. Volunteer! Yes actually get out and meet real human beings in person. Or at least help stuff envelopes.
5. There is a group of extremely pursuasive politicians that you have never heard of. They are the local people who do the political scut work, the local party committee members. Many local Republican/Democratic committees have discovered electricty and have web sites. Look up who ever is listed as the committee member for your street/neighborhood and talk to them.
6. If after no. 3 above, your neighbors/friend are/is still talking to you, invite them over to meet said local politician and discuss why municipal open access broadband is good for him/her/it.
This is a democratic republic. If you don't do the democrating bit, the politicians can't do the representing bit. So shut up with the complaigning and get to work.
annoyed with you all.
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Re: How to Get It
Wrong, This is a Constitutional Republic...
If you cannot even get that right... why should anyone pay attention to you? though everything you said is pretty much a good idea if for nothing other than to be involved with your communities.
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Re: Re: How to Get It
democratic: relating to or supporting democracy or its principles.
democracy: a system of government by the whole population or all the eligible members of a state, typically through elected representatives (emphasis added).
smug: contentedly confident of one's ability, superiority, or correctness
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Re: How to Get It
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Competition is no miracle.
However, since we have a society built on the horrible idea of competition, you can't take away competition by letting an ISP gain a monopoly or oligopoly position. Obviously, in a competition based society you must have competition or it breaks even worse.
But the proper solution to this and so many other issues would be to remove competition and currency entirely and do things at cost, focusing on technical quality and minimal resource use - not greed. But that would require more serious changes to society itself - but those changes will be necessary anyway. Humanity can no longer afford the intense inefficiencies and inequalities brought about by competition.
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Re: Competition is no miracle.
Sounds nice but how would it work? If there's no money, why do people work, are they forced to work? Who chooses who does what job? If people aren't paid what is their incentive to do a good job? So many questions about this plan.
You think a centrally planned economy will be more efficient?
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Re: Re: Competition is no miracle.
Of course not! And I have yet to figure out why we waste money supporting the elderly and disabled. That just isn't efficient!
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waste of tech
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