Comcast Belatedly 'Introduces' Faster Broadband To City It Sued To Keep From Doing The Same Thing Years Ago. It Didn't Go Well

from the reap-what-you-sow dept

Back in 2008, Comcast sued the city of Chattanooga shortly after the city-owned utility (Electric Power Board, or EPB) announced plans to deliver the kind of cheap, ultra-fast broadband Comcast long refused to. After being saddled with legal expenses, EPB ultimately won that lawsuit, and in 2010 began offering ultra-fast fiber broadband. But it wasn't long before the community-owned broadband network ran into another obstacle: a Tennessee state protectionist law -- quite literally written by AT&T and Comcast -- that hamstrung the operation and prohibited it from expanding.

Fast forward nearly a decade, and EPB now offers symmetrical gigabit connections for around $70 a month -- at least to the parts of Chattanooga ISP lobbyists have allowed it to. A 2016 survey by Consumer Reports ranked EPB, outside of Google Fiber, as the only ISP with a truly positive consumer satisfaction rating among the 30 national ISPs ranked by the magazine. Chattanooga's Mayor, meanwhile, has cited EPB as a major contributor to the city's reinvention.

Facing this weird new phenomenon known as competition, Comcast this year finally broke down and brought its own gigabit offering (technically 1 Gbps down, 35 Mbps up) to the city. But Comcast being Comcast, it simply couldn't help but saddle the offering with a number of restrictions. Specifically, Comcast's offering the gigabit option to Chattanooga residents for $70 a month -- but only if they're willing to sign a three year contract. If users refuse -- the price of the service not only is jacked to $140 per month -- but you'll face usage caps and overage fees -- which are only avoidable if you sign the absurdly long contract.

Hoping to get Chattanooga residents excited about the new option when it finally arrived a few weeks ago, Comcast posted an announcement to Facebook "introducing" the city to gigabit broadband service. It didn't go well. The company began taking an absolutely ferocious beating from area locals tired of Comcast's high prices and legendarily-bad customer service:

Take note of the automated Comcast "support" representative that appears to believe they're "helping" without any understanding of the context of the concerns. The beating proceeds like this for an amazingly long time, consistently citing slow speeds, high prices and poor service:

You may notice a consistent theme or two brought up by Chattanooga locals. The beating was so severe it made the Chattanooga Times Free Press, via which Comcast tried to claim that the response to the company's quickly-backfiring ad campaign was a "misunderstanding":

Comcast says the ongoing backlash is the result of a misunderstanding. The cable giant says that it didn't mean to imply it was rolling out the city's first gigabit service. Rather, it was introducing Xfinity's first gigabit service for residential customers.

"Comcast's recent advertisement on Facebook was intended to remind customers in Chattanooga that our 1-gigabit internet service is now available in their area," said Alex Horwitz, vice president for public relations at Comcast. "The service is offered via cable modem technology, which makes Chattanooga one of the first markets in the nation to enjoy this new service."

There's no misunderstanding. Chattanooga locals understand all too well that Comcast has thrown millions at lawmakers on both the local and state level to try and stifle competition, then expected locals to be awed when the company belatedly introduced its own, inferior and restriction-laden product -- nearly a decade later. There's a reason that Tennessee remains one of the least connected states in the union (pdf), and it has absolutely everything to do with Comcast being an anti-competitive bully with a near-total stranglehold over the state legislature and politicians like Marsha Blackburn.

Tennessee isn't alone in spending the majority of its time bending over backwards to please the country's biggest broadband incumbents to its own, obvious detriment. And more restrictive state laws are being passed all the time. And instead of fixing this corruption on the state or federal level, we're now looking at axing consumer privacy protections and killing net neutrality. Because, you know, that's certain to deliver the kind of broadband Utopia Chattanooga and countless other U.S. markets have been begging for over the last decade.

Filed Under: broadband, chattanooga, competition, customer service, gigabit, muni broadband
Companies: comcast, epb

Tennessee Gives AT&T, Comcast Millions In New Taxpayer Subsidies, Yet Banned A City-Owned ISP From Expanding Broadband Without Taxpayer Aid

from the dysfunction-junction dept

If you want to understand what's wrong with the American broadband industry, you need look no further than Tennessee. The state is consistently ranked as one of the least connected, least competitive broadband markets in the country, thanks in large part to Comcast and AT&T's stranglehold over politicians like Marsha Blackburn. Lawmakers like Blackburn have let Comcast and AT&T lobbyists quite literally write protectionist state laws for the better part of a decade with an unwavering, singular focus: protecting incumbent revenues from competition and market evolution.

The negative impact of this pay-to-play legislature is non-negotiable. One state-run study last year ranked Tennessee 40th in terms of overall broadband investment and availability (pdf), and found that 13% of households (or 834,545 Tennesseans) lack access to any high-speed broadband internet service whatsoever. The study found that the vast majority of Tennessee residents still get internet access through slower services like DSL, wireless or dial-up connections, either because that's all that's available, or because they couldn't afford faster options.

Like twenty other states, Tennessee long ago passed a state law hamstringing towns and cities looking to improve regional broadband networks. As a result, popular municipal broadband providers like Chattanooga's utility-run ISP, EPB, have been banned from expanding its up to 10 Gbps offerings into any more markets. Attempts to repeal the law earlier this year went nowhere after mammoth pressure from incumbent ISP lobbyists. When that didn't work, one lawmaker tried to pass a compromise bill that would have allowed EPB to expand into just one neighboring county.

That proposal was shot down as well, one of the dissenting votes being that of Rep. Patsy Hazlewood, a former AT&T executive.

Tennessee residents have increasingly seen through Tennessee's unwavering fealty to some of the most despised brands in America. Some annoyed state residents have gone so far as to spend their own money to wire the state glacially, hilltop by hilltop. In a feeble attempt to try and placate those tired of expensive, slow broadband, Tennessee lawmakers recently passed HB 0529 or the "Broadband Accessibility Act of 2017." The centerpiece of the bill: throwing $45 million in additional subsidies at ISPs, the majority of which will be enjoyed by AT&T.

Motherboard correctly points out that the state banned EPB from expanding service to those same users without any cost to taxpayers, but was willing to throw additional subsidies at two giant companies with a mixed track record on putting government subsidies to work:

"To be clear: EPB wanted to build out its gigabit fiber network to many of these same communities using money it has on hand or private loans at no cost to taxpayers. It would then charge individual residents for internet service. Instead, Tennessee taxpayers will give $45 million in tax breaks and grants to giant companies just to get basic infrastructure built. They will then get the opportunity to pay these companies more money for worse internet than they would have gotten under EPB's proposal.

"Tennessee taxpayers may subsidize AT&T to build DSL service to Chattanooga's neighbors rather than letting [EPB] expand its fiber to neighbors at no cost to taxpayers," Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance said. "Tennessee will literally be paying AT&T to provide a service 1000 times slower than what Chattanooga could provide without subsidies."

Given the repeated billions that have been thrown at incumbents that then consistently find ways to wiggle out of the obligations, resistence to the "throw subsidies at giant ISPs with a long, documented history of anti-competitive behavior and hope that does the trick this time" model is understandable. Especially in a state like Tennessee, where holding giant companies accountable for misdirection of telecom funds has never been a priority.

Fortunately, this new bill does make it legal now for electric cooperatives to provide broadband internet access to some areas -- a concession to outraged locals and a small sign of progress. That said, these co-ops will still find themselves hamstrung by Tennessee's other, existing, protectionist laws, which impose all manner of reporting and financing restrictions on anybody not named AT&T or Comcast. Popular companies like EPB -- ranked recently by Consumer Reports as one of the best rated ISPs in the country -- still can't offer service outside of its traditional electric utility footprint under Tennessee state law.

It's ironic, in that ISP lobbyists and loyal lawmakers usually try to justify their state bans on community broadband by pretending they were solely interested in protecting state residents from additional taxpayer spending. Yet this is all pretense to justify protecting large incumbent broadband duopolists from having to actually compete. One lawmaker that's actually trying to eliminate the state's restrictions on community broadband perhaps put it more succinctly:

"What we have right now is not the free market, it's regulations protecting giant corporations, which is the exact definition of crony capitalism."

And yet Tennessee's Marsha Blackburn has been consistently and generously rewarded for the kind of "crony capitalism" she's relentlessly advocated for on the state level. She recently was tagged to replace Greg Walden as the head of the House Energy and Commerce Committee's Subcommittee on Communications and Technology. Since that committee tackles most of the pressing internet-related issues, you can expect Tennessee's particular brand of AT&T and Comcast earlobe nibbling to manifest even more strongly on the federal level moving forward.

Filed Under: broadband, chattanooga, competition, marsha blackburn, municipal broadband, subsidies, tennessee
Companies: at&t, comcast, epb