Small Idaho City Shows The Benefits Of Open Access Broadband Networks

from the build-it-and-they-will-come dept

In 2009, the FCC funded a Harvard study that concluded (pdf) that open access broadband networks (letting multiple ISPs come in and compete over a central, core network) resulted in lower broadband prices and better service. Of course when the FCC released its flimsy, politically timid "National Broadband Plan" back in 2010, this realization (not to mention an honest accounting of the sector's limited competition) was nowhere to be found. Both parties ignored the data and instead doubled down on our existing national telecom policy plan: letting AT&T, Verizon, and Comcast do pretty much whatever they'd like.

Since then, "open access" has become somewhat of a dirty word in telecom, and even companies like Google Fiber -- which originally promised to adhere to the concept on its own network before quietly backpedaling -- are eager to pretend the idea doesn't exist.

The town of Ammon, Idaho showcases precisely why telecom giants are so worried. The town built a locally owned 30 mile fiber network, then invited ISPs to come in and compete under an open access model. Locals currently have four ISPs to chose from (with more presumably coming), and users can switch ISPs in a matter of seconds. This week, Ammon Mayor Sean Coletti took to Twitter to highlight the benefits of this competition, noting that one of the ISPs using the network was offering 15 Mbps broadband for as little as $1.88 a month:

Granted there's a catch here (isn't there always?). That $2 doesn't include a tax assessment of $10 to $15 (levied separately), plus a $16.50 utility fee intended to help pay off the bonds used to fund the project. Still, the service (especially faster speeds) winds up being dramatically cheaper than most local ISPs, especially telcos still charging an arm and a leg for sluggish DSL. It's also hard to quantify the value of user control. Unlike most markets (where users only have the choice of one ISP), Ammon residents can just quickly switch to a different ISP should their current one offer terrible customer service, or engage in privacy or net neutrality violations (both arguably symptoms of limited competition).

A video from a few years ago by the Institute for Local Self Reliance took a closer look at Ammon's network, and featured several ISPs that were happy to have access to cheaper fiber. They were also more than happy to compete because, as one small ISP executive put it, "it keeps us on top of the game so we can continue to provide a superior product and no one gets lackadaisical":

It shouldn't be particularly hard to see why natural monopolies like Comcast, who've been allowed to apathetically nickel and dime American consumers for years, are terrified of such proposals. It's largely because it raises the question: what if we treated broadband more like an essential utility? One where locally-owned and operated networks had a direct, financial interest in the contentment of the public? One where private ISPs partner with locals in layers of competition? That's not to say community broadband and open access are the solution for every market. But after decades of doubling down on bad ideas and worse outcomes in US telecom, it's an idea that's worth at least paying attention to.

Filed Under: ammon, broadband, competition, idaho, municipal broadband, open access, sean coletti, unbundling
Companies: ammon fiber

We May Have Unbundled The Music... But We've Smartly Bundled The Music Experience

from the doing-it-right dept

A new, more positive story is emerging. As artists get their arms around all their rights and build direct relationships with their fans we’re seeing artists’ output RE-BUNDLED into higher value packages and average revenue per transaction greater than those delivered by the Compact Disc. Instead of selling their art across a variety of channels (CD at Best Buy, digital download at iTunes, t-shirt at Hot Topic, ticket at Ticketmaster, and vinyl at Amoeba) artists are able to bundle their collective output into a single direct-to-consumer sale where they are the retailer (and pocket half the retailer margin, too). It’s true the CD was an incredibly efficient product with massive distribution (the move from “record stores” to big box retail in the 90s was a large contributor to the bubble you see in the above slide) with an average revenue per sale of greater than $10. It’s also true both piracy and individual track sales have unbundled the product and driven the average revenue per transaction for most artists to less than $3. But at Topspin we see people selling new bundles, different from the CD and as a result very high revenue per transaction:

Filed Under: bundles, business models, experience, music, unbundling

Unbundling The Newspaper Could Be A Good Thing

from the future-of-news dept

A lot of the discussion at the Future of News conference has focused on the supposedly dire consequences of the newspaper's decline. Newspaper readership is falling, and advertising revenues are dropping even faster. A lot of people here (especially folks who work at newspapers) seem to think that newspapers fill a unique niche that will go unfilled if increased competition from the Internet causes newspapers to go out of business. One of the people on the second panel, Eric Alterman, wrote an article for the New Yorker recently making the same argument. He thinks that bloggers have a "parasitic relationship" with the mainstream media, perhaps exemplified by me linking to a New Yorker article as the jumping off point for this post!

What I think this misses is that the current structure of the newspaper industry may not make a lot of sense in the Internet age. Today, every newspaper has its own stable of movie critics, book reviewers, sports reporters, and coverage of science, technology, medicine, foreign affairs, and other topics. This arrangement was largely dictated by the limitations of 20th-century distribution technologies; in the 20th century, there were economies of scale to delivering news, and so it made sense to put all of the day's news into one big bundle and deliver it to everyone's door.

Thanks to the Internet, the web, and technologies like RSS, there's no longer any reason for everyone to get the same bundle of news, and there's certainly no reason to think that everyone will want to get all their news from the same metropolitan area. There's no particular reason that I should get my movie reviews or technology coverage from my local paper, the St. Louis Post-Dispatch, rather than specialized publications based elsewhere that cover these topics in great depth. People can assemble their own bundle of news by picking and choosing among the thousands of publications online. And for those who don't have the time or the knowledge to do that, there are going to be plenty of aggregators that offer a comprehensive summary of the day's news syndicated from a bunch of different sources.

Treating the metropolitan newspaper as a bellwether for news gathering as a whole is misguided. Newspapers are declining not because there's no market for good content, but because the 20th-century newspaper probably isn't the best model for organizing the enterprise of news gathering. There's a ton of good content on the Internet that doesn't come from mainstream media outlets, and there's every reason to expect that a lot more will be created as the online audience continues to grow. But the new outlets aren't newspapers, and there's no reason to expect them to have the comprehensive ambitions or monolithic structure of newspapers. People looking for a single institution that will take the place of the newspaper are likely to be disappointed. Rather, the newspaper is likely to be replaced by a swarm of smaller, nimbler and more specialized news outlets, combined with aggregation tools that help people assemble their own bundles of news from these myriad sources.

Filed Under: newspapers, unbundling