Utilities Are Playing Dirty In Florida To Kill Solar Energy Disruption In The Cradle

from the artificial-consumers-for-stagnation dept

Facing a future where competition is rampant, customers pay less money, and solar users actually get paid for driving power back to the grid gives any entrenched utility executive heartburn. Fortunately for them, we live in an era where buying state law and tricking consumers into rooting against their own best self interests is easier than ever before. Florida (where air conditioning drives the second highest energy consumption nationally) is quickly becoming the poster child for how utilities are using ethically incontinent lawmakers and a gullible populace to prevent solar power technology from reaching critical mass.

In Florida the average household spends $1,900 a year on power, 40% higher than the national average. Yet incentives or other measures designed to spur solar power adoption are either absent or illegal, in large part thanks to utility lobbying. Last year, a coalition of solar energy advocates called the Southern Alliance for Clean Energy (SACE) tried to push an amendment that would have opened up the Florida energy market to solar competition. The group helped create a coalition of some strange bedfellows dubbed "Floridians for Solar Choice" with an eye on a November 2016 ballot initiative:

Seeking to crack open Florida's energy market at the ballot box, the Southern Alliance for Clean Energy (SACE) mounted a $2 million campaign to qualify a "Solar Choice" amendment for the 2016 election. The constitutional amendment would have ended Florida's rare lock on electricity sales; only Kentucky, Oklahoma and North Carolina have similar prohibitions. It would have freed consumers to install leased solar panels on their rooftops at no upfront expense. Retailers could have installed solar arrays and sold power to tenants in the same shopping complex.

Instead of just the boring traditional approach of attacking the initiative (which was polling at 70% public support), Florida utilities got creative. They created an operation calling itself Consumers For Smart Solar -- a group pretending to support solar technology, yet whose sole purpose is to push a competing proposal that hard bakes the existing, utility-friendly regulations into the Florida state constitution. The sales pitch at the group's website works hard to craft the illusion that the proposal is a huge boon to consumers and solar:

Amendment 1 helps those who choose solar by allowing state and local governments to pass commonsense consumer protection regulations, designed to prevent fraud, abuse and overcharging. Non-solar customers who use traditional energy are protected by these regulations and we think solar customers should be protected, too. Even if you don’t choose solar, Amendment 1 works for you by ensuring that everyone who uses the electric grid helps pay to maintain it—including big, out-of-state companies.

The "about us" section of the group's website fails to mention its ties to the utility sector whatsoever. Instead, as we've also seen in telecom, the group crows that it has the support of a variety of third-party associations and minority groups, apparently willing to sell their constituents' best interests down river for industry financing. It also has the support of a myriad of groups just like itself, professing to be "coalitions of working people, business owners, environmentalists," yet oddly enough supporting proposals that work in stark opposition to the interests of pretty much everybody -- except utilities.

In other words, an ouroboros of carefully-constructed bullshit built specifically to protect the status quo.

Unsurprisingly, the initiative backed by companies and individuals actually supporting solar power has raised $1.52 million as of January 1, while the initiative backed by regional utilities like Florida Power & Light, Duke Energy, Tampa Electric and Gulf Power has raised nearly 7 million. Outspent and outgunned, Floridians for Solar Choice (the group actually for energy market disruption and evolution) was forced to retreat and refocus on the 2018 ballot initiative, while the utility-backed proposal remains on track for a potential November approval, with few seemingly bothered that the masquerade has been so successful.

Filed Under: florida, solar power, utilities

ISPs Are Blocking Google Fiber's Access To Utility Poles In California

from the deregulatory-hypocrisy dept

Last month, we noted how entrenched broadband providers had found a new way to try and prevent Google Fiber from bringing much-needed competition into their markets: blocking access to carrier-owned utility poles. AT&T recently sued the city of Louisville for embracing so-called "one touch make ready" policies that dramatically streamline the pole-attachment process. The rule rewrites allow third-party contractors to move (often just a few inches) multiple companies' gear, dramatically reducing the cost and time frame for new deployment (in Louisville by an estimated five months or so):

In the case of one touch make-ready, companies that own poles agree on one or more common contractors that could move existing attachments on a pole (‘make ready’ work), allowing a single crew to move all attachments on a pole on a single visit, rather than sending in a unique crew to move each attachment sequentially. Sending in separate crews is time-consuming and disruptive to local communities and municipal governments. One-touch make-ready polices would ease this burden.

And while this is generally an idea that would benefit all broadband providers, it would benefit new providers like Google Fiber the most. That's why companies like AT&T, Comcast and Time Warner Cable have been blocking this pole-attachment reform, in some cases trying to claim such policies violate their Constitutional rights. The ISPs figure that if they can't block Google Fiber from coming to town, their lawyers can at least slow Google Fiber's progress while they try to lock customers down in long-term contracts.

In addition to skirmishes like this in Austin and Louisville, AT&T, Comcast and Time Warner Cable have been fighting pole-attachment reform across California, where Google Fiber is eyeing San Diego, Irvine, Los Angeles and portions of Silicon Valley as potential expansion markets:

Mountain View-based Google has been fighting before the California Public Utilities Commission for the right to use publicly and privately owned utility poles because burying fiber cables is expensive and in places impossible. AT&T and the cable TV association representing Comcast and Time Warner Cable have told state regulators that Google has no such right. And Google contends that a group that controls many Bay Area utility poles, and includes Google competitors as members, also has been blocking access to the poles.

...The Northern California Joint Pole Association has refused to grant membership to Google, according to (Google lawyers), and membership is required for access to the group's poles. Among the association's members are AT&T and Comcast, both expanding their own gigabit-speed Internet services.

In addition to thwarting streamlined pole attachment rules, both companies have played a starring role in crafting state level protectionist laws -- some of which hinder Google Fiber or other companies' ability to strike public/private partnerships. As such, it's worth remembering the next time you hear companies like AT&T or Comcast complaining about "onerous regulations" -- that they're consistently in favor of just such regulations -- if they protect them from having to actually compete.

Filed Under: california, google fiber, isps, pole access, utilities
Companies: at&t, comcast, google, time warner cable

Are Cellphone Carriers Like Gas Stations?

from the Liger-In-Your-Tank dept

It's a simple lesson from Kindergarten: Share. You probably don't think of oil companies as being particularly good at this - except perhaps in the sense of sharing oil price hikes at the pumps - but it turns out they have another hidden sharing skill that they'd rather you didn't see. They share gas and pipelines, run by pipleline firms called "common carriers". Although not widely known, there is very little difference between the gas you buy at competing fuel stations in the US. The gas is a commodity product based on quality specs, and the differences are mostly marketing.

The privately-owned national gas/oil distribution infrastructure is quite formidable (offering a massive legacy advantage over any future fuels). There are pipelines that cross the country, refineries, trucks, equipment, tanks, catchments, reserves - all to deliver fuel to a growing economy (yes, growing...over the long-term at least).

But it would be prohibitively expensive to build such an infrastructure for EACH of the gas station brands. So instead of separate pipelines snaking the country, one each for Chevron, Shell, Texaco, Philips, etc...they share. Tanker ships deliver a standard grade of oil to refineries where it is refined to standard grades of fuel. And while the refineries may be owned by a specific oil company, the fuel they produce is put in common pipes to transport across the nation. Thus, the premium gas that Shell puts in the pipe in California could be taken out by Texaco in Nevada. Since it is a commodity product, it doesn't matter whose batch of fuel is taken out of the pipe, it only matters how much. This pipe is quite "dumb", but the network is shared, and the commodity that is transported is a standard package - sound familiar to any telco people?

The Fair Trade Commission in the US has stopped gas companies from making false advertising claims, and if the companies are selling the same gas, they can't claim it to be better. Thus claims like "More powerful" get replaced with the metaphorical, nonsensical "Put a tiger in your tank!" Is shared infrastructure and a standards-based product killing the gas companies? No. How do they compete if the product they sell is EXACTLY the same as their competition? What's the value of brand?

The answer lies in a small trick. The FTC won't allow them to say their gas is better if it's the same. But if they inject some small amount of "additive" just before selling the gas to customers (This additive can be anything...even a secret formula of 11 herbs and spices) that's all it takes to claim a different product. And with a different product, the gas companies can claim to have a "cleaner running" product, or "burns better" or whatever angle they want to promote with their brand. It works. They have been sharing pipes for decades, so maybe their case is instructive for telcos.

There IS money to be saved from sharing a single infrastructure. Especially when the product is standards-based. GSM, EDGE, 3G, HSPA, LTE are all pretty standard. As are Metro Ethernet, IP backhaul, etc. So I believe the carriers are on to a good idea in reducing their CapEx by sharing common network elements. Even more so because of the frequent 2G-3G-4G-... upgrades needed to compete. They can easily continue to differentiate by offering special "additives" to their product.

And while the gas companies' additives are mostly snake oil. The telecom "additives" are quite important, and can truly differentiate a mobile subscription over the raw bits inside the dumb pipe: Customer service, retail presence, data services, location platforms, fixed/mobile integration, easy-to-read bills, the iPhone, fave-5, rollover minutes...these are all very important parts of the service mix, and are true differentiators about which customers care. The things that subscribers don't care about might as well be shared. Amazon.com and buy.com both ship with UPS - do you care that they share the delivery mechanism?

Sol Trujillo, outgoing CEO at Australian cellco Telstra, is making the opposite gamble, detailed in a speech at MWC. He thinks the differentiator is the network infrastructure, and is piling money into it to be the first carrier to offer high-speed LTE technology, contrasting his approach to the common-carrier approach of Telfonica and Vodafone. While LTE is great, thinking that the network is a differentiator is wrong, and shortsighted. No customer has ever cared about the technology or the infrastructure. And while Telstra invests in a brief technology lead with LTE, their higher costs of upgrades may eventually make them technology laggards compared to competitors that share.

I can see it now: "Cleaner burning Vodafone Wireless", or "AT&T. Put an Apple in your tank!"

Filed Under: common carrier, gas stations, utilities, wireless