A new documentary from California explores the failure of the private sector and competition more generally to sufficiently invest in fast, affordable, and reliable access to the Internet.  It comes in three parts and runs about 25 minutes in total.  

This provides a good summary of the present broadband landscape and how AT&T, Comcast, and other major providers are not the answer to our increasing need for better connections to the Internet.

Santa Monica has received yet another award for its publicly owned broadband network, not too long after it received award from the Ash Center at Harvard University.

Santa Monica’s broadband initiative was nominated for the network’s ability to provide speeds of 10 Gigabits per second, achieve a 67% cost reduction, and the economic and technological growth opportunities that result from supporting companies along Santa Monica’s Tech Coast with a leading-edge broadband infrastructure.

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The City of Santa Monica leases dark fiber and offers lit fiber to local businesses for affordable broadband at 100Mbps, 1Gbps, and 10Gbps speeds. Santa Monica's broadband model results in a reduction of construction costs for new broadband service, an increase in purchasing power of connected local businesses, and a broadband market expansion for Internet service providers that now may offer service to small, medium and large commercial buildings. The city also recently received honors as one of the Top 25 Innovations in Government by the Ash Center at the Harvard Kennedy School and a Significant Achievement Award from the Public Technology Institute (PTI) for the broadband initiative.

We try to keep track of the many awards the community networks have won so don't be afraid to alert us of community networks winning awards.

Santa Monica's approach to building community owned broadband that puts the community first has been wildly successful. They have not focused on providing residential connections, and likely will not in the future, focusing instead on meeting their municipal needs and businesses to spur economic development.

They can deliver up to 10Gbps to businesses that need it and they have connectivity throughout the City for whatever projects they choose to pursue. This includes free Wi-Fi in parks, controlling traffic signaling (prioritizing mass transit, for instance), and smart parking applications. On top of all that, their investments have saved more than a million dollars that would have been wasted on slower, less reliable connections provided by leased lines.

In the matter of controlling traffic signals, Santa Monica wants all intersections with fiber-optics.

Arizona Avenue, the Mid-City area and the city's office district will all be getting makeovers if the City Council approves two contracts that will connect 40 signalized intersections to City Hall's centralized traffic control system.

The work represents the fourth phase in a five-phase effort to connect all of Santa Monica's intersections using fiber optic cables. Some signals will need to be fully replaced, while others can get by on smaller upgrades, according to the staff report.

Don't miss this hour long interview between Craig Settles and Jory Wolf, the brains behind Santa Monica's success.

Around 45 minutes into the interview, Jory Wolf talks about the ways the free Wi-Fi network promotes local businesses in partnership with a Buy Local campaign. I was thrilled to hear this as a colleague of mine at the Institute for Local Self-Reliance is a great friend of buy local campaigns because they are proven to help the small, independent businesses that contribute so much to communities.

If you want to learn more, particularly about how Santa Monica's approach has created many new jobs (that's right, smart public investments in broadband create jobs!) check out .

For more information about Santa Monica, check out this article from Broadband Communities Magazine.

-Though the city provides Internet access directly, it also makes the network available to third-party providers on an open-access basis. “The incumbents have chosen not to use our assets,” Wolf says, explaining that larger providers are often reluctant to operate over networks where they cannot control the user experience and that their marketing and support organizations are not geared to using other companies’ networks. 


However, other ISPs have shown interest in the network now that it is becoming successful. Currently, two ISPs offer services generally over the network, and other ISPs serve the Santa Monica offices of businesses that they deal with in other locations. Wolf says, “We have the opportunity to handle the business any way they prefer. … We’re not an obstacle; we’re an enabler. We don’t see ourselves as competitors, but as filling a void.” 


City Net’s revenue from current business customers totals about $300,000 per year, enough to fund network operations and maintenance and to support an extensive system of free Wi-Fi hot spots throughout the city. Wi-Fi is now available at parks, beaches, libraries, public buildings and other open-space areas. On any given day, about 2,000 of Santa Monica’s 87,000 residents use the 27 Wi-Fi hot spots. 


The city also has $190,000 of its capital funds remaining, which it uses as a revolving capital improvement project account. This account funds construction for network expansion, which is repaid by customers as the network is extended to their premises. 


An indirect benefit of City Net is that it has forced competing networks to lower their prices. Wolf’s office estimates that nonparticipating providers have lowered their bandwidth prices by 20 percent or more, making bandwidth generally more affordable throughout the city. “If that’s all we had accomplished, we’d feel that we’d done what we intended,” Wolf says.

See also a webinar hosted by Broadband Communities [Cisco WebEx] where Jory discusses Santa Monica and nearby Long Beach talks about a similar approach they are using.

Finally, check out a recent segment of Santa Monica Update that discusses Santa Monica City Net (fast forward to 9:20 in the video to skip right to it).

Video: 

We watch in frustration as the federal government, dressed as Charlie Brown asks AT&T, wearing Lucy's blue dress and smiling brightly, if she really will hold the football properly this time. "Oh yes, Charlie, this time I really will create all those jobs if you let us buy T-Mobile," says AT&T Lucy.

Over at HuffPo, Art Brodsky recently revisited AT&T's promises in California to create jobs, lower broadband prices, and heal the infirm if the state would just deregulate the cable video market -- which it did, 4 years ago. California upheld its end of the bargain -- wanna guess if AT&T did? Hint: Charlie Brown ended up on his back then too.

The answer comes from James Weitkamp (via Art's HuffPo post), from the Communications Workers of America, a union that all too often acts in the interests of big companies like AT&T and CenturyLink rather than workers:

"AT&T and Verizon have slashed the frontline workforce, and there simply are not enough technicians available to restore service in a timely manner, nor enough customer service representatives to take customers' calls. Let me share some statistics. Since 2004, AT&T reduced its California landline frontline workforce by 40%, from about 29,900 workers to fewer than 18,000 today. The company will tell you that they need fewer wireline employees because customers have cut the cord going wireless or switched to another provider, but over this same period, AT&T access line loss has been just under nine percent nationally. I would be shocked if line loss in California corresponds to the 40 percent reduction in frontline employees.


"Similarly, since 2006 Verizon California cut its frontline landline workforce by one-third, from more than 7,000 in 2005 to about 4,700 today. I venture that Verizon has not lost one third of its land lines in the state."

Note that AT&T, Verizon, and other massive incumbents like Comcast have been wildly profitable over this term.

The same trend holds in cellular wireless - as noted by the Wall Street Journal:

The U.S. wireless industry is booming as more consumers and businesses snap up smartphones, tablet computers and billions of wireless applications. But for the industry's workers, the story is less rosy.

In May, on the heels of a record year for industry revenue, employment at U.S. wireless carriers hit a 12-year low of 166,600, according to U.S. Labor Department figures released earlier this month. That's about 20,000 fewer jobs than when the recession ended in June 2009 and 2,000 fewer than a year ago.

While the industry's revenue has grown 28% since 2006, when wireless employment peaked at 207,000 workers, its mostly nonunion work force has shrunk about 20%.

This should not be a surprise. In fact, it would be shocking if the increasing consolidation of telecom created more jobs. The fewer firms in the market, the more they are likely to work together for mutual gain -- to the detriment of all the rest of us.

Rural voices are continuing to make this point, as Parul Desai recently did on the Daily Yonder:

If the merger goes through it is unlikely the two remaining larger carriers would try to compete on price.  AT&T has chosen to emphasize network improvements, speeds of service, and gains in network development that the merger will enable, rather than tout future pricing benefits. The company has indicated to stockholders that it plans to bring T-Mobile revenues per user up to match those of AT&T, suggesting that price increases may be inevitable. 

But for every Parul Desai, there is a massive organization already bought off by AT&T claiming all their members are clamoring for fewer choices and higher prices.

But that is where we are going - both in wireline and wireless. The only question is how long policy makers will pretend the telecom/broadband industry is characterized by competition at all. But the fiction of competition serves a purpose - it allows those policy makers to justify their refusal to regulate in the public interest. As long as they pretend telecom has competition, they can say there is no need to regulate because the market will prevent AT&T, Comcast, Verizon, et al., from raising prices too much and cutting back on investment.

We can do better - but it requires smart government policies on the national level as well as preserving local self-determination to choose if building a publicly owned network makes sense. Though we will not have competition in poles, wires, or towers, we can have competition in services -- telephone, cable television, and access to the Internet. We can... but will we?