The following stories have been tagged prices ← Back to All Tags

Lexingtonians Consider Municipal Network Options in Kentucky

Community leaders in Lexington are the latest to stand at a fork in the broadband road. In September, the franchise agreement between the Lexington-Fayette Urban County Government (LFUCG) and Time Warner Cable expired, resulting in a month-to-month agreement continuation. As they negotiate a new contract, local citizens have called for consideration of a municipal network.

When the contract was originally negotiated in the 1990s, the community was primarily interested in cable TV servce. As broadband has become critical infrastructure for residents, businesses, and government, the community's focus shifted. Lexington customers have complained repeatedly about Internet and cable TV service from Time Warner Cable. A February Kentucky.com article noted that local consumers complained over 300 times to Lexington's Urban County Government, the entity responsible for contract negotiations. According to the article:

The biggest single category of complaints was about price and the volatility of monthly rates. Other complaints were that the cable TV service "repeatedly fails, resets or freezes"; that there was an extended wait time and/or "unhelpful responses" in customer service; and that email and Internet "had declined in service" and showed "significantly slower service."

The City Council considered the situation bad enough to debate whether or not to appoint an ombudsman to advocate for Lexington consumers.

The community wonders how the proposed merger between Time Warner Cable and Comcast will impact their current service. While the Vice Mayor seems to think it is an "almost golden opportunity" to deal with a different provider, local citizen Roy M. Cornett has a different perspective. He wrote for Business Lexington.com:

We can choose to maintain the status quo and allow out-of-state corporations to continue to control our access to the Internet, or we can rescind the franchise agreements to the copper and fiber lying in the ground around our community and treat the Internet as the piece of infrastructure essential for our future economic growth that it is. 

We would just note that this is not an either/or proposition. They can both develop a new franchise or not separately from deciding to move forward with some smart municipal investments.

As the LFCUG has moved forward with franchise negotiations, they opened up the discussion at City Council meetings. Cornett attended a Cable Franchise Workshop to learn about the process. What he learned is that the LFCUG possesses very little power in negotiations, due to federal law. In fact, if Time Warner Cable meets a very low standard, the LFCUG has no option but to renew.

Lexington Kentucky Logo

Cornett and others in the community wonder if Lexington wants to go down the same Internet road again - expensive, unreliable, and ruled from a far off corner office. He addresses the question in another article on the Barefoot and Progressive site:

If the Time Warner [Cable] and Comcast merger goes through, Lexington will not only have piss poor download speeds, but caps on the amount of data you can use in a month. Comcast currently has a cap of 300 gigabytes per month for customers in Elizabethtown and Campbellsville, Kentucky. To put this in perspective, my family’s usage as of February 15, was 99 gigabytes for the month and we still have two weeks to go. I am terrified of what it will be in a few years when my youngest kids become teenagers. 

Cornett reached out to us when he wanted to learn more about the possibilities of a muni for Lexington:

The City of Chattanooga just recently built a municipal ISP to provide gigabit service to 147,000 homes at a cost of $330 million (of which $111 million was provided by the feds). Christopher Mitchell, the director of Telecommunications as Commons Initiative for the Institute for Local Self-Reliance, did some very rough back-of-the-envelope calculations for the City of Lexington and estimates that a full gigabit fiber network to every resident and business would be somewhere in the $200 million range. 

Those are huge numbers and should give anyone pause, but consider that we are spending $1.6 million on sidewalks for Tates Creek Road, $17 million for resurfacing a few blocks of South Limestone and $310 million dollars renovating Rupp Arena. Ask yourself if any of the above projects could come close to offering the economic impact that gigabit internet service would bring. It isn’t even close.

In his Business Lexington.com article, Cornett encourages a new coalition, the Bluegrass Economic Advancement Movement (BEAM), to take up the muni possibility. The group is a collaboration between Louisville and Lexington with support from the Brookings Institute. The goal of BEAM is to bring quality jobs to the Bluegrass and increase export activity.

Cornett, who we expect to hear more from, writes in his Barefoot and Progressive article:

I won’t speculate on the motives of the corporations for attempting to kill competition, but the issue of our city possessing a modern, reasonably priced, continually upgraded network is essential to our future.

This is not a fight we should shy away from. On the contrary, this is a fight we need to embrace, and it can be the lynchpin that takes the BEAM super region from a good idea to a shining success. I urge Mayors Gray and Fischer to – at the very least – explore the option of retaking control of this vital component of our infrastructure.

High Speed in the Blue Grass State: Russellville's Gig

The Logan Journal recently reported that the Russellville Electric Plant Board (EPB) now offers gigabit service to local businesses. The article notes that Net Index, an online tool to measure download and upload speeds, recognizes EPB as the first Gig city in Kentucky. To learn more about the community and its network, we talked with Robert White, General Manager of EPB.

The community of 7,000 is the county seat of south central's Logan County. Russellville is located in the center of several other larger communities: Nashville, Bowling Green, Hopkinsville, and Clarksville, Tennessee. Manufacturing has been a large part of the local economy for generations, but community leaders recognize the vulnerability of a narrow economic base. In order to encourage a versatile economy, Russellville invested in its telecommunications utility.

The community wants to encourage small business while simultaneously providing manufacturers the connectivity they need. Leadership sees the ability to remain competitive directly tied to their network. In addition to the economic development opportunities a fiber network can provide, communities like Russellville rely on electricity revenue from large consumers. Retaining the large electric consumers that also provide jobs in the community it a must.

Russellville's electric utility created a strong advantage when it was time to venture into telecommunications. EPB had already established a strong relationship with its Russellville customers, says White, and locals felt they could trust their municipal electric provider.

EPB began offering wireless Internet to the community in 2005; at the time, there was very little choice for wireless or wired Internet. The product was competitively priced and it performed well for wireless service at the time but EPB eventually shifted focus to its next generation high-speed network. The wireless service is still available to customers who subscribed prior to the construction of the fiber network but EPB no longer offers it to new customers. Wireless speeds vary from 1-2 Mbps download and approximately 500 Mbps upload. The area now has several options from the private sector - Verizon and Bluegrass Cellular provide wireless up up to 10 - 15 Mbps.

Russellville EPB Logo

According to White, Russellville's inspiration to build the network was not to compete, but to fill the services gap. He told us:

"We support Logan County residents having the best product. If that means us offering the product, that's fine. If it means the private sector will step up to the plate and serve the areas we can't serve…that's fine as well. We want our residents to be served, whether by us or an incumbent."

Larry Wilcutt, White's predecessor at EPB, began studying the possibility of a fiber network in 2007, but external forces motivated Wilcutt and EPB to seriously pursue the project a few years later.

In early 2010, EPB learned that its power supplier, the Tennessee Valley Authority (TVA), would switch to time-of-use wholesale rates and begin using smart grid technology by 2012. In order to participate in the new technology, EPB needed meters that could communicate with its electrical system operations. EPB installed fiber optics for Advanced Metering Infrastructure (AMI) and for future expansion into telecommunications. A News-Democrat & Leader article from October, 2010 (reprinted at MobilityTechZone.com) reported:

The EPB's goal is to eventually install fiber optic cable to every home and business in Russellville, is installing the cable to every home in the Russellville, city limits -- even those that are serviced by other electricity providers. There are also plans to include some locations outside of the city limits to extend service to the more populated areas adjacent to the city limits of Russellville. 

The article quoted Wilcutt:

"The Board has been working on this project for over two years and we are extremely excited to finally start construction on this project. We want to provide the citizens of Russellville with a system that is second to none, one they will be proud of, one that will entice new investment in the community. Whether that new investment is in the form of capital, technology or people, we believe the City of Russellville and Logan County will benefit well into the future" Wilcutt said.

AT&T Logo

At the time, the best connectivity in Russellville was AT&T's DSL at 6 Mbps download. Satellite Internet was available but was unreliable, expensive, and maximum speeds were 1 - 2 Mbps download.

The community was also starved for quality video service. Suddenlink did not offer HD channels and made it clear that HD service was not planned for Russellville. Large corporate providers had no interest in Russellville so EPB felt it was time to take control of their own connectivity.

Construction of the 99% aerial, 120-mile network began in October 2010; EPB began offering services in December 2011. White presented the results of an audit in November 2013 to the City Council showing that 8% of EPB's total revenue came from its broadband division. The audit also showed that the network was ahead of its projected take-rate with 1,300 active subscriptions out of 4,000 passed homes. 

The network capital costs were approximately $11 million with approximately two-thirds designated for electrical system expenditures. In 2010, the American Recovery and Reinvestment Act (ARRA) offered Build America Bonds (BABs), some of which provide federal subsidies to help communities pay back interest to bondholders. BABs, backed by electric system revenue, provided funding for the entire project and contributed to interest expenses.

EPB offers services to every home and business in its service area and hopes to expand further. They expected video to be the lead product, but  Internet service is the most popular. White considers the lack of high-speed Internet in the region the driving force. The commercial gigabit product is new and no customers subscribe yet but local businesses take advantage of the fiber network. One local contractor tells White he enjoys the ability to share documents and bid for projects online without fear of technical glitches. When he used unreliable DSL connections to transmit data, he was perpetually concerned about deadlines and the status of data sent via DSL.

Local public safety agencies, the local library, Russellville City government, and Russellville Independent Schools now use the network. EPB and the Logan County Schools may soon be working together.

Word of Mouth graphic

In addition to providing much needed connectivity to the community, the network provides an increased stream of revenue. EPB submits a payment in lieu of taxes (PILoT) to county and city governments based on electrical and broadband services revenue. As EPB gains customers transitioning away from satellite video service, its contribution to the City increases; satellite providers do not pay a franchise fee to Russellville. At a July 2010 City Council meeting, EPB expected broadband services to add approximately $25,000 in PILoT within the first five years. EPB also pays a separate and voluntary video franchise fee to the local municipality. 

These days, White and EPB are concentrating on raising awareness of the commercial gig product and service to residents. To spread the word, EPB holds regular workshops for the community to explore ways to maximize the the network's possibilities. Commercial gig service is available for $1,499.95 per month.

White and the EPB understand that the private sector must make decisions based on returns. In the case of this publicly owned network, some key returns take the form of benefits to the community. Since EPB lit its network, White and his crew often hear from customers who rave about their service. White says:

"They hate to pay electric bills but they say getting superior broadband services from EPB is all worth it."

EPB's residential fiber Internet services begin at 20/5 Mbps for $39.95 per month with higher speeds at 100/25 Mbps for $69.95 per month. Video services from EPB range from $29.95 per month to $62.95 per month with the option to add over 100 HD channels. Voice packages start at $14.95 per month.

For Chris' recent interview with White, check out episode #82 of the Broadband Bits podcast. 

LightTUBe Financially Secure in Tennessee

Tullahoma Utilities Board's triple-play FTTH LightTUBe, began serving Tullahoma in 2009. The fiber network utility is paying off its city bond debt on schedule reports the Tullahoma News.

The network's income during the first four months of fiscal year 2014 is a positive $58,939. General Manager Brian Skelton spoke with Chris Mitchell in July 2013 and expressed confidence that that network will continue to operate in the black. The News reported on our podcast interview with Skelton and provided some recent updates:

With an estimated potential customer base of 9,000 in the TUB service area, LightTUBe services 3,201 fiber customers. That number is slightly ahead of goal (3,186) and represents nearly 36 percent market penetration against primary competitor Charter Communications.

Tullahoma deployed its network to encourage economic development. In 2011, we reported on J2 Software Solutions. The company located its headquarters in Tullahoma because LightTUBe offered fast, reliable, affordable service. 

According to the News article, expenditures on Internet service remain consistent while subscriptions grow. The Tullahoma Utilities Board (TUB) only recently approved a $7 rate increase for video service due to an increase in the cost of television content. When content rates rose in the past, TUB chose to absorb the increase but the cost of content continues to increase for all providers. Since 2009, TUB increased Internet service speeds five times without increasing prices. From the article:

”LightTUBe is in a very comfortable position from a financial perspective. Our biggest concern at this point is the unreasonable price increases that we (and others in the video business) are seeing from many of our channel providers,” said Skelton.

That comfortable financial position appears to rest largely on the shoulders of LightTUBe’s Internet service.

While video and telephone services together generate enough income to offset the system’s net maintenance and depreciation costs, Internet services generate enough income to offset its additional customer service, sales, administration and debt costs.

Unlike the private providers it competes against, Tullahoma is limited in where it can offer service. State law prevents it from serving customers outside its electrical territory - something AT&T and Comcast lobbyists have preserved year after year by killing bills that would remove this damaging law. Across Tennessee, local businesses, residents, and anchor institutions are stuck with slower, less reliable connections despite desiring expansion from the nearby utility but they are denied.

Because Tennessee law prohibits municipal utilities from providing their fiber services outside of their electric service territory, LightTUBe cannot offer its 1G Internet to – for example – the Coffee County Joint Industrial Park, which is serviced by Duck River Electrical Membership Cooperative (DREMC). The joint park, located five miles northeast of Tullahoma and outside of TUB’s service area, has cable-based Internet service.

Palm Coast's FiberNET Produces Dramatic Savings Locally

We last took a look at Palm Coast’s FiberNET over two years ago when Broadband Communities featured the open access fiber network along Florida’s upper east coast. Due to its initial focus on community anchor institutions and incremental build out, FiberNET serves as an outstanding example of how to justify a network investment with cost savings. We recently spoke with Courtney Violette who created the initial business plan for FiberNET under his previous role as Palm Coast’s CIO; he is now a Managing Partner with Magellan Advisors, an international broadband planning firm.

A presentation on the Palm Coast government website shows how FiberNET generates hundreds of thousands of dollars in annual cost savings for the City of Palm Coast, Flagler County School District and Florida Hospital. The data is impressive. The City of Palm Coast alone saves around $160,000 per year by switching to FiberNET for its networking needs.

Flagler County School District is likely the biggest beneficiary of cost savings in the community. Before FiberNET came onto the scene, the District paid Bright House Networks more than $500,000 per year for network services over a hybrid fiber-cable network. Now Flagler County School District pays around $300,000 for faster, more reliable services over FiberNET’s all-fiber network. These savings paid for the schools’ initial cost of connection after just one year.

Florida Hospital and its affiliates are also saving big. Affiliated doctors’ offices and clinics are required to maintain a 10-Mbps (minimum) connection with the hospital. Before FiberNET, these connections cost around $900 per month from the local incumbent. FiberNET now offers them for $250 per month. Similarly, the Hospital itself saves tens of thousands on its annual networking costs by switching to FiberNET.

It is worth noting these initial figures are conservative by not accounting for growing internal demand for high-speed networking. In other words, as these entities ramp up usage of faster network services available through FiberNET, their savings will grow accordingly. In fact, their savings will actually accelerate as they use services only available over fiber which the incumbent could not offer without incurring major upgrade costs.

With the network mostly built, expanding incrementally on a business case basis, FiberNET is now paying for itself in cost savings to the City and revenue from anchor institutions and businesses that previously paid much higher prices for slower services from the incumbent. Revenue has nearly doubled each year since 2010, reaching $522,940 in 2012, against expenses of $161,260. At this rate, FiberNET is expected to break even in less than six years.

Cedar Falls Shows Long Term Muni Network Success: Community Broadband Bits Episode #75

Cedar Falls Utilities operates one of the oldest community owned networks in the nation. It started as a cable network in the 90's, upgraded to FTTH recently, and this year began offering the first citywide gigabit service in Iowa. CFU Communication Sales Manager Kent Halder and Network Services Manager Rob Houlihan join me for Community Broadband Bits podcast 75.

We discuss why Cedar Falls Utilities decided to add cable to their lineup originally and how it has achieved the incrediblely high take rates it maintains.

We also discuss the importance of reliability for municipal network and why they decided to transition directly to a FTTH plant rather than just upgraded to DOCSIS 3 on their cable system. Finally, we discuss its expansion into the rural areas just outside of town.

Read all of our coverage of Cedar Falls on MuniNetworks.org.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 20 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Haggard Beat for the music, licensed using Creative Commons.

GRUCom Gives Gainesville Gigabit Broadband

Gainesville Regional Utilities (GRU) has been deploying fiber in the north-central Florida home to the University of Florida (UF) since the late 1990s. We briefly mentioned them last year when Gig.U teamed up with GRUCom, GRU’s telecom division, to connect neighborhoods and businesses surrounding the University with fiber broadband. We’ve since taken a deeper look at GRUCom’s work and like what we see.

GRUCom was born after the FCC reclaimed the spectrum GRU used for microwave control of its SCADA systems. GRU naturally switched to fiber, and in the process of running lines for its utilities, it ran into crews doing the same for Shands Hospital, part of the University. Realizing the substantial demand for fiber broadband across the county, GRU created GRUCom to serve that demand more efficiently.

GRUCom Director, Ted Kellerman, points out that, as an enterprise division of GRU, GRUCom has a mandate to generate profit. This essentially means that the network only expands on a business case basis, so prices can vary across customers depending on connection costs. Despite this constraint, GRUCom manages to provide reliable high-speed data services at reasonable prices. 

GRUCom connects 100 public facilities including government, fire department, utilities and Alachua County Schools and Libraries. All facilities are on redundant fiber rings with route diversity and 10-Gbps capacity. Seven locations receive 1 Gbps service while the rest take either 10 or 100 Mbps. The average cost for 10 Mbps connections is $400 and $900 for the 100-Mbps links.

GATORNET

While GRUCom doesn’t serve residential customers directly (with a few exceptions), it does offer bulk Internet access to apartment complexes where many students live. As Mr. Kellerman explained it, GRUCom strives to fill growing demand for high-speed broadband from students who come to Gainesville, a Tier 2 market , from homes in Tier 1 markets where high-speed options are more readily available. GRUCom’s response is GATORNET, a 50 Mbps Internet access package that retails for $29.95 per month. This beats most Tier 1 market prices for comparable services, many of which advertise “up to 50 Mbps” over crowded cable networks but deliver only a fraction of that speed most of the time.

GRUCom brings another key benefit of community networks to Gainesville - local control accommodating local needs. When the music streaming service Grooveshark, started by two UF students, took off, its need for bandwidth exploded. Director Ted Kellerman recalls having regular discussions with Grooveshark’s founders during those times and making arrangements to get them the bandwidth they needed without breaking their startup budget. That’s what a community network is all about - meeting local needs.

Denver Suburb Seeks to Take Back Local Authority

Centennial is asking its voters to reclaim local authority this election. City leaders want to make better use of an existing fiber optic system but a 2005 Colorado state law pushed by a corporate telephone company precludes it. If the citizenry reclaims its local authority through referendum, the City can take the next step toward providing indirect services via its fiber network. 

We contacted City Council Member Ken Lucas to find out more about the ballot question. Centennial is a relatively young city that was incorporated in 2001 and has about 100,000 residents. Lucas told us that this ballot question is not only about using their fiber resources. The community of Centennial considers this a critical step toward maintaining a business friendly environment.

The National Transportation Safety Board (NTSB) provided grants to install the existing network for traffic control, security cameras, and public works monitoring. The City contributed only approximately $100,000 to the network, valued at $5 million. Traffic and public safety now use only two strands of the network that runs through the center of town. City leaders want to use the remaining 94 strands to improve access in the community. To see a map of the fiber and open conduit in Centennial, check out the City's PDF.

Approximately 94% of Centennial businesses and 85% of households are within one mile of the fiber backbone. Residents and business owners can now choose between Comcast or CenturyLink and rates are high. Lucas tells of one business owner who asked Comcast to provide 1 Gbps service to his building. Comcast offered to lease a line to the business at a high rate, but the customer would still have to pay $20,000 for installation.

Community leaders want to encourage more competition and, if they eventually develop the fiber, will explore open access models. Centennial knows their authority to invest in fiber infrastructure will influence economic development. City leaders want to attract high tech jobs to the Denver suburb.

The incumbents have not yet launched an expensive astroturf campaign or lobbied heavily against the ballot question as we saw previously in Longmont. This is the ballot question language:

SHALL THE CITY OF CENTENNIAL, WITHOUT INCREASING TAXES, AND TO RESTORE LOCAL AUTHORITY THAT WAS DENIED TO ALL LOCAL GOVERNMENTS BY THE STATE LEGISLATURE, AND TO FOSTER A MORE COMPETITIVE MARKETPLACE, BE AUTHORIZED TO INDIRECTLY PROVIDE HIGH-SPEED INTERNET (ADVANCED SERVICES), TELECOMMUNICATIONS SERVICES, AND/OR CABLE TELEVISION SERVICES TO RESIDENTS, BUSINESSES, SCHOOLS, LIBRARIES, NON-PROFIT ENTITIES AND OTHER USERS OF SUCH SERVICES, THROUGH COMPETITIVE AND NON-EXCLUSIVE PARTNERSHIPS WITH PRIVATE BUSINESSES, AS EXPRESSLY PERMITTED BY ARTICLE 29, TITLE 27 OF THE COLORADO REVISED STATUTES? 

Centennial does not want to compete with Comcast or CenturyLink - it wants to encourage other providers to compete with each other. Many communites express the same desire to improve telecommunications for their citizens without delivering the services themselves. However, many have found that they have to take an active role in order to ensure a real choice between slow DSL and modestly faster cable, each owned and operated by distant corporations.

Lucas told us that plans to use the fiber are far down the road. For now, the community wants to recapture the power the state preempted in 2005.

Rates Approved for Opelika Community Fiber Network

We have followed happenings in Opelika, Alabama, for three years as the community investigated the benefits of a fiber network. They contended with a Charter misinformation campaign and voted yes on a referendum. Construction began in 2012, Opelika Power Services (OPS) tested the network, and recently the Opelika City Council approved proposed rates. 

OANow.com now reports that the FTTH network and smart grid project is ever-so-close to offering triple play services to the city's 28,000 residents and local businesses. 

OPS offers three standard bundled plans, but customers can also customize. All three include voice:

  • Essential - $99.95 - 75 channels, 10/5 Mbps data
  • Choice - $139.95 - 132 HD & SD channels, 30/30 Mbps data
  • Ultra - $154.95 - 207 HD & SD channels, 30/30 Mbps data

Data offerings for customized plans range from 10/5 Mbps for $34.95 to 1 Gbps symmetrical for $499.95.

Voters approved the plan for the $41 million network in 2010. The project included a $3.7 million network hub that houses all OPS offices. The smart grid will help approximately 12,000 OPS electric customers save with efficient electric usage.June Owens, manager of marketing at OPS said it well in an August OANow.com article:

“Fiber is going to put Opelika on the map like never before,” Owens said. “Opelika should be very proud. Nobody in the state is doing a project like this. And there is not much outside the state of Alabama like this. This is 100 percent fiber to the home. Fiber to the house doesn’t require the electronics in the field – this eliminates problems in the field that you might have with other types of systems. It is truly state-of-the-art equipment at its best.”

While this project is certainly a landmark in Alabama, it is curious to see a community owned fiber network offering assymetrical services on the standard tier - with 10 Mbps download and 5 Mbps uploads. Though many community owned networks offer assymetrical packages, the vast majority were built more than 5 years ago. Most modern fiber networks have launched with the same upstream capacity as downstream.

Additionally, we have been accustomed to seeing community fiber networks launching with a faster standard tier in order to clearly differentiate themselves from competitors using older technologies like cable and DSL. Cable, and DSL to a lesser extent, can compete with 10/5 packages.

But we don't know the situation on the ground - it is not hard to believe that Charter's services are so bad that a reliable and affordable 10/5 will be warmly received by many households. We are curious to see how the marketing war plays out in Opelika and wish them the best as they roll out the network.

For more about Opelika's project, listen to Christopher interview Mayor Gary Fuller and Jennifer McCain from the Motive Group in Episode #40 of the Broadband Bits podcast. In addition to the story of the network, the two discuss the political challenges that inevitably accompany any large publicly funded project.

Crap Cable Threatens Cloud Services

For my money, the best headline of last week was "The U.S.'s crap infrastructure threatens the cloud." The rant goes on to explain just how crummy our access to the Internet is.

As a patriotic American, I find the current political atmosphere where telecom lobbyists set the agenda to be a nightmare. All over the world, high-end fiber is being deployed while powerful monopolies in the United States work to prevent it from coming here. Some of those monopolies are even drafting "model legislation" to protect themselves from both community broadband and commercial competition.

He nails a number of important points, including the absurdity of allowing de facto monopolies to write the legislation that governs them. However, Andew Oliver's article is a bit muddled on the issue of "monopoly." I have argued with several people that the term "monopoly" has historically meant firms with large market power, not the more stringent definition of "the only seller" of a good. It is not clear how Oliver is using the term.

Because of this confusion, you can come away from his piece with the firm idea that it is primarily government's fault we have a duopoly of crap DSL and less crappy cable. He repeatedly says "state-sponsored monopolies." However, no local or state government may offer exclusive franchises for cable or telecom services and the federal government hasn't officially backed monopolies for decades.

This is a key point that many still fail to understand - a majority seem to believe that local governments bless monopolies when local governments actually are desperate for more choices. This is why they fall all over themselves to beg Google to invest in their community or they build they own networks (over 400 communities have wired telecom networks that offer services to some local businesses and/or residents).

Poor laws and regulations have helped the massive cable and telephone companies to maintain their status - that is why they spend so much on lobbying and political contributions at all levels of government. They want to and have successfully corrupted the process, neutralizing the power of government to protect consumer interests and prevent a few firms from dominating the market.

wall-street.jpg

What is missing from the conversation is Wall Street's role. Wall Street abhors competition, particularly for something as essential as Internet access because rigorous competition drives down profit margins. Wall Street puts a massive premium on consolidation and preventing competition. It wants a few firms to control this market so they can regularly increase fees and increase shareholder value (at the expense of the rest of our economy).

It isn't JUST federal and state government policy that is rewarding the duopoly, there are a host of reinforcing factors. And while government did indeed establish monopoly for the phone system 100 years ago, it resulted in a fantastic universal service network - so those who might argue a government sanctioned monopoly was never a good idea have a high burden to prove it.

As to how we have moved from a monopoly service model to having choices... well, lobbyists have been paid a lot specifically to mangle that process to benefit a few corporations. Our government has been corrupted and we have to live with the effects every day. But even without government, we would almost certainly we stuck with a monopoly, perhaps even worse as we would lack the few consumer protections we still have.

I was heartened to see the Obama Administration block the AT&T - T-Mobile merger as it suggests that there is a spark of hope for antitrust rules to prevent further consolidation. Stopping consolidation is the first step to having real choices because massive corporations amass not just economy of scale advantages over rivals, but find it much easier to influence the rules in their favor and to disadvantage competitors.

Returning to a fact from Oliver's article, he pays $1500/month for 30 Mbps symmetrical fiber. If he lived in Monticello, he would pay $100/month for that business connection. Community owned fiber is not merely about the technology, it includes numerous other benefits including radically lower prices that help local businesses to succeed.

Photo courtesy of JSquish via Wikipedia Commons

UTPOIA The Latest Network to Offer Super Affordable Gigabit

As we recently reported, EPBFiber presented a birthday gift to its current and future Chattanooga customers - gig service for $69.99 per month. In Utah, UTOPIA is extending the list of like-minded publicly owned networks and dropping prices. UTOPIA just announced that gig service is now available for as little as $64.95 per month. According to the Free UTOPIA! website, seven providers are now offering gigabit speeds for $70.00 or less.The Deseret News also reported on the story:

In addition to the exceptional speeds, residential subscribers on the network will also be able to choose their provider based on the services and pricing that best meets their individual needs, explained Gary Jones, UTOPIA chief operating officer.“More residents in Utah have access and the ability to connect to the digital world at the speed of light than anywhere else in the country, and the prices and services being offered by our ISPs make it affordable for many more customers,” Jones said. “This new price is … not much more than most phone and cable companies charge for their basic 8 megabits per second service.”

The News also quoted XMission's Pete Ashdown:

"As the Internet becomes an essential conduit for work, school and entertainment, gigabit availability is essential,” said Pete Ashdown, CEO of XMission. “Only fiber allows this kind of bandwidth and speed."

Just a month ago, we reported that Xmission chose to increase speeds for subscribers of its 50 Mbps to 100 Mbps at no extra charge. As we monitor rates from networks around the country, we find that customers of municipal networks regularly enjoy free speed increases. EPBFiber increased speeds for residential customers for free about a year ago. Tullahoma's LighTUBe upgraded its prior highest tier from 300 Mbps to 1 gig service with no price increase earlier this year. The same cannot be said of the large cable and telephone corporations, which regularly increase rates instead. Publicly owned networks can focus on benefits to the community rather than financial rewards for only a select few.