Image
Fast, affordable Internet access for all.
incumbent
Content tagged with "incumbent"
Florida Muni Dunnellon Building FTTH Network
Yet another town has decided to take responsibility for their broadband future: a small Florida community has secured financing and is moving forward with their publicly owned FTTH network.
The City Council voted unanimously Monday night to approve the $7.3 million in funding with Regions Bank in Orlando. City Manager Lisa Algiere told the council members the city would be doing most of its business with the local Regions Bank. The funding will come in the form of three bonds: a series 2010A Bond, which is good for 20 years and has an interest rate of 3.61 percent; the second bond is a Series 2010B Bond and is for five years with an annual interest rate of 3.20 percent; while the third bond is a Series 2010C Bond and is good for one year. The funding secured by the city is a drawdown loan, meaning it will only take what it needs and only repay that portion.The network has been branded Greenlight (though the website is not yet fully functional). Greenlight is also the name used by the Community Fiber Network in Wilson, North Carolina. Light Reading interviewed a network employee, shedding more details than have been released elsewhere. He says they are passing 7,000 premises, but Wikipedia only notes a population of 2,000 in 2004, so there is more than meets the eye at first glance. They financed the network without using general obligation bonds, working with a nearby bank (Regions is a big bank, headquartered out of state). Local competitors are AT&T and Comcast, though both offer extremely slow services; the fastest downstream speed available from Comcast is 6Mbps. The new network, as do nearly all recent community fiber networks, will offer much faster connections, the slowest being 10Mbps.
National Carriers Kill Jobs, They Do Not Create Them
The Media and Democracy Coalition has released a short paper detailing the many ways in which cable and phone companies have failed America. These companies use their market power to gouge residents and businesses, putting a drag on our economy. Meanwhile, the biggest ones are massively profitable and refuse to invest in the networks necessary to keep America competitive with peer nations.
We recently wrote about how privately owned networks tend to consolidate and reduce competition rather than reducing prices. The lesson is as clear as it has always been throughout human history: allowing a select few to control essential infrastructure is a recipe for economic calamity.
From the paper:
It’s good for our economy when companies make money and hire workers. But while small businesses continue to struggle in this economy, the cable and phone companies achieved extremely healthy profit margins. If the Great Recession didn’t stop these ISPs from making big profits, how could they be hurt by sensible consumer protections to keep the net operating just like it always has?Well, seeing as how seat belts destroyed the automobile industry... and then air bags also destroyed the automobile industry... and CAFE standards destroyed the automobile industry.... wait -- all of these predictions were false. Perhaps we should not base important policy decisions upon the dire predictions of self-interested parties who are obligated to put self-interest ahead of the public interest. I was saddened to see that the paper suggest "we need" the private companies to build these networks. Point of fact, not only do we not "need" them to do it, we "need" to wake up to the fact that even when they do the best they can, it is second best to networks built by those who put the public interest first. Compare the networks of communities like Salisbury, NC; Monticello, MN; Lafayette, LA; and Chattanooga, TN, to the joke AT&T calls U-Verse and the stronger offers of FiOS. The private sector cannot be trusted to build the infrastructure we need. Addendum: I should note that while infrastructure must be managed in the public interest, I do believe the private sector should have a strong role as service providers operating on top of an open access platform.
Fibrant Laughs at Time Warner Cable Puny Upgrades
As we wrote last week, Salisbury's Fibrant -- the newest community fiber network in the country -- launched last week and immediately saw Time Warner Cable respond with an upgrade to its cable plant that allowed it start advertising even faster speeds - a 50/5 tier of broadband (whether they actually deliver that to anyone, I doubt and will wait to see).
Fibrant was "only" advertising (and delivering) 15/15 and 25/25 speeds, so some suggested that TWC had taken the top honors away... though for people who know much about telecom technology, most of us will gladly take a 25/25 on fiber-optics over a supposed 50/5 on an old, unreliable coax network.
Nonetheless, Fibrant didn't break a sweat, and announced that they were already offering a 50/50 plan though they did not advertise it. I'm not sure why it was not advertised -- though if the reason was to hold a trump card ready in response to TWC's gimmicks, it was a smart move. And Fibrant's 50/50 plan at $85 is cheaper than TWC's 50/5 plan.
Though community fiber networks consistently offer better experiences and lower costs, the big incumbent providers are well versed in gimmicks -- communities must keep that in mind as they plan their own networks. This may mean creating higher tiers of service that many only interest a select few, if that, to remind the populace of the technical superiority of the public network.
Salisbury has since announced that both 100/100 and 200/200 plans are in the works from their network. A 200/200 will be the fastest plan in North Carolina -- though one wonders how the results of the election will impact the future of community fiber networks in the state. Unable to beat community fiber networks in the market, TWC has repeatedly pushed for crippling laws against communities that would dare create competition against TWC. After the 2010 election, North Carolina has a more conservative state government that may find TWC's lobbying more persuasive.
In the meantime, TWC is yet again increasing rates to subscribers, as noted by Stop the Cap!.
Salisbury's Fibrant Launches, TWC Responds With DOCSIS 3
In North Carolina, Salisbury has launched the state's second FTTH network, as communities continue to build the next-generation broadband infrastructure in which their massive incumbent providers decline to invest. We have offered in-depth coverage of Fibrant as they prepared to launch the new services. As of Tuesday, Nov 2, the network softly launched, which is to say they will slowly ramp up the number of paying customers as they gain experience and confidence. Stop the Cap! also covered the launch with extensive coverage as well as both praise and criticism for Fibrant's approach.
Some of the 115 early, free testers of Fibrant became the first paying customers Monday, with the utility scheduling installations for 200 other residents on a waiting list.
A local group has posted a number of videos about Fibrant, including a recent one that compares Fibrant's speeds to the pathetic offering of Time Warner Cable (see bottom of this post). In a totally unrelated development (or so Time Warner Cable would have us believe), TWC has rapidly increased its broadband tiers in the region. In this, TWC has joined Comcast in downplaying the role competition has in forcing incumbent investment. If you believe TWC, competition plays no role in their investment decisions, a fascinating approach to succeeding in an area they constantly claim is a very competitive market.
Wilson's Greenlight Ahead of Schedule, Deals with TWC Predatory Pricing
Wilson's Greenlight community fiber network is ahead of schedule. They continue to operate ahead of the business plan, despite a few difficulties that offer lessons to up and coming community networks.
We recently covered the fallout from their application to the broadband stimulus program where they had to disclose network information to their competitors.
Fortunately, that was not the only news last month from North Carolina's first all-fiber citywide network. They also surpassed 5000 subscribers and remain 6-9 months ahead of their business plan in take rate, according to the Wilson Times.
The number of customers is expected to reach 5,300 by the end of the fiscal year if the current trend continues, according to Dathan Shows, assistant city manager for Broadband and Technical Services. The city's current business plan calls for Greenlight to reach 5,000 customers by the end of the third full year of operation, which will be June 2011.This is not the first time the network has exceeded projections; the network was built faster than expected and quickly jumped out ahead of take rate expectations. One of the reasons Greenlight may be growing is its attention to local needs, as illustrated by the network finding a way to televise local football matches that otherwise would not have been available. However, the Wilson Times story goes into much greater detail regarding the competition from Time Warner Cable. As we regularly see, Time Warner Cable is engaging in what appears to be predatory pricing to retain customers and starve Greenlight of new subscribers. A lesson to other community networks, Wilson is documenting the deals TWC uses to keep subscribers. All communities should keep these records.
"Time Warner Cable's market tactics include anti-competitive pricing that interferes with Wilson's ability to secure customers through normal marketing," the application [for broadband stimulus] states.
Importance of Customer Service
I was doing some research on the cost of business broadband services in the Twin Cities when I encountered one of the stark differences between local networks accountable to the public and the massive telcos (in this case, Qwest).
I was compiling some numbers on broadband costs and had just gotten through a very quick and efficient chat with Xmission - a service provider on the UTOPIA network.
For some reason, I thought getting similar information from Qwest would also be easy, particularly as we are in the middle of Qwest territory up here in Minnesota. But Qwest's website couldn't tell me what services are available in our area because it was convinced our address and phone number was outside their 14-state operating territory. Our office is in Minneapolis, which is certainly within the Qwest territory.
So I picked up the phone to call Qwest and find out what was available. After 4.5 minutes (which is a long time when one is already annoyed) listening to Qwest advertising in between being assured that my business was VERY important to them, I was connected to a rather friendly woman who tried to help.
For another four minutes, she tried to locate my building to tell us what services are available. She noted several times, as they all do, that the system was slow today and she was waiting for it to update. As a side note, this is the direct consequence of consolidation and the supposed economy of scale that results from bigness: we wait on hold to eventually talk to people across the country (or globe) while they wait for the computer to give us some probably inaccurate information because no one has any actual idea where services are available.
Alas, she found our address and was sorry to report that they only had slow services available for us because they have not yet lit the additional fiber necessary to offer services faster than 5Mbps down and .896Mbps upstream. Perhaps by the end of the year. Our office is located at the edge of the University of Minnesota in a dense area -- hardly the kind of place you would expect Qwest to struggle to offer decent connections.
I'm glad the customer service person was so pleasant because we spoke for almost ten minutes while waiting for their computers to find the information she needed to tell me.
Adult Content on Community Networks
Fibrant has decided to offer premium adult content to subscribers that choose to receive it. Salisbury's approach and response offer a window into the benefits and responsibilities inherent in building a triple-play network that offers services directly.
As a gesture to those who are publicly opposed to such content being available, the channel listings do not show up to the subscriber by default -- which is to say that you cannot even see the scrambled channel unless you take action to tell Fibrant you would like the option of purchasing adult content.
The reason for offering the adult content? Much like the reason most community networks get involved in television at all: it helps pay the bills. The margins on premium content are high and competitors also offer these options locally.
However, a number of people are morally opposed to such content -- this has been a particularly sensitive issue in both Utah and the South more generally. Opponents to community networks generally take this opportunity to rally some opposition to the network in general.
Years ago, we wrote about a similar situation in Burlington, Vermont, because they carried the Al-Jazeera English international news channel.
The lesson we draw from these situations is that running a community fiber network is not all about creating economic development and educational opportunities. There are many issues that may be confronted, and some are messy First Amendment discussions. When a community takes responsibility for its future, it really has to take responsibility for its decisions.
When Comcast or Time Warner Cable chooses the channels, these problems may lurk under the radar because no one expects TWC or Comcast to take community needs or desires into account when they choose their channel lineup.
But when the network is owned locally and accountable to the public, the public has a voice in the decisions governing the network. Controversy on adult content on television may well subside over time, as few are actually proposing to censor the same content delivered via words, photos, and video over the Internet.
Salisbury's Fibrant Deals with Incumbent B.S. Before Launch
As Salisbury prepares to officially launch its publicly owned FTTH network offering triple-play services, it offers lessons for other communities that want to follow in its footsteps. As we wrote a month ago, Fibrant has candidly admitted it cannot win a price war with incumbents. Companies like Time Warner Cable have a tremendous scale advantage, which allows them to price below cost in Salisbury because the large profits from all the non-competitive markets nearby can subsidize temporary losses.
On October 10, the Salisbury Post ran a story "Fibrant can't match cable company specials." Alternative possible titles for the article could have been "Cable Co cuts prices to drive competition from market," or "Time Warner Cable admits customers pay different prices for same services." Interestingly, when Fibrant unveiled its pricing originally, the headline read "Fibrant reveals pricing" rather than "Fibrants offers speeds far faster than incumbents."
A lesson for community networks: do not expect the media to cover you fairly. The big companies have public affairs people with relationships with the press and they often buy a lot of local advertising. This is not to say all local media is bought off -- far from it -- but local media will have to be educated about the advantages of community networks.
Quick question: When you hear this quote, who do you first think of?
"We always work with customers to meet their needs and budget."The cable company, right? Well, that is Time Warner Cable's claim in the above Salisbury Post article. Later in the article, a local business owner expressed a different sentiment: "Time Warner has the worst customer service I have ever dealt with." The business owner goes on:
“Fibrant may have these same kind of issues, however I can actually go to the source to deal personally with someone who is vested in the community, not spend two hours on the phone and never solve the problem as I do with TWC,” he said. “Even if pricing is higher, I would make the change.
More Details Emerging about Fibrant in Salisbury
The nation's newest community fiber network (FTTH) is launching in Salisbury, North Carolina, in the next month. Fibrant, a $29 million project financing by general obligation bonds, is slightly behind schedule but way ahead of the cable and DSL competition.
The City Council has approved the network's pricing in anticipation of hooking up customers in October. Some 70 people have been testing the network, but it will soon be available to everyone in the community. The basic tier of broadband speeds is 15Mbps and they have a second tier at 25 Mbps. The network is capable of much faster speeds but these are the tiers they will start with, making them the fastest basic tier available in North Carolina.
They are offering over 460 television channels, of which 100 are HD. HD quality over fiber-optics tends to be the highest quality viewing experience (though not everyone can tell, depending on their level of obsession with picture quality) but the first year or so of video service on Fibrant may suffer from occasional problems as they iron out the quirks of the new system. Reports of the broadband and voice services are tremendously positive.
They have made it clear that they cannot get into a price war with incumbents (Time Warner Cable and AT&T) and cannot beat the "promo" prices these companies offer for the first x months. However, Fibrant's rates are 7-10% lower than the regular rates of the incumbents and will come with local, superior, customer service.
Big companies like Time Warner Cable often claim they are at a disadvantage relative to these municipalities but the reality is that the massive scale of national cable and phone companies give them many more advantages to offer lower prices for their services (which tend to also be lower in quality).
“If you get deal you can’t refuse from someone else, just thank Fibrant for it because you wouldn’t have gotten it if we hadn’t been here,” Clark [Fibrant Marketing Director] said.Fibrant aims for a 30% take rate (4400 subscribers) by the end of year 3 and a positive cash flow in year 4. Pricing and channels lineups are available at the end of this Salisbury Post article.
Comcastic Contracts and Communication
I really try to focus on the many good things communities are doing rather than the many bad things done by massive companies like Comcast. However, sometimes I have a few items I need to publicize to illustrate the differences between providers that are accountable to communities and those that are accountable solely to shareholders.
Fine Print Friday has taken a sardonic look at Comcast's Contract with subscribers. Who says the truth cannot be humorous?
Comcast specifically does not guarantee that the equipment and services will: (1) Meet your requirements, (2) Provide uninterrupted use, (3) Operate as required, (4) Operate without delay, or (5) Operate without error. Nor do they guarantee that the communications will be transmitted in their proper format. So basically, if you want digital services you can rely on to work how you expected them to work, when you expected them to work, then Comcast can’t provide that to you. According to their limitation of warranties (section 10), what you are paying for each month is the possibility of having service that works as advertised, but they can’t promise anything.There is a mention in there about Comcast having the right to monitor whatever you do with your connection. The next time you hear people complaining that their local government may spy on them if the public owned the network, ask if they prefer being spied on byh unaccountable corporations that want to sell their private surfing habits. After all, the private sector has more motivation to spy on subscriber activity than the local government. The full post is worth reading - though it does not cover the entire Comcast contract:
The Comcast Subscriber Agreement for Residential Services is too long to continue to write about in a single post. I may come back to it and do a second part if necessary. This list, however, represents what are the most important provisions in the contract for customers to know about. It’s not a good contract for the customers, and it’s a very good contract for Comcast. But if you want their services (and in many places you don’t have a choice, as they are essentially a monopoly), then you have to play by their rules.