Carl’s opinion piece is clearly in support of an industry that is very happy to sell equipment to these new customers because the incumbent telco business is not growing very fast, if at all. Allowing government to offer communications services in a particular market is not competing; it is taking it over because they can use bonds (low interest) and taxpayer money to fund these networks. State legislators have created these laws to prevent just these things from happening along with providing protection when half of these ventures go bankrupt.
Telcos are not clean on this because they are using crony capitalism to protect their monopoly or duopoly. If legislators enact such laws they should hold incumbents to the universal service agreement that AT&T adhered for decades.
What is missing in all of this protectionism and governmental expansion is a discussion on how we can make the market competitive. There is one simple answer that has been used around the world to stimulate competition: open access. Allow the government, PPP, or consortia to build and operate the last-mile fiber access so multiple commercial service providers can offer communication services to customers. Think of it like cities build roads that many different people use to deliver goods and services.
The open access infrastructure is shared between several carriers so it can be economically feasible and the incumbents can either utilize the network or build their own. In any case multiple carriers can offer services on the fiber which benefit consumers from greater choice and lower prices. It puts the incumbents on notice to be competitive or lose market share. The government’s role is either as a seller and maintainer of the infrastructure or to reduce regulations to support the infrastructure.
Governments are not savvy enough to comprehend this option and incumbents are wary of competition so the battle goes on to the consumers’ detriment.
by Karl Bode
Back in February the FCC voted to use its Congressional mandate to ensure speedy broadband deployment to dismantle protectionist state laws intentionally designed to hinder broadband competition. But the FCC recently found itself swatted down by the courts, which argued the agency lacks the authority to pre-empt even the worst portions of these laws. As a result municipal broadband providers continue to run face first into protectionist provisions written by incumbent ISP lawyers and lobbyists solely concerned about protecting the current broken broadband market.
The impact of the FCC’s loss is very real. Ars Technica notes that one of the broadband ISPs that originally asked for help from the FCC, Wilson North Carolina’s Greenlight, has had to disconnect one neighboring town or face violating state law. With state leaders tone deaf to the problem of letting incumbent ISPs write such laws, and the FCC flummoxed in its attempt to help, about 200 home Internet customers in Pinetops will thus lose access to gigabit broadband service as of October 28:
“We must comply with our state law,” Agner said. But city council members were very vocal in their opposition to the law and regret having to disconnect the service, she said. “We have not identified a solution where Greenlight can serve customers outside of our county,” Wilson City Manager Grant Goings told The Wilson Times earlier this week before the city council vote. “While we are very passionate about reaching underserved areas and we think the laws are atrocious to prevent people from having service, we’re not going to jeopardize our ability to serve Wilson residents.”
Greenlight’s fiber network provides speeds of 40Mbps to 1Gbps at prices ranging from $40 to $100 a month, service that’s unheard of from any of the regional incumbent providers (AT&T, CenturyLink, Time Warner Cable) that lobbied for the protectionist law. Previously, the community of Pinetops only had access to sluggish DSL Service from CenturyLink:
Wilson already had fiber in Pinetops, which has been an electric customer of Wilson’s for more than 40 years. Before deploying Internet access to Pinetops, Wilson was laying fiber in the town to support smart grid initiatives. After the FCC voted to let city Internet services expand outside their boundaries, Wilson extended the fiber network to pass the roughly 700 homes in Pinetops, Agner said. Prior to this, Pinetops residents’ only option was CenturyLink DSL, she said.