Time Warner at it again, this time squeezing out the competition

[NoStateofMind]

Time Warner, Embarq Fight to Outlaw 100 Mbps Community Broadband in Wilson, NC

The cable companies aren't happy that they've been one-upped in both price and quality of service Time Warner Inc., after finally dropping its plans for metered internet services for the time being, appears to be back to its old ways. This story begins in Wilson, North Carolina. Wilson is a small city of about 47,000 residents located in the middle of North Carolina, roughly 45 minutes east of Raleigh, the state's capital. The city's residents, like many, long complained over high internet, cable, and telephone prices. So the city launched an ambitious $28M USD program to deliver these services basically at cost, at much lower rates than local service providers Time Warner Inc. and Embarq.

Comparison Chart

I say there should be an open market or "free market". People will choose the best option and those who don't keep pace will fall off the map.

 

[LumbergTech]

I was reading this article on dailytech and a lot of commenters sided with Warner because they said that using taxpayer money to make it impossible for private businesses to compete is a big nono

 

[NoStateofMind]

Originally posted by: LumbergTech
I was reading this article on dailytech and a lot of commenters sided with Warner because they said that using taxpayer money to make it impossible for private businesses to compete is a big nono

The taxpayers are the ones who wanted it because of the high prices. If TW would have had reasonable prices then this program would have never gotten off the ground.

 

[Craig234]

Originally posted by: LumbergTech
I was reading this article on dailytech and a lot of commenters sided with Warner because they said that using taxpayer money to make it impossible for private businesses to compete is a big nono

That's because we have too many right-wing ideologues.

This is a fine idea for a government to do, if it can do a lot better for citizens.

Of course, some willl scream that the government should not be allowed to have PBS or NPR because 'they compete with private business', that public libraries should be outlawed because 'they compete with private bookstores, that there should be no public parking because it comptes with private parking lots. It's a fine thing for the city to do.

 

[cubby1223]

You've got it mixed up on who is squeezing out the competition.

 

[NoStateofMind]

Originally posted by: cubby1223
You've got it mixed up on who is squeezing out the competition.

I wouldn't be so sure. As I stated before, it wouldn't have gotten off the ground had TW not been greedy. Cable companies are notorious for procuring their own 'patch' for cable services. Whats the difference? One is wanted, while the other is forced.

 

[cubby1223]

Originally posted by: PC Surgeon

Originally posted by: cubby1223
You've got it mixed up on who is squeezing out the competition.

I wouldn't be so sure. As I stated before, it wouldn't have gotten off the ground had TW not been greedy. Cable companies are notorious for procuring their own 'patch' for cable services. Whats the difference? One is wanted, while the other is forced.

The government's job is to promote competition and stop Time Warner if it is believed they are acting illegally. It is not the government's job to start up an ISP service.

 

[frostedflakes]

I can understand where the ISPs are coming from; it's pretty unfair, there's no way they can compete with the government. That said, I don't think we should let this hold back technological development. There are some things that the private industry just is not good at, and I'm increasingly becoming convinced that broadband internet is one of those things.

cubby: The government can lay/maintain the infrastructure and then lease it out to ISPs. They do open access in a lot of other countries and it works well. Instead of a handful of providers in an area, you have a dozen or more providers in an area competing for customers.

 

[NoStateofMind]

Originally posted by: cubby1223

Originally posted by: PC Surgeon

Originally posted by: cubby1223
You've got it mixed up on who is squeezing out the competition.

I wouldn't be so sure. As I stated before, it wouldn't have gotten off the ground had TW not been greedy. Cable companies are notorious for procuring their own 'patch' for cable services. Whats the difference? One is wanted, while the other is forced.

The government's job is to promote competition and stop Time Warner if it is believed they are acting illegally. It is not the government's job to start up an ISP service.

The government didn't, the people did. They asked TW to lower rates/increase data speeds but they refused. So the people took it upon themselves to make their own service that reflects their needs.

 

[redgtxdi]

And keep in mind that where these things differ from things like PARKING LOTS & LIBRARIES is that we don't have choices in these matters for services to our home.

For most, it's CABLE or RABBIT EARS........Take it or leave it!!!

THAT is when it's time for the government to get involved.

I'd dare say that another idea might be to co-op taxpayer money (in this case) to negotiate with their native competition (Uverse, FIOS, etc.) for an accelerated layout where otherwise there exists a "cable-only" environment.

Expedite competition to make the legacy players step up!!!!!

 

[cubby1223]

See, here's the deal, if there is room in this area to create such an internet service at much lower costs than what Time Warner is providing - then someone would start up the business and get it done.

Or the government should be soliciting bids for existing companies to take on this project, to take on the risk.

But the government should not be getting directly involved in the ISP business.


How often to government ventures come in under budget? How often to they end up drastically over budget?

 

[frostedflakes]

Barriers to entry for this market are probably enormous, though. I doubt it's just as simple as starting your own ISP, competing with well-entrenched incumbents is never easy.

And the whole idea behind the municipal broadband is they can do stuff that the private sector can't. For example they can invest in a network that may take 5-10 years or more to pay for itself. The private sector has to answer to shareholders, and it's going to be hard to sell them on an idea unless it offers a quick ROI. It's looking like it will pay off for them, but at the time Verizon proposed the $23 billion FiOS rollout, I don't think shareholders were very keen on the idea. I mean why would they be, that's $23 billion that could have been used for a number of other things, such as increasing their dividends.

 

[novasatori]

I'd like to see a comparison chart with both upload and download circles side by side for better comparison.

 

[TastesLikeChicken]

Are these costs just the infrastructure costs? What about service and maintenance? What is the future upgrade capacity of the system?

I'm wondering because when you calculate the costs per taxpayer I'm not sure that it pays for itself in the long run. If the upgrade capacity isn't there, any benefits may erode in the future too. Right now 10Mb up and down sounds pretty good. 10 years ago most people would kill for 1 Mb up and down (and some even today). What about 10 years from now?

 

[cubby1223]

Originally posted by: frostedflakes
Barriers to entry for this market are probably enormous, though. I doubt it's just as simple as starting your own ISP, competing with well-entrenched incumbents is never easy.

And the whole idea behind the municipal broadband is they can do stuff that the private sector can't. For example they can invest in a network that may take 5-10 years or more to pay for itself. The private sector has to answer to shareholders, and it's going to be hard to sell them on an idea unless it offers a quick ROI. It's looking like it will pay off for them, but at the time Verizon proposed the $23 billion FiOS rollout, I don't think shareholders were very keen on the idea. I mean why would they be, that's $23 billion that could have been used for a number of other things, such as increasing their dividends.

And this city's $26 million could be used on a number of other things, like improving their public schools, improving emergency services, or hell, feeding the homeless.


I openly admit I don't know what the ultimate solution is for internet access. And perhaps it's just a problem with me living too close to Chicago.

 

[cubby1223]

And if money pooled together from one fairly wealthy town drives out the evil corporation from making profits - then that evil corporation may be forced to raise rates in other, poorer markets, you know, the towns who are not wealthy enough to pool together sufficient $$ for shared services. Is that fair?

 

[frostedflakes]

Originally posted by: TastesLikeChicken
Are these costs just the infrastructure costs? What about service and maintenance? What is the future upgrade capacity of the system?

I'm wondering because when you calculate the costs per taxpayer I'm not sure that it pays for itself in the long run. If the upgrade capacity isn't there, any benefits may erode in the future too. Right now 10Mb up and down sounds pretty good. 10 years ago most people would kill for 1 Mb up and down (and some even today). What about 10 years from now?

That remains to be seen. spidey07 has mentioned that maintaining these networks can be very costly. It would be bad for municipalities if they underestimate these costs.

Something to keep in mind about upgrading, though, is that it's not nearly as expensive as the initial rollout. My understanding is that the fiber itself has *a lot* of theoretical capacity (I've read that for the next few decades at least, speed of fiber optics is supposed to increase pretty consistently). Once you have the fiber laid, upgrades will simply involve replacing the equipment at each end of the fiber.

It's no problem cubby, I don't claim to know the answer either. Municipal broadband may end up being a complete failure, but it may also end up working very well. Unfortunately cities won't get the chance to test how well municipal fiber works if incumbent ISPs are successful in getting laws like this passed.

edit: cubby, that's kind of why I like the idea of municipal owned/maintained fiber and then having the private sector actually provide the services over those lines. A public/private partnership like this seems pretty fair to me. This way the private sector isn't pushed out of the ISP business, although it will surely cut into their profits because they'll actually have to compete by offering better services and lower prices.

 

[Craig234]

Originally posted by: cubby1223
See, here's the deal, if there is room in this area to create such an internet service at much lower costs than what Time Warner is providing - then someone would start up the business and get it done.

That's ideology talking, not information.

Or the government should be soliciting bids for existing companies to take on this project, to take on the risk.

But the government should not be getting directly involved in the ISP business.


How often to government ventures come in under budget? How often to they end up drastically over budget?[/quote]

You don't know, because you are posting ideology, not information. Why not find out?

 

[Lemon law]

Silly me, and here I believed that we were supposed to believed in free market competition, the more the merrier. Its no accident that we in the USA are way behind the rest of the world in delivering broadband at a reasonable price. Because what has proved to work is more competition in all forms. Which is incompatible with what our few broadband providers try to use as they always try to knee jerk reduce competition.

Pardon me, as one of the totally screwed, their public be damned policies hardly motivate me to agree with monopolies that act contrary to the public interest.
If tax payers can delver broadband cheaper, its just more free market competition. Nothing unfair about that.

 

[Craig234]

Originally posted by: Lemon law
Silly me, and here I believed that we were supposed to believed in free market competition, the more the merrier. Its no accident that we in the USA are way behind the rest of the world in delivering broadband at a reasonable price. Because what has proved to work is more competition in all forms. Which is incompatible with what our few broadband providers try to use as they always try to knee jerk reduce competition.

Pardon me, as one of the totally screwed, their public be damned policies hardly motivate me to agree with monopolies that act contrary to the public interest.
If tax payers can delver broadband cheaper, its just more free market competition. Nothing unfair about that.

Actually, there is potentially something 'unfair' about it, in that the city doesn't have to make a profit; what if they subsidized it, as they do libraries?

Nonetheless, the government should loo at the larger societal issues, such as the benefits of broadband access if the private sector isn't meeting the need.

They should not be restrianed by the right-wing ideology of don't do many things, if it otherwise is in the public interest.

 

[Auryg]

I would be completely opposed to this if another cable company could step in and offer services in the area..but they can't. We need competition in our broadband, and if this is the only way it's going to happen so be it, although the idea of the government laying down the 'tubes' and private companies using them isn't such a bad idea either.

And it would create jerbs

 

[Wheezer]

Originally posted by: PC Surgeon

Originally posted by: cubby1223

Originally posted by: PC Surgeon

Originally posted by: cubby1223
You've got it mixed up on who is squeezing out the competition.

I wouldn't be so sure. As I stated before, it wouldn't have gotten off the ground had TW not been greedy. Cable companies are notorious for procuring their own 'patch' for cable services. Whats the difference? One is wanted, while the other is forced.

The government's job is to promote competition and stop Time Warner if it is believed they are acting illegally. It is not the government's job to start up an ISP service.

The government didn't, the people did. They asked TW to lower rates/increase data speeds but they refused. So the people took it upon themselves to make their own service that reflects their needs.

*cough* bullshit *cough*

no residential customer "needs" 100Mps, nor do they "need" digital phone nor do they "need" digital cable.

These fall under the category of wants. They want all this for a lower price.

Just how exactly was all this getting paid for and who's fiber are they going to piggyback on? shit like this does not just appear out of thin air or for free.

sorry...outrage not found.

Digital services are a nice to have thing.....they do not all under the category of a basic human right that should be funded through taxpayer dollars.

 

[lupi]

Oh look, another example where the government screwed us by allowing these monopolies.

 

[bozack]

Originally posted by: Wheezer

no residential customer "needs" 100Mps, nor do they "need" digital phone nor do they "need" digital cable.

These fall under the category of wants. They want all this for a lower price.

Just how exactly was all this getting paid for and who's fiber are they going to piggyback on? shit like this does not just appear out of thin air or for free.

sorry...outrage not found.

Digital services are a nice to have thing.....they do not all under the category of a basic human right that should be funded through taxpayer dollars.

Gotta agree with this, not being familiar with the area one has to figure if it isn't a massive community then of course there will be less competition and rates will be higher as no one will want to support the area.

Govt shouldn't be subsidizing needless luxuries.

 

[Colt45]

Originally posted by: bozack

Originally posted by: Wheezer

no residential customer "needs" 100Mps, nor do they "need" digital phone nor do they "need" digital cable.

These fall under the category of wants. They want all this for a lower price.

Just how exactly was all this getting paid for and who's fiber are they going to piggyback on? shit like this does not just appear out of thin air or for free.

sorry...outrage not found.

Digital services are a nice to have thing.....they do not all under the category of a basic human right that should be funded through taxpayer dollars.

Gotta agree with this, not being familiar with the area one has to figure if it isn't a massive community then of course there will be less competition and rates will be higher as no one will want to support the area.

Govt shouldn't be subsidizing needless luxuries.

No one "needs" running water, sewage, gas, electricity, telephone, trash pickup, etc. People got on fine without it... It sure is nice to have though, i.e. a luxury.

Progress man.