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How Big Telecom Smothers Municipal Broadband

Soulskill posted about 2 months ago | from the can't-even-trust-the-huge-soulless-corporations-anymore dept.

The Internet 111

Rick Zeman writes: The Center for Public Integrity has a comprehensive article showing how Big Telecom (aka, AT&T, Comcast, Charter, Time Warner) use lobbyists, paid-for politicians, and lawsuits (both actual and the threat thereof) in their efforts to kill municipal broadband. From the article: "The companies have also used traditional campaign tactics such as newspaper ads, push polls, direct mail and door-to-door canvassing to block municipal networks. And they've tried to undermine the appetite for municipal broadband by paying for research from think tanks and front groups to portray the networks as unreliable and costly."

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This Just In! (5, Insightful)

pwnyxpress (2597273) | about 2 months ago | (#47784799)

Group in power tries to maintain power...story at 11.

Re:This Just In! (5, Interesting)

Jason Levine (196982) | about 2 months ago | (#47784893)

It's even worse when the big ISPs are trying to kill municipal broadband in an area they don't serve. Because you can't have the government competing with them in an area that they might, someday, begin to consider serving. Until then, the residents should grovel (over dial-up) at the big ISPs' feet for broadband Internet service.

Re:This Just In! (3, Insightful)

sabri (584428) | about 2 months ago | (#47784939)

Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.

There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.

Re:This Just In! (4, Insightful)

i kan reed (749298) | about 2 months ago | (#47784969)

There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.

Given a few common, yet unproven, assumptions about how markets operate. ISPs operate a lot like utilities in terms of fundamental market behaviors, and the prevalence of natural monopolies. Organizing the structure of the market to allow smaller competitors, to me, is one way a government could help. Not the only way.

"monopolies" (2, Informative)

Anonymous Coward | about 2 months ago | (#47785997)

Given a few common, yet unproven, assumptions about how markets operate. ISPs operate a lot like utilities in terms of fundamental market behaviors, and the prevalence of natural monopolies. Organizing the structure of the market to allow smaller competitors, to me, is one way a government could help. Not the only way.

Close, but not quite IMHO.

The ISP component does not have to be a monopoly: and by "ISP" I mean the routing of packets. What tends to be monopolistic in practice is the cabling, whether fibre, twisted pair, or co-ax.

I think that separating the part of current incumbent telcos and cablecos into separate entities, one which runs the physical stuff and the other which runs the packet routing (and telephone and television signals) would go a long way to improving things. At the very least forcing the incumbents to provide access like they have to do in Canada would be the very minimum for a proper functioning ISP market.

Ideally the company that runs the ISO Layer 1 and 2 stuff would completely separate and a nonprofit. Whether that entity is publicly owned or a private company is a minor point.

But separating physical access and network service (even by a "Chinese wall" with-in the current mega-corps) is the key point that needs to happen. Everything else is shuffling deck chairs.

Re:"monopolies" (1)

jenningsthecat (1525947) | about 2 months ago | (#47787735)

At the very least forcing the incumbents to provide access like they have to do in Canada would be the very minimum for a proper functioning ISP market.

Mod parent up!

I'm a Canadian. Right now I use Bell because my GF wants to keep her Sympatico address. But I miss the days when I had an ISP called TekSavvy, which delivered DSL service via the Bell phone lines, while the phone service on those same lines was provided by Bell.

I wasn't totally satisfied with the service, (though I felt it was way better than Bell's had been), and was about to switch to another ISP when I ended up moving. But that was the beauty of it - I could choose from among several ISP's with just a few phone calls. (Plus a minor interruption of service while Bell 'accidentally' messed up the changeover).

I shudder to think of living someplace where I have NO choice of ISP, or am forced to choose between a 'wired' monopolist bully and a 'wireless' monopolist bully.

Re:This Just In! (3, Interesting)

Anonymous Coward | about 2 months ago | (#47785009)

In most municipalities, it is impossible to start a small ISP because the city government didn't want to have to talk to more than one supplier of each kind of service. Competition is annoying for bureaucrats, they get two sides making claims and showing evidence, it actually requires work. So much easier to assign a monopoly and approve or reject their requests entirely on personal and political grounds.

Re:This Just In! (5, Insightful)

Anonymous Coward | about 2 months ago | (#47785039)

There is only one reason for the government to step in: make it easier for smaller ISPs to start shop. I'd love to start a small ISP in my area, but it is practically impossible.

No, there is only one real reason for the government to step in: To serve the interests of its citizens.

You may argue that smaller ISPs are in the interests of the citizenry, that's certainly reasonable enough to assert.

But never forget why it's done.

Re:This Just In! (0)

Anonymous Coward | about 2 months ago | (#47785779)

Yes - there are several ways the government could act to fix this problem. One way is to impose heavy restrictions on the monopoly incumbent (such as Title II Common Carrier), i.e., treating them like any other utility. Another valid way would be to eliminate the barriers to competition. If anything, this is the debate we should be having between 'left' and 'right'.

Why should the government step in? Because the government (at varying levels) created this problem in the first place, by doing things such as classifying ISPs as an 'Information Service', by granting region specific franchise agreements, and generally allowing lobbyists to influence policy to the degree that we're back to an age of Robber Barons, except this time it's Telecommunications instead of Railroads. While they can't get away with the same kind of blatant securities fraud that went on back then (and leave that to Wall Street these days), it's still the same sort of monopoly squeezing out "whatever the traffic will bear".

The government has been acting in the interests of these corporations - not its citizens.

Re:This Just In! (0)

Anonymous Coward | about 2 months ago | (#47786549)

You can say the government created the problem of some people getting wealthy by actually supporting rules regarding property ownership.

It's a tedious discussion, at least for most people, since the practicality or not of anarchism is a philosophical argument more than a real world one.

Re:This Just In! (0)

Anonymous Coward | about 2 months ago | (#47786753)

"problem"? When did rewarding risk taking and skill become a problem?

Re: This Just In! (0)

Anonymous Coward | about 2 months ago | (#47787595)

It became a problem when the alleged risk takers started believing they should be rewarded regardless of what happens. In other words, modern American capitalism.

The behavior of corporations and 2 year olds is kind of hard to distinguish these days.

Re:This Just In! (0)

Anonymous Coward | about 2 months ago | (#47786699)

"Government" shouldn't act. Citizens should decide what they want and tell their elected officials to get on with it rather than the other way around.

Why can't taxpayers decide for themselves? (5, Informative)

sjbe (173966) | about 2 months ago | (#47785275)

There is only one reason for the government to step in: make it easier for smaller ISPs to start shop.

So you don't think the government should step in if the big guys are abusing their monopoly? You don't think the voters in a municipality should be allowed to decide for themselves if they want the government to establish broadband services for their own use? I know it's a popular meme to presume that governments are nothing but incompetent but the reality is that sometimes the government is the best way to get something done. If the existing ISPs find it not worthwhile to serve a population I see no credible argument why the local government couldn't fill that role if the taxpayers want them to. Might not be economically ideal but sometimes perfect is the enemy of good enough.

I'd love to start a small ISP in my area, but it is practically impossible.

Out of curiosity, why? It's a pretty tough way to make a buck. The margins in being an ISP are pretty thin unless you are able to obtain some form of monopoly. If there is any competition the margins plummet but costs don't. Huge fixed costs, lots of customer service, maintenance, etc. Maybe it's your passion but I've started a number of businesses and that is a seriously difficult business to get into. I can introduce you to several people who have actually tried to start an ISP and failed in spite of being well funded.

Re: Why can't taxpayers decide for themselves? (0)

Anonymous Coward | about 2 months ago | (#47785625)

Yeah, I mean AT&T has done so poorly in the ISP business that they had to buy out their competitors to maintain an edge. And just to be on the safe side they bought former fragments of their own company.

You would have to be crazy to think anyone could possibly make money by providing internet service in this day and age.

Re:Why can't taxpayers decide for themselves? (5, Informative)

Frobnicator (565869) | about 2 months ago | (#47786399)

So you don't think the government should step in if the big guys are abusing their monopoly? You don't think the voters in a municipality should be allowed to decide for themselves if they want the government to establish broadband services for their own use? I know it's a popular meme to presume that governments are nothing but incompetent but the reality is that sometimes the government is the best way to get something done. If the existing ISPs find it not worthwhile to serve a population I see no credible argument why the local government couldn't fill that role if the taxpayers want them to. Might not be economically ideal but sometimes perfect is the enemy of good enough.

My region (the 2M people metro area) is going through municipal broadband fights. They started the fights back in 2002.

The group got an initial rollout in a few of the smaller cities, roughly 11,000 people got hooked up. Then the entrenched monopolies kicked in. Some highlights:

* Lawsuits from both the incumbent megacorps on cable-based and phone-based Internet on the claim that it was unlawful and anti-competitive for a state agency to compete with an established business. The lawsuits took several years and cost millions. The judges and the appeals court found that government is allowed to provide services, similar to how they provide municipal trash services and still businesses compete; nothing prevents the cable and phone companies from competing if they want.

* Every year state legislators keep introducing new bills prohibiting government agencies from competing with existing businesses, or requiring that governments cannot provide information services to the public without high fees and those fees should go to education, or that any group providing Internet services have so many billions in assets to mitigate risk of disaster, and other variations. Invariably a little research shows the legislators get money from the phone and cable companies, and the company lobbyists vocally support them. The municipal fiber groups have needed to spend several million dollars to fight these as well.

* In a few cities installation was unexpectedly stopped again when some of the smaller cities discovered their own contracts with the megacorps demanded that they couldn't build their own systems until after a multi-year vetting process with the megacorps plus giving them another multi-year opportunity for megacorps to adjust prices and to improve their infrastructure. Basically the smaller city and town governments signed deals for their own cheap Internet that block municipal fiber within their limits for a decade or more. Since then the FCC and other groups have urged cities to be more careful in the contracts they sign.

* Incumbents even got the federal government to drop contracts. In one case they had a contract with the federal government for a $66M under the RUS. After the municipal system had invested and contracted based on that contract it was unexpectedly cancelled. Investigation showed the federal contract was cancelled because the federal RUS system was threatened by the megacorps. A chain of 'smoking gun' emails were discovered where Comcast and CenturyLink demanded the RUS cancel the contract or the two megacorps would act against it; a lawsuit on tortious interference is ongoing, but the cost will be several more million before any ruling will follow, in the mean time the municipal system is out the $66M plus all the interest they need to pay on the emergency loan they had to take out to avoid defaulting on the expenses.

* Because the megacorps have forced the municipal fiber system to spend hundreds of millions on lawsuits and illegally-broken contracts, and because the redirected money has resulted in higher interest rates and longer-term loans costing over $500M to date, they are leveraging it and constantly sponsoring print ads, billboards, and TV ads (on their own cable networks) making nonspecific claims about how the municipal fiber has collected so many millions but only invested a limited amount and how so few people are currently hooked up. The city is covered with signs paid for by the megacorps with things like "$500,000,000 Wasted!", "Municipal Fiber Failed!", "Demand (city) Stops Internet Tax!" They all say things like "sponsored by Citizens for Fair Taxation and Representation", which in turn are run by and sponsored by the megacorps. They fail to mention that they're the ones who induced the huge expenses.

* The few people who are hooked up try to convince everyone just how good it is. Just $20/month for a hundred megabit (both ways) Internet connection on a fiber-to-the-home connection. Business pay a just little more and are seeing into the gigabit speeds. They are immediately drowned out by people making claims that is only cheap because the entire region is subsidizing only a few thousand connections and that nobody will ever see that when everything is hooked up and that we should all by Comcast because it is only $45 for the first year plus taxes and fees and installation. They are also accompanied with ads are along the lines of "Right now you are paying the city $20 every month for high speed Internet that you can't use. Get high speed Internet from Comcast starting at just $45 per month for the first year."

So while it is nice to think the governments could do that kind of transformation, know that the incumbents see this as a death threat. The cable and phone monopolies are willing to spend hundreds of millions of dollars fighting municipal broadband because they see it as a threat to their very existence. It is very much a case of adapt or die, but they fail to see the adapt part.

Re:This Just In! (1)

Anonymous Coward | about 2 months ago | (#47786251)

Municipal broadband = BAD, (the government doesn't have the incentive to succeed that small business must.)
Co-Op internet: not a bad idea, but really a form of small business.
Giant corporate Broadband = No Competition....

We need smaller providers like WISPs and small FTH providers like golightspeed.com to have some competition.

And what does the government actually do? They give out grants to the big corporate providers at nearly $1000 per home to expand into areas that they don't make money in. Politicians funnel the money to the big providers and keep it out of the hands of the small local providers that can service the same homes at less than half the price. Small business can compete, but not against Big providers+Government grants.
I wish the government would just stay out of it. Politicians don't understand the last mile delivery of internet service. They want to shovel money around to buy peoples votes but don't understand that they just disrupt the market and make life more difficult for small business.

Re:This Just In! (1)

tc3driver (669596) | about 2 months ago | (#47787303)

Politicians don't understand the last mile delivery of internet service.

I would say that they don't understand anything of internet service. At least the elected officials (in general of course). Otherwise I agree fully.

Re:This Just In! (4, Insightful)

nine-times (778537) | about 2 months ago | (#47785429)

Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.

That's not why. It's because they're afraid of getting shown up.

If you have a bunch of people out in the country getting gigabit internet for $25/month while the city folk are still paying $50/month for 1mbps DSL, it makes AT&T/Verizon look either corrupt or incompetent. It also destroys their argument that they can't provide good Internet in the US because of the low population density.

Re:This Just In! (1)

pr0fessor (1940368) | about 2 months ago | (#47785685)

It would reduce the overhead and risk for the ISPs to move into more rural areas if the municipality was footing the bill..... I'm surprised they are not trying to bid on the work of building the infrastructure, operation, and maintenance.

Re:This Just In! (1)

Jason Levine (196982) | about 2 months ago | (#47785893)

That might be the real reason, but the public reason the big ISPs offer up is "unfair competition" from government - even when the "competition" would be serving an area that the ISP isn't serving. And yet, Comcast and Time Warner Cable claim they aren't competing with each other because they serve different areas.

Re:This Just In! (1)

Obfuscant (592200) | about 2 months ago | (#47787407)

It also destroys their argument that they can't provide good Internet in the US because of the low population density.

No, it just shows that when you remove the requirement for prices to cover costs and yield a profit, governments can do what private companies cannot. If the existing telecom could cover any operating losses by just dipping into the taxpayer general fund, you'd see prices go way down -- covered by taxes, of course.

And that is what makes government competing with existing private companies wrong. It isn't fair in any sense of the word, and the private companies, even if the courts say they are free to compete if they want to, have no way they'll make any return on their investment. I mean, existing markets are already defacto monopolies (not dejure) because even in major markets the density of consumers is too low to support two systems in direct head to head competition. If both TW and Comcast could make a profit operating in the same markets, they would. They'd both get franchises and both run physical plant and you'd have a choice.

Re:This Just In! (1)

dryeo (100693) | about 2 months ago | (#47789175)

Around here it usually works the opposite, the government delivers cheaper service including running at a lose in some rural places that private business would never service and puts money into the general fund. This is the danger with government infrastructure, they discover they can cut taxes and make up the shortfall by raising prices and pretty soon you're paying almost as much (or in the case of monopoly, more) then private business would charge.
If big cable company can charge X, pretty soon some government decides that it can also charge X and get voted in by lowering taxes. Then they can use the high prices as an excuse to give the infrastructure to their friends in industry.

Re:This Just In! (1)

symbolset (646467) | about 2 months ago | (#47785455)

This is what led the Grant County PUD to begin rolling out fiber to the home in 2000. Now this rural Washington county has gigabit fiber to the home at reasonable rates when much of Seattle is still stuck on DSL or Comcast level technology and rates.

Re:This Just In! (1)

bill_mcgonigle (4333) | about 2 months ago | (#47785587)

Because you can't have the government competing with them in an area that they might, someday, begin to consider serving.

Yeah, so ... don't let them hear this too loudly ... one way to get Comcast into a town (where that's the only neighboring monopoly) is to lay out plans on paper to have a market competitor build out a WISP to serve the town. It doesn't even have to be a great-coverage plan and you don't have to have affordable backhaul, but have some public hearings and make sure the papers cover it thoroughly - Comcast will be along shortly to talk to the town administrators about pulling cable, on their dime.

I've even seen this happen in sequence, from town to town.

Re:This Just In! (1)

Keick (252453) | about 2 months ago | (#47785887)

Just to burn some Karma i'm going to offer an opposing argument.

My biggest objection to municipality run ISP's is the rural factor; There is no laws that says a municipality has to provide service to those just outside.

I'm on Verizon DSL where I live, 3/4 mile outside of town limits but in a non-dense area. In college town there are thousands of apartments in high density areas, and also served by Verizon.

Now say the town decides to run it's own fiber to all these apartments. Now Verizon loses all that customer base, but is still required to operate in the surrounding low density areas. What do you think is going to happen to MY bills?

Subsidy for the win (1)

AF_Cheddar_Head (1186601) | about 2 months ago | (#47786225)

So you are saying that you have no problem with the city folk subsidizing you. Sounds like that's what you are saying.

Privatize sewage too. (1)

Snufu (1049644) | about 2 months ago | (#47786661)

Think of the profits from monthly "bowel data caps".

Re:This Just In! (1)

joocemann (1273720) | about 2 months ago | (#47786747)

I think that the free market should attempt to try to compete with what they call 'inefficient big government'. I think it would be awesome to see if government or business can manage better.

Re:This Just In! (1)

Jason Levine (196982) | about 2 months ago | (#47787083)

I would love a free market for broadband Internet. The big companies that offer broadband Internet, though, don't want one and will use all of their power and influence to keep one from emerging.

Re:This Just In! (1)

Obfuscant (592200) | about 2 months ago | (#47787975)

I would love a free market for broadband Internet. The big companies that offer broadband Internet, though, don't want one and will use all of their power and influence to keep one from emerging.

You're really trying to argue that government run competition is how you create a "free market"? Really?

Re:This Just In! (2)

fustakrakich (1673220) | about 2 months ago | (#47785051)

Oh no no no.. The real story that should be addressed is how people are so easily swayed by propaganda. This is the issue to attack.

Re:This Just In! (3, Insightful)

Mr D from 63 (3395377) | about 2 months ago | (#47785089)

Unfortunately, the major news outlets have long since lost the ability to explain anything of this nature in a factual manner. And since the telecom wield influence over them as well, they aren't likely to help on this one.

Re:This Just In! (1)

fustakrakich (1673220) | about 2 months ago | (#47785247)

And we shouldn't be depending on their help to spoon feed us every little tidbit. If anything, we need to learn to tune them out.

Re:This Just In! (1)

Mr D from 63 (3395377) | about 2 months ago | (#47785519)

The topic wasn't the us, but the masses. Fat chance of that happening.

Re:This Just In! (1)

fustakrakich (1673220) | about 2 months ago | (#47789727)

us - we... we are "the masses"

Hey, look, I'm cool with however you want to run it. I'm just asking if you have a plan for implementation of whatever changes you want made, or are we just expected to slog along, and keep voting for salesmen, and watch the next 10 or 12 years become a little worse than the last, and hope to be rescued by Harry Potter?

There's no other way to put it. What you have is what you voted for, under the veneer of charisma.

Re:This Just In! (4, Informative)

Penguinisto (415985) | about 2 months ago | (#47785137)

"people"? You misspelled "legislators" - in 2003/4, Qwest (now CenturyStink) and Comcast went nuts and brib^M convinced Utah legislators to abandon the UTOPIA multi-city municipal broadband project, then they began slathering on lawsuits and threats thereof [freeutopia.org] .

Re:This Just In! (3, Interesting)

fustakrakich (1673220) | about 2 months ago | (#47785229)

I don't give a damn about any of that. I only care that these politicians are being reelected over and over. That is a problem of the people.

I don't know what's scarier about this article (5, Insightful)

Joe Gillian (3683399) | about 2 months ago | (#47784811)

The fact that a 67-year-old grandmother from Tennessee has more progressive views on municipal internet than a large portion of the rest of the country, or that AT&T stepped in and threatened a 67-year-old grandmother over her attempt to provide municipal internet to her community.

Re:I don't know what's scarier about this article (5, Insightful)

AnontheDestroyer (3500983) | about 2 months ago | (#47784967)

She doesn't have more progressive views than most in the country. This is yet another issue that proves the country is an plutocracy rather than a democracy. In this instance, a few corporations (who Republicans will have you believe are, "people") are buying up politicians and subverting the will of the masses.

It just happens to be one of the more glaring flaws with our campaign finance and electoral systems. And it still can't be fixed.

Re:I don't know what's scarier about this article (0)

Anonymous Coward | about 2 months ago | (#47785869)

who Republicans will have you believe are, "people"
Look to what that 'grandmas' party was.

Then look to who is getting the money. In her particular case they basically blackmailed her with court action.

My point? This is *NOT* a party issue. The big companies are playing you into thinking that. Because it makes it easier for them to bribe/contribute to your guy. They only have to deal with half as much money.

In my state it was the D's pushing for this mess and the R's saying how it was the stupidest thing evar! 2-3 years later power shift and suddenly polar opposite views. It was dead easy to see how much money it costs. About 20k for a congress critter, 400-1200 for a state level dude 15-30k for a majority leader in that state. That is the real tragedy. Our political class is for sale to the highest bidder. :( In fact one of the guys they were talking about in that article was pushing for the very laws he now says hurts his constituents (same bill nearly word for word before the republicans killed it in committee the D's couldnt pull that maneuver off).

If you think 'oh my guy wouldnt do that' Go look up his track record for donations. Then look at who is funding his PAC's. There is a *very very very* small handful that are not like that. None of them are from my state.

It just happens to be one of the more glaring flaws with our campaign finance and electoral systems. And it still can't be fixed.
It will take term limits of 1 term service and you are done. Which will take a constitutional amendment. Our politicians are so in love with being re-elected they will whore themselves out to anyone to do it.

Simle fix (1)

AF_Cheddar_Head (1186601) | about 2 months ago | (#47786247)

If you can't vote in the election, you can't contribute to the candidates in the elections. Eliminates outside money.

Re:Simle fix (1)

tc3driver (669596) | about 2 months ago | (#47787331)

That doesn't stop a CEO of a corp from handing money to a politician and asking for the same favors.

Re:I don't know what's scarier about this article (1)

jellomizer (103300) | about 2 months ago | (#47785095)

Being that in most area we have the choice of only one broadband provider. So we are reliant on taking what we can get. If we can have Broadband internet at the Local Town level, vs. State or Federal level. We can have internet and still be close enough to local government to control what goes on.

MaBell on the other hand was just what everyone used in the US. So we had to suck it up and pay for a monopoly.

The thing is with a municipal Internet. the carriers can still dominate the market, as they could the the Towns ISP. It is that they just won't get paid as much as charging everyone $70.00 a month.

Re:I don't know what's scarier about this article (0)

Anonymous Coward | about 2 months ago | (#47786797)

What's really scary is you believing the FUD from a far left web site like the link.

Re:I don't know what's scarier about this article (2)

bughunter (10093) | about 2 months ago | (#47787457)

What's truly scary, is that in the US some people consider Public Integrity (both the nonprofit and the concept) to be "far left."

From the site's "about" page:

Our mission: To serve democracy by revealing abuses of power, corruption and betrayal of public trust by powerful public and private institutions, using the tools of investigative journalism.

Yep. Anarcho-communist FUDmongers, the lot of 'em.

Re:I don't know what's scarier about this article (1)

dryeo (100693) | about 2 months ago | (#47789427)

Well democracy itself is pretty left wing, at least by the original definition where the left was the common people and the right was the aristocracy. It's just a shame that currently a quote like

Our mission: To serve democracy by revealing abuses of power, corruption and betrayal of public trust by powerful public and private institutions, using the tools of investigative journalism

has become an insult.

Stakeholders vs. Customers (2, Interesting)

SpzToid (869795) | about 2 months ago | (#47784835)

Seems to me that stakeholders in municipal broadband are a more satisfied lot than the customers of the Telcos (with their paid lobbyists so nicely donating money to the boy/girls scouts to enlist their 'support' for crazy-ass mergers and what-not; nevermind that The Public has Clearly Told The 3 (is it?) commissioners at the FCC to take a flying leap).

progressive = slut kommi views: (-1, Troll)

noshellswill (598066) | about 2 months ago | (#47784867)

More Gub'mnt handouts eh hoser?  Call it municiple, but it's the DOLE for parasites you really mean.  Better: If you can't pay then don't play. I don't want to pay for your media-play thru a Gub'mnt pimping service ... like another Obama.phone for Bantu baby-momaz and krak-dealers. 

Logical result of gov't sanctioned monopolies (0)

Anonymous Coward | about 2 months ago | (#47784873)

How can anyone be surprised when governments and corporations get in bed together to monopolize a market, they resist any competition in all ways possible?

Costly and Unreliable (1, Interesting)

Anonymous Coward | about 2 months ago | (#47784907)

"And they've tried to undermine the appetite for municipal broadband by paying for research from think tanks and front groups to portray the networks as unreliable and costly."

So let me get this straight, per the broadband industry municipal broadband is costly and unreliable, but they, meaning AT&T, ComCast, CenturyLink, cannot compete with "Costly and Unreliable". I think this says more about broadband industry than it does about municipal broadband.

Republican? (1)

Anonymous Coward | about 2 months ago | (#47784937)

She's a republican? Offering something to her non-corporate constituents? What planet is this?

Re:Republican? (2)

Shatrat (855151) | about 2 months ago | (#47785079)

The one that doesn't conform to the group-think stereotypes of online forums.

Re:Republican? (0)

Anonymous Coward | about 2 months ago | (#47785151)

It were the republicans who were against slavery, the democrats supported slavery.

Re:Republican? (1)

Anonymous Coward | about 2 months ago | (#47785265)

Yes. Back when democrats were social conservatives and republicans were progressives.

Re:Republican? (0)

Anonymous Coward | about 2 months ago | (#47786449)

SO glad to know there are still progressive Republicans in Tennessee.

Crowding Out Effect (4, Insightful)

digsbo (1292334) | about 2 months ago | (#47784947)

It's funny that when a free-market proponent says government monopolization of some good or service "crowds out" for-profit competition we get called names. It's also funny that when we point out that these companies with government sanctioned monopolies aren't really operating in a free-market environment we get accused of using the "no true scotsman" fallacy.

Re:Crowding Out Effect (1)

VTBlue (600055) | about 2 months ago | (#47785011)

No one I know says this. It should pretty cleanse that telecoms, cable, are not functioning in any Market. As you correctly say they are local government monopolies whic are further protected by the states, for stupid and nonsensical reasons.

Re:Crowding Out Effect (1)

digsbo (1292334) | about 2 months ago | (#47785083)

No one I know says this.

You hang out with people who have more than typical insight, then. I hear a lot of this kind of thing from people. Mostly, but not exclusively, who are left-leaning, and who also blame the banking crisis on "the free market".

Re:Crowding Out Effect (1)

VTBlue (600055) | about 2 months ago | (#47785917)

I did public finance and Econ in grad school...post Keynesian bent. :)

Re:Crowding Out Effect (1)

digsbo (1292334) | about 2 months ago | (#47786017)

Yeah, I saw your reference to MMT.

Re:Crowding Out Effect (1)

mvdwege (243851) | about 2 months ago | (#47787287)

I didn't hear of any government officials putting guns to the heads of investment bankers to package up bad loans and sell them as AAA securities. Got any cites for that?

Re:Crowding Out Effect (1)

digsbo (1292334) | about 2 months ago | (#47789435)

After repeated bailouts, they didn't have to. It was largely assumed that the boys' club would take care of each other. And indeed it has, for TBTF banks that received bailouts enjoyed discounts on their interbank borrowing after they were bailed out, because their creditors knew the central bank would make good on any bad loans. Small banks actually operate at a disadvantage because the assumption is they WON'T get bailed out unless they're big enough for "systemic risk". Also, the whole Federal Reserve fractional system is designed for the benefit of banks (and also to facilitate deficits).

Re:Crowding Out Effect (1)

mvdwege (243851) | about 2 months ago | (#47789945)

Right, so the banks, of their own free will, package up bad loans and sell them as AAA securities, and it's the government's fault.

I give up, you're in incorrigible libertard.

Re:Crowding Out Effect (4, Insightful)

i kan reed (749298) | about 2 months ago | (#47785071)

It comes from the fallacious belief that non-government created monopolies leveraging their position will face competitors who can "do it for less". The truth is that infrastructure just isn't that conducive to competition. Who'd want 3 different water/sewer systems connected to their house?

Re:Crowding Out Effect (0)

Anonymous Coward | about 2 months ago | (#47785171)

Who'd want 3 different water/sewer systems connected to their house?

It'd be better than one unified system x^P

And joking aside, I used to live in a place that had a local well, a community water system, a grey water system and an aerobic septic system. So that would be two of each. Of course, the well had the ability to feed back into the community system; the two had different demand curves, so there was always plenty of water, even when one of the systems went dry/turbid/etc.

Re:Crowding Out Effect (1)

bill_mcgonigle (4333) | about 2 months ago | (#47785319)

The truth is that infrastructure just isn't that conducive to competition.

Heh, just ten years ago I heard people saying that - shortly before Comcast offered phone service and before Verizon offered TV service. Both cable TV and telephone were "natural monopolies" before they weren't. To offer that Verizon had to replace their entire cable plant and Comcast had to replace much of it. What they didn't have to do was go through an extremely expensive political and regulatory process to get access to pole space (in the "public right of way").

Who'd want 3 different water/sewer systems connected to their house?

When the first two are charging $1000/mo for water and the third offers it for $50 a month, then the cost of laying the new piping can be amortized over a short enough time period that either customers or investors are willing to put up the money for the time-value return of the subscribers' rates.

It's exactly the same calculation for anything anybody calls a 'natural monopoly'. Absent an interfering government, the money flows to the best service provider.

Re:Crowding Out Effect (1)

i kan reed (749298) | about 2 months ago | (#47785381)

Yeah, but we know from relatively basic studies of economics, (varying) on the exact elasticity of demand, that any sort of sane monopoly tends to price somewhere in the range of double to triple what a competitive market would.

Not the fantastical 20x you just proposed.

Re:Crowding Out Effect (1)

ebyrob (165903) | about 2 months ago | (#47785679)

Oh yeah. Bring up phones. Those land-lines have REALLY gotten more reliable and useful in the last 60 years haven't they? I mean, look at the horrible phone track records for emergency service and reliability in 1954 after all.

> It's exactly the same calculation for anything anybody calls a 'natural monopoly'. Absent an interfering government, the money flows to the best service provider.

I suppose that's why municipal water is so expensive, unreliable and horrible in the US, whereas such an "incredibly difficult" service as data transfer works cheaply and flawlessly under the wonderfully popular and incredibly excellent Comcat, Verizon et al. "services". </puke>

Re:Crowding Out Effect (1)

digsbo (1292334) | about 2 months ago | (#47785881)

I think the fact that the land line providers were granted privileges (right of way, regulatory capture) by the government is a good example of what I referring to in my original post. Your apparent lack of comprehension is a pretty good example of the kind of behavior I was describing precisely in the second sentence.

Re:Crowding Out Effect (0)

Anonymous Coward | about 2 months ago | (#47785805)

then the cost of laying the new piping can be amortized over a short enough time

One quarter? No? Fuck this shit, I'll invest in the $1000/mo enterprise and collect my winnings October 1, on schedule.

Investing in the underdog to spend millions on infrastructure might be the right thing to, but the rational thing to do would be to expect the incumbents to use the billions of dollars they've collected to run a customer retention sale and undercut your $50/mo competitor until it goes out of business, then bid on the assets so that nobody else gets any bright ideas of buying into the market cheap.

Re:Crowding Out Effect (2)

_Sharp'r_ (649297) | about 2 months ago | (#47786157)

Who'd want 3 different water/sewer systems connected to their house?

Ummm... me?

I'm currently forced to buy water from only the local government-granted monopoly water provider, who has decided not to provide one type of water I want to purchase (greywater) to residential customers. They sell it to commercial customers at1/10th the cost of their potable water lines, but despite the fact that the pipes and infrastructure supporting it are literally 2 feet from my property, I'm classified as residential, so no using greywater for landscaping for me.

There's another potential water provider less than a mile away in a different political jurisdiction who I could purchase from... if it was legally allowed for them to compete here, which it isn't.

The truth is that taking a government-created monopoly and saying that's proof that a market wouldn't support a non-monopoly setup is really saying that the legal framework creating the monopoly in the first place isn't really needed. So let's get rid of the government enforcing monopolies and see what's really a persistent natural monopoly vs what's actually a favor for buddies of the local politicians instead?

Re:Crowding Out Effect (1)

bill_mcgonigle (4333) | about 2 months ago | (#47785385)

Hey, it says right in TFS "lobbyists, paid-for politicians, and lawsuits" - what part of the Free Market doesn't have "lobbyists, paid-for politicians, and lawsuits"?

Can't you see how this is a problem with voluntary trade and not fascism [econlib.org] ?

Municipal Broadband is Socialism! (1)

Anonymous Coward | about 2 months ago | (#47785141)

You can't allow it. If it works well, people might think socialism isn't always a bad thing. Who knows what other crazy, un-American ideas would then catch on?

Seriously, this isn't just to eliminate municipal broadband as an Internet delivery mechanism, it is to stamp out the idea that municipally owned utilities are possible and sometimes desirable.

Re:Municipal Broadband is Socialism! (2)

towermac (752159) | about 2 months ago | (#47785335)

It's not socialism. Unless you expand the definition of socialism all the way down to include two people talking...

Re:Municipal Broadband is Socialism! (0)

Anonymous Coward | about 2 months ago | (#47786959)

Unless their communications involve an exchange of private property (let's call it "Intellectual Property") for money in a marketplace, it is indeed socialism.

A market based alternative would have people buying and selling conversation, with a market established bidding for other people's conversation, and price determined by supply and demand.

I mean striking up a conversation with someone and just chatting - it sounds like something Karl Marx would advocate.

Re:Municipal Broadband is Socialism! (0)

Anonymous Coward | about 2 months ago | (#47785369)

It has worked well, 100% of the time. That's what strikes fear into the plutocrats, is people realizing that people-owned services work MUCH better than being fiscally raped for the same service.

Start an L3C company (0)

Anonymous Coward | about 2 months ago | (#47785343)

Start an L3C company, a type of company which is for-profit but for a beneficial purpose instead of simply maximizing income. The L3C's purpose would be to install and operate a high-speed fiber network. The company could then lease space on their network to companies such as Comcast, AT&T, etc allowing customers to pick which ISP they like (competition anyone?).

Or require the traditional communication companies to form a not-for-profit entity together to build out the fiber network in an area. They would each have access (competition anyone?). This entity could be called Federation of United Communications Companies for Universal Access (FUCC-UA, pronounced "fuh que eh").

Eliminate municipal monopolies (5, Informative)

BobandMax (95054) | about 2 months ago | (#47785351)

The answer is pretty easy. Eliminate the ability of cities, counties or states to create monopolies. In jurisdictions where there is no monopoly and multiple offerings exist; prices are lower, service is better and customers are more satisfied.
http://www.pcworld.com/article... [pcworld.com]
http://cbpp.georgetown.edu/wp-... [georgetown.edu]
http://www.uspirg.org/reports/... [uspirg.org]

Re:Eliminate municipal monopolies (0)

Anonymous Coward | about 2 months ago | (#47786373)

The answer is pretty easy. Eliminate the ability of cities, counties or states to create monopolies.

Monopolies like municipal water and sewage systems?

Monopolies like public works departments that maintain roads?

Monopolies like fire and police departments?

In jurisdictions where there is no monopoly and multiple offerings exist; prices are lower, service is better and customers are more satisfied.

What if the competition is the municipal system?

The problem is that in many, perhaps most, jurisdictions there are no multiple offerings.

And cable companies like that just fine.

If they could get laws passed to prohibit any competition, they would, not just municipal systems.

Re:Eliminate municipal monopolies (2)

BobandMax (95054) | about 2 months ago | (#47787389)

The subject under discussion is broadband. Try to pay attention. And, yes, municipalities do prohibit competition through sleazy deals with all-too-eager providers. In those areas where there are no contractual monopolies, lower rates, better service and higher consumer satisfaction are the norm. The reason why there is only one choice in so many locations, like mine, is because local government has sold the monopoly rights.
http://www.wired.com/2013/07/w... [wired.com]

Re:Eliminate municipal monopolies (0)

Anonymous Coward | about 2 months ago | (#47789249)

Ahh, to prohibit the right to sell a contractual monopoly to a commercial entiy, not to be a monopoly.

My bad.

Eliminate municipal monopolies (0)

Anonymous Coward | about 2 months ago | (#47787703)

... counties or states to create monopolies ...

One of the many delusions that Americans have about capitalism is that it is more effective than socialism: Capitalism provides efficiency of manufacturing and supply. It is how the basic mathematics of capitalism, marginal revenue exceeding marginal expense, is achieved. But socialism and municipal governments are driven by completeness: Everybody pays and everybody gets the same deal. This ignores the capitalist attributes of exclusivity and profit. So the only way to encourage a for-profit venture to give everybody the same service at the same price is a monopoly. Refusing to create a monopoly means less research and development, fewer high-quality artists, less community infrastructure. That's makes a whole nation suffer.

Perhaps the problem with the current bevy of monopolies is their neo-liberal authority and lack of accountability. The US government has paid tel-cos to provide services which were never delivered. Americans demand frugality from their supposedly wasteful government but don't demand the same from corporations receiving government subsidies.

This leads into the next delusion suffered by capitalist Americans, "Their monopoly is good for me", where all the actors work very hard to ignore the fact a corporation has a monopoly. Also ignored is that the "invisible hand" used to defend corporations exists only when multiple vendors offer identical goods: A monopoly eliminates competition which eliminates the invisible hand.

Re:Eliminate municipal monopolies (0)

Anonymous Coward | about 2 months ago | (#47788037)

And you know this because of the many, shining successes of Socialism? Oh, wait...

Socialism is used by all the systems. (0)

Anonymous Coward | about 2 months ago | (#47789093)

Socialism essentially is: the needs of the many outweigh the needs of the many (it's not just from Spock.)

Capitalism's central argument is that long term, eventually, it benefits the most people and while imperfect, it does better than any other approach. This is also where the believers all go wrong, they turn it into an idealistic extreme which is the very downfall of all the other systems which capitalism cites in justifying itself.

Government subsidy vs government monopoly (2)

A nonymous Coward (7548) | about 2 months ago | (#47785399)

What galls me the most is the panty-wetting over a government-granted monopoly trying to maintain its government granted monopoly when that very same government tries to compete using taxpayer dollars as a subsidy.

The outrage should be against government involvement period. If governments didn't grant local monopolies, there would be real competition among the real companies, and no perceived need for the government competition which is only competitive because it has the taxpayer subsidy.

Article in a nutshell (0)

Anonymous Coward | about 2 months ago | (#47785451)

Just a reminder who really runs this country, for those people who though the US was a republic and voting matters.

Terrible idea (4, Funny)

Dega704 (1454673) | about 2 months ago | (#47785477)

Municipalities providing a critical infrastructure? What Lunacy! That will never work! What other crazy ideas do these municipalities have in store for us? Electricity? Running water and sewage? Gas heating? Paved roads? Balderdash! Best to leave these things to the large corporations and eliminate all of the regulations since they have nothing but the public's best interests at heart. To the free market fairy we pray for forgiveness. Amen.

Huh! (3, Insightful)

DaMattster (977781) | about 2 months ago | (#47785597)

With all of the money they spend lobbying politicians and rallying people against municipal broadband, they could've built out their networks and made them even better. Utter stupidity!

Free wi-fi municipal networks (1)

fok (449027) | about 2 months ago | (#47785633)

Free wi-fi municipal networks are springing up in Brazil since at least 2009. Nonetheless, as these networks are intended for public access to government services, people still buy 30Mbit+ broadband connections for their homes from the big telcos.

um (-1)

Charliemopps (1157495) | about 2 months ago | (#47785693)

So we're using the Center for Public Integrity as a source of info now?
CPI is a well documented political organization funded by George Soros and used by him to attack his various right wing opponents. They are not journalists. This article is basically like claiming "The Heritage Foundation explains why Obama's not really a US citizen!"

Once again, Slashdot doesn't care if it's true as long as it supports their own world view.

Re:um (4, Informative)

sam_nead (607057) | about 2 months ago | (#47786495)

Soros hasn't funded them in the last decade. http://en.wikipedia.org/wiki/C... [wikipedia.org] "They are not journalists" - they won a Pulitzer...

Re:um (1, Troll)

Bing Tsher E (943915) | about 2 months ago | (#47787207)

"They are not journalists" - they won a Pulitzer..

Obama won a Nobel.

Re:um (2, Informative)

Anonymous Coward | about 2 months ago | (#47786937)

Ah yes, the age-old "if you can't attack the message then attack the messenger". The article was well researched and correct. Deal with it.

Re:um (0)

Anonymous Coward | about 2 months ago | (#47786977)

You just got smacked with the cluebat.

Re:um (4, Funny)

mvdwege (243851) | about 2 months ago | (#47787297)

You forgot to mention Al Gore, Hillary Clinton and Nancy Pelosi.

Solution (0)

Anonymous Coward | about 2 months ago | (#47786395)

The solution is a major city doing a build out. NYC, Chicago, la. (Too many libertards for it to happen in sf)
These cities have to big dicks to beat these companies into submission.

Costly and Unreliable? (1)

jbmartin6 (1232050) | about 2 months ago | (#47786517)

to portray the networks as unreliable and costly

I wasn't sure to which networks this was referring.

NSA (0)

Anonymous Coward | about 2 months ago | (#47788553)

And not one comment on how the big corporations are in cahoots with the government, actively allowing them to spy on you. It is much harder to get their little box of tricks installed in a municipal isp, whereas they can pretty much force a large corporation to accept it for appropriate "compensation".

corporate-fascists (0)

Anonymous Coward | about 2 months ago | (#47788927)

It's the corporate-fascist way! Which unfortunately has become the way of "merica"... Hardly surprising!

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