Your ISP's Worst Nightmare...

Category: Networking

The worst nightmare of Verizon, Comcast, and other commercial broadband providers is coming true. Across the USA, their customers are voting to establish municipally owned and operated networks. The tide is turning overwhelmingly in favor of public alternatives to private broadband. Here's what you need to know, if you'd like low-cost, super-fast Internet in YOUR town...

Municipal Broadband Networks

On Election Day, November 4, voters in 44 Colorado cities and counties gave the green light to development of municipal broadband networks by majorities of 75 to 92%, bringing to 57 the number of local governments that have opted out of the 2005 State law forbidding municipal networks unless voters approve.

In Decorah, IA, the vote was 1,289 to 95 to let the city establish a municipal broadband Internet, TV, and telephony network. Vinton, IA (pop. 5,257), voted 792 to 104 to let its municipal electric utility deploy a broadband network; significantly, Vinton voters had rejected the very same proposal twice before. Back East in Greenfield, MA, the people voted in favor of allowing the city to develop a combination fiber/WiFi network.

Americans are tired of paying some of the highest prices in the developed world for some of the slowest Internet speeds. Rural residents - and less affluent city dwellers - are tired of hearing that they will get fiber optic cables “in the future” that never arrives. Perhaps most of all, everyone is tired of the truly horrible customer service that major ISPs provide. They are turning to their local governments for alternatives.
Download Speeds by City

And in some cities, it's already happening. Residents of Longmont, CO, can buy 1 Gbps (1000 Mb/sec) connections from their municipal utility for $50 per month, beating Google Fiber’s bleeding-edge price by $20. Comcast offers 1 Gbps for $300 per month in selected markets, and didn’t begin doing so in Longmont until the municipal network came online.

How can Longmont Power & Communications do it? General Manager Tom Roiniotis told the Institute for Local Self-Reliance in a podcast: “You don't measure the success of a muni broadband network by looking at the financial books of the utility that's providing it. If we were simply to just barely cover our costs, yet be able to bring this kind of capability to the city, we would be achieving our goals.”

The Bottom Line is the Bottom Line

All of the major ISPs have shareholders to please, and Wall Street only cares about this quarter’s growth. But even Comcast CEO Brian Roberts said recently that cable companies “can’t raise the price forever.” (Ironically, on the very same day Comcast did raise prices in several markets.)

You might wonder why anyone would vote "NO" to the idea of a town or city starting a low-cost broadband Internet alternative. Here's the reason: The big ISPs have poured millions of dollars into fighting municipal broadband initiatives nationwide. Their arguments have been debunked time after time.

“Governments have overwhelming advantages over private companies,” they claim. All of the “level playing field” arguments are thoroughly refuted by the Institute for Local Self-Reliance so I’ll just add two points:

First, it’s intuitively obvious that towns like Longmont, with a 2015 budget of $254 million, do not have any advantages over $68 billion/year Comcast - except the ability to offer faster broadband service, cheaper. And second, government’s job is to serve citizens, not to play nicely with corporations.

“Governments should not spend taxpayer dollars on high-risk ventures like broadband networks.” Seriously, that’s a favorite ISP argument to state legislatures. The technical aspects of designing, building, and maintaining broadband networks are well established, and there’s nothing “high-risk” about offering people a much cheaper alternative to a company they utterly loathe.

As for the risk of not signing up enough people: what’s not to like about $50/month gigabit Internet? Put another way, what's not to like about an Internet connection that's 50 to 100 times faster than the one you have now, for a lot less money?

“...one measure of "success" is defined as the level of their "take rate," that is, the percentage of potential subscribers who are offered the service that actually do subscribe. Nationwide, the take rates for retail municipal systems after one to four years of operation averages 54 percent. This is much higher than larger incumbent service provider take rates, and is also well above the typical FTTH (fiber-to-the-home) business plan usually requiring a 30-40 percent take rate to "break even" with payback periods.” (Source: Municipal Fiber to the Home Deployments: Next Generation Broadband as a Municipal Utility)

“Existing municipal networks are losing money” is another argument the for-profit corporations like to make. They fail to mention that every broadband network venture has lost money during its early years, when construction costs are high and subscriptions are low. They also omit the hobbles that their own lobbyists have persuaded state legislators to impose upon municipal broadband efforts. Worst of all, they make the mistake of judging public efforts by Wall Street standards. Municipalities are in broadband for the long-haul, to benefit their citizens and not shareholders.

If you’re tired of being abused by incumbent ISPs, you could start a grassroots muni network initiative of your own. Meetup.com is a natural place for this type of thing, and you can visit the Fiber for Aurora, CO page to see one example. There are lots of case studies, news articles, white papers, and other resources for muni network activists at the Community Broadband Networks site.

Your thoughts on this topic are welcome. Post your comment or question below...

 
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Most recent comments on "Your ISP's Worst Nightmare..."

(See all 24 comments for this article.)

Posted by:

Stan G. Duncan
09 Nov 2015

Hi Bob,
I would absolutely support this if it came to my town (Quincy, MA). I'm getting increasingly tired of the slow, intermittent, and expensive service I get from Comcast.

I really got a sense of how bad service was in the US last March when I spent a couple of weeks in Cuba. Cuba, as you know, has bad and expensive internet because the government is not fond of the population having access to outside information. However, there are a handful of places that get it by old fashioned dial-up, and I happened to be able to use that antique system more than once while I was there. And, in spite of its shortcomings, I was invariably surprised at how much faster it was than what I typically get in the US. It's true that it was more expensive and it's true that Cuba needs to upgrade to be a part of the outside world, but it's still amazing that what is generally considered a backward system there is still faster than the much vaunted "First World" system we have here.

Stan


Posted by:

Genesis40
09 Nov 2015

I live in Mississauga Ontario Canada.
Boy, would I happy if my municipality would offer internet service. I pay $56.96 for a 50 Mbps internet service. This was a Promo rate. Without the Promo I would be paying $75.95.


Posted by:

HA
09 Nov 2015

Time Warner Cable's 15$ per month 2mb/sec is fine for me.


Posted by:

Mike
09 Nov 2015

Very interesting Bob. Thanks
Mike


Posted by:

Al. S
09 Nov 2015

When a Municipality becomes involved, the taxpayers lose money. Water, Natural Gas, Real Estate Texas, Schools all have gone up. Reduction of Police, EMS and Fire Departments have caused an increase in Insurance Rates.

Potholes have not been repaired, Roads and Bridges are Deteriorating. Leans are placed against people who can't afford to pay their Taxes, while Corporations owe hundreds of Millions.

Over half the Drivers have expired or no License and members of City Council defend them because they are to poor to pay for them, but they own a car. We had WiFi in some low income areas, the private operators the city contracted with pulled out leaving cell tower unused.

No way would I ever vote for my City to allow taking over from Comcast, Dish and any other Satellite Companies. Even the much hated Verizon Fios.

Then there is the question of the city having to wire 300,000 Homes and Bldgs and cost involved. The cables run along Telephone and Electric Poles which are not City Property, they will have to lease the right to use. It took more than 5 years for the 3 cable Companies to wire their area. Two went broke and Comcast took over.

I am tired of hearing that people are cutting their Cable service and watching movies on their cell phones. This will only increase of phone rates, hopefully only for those who do so instead of charging those who do not do so.

No way should the City Compete with Private Companies.


Posted by:

Daniel
09 Nov 2015

I wish I had the time to research this more. It would be interesting to see how many of these municipal efforts are set up more as a CO-OP as opposed to a Municipal utility company.

Is the biggest deterrent to rural areas the literal cost of the 'main trunk' coming to the area? Many cities here in my state are 100+ miles away from a major city. I would imagine the cost to travel to one rural city would be extravagant.


Posted by:

DanielW
09 Nov 2015

At first this seems like a good idea, who wouldn't want cheaper IPS service? We have an example of this in a local area and it is not what you at all what you I have depicted. The idea in concept was great, but then since it was a goverment thing it had to be fair so how can we make it available to those who "can't afford it". I know we will tax those evil "rich" people who have too much money, but we can't offer all that and still compete with the big companies. Some we make fees and regulations so the big evil companies like Verizon, Comcast, have to go else where. Then you are left with one 3rd rate provider with no competitors. We know the government does so well at this kind of this just look at Social Security and Medicare. Leave it alone goverment should not mess with business, they can't do it well so the just raise taxes to "patch" it.


Posted by:

Mike Curtis
09 Nov 2015

We get 100MBit/sec from Virgin in the UK for $51 equivalent. about $25 for BB and $25 for a telephone line rental but we only pay this temp[orarily to get a better deal on our TV package. The basic BB charge is $25. Soon we will get up to 150mbits/sec for this price.


Posted by:

clyde reed
09 Nov 2015

Hi Bob,

I have my ISP from my phone Co cost less and I run at 144.5 mbps which uploads and downloads fast


Posted by:

daf
09 Nov 2015

Our town, Alameda, CA, tried this several years ago. What Comcast did was undercut the municipal service price and it finally failed. The local fiber wire and customer base was then sold to Comcast at a rock bottom price further costing the city a bundle of money. To make this successful, a city needs to have a monopoly like in Ashland, Oregon. The big providers can afford to under cut the price of the municipality and not even notice the loss.


Posted by:

Matt
09 Nov 2015

Great Article. In Piedmont California I only have choice between ATT and Comcast. I've tried them both and they both have slow speeds for $110/month. Time for Piedmont to start its own system.


Posted by:

Robert Kemper
09 Nov 2015

Sounds like the way to go and hopefully soon.


Posted by:

Dennis King
09 Nov 2015

Nice article Bob.

I live in Longmont and own an Engineering Design and Consulting business here for the past 11 years. I will be able to get 1 Gbps internet service for $50 a month for life if we sign up within a specified time. I think it's 90 days or so of availability.

The more local control we have over utilities the better. Internet service is a required utility in today's modern world.

Longmont is a great place to live!

Keep up the good work, Bob!


Posted by:

Mark Crosbie
09 Nov 2015

At my home, just north of Boston, I switched from Comcast to Verizon, hoping for some financial relief. I soon found my WiFi for my TV lacking and Streaming video kept cutting out. Verizons answer was I need to Upgrade. Hmm.. Ok but still no good. Next was I need a better router (for $199. more). Goodbye Verizon. Now I am back at the mercy of Comcast. Wall St. wins either way.


Posted by:

Robert
09 Nov 2015

Al. S Your political leanings are evident in your post. Most of the ills you describe affect every city or town in the US, and I doubt all the blame falls on dealing with private companies. Plus most of your city services that many take as a right and for granted have shown to be a disaster when farmed out to private companies. Fire and police departments, snow removal, trash collection, etc.

Way back when (and even now in some areas of the country) you had to "hire" or contract with a private company to get someone to respond to a fire on your property (you would have to post a sign out front much like the ones you see nowadays for alarm system). If you didn't have a contract, you watched your place burn to the ground.

Sure, in some cases such "for the people" city services have problems, poor service, bureaucratic nightmares, but I suspect there are far more good deals than bad. Right now our only internet and TV options in our area are Private Companies, and they are taking us to the cleaners with exorbitant rates, and companies Comcast have the reputation for being some of the worst.

Private enterprise SHOULD have to compete with alternatives. That's the way things are designed to work in the US. And may the best one in each case win, based on how well they respond to the customers, not the stockholders.


Posted by:

Duane
09 Nov 2015

UTOPIA is a group of Utah cities that joined together to form a state-of-the-art network. We are community-owned and are incorporated into the blueprint of each city we operate in. Our 15 member cities are: Brigham City, Cedar City*, Cedar Hills*, Centerville, Layton, Lindon, Midvale, Orem, Payson, Perry*, Riverton*, Tremonton, Vineyard*, and West Valley City.

*UTOPIA services are not available at this time.

The above is a somewhat successful summary. Provo was a financial sinkhole, dropped out of Utopia and sold what had been done to Google Fiber.


Posted by:

Clyde w
09 Nov 2015

Our city runs a cable/internet/phone and I am very pleased with the service. The cost is not to bad 57 for basic cable and 38 for upgraded internet. We don't have ant trouble streaming on a couple of tablets and tv's. I am very pleased with the service. Thanks Bob for such timely information.


Posted by:

Russell Coover
09 Nov 2015

I live in a City of about 200000 residents. You would think that in a community of that size that all would access to several ways to get the internet, yet that is not so. Most of the City can get DSl from a phone company. Most of the City can get Cable Internet from one of 2 or 3 Cable Companies that operate in the City, but in the portion of the City where I live, I have two options, neither of them acceptable to me. The cable company has not and probably will not wire my neighborhood, and the local phone company offers 768 kbps max.

So the two options I have are Satellite Internet and RF internet. Satellite Internet is not a viable option because they limit bandwidth. Anything more than 20 GB per month becomes very costly. I have 6 computers and use that much per month simply updating them. RF or Radio Frequency internet, where I have an antenna on my roof pointed at a transmitter on a water tower (about 1/4 mile away) allows me unlimited broadband, but is fairly slow. Maximum speed is listed at 3 MBps, but I rarely ever see that speed, as the internet is shared by about 300 homes. Trying to go online when there is a lot of use by others in my area can be very frustrating. And trying to watch a stream on TV can become impossible.

So I would welcome my City adding fast internet service. The only problem I would foresee is that the City, San Bernardino, CA, has declared Bankruptcy because of the City Council's wild spending on other things. I very much doubt there is much of a chance here for a Citywide, City owned Internet Service.


Posted by:

Larry
10 Nov 2015

I live in the suburbs of Philadelphia and I would bet the farm that this will not happen here in the near future. Comcast up until the past few years had a monopoly on broadband and even with Fios in some of the market it stills has the majority of users. Our local government here is lazy and to be quite honest they are whores. Anything for money and Comcast has lots of it.

On another note however I am getting 150-180 Mb/sec on average for $57.00 per month. Not bad for "American" Internet standards.


Posted by:

Wm Meyer
10 Nov 2015

We have a cooperative providing telecommunication services to 16 communities in our area. With fiber to the home (FTTH) one becomes a member by having phone service. Digital TV and Internet are available with speeds sufficient to allow streaming video for a variety of sources and options. Performance and support are excellent. I base these observations on professional experience I have had working for the last 17 years with a large number and variety of different ISPs. The beauty of the cooperative model is that the members are the owners and basically service and govern themselves. Dividends have been paid out annually to all members based on usage which lower member costs.


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