Your ISP's Worst Nightmare...
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.
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...
This article was posted by Bob Rankin on 9 Nov 2015
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Article information: AskBobRankin -- Your ISP's Worst Nightmare... (Posted: 9 Nov 2015)
Copyright © 2005 - Bob Rankin - All Rights Reserved