Monday, June 23, 2014

Exit Clause

The mayors of the great cities of these United States have taken notice that incumbent internet service providers will not provide better service if there is no competition. Unfortunately, these same service providers have built-in gotchas for their franchise agreements with the cities they serve. The franchise agreements are designed to preempt the possibility of competition. The big one is called the non-compete clause. This part of the agreement prevents the city from developing it's own resources in direct competition with the incumbent service provider.

For example, the city could use a public electric utility to provide internet access as some cities have done. You can find an interesting example of that in Fayettville, Tennessee. Alas, the incumbent ISPs have found 20 states willing to pass laws that prevent such use of utilities.

Perhaps it's time to review these agreements to see exactly what they do and whether or not these agreements protect the interests of the people living within. So I've submitted a GRAMA request to my own city just to check it out. In a future post, we'll have a look at one of these agreements to see how they work.

In case you didn't know, GRAMA is the Government Records Access and Management Act of the state of Utah, it's an analogue to the federal Freedom of Information Act. Like FOIA, GRAMA is a useful tool for extracting information from local and state government agencies in Utah. In this case, I'm sending a request to the city and have requested a digital copy of the franchise agreement for Comcast and Centurylink. That should make the cost of duplication of the documents zero or hopefully, close to zero.

One important point I want to share with you about "sunshine laws" like FOIA and GRAMA: I've learned more about how government works through sending requests for documents than I ever did in school. Sunshine laws provide real insight into how our government works and helps citizens to determine if their government is working for them.

The goal then, is to review the agreements, find out when the agreement expires and suggest important amendments upon renewal. Here are a few amendments I've been thinking about:

  1. There should be a moving definition of "broadband" that is based on the moving average of the top 10 fastest networks in the world. The top 10 is a measure of the average symmetric speeds for the top 10 nations. This list is determined by the Communications Workers of America. This should be revised at least once a year.
  2. There should be a new standard in pricing such that, comparative pricing in the top 10 ten countries should be the new standard. For each country in the top 10, the price per megabit of speed is calculated. The average of the price/speed ratio for all top 10 countries is used as the standard for pricing. Incumbent ISPs would then be compared against this ratio.
  3. If the incumbent ISP is unable to match or exceed the speed average of the top ten in speed and pricing, then the city is free to develop their own network to provide the necessary infrastructure for internet access.
The goal here is to establish world-class internet access to rival that of Japan or South Korea. Currently, worldwide, we rank about 30th or 31st, depending on which data you use. The incumbents will try to tell you that we have a "vibrant, dynamic and competitive market" for internet access. Well, if you're like me, you have only one ISP that provides better than 5mbs for access. Even if you just have two, that isn't even close to what we could call a competitive market.

I think it's time to hold ISPs accountable for their lack of enthusiasm in upgrading their networks. ISPs have been fighting hard to discourage or even outlaw community broadband. They do so on the failed proposition that private enterprise will always outperform government in every respect. But in more than 400 cities and towns across this nation, the incumbent ISPs have been proven wrong, over and over again. (Here is a cool map to find those cities!)

As legislatures wake up to citizens moving to where the access is, they are beginning to see that they've been had by the incumbent ISPs. The profit motive is a fine motivator for innovation and success, until monopoly is achieved. Once a monopoly is achieved, the only thing left to do is to raise barriers to new entrants to the market.

That is not a bug in capitalism. That's a feature.
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