Wednesday, August 20, 2014

Media consolidation - just another reason for community broadband

There is no question that media consolidation has been a problem in this country, no less the world. Media consolidation is very well documented and estimates indicate that we have consolidated 50 companies in the 1980s to 7 now. In other words, every major news outlet that we can find can be traced to a parent company in that group of 7. Media consolidation is covered in depth at the FreePress website.

Some say that nothing in politics happens by accident. Then it might not be an accident that we have experienced so much media consolidation. Remember, when there is consolidation in an industry, there is much less competition. Perchance, I found myself watching the morning news on the weekend with my wife. I found that there wasn't very much news. Mostly, it was a sort of variety show with two very happy anchors sharing banter and jokes with their correspondents around town. What was on the screen reminded me very much of watching open-access cable TV, you know, like Wayne's World.

That kind of attitude about TV by the people on the set suggests that there really isn't that much competition between television networks. Checking the listings, the next program was a paid advertising program, that is a 1-hour show that is nothing but paid advertising. The channel lineup has many more paid advertising channels than I can remember. Those paid advertising channels are the Shopping Channel, QVC, and so on. That's a very different landscape than what I remember as a young man, or as a kid.

Two of the big 7, Comcast and Time-Warner are not just media companies, they are internet service providers as well. They are in a position to dictate terms to their customers given the vast size of their monopoly. In recent months, Comcast and Time-Warner have even proposed a merger of two titans into one company. The guys at TechDirt have run the numbers and estimate that Comcast/Time-Warner would have 47% of the high-speed internet market, and that is a very conservative estimate. Comcast has already admitted that Verizon is it's only real competitor, and it's worth nothing that both of them are protected by government franchise agreements with cities all over the country. They are not just private monopolies, they are government protected private monopolies.

These same two companies have already been found to be slowing traffic from Netflix in order to get more money from Netflix. Who knows what else they are doing in order to tip the scales in their favor. We know that they have very powerful lobbies in Congress and in state legislatures, too.

As an example, take a look at DNS, the Domain Name Service, on the internet. DNS converts the domain name that you enter into a browser into an Internet Protocol address. For example, Google.com translates to 74.125.239.46 - this is what is returned by the ping command. Comcast could alter the DNS service so that a website they don't want you to see doesn't exist as far as they are concerned.

Now I have no proof that they are doing that, but I would not be surprised if that is what they are doing. I don't use the DNS of any internet service providers anymore because I'm suspicious of their drive for complete and total monopoly power. I use Google DNS (8.8.8.8/8.8.4.4) or OpenDNS (208.67.222.222/208.67.220.220). I've been using one of those two for years.

Currently, there is a fight brewing over a relatively recent development: community broadband. For a few years, under the radar, cities that could not get high speed service began to build their own networks after years of begging the incumbents to provide better service. Companies like AT&T, Time-Warner, Comcast and Verizon, refused to do so with impunity and with local monopoly power.

The most notable example of community broadband is in Chattanooga, Tennessee, where they built their own community owned network with the local power utility, EPB. By 2010, they had 100mbs, roughly 33 times faster than surrounding areas. Now they have gigabit speeds, 300 times faster than the surrounding areas for $70 a month. Residents nearby have made numerous requests for the same service, only to be told that a state law prevents them from expanding service. Who wrote these laws? The cable and phone companies, completely mortified at the thought of competition, through their favorite proxy, ALEC, the American Legislative Exchange Council.

This sort of legislation was cooked up by conservatives under the guise of, "Incompetent governments should not be competing with private enterprise with our tax dollars". Yet, time and time again, people willingly vote for higher taxes to pay for a community network. I know I would. Whatever it takes to get away from Comcast and Centurylink, I will do.

As it stands now, more than 400 cities and towns have built their own networks to get that freedom from the incumbent carriers. What I find really interesting is that private enterprise is afraid to compete with an incompetent government in the broadband market. This fear seems very disproportionate in areas where there is limited to zero service and no competition. What is it that the cable company fears when citizens raise their own taxes to build their own network? After all, the cable and telcos had what they wanted handed to them: a competition free service area with a captured audience. Disintermediation.

In many communities with community broadband, internet access is considered a utility. Let's compare Comcast to a water utility just for a thought experiment. When build a new home, I go to the city to make sure that I get water service, and I get it, right? If I want to use more water, I can get it, right?

But when I want internet access, I have to go to Comcast, the only carrier in town. Oh, sure, I could use Centurylink, but Comcast and Centurylink already have an implicit agreement on territories, so if I want faster service, I have to go to Comcast. But what if a board of directors in New York has decided on a policy that identifies my part of town as a low value neighborhood? What if when I get to the counter at the local Comcast offices, they tell me not only that I can't get their service, but that they have no plans to offer service at my address? Where do I go to get service?

Oh, that's right. I can go to Centurylink and get 5mbs - but no more than that. But then I discover that Centurylink offers crappy service and there is no alternative. This is what community broadband is all about. It's not about competing with cable or telephone companies. Community broadband is about providing a service, that incumbents are unwilling to provide.

On my street, I have Comcast and Centurylink. Centurylink only offers 5mbs and of that, they only guarantee 80%, which is effectively, 4mbs. With Comcast, I had to wait a year and half to get service with periodic phone calls and emails. It was only when I found someone up to the challenge of getting me hooked up did I get service from Comcast. Above 5mbs, Comcast has no competition on my street.

So when Marsha Blackburn offers an amendment that excludes funding for any action on the part of the FCC that would pre-empt state laws that limit or prohibit community broadband, and every House Republican votes in favor of that, we know where they stand. In the pockets of incumbent carriers. Sure, they could paint this as a states rights issue, but really, for them, it is an incumbent carrier rights issue.

In every case where community broadband has been deployed, the deployment agency has done well, customers are happy, incumbents have improved service and dropped their prices, and jobs have been created. Marsha Blackburn and everyone who voted for her amendment, including my own Democrat representative, Jim Matheson, vote against community choice. They apparently don't want communities to decide for themselves how to get access to the internet. They don't want to see better broadband service creating jobs, helping communities to compete in a global economy.

When communities cannot get the high speed internet access they need to create jobs, grow their economies and compete with the world, they have every right to build their own networks with their own money. That is what the incumbent providers like Comcast are set against.
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