Friday, September 05, 2014

Private internet monopolies run for their lives

I just finished reading this fascinating piece about how our much bemoaned incumbent internet service providers have been fending off the latest threat to their existence: community broadband. The Center for Public Integrity has done a great job of rounding up compelling examples of success and failure in community broadband. They have also shown just how low incumbent carriers are willing to go to protect their private monopolies.

In particular, I found this choice quote:
“The idea of private capital competing with taxpayer-provided capital just feels inconsistent to us with what a free-market system looks like,” AT&T Chief Executive Officer Randall Stephenson said at a U.S. Senate hearing in June. “But where it’s unserved, it seems like a logical place for government to step in and provide a solution.”
Here again, we see a government protected monopoly perpetuating the illusion that they are acting as a private enterprise in a free market, when in fact, nothing could be further from the truth. They think that they can pick and choose who and where they want to serve, but the purpose of their franchise agreements is to make sure that everyone is served and that they meet the demand for service. If they were meeting demand, community broadband would not even be a consideration.

I also found the following quote very telling about the other side, the government side:
“We don’t quarrel with the fact that AT&T has shareholders that it has to answer to,” Bowling said with a drawl while sitting in the spacious wood-paneled den of her log-cabin-style home. “That’s fine, and I believe in capitalism and the free market. But when they won’t come in, then Tennesseans have an obligation to do it themselves.” 
That is from Janice Bowling, a Republican state senator from Tennessee. Clearly, we have a difference in opinion here. But what is striking to me is that incumbent telcos actually believe they have the right to tell communities to sit down, shut up and wait for them to give residents world-class service when they're good and ready.

This is the problem with the entire debate and the debate needs to be reframed. The debate isn't about whether or not government should get involved in providing and selling internet access. There are numerous examples of utilities selling internet access at very reasonable rates with very high speeds, and making money doing it. They are paying off bonds and setting aside money for improvements.

The debate needs to take into account that so-called "private internet" services offered by the incumbents are really all that private. They act as if only private capital is involved, and ignore all of the help they have gotten along the way, all of the trust we have given them to provide the services we expect to get.

Consider the easements internet providers get around the home. They get to run their cable in the ground in public roads on poles on our sidewalks. They are also willing to sue to prevent others from using that space, just as Centurylink sued Utopia to stop it from running cable to my house.

Then there is the matter of trust. At my location, there is only one provider with better than 5mbs of speed and that is Comcast. In a truly competitive market, I would expect see more than a dozen companies offering service, but there are only two. As far as I can tell, Centurylink has ceded this territory to Comcast. Probably because they both know that true competition is expensive.

If we listen to the incumbents, we will hear about the failures, the mismanagement and the problems associated with community broadband. But we will never hear about the same problems with so-called private broadband services. Nor will we ever hear about the millions spent on lobbying rather than on building.

Shouldn't that be what the debate is about?
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