Political lobbying is why many parts of the U.S. lack substantive broadband speeds

June 10, 2014

    Growadesign

    Recently, Motherboard wrote a fantastic piece on Internet Service Providers fighting back against cities who want to wire themselves due to a lack of satisfaction with current broadband speeds. Included in the piece are stories about Comcast agreeing to wire the Washington DC government in exchange for a monopoly on the DC area (including residential areas that Comcast wouldn’t wire) and San Francisco wiring the city schools, police and government buildings yet are not ranked in the top 100 for municipalities in the country due to other parts of the city lack substantive broadband speeds.

    incumbent internet providers continue to make it as hard as possible for others to enter their markets

    Thankfully, Google Fiber has brought attention to this problem through their entrance into areas around the country where there is little to no competition outside of the local monopoly provider. Unfortunately, incumbent internet providers continue to make it as hard as possible for others to enter their markets.bb2 Source url

    Basically, ISP’s will make fantastic deals with city governments so that the provider can therefore lock out any and all competition through sweetheart franchise agreements.

    • When AT&T didn’t want to compete in Wisconsin against a local university internet system, they got lobbyists to say that AT&T was fighting for “fiscal responsibility.”
    • When Cablevision wants to stop any competition from entering their monopoly-dominated markets, they use the “level playing field” excuse which means they want to add as many rules and regulations onto competitors looking to enter the market.
    • When Time Warner Cable wants to help their customer service rankings, they simply put in legal language in contracts which restrict what is technically deemed a complaint.
    • When Comcast wants to stop competition, they start and fund (to the tune of $250,000) a group that pushes ads about the competition having “secret plans” to put money into the pocket of executives!

    yourgig StopTheCap

    In 2005, the Tri-Cities area government (outside of Chicago, IL) decided that it was time to start their own high-speed internet service due to incumbent broadband providers, SBC and Comcast, being despised in the area by residents due to the lack of quality service at an affordable rate.

    After the idea of a municipal broadband network was floated to the public, the broadband providers fought back. Or, as the mayor put it, “all hell broke loose” due to “fear and trepidation” by SBC and Comcast. The local providers spent millions of dollars telling citizens that if a municipal network was allowed, there would be phantom tax increases, employers of the broadband companies would lose their pensions and other fabricated information.

    After the idea of a municipal broadband network was floated to the public, the broadband providers fought back

    The companies’ main claim was that municipal broadband was a dangerous gamble. This assertion was based on the Heartland Institute making the claim that most municipal broadband networks “operate at a loss.” Mother Jones interviewed Heartland’s president, Joe Bast, where he admitted that he never studied enough cases to show this was true.

    Georgia-Flyer1 MuniNetworks

    The providers also called residents with pitches such as this:

    “Should tax money be allowed to provide pornographic movies for residents?” the caller asked. “It was just blatantly a push poll,” says Simon, a landlord and entrepreneur in a Chicago exurb called the Tri-Cities. “When I asked, ‘Who are you representing?’ they just hung up.”

    Comcast and SBC defeated both referendums by winning between 53 and 60 percent of the vote. Following this victory, Comcast would raise basic cable rates more than 30 percent.

    The city of Lafayette, Louisiana found with Bellsouth and Cox for years as detailed by USAToday. Even though the vote for a municipal broadband network would eventually pass, Bellsouth and Cox took a page out of Comcast/SBC’s book with threats that if the plan did pass, BellSouth would fire 1,300 local employees.

    info-longmont-650 MuniNetworks

    Then there is this brilliant tactic by paid-off lobbyist groups representing the incumbent providers:

    One local Louisiana television channel quotes several local residents, one of whom claims they were told by a pollster:”if the government controls the cable TV, you may not be able to watch TV except on Monday, Wednesday, and Friday ’cause they could ration your TV watching.”

    In the last 5-10 years, ISPs have teamed up with heavily-donated-to state legislatures to pass laws that make it almost impossible for cities to offer broadband service. In fact, up to 20 states have laws on the books which have such restrictions.

    graph browardbulldog

    This year, Kansas tried and failed to pass a cable lobby proposed bill which would have outlawed municipal broadband service for residents except in “unserved areas,” which was defined in such a way that it was impossible to call any area unserved. Utah also tried to implement a similar bill but it was pulled back after criticism for some “minor adjustments.”

    Ars Technica wrote a piece detailing the tactics used by the cable lobby when facing pressure from competition whether privately or publicly funded:

    “One tactic is to require public broadband networks to quickly achieve profitability, something that is difficult even for a private entity because of how much initial construction costs. Some laws also force municipalities to impute to themselves costs that private providers would pay, even if the municipality doesn’t actually have to pay them. These bills are supposedly intended to create fair competition but what they’re really intended to do is thwart altogether or significantly delay and make public communications projects as unattractive as possible.”

    The country’s first 100 Gbps fiber network was installed in Washington D.C. During a re-negotiation with Washington D.C. in 1999, Comcast threatened to cut off cable service to the city unless its fiber access was only used for the government’s “exclusive use.” Therefore, the renegotiated contract required that the city not ‘engage in any activities or outcomes that would result in business competition between the District and Comcast or that may result in loss of business opportunity for Comcast.’”

    FCC-lobbying-illustrator MotherJones

    Another way for incumbent providers to keep smaller competitors out is through “level playing field” protections found in franchise agreements. The general point of these regulations is to allow incumbent cable providers to be the “most favored” if another company tries to compete in that area. Incumbent internet and cable providers have taken this provision and forced out competitors for a variety of reasons.

    • When United Cable Television Services felt that another cable franchise was allowed “without properly considering its financial responsibility,” they said that their “level playing field” protection was being violated.
    • When Cablevision didn’t want a competitor in their area, they claimed that the deployment schedule of the new company was too fast and therefore violated their “level playing field” protection.
    • When Comcast didn’t want competition in their area, they claimed that since it took them 6 years to build out (with much in place already), a new competitor starting from scratch with a 12 year build-out was violating their “level playing field” protection.
    • When multiple competitors across New England didn’t want competition in their area, the Supreme Court of Connecticut had to remind them that it wasn’t illegal for a new company to profit from building out into areas that were not being served by the current companies.
    • When an incumbent cable operator in Minnesota didn’t want competition in their area, they claimed that a new cable franchise being awarded was “arbitrary and capricious” due to the incumbent wanting to examine the new companies “employees, staff and consultants.”

    netflix-buffering BoxSlant

    Strong competition in the Internet world causes prices to reflect marginal costs. The biggest issues that we face, however, are that access networks in the US and many countries are monopolies or duopolies under significantly less competitive pressure. This is why ISP’s like Time Warner Cable, Comcast and Verizon FiOS are using their size as a way to demand payments from Netflix, Google and YouTube.

    Comments

    • Cole Raney

      I am glad I live in a city with fast Internet. Champaign and Urbana, Illinois have Urbana-Champaign Big Broadband (sometimes called UC2B), which rivals google fiber in speed.

    • Roberto Tomás

      luckily none of this matters .. in less than half a decade we will be rolling out 5G and wireless networks will obviate the need for fiber-to-the-home.

      • Amadeus Klein

        With $200 2GB data caps! Yay!!!! That’s an obvious exaggeration but there will always be a need for direct connections to homes and businesses as long as real unlimited Data does not exist on Wireless broadband networks…. Not to mention initial deployment in 5 years, add another 5 on top for full build out….

        • Roberto Tomás

          :) yea you have a point w/ data caps (your idea about “roll-out” seems wrong though, that’s happening so fast with these techs). but prices will flatline when 5G LTE starts coming online a couple years down the road. A year or two after that, and “truly unlimited” rates will be commonplace, just like with 3G right now.

          — a bit more about that: I think that right now the broadcasters are happy with crazy high compression with 4k video, and without 60fps, without 10 bit color .. without basically half the good stuff that comes with the new standard. So 10-30mbps is about all you’ll need for “barely-better-than-1080p video”, which is as good as it will be for a while. But that won’t last forever. 5 years from now, “nearly compression error-rate free” 4k video will be common, and will be brandished to stave off 8k (which Japan is beginning to roll out right now but won’t release it on a national level until 2020).

          • Cole Raney

            We have had LTE since late 2010, and we still haven’t fully rolled it out. Not to mention LTE-A hasn’t rolled out yet at all in the US. It might take more than 5 years to fully build out and roll out 5G. Btw, LTE is only 4G, we dont have named technologies for 5G, so 5G LTE won’t be a thing.

            • Roberto Tomás

              No it’s been standardized at the naming convention level. The 5G standard is based on the work Samsung that is rolling out right now in Korea (so in a way Korea won’t be the first with 5G .. but only by technicality)

        • HalfnHalfCoffeeJelly

          You gotta love the brilliance in them basically destroying the whole point of faster data speeds. For those with unlimited it’s great but for people on caps you just used up your quota in one day. Everyone spends so much time on wifi trying not to use a service they paid for. This proves wrongly that people really don’t “use” that much data so caps are real money savers.

      • no name

        Fiber hasn’t been maxed out yet. The largest test they been able to do is around 6,000 HD movies at once, with zero problems or lag.

        • Roberto Tomás

          Well for everyone that watches 6000 HD videos, I guess there will always be fibre

    • Amadeus Klein

      America: Land of the pay more get less way of life!! We seem to be under the impression that unlimited profit regardless of quality and social responsibility is a good thing. I’m not sure why… In America we pay hidden profits (Fees) to our companies that provide our internet access and even begin to allow them to throttle legally our services… Talk about unfair competition… Maybe someone should do a kickstarter to fund the “American Internet Access Corporation”, so we can fight the current crop of “Internet service thieves” and create a system where you actually get what you pay for…

      • Luka Mlinar

        You guys perfected corruption to the point where you legalized it :D

    • wezi427

      Is this really shocking anyone?

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    • HalfnHalfCoffeeJelly

      Pfft. Knew about this crap years ago. Glad everyone is finally waking up to all this BS. Loved the part where rates went up 30%, you think they were gonna absorb the cost of their victory?

    • Herve Louis

      We need to make our voices Heard, Let them know on all Over FB and G+ and Twitter and Instagram and everything else. This will make way for change in communications Industry!!!!!

    • D.I.

      ISPs spend enough money on lobbyists to roll out fiber to every last mile in America and lie through their teeth and bleeding lips about it.

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