Town Loses Gigabit Connections After FCC Municipal Broadband Court Loss

from the don't-build-it-and-they-won't-come dept

Back in February the FCC voted to use its Congressional mandate to ensure speedy broadband deployment to dismantle protectionist state laws intentionally designed to hinder broadband competition. But the FCC recently found itself swatted down by the courts, which argued the agency lacks the authority to pre-empt even the worst portions of these laws. As a result municipal broadband providers continue to run face first into protectionist provisions written by incumbent ISP lawyers and lobbyists solely concerned about protecting the current broken broadband market.

The impact of the FCC’s loss is very real. Ars Technica notes that one of the broadband ISPs that originally asked for help from the FCC, Wilson North Carolina’s Greenlight, has had to disconnect one neighboring town or face violating state law. With state leaders tone deaf to the problem of letting incumbent ISPs write such laws, and the FCC flummoxed in its attempt to help, about 200 home Internet customers in Pinetops will thus lose access to gigabit broadband service as of October 28:

“We must comply with our state law,” Agner said. But city council members were very vocal in their opposition to the law and regret having to disconnect the service, she said. “We have not identified a solution where Greenlight can serve customers outside of our county,” Wilson City Manager Grant Goings told The Wilson Times earlier this week before the city council vote. “While we are very passionate about reaching underserved areas and we think the laws are atrocious to prevent people from having service, we?re not going to jeopardize our ability to serve Wilson residents.”

Greenlight’s fiber network provides speeds of 40Mbps to 1Gbps at prices ranging from $40 to $100 a month, service that’s unheard of from any of the regional incumbent providers (AT&T, CenturyLink, Time Warner Cable) that lobbied for the protectionist law. Previously, the community of Pinetops only had access to sluggish DSL Service from CenturyLink:

Wilson already had fiber in Pinetops, which has been an electric customer of Wilson’s for more than 40 years. Before deploying Internet access to Pinetops, Wilson was laying fiber in the town to support smart grid initiatives. After the FCC voted to let city Internet services expand outside their boundaries, Wilson extended the fiber network to pass the roughly 700 homes in Pinetops, Agner said. Prior to this, Pinetops residents’ only option was CenturyLink DSL, she said.

That’s the same CenturyLink that’s currently using the lack of competition in its markets to begin saddling already slow and expensive DSL service with usage caps and overage fees. ISPs have been very successful in sowing partisan discord by framing municipal broadband as a partisan issue (pesky government interfering in private enterprise!). In reality, most municipal broadband networks have been built in Conservative areas and see broad, bi-partisan support. Disliking the local phone and cable company (and the market failure that built them) is actually something that tends to bring bickering partisans together.

Still, with the FCC’s loss there’s nothing really stopping ISPs from continuing to use state legislatures as their personal playthings. Currently there’s twenty such laws protecting broadband duopolies in place, and despite growing attention to the practice, new protectionist laws are being passed each year.

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Companies: centurylink, greenlight

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Comments on “Town Loses Gigabit Connections After FCC Municipal Broadband Court Loss”

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Derek Kerton (profile) says:

Re: Re: Re: Govt meddling

You have it backwards (um…ass clown…I guess?)

Some sectors of the economy are what are called Natural Monopolies. These sectors are defined by barriers to entry and cost advantages to incumbency and scale. Telecoms fits tidily into the category. If you don’t understand Natural Monopoly, then you’re not qualified to enter this discussion.

In a Natural Monopoly, a free market is distorted not by regulations, but by the price control of the incumbents. Most new entrants are scared off by the price control power of the incumbent.

Any new entrants in telecom must dig ditches, or pay to use the incumbent’s poles. You need permission to dig into hundreds of properties and rights-of-way, then you have the cost to dig and lay cable. They you need to connect each house, pay for marketing, and only then can you collect some revenue from your first customers. Meanwhile, the incumbent (with a lower cost basis, amortized long ago), simply drops price below the new entrant, and kills them off, then buys up the assets for pennies on the dollar. Thanks.

The reason you are wrong is because regs aren’t the only things that can distort a free market. Naturally occurring things do, too. Sometimes, regs can bring us CLOSER to a free market, not farther. It’s hard for absolutists to understand.

Anonymous Coward says:

Re: Re:

um, have you been paying attention ? ? ?
your ‘choice’ (sic) boils down to :
D) bought-and-sold korporate money party candidate with the smiley face…
R) bought-and-sold korporate money party candidate with the frowney face…
i would add, about the only way out of this mess, is ‘ranked choice voting’ which is about the one method left for non-korporate money party factions to get in the mix…
(oh, you have to ditch the computer-based voting systems, too: paper ballots, hand counted, locally reported…)
then, you might have a chance of reclaiming small-dee democracy…
otherwise, it is police states all the way down…

djl47 (profile) says:

Do such laws violate the commerce clause?

Could these protectionist laws be an unconstitutional regulation of interstate commerce? Someone who wants to stream Netflix, listen to tunes on Pandora or watch the latest cat videos on YouTube needs broadband to do so. A law preventing deployment of broadband in locations where broadband isn’t available prevents these prospective users from engaging in commerce on the internet, most of which is interstate commerce.

David says:

Re: Do such laws violate the commerce clause?

That might be where Google would have leverage, since it would be an inter-state business. Sounds like Greenlight would be intra-state, and wouldn’t qualify.

Of course, Supreme Court ruled once that you couldn’t grown your own wheat for your own use, since that could impact the amount of wheat you might buy inter-state. So given the services you would 100% be wanting to use, the same concept could force this to a inter-state issue.

Placebo says:

Remember folks, multiply the "paid for" bandwidth by 328725.

That tells you how many “bytes” of download bandwidth you’ve paid for..

That number is derived in the following manner.

((( 60 * 60 * 24 * 365.25 ) / 12 ) / 8 )

60 Seconds
60 Minutes
24 Hours
365.25 Days per year
12 Months
8 Bits per Byte

For a simple 20Mbit/S VDSL2 subscription, that equates to
6,574,500,000,000.00 or just under 6 TiB (exabinary) or just over 6.5TB (decimal).

Let your ISP know that they can start charging for “over usage” once you’ve reached the contracted for data value.
Then mention that you’re keeping track of “roll-over” data 🙂

Derek Kerton (profile) says:

TPP for States

Isn’t it funny how so-called “trade deals” like TTIP or TPP have Corporate Sovereignty clauses, that allow multi-national companies to knock-back nations’ regulations when it impedes their business…and we get hurt.

But when states of the Union pass true protectionism laws, there is no similar Sovereignty protections…and we get hurt.

When do we win?

Mark Milliman (user link) says:

Larger Government

Carl’s opinion piece is clearly in support of an industry that is very happy to sell equipment to these new customers because the incumbent telco business is not growing very fast if at all. Allowing government in a particular market is not competing; it is taking it over because they can use bonds (low interest) and taxpayer money to fund these networks. State legislators have created these laws to prevent just these things from happening along with providing protection when half of these ventures go bankrupt.

Telcos aren’t clean on this because they are using crony capitalism to protect their monopoly or duopoly. If legislators enact such laws they should hold incumbents to the universal service agreement that AT&T adhered for decades.

What is missing in all of this protectionism and governmental expansion is a discussion on how we can make the market competitive. There is one simple answer that has been used around the world to stimulate competition: open access. Allow the government, PPP, or consortia to build and operate the last-mile fiber access so multiple commercial service providers can offer communication services to customers. Think of it like cities build roads that people can use to deliver goods and services.

The open access infrastructure is shared between several carriers so it can be economically feasible and the incumbents can either utilize the network or build their own. In any case multiple carriers can offer services on the fiber which benefit consumers from greater choice and lower prices. It puts the incumbents on notice to be competitive or lose market share.

Governments are not savvy enough to comprehend this option and incumbents are wary of competition so the battle goes on to the consumers’ detriment.

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