EU Says No To Muni-Fiber Effort

from the not-allowed dept

Despite massive telco lobbying efforts in the US, it looks like the US Senate at least recognizes that states shouldn't ban cities from offering muni broadband networks (the question of city vs. state vs. federal regulatory arguments is a discussion for a different post). However, in Europe, it looks like they might be going in the other direction. The EU has told a Dutch town that it cannot move forward on a muni-fiber network, because it represents unfair competition to private companies. We tend to agree that muni networks don't always make the most sense, but if the people want it, it seems a bit silly to have a non-local government tell them they can't have it. From the description in the article, it actually sounds like the plans for this muni-fiber offering were done like other smart deployments. That is, it's not a "government run utility," but rather a fiber network that any provider could then offer service over. In other words, it's not what most people immediately think of when they hear "muni-broadband." This isn't about the city offering service -- but about them offering infrastructure to private service providers. For fiber networks, this remains a smart plan -- as it involves creating real competition without overbuilding infrastructure. Instead, the town will have fewer competitors and more infrastructure -- even though they wanted it the other way around. It's a recipe for much more limited, but still more expensive, service.
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  • identicon
    Rational Beaver, 19 Jul 2006 @ 8:00pm

    The city of Provo, UT did the same thing. The city built out the fiber and then leases it to service providers who offer TV/Internet/Phone over it. Though I left before the project was finished, the packages that were advertised for the service were extremely tempting.

    reply to this | link to this | view in chronology ]

  • identicon
    gee, 19 Jul 2006 @ 8:03pm

    government competition

    I think local goverments should be able to compete just like any other business. There was never a problem with the government running the post office, even though it creates competition. Why can't the be the same thing with electronic communication as there is with postal communication.

    reply to this | link to this | view in chronology ]

    • identicon
      howard, 20 Jul 2006 @ 12:51am

      Re: government competition

      There was never a problem with the government running the post office, even though it creates competition

      The post office doesn't create competition -- in fact it is illegal to compete with the post office for letter carrying.

      When Ben Franklin set up the post office, competition (commerical implementation) would have been a problem due to fracturing of the areas covered (especially when people thought of themselves as state citizens more than national citizens).

      It would be really tough to effectively argue that the same conditions apply with muni-fibre.

      reply to this | link to this | view in chronology ]

    • identicon
      less is more, 20 Jul 2006 @ 9:04am

      Re: government competition

      (sorry for the long wind, just got going and didn't know when to stop)

      The problem with we, the people, allowing any bureaucracy to compete in the market is that they have an unfair, immoral advantage over all others: They use funds that they extorted from everyone in the area as seed money. If only just ONE person has no desire, or need for the service, mail/web/trash pickup, they are still coerced into paying for the service and a little bit of their freedom is taken away.

      Do you go to your next door neighbor and put a gun to his head and gently ask him to pay for your cable bill every month? That is technically what you do when you support public funding of any special interest.

      Probably 50-60% of the fruits of our labor are extracted for services that we may, or may not want. Think about it.. not just fed/state/local income tax, but every little extra tax on services. Especially the hidden income taxes on that are added on at every step of the way to a product being brough to market. These just end up being passed on to all of us in higher prices.

      I suggest anyone reading this pick up the book by Mary Ruwart: Healing our world. (there's an older version of the book in electronic form or her website) Maybe it will open someone's eyes.. It did for me. (and 'Good to be King' by Michael Badnarik)
      I'm so sorry that I supported the facist & socialist regimes and that my wants and desires may have resulted in extortion and or physical injury of someone, up to and including death by "finger men" for refusing to vacate their property because protection money was not paid to the mafia boss.

      Spoken like someone who has it made? (hell, I'm as bad as the Fed with my money, broke as can be and upside down, but I'll never make someone else pay my bills, it's my responsibility)

      "This and no other is the root from which a tyrant springs; when he first appears he is a protector." - Plato

      "If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy." - U.S. President James Madison

      "Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death". - Adolph Hitler

      "The easiest way to gain control of a population is to carry out acts of terror. [The public] will clamor for such laws if their personal security is threatened". - Josef Stalin

      reply to this | link to this | view in chronology ]

  • identicon
    Kob, 19 Jul 2006 @ 8:14pm

    Frigen Telcos

    reply to this | link to this | view in chronology ]

  • identicon
    Andrew Strasser, 19 Jul 2006 @ 9:09pm

    We have great broadband pricing here.

    They added this line within the last year or two and it has helped to create more internet services and it has helped to lower the price of existing internet services. With us being a college town and the only place in the world that makes certain hummers we certainly have a use for this in our town. It has raised every service in towns performance.

    reply to this | link to this | view in chronology ]

  • icon
    Devang (profile), 19 Jul 2006 @ 10:56pm

    It's unclear just how much control the city would be handing over, but if it's a limited amount where the citizens are pluging into an effectively tier 1 or 2 ISP, it can't possibly be bad. It's about owning the "last mile", that's what the muni's should and are helping citizens do. As for "more infrastructure" and "less competition" I'm not convinced.

    Mentioning "Instead, the town will have fewer competitors and more infrastructure -- even though they wanted it the other way around. It's a recipe for much more limited, but still more expensive, service." and not "last mile" efforts, is dis-information at best. I expect better.

    reply to this | link to this | view in chronology ]

  • identicon
    The Loeki, 20 Jul 2006 @ 12:10am

    Read the fine print

    1) AFAICT the EU just stopped the municipality's subsidizing of the project.
    2) This is actually the very first time the EU has done such a thing, and they actually have pretty good reasons for it.
    http://www.database-online.nl/dsa/asp/nieuws/aktueeldetail.asp?sl=2096
    3) One of those was because "Appingedam" is a rural shithole, but one with more than plenty of the usual broadband offerings (up to ADSL2+), which is usually not the case in the muni-fiber projects.
    4) It isn't even said that nothing in terms of government money will be spent on this project. For example, in Amsterdam they've got a similar project running, in which the municipality of Amsterdam is contracted as a "regular" private investor, instead of subsidizing the project. Result: No single drop of sweat from the EU.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jul 2006 @ 12:24am

    because people would realize

    who else thinks this is because they don't want people in the proposed infrastructure area to realize they were getting ripped off with the service they have now (before any muni-fiber service, so even from the same company...) and switch to some other telco???

    reply to this | link to this | view in chronology ]

  • identicon
    PopeRatzo, 20 Jul 2006 @ 4:21am

    With more and more states relying on gambler's losses to finance their programs, this is simply a matter of getting rid of the competition.

    You see, (and I won't point out that Republicans are currently running the government) free markets are a Cato Institute fantasy.

    If you care even a little bit about the future of this nation, you must vote against your incumbent representative.

    reply to this | link to this | view in chronology ]

  • identicon
    DoxAvg, 20 Jul 2006 @ 4:54am

    "For fiber networks, this remains a smart plan..."

    I'd have to disagree with you on that. It's based on a couple of false premises: 1) Fiber has enough bandwidth for forever and 2) That "any service" will, in fact, run over the fiber. What you're setting up is a compulsory ISP for citizens. You don't have to use it, but you do have to pay your part of the taxes that support it. Everybod who subscribes thinks it's just great that they get fiber-line speeds at a lower cost than the DSL provider; sure - everybody who doesn't subscribe is subsidizing your line.

    For the first fallacy: Imagine a future where PIFL (Plain Infrastructure Fiber Lines) aren't providing enough bandwidth (640k ought to be enough for anybody, right?) The muni isn't going to upgrade to the latest Quantum Multimode Super-Headend, because we're in a tax crunch and the incumbent doesn't want to pay for it (go ahead - argue that politics won't overwhelm muni broadband). I, as a QMSH entrepeneur, want to enter your market. I can try to roll out my service, but I'm competing against a tax-subsidized entrenched monopoly. This will stifle progress as much as Ma Bell did for decades.

    For the second case, how long until somebody looks at the upstream costs for the mad T3s that our community is consuming and wonders "where is all that bandwidth going?" They do a quick analysis and find that 80% of it is BitTorrent traffic. Easily solved - they just put in a traffic filter to close down BitTorrent, save the taxpayers a boodle of money, and get re-elected (see above politics point). As a consumer, what choice do I have? The tax-subsidized muni fiber has destroyed all competition in my local area (who can compete with cheap fiber?), and the puritains in power have blocked the services that I use because they're mostly used for porn and piracy (but the *AA's would never be able to influence _my_ muni broadband that way, right?)

    You could posit that the muni ISP would be forbidden from filtering the content going over the shared wire, but you'd be burying your head in the sand. Does that mean I can run a kiddie porn server? Of course not, that's evil, and we won't allow it. Warez servers? No, Illegal. We'd shut you down. Does that mean I can run spam servers all day long? Well, no, that's worse than kiddie porn. File servers for the most popular shareware? Central servers for linux ISOs? How do you handle it when one user is using 80% of the shared bandwidth for legal but non-essential activities, and substantially affecting the availability for everybody else? If you lay a finger on them, you've opened the door for every other Big Brother case I've mentioned.

    A whacknut Libertarian friend of mine once posited that "there's nothing so simple the government can't mess it up", and in this case I'm inclined to agree with him. As a dyed-in-the-wool geek, I would love to have everybody else in my county subsidize my streaming multicast video server. Heck, it'd be nice if they just passed a bill saying "Everybody send $1 to DoxAvg". But it's a recipe for disaster, and I expect to see lots of stories over the next 10 years of muni broadband systems getting canned or wrapped up in protracted political and legal battles.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Jul 2006 @ 5:44am

      Re: DoxAvg

      You were making a wonderful argument until you made your point that your right to steal outweighed everyone elses right to a fast internet connection.

      An argument such as your own completely undermines the efforts of broadband consumers in the US (yeah, Im biased and talking about my own country here, kind of ot, sorry) to catch up to the speeds that broadband subscribers in other countries have.

      Its a crying shame that our current broadband providers are raking us over the coals on cost/speed.

      As far as I'm concerned, Muni-Fiber projects are akin to sewage/water facilities. Its ridiculously expensive to put that infrastructure in more than once. Can you imagine 7 different sewage pipes being drilled through your foundation to serve competition? I can't. It would be absurd. I don't want that.

      I could be wrong, and I could be an idiot, but I dont think I need 7 holes drilled in my foundation to deliver access to the next generation of broadband services either. I do want a tightly regulated local government controlled communications infrastructure. I want those pipes (sorry senator, I meant tubes) to be managed JUST LIKE the public utility they SHOUD BE.

      reply to this | link to this | view in chronology ]

      • identicon
        eb, 20 Jul 2006 @ 7:26am

        Re: Re: DoxAvg

        " . . . your right to steal outweighed everyone elses right to a fast internet connection"
        Nothing illegal about a linux iso.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 Jul 2006 @ 9:52am

          Re: Re: Re: DoxAvg

          "" . . . your right to steal outweighed everyone elses right to a fast internet connection"

          Nothing illegal about a linux iso."

          This is true, but if there were nothing illegal about BT then noone would think of blocking the protocol, and his situation would not come to pass.

          His argument sure sounds to me (and remember, I already admitted I may be an idiot) like a smokescreen. Bit Torrent has very few valid purposes. However, the more vocal the few (that are using it legitimately), the stronger the illusion that the masses are using it for good.

          Society as a whole does not stand to gain anything from the bit torrent protocol. Even for corporations using it to distribute things like iso images, it is merely a way for them to subtract the cost of distribution and pass it on to consumers. Meanwhile upload bandwidth is actually MORE expensive for consumers than it is for corporations who get the benefit of buying it in bulk.

          So... whats the benefit? consumers get an intangible cost as a replacement for a tangible download fee? The infrastructure providers themselves suddenly find themselves facing enormous costs compared to what they should have? It doesn't matter WHO the infrastructure provider is, BT is costing them alot of money, and that cost IS going to get passed on to the consumers of said infrastructure.

          There is no net positive in BitTorrent. There is only a false pretense of free.

          The point I'm trying to make (and doing a absolutely terrible job of) isn't that BT is illegal, it is that its not a good idea to try to justify ones own desires with something that is used PRIMARILY for illegal purposes. Its just bad association. Even if the OP was trying to do something perfectly legal, he lost all sympathy (from me) because of association.

          To me, its alot like the situation in Iran. They want to enrich fuel. WE DON'T BELIEVE THEM. ok, maybe thats a bit of an extreme analogy.

          reply to this | link to this | view in chronology ]

          • identicon
            DoxAvg, 20 Jul 2006 @ 10:25am

            Re: DoxAvg

            BitTorrent is the perfect example for my case. It is some application that will consume an inordinate amount of resources for questionable utility, and will require the central authority to intervene and control what traffic can travel over the subsidized pipes are are a state-controlled monopoly. When I do have a legitimate purpose (distributing _my_ linux ISO, streaming my counter-culture radio show) and those applications are blocked, there is no room in the market to provide an alternative.

            > There is no net positive in BitTorrent. There is only a false pretense of free.

            On the contrary. BitTorrent allows a mass of people to leverage their collective upstream bandwidth to have the same net effect of your wholesale upstream connection. A bandwidth virtual barn-raising, if you will. Now DoxAvg's Utility CD can be served from my home via BitTorrent, and I can stand on equal footing with the servers at MacAfee, thanks to the upload donation of my peers. It uncorks upstream bandwidth as a limiter of data sharing. That is not a trivial issue.

            One step back, though, BitTorrent is a glimpse of the future when bandwidth is plentiful. When anybody can send vast amounts of digital content to anybody else, instantly, for "free", piracy becomes very easy and attractive. On the other hand, so does VOIP, videoconferencing, backing up personal data, and running a digital business from the home.

            One can argue that today's piracy is the efficient market pushing against copyright - when the incremental cost of your next unit is exactly zero, and you attempt to charge a substantal premium, there's a market imbalance. Any time the cost structure presented to the consumer is grossly out of balance with the cost structure of the producer, there is a market void that wants to be filled. The razors and blades model gets away with this for razors and blades because there is a significant cost in the production of blades, so they can absorb a significant profit margin. The inkjet cartridge business, on the other hand, is fighting because the cost of production is so low, and the margin is so high that it creates a significant vaccuum for third parties to slip into. They're trying to protect that with spurious copyright suits and trade secret allegations, but at the end of the day, they chose a losing business model.

            reply to this | link to this | view in chronology ]

      • identicon
        DoxAvg, 20 Jul 2006 @ 9:53am

        Re: DoxAvg

        I must not have been clear; it exactly because some central authority needs to ensure that you don't use the system to steal that dooms it to inevitable intrusive meddling. Because some people will use BitTorrent to steal, The Man will feel the need to intervene, which will interfere with my ability to use BitTorrent to move linux distributions (legal), purchased movies (legal), or home-made movies of Star Wars Boy (legal, but in bad taste). Once the government has dipped their fingers into that pot, they will inevitably be under pressure from specal interests (which they have a lousy track record of resisting) to limit what data can go over the lines. Hate speech? Hate speech as defned by the French?

        Once the government is in control of the pipes, you will no longer be able to innovate the way you used to.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jul 2006 @ 10:31am

    "Once the government is in control of the pipes, you will no longer be able to innovate the way you used to."

    Right, and if we give control of the sewage to the municipalities, they won't let me innovate in what I can throw away.

    And if we give control of the water to the municipalities, then they won't let me make kool aid, because they got pressure from the crystal light folks.

    By making your statements about The Man you are showing your true colors: A conspiracy theorist who just wants to point a finger.

    reply to this | link to this | view in chronology ]

  • identicon
    DoxAvg, 20 Jul 2006 @ 11:07am

    Re: Didn't bother to title

    > By making your statements about The Man you are showing your true colors: A conspiracy theorist who just wants to point a finger.

    Au contraire; I'm a cynic who looks at a long history of government mismanagement and abuse of centralized structures, and when offered a choice of "Do you want your bandwidth provided by the government", I say "no, thanks".

    I was conflicted on this issue for a very long time. Like many others, I'm very dissatisfied with the service provided by the local monopolies or duopolies. And yes, there are many infrastructure items that I think the government _should_ centrally manage. The highway system has been pretty useful, and a look at any city's history when the bridges were private concerns will show you the inefficiencies that an open market will create. As you pointed out, the sewers are a big hit.

    But for broadband, I don't think it's the right choice. Had we muni narrowband in days of yore, would DSL have ever been rolled out? Who is going to sign up for $40/month 512k data service when my local municipality provides 56k for free (or close to free)? Without the bulk of subscribers, DSL and cable-modemtry would never have gotten off the ground. If we roll out muni-DSL, would anybody be interested in providing FTTP? I sure wouldn't target that market if I were a competitor.

    My cable company prohibits me from running any kind of server on my cable-modem line. If they were the only game in town, I'd be sunk. Thankfully, I have a choice of commercial DSL providers, and can pick one that supports me running my little tiny server, and that makes me happy. However, if I had to choose between my $50 DSL bill, and a tax-subsidized $10 DSL line, I know which I'd choose, and my little piece of the web would disappear, I couldn't play Empire Earth with my buds, and my Jabber wouldn't work any more. That's what I don't want to see.

    Don't read too much into The Man. It was a toungue-in-cheek reference to the government, business interests, and lobbyists whose agenda doesn't match yours (whatever it may be). An affection borrowed from the 60's, when people were very concerned (no matter how mis-guided) with freedom, privacy, and individuality. Please have a great rebutting any of the points I've made and don't let this interesting thread degenerate into name-calling. Shame.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 27 Aug 2006 @ 11:34pm

      Re: Re: Didn't bother to title

      My understanding of the biz model for muni fiber is a cost-plus model of service (pay as you go to cover cost of operations and debt), rather than the "what the market will bear under conditions of artificial scarcity" for-profit ATT and comcast use.

      This is to say it's not clear that in a muni network, taxpayers subsidize the cost of DSL services directly. There is a question of how public employees time is spent perhaps, whether there's anyone paid to oversee the network or its contracted out.

      reply to this | link to this | view in chronology ]


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