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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  1. 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.

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