If You Want To Fix U.S. Broadband Competition, Start By Killing State-Level Protectionist Laws Written By Duopolists

from the long-overdue dept

For fifteen years now I've watched as phone and cable duopolies lobby to pass draft legislation designed to keep broadband uncompetitive. Specifically, in more than a dozen states these protectionist measures either hinder or outright ban a town or city's ability to wire itself for broadband (either alone or with a private industry partner) -- even in cases where nobody else will. If the laws don't ban such efforts outright, they force anyone looking to build a broadband network to jump through layers upon layers of bureaucratic hoops, during which the regional duopolies with limitless budgets harass the efforts with lawsuits and negative publicity campaigns (I've seen ISPs hire push pollsters to tell locals that a government-built network would ban their religious programming).

The worst part of these bills is that at their base they're simply duopolists buying laws that keep towns and cities from making regional infrastructure decisions for themselves, whether that's building their own core fiber network or developing a public/private network build partnership. Carriers get to have their cake and eat it too; they're not going to build you better broadband networks, but they're not going to let anybody else do it, either. Some of these projects work, some don't (it depends on the specific business model), but if the country is actually serious about improving broadband competition, these miserable bills are the very first thing that need a long, hard look.

For many years these bills were quickly passed without much debate, public scrutiny and absolutely no tech-press attention. All too often, when they were noticed, they were defended using traditional partisan tropes. Locals simply trying to get connected by any means necessary are usually vilified and portrayed as supporting "government meddling with industry." It's a shame, given that, like so many technical issues, there should be nothing partisan about protecting your local rights. Fortunately, with Google Fiber's entry into the market I've seen a renewed flurry of attention on these bills, in large part because several would have impacted Google Fiber's expansion, and Google Fiber, as I've noted, appears to have captured the imagination of the public.

In Kansas, for example, cable operators recently ran into a bit of a chainsaw when they attempted to ban towns and cities in the state from running their own fiber or working with partners like Google Fiber (operating in Kansas City). SB304 claimed to allow such efforts if they targeted unserved customers, but then sneakily defined unserved as someone unable to even get satellite or a cellular dial tone, ensuring that nobody would get that designation (a pretty common trick to make the bills seem more reasonable). In Utah, SB190, one such bill pushed in part by regional incumbent CenturyLink, also won't be surviving this year thanks in part to the new attention Google Fiber (who purchased a network in Provo) has brought to the issue.

A few years ago, these bills would have flown through state legislatures with nary a mention. Not only are new bills starting to fail more regularly under heightened public awareness, I'm starting to see -- for the first time in my many years covering the industry -- pushes to roll back some of these ridiculous protectionist measures. In Tennessee, for example, there's four different bills in process that would roll back such incumbent-friendly bills, and they're coming from both sides of the political aisle. Jon Brodkin at Ars Technica, who has been doing an absolutely fantastic job lately making these important issues interesting for readers, notes how local ISPs quickly complained about the sea change:
"We are particularly concerned about four bills that have been introduced this session," Tennessee Telecommunications Associations chief Levoy Knowles said in an announcement. The TTA claimed to be presenting "concerns of rural consumers" but are more worried about the potential of losing customers. "These bills would allow municipalities to expand beyond their current footprint and offer broadband in our service areas. If this were to happen, municipalities could cherry-pick our more populated areas, leaving the more remote, rural consumers to bear the high cost of delivering broadband to these less populated regions," Knowles said."
Yes, god forbid you'd have to face a new competitor and adjust your business model accordingly; you might even have to work with a local government to determine what works best in each region! Meanwhile, Google Fiber's recent announcement to help 34 cities in nine regional markets examine local fiber needs should bring greater attention to the issue. Google intentionally targeted regions like North and South Carolina, where regional incumbent Time Warner Cable passed protectionist bills a few years ago (on their fourth try). It only took fifteen years, but we're only just starting to see people realize that perhaps letting your regional duopolists write laws dictating what you can and can't do for your own community might not be the best idea.

Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Ninja (profile), Mar 13th, 2014 @ 4:12am

    Google may not take its fiber everywhere. But they've done an insanely good job raising awareness. And as we know, awareness is power.

    Google just has to sit back and enjoy the ripples.

     

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  2.  
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    Anonymous Coward, Mar 13th, 2014 @ 5:49am

    Re:

    "And as we know, awareness is power."

    Knowledge is power. Awareness 'can' help you get there, but having awareness does not mean people have the correct facts. There is a lot of awareness in politics but surprisingly little real knowledge.

    And even after having knowledge, it is only power when you wield it. Otherwise it is like food rotting in the corner... not doing anyone (except the microbes) any good.

    In this case the microbes are the providers... think people will get off their duff and actually do something?

     

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  3.  
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    Anonymous Coward, Mar 13th, 2014 @ 6:31am

    has no one learned anything yet? the phone companies come out with crap deals and buy politicians. they ask for suggestions as to how a better broadband system can be built, but only do it so they can put in place what is necessary to thwart anyone who tries to implement the suggestions

     

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  4.  
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    ltlw0lf (profile), Mar 13th, 2014 @ 6:38am

    In Kansas, for example, cable operators recently ran into a bit of a chainsaw when they attempted to ban towns and cities in the state from running their own fiber or working with partners like Google Fiber (operating in Kansas City).

    I believe in capitalism, but in the case of crony capitalism, I think the best solution is to go to the logical conclusion of their argument. If they don't like government "meddling" in their affairs, than they should not be allowed to own or control any network built using government funds (even if it only supplemented their own, and/or they received funds from the government for, during construction, or as a result of the build.) If they don't like it, don't accept the money in the first place.

    Now that the government owns and controls the entire infrastructure (since government money was used to build it,) then the government can open it up to anyone who wishes to pay to connect to and provide infrastructure support. Problem solved.

    Good thing I am not a politician...it seems so easy to figure this stuff out when you don't have to worry about who's going to pay for your next round of hookers and blow.

     

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  5.  
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    WDS (profile), Mar 13th, 2014 @ 7:32am

    Good thing I am not a politician...it seems so easy to figure this stuff out when you don't have to worry about who's going to pay for your next round of hookers and blow.


    Trust me, not many politicians are worried about that. They already know exactly who is going to pay for it.

     

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  6.  
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    madasahatter (profile), Mar 13th, 2014 @ 7:35am

    Competition

    The main reason for one-sided laws and local agreements is to protect profits. If there is real competition, prices often fall and at worse the price increases are less. In retail, one has price/delivery/selection/shopping experience options based on Amazon/Walmart/Specialty shops/premium shops/etc. because of competition. The successful retailers have found a market niche they can serve. Cable/Fiber is really no different, real competition forces companies to find viable market niches to survive.

     

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  7.  
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    Ninja (profile), Mar 13th, 2014 @ 7:36am

    Re: Re:

    You do have a point. But being "aware" of something false or distorted isn't awareness at all, is it?

     

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  8.  
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    art guerrilla (profile), Mar 13th, 2014 @ 8:29am

    Re: Competition

    which is what makes it doubly maddening: according to THEIR self-professed 'principles' (as if...), of being -you know, like- all free-marketey, and competition is the driving force of capitalism, blah blah blah, you'd *THINK* they would be 180 degrees OPPOSED to any such protectionism like this...

    but these issues only serve to PROVE, they have NO PRINCIPLES: it is ALL about jumping when their puppetmasters say 'frog'...
    they will hop this way today, and that way tomorrow, ALL DEPENDING on their paymasters talking points that moment...

    thus PROVING (for the millionth time) they are hypocritical liars who have no bedrock principles, no morals, no nothing but their unchecked power and the desire to wield it to benefit the 1%...

    fuck 'em all...
    the VERY FEW good ones are no reason not to hang the lot...

     

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  9.  
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    Jay (profile), Mar 13th, 2014 @ 8:59am

    Re:

    " Now that the government owns and controls the entire infrastructure (since government money was used to build it,) then the government can open it up to anyone who wishes to pay to connect to and provide infrastructure support. Problem solved."

    Uhm... It was made with taxpayer dollars, yes... But it ignores how private parties are trying to keep it private to maximize revenue to themselves.

    The solution would be to take it out of the hands of the private market or ensure the public has access to it via government/worker control.

     

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  10.  
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    Bengie, Mar 13th, 2014 @ 9:02am

    Re: Re: Re:

    I was going to say, "Awareness" is a subset of knowledge, it is knowing of the existence or lack of knowledge.

    A distorted awareness is just distorted knowledge.

     

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  11.  
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    Nick (profile), Mar 13th, 2014 @ 9:18am

    About 10 years back, some private group tried starting up a fiber-to-the-home project, called Utopia. In it, they went to every city that wanted it and asked them to put up a bond in case the project failed to turn profitable. In exchange, they would be able to install and sell fiber lines in the city.

    Sale Lake City refused, but Provo (down south) and Brigham City (up north) got it, but not the main most-populated city.

    It didn't do too well, being sold off a few times, until most recently it is still around, but tiny regional internet providers I've never heard of are the ones providing the internet. The big names such as Comcast and Century Link all refuse to use this "open" network, probably because anyone can use whatever provider they want to, and they don't want to provide internet for the cost the others do.

    I checked just last week, and they charge (unless you buy the install out-right for almost $3000) 30/month for the equipment, and the ISPs charge about 35/month for the internet of synchronous 50 mbps. So, 65/month total.

    And Salt Lake City still has no fiber-to-the-home network, because.... it would be too good? I can't understand how Century Link can justify it. At all. Without lies.

     

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  12.  
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    Alien Rebel (profile), Mar 13th, 2014 @ 9:38am

    ALEC

    One large element missing from this story is mention of ALEC, (American Legislative Exchange Council) which has been a huge driver in all this state and local protectionist nonsense. ars technica, June 29, 2012. South Carolina passes bill against municipal broadband.

    This leads me to call out yet again former Sen. Don Nickles, patron of the Copyright Alliance and ALEC supporter, who's lobbying firm The Nickles Group LLC, serves COMCAST, AT&T, MPAA, Walmart, and Intellectual Ventures. My first thought is that it's really too bad he's facing a headwind these days. But on second thought, increasing resistance probably just means more lobbying work and gravy coming his way. Shiny.

     

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  13.  
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    Anonymous Coward, Mar 13th, 2014 @ 9:48am

    Re: Re: Re:

    We need some slight cleanup here. I did not do the best job in explaining what I meant.

    In regards to the saying "Knowledge is Power" implies that the "Knowledge" in question is accurate & understood.

    Unfortunately being "aware" does not preclude being or having false and/or distorted knowledge. It is why I brought up Politics. Lots of awareness, but very little understanding of things.

    Since Awareness is a subset of knowledge you were not entirely off base with your saying, I just wanted to tweak it making it better, but I failed at doing a good job of it.

     

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  14.  
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    vastrightwing, Mar 13th, 2014 @ 9:50am

    Outright war

    There is an outright war of ISP vs consumers. As such, they are preventing competition. However, as consumers we do have options. The one I'm using right now is setting up a mesh network of neighbor to neighbor. I buy a $75 mesh compatible access point/repeater and connect it to my broadband connection. My neighbor buys the same thing and now we have a two node mesh network. Other neighbors buy similar hardware and a few of them connect their access point to their broadband connection and now we have a fault tolerant, scalable, self managed network!

    Ideally our mesh network will have multiple vendor ISP connections in case one vendor's network has technical problems. The idea here is to have a large private network with external internet access. Bandwidth is managed by the mesh software. It is slick, reliable and inexpensive. Why pay over $50/month for bandwidth you don't use when you can all benefit from each other?

     

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  15.  
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    nasch (profile), Mar 13th, 2014 @ 9:55am

    Re: Re:

    The solution would be to take it out of the hands of the private market or ensure the public has access to it via government/worker control.

    Isn't that more or less what he said?

     

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  16.  
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    nasch (profile), Mar 13th, 2014 @ 10:15am

    Re: Outright war

    Ideally our mesh network will have multiple vendor ISP connections in case one vendor's network has technical problems.

    If you have a choice of multiple broadband providers, why do you need the mesh? Not being snarky, it just seems like a chicken and egg problem (sort of). You need the mesh because there's no competition among ISPs so they suck. But the mesh works best with multiple independent ISPs, and if you have that then they have to compete with each other, so they won't suck, so you won't need the mesh.

    And I cannot ever type "mesh" without first typing "mest" and then fixing it, for some reason.

     

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  17.  
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    John Fenderson (profile), Mar 13th, 2014 @ 10:26am

    Re: Outright war

    Not sure how your idea addresses the problem of lack of competition.

     

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  18.  
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    Tony, Mar 13th, 2014 @ 11:07am

    Tide is changing

    One reason I like Google. They saw something that was unfair and pushed for a change. They did the same thing with google docs. MS lost business and had to change their model too.
    Once a few more major cities make the change companies will have to fall in line. The samething is happening with wireless service and the competition with metro PCS expanding. (still totally messed up hoping google jumps on the wireless phone provider band wagon too)

     

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  19.  
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    fgoodwin (profile), Mar 13th, 2014 @ 11:15am

    Re:

    Government neither owns nor controls the entire infrastructure.

    The DC Circuit court struck down the FCC's net neutrality rules, so that pretty well demonstrates how little control the government exercises over the infrastructure.

    And the idea that government "built" the network is popular but wrong. Saying it over and over doesn't make it any more correct.

     

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  20.  
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    Casey, Mar 13th, 2014 @ 11:24am

    Re:

    They have made awareness, but has it really done much of anything? They deployed in 2 cities and resulted in At&t deploying 1Gbps in Austin to counter Google. Comcast has upped their game a little in Provo. Other than that, the impact has been pretty miniscule. Areas that are unserved remain unserved. Areas that are underserved by crap DSL remain that way. Areas that Google has not threatened to deploy in remain virtually unchanged other than the occasional speed boosts, something companies have been doing for over a decade.

    Most of the actual game changing competition is coming from muni's and independent overbuilders, who existed before Google Fiber and would still have existed without Google Fiber.

     

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  21.  
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    nasch (profile), Mar 13th, 2014 @ 11:49am

    Re: Re:

    Government neither owns nor controls the entire infrastructure.

    The DC Circuit court struck down the FCC's net neutrality rules, so that pretty well demonstrates how little control the government exercises over the infrastructure.


    I think you're conflating local and federal government.

     

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  22.  
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    Anonymous Coward, Mar 13th, 2014 @ 12:07pm

    Re: Tide is changing

    You forgot gmail. Before gmail, the webmail providers had really small quotas (on the order of 10 megabytes). After gmail, the quotas are much larger.

     

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  23.  
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    Suzanne Stenson O'Brien, Mar 13th, 2014 @ 12:36pm

    nice opinion piece

    Great piece, Karl. Do you know about muninetworks.org?

     

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

  24.  
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    Jay (profile), Mar 13th, 2014 @ 1:11pm

    Re: Re: Re:

    No, his argument relies on dealing with the government as if it's an enemy of the people.

    That's pretty dangerous when you set up the public as antagonistic to the government. There certainly is a pressure to having the government bend to your will, but that requires a push from the people to prevent them from only hearing to people with the most money.

     

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  25.  
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    That One Guy (profile), Mar 13th, 2014 @ 1:13pm

    Re:

    And Salt Lake City still has no fiber-to-the-home network, because.... it would be too good? I can't understand how Century Link can justify it. At all. Without lies.

    That part's easy, they just leave the justifications to their bought-and-paid-for politicians, politicians have no problems lying through their teeth.

     

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

  26.  
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    ltlw0lf (profile), Mar 13th, 2014 @ 3:17pm

    Re: Re: Re: Re:

    No, his argument relies on dealing with the government as if it's an enemy of the people.

    I admit I had to go back and read what I said, because I don't remember ever saying anything of the sort. Luckily, I did read exactly what I said, and I am pretty sure you are putting words in my mouth. I can't be certain, as what I said was said before I had enough coffee.

    I believe what I said, and what I meant, was exactly what you said (as nasch pointed out.) If the companies want to use government money to help purchase and build their business model, then they can't be upset when the public (through the government) comes back and takes their infrastructure away and gives it back to the people who actually paid for it (as in, the American public.)

     

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

  27.  
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    ltlw0lf (profile), Mar 13th, 2014 @ 3:27pm

    Re:

    Trust me, not many politicians are worried about that. They already know exactly who is going to pay for it.

    Sadly, I believe you are correct about this.

    Unfortunately, the laws that exist to keep government employees from benefiting in corruption such as bribes and kickbacks don't exist for the politicians. Sure, there are laws against bribing politicians, but campaign donations don't qualify.

     

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

  28.  
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    Jay (profile), Mar 14th, 2014 @ 7:15am

    Re: Re: Re: Re: Re:

    Ok, that makes sense.

     

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

  29.  
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    John Fenderson (profile), Mar 14th, 2014 @ 9:30am

    Re: Re: Tide is changing

    I consider gmail an insidious force for the worse. It popularized and normalized a number of terrible practices, such as storing your email on servers you have no control over or knowledge of, and normalized the scanning of emails by third parties not involved in the conversations.

     

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

  30.  
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    fgoodwin (profile), Mar 15th, 2014 @ 5:18pm

    Re: Re: Re:

    The point remains. Neither the local, state or federal governments own telecom infrastructure installed by private companies.

     

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

  31.  
    identicon
    Anonymous Coward, Nov 24th, 2014 @ 6:53am

     

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


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