Google, Ting, Netflix Dare To Suggest That Maybe Giant, Anti-Competitive ISPs Shouldn't Be Writing State Telecom Laws

from the pay-to-play-legislation dept

For years now, we've noted how state legislatures are so corrupt, they quite literally let giant ISPs like AT&T and Comcast write state telecom law. These laws, as you might expect, do everything in their power to keep the pricey, abysmal customer service broadband status quo in place by hamstringing any and every attempt to bring competition to bear on these complacent duopolists. That's particularly true of the anti-community broadband bills passed in more than 20 states that prevent towns and cities from upgrading their own local telecom infrastructure -- even in instances where incumbent providers refuse to.

This kind of protectionism is precisely what's going on right now in Virginia, where incumbent broadband providers have convinced (read: thrown a lot of money at) state Delegate Kathy Byron to propose HB 2108, aka the "Virginia Broadband Deployment Act." The act does nothing to improve broadband deployment; in fact it does the exact opposite, preventing ad-hoc community broadband solutions in light of market failure. It also saddles towns and cities with all manner of restrictions, forcing them to get approval by committees stocked with incumbent ISP lobbyists if they want to even strike public/private broadband partnerships.

Byron has been under notable fire the last few weeks by folks who believe, crazily, that perhaps you shouldn't let giant ISPs with decades of documented anti-competitive behavior write state telecom policy. While Byron has tried to claim that hamstringing towns and cities will somehow improve broadband expansion and pricing, other locals have been busy calling a spade a spade:

Opponents argue that the bill would discourage competition that would drive down broadband costs for poor Virginians and that it would hamper existing municipal broadband networks from providing a necessary service.

The Roanoke City Council unanimously condemned HB 2108 on Tuesday, claiming it would endanger a $9.6 million investment by the city and other local governments in the Roanoke Valley Broadband Authority.

“I’ll call it what it is – an effort by the legacy carriers to protect their turf,” Councilman Ray Ferris said, according to the Roanoke Times. “It’s crony capitalism at its finest.”

Opposition to Byron's bill includes incumbent competitors Google, Ting, Netflix and others, who collectively penned a group letter to the Chairman of the Virginia House Commerce and Labor Committee (pdf), noting that the measure actually makes broadband connectivity in the state worse:

"If enacted, HB 2108 would not only hurt Virginia’s localities and their residents, but it would also harm the private sector in multiple ways. Among other things, it would derail or unnecessarily complicate and delay public-private partnerships. It would interfere with the ability of private companies to make timely sales of equipment and services to public broadband providers. It would deny private companies timely access to advanced networks over which they could offer business and residential customers an endless array of modern products and services. It would also impair economic and educational opportunities that contribute to a skilled workforce from which businesses across the state will benefit.

The letter also proceeds to crazily suggest that maybe, just maybe, decisions on local infrastructure should be left up to the voters, not the CEOs of Comcast, CenturyLink, or AT&T:

Communities in Virginia are eager to work with willing established carriers, enter into public-private partnerships with new entrants, develop their own networks, if necessary, or create other innovative means of acquiring affordable access to advanced communications capabilities. These are fundamentally local decisions that should be made by the communities themselves, through the processes that their duly elected and accountable local officials ordinarily use for making comparable decisions. They should also be able to use their own resources as they deem appropriate to foster economic development, educational opportunity, public safety, and much more, without having to comply with the bottlenecks that HB 2108 would impose.

As we've noted repeatedly, ISPs have been extremely successful the last fifteen years in passing these kinds of laws by framing this as a partisan debate, intentionally sowing division. But getting better broadband and improved competition has broad, bipartisan support. As does letting local communities decide for themselves what to do about the local infrastructure impact of obvious private sector failure. And these bills don't solve any problems; in fact they make fixing the problem of spotty broadband coverage significantly harder.

Most consumers realize this, which is why, like so many tech policy issues incorrectly framed as partisan (net neutrality), these ad-hoc local solutions often see broad, bipartisan support among actual consumers.


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  • icon
    DannyB (profile), 25 Jan 2017 @ 6:41am

    It's about time

    It's about time that giant internet companies like Google and others finally stood up in public and made a stink about this.

    The corruption between ISPs and lawmakers is at least as big a threat as SOPA ever was.

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

  • identicon
    Anonymous Coward, 25 Jan 2017 @ 7:09am

    someone needs to argue the tax base revunue

    Broadband is pro-business, which increases tax revenue.
    Restrictions are anti-business, which decrease tax revenue.

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

    • icon
      DannyB (profile), 25 Jan 2017 @ 8:49am

      Re: someone needs to argue the tax base revunue

      It would seem that having even more broadband providers would mean even more businesses providing that service and which can be taxed.

      Increased competition results is lower prices and better service (than Comcast provides). Lower prices result in sales of higher end broadband packages.

      In addition to the Tax consideration, one should consider that the internet is the infrastructure of the new economy. Just as the interstate highway is an important infrastructure. It has social benefits that go way beyond being able to easily move military equipment around the 48 states.

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

      • identicon
        Anonymous Coward, 25 Jan 2017 @ 9:29am

        Re: Re: someone needs to argue the tax base revunue

        The presence of additional businesses does not (at least in telecom) generally lead to significantly higher sales (as demand is more or less the same), and, in fact, generally leads to lower profit margins, and therefore less taxable business.

        Or more generally, taxes are generally applied as a percentage of sale price, and as a percentage of corporate net income. Lower prices reduce the sale price and reduce net income, thus lower prices mean lower tax revenue. This can in some cases be counteracted by higher demand, but that is generally not true in telecom.

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

        • icon
          DannyB (profile), 25 Jan 2017 @ 11:07am

          Re: Re: Re: someone needs to argue the tax base revunue

          Higher sales, or not. Higher taxes, or not. The major consideration should be that the internet is an important engine of economic growth in the 21st century.

          More and redundant internet access is a good thing. Competition is a good thing.

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

        • icon
          Nihiltres (profile), 25 Jan 2017 @ 3:06pm

          Re: Re: Re: someone needs to argue the tax base revunue

          Yes, it might reduce taxable business as a direct effect. However, by fostering competition and making internet access cheaper, you're effectively giving everyone who pays for internet a bit of extra income, which could then go into different parts of the economy.

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

        • icon
          helldesk tech (profile), 26 Jan 2017 @ 4:09pm

          Re: Re: Re: someone needs to argue the tax base revunue

          I think you're looking too small, my friend, as in limiting your view to taxes the current ISPs with a static customer base would be paying, if the only change caused by increased competition was merely lower costs to consumer and reduced corporate revenue. I don't profess to have any kind of knowledge in economics beyond my MicroEcon 101 class, but I can guarantee that removing restrictions and increased competition will result in a larger amount of aggregate taxes into the State's coffers.

          How? If ISPs are to reach the more extreme rural areas and provide broadband as defined by the FCC to as many customers as possible, there must be increased infrastructure spending by all ISPs that want to gain customers. There will then be visible and verifiable spending in developing technology, not just lip-service promises most ISPs give now. Taxes are paid on such build out and research, and on salaries paid to line crews and lab technicians.

          By making service more readily available to customers in areas currently underserved or ignored by incumbent ISPs - areas which will become enshrined as ignored if bills such as HB 2108 are passed - the number of customer accounts which can be assessed taxes will be increased. Increased competition will result in more affordable rates for base service packages, which will entice more consumers to subscribe for higher-tier packages and / or additional service packages, thereby increasing sales, which means - say it with me - increased taxes.

          Larger taxable base, increased spending for infrastructure, and an incentive of value for consumers to subscribe to affordable premium packages, will result in increased taxes paid.

          THAT I do know is part of the idea of economics of scale.

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

      • identicon
        MWebb, 25 Jan 2017 @ 11:50am

        Re: Re: someone needs to argue the tax base revunue

        Absolutely! I was at the press conference last week at the VA State Capitol to oppose the bill on behalf of Ting, and outlined how this bill was anti-business and would stifle economic growth. I would characterize this type of legislation as protecting monopoly players in one industry sector at the expense of local businesses in every other sector.

        The tax base argument actually extends further, to local property tax receipts. Having fiber-optic connections to the premise have shown to increase property values and rental prices, which in turn increases property tax revenues.

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

  • identicon
    Anonymous Coward, 25 Jan 2017 @ 7:21am

    This is nothing new with company's writing the laws. It's why we have thee Monopolies in the first place. They have been doing this as long as they have been around. Why stop now.

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

  • identicon
    Anonymous Coward, 25 Jan 2017 @ 7:28am

    Attribution

    Every piece of legislation introduced should have, as the beginning, a declaration of authorship, signed, under penalty of perjury, by the legislator introducing it.

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

  • icon
    Berenerd (profile), 25 Jan 2017 @ 7:28am

    How much are they willing to pay the state government to rewrite the laws? Come on now, you can't expect them to do their job on THEIR salary can you?

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

    • icon
      That Anonymous Coward (profile), 25 Jan 2017 @ 8:43am

      Re:

      IIRC the contribution to the wackjob from TN (I forget her name) was pretty much a pittance and she toed the party line & screwed an entire state.

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

  • icon
    Ryunosuke (profile), 25 Jan 2017 @ 7:54am

    but but... Randall Stephenson (AT&T CEO) SURELY knows what is best for my internet needs rather than local, or even state leaders!

    All hail our corporate overlords!

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

    • icon
      DannyB (profile), 25 Jan 2017 @ 8:51am

      Re:

      Surely AT&T knows best that not having an alternative to AT&T is in our best interest. After all, with an alternative, people might vote with their wallet.

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

  • icon
    Jeffrey Nonken (profile), 25 Jan 2017 @ 9:13am

    All hail Ting!

    I've been with Ting (Sprint and T-Mobile MVNO) for just over a year and I have to say that I only have one complaint: They persistently don't wire my community with fiber. Damn them!

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

    • identicon
      techno, 31 Jan 2017 @ 9:50pm

      Re:

      I love Ting too! Such an awesome company, it's so weird to have good customer service isn't it? Must be that Canadian thing.

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

  • identicon
    Christenson, 25 Jan 2017 @ 9:24am

    Net Neutrality -- the name kills it!

    Don't say Net Neutrality!

    (It's some complicated concept that's easily twisted to the uninitiated or careless and carries no moral weight)

    Call it:

    NETWORK FAIRNESS

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

  • identicon
    Paul Clark, 25 Jan 2017 @ 10:58am

    There is a Wayto get Their Attention

    There is a simple way to get this moving. Google needs to hire some lobbyists and start talking up a RICO investigation of AT&T. You can make a case that the actions of AT&T are racketeering. Even if it does not go to the Justice department, we may get net neutrality back.

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

  • identicon
    Anonymous Coward, 25 Jan 2017 @ 1:06pm

    It would be ideal if Google, etc put $$ into advertising how corrupt Kathy Byron is for taking this bribe money in the first place. Maybe publicly disgracing these criminals would deter them from accepting the bribes.

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

  • identicon
    Anonymous Coward, 25 Jan 2017 @ 1:53pm

    What's the news here? Each if these companies depends heavily on infrastructure built by others to make their business models work. Netflix represents somewhere near a third if peak bandwidth demand. Of course they don't want the people having to invest heavily to support them to have a say.

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

    • icon
      That One Guy (profile), 25 Jan 2017 @ 4:15pm

      Re:

      Of course, because clearly when people sign on for internet service it's with the understanding that it's only to certain parts of the internet and/or services, of which the likes of Netflix aren't included unless they pay extra.

      The customers are the ones deciding to use Netflix so much, it doesn't matter where the traffic is coming from, if the ISPs can't provide what they sold then they need to be slapped down for false advertising otherwise known as lying.

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

      • identicon
        Anonymous Coward, 25 Jan 2017 @ 11:14pm

        Re: Re:

        Nobody is blocking Netflix they do however max out network connections and infrastructure beyind any other online service.

        Netflix doesn't just want net neutrality they want yo be able to force isos to spend more ti support them. Is that really fair?

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

        • icon
          That One Guy (profile), 26 Jan 2017 @ 3:00am

          Re: Re: Re:

          Yes.

          So long as the customer is paying for the connection it shouldn't matter where the content is coming from, and if the network can't handle the load then it's up to the ISPs to improve it, stop overselling it, or both, not Netflix to pay for what it's customers are using the connection they've already paid the ISPs for to access.

          The ISPs are trying to get paid twice, once from the customer for the connection and the content carried over it, and then again from Netflix for providing that content. How is that supposed to be fair?

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

        • identicon
          Thad, 26 Jan 2017 @ 3:11pm

          Re: Re: Re:

          Netflix doesn't just want net neutrality they want yo be able to force isos to spend more ti support them. Is that really fair?

          Cox has jacked up my monthly internet bill by $30 over the past 10 years, without increasing my connection speed, has actually removed services (such as Usenet) in that period of time, and the last time I called them for tech support I was on the phone for three hours with people who kept insisting it was impossible to revoke a DHCP lease.

          And Cox is one of the better major ISP's.

          Cry me a fucking river about how unfair it is that price-gouging monopolies only get to price-gouge their customers instead of also being allowed to price-gouge the companies that provide the content their customers are paying to access.

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

  • identicon
    Anonymous Coward, 26 Jan 2017 @ 5:36am

    What?
    Our so called "law makers" do not write our laws?

    Hahahaha, the joke is on you - because they neither write nor read them, just sign. US Congressional rubber stamp. It is interesting to note the oath which they swear to and how they violate same with little to no perceptible acknowledgement of their huge conflict. I doubt they admit to themselves that they are liars.

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

  • identicon
    asdf, 30 Jan 2017 @ 3:44am

    it's not about dare or not

    idts

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


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