Huntsville, Alabama Is Suddenly Awash In Broadband Competition, Showing Why Comcast Is So Afraid Of Municipal Broadband

from the build-it-and-they-will-definitely-come dept

For years, we'ved noted how incumbent ISPs have waged a not-so-subtle war on towns and cities looking to escape from the high prices and abysmal service of the country's broadband duopoly (which is actually quietly becoming more of a cable monopoly without many noticing). Many of these cities have taken to either building fiber networks themselves -- or striking public/private partnerships with companies like Google Fiber or Ting/Tucows -- because the private sector has failed to deliver the service and connectivity they want at prices they can afford.

This kind of grassroots revolution is precisely why large ISPs like Charter, Comcast and AT&T have spent the last decade lobbying for (and in most instances directly writing) protectionist bills across twenty different states banning local citizens from making these kinds of decisions for themselves. If you want to see precisely why these regional monopolists are so afraid, you need look no further than Huntsville, Alabama.

City-owned Huntsville Utilities has been building a fiber broadband network that should service the lion's share of the city's homes and businesses over the next few years. What's more, the network will be open access -- meaning that ISPs can come in and compete with each other over the regional infrastructure. Google Fiber has already signed up to be one of at least three ISPs taking advantage of the build, and should begin offering service there by the middle of this year.

FCC data has long noted that the open access model provides consumers with better service at lower prices, thanks to the miracle of competition. Obviously that's a nightmare for large ISPs used to doing the bare minimum while charging captive subscribers the absolute maximum. As such, the federal government consistently has treated open access networks like a plague, given that regulators and lawmakers are consistently terrified of upsetting some of the biggest campaign contributors in the country. For what it's worth, Google Fiber also walked back its original promise to run its network under the open access model.

But you only need to look to what's happening in Huntsville to understand why ISPs have spent so much time and money demonizing municipal broadband. With competition looming, incumbent ISPs have miraculously wasted no time in finally delivering the speeds locals have been clamoring for. Comcast this week announced that it will soon bring its cable-based gigabit broadband service to Huntsville, the company breathlessly insisting this deployment reflects Comcast's unwavering dedication to being, well, awesome:

"This launch reflects Comcast’s ongoing commitment to offering the fastest speeds to the most homes and businesses in Huntsville,” said Comcast Regional senior VP Doug Guthrie, also in a statement. “Soon, customers will leverage a new gigabit internet service that will deliver a truly unparalleled online experience."

Yes, only coincidentally inspired by the kind of community broadband networks Comcast has spent billions trying to kill in places like Chattanooga and elsewhere. Another regional incumbent, Mediacom, this week also miraculously began offering gigabit broadband service it claims simply reflects its unwavering dedication to the consumer:

"Since 1996, Mediacom has invested over $8 billion of private capital in its national network to ensure that hard-working families throughout the smaller markets we serve receive the same advanced communications services as America’s largest cities,” said Mediacom’s Senior Manager of Area Operations, Lee Beck. “As a result of these investments, we are extremely proud to add the cities and towns we serve in the Huntsville area to Mediacom’s rapidly expanding list of true gigabit communities."

And while that's great and all, again there's no mention of why they're suddenly interested in actually giving Huntsville-area residents what they want. It's important to note that competition isn't just improving speeds and prices. Both Comcast and Mediacom have consistently (ab)used the lack of last-mile competition to impose arbitrary and unnecessary usage caps and overage fees, which you can be sure will be nowhere to be found once they're forced to keep pace with uncapped ISPs like WOW! and Google Fiber riding over the Huntsville-area network.

ISPs and the consultants, think tankers, lobbyists, and politicians who love them have spent fifteen years demonizing municipal broadband as some kind of vile socialist evil straight from the maw of hell; usually focusing on claims that these networks are inevitable fiscal disasters that need to be thwarted before the big, bad government begins monitoring your porn consumption. The focus from these folks is that they're just worried about local taxpayers. Less of a concern, apparently, is the fact that we're quite literally letting giant companies write shitty state telecom law.

But claiming that municipal broadband is spend-crazy government run amok is a violent misread of what's actually happening in these towns and cities. Municipal broadband business plans are like any other business plan; some are good, some aren't. Ideally that should be up to the locals to decide, not billionaire CEOs and grumpy armchair partisans sitting half a world away in judgement. Municipal broadband isn't the devil, it's a genuine, grassroots, local reaction to market failure; one that can be avoided by ISPs doing one thing: actually delivering the kinds of services, prices and features locals have spent fifteen years clamoring for.


Reader Comments

The First Word

Re: Re: Re: Open Access FTW

find out how much it really costs to provide broadband

From my personal knowledge:

Given cost of capital, labor, materials, licenses, permits, fees, taxes, incremental and operations costs, compliance costs, and given a SLA of 25 megabits down, 5 megabits up with 500 percent bandwidth over-subscription[1], while providing no other services such at television, radio, or corporate deployable VOiP (something a consumer would buy and use is not factored in), total cost of providing service over 15 years is around $11 per month per subscriber for 2,000 to 15,000 subscribers in 2015 dollars with fixed rate financing, assuming a network deployment backbone of coaxial cable, and not factoring in losses due to non-payment, vandalism, or acts of God (which are covered by insurance for the most part) but excluding costs for IPv4 address allocation (which is a yearly fee).

The highest recurring expense is cost of capital, labor, and maintenance, again excluding IP allocation costs. One could get the per subscriber costs down about thirty percent through the use of second tier equipment (eg: don't buy name brands) and having the subscriber buy the termination equipment. No network service infrastructure would be built out. (Eg: No network news, time, chat, web, or other self generated services, only what's on the internet.)

Much more than 15,000 subscribers and you run in to higher centralization costs (eg, what your aggregation/demarcation ratio is.)

If you consider that the cost is around $11 and the average bill is around $60, if you are feeling ripped off, well, it's because you are.

[1] Most companies oversubscribe by 1,000 percent or more - in other words, selling 1 megabit bandwidth to 10 different subscribers. It's mostly never noticed due to the packet nature of networks and given most folks don't all use the internet at the exact same instant.

—Anonymous Coward

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  1. identicon
    Anonymous Coward, 16 Feb 2017 @ 8:04am

    Re: Re: Open Access FTW

    But I thought all of those things were supposed to benefit me as a consumer! Why are they all gone suddenly when there's competition?

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