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Content tagged with "incumbent"

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Need Cloud Services like Online Backup? Steer Clear of Comcast

The net is buzzing about Comcast's data caps after a Seattle resident ran afoul of them. I found it particularly interesting given Seattle's recent decision to use its assets to further Comcast's monopoly following a poorly considered RFP. This story highlights many of the frustrations and injustices that come with companies as massive as Comcast effectively monopolizing an essential utility, with practically no oversight locally or federally. When Comcast enacted is 250GB monthly transfer cap years ago, many thought it was sufficiently high that few would run afoul of it. But the smart folks noted that if it did not increase as natural usage increases, it would hurt legitimate users (as opposed to those who run servers constantly trafficking in file sharing that violates copyright).
I made very clear to the gentleman I spoke with that I thought Comcast’s data cap policy was arbitrary, unfair, and extremely irritating… and that if I had any decent competitive options in the neighborhood I’d dump Comcast in a heartbeat. Since I don’t, I listened to him read his canned warning that if I exceeded their cap again I’d be cut off again.
Bear in mind that when you fill up the fuel tank in your car, you are at a gas station that is regularly inspected by the state to ensure it is correctly measuring the volume of gas dispensed. Comcast is not similarly regulated and we have to take Comcast's word on how much traffic we use. Most of the time I have visited Comcast's meter to see what my household usage is, I have been unable to even access it. But back to the story, our Seattle friend later found that he had unintentionally violated the cap again, despite taking precautions not to:
The Customer Security agent was polite, and after the standard identification questions notified me I was cut off for a year due to exceeding Comcast’s Acceptable Use Policy limits on their bandwidth cap. I asked for details on what had been using bandwidth, and again, Comcast would not share. In a sudden brainstorm, I then asked whether the 250 GB bandwidth cap applied to just downloads (which I had assumed, as the majority of most bandwidth used in households is downstream bandwidth), or download and upload bandwidth. Surprise, surprise!

Community Networks Provide Cable/Broadband Competition That is Otherwise Unlikely

You can also read this story over at the Huffington Post. How can it be that the big companies who deliver some of the most important services in our modern lives (access to the Internet, television) rank at the top of the most hated? Probably because when they screw up or increase prices year after year, we have no choice but sticking with them. Most of us have no better options. But why do we have so few choices? Government-sanctioned monopolies have been outlawed since the 1996 Telecommunications Act. Unfortunately, the natural tendency of the telecommunications industry is toward consolidation and monopoly (or duopoly). In the face of this reality, the federal government has done little to protect citizens and small businesses from telecom market failings. But local governments have stepped up and built incredible next-generation networks that are accountable to the community. These communities have faster speeds (at lower prices) than the vast majority of us. Most of these communities would absolutely prefer for the private sector to build the necessary networks and offer real competition, but the economics of telecom makes that as likely as donuts becoming part of a healthy breakfast. In most cases, the incumbent cable and telephone companies are too entrenched for any other company to overbuild them. But communities do not have the same pressures to make a short-term profit. They can take many years to break even on an investment that creates many indirect benefits along the way. One might expect successful companies like AT&T and Time Warner Cable to step up to the challenge posed by community networks, and they have. Not by simply investing more and competing for customers, but by using their comparative advantage – lobbying state legislatures to outlaw the competition.

Response to Seattle RFP: More of the Same

We have an answer to the question of what a city gets when it commits the bare minimum to improving broadband access: more of the same. We were skeptical of Seattle's approach of using city-owned conduit to spur serious improvements to broadband and, it turns out, correct. Only one company bid on the project, Comcast, a provider in much of Seattle already -- and a much maligned one at that. So Pioneer Square will have better access to the Internet, but from the dominant provider of high speed access in the City. Seattle just helped Comcast consolidate its monopoly just a bit further. This is a small step forward for Pioneer Square, and a larger step backward for the City as a whole. With FiOS available in the suburbs, offering much faster and more reliable connections for the same prices, Seattle has done very little to stem the flow of techies to the burbs. The RFP set certain requirements for use of the City's conduit, as noted in the Seattle Times article but one has to wonder if Comcast might be able to negotiate that down - few are better at exercising monopoly power than the Nation's largest cable and Internet provider.
Comcast is slated to pay $78,000 in one-time fees to cover part of the cable's installation, plus $4,057 in annual leasing fees, according to city documents.
The City elected a Mayor who promised to improve broadband access, but it seems the City Council is standing in the way of actually doing anything that would bring residents and businesses a meaningful choice in providers. Photo, used under creative commons license, courtesy of Jeff Hathaway

Greenville: The Texas Muni Cable Network

If you the take a look at our community broadband map, you'll see that Texas has only one citywide wired network owned by the public: Greenville. The story behind it is the same story we hear from just about every other community - but they actually spelled it out on their history page.
In 1999, Greenville, Texas' economic development leaders were unable to attract certain businesses and on the verge of losing existing companies due to a lack of high speed Internet. In response, Mayor Sue Ann Harting asked SBC for a commitment to deploy DSL. That request was denied. The city's cable franchise, Time Warner, also declined to commit to cable modem Internet deployment. Greenville found itself in a situation similar to one that many towns had faced years ago when railroads changed transportation. If the railroad was not routed through a town, that town just might die. What would happen to Greenville if the information superhighway did not come through the city?
Incumbent cable and telephone companies, their lobbyists, and associated "think tanks" like to claim that communities are somehow "duped" into building publicly owned networks. The truth is that just about every community wants to avoid the hassle of building a network but incumbents refuse to invest sufficiently to keep the community competitive for economic development and a high quality of life. They build networks when backed into a corner, not because they want to. Fortunately, all that hassle almost always pays off with far more benefits than problems over the long term as communities transition from depending on some distant corporation to solving their own problems locally. In fact, the results are often like that of Greenville:
Greenville citizens were not willing to take that chance. They took destiny into their own hands by amending the city charter to allow their revenue-only supported, municipally-owned electric system to build a hybrid fiber coaxial system to make high speed Internet available to everyone.

Munis Tell Carriers: Forget You Guys

MHT, Mass High Tech -- the Voice of New England Innovation -- recently turned a spotlight on the difficulty of creating Ubiquitous high-speed broadband. Always refreshing to see others understanding the real impediments to expanding fast, affordable, and reliable access to the Internet in this country:
For Andrew Rollins, chief software architect for Cambridge mobile analytics software as a service company Localytics Inc., the answer is to go DIY — at least for municipalities. “I think the most interesting thing that is happening today is that you are looking at municipalities that are saying (to carriers), ‘Forget you guys. We are going to do it ourselves,’” Rollins said. That is happening because there is no real business incentive for broadband carriers like Verizon Communications Inc. or Comcast Corp. to make the investment in infrastructure required to reach everyone in the U.S. Add to that the deals they have struck to function as monopolies in many locations, and it adds up to companies that really want to hold on to the status quo, Rollins said. “Somehow you have to incentivize these guys to build out the infrastructure and I don’t think they are going to do it on their own. They’re already gouging the heck out of customers today so why bother making that infrastructure if you are already getting that money out of people.” 
They go to discuss the backwards approach from North Carolina:
“Down in North Carolina they have been actually going out of their way saying the community fiber-to-the-home and broadband networks are bad and can’t happen,” she said. “That’s not going to get us there. If you say to the communities that you can’t do it yourself, that’s not an environment in which we can achieve success, not just in 5 years but in 10 or 20 years.”
Well worth the read.

WiscNet Under Continued Attack, Contact Elected Officials

As we feared, the compromise may have been compromised by the uncompromising power of AT&T lobbyists. Once again, we learn that they struck at the last hour and may have put local schools and libraries on the chopping block. If WiscNet goes and stimulus funds are returned, local institutions will have to double and triple their telecom budgets just to continue receive adequate service. This is intolerable. Until we hear otherwise, we encourage people to continue contacting their elected officials [pdf] in Wisconsin to express their opinion on the matter. Some more details here and here. Update: The Assembly will now be meeting at 1:00 rather than this morning. Rumors abound that they are still discussing how to "compromise" on AT&T's attack on the schools and libraries. Unfortunately, this afternoon, I'll be leaving for a short camping trip (AT&T is not going to ruin my trip) and I have some canned posts queued up, so I won't be able to cover what happens in Wisconsin immediately. For news on the stimulus grant impact, follow WI_Broadband and for news about WiscNet, follow ijohnpederson and his live blog. 2nd Update: To understand how AT&T has so much power in Wisconsin, check out who "donates" the most money.

Positive Update from Wisconsin on WiscNet, Stimulus Awards

The word from Wisconsin is mostly good. A deal has been struck that will spare WiscNet, though it will be studied for two years and then could be killed. But a fair, open study will allow WiscNet to clearly demonstrate its value -- WiscNet thrives in the light while AT&T thrives at secretive, last minute measures to gut its competitors. Additionally, the stimulus grants appear to be safe. The Legislature apparently will not require them to be returned long after the recipients had begun implementing them. But again, there is some bad news in that UW Extension will be restricted from receiving federal grants in the future to build the networks otherwise unavailable to schools and libraries. So that is disappointing. Returning those funds would have cost a few communities $27.7 million over just 5 years. However, nothing is settled until the Legislature fully votes on it (today and Thursday) and the Governor signs the bill. AT&T lobbyists don't get paid to create fair compromises and surely aren't finished scheming. So make sure you have made your thoughts on this matter known to your elected officials. The Rootstrikes make it easy. Don't forget to tell the Governor too -- the line-item veto is a powerful tool.

Cartoonist Turns Attention to Telco Domination of Wisconsin Leg

A cartoonist turns his attention to AT&T and its allies in the Wisconsin Legislature, which is currently slated to kill a telecommunications network essential for schools, libraries, and local government. Why? So AT&T and its allies can provide the service instead, shifting local tax dollars from school teachers and libraries to AT&T. As long as AT&T can dominate state legislatures with its campaign contributions and lobbyists, we will see scenes like this: cartoon-wi-trough.png Please share.

Short History of Powellink Muni Fiber in Wyoming

I wrote this short case study of the Powell network in Wyoming for our Breaking the Broadband Monopoly report but it never got published on this site. As we noted a year ago, Powell bought its system back from investors last year. The city of Powell started talking about a fiber network in 1996 but did not make progress for almost ten years. They developed a plan to build a FTTH network and lease it to an outside operator. The incumbents declined to partner with the City and later spent considerable effort to derail the City’s efforts. However, the City found a local cooperative, TriCounty Telephone (TCT), willing to offer triple-play services on the City’s network. Financing the deal took more time than expected because the City was unwilling to commit public money directly or even as a backstop if the network fell behind on debt payments. While the City worked on the financing, cable incumbent Bresnan and telephone incumbent Qwest tried to convince the state legislature to abolish Powell’s authority in this arena. The legislature did create new obstacles for cities building such systems but Powell was grandfathered in. In late 2007, the City agreed to an arrangement where TCT would exclusively lease the network and make up shortfalls in debt payments if required for a period of six years. After that period, the network would be open to other service providers as well and it would be the City’s responsibility to cover any shortfalls if needed. If the City chose not to appropriate in that situation, the investors could take the network. Estimates suggested a 33% take rate would allow the network to break even by the fifth year but most expected a higher take rate. In early 2008, Powell completed the $6.5 million bond financing. As is more common in small builds, they immediately connected a line to the home rather than waiting for the subscriber to sign up. They trenched a fiber to the side of every house regardless of whether they were taking service, putting the fiber in a box on the side of the house. If the occupant signs up, a crew only has to install electronics rather than bringing a line down from the pole.

Does AT&T Really Own the Wisconsin Legislature? Battle Over WiscNet Continues

There are many places to find information about AT&T's war on WiscNet, a great credit to those who recognize the importance of WiscNet to schools, libraries, and local governments around the state. The best article on the subject may be from Wisconsin Tech News (WTN), with "UW faces return of $37M for broadband expansion in 11th hour bill." This post builds on that as a primer for those interested in the controversy. Update: Read a Fact Check Memo [pdf] from the University of Wisconsin Extension Service with responses to false allegations from AT&T and its allies.

Synopsis

AT&T and its allies have long made false claims against WiscNet, setting the stage for their lobbyists to push this legislation to kill it. AT&T and some other incumbents want to provide the services WiscNet provides in order to boost their profits. WiscNet not only offers superior services, it offers services the private providers will not provide (including specialized education services). For instance, from the WTN article:
One of features that differentiates WiscNet from a private broadband provider is allowing for “bursting,” so that during isolated periods when researchers send huge data sets, they greatly exceed the average data cap. UW-Madison currently uses seven gigabits on average, and would have to procure 14 gigabits under the new legislation, even though most of the extra seven gigabits would seldom be in use, Meachen [UW CIO] said. “We'd be paying for the fact that researchers have to send these huge data sets, and not have it take hours and hours to get to where it's going,” Meachen said. “You can't afford to pay for that extra 7 gigabits from the private sector because it's too costly. They increase your charges based on that.” A private network would not have the necessary capacity for scientists on the UW-Madison campus, who are some of the leading researchers on next generation Internet.