I encourage readers to visit Doc Searls post "Broadband vs. Internet" for a discussion about things that matter regarding the future of Internet access for most Americans.

The Internet is no more capable than the infrastructures that carry it. Here in the U.S. most of the infrastructures that carry the Internet to our homes are owned by telephone and cable companies. Those companies are not only in a position to limit use of the Internet for purposes other than those they favor, but to reduce the Net itself to something less, called “broadband.” In fact, they’ve been working hard on both.

There is a difference between the Internet and "broadband." Broadband is a connection that is always on and tends to be somewhat faster than the dial-up speeds of 56kbps. Broadband could connect you to anything... could be the Internet or to an AOL like service where some company decides what you can see, who you can talk to, and the rules for doing anything. The Internet is something different. It is anarchic, in the textbook definitional sense of being leaderless. It is a commons. As Doc says,

The Internet’s protocols are NEA:

• Nobody owns them.*
• Everybody can use them, and
• Anybody can improve them.

Because no one owns it, few promote it or defend. Sure, major companies promote their connections to it (and when you connect to it, you are part of it) but they are promoting the broadband connection. And the biggest ones (Comcast, AT&T, Verizon, Time Warner Cable, etc) will do anything to increase the profits they make by being one of the few means of connecting to the Internet -- including charging much more and limiting what people can do over their connection, etc. This is one reason the connections from major corporations are so heavily tilted toward download speeds -- they want consumers to consume content. Just about every community network built in the last 3-4 years offers symmetrical connections by contrast.

Last I heard, the fastest cable offering in the upstream direction was 12Mbps. Cox, our cable provider in Santa Barbara, gives us about 25Mbps down, but only 4Mbps up. Last time I talked to them (in June 2009), their plan was to deliver up to 100Mbps down eventually, but still only about 5Mbps up.

Susan Crawford published an excellent essay in the New York Times presenting her Looming Broadband Monopoly argument as a discussion of the coming digital divide between those with access to next-generation networks and those without.

These numbers are likely to grow even starker as the 30 percent of Americans without any kind of Internet access come online. When they do, particularly if the next several years deliver subpar growth in personal income, they will probably go for the only option that is at all within their reach: wireless smartphones. A wired high-speed Internet plan might cost $100 a month; a smartphone plan might cost half that, often with a free or heavily discounted phone thrown in. The problem is that smartphone access is not a substitute for wired. The vast majority of jobs require online applications, but it is hard to type up a résumé on a hand-held device; it is hard to get a college degree from a remote location using wireless. Few people would start a business using only a wireless connection.

She identifies the problem as a lack of competition in the market while highlighting the role of lobbying from the wealthy cable companies to keep it that way:

The bigger problem is the lack of competition in cable markets. Though there are several large cable companies nationwide, each dominates its own fragmented kingdom of local markets: Comcast is the only game in Philadelphia, while Time Warner dominates Cleveland. That is partly because it is so expensive to lay down the physical cables, and companies, having paid for those networks, guard them jealously, clustering their operations and spending tens of millions of dollars to lobby against laws that might oblige them to share their infrastructure.

In this essay, her preferred solution is better federal regulation that would require companies that own networks to share parts of their infrastructure with competitors (to significantly reduce the problems of natural monopoly). Unfortunately, she did not explicitly discuss the solution of the communities building their own networks - a topic she has discussed at great length elsewhere in very positive terms.

Learning the lessons of Longmont's recent cable referendum.

Download a larger PDF version here.

Ever since the towns of Mooresville and Davidson purchased and began fixing the failed Adelphia franchise in their part of North Carolina, private sector purists have tried to portray their efforts as a disaster. MI-Connection has had some serious difficulties amid higher than expected costs, but just reported a promising increase in revenues.

At their monthly board meeting at Davidson’s Town Hall on September 22, Transition Manager David Auger said that, from July through September, the system had increased its voice customers by 48 percent over the first quarter last year, its video customers by 296 percent and its data customers by 2,248 percent. 83 days of the gains, said Auger at the time, were actual, and 9 were projected, since September was not yet over. The final customer numbers, which the system released today, showed that the last few days of September growth activity exceeded projections: voice customers grew by 60 percent over the first quarter last year, video customers by 319 percent, and data customers by 2257 percent.

This network was targeted time and time again by Time Warner Cable and its allies in pushing the anti-competitive bill that has effectively stopped any investment in next-generation networks in the state by killing local authority to make broadband investments. They regularly blamed the network's problems on the local governments owning it while providing no context -- the network was in terrible shape because its prior private-sector owner saw little reason to invest in it. The network is now far superior because the local governments care more about encouraging economic development and creating local jobs than producing a quick profit for out-of-state shareholders. As MI-Connection continues to correct its problems, Davidson's government is remarkably open and transparent. You can read just about all the documents relating to the network, finances, and history here.

A common misconception is that local governments award exclusive (or monopolistic) franchises to cable companies and that is why the US has so little cable competition.  However, no local government has done this since the 1996 Telecommunications Act 1992 Cable Act made the practice illegal.

But even before the '96 Telecom Act '92 Cable Act, local governments tended to award non-exclusive contracts to cable companies because they wanted more competition, not less -- as illustrated in this article about Cox preparing to renew its franchise agreement with New Orleans.

Federal laws and Federal Communications Commission decisions also have sharply curtailed the city's negotiating ability. Even if other companies were seeking permission to provide cable to local customers, said William Aaron, a legal adviser to the council on telecommunications issues, council members could not arbitrarily refuse to renew the Cox franchise. The council could do that only on the basis of certain limited criteria, such as that the company has not lived up to the terms of the 1995 agreement. Cox has had a nonexclusive franchise to operate in Orleans Parish since 1981, meaning that other companies also can apply to provide cable services, though none has done so. The franchise was renewed in 1995.

For years, state and federal policies have limited local authority to require just compensation for access to the valuable right-of-way because the cable and telephone companies pretended that they would invest more and create competition if local authority were preempted. Local authority has been significantly preempted in many communities without any real increase in competition or lowering of prices. No surprise there - another victory for companies better at lobbying than providing essential services.

Comcast has once again distinguished itself as an extraordinary company - not only do Americans trust it less than any other company on the list, it occupies the two bottom positions.  Big shocker that communities want better local service with their own networks.  

Accoding to the 2011 Temkin Trust Ratings, which looks at the level of trust that consumers have in 143 large U.S. companies in a total of 12 industries, only eight companies earned "very strong" ratings while 26 earned "very weak" ratings.

Comcast was the worst. But it is in the company we would expect - Time Warner Cable and Charter are close to the bottom also.

No matter how much community broadband advocates prepare the community and elected officials for the expected difficulty of building a successful local project, in the midst of the deployment, times are tough. A local paper in Lafayette claims "LUS Fiber [is] at a crossroads" but starts with an admission that these problems were forecast and expected:

Competitors will pay less for programming than you do, and in turn play hard ball by lowering rates for customers. Good luck keeping up with technological advances, expansion needs and growth costs; it's a risky proposition for a public entity used to maintaining rather than adapting. Your opportunities will be limited because you can't provide services outside the city limits. You'll be criticized for offering programming such as adult movies, and you'll be told you really should be focusing on your core business: running power, water and wastewater plants.

Terry Huval delivered that message in 2000, long before Lafayette committed to building their community fiber network -- a network that delivers some of the fastest speeds in the nation at the lowest rates and has already delivered hundreds of jobs. Nonetheless, LUS Fiber is behind the take rate goals they had set in the business plan. The expenses are higher than forecast because Lafayette was unfairly denied entry to a coop that secures lowers rates for television contracts for members. The only discernible reason for rejecting Lafayette is that Cox joined the coop after Lafayette committed to building its network. There is little doubt that Cox was influential in denying Lafayette's application, likely increasing LUS Fiber expenses for offering cable channels by more than 20%. This is just one of the many ways that the telecommunications market is rigged to benefit incumbents at the expense of all of us -- residents and small businesses alike. We will not have real choices in competition until government policy treats telecom like the essential infrastructure it is. Mike Stagg, a long time supporter of the network is quoted in the article, challenging LUS Fiber to improve its marketing:

Can they do better? Probably so. Part of it is the fact that, just from a mindset standpoint, LUS is a utility and utilities generally do not compete," Stagg said.

In a Q&A following a speech at the National Association of Regulatory Utility Commissioners, AT&T CEO Randal Stephenson candidly called DSL obsolete. This echoes not only our view, but that of hundreds of communities who have built their own networks upon realizing they cannot be competitive in the modern world with DSL. Interestingly, AT&T still has millions of customers that use its DSL product. And it has announced its super-DSL offering called U-Verse is finished -- no doubt surprising many state-house policymakers that AT&T had convinced they would invest in communities. The context of his comment was that DSL is no longer competitive with cable in broadband capacity (and often reliability) -- something we documented in our video comparing different types of networks. We would argue that U-Verse itself is not competitive with cable due to its greatly constrained upstream speeds -- even worse than cable networks typically experience. So, to recap -- we have yet another admission from the private sector that it is delivering obsolete broadband services to our communities. How can there be any surprise that so many more communities are considering building their own networks to create economic develop, increase quality of life, and generally be competitive in the digital economy. If AT&T can barely keep up with the investment necessary for our communities, how can far less profitable companies like CenturyLink and Frontier? They can't. But that doesn't stop them from advertising the hell out of their obsolete networks. Smart communities will choose self-determination rather than betting on last-generation networks run by distant, unaccountable corporations.

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!

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.