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June 23, 2005 4:00 AM PDT

Should cities be ISPs?

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these arguments at a time when we need to get the country moving toward nationwide broadband coverage."

"People saw the outrageous message being sent from the government to try to prohibit local people from deciding their communities' communications needs," Scott said. "It also helped that the only opponents to these networks are the incumbent service providers."

special report
Broadband nation
U.S. cities are bracing for a broadband war. At stake is the fate of high-speed Internet access for millions of Americans.

Whether governments or private companies are best-positioned to provide Internet connectivity invokes questions of both economics and politics. Governments and private businesses have long quarreled, for instance, over who should control the build-out of highways, canals, railroads, the postal system and telephone networks.

In the case of broadband, governments that make money from selling Internet service would be tempted to impose onerous taxes and regulations on private companies--which would be, after all, their competitors. "Why would a carrier like Verizon try to offer EV-DO in Philadelphia if the city is trying to undercut them at every turn?" asked Adam Thierer, an analyst at the free-market Progress and Freedom Foundation in Washington. (EV-DO is a high-speed wireless service that works over longer distances than Wi-Fi.)

"It's not surprising that this fight, like so many others, is going to be federalized and turned into a national issue," Thierer said. "It's a bit bizarre, especially because there are so many other issues that deserve the attention of politicians."

Some governments have experimented with municipal connectivity--and then abandoned it. On June 19, the city of Orlando shut down its 18-month-old downtown Orlando Wi-Fi pilot program that once served a sliver of the city's business district.

Meant to boost foot traffic in the area, instead "usage was not what they expected," plus the costs of running it were too high, said a representative for Orlando-based Net provider Pure Connection, which the city hired to provide the hot zones.

Traffic was a disappointing average of 27 users each day, said Brie Turek, Orlando's public information officer. "We're just hoping this is a temporary break," she said. "We're looking at alternate ways to bring this back."

CNET News.com's Marguerite Reardon and Ben Charny contributed to this report.

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I love it when Verizon is pissed.
by Remo_Williams June 23, 2005 5:35 AM PDT
Talk about a win-win. Cheap broadband *and* Verizon gets it in the neck.

Seriously, the article nails it: railroad build-outs, canal build-outs, highways, telephone lines, water and sewer, electrical lines all require special consideration because they provide the infrastructure for the people. In each case, the government has had a very strong hand in determining the level of private versus public ownership and responsibility.

On the one hand, railroads were granted generous rights-of-way and had less governmental intervention against them. A reflection of the times is more properly the explanation for this, since mid-century 1800s were not well-noted for antitrust actions.

On the other, AT&T was forced by the US government to build out the nation in return for operating its regulated monopoly. Like it or hate it, Ma Bell connected North America better than any other telco (for its size; comparing NTT to AT&T is retarded).

I don't think anyone disputes the rationality of water, sewer, and electric service distributions being consolidated, unless you don't like water, sewers, or electricity. Or you prefer multiple water mains running through town, etc.

There is no problem, in my mind, in building out the infrastructure for broadband in a municipality. Waiting for Verizon or another RBOC to build out your neighborhood is not an option; the days of a benevolent dictatorship in the form of AT&T, soaking huge long-distance fees in return for connectivity throughout the US, is over. It's been over. Because the bargain is past, Verizon and other RBOCs should not expect to enjoy the benefits of a monopoly without the attendant responsibilities to the people they purport to connect.

Let the munis build the infrastructure. Let them bid out the maintenance contracts for its upkeep, and let them lease the lines (fiber, we hope) to *anyone* who wants to provide a service: cable, RBOCs, ISPs, whoever. The munis should actually *make* money if they have smart administrators on staff, because leases should eventually recoup the build-out costs, provide for the maintenance, and generate an alternative revenue stream.

Verizon doesn't want this, because Verizon likes their 90/10 split on the business. If it gets flipped, and now Verizon has to compete with Joe's ISP for your Internet dollars, it'll be exposing its tremendous shortcomings as a gargantuan monopoly: too slow, too big, too aloof from its customer (we're not ratepayers anymore, you bastards).

Remo
Reply to this comment
I love it when Verizon is pissed.
by Remo_Williams June 23, 2005 5:35 AM PDT
Talk about a win-win. Cheap broadband *and* Verizon gets it in the neck.

Seriously, the article nails it: railroad build-outs, canal build-outs, highways, telephone lines, water and sewer, electrical lines all require special consideration because they provide the infrastructure for the people. In each case, the government has had a very strong hand in determining the level of private versus public ownership and responsibility.

On the one hand, railroads were granted generous rights-of-way and had less governmental intervention against them. A reflection of the times is more properly the explanation for this, since mid-century 1800s were not well-noted for antitrust actions.

On the other, AT&T was forced by the US government to build out the nation in return for operating its regulated monopoly. Like it or hate it, Ma Bell connected North America better than any other telco (for its size; comparing NTT to AT&T is retarded).

I don't think anyone disputes the rationality of water, sewer, and electric service distributions being consolidated, unless you don't like water, sewers, or electricity. Or you prefer multiple water mains running through town, etc.

There is no problem, in my mind, in building out the infrastructure for broadband in a municipality. Waiting for Verizon or another RBOC to build out your neighborhood is not an option; the days of a benevolent dictatorship in the form of AT&T, soaking huge long-distance fees in return for connectivity throughout the US, is over. It's been over. Because the bargain is past, Verizon and other RBOCs should not expect to enjoy the benefits of a monopoly without the attendant responsibilities to the people they purport to connect.

Let the munis build the infrastructure. Let them bid out the maintenance contracts for its upkeep, and let them lease the lines (fiber, we hope) to *anyone* who wants to provide a service: cable, RBOCs, ISPs, whoever. The munis should actually *make* money if they have smart administrators on staff, because leases should eventually recoup the build-out costs, provide for the maintenance, and generate an alternative revenue stream.

Verizon doesn't want this, because Verizon likes their 90/10 split on the business. If it gets flipped, and now Verizon has to compete with Joe's ISP for your Internet dollars, it'll be exposing its tremendous shortcomings as a gargantuan monopoly: too slow, too big, too aloof from its customer (we're not ratepayers anymore, you bastards).

Remo
Reply to this comment
Absolutely Not
by Collants June 23, 2005 7:21 AM PDT
You gotta be kidding me. Government should absolutely not get involved in this business.

- Creates a government monopoly (possibly).
- Slows technological improvements.
- Kills competition, drives prices up.
- Poor customer service

Internet access is not a life or death type of service. If you want lower costs and better access for everyone, keep this a free market enterprise where all fish are allowed to swim and compete for food.
Reply to this comment
Well said.
by William Squire June 23, 2005 8:12 AM PDT
I agree 100%. Dial-up access has already fallen from $40 to $5 in most areas. DSL and cable prices have also dropped considerably in recent years. WiFi is not a revolutionary technology that everybody must have. Our tax money already pays for Internet access in government buildings, many parks, schools, public events, and libraries. Setting up WiFi access on a city-wide basis under the argument that it is cost prohibitive to low-income families also completely ignores the fact that wireless devices are also cost-prohibitive to low-income families. Let the private market do what it does best, and keep socialistic ventures out of our governments. Anything else would be the destruction of a profitable market in exchange for higher taxes.

http://www.inaniloquent.com/PermaLink.aspx?guid=d49a7645-c2b3-4daf-a165-2a066cb1f791
Your a little late...
by June 23, 2005 9:38 AM PDT
Government is already a monopoly. Get used it, it isn't going to change.

As for cities, states or counties that want to put in the own net access systems I think it is a good idea. Either that or the companies that have net access already in place need to be forced by laws to limit the amount the charge so that everyone can afford it and they need to be forced to expand to cover the whole city, state or county. They shouldn't be able to pick and choose what, were and who they want to cover.

I have several friends that live about a mile out side of Santa Rosa, Ca. They have an SBC substation less than 1/4 mile from them and yet SBC refusses to install the needed equipement for these people to get broadband. This should not be permitted. They either offer it affordably to everyone or they get the hell out and the city, state or county does it.

Robert
You are forgetting an important fact
by Bill Dautrive June 23, 2005 11:31 AM PDT
Poor areas, smaller towns and rural areas are being left out in the cold. Greedy broadband companies do not want to build into these areas.

Letting the government build in these areas do not hurt the greedy corporation and helps the area with new broadband acsess. This is one way for governments to help revitilize certain areas, and has been successful in Canada. It is the governments job to help its people, not service greedy corporations.

It is sad that the corporations have so much control over everything these days.
View reply
Its not free enterprise
by mgbergman August 5, 2005 6:34 AM PDT
This is not free enterprise!! In many cases, people have maybe 1 or 2 choices to receive broadband access (if that). The people who own the infrastructure block other providers from using it. A municipal built infrastructure would ensure that multiple providers can give services at a lower price...
Absolutely Not
by Collants June 23, 2005 7:21 AM PDT
You gotta be kidding me. Government should absolutely not get involved in this business.

- Creates a government monopoly (possibly).
- Slows technological improvements.
- Kills competition, drives prices up.
- Poor customer service

Internet access is not a life or death type of service. If you want lower costs and better access for everyone, keep this a free market enterprise where all fish are allowed to swim and compete for food.
Reply to this comment
Well said.
by William Squire June 23, 2005 8:12 AM PDT
I agree 100%. Dial-up access has already fallen from $40 to $5 in most areas. DSL and cable prices have also dropped considerably in recent years. WiFi is not a revolutionary technology that everybody must have. Our tax money already pays for Internet access in government buildings, many parks, schools, public events, and libraries. Setting up WiFi access on a city-wide basis under the argument that it is cost prohibitive to low-income families also completely ignores the fact that wireless devices are also cost-prohibitive to low-income families. Let the private market do what it does best, and keep socialistic ventures out of our governments. Anything else would be the destruction of a profitable market in exchange for higher taxes.

http://www.inaniloquent.com/PermaLink.aspx?guid=d49a7645-c2b3-4daf-a165-2a066cb1f791
Your a little late...
by June 23, 2005 9:38 AM PDT
Government is already a monopoly. Get used it, it isn't going to change.

As for cities, states or counties that want to put in the own net access systems I think it is a good idea. Either that or the companies that have net access already in place need to be forced by laws to limit the amount the charge so that everyone can afford it and they need to be forced to expand to cover the whole city, state or county. They shouldn't be able to pick and choose what, were and who they want to cover.

I have several friends that live about a mile out side of Santa Rosa, Ca. They have an SBC substation less than 1/4 mile from them and yet SBC refusses to install the needed equipement for these people to get broadband. This should not be permitted. They either offer it affordably to everyone or they get the hell out and the city, state or county does it.

Robert
You are forgetting an important fact
by Bill Dautrive June 23, 2005 11:31 AM PDT
Poor areas, smaller towns and rural areas are being left out in the cold. Greedy broadband companies do not want to build into these areas.

Letting the government build in these areas do not hurt the greedy corporation and helps the area with new broadband acsess. This is one way for governments to help revitilize certain areas, and has been successful in Canada. It is the governments job to help its people, not service greedy corporations.

It is sad that the corporations have so much control over everything these days.
View reply
Its not free enterprise
by mgbergman August 5, 2005 6:34 AM PDT
This is not free enterprise!! In many cases, people have maybe 1 or 2 choices to receive broadband access (if that). The people who own the infrastructure block other providers from using it. A municipal built infrastructure would ensure that multiple providers can give services at a lower price...
Old Story...
by kieranmullen June 23, 2005 9:02 AM PDT
Sure it has todays date but again the story is not new news. There have been articles here on this subject before. Not too long ago either I might add!

Time for news.google.com :-(

Kieran Mullen
Portland OR
Reply to this comment
Old story?
by declan00 June 23, 2005 11:54 AM PDT
You're right to say that the question of "should cities be ISPs" is not a new one. You'll find lots of links to our old articles along with the story.

But the question of whether the Feds will be the ones to decide is in fact new. Perhaps the headline wasn't perfect, but congressional intervention is a new development.
View reply
Old Story...
by kieranmullen June 23, 2005 9:02 AM PDT
Sure it has todays date but again the story is not new news. There have been articles here on this subject before. Not too long ago either I might add!

Time for news.google.com :-(

Kieran Mullen
Portland OR
Reply to this comment
Old story?
by declan00 June 23, 2005 11:54 AM PDT
You're right to say that the question of "should cities be ISPs" is not a new one. You'll find lots of links to our old articles along with the story.

But the question of whether the Feds will be the ones to decide is in fact new. Perhaps the headline wasn't perfect, but congressional intervention is a new development.
View reply
Government ??
by Richie June 23, 2005 9:56 AM PDT
NO NO NO When did the government do anything that works out GOOD. It starts out wonderful and ends up costing more than it does now. You want the senior citzens and the poorer of our community or any community on the internet, make it cheaper and easier to do. It cost a fortune to get on the net for us seniors and the less than forurnete amoungst us. You know the seperation between the poor and rich is getting larger and larger. Were going to fall thru the crack of economics. Windows pricing show the seperation.
Reply to this comment
Yes Yes Yes
by mgbergman August 5, 2005 6:37 AM PDT
Government does a lot of things that end up good. This is a great example of government ensuring that a service is provided equally to all of their citizens. If fire or police service was only provided to rich citizens, there would be an outcry...
Government ??
by Richie June 23, 2005 9:56 AM PDT
NO NO NO When did the government do anything that works out GOOD. It starts out wonderful and ends up costing more than it does now. You want the senior citzens and the poorer of our community or any community on the internet, make it cheaper and easier to do. It cost a fortune to get on the net for us seniors and the less than forurnete amoungst us. You know the seperation between the poor and rich is getting larger and larger. Were going to fall thru the crack of economics. Windows pricing show the seperation.
Reply to this comment
Yes Yes Yes
by mgbergman August 5, 2005 6:37 AM PDT
Government does a lot of things that end up good. This is a great example of government ensuring that a service is provided equally to all of their citizens. If fire or police service was only provided to rich citizens, there would be an outcry...
Change is needed
by wazzledoozle June 23, 2005 10:40 AM PDT
Right now in Seattle, there is no competition. Each company has a monopoly over a region, and the prices are horrible. Its 39.99 for DSL about 3 times slower than cable, or 45.95 for cable. They dont change prices or speeds anymore.

A little government competition would be good. Build the fiber lines, and the ISP's will come.
Reply to this comment
Article in WSJ
by June 23, 2005 2:00 PM PDT
There was an article in the Wall Street Journal about this today. I think that the government should get involved. If telecom companies like SBC and Verizon are not going to go to rural areas then the government should step in and take care of things. All the telecom companies are pissed because the government is unfair competition. Well then they should go to the small towns and build their networks and high-speed internet instead of whining about it.
View reply
Bingo
by mgbergman August 5, 2005 6:40 AM PDT
Abolutely correct. Roads are a great analogy...build the road and let all cars use it...
Change is needed
by wazzledoozle June 23, 2005 10:40 AM PDT
Right now in Seattle, there is no competition. Each company has a monopoly over a region, and the prices are horrible. Its 39.99 for DSL about 3 times slower than cable, or 45.95 for cable. They dont change prices or speeds anymore.

A little government competition would be good. Build the fiber lines, and the ISP's will come.
Reply to this comment
Article in WSJ
by June 23, 2005 2:00 PM PDT
There was an article in the Wall Street Journal about this today. I think that the government should get involved. If telecom companies like SBC and Verizon are not going to go to rural areas then the government should step in and take care of things. All the telecom companies are pissed because the government is unfair competition. Well then they should go to the small towns and build their networks and high-speed internet instead of whining about it.
View reply
Bingo
by mgbergman August 5, 2005 6:40 AM PDT
Abolutely correct. Roads are a great analogy...build the road and let all cars use it...
Once upon a time....
by Earl Benser June 24, 2005 2:06 PM PDT
... AT&T had the idea that telephone communications should be
readily available for almost every one in the US, city dweller or
remote farmer or anyone in between. And AT&T, with the
cooperation of the individual state's Public Service Commissions,
provided that service using business phone revenue to subsidize
the 'end-of-line' residential customers. And it worked well,
producing one of the world's finest communications systems at
a reasonable cost for everyone, and free maintenance.

Then the Justice Department got involved and rewrote all the
rules. So AT&T was broken up, customers had to pay (usually)
the actual cost of service with no subsidy. and suddenly,
whatever was wrong with the telepohone was the other guy's
job.

So now, the rural people get screwed, nobody's phone works like
it should, and the Justice Department honchos sit back with
smug looks on their faces.

Actually, if the Justice Department had any brains, they would
have penalized AT&T by making them take over the Post Office.
Then, we would have had the TWO best communications
systems in the world.

Now, we have neither.
Reply to this comment
what?
by Bill Dautrive June 25, 2005 12:16 PM PDT
Telephone service is better and cheaper today. You don't even have to covert the difference in the dollar to make the case it is cheaper. Convert todays prices to pre-AT&T breakup values, and it is virtually free today.

Look at other government approved monopolies. Cable and electricity. Neither has grown cheaper, nor by themselves, improved its service.

Monopolies are the bane of any industry, just look at Microsoft dragging down nearly the entire computing world.
View reply
Once upon a time....
by Earl Benser June 24, 2005 2:06 PM PDT
... AT&T had the idea that telephone communications should be
readily available for almost every one in the US, city dweller or
remote farmer or anyone in between. And AT&T, with the
cooperation of the individual state's Public Service Commissions,
provided that service using business phone revenue to subsidize
the 'end-of-line' residential customers. And it worked well,
producing one of the world's finest communications systems at
a reasonable cost for everyone, and free maintenance.

Then the Justice Department got involved and rewrote all the
rules. So AT&T was broken up, customers had to pay (usually)
the actual cost of service with no subsidy. and suddenly,
whatever was wrong with the telepohone was the other guy's
job.

So now, the rural people get screwed, nobody's phone works like
it should, and the Justice Department honchos sit back with
smug looks on their faces.

Actually, if the Justice Department had any brains, they would
have penalized AT&T by making them take over the Post Office.
Then, we would have had the TWO best communications
systems in the world.

Now, we have neither.
Reply to this comment
what?
by Bill Dautrive June 25, 2005 12:16 PM PDT
Telephone service is better and cheaper today. You don't even have to covert the difference in the dollar to make the case it is cheaper. Convert todays prices to pre-AT&T breakup values, and it is virtually free today.

Look at other government approved monopolies. Cable and electricity. Neither has grown cheaper, nor by themselves, improved its service.

Monopolies are the bane of any industry, just look at Microsoft dragging down nearly the entire computing world.
View reply
The monopoly was better?
by Michael Grogan June 24, 2005 3:20 PM PDT
I don't know what world you live in but in mine long distance calls were outrageously expensive under Ma Bell's monopoly. Since they were broken up typical long distance service is around 5 cents a minute and my phone service is as good or better than it was then. Of course, if you try to depend on a cell phone for all your service, you should expect lousy service.
Reply to this comment
Maybe so...
by Remo_Williams June 25, 2005 5:26 PM PDT
... but you could bring in your broken phone for a new one, no questions asked. And they fixed every single problem with your telephone service. And they did wire North America, invent the transistor, the laser, the C language, the UNIX operating system, modern networking, C++, the Korn shell, modern switching equipment... yeah, they sucked on prices and it was expensive to call long-distance not too long ago, but they held up their end of the bargain.

You don't see Verizon bringing anything innovative out of their monopoly.

Remo
View reply
The monopoly was better?
by Michael Grogan June 24, 2005 3:20 PM PDT
I don't know what world you live in but in mine long distance calls were outrageously expensive under Ma Bell's monopoly. Since they were broken up typical long distance service is around 5 cents a minute and my phone service is as good or better than it was then. Of course, if you try to depend on a cell phone for all your service, you should expect lousy service.
Reply to this comment
Maybe so...
by Remo_Williams June 25, 2005 5:26 PM PDT
... but you could bring in your broken phone for a new one, no questions asked. And they fixed every single problem with your telephone service. And they did wire North America, invent the transistor, the laser, the C language, the UNIX operating system, modern networking, C++, the Korn shell, modern switching equipment... yeah, they sucked on prices and it was expensive to call long-distance not too long ago, but they held up their end of the bargain.

You don't see Verizon bringing anything innovative out of their monopoly.

Remo
View reply
Hmmmmmmmm!
by June 27, 2005 3:53 AM PDT
They were poor in the 60's Hmmmm, they were poor in the the 70's Hmmmm, they were poor in the 80's Hmmmm, they were poor in the 90's Hmmmm, and now they are poor in the 2000's, Maybe the " poor" should quit doing the things that make them poor! Oh wait that's right the goverment helps them!
Reply to this comment
Hmmmmmmmm!
by June 27, 2005 3:53 AM PDT
They were poor in the 60's Hmmmm, they were poor in the the 70's Hmmmm, they were poor in the 80's Hmmmm, they were poor in the 90's Hmmmm, and now they are poor in the 2000's, Maybe the " poor" should quit doing the things that make them poor! Oh wait that's right the goverment helps them!
Reply to this comment
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