Broadband – a public utility or a profit margin?

Our current crop of broadband providers, companies like Time Warner, Verizon and AT&T, have it pretty good. Their lobbyists often out number local government representatives they are calling calling upon on behalf of the big providers these companies hold what amounts a monopoly on access. We have seen Time Warner recently pull their roll-out of real broadband speeds because people complaining so loudly about their tiered packages being rolled out that Time Warner had to postpone implementing them.

In short they hold our broadband access by the nuts and they will do anything to keep it that way. This is sad to see in a country that supposedly prides itself in its perceived desire for innovation and drive for success. Instead of innovation though we have companies that fight tooth, nail and political manipulation in order to see that their status quo stay the same.

Never mind that more and more communities around the country are beginning to fight back these powerful companies do everything that they can to squash innovation and stop world class broadband access dead in its tracks. To the big cable and telco broadband providers the whole municipal broadband movement is an enemy that they will fight against, whether it be in the courts or local and state legislatures.

This is exactly the fight that Wilson; and a growing number of other small communities in North Carolina, is now facing. This community in North Carolina is one of 44 publicly owned fiber networks serving more than 60 communities that has decided that they can do a better job of providing their citizens with high-speed access than the big providers either won’t or say isn’t economically feasible at this time. Wilson is doing just that and at higher speeds and a lower subscription cost to their service’s subscribers.

In the case of Wilson Time Warner; who has been providing cable service to the community for 30 years, charges customers $240 per month for their premium cable TV and broadband services. through Time Warner’s Roadrunner service; the name of the division that handles broadband accounts, they typically offer speeds no higher than 10Mbps. They recently increased this speed in Wilson to 15Mbps – due they say to competition.

However through Wilson’s public company; Greenlight, that handles their equivalent ‘triple-play’ services customers get the same 300 TV channels, High Definition signal, pay-per-movies, DVR boxes and all the same phone services customers will see broadband speeds starting at 10Mbps. Not only that but unlike the choked back upload speed that Time Warner provides the Greenlight customers see almost an equal speed of 10Mbps for uploads.

For a breakdown in the differences of services being provided here is a chart of services courtesy of Indy Week

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Time Warner’s reaction to this competition?

They gathered up all their lobbyists and headed to Raleigh, North Carolina’s state capital, and proceeded to try and the movement hobbled and for all intents and purposes too onerous to implement. At this point the push for the Local Government Fair Competition Act has failed to pass but that doesn’t mean it won’t be coming back up again in future legislative sessions.

The reason for fighting movements like the one happening in Wilson is as quoted by Fiona Morgan of Indy Week having to compete against public money

“We don’t believe it’s a good idea for public entities to compete with private business because it’s inherently not a level playing field,” said Embarq spokesperson Tom Matthews. “We’re going to be competing against purely public money.”

On the other hand communities like Wilson are going this route because companies like Time Warner won’t provide the services that more and more people are coming to consider a necessity – a utility – in today’s world. As companies like Time Warner continue to control access it is the state and local legislators that are being called to task by the people that they represent

If you have any doubt about whether broadband is an issue that matters to people, ask state Rep. Bill Faison. A House Democrat representing Orange and Caswell counties, Faison said the No. 1 constituent complaint he hears is a lack of access to broadband.

“I can’t go to a public meeting anywhere in Orange or Caswell without someone coming up to me and saying, ‘We’ve got a problem with Internet and here’s what it is,'” Faison said. “No one comes up and says, ‘We’ve got a problem with Medicaid,’ or ‘We’ve got a problem with the wildlife commission.’ No one complains about the Department of Transportation not fixing a road in front of their house. They all show up and want high-speed Internet.'”

Source: Indy Week

So far Wilson’s business model; at 54 percent of subscribers, is above the national industry standard of 30 to 40 percent. For Greenlight, the break even point of their business is the low end of the industry standard which after four years of service they have more than surpassed.

Is this kind of community driven movement for world class broadband access a threat to the major companies like Time Warner?

You bet it is but isn’t that what being an innovative country all about – finding ways to improve upon the proverbial mousetrap. Or, in this case being able to have the same kind of access to the Internet that other countries have without having to hand over a pound of flesh for substandard services and all in the public eye.