

As Big as Net Neutrality? FCC Votes to Kill State Imposed Internet Monopolies - paralelogram
http://www.fastcompany.com/3042895/as-big-as-net-neutrality-fcc-takes-aim-at-state-imposed-internet-monopolies

======
kristopolous
It's almost like the regulatory capture of the FCC has been undone. Is there
even a political term for that? Regulatory release?

How did this happen? Was it just the 4 million request for comment responses?
Is there something else at play?

Also the quote from the congresswoman is quite brilliant how she uses tea
party rhetoric to defend laws that lock in regional broadband monopolies. Her
spin is artfully magnificent. Boldly rising to the defense of crony
capitalism.

I only wish everyone saw it for the utter bullshit it is.

~~~
joelrunyon
> Also the quote from the congresswoman is quite brilliant how she uses tea
> party rhetoric to defend laws that lock in regional broadband monopolies.
> Her spin is artfully magnificent. Boldly rising to the defense of crony
> capitalism. > I only wish everyone saw it for the utter bullshit it is.

The inability to agree with "opposing" parties on some issues while still
disagreeing on other issues is a symptom of a much larger issue in American
politics.

I'm confused as to how this is "BS" as that is the actually one of the main
stances of the tea party. If they're inconsistent about enforcing it, then
call them out when they do that (or when they're doing it solely to back huge
corps) and if you don't like their focus on regulating personal behavior
(which is inconsistent in their idea of limiting government involvement in
personal lives), but it seems like an odd to criticize them when they do
something that's actually helpful.

That is, unless someone who disagrees with you is incapable of even
potentially having a useful point every now and then. If that's the case, then
that speaks volumes more about you than it does them.

~~~
vidarh
I don't know whether that is consistent with tea party politics, but it's
still fascinating contortionism to argue for states rights in order to
safeguard the use of those rights to _take away_ local governments ability to
do what they want, in order to try to safeguard uncompetitive monopolies.

~~~
rhino369
Not when you understand how local governments are chartered. In every state
I'm familiar with, the state government grants local governments a charter to
exit. Local governments are essentially organs of the state and have no
sovereignty.

Illinois could end Chicago's existence if it were so inclined.

So telling a state that it can't regulate it's local government is an actual
and serious violation of state's rights.

~~~
vidarh
I don't doubt it can be seen a violation of state's rights. But the call for
state's rights is generally to bring government closer to the people. In this
case it is (attempted) used to pull government further away from the people.

------
rayiner
The article title is misleading. This measure isn't about state imposed
Internet monopolies, but overturning state bans on municipal broadband. On the
substance: this is an excellent decision, but needs to go further. The FCC
should act to ban anti-competition municipal measures like build-out
requirements.

Right now, if you're an ISP startup and you identify some neighborhoods where
it would make sense to build fiber, most cities won't let you. Instead, to
build anywhere, you have to build everywhere. This is a huge missed
opportunity, because competition in even a limited service area could cause
change in incumbent behavior if that area is full of lucrative accounts.

Google is leading the way on this as part of it's Fiber deployment, but the
FCC has the opportunity to make it national.

~~~
chimeracoder
> The FCC should act to ban anti-competition municipal measures like build-out
> requirements.

I'm not sure it would be a good idea for the FCC to ban buildout requirements
across the board. That seems really heavy-handed.

Buildout requirements can be bad, in that they hold back an entire region to
the least common denominator, but they can also be used as a bargaining chip
to force service to regions that otherwise would never receive service at all.

Remember that local politicians are much more beholden to the needs of their
constituents than the FCC is[0], so if an entire neighborhood is being
technologically blighted, it may make sense for the city council or town to
use build-out requirements to ensure that those neighbourhoods don't get
remain stuck in the 20th century.

I think it makes far more sense to let cities and states negotiate these
requirements than to disallow them across the board. Over time, it'll be clear
that cities that don't impose all-or-nothing build requirements get much
better service in wealthier and denser neighbourhoods (like Google Fiber), and
other cities will either follow suit or not.

[0] and this is a _good_ thing; they _should_ be attuned to what their
constituents need

~~~
rayiner
> so if an entire neighborhood is being technologically blighted, it may make
> sense for the city council or town to use build-out requirements to ensure
> that those neighbourhoods don't get remain stuck in the 20th century.

But that's not what happens. In all but the wealthiest cities, this just
becomes a focus point for class warfare, where municipal representatives for
poor neighborhoods torpedo fiber build-out across the whole city.

~~~
chimeracoder
> where municipal representatives for poor neighborhoods torpedo fiber build-
> out across the whole city.

But that's an issue for the city government to address internally, perhaps by
means of negotiating a deal involving some other issue that those
representatives also care about. That's how city government works.

This isn't exactly the only case in which neighbourhoods within a city or town
have conflicting interests in local government[0]. I don't see yet why _this
one_ in particular should be special-cased (by allowing the FCC to bypass
city/town governance).

[0] Arguably, that describes _all_ of local government.

~~~
rayiner
What deal could representatives make that fixes the problem? Someone has to
pay to service those poor neighborhoods, and it'll be the ISP's shareholders
only if they can make outrageous amounts of money on the remaining
subscribers. Otherwise, the options are public money, or no fiber. Most cities
are broke, so the former option is off the table, so in practice the result is
no fiber for anyone.

~~~
nitrogen
If Internet access is an essential utility, and the city can't reach an
agreement with ISPs, then the city itself should pay. This is what many cities
are already doing, and the state laws prohibiting municipal networks are the
issue addressed by the FCC.

~~~
tptacek
How are they supposed to pay for Internet buildout when they're running 8-9
figure deficits servicing 9-10 figure debt loads, watching their municipal
bonds downgraded, and scrambling to figure out how to pay down defined-benefit
pension plans to firefighters, police officers, and teachers?

~~~
nitrogen
Not all cities are in such a position. Fixing crushing debt is not an Internet
problem, it's a governance problem.

~~~
tptacek
Name a major US city in a strong position to build out fiber Internet at their
own expense and we can drill into the numbers.

Before I wrote, I pulled up the general fund numbers (debt load and deficit)
for the 5 biggest US cities, and a couple random cities down around #15. I was
going to write up a little table, but got pulled into a meeting.

This is one of those discussions where we have the benefit of actual numbers
to work from. They're just a Google search away. If you're right, this should
be an easy debate for you to win.

 _Slightly later_

Figuring that the top 10 cities might put your argument at a disadvantage
(it's harder to run a giant city than a smaller one and obviously more
expensive to roll fiber out in one), I checked the next 10 cities on the list
(by population). Quick observations:

* San Jose - huge deficits, pension crisis, closing police stations.

* Austin - like all the cities in Texas they seem to be doing OK.

* Indianapolis - 8 figure deficit, funding the city from reserves.

* Jacksonville - small deficit, service and pay cuts to keep the budget balanced.

* San Francisco - mid-high 8 figure deficits.

* Columbus - hard to find figures, probably doing OK.

* Charlotte - seems to be doing OK

* Fort Worth - Texas, seem to be doing OK

* Detroit - Heh

* El Paso - Texas, seems to be doing OK

* Memphis - 8 figure deficit, service cuts.

~~~
nitrogen
It's interesting that the major cities in Texas are doing OK. Even for those
that aren't doing OK, I'd propose that adding fiber rollout to the city's
utility maintenance budget is the right thing to do in the absence of a better
alternative.

------
mlangdon
I know it's popular to suggest there are no differences between the two
parties. Obviously, this is the case for some issues that many people here are
passionate about (privacy, to an extent, foreign policy). However, I'll be
pretty sad when there's a Republican president and a Republican FCC chair and
these 3-2 votes start going the other way.

Here's one undeniable difference between the two parties.

~~~
joelrunyon
I'm confused about "parties" here. It seems all 5 current FCC members were
appointed by BO.

[http://www.fcc.gov/leadership](http://www.fcc.gov/leadership)

Am I missing something?

~~~
vermontdevil
Max of 3 can be of the same party as the president.

~~~
joelrunyon
Stuff like this makes me mad, because it seems to do more to reinforce the
"2-party" system which automatically means that the "other" party is the "bad"
party.

Not sure that not having it would be any better though.

------
bobwaycott
As a resident of Chattanooga, and EPB customer, I wholeheartedly support this
move. Some of the things quoted in this article from politicians and ISP
spokespeople strike me as laughably outlandish distortions of reality.

I know the folks at EPB quite well, and used to work with them--first as the
primary developer in town who built nearly all their online software for
nearly 4 years, then as an employee running their internal development
department/team. Then again as a vendor when I left the company to consult
full-time. They are insanely committed internally to providing the best
possible service, speed, and prices they can. They're also serious about
providing excellent customer service (more on that in a moment).

Moreover, at least where EPB is concerned, the bullshit posturing of big ISPs
alleging these small companies would cherry-pick bigger markets falls
completely flat. Come on, now. Isn't that exactly what FiOS did when it chose
years ago to stop expanding? Isn't that the primary attitude we see displayed
by the big telcos? Have they connected every last mile in America yet, in
2015?

Almost as soon as they'd barely proven the concept of providing insanely fast
internet to a few choice, small areas of the city, EPB embarked on blanketing
their entire power service area with connectivity. IIRC, it took them a couple
years to pull it off--I know roughly because I built the integrated online
services customers used to find out if EPB had service at their homes yet, and
it was a big deal when we finally got to rip out a bunch of code that handled
when the backend services couldn't return a " _Yes! We 're in your area!_".
They didn't leave out the poorer areas of the city. They didn't only put it
where the highest populations are. They were installing connectivity at an
incredible pace--so much so, that there was actually a bit of a local stir
when some residents started raising a fuss over not asking for the
connectivity and having it installed in their neighborhoods (and having the
upgraded power boxes installed on their houses (at no charge) that also housed
the fiber-ready connections should they decide to become a customer). There's
only one place they failed to be able to offer service that, afaik, may still
remain to this day--MDUs[1] that have contracts with Comcast.

\----

A brief(ish) anecdote on the dedication a small municipal company has to
providing top-notch customer service:

I was sitting in a meeting one day with two of the senior VPs and one VP of
engineering, who reported directly to the President. We were waiting for
others to join for whatever we were actually supposed to be discussing, and
the VPs were discussing a host of troubles they had when they send field techs
out to customer's home for installation, upgrade, and troubleshooting jobs. At
the time, whenever the techs were on location and had to have something
handled by the tech ops center--this is a smart grid, so they could just flip
switches and make shit happen once they knew what a problem was--they had to
call into a customer service line that went to tech support to get the
situation resolved. That means all the techs are calling in throughout the day
just like customers would call in, so they wind up spending a lot of time on
hold. They were estimating it was at least a 15-minute wait at each site.
Bemoaning the lack of any easy way to fix it, and the lack of any off-the-
shelf third-party software they could contract in to help solve it, they
expressed feeling stuck. As a customer, I'd experienced this very problem a
couple of times myself. I had a great team of devs who worked for me, and they
were itching for a problem to solve. So, I spoke up. I asked if it was true
that all the techs had laptops in their trucks. It was. I asked if they were
all connected to the network via VPN. They were. I then gave them a quick
5-minute pitch right out of my ass, saying that my team had just completed
what we were doing, and we could build and launch an app on the intranet that
would allow the techs to go to their trucks, answer about 3 questions telling
customer's acct, the problem, and their phone number, and submit a help
request. Then we'd make that pop up in real-time on tech support's displays,
and anyone in tech support could immediately call the tech back as they were
flipping switches and pressing buttons to verify the problem was corrected.
There were some surprised and questioning looks shot back at me across the
table--I was new, they didn't know me, and they definitely didn't expect me to
speak up, I think. One of them, seasoned veteran of the company's many forays
into having custom software built for them, said they'd looked into some
things like that before and it would take months to complete something like
that. When he asked how long we'd need, I told them to give us a week. The
looks turned into comical disbelief--they were new to having a dedicated
internal team of developers, and my department was brand new, full of devs and
a designer I'd hand-picked. There was all the usual "there's no way you can do
this," and my typical over-confident assurances we could.

It took us 10 days and one meeting halfway through to get all the requirements
and launch the app. By the end of the first month, our little project had
taken in a bit over 2,000 real-time support tickets, and we'd cut average wait
time at customer's homes from a rough estimate of 25 minutes down to an
exactly timed 12 minutes from ticket open to ticket closed. The VPs called us
all into a room at the end of the month. They were beaming. My team felt like
badasses. They were showered with praise. The VPs said they couldn't believe
it, and couldn't argue with the results. Next thing on the agenda? "We've got
about 5 more departments we want to roll this out to right now and get
everyone doing this stuff in real-time. We can kill all the time customers are
waiting on us in so many ways with this."

\----

All that to say that a small, municipal telecom has some characteristics and
features the likes of Comcast don't--a personal stake in the local community,
a desire to take care of the local community because it's themselves, and a
willingness to do whatever it takes to make their community better. I don't
think Comcast gives two shits about any of its customer areas. EPB, on the
other hand, not only provides a service at crazy speed and fair prices, but
they continue to invest time, money, guidance, and other resources into all
kinds of things that matter to the local community--all the gig business
stuff, tech councils, etc. Their internal corporate structure tends in a
number of ways toward stupid political bullshit, like any other company (it's
why my whole team and I eventually stopped being employees, and went back to
being vendors). But it doesn't get too much or too often in the way of
everyone at the company trying to constantly find any and every feasible way
to make their services better than the big ISPs, take care of their customers
better because they are family and friends, and take pride in finding more
ways to play a part in making Chattanooga a better place[2].

[1]: multi-dwelling units, aka apartment complexes

[2]: I'm feeling really weird about this being probably one of the few times
I've ever extended such effusive praise toward CHA.

~~~
afarrell
Do you have a blog about CHA?

~~~
SeanLuke
I guess this is the modern version of "Your ideas are intriguing to me and I
wish to subscribe to your newsletter". :-)

~~~
afarrell
Precisely.

------
jusben1369
I'm torn. Do these state bodies (Chattanooga power utility) have a state
mandated monopoly or protection? Do they use those protected profits to build
a network which they then sell to consumers? I would be upset if my competitor
had that advantage and I didn't (note I'm wondering not certain that that's
the case here)

~~~
AnthonyMouse
> Do they use those protected profits to build a network which they then sell
> to consumers?

I don't understand this argument at all. Having access to capital isn't an
"unfair advantage" \-- it's a hard prerequisite to building a network. Nobody
can do it without that.

And sources of money are never unfair. If somebody has easier access to
capital than you, that isn't an "unfair" advantage, it's a completely
reasonable advantage. It isn't unreasonable for large entities to invest in
things they want to just because they have more money than you.

The only way it would be unfair is if they were operating below cost in the
long term, which has nothing to do with where they get the money and which
they aren't doing and have no reason to do.

~~~
jusben1369
Hmmm. Let's say people in your state love bananas and the average price of a
banana is $1 with a profit of 20 cents. And your friend who is married to the
daughter of the governor suddenly has an exclusive license to sell bananas in
your state. What do you think will happen to the price of bananas and
subsequently what do you think happens to profits your friend starts accruing?
Ok, so far so good you don't really care because you don't like bananas. You
are your 10 friends sell apples and you all compete hard against each other
and sell an Apple for between 95 cents and $1.05 cents. One day your friend
thinks the Apple business looks interesting. He's raised the price of bananas
to $1.20 and is now making 40 cents a banana. Now he starts selling Apples. At
70 cents each. 10 cents below cost. He's losing 10 cents on every apple but he
doesn't care because he makes 40 cents on every banana he's selling. Naturally
in 9 months you and your 10 friends are out of business. You can't sell Apples
at a loss. Once you leave he raises the price of Apples to $1.10. Feel tempted
to jump back in? No way, he'll just drop them to 70 cents each for a while and
crush you a second time.

All of this happens because your friend has an unfair advantage in terms of
his access to capital. Power utilities (and cable and internet too) are great
examples of law mandated monopolies who generate protected profits. Taking
that protected revenue stream to subsidize your entrance into a competitive
marketplace isn't fair.

~~~
gonzo
As if VZW didn't have access to cheap money. RBABs, anyone?

~~~
jusben1369
Yes but cheap money is very different to protected money.

------
mwsherman
This may be helpful, but seems to miss the point. Municipalities are the ones
who created the monopolies.

The wired networks were conceived as utilities during their initial buildout,
thus the monopoly. It takes years of lobbying and dealmaking for a new ISP to
enter a municipality (see Google). That's unrelated to the state, in most
cases.

------
shmerl
Good. It's really bizarre that some parties are so openly opposed to it, while
pretending they are pro competition. Do they not care, or they simply think
that public will eat that nonsense without second thought?

~~~
wmf
I think they're pro-business. They don't like competition in the form of the
government competing with business.

~~~
tzs
In the case of Chattanooga, one of the cities that petitioned for this, there
was little or no business to compete with. They want to expand their network
to outside the city limits, largely two areas that currently have either no
broadband at all, or only have low speed broadband.

This causes problems for the people in those areas. Schools assume students
have access to the Internet at home, and assign homework that requires
Internet for research. Parents have to frequently drive their kids to
McDonalds or church or someplace else with public Wi-Fi so the kids can do
their homework.

Tennessee does allow for a municipal electric company to offer municipal
broadband, which is how it works in Chattanooga, but it can only serve areas
where it offers electricity service which was why they could not expand the
broadband to the neighboring communities.

------
tessierashpool
this is fantastic news. the FCC is doing an amazing job right now.

