
Municipal ISP forced to shut off fiber-to-the-home Internet after court ruling - johnhenry
http://arstechnica.com/information-technology/2016/09/muni-isp-forced-to-shut-off-fiber-to-the-home-internet-after-court-ruling/
======
grahamburger
I've spent most of my career (15+ years now) building and maintaining private
regional ISPs that compete with big TelCos, with considerable success. It's
surprisingly feasible to start an ISP in your garage with a few thousand
dollars and grow it to a few hundred customers just by providing decent
customer service and a working product. If you've ever been curious about what
it takes to get started with something like that I'm happy to answer questions
- here or email in my profile.

~~~
atomical
How common are regional wireless ISPs?

~~~
cookiecaper
There was a really small one that serviced half of my apartment complex in
Pleasant Grove, Utah back in 2006 or so. A colleague who lived in the same
complex told me about them. I called to see if I could sign up and the guy
came out to my apartment and told me that because my apartment faced the inner
courtyard, I wouldn't get good service, so he couldn't sign me up. :\

The ONLY internet access available was provided by the apartment complex
itself. I think they had a few T1s split between a couple hundred units. Even
10 years ago, that was still embarrassingly bad. It was unusable in the
evenings or weekends. You could do a traditional ARP spoof and read everyone's
traffic. Really bad stuff.

I had no option but to deal. I set up a VPN to protect and compress my traffic
and spent weekends at the homes of friends and family.

These days, I hear wireless ISPs are far more versatile and reliable. They're
great options for people who get stuck like I was (as long as your apartment
points the right direction!).

~~~
grahamburger
Lol, I grew up in Pleasant Grove. I might even know what complex you're
talking about :) small world.

------
openasocket
It should be noted that it's not like this ISP is shutting down, it's just
being barred from serving customers outside its county. This action shuts off
service for about 200 people, but the ISP will continue to serve over 7,000.
Still pretty bad, but not as bad as the headline makes it seem.

~~~
themartorana
How are government sponsored protectionist laws like this even legal? It's
very frustrating.

Edit: For further context, both towns wanted the service, which makes it even
more frustrating. If Wilson made its service private there'd be no issue.

Can a private enterprise be government owned? I guess not? How about a tiny
startup with one person operating billing and they call it a "private-public
partnership"?

I'm grasping at straws, I realize.

~~~
MR4D
What about a non-profit? Sort of a way around the issue.

Further, everything you buy avoids sales tax, so that alone gets you an 8%
cost advantage.

------
lucaspiller
> There are laws in about 20 states that restrict municipal broadband,
> benefiting private ISPs that often donate heavily to state legislators.

I'm not that clear on how US politics and 'lobbying' works, but why don't you
just call it what it is - a bribe? In this case 200 families will be back to
slow speeds and poor service ISP (who no doubt will be putting their prices
up) just because said ISP has enough spare cash to bribe the politicians. How
is that fair?

~~~
beagle3
As long as it's not "this favor for this donation", it is legal in the US and
not considered a bribe.

It's not even a bribe when constantly give donation but threaten to stop them
if the legislator doesn't follow your wishes [0]. The DOJ was petitioned to
investigate but refused to even look into it, so, (by fiat, or rather lack of
it) it is legal.

[0] [http://www.zdnet.com/article/chris-dodd-and-the-mpaa-
bribery...](http://www.zdnet.com/article/chris-dodd-and-the-mpaa-bribery-or-
politics-as-usual/)

------
jrowley
This seems like a fairly clean cut case of corruption. It's amazing how
external money can drive legislation and political action. Why would these
politicians ever try to block this on their own accord? Do they really fear a
government monopoly that much? Or maybe they just love small government (with
the exception of the military/military contractors, which need to be bigger of
course).

~~~
xupybd
I love small government. But if certain infrastructure makes more sense at a
municipal level ideology should go out the window. We don't have a lot of
private roads because it just doesn't make sense, the normal competition
driving efficiency model falls over because the most efficient solution
involves only one road per route ( over simplifying here ). I think the same
maybe true with the local loop of consumer level internet connections.

~~~
Ericson2314
A big difference is that roads are (roughly) a government monopoly— _reudcing_
competition while these municipalities are _adding_ competition.

The idea is that in poorly functioning markets the government can step in with
an alternative, especially one that is obligated to at least break even in
order not to stifle innovation, to restore the market.

This really ought to be a bipartisan idea. I beleive the Roosevelt institute
his written on this, let me find a link.

~~~
pitaj
Many would say that these markets are poorly functioning due to government
interference in first place, like these very laws, for instance.

~~~
Ericson2314
Traditionally, such laissez-faire views would distinguish government
constraining itself and government constraining the private sector, approving
of the former and not the latter.

But I'm down to look at both the same way (especially when, as I wrote,
government is constrained not to indefinitely run at a loss so as to play by
more similar rules).

That said, I know of little historical evidence that market competitiveness
restores itself in the absence of external meddling. The fact is in telecom we
are coming off a history of official monopoly, competition, and then a near-
reformation of the monopoly without the increased regulation to go with it. So
it sure as hell looks as if we backed off the controls and market-based
approaches failed.

Now it could be that post-deregulation and trust-busting, there was still too
much regulation, but again I don't often see laissez-faire views claiming that
government entry into the marketplace must be allowed. A middle ground that
I'm more receptive to is that a never-interfered-with market will always self-
correct, but past interference interference may have distorted the market into
an otherwise-unreachable state where self-correction is not possible. In that
case we should with heavy intrusion try to force the market into a good state,
and then slowly easy off the controls carefully monitoring to see if such
self-correction does occur.

Economic pontificating aside, with wired networks I think there is a
legitimate public interest in fewer redundant wires (like roads), and too much
incumbency advantage with the amount of infrastructure required, for me to put
much faith in market-based approaches. Wireless networks on the other hand
largely avoid those problems so I think that's a better area for them.

------
bcheung
One thing to point out that I think people are missing is that the ruling was
that a government could not operate a business in a different jurisdiction.

It has nothing to do with free market or net neutrality concerns.

~~~
jfoutz
It still seems weird. I can think of many small municipalities around here
that can't quite do things on their own. Sharing water, fire, police,
electricity, sewer, gas, roads, busses, trains, schools, hospitals and garbage
services with a larger town seems pretty reasonable. I mean, as long as it's
not forced on any of the participants.

The internet must be really dangerous in some way to require the special
regulation.

 _edit_

"Electric is provided with a contract with the City of Wilson, however
Pinetops owns and maintains all distribution lines to Pinetops citizens and
businesses." [1]

[1]
[http://pinetopsnc.publishpath.com/departments](http://pinetopsnc.publishpath.com/departments)

~~~
bcheung
It didn't sound like that was ruled out. If the other city wanted to contract
with them it would probably be possible.

~~~
jfoutz
"Wilson decided not to appeal the court decision and voted to terminate the
service agreement with the town of Pinetops, Wilson's city spokesperson,
Rebecca Agner, told Ars today."

The agreement looks like it was between the two towns. I wonder how it's
fundamentally different than electricity.

------
xupybd
How is lobbying still legal in the USA? Isn't it clear as day corruption,
where you pay for influence over the government? I thought Americans valued
freedom?

~~~
jomamaxx
'lobbying' just means individuals or groups speaking to their government reps.
There's nothing wrong with it.

It's when there's a disproportionate power imbalance that we run into
problems.

~~~
xupybd
Isn't there disproportionate power there now? Large amounts of money can be
used to employ full time lobbyists. These full time lobbyists mean you can pay
for influence that the ordinary citizen would not have the resources to
achieve.

~~~
jomamaxx
Yes, there is definitely a problem.

But 'lobbying' itself is not the problem.

------
johnhenry
Unfortunately, the idea of government assisted monopolies rarely makes it into
the net neutrality debate. :.

~~~
tn13
Net neutrality IS a government assisted monopoly but in the favor of consumer
instead of provider. I don't think people who support net neutrality will be
able to bring arguments in support of free market policies for ISPs.

~~~
daeken
> Net neutrality IS a government assisted monopoly

The definition of monopoly ("the exclusive possession or control of the supply
or trade in a commodity or service") makes this clearly false. Net neutrality
is a policy, supported by legislation that gives the FCC the power to enforce
that policy. In no way is that related to monopolies.

~~~
russell_h
Right, I'm not quite how you make the leap that "Net neutrality IS a
government assisted monopoly".

It does seem to me that net neutrality makes it effectively impossible for
ISPs to differentiate, because they're all compelled to sell the same product
- dumb pipes. This will likely make it difficult for two ISPs to exist in the
same market, but it doesn't preclude competitors from entering the market at
such time as the prevailing ISP becomes abusive. In other words, it's not
worse than the status quo.

~~~
duaneb
> It does seem to me that net neutrality makes it effectively impossible for
> ISPs to differentiate, because they're all compelled to sell the same
> product - dumb pipes.

If ONLY they viewed themselves as a dumb pipe, I could actually shop on
relevant metrics—price, availability, bandwidth, latency—and I would be happy
to switch to the best available ISP in the market. As it is, it's actually
very difficult to find any numbers on availability, bandwidth, and latency.

Instead, I'm forced to compare prices and offerings. The offerings are
actually an UPPER bound on bandwidth, rendering comparison meaningless for
comparing ACTUAL bandwidth. The pricing advertised is often not for internet
but some "bundle" of varied services, most of which will drastically increase
in price after the first year, and only one of which (broadband internet) I
actually want. For instance, I see ads for FiOS all over the damn
place—successfully suckering me in, I might add—but in spite of living in
residential, downtown city for the last eight years of my life I've never
actually found a place I can actually get fiber.

ISPs are already impossible to differentiate in terms of actual value. Selling
dumb pipes can only improve.

------
michaelbuddy
Followed by a more expensive subpar service. I typically lean towards getting
governmetn out of most business, but these muni ISPs have always struck me as
more grassroots democratic very american bootstrap sort of thing and
commercial ISPs who fail to serve their customers exhibiting very anti-
american behavior.

~~~
SwellJoe
If the major telco and cable companies weren't consistently the most hated
companies in the country...well, these things wouldn't spring up. There
wouldn't be sufficient drive among people to make it happen; it's _hard_ to
get something done in government. So, the fact that it has gotten done in a
number of municipalities should be taken as a warning sign for just how poorly
existing providers are doing their job.

Internet is a _necessity_ for participating in the modern economy. So,
companies that provide it, particularly when they hold a monopoly or are part
of a duopoly, wield a tremendous amount of power; or, maybe even worse, when
they have a strong enough hold on a given region but opt not to provide
broadband to some of their service area, making it nearly impossible for some
rural folks to even have broadband. They've shown themselves unworthy of being
trusted with such power, over and over again. It's unfortunate that
legislators in NC are complicit in that abusive behavior.

~~~
DasIch
These companies are doing their job perfectly. Extracting as much money out of
their assets as possible.

It would be ridiculous for them to waste any money by investing into their
infrastructure unless it enables them to compete better, increasing revenue
and profits.

They are acting in exactly the way you'd expect given how the economy is
designed. The problem are the rules politicians have setup which are designed
for a free market not for monopoly/duopoly situations. The only option you
have here is realistically is letting local government provide internet.

This way internet becomes part of the services municipalities provide and they
compete with each other in being an attractive location for businesses and
citizens, so they're incentivized to provide good and cheap internet. At least
as cheap and good internet as other places anyway.

~~~
michaelbuddy
Telcom companies are actually given government incentives to provide servies
in uncovered areas. Sadly they can also monopolize the way they get some of
the incentives by applying for and thus blocking out other competitors from
getting the same funds for the same areas. They also manage to tie up the
gov't in application processes (or rather the the gov't allows itself to be
tied up in these applicaion processes for incentives). It's true these
companies would rather continue collecting more money for less services,
increasing profits. Dosen't make capitalism so dark a concept. These are
unique situations because telecoms get to operate within the framework where
they can fight and get cancelled a homebrew ISP project in a community.
Spending resources fighting rather than actually building services with their
profits. Pretty sad.

------
dpark
What stops Pinetops from forming a municipal broadband corp that simply
subcontracts everything to Greenlight?

~~~
thyrsus
Wilson established its internet service before the law went into effect, and
probably paniced the monopolies into getting the law passed, since their
service was so utterly superior and cheaper in cost to anything the monopolies
offered. Wilson only barely managed to get grandfathered in; the law _also_
prohibits any new government provided internet service. Example: Chapel Hill,
NC was busy designing public WIFI service, but has abandoned that to the
incumbent Time Warner Cable monopoly WIFI. Oh, you don't have a TWC account?
Sucks to be you.

My opinion: the legislature is totally corrupt. The only silver lining is that
Google is (a) a "private" concern and (b) is coming to me in a few years. AT&T
is also competing right now, but their "fiber" turns into ADSL a few hundred
yards from the customer. The non-Research Triangle Park areas of the state are
screwed until Google can provide competition. It would be far better for
counties/cities to start that competition _now_.

~~~
jfoutz
I did a tiny bit of research this evening, because this sounded so crazy.

My opinion: People on the edge of wilson county should petition to redraw the
county line. Eroding the tax base might scare the legislature into being a
tiny bit more sane.

------
ams6110
I call BS on this:

 _The Vick Family Farms predicament was described in a recent New York Times
article. The business has used Greenlight 's faster Internet to support a
high-tech packing plant that automatically sorts sweet potatoes by size and
quality, with each spud tagged with its own bar code. “We’re very worried
because there is no way we could run this equipment on the Internet service we
used to have, and we can’t imagine the loss we’ll have to the business,” farm
sales head Charlotte Vick said._

Potato-sorting and tagging does not require internet access.

~~~
monitron
Maybe software updates? Remote monitoring/control? Something really off the
wall like sweet potato classification by cloud-based neural network computer
vision?!

------
beached_whale
I wonder if these municipal broadband networks can be sold to a new not for
profit that does the same function

~~~
20yrs_no_equity
I suspect the regulators who wrote the laws that are preventing this are wise
to your idea and its the actual right of way that they are going after. The
only advantage that a municipality has over a private company or not-for-
profit, is a monopoly on the control of rights of ways in their geographic
area. That's why municipality is can do this- private entities would have to
get their permission to install a network. And it would come at high cost.

~~~
Spooky23
With the right leadership, .gov has a ton of advantages.

These include:

\- Access to fewer-strings capital with bonding.

\- Lower staff turnover.

\- Better buying power and terms than a small/mid sized company.

\- No taxes

\- No profits

I used to run shared service offerings within a .gov. We almost always beat
market pricing for most things. S3 and O365 are the notable exceptions.

------
DasIch
I wonder if the necessary prerequisites for a free market will ever become
common knowledge. This approach of just not regulating markets in the hope
that a free market magically appears seems insane to me. It is like hitting a
screw with a hammer and hoping the screw turns into a nail before the hammer
connects. It never happens and you'll always get a huge fucking mess everyone
somehow is surprised about.

Health care is the best example. The only thing unexpected and worrisome about
it is that the executives at pharma companies have just now realized that they
can increase prices this way. Doesn't exactly speak well for their knowledge
of economics.

~~~
SomeCallMeTim
Saw a great talk recently that explained _there is no such thing as a free
market._

Any market needs government oversight and laws to _exist_. It needs government
(courts) to enforce contractual obligations. It needs infrastructure to
deliver goods (roads) and to run businesses (power; water; garbage; police).

All successful markets have rules. The so called "free market" proponents
simply lobby for the rules to be changed in such a way that those at the top
make _more_ money; they are almost never lobbying for extra actual net
freedom, but just a different skew to the rules so that they can take home
still more of the profits.

~~~
zzzcpan
Sounds like a pro-government propaganda. Illegal market places exist and
operate successfully despite breaking laws, hiding from the police and not
having anyone to enforce contractual obligations.

~~~
Spooky23
They tend to degrade into cartels. With the absence of courts, they do stuff
like decapitate the competition.

~~~
icebraining
When only people who are willing to risk imprisonment participate in those
markets, violence is to be expected, no? Extrapolating that to what would
happen in an actual absence of law seems unsound.

~~~
Spooky23
Violence is only one expression of lawlessness. Price fixing, divvying up
retail locations to minimize competition, etc are other more subtle things
that happen.

~~~
icebraining
I'm not sure there's evidence that price fixing without the State's help can
last for more than a few years, is there?

------
lifeisstillgood
"""There are laws in about 20 states that restrict municipal broadband,
benefiting private ISPs that often donate heavily to state legislators. """

Aha! And all became clear.

------
AnsemWise
I have nothing to add other than my voice of agreement about the clear
corruption of these laws.

What is the benefit, to the people of North Carolina, of restricting municipal
ISP growth? What rights are being protected by these laws? I am disgusted by
the clear disregard of the people of NC's interests, but also by the lack of
action by the people themselves.

------
plandis
This seems almost by definition of government working for corporations over
its citizens. What a sad day.

~~~
droopyEyelids
Now is the time for all good hackers to come to the aid of their country

------
Animats
This shutdown increases the "economic liberty" index slightly.[1]

[1]
[https://news.ycombinator.com/item?id=12518783](https://news.ycombinator.com/item?id=12518783)

------
vpeters25
I don't how how the actual law is written but maybe the Muni could just supply
dark fiber and allow private ISPs to provide the actual broadband service.

~~~
sitkack
Who is going to start a company to supply 200 people with Internet?

~~~
nickpsecurity
Maybe people like this:

[https://motherboard.vice.com/read/this-rural-community-is-
bu...](https://motherboard.vice.com/read/this-rural-community-is-building-its-
own-gigabit-fibre-network)

------
duncan_bayne
Good. The fewer coercively funded projects like these the better.

To describe this as "community" broadband as some commentators do is really
propaganda. Consider how absurd it'd sound if someone spoke of a "community
Air Force".

------
20yrs_no_equity
So long as there are levers of control, people will attempt to exploit them.
The government at every level, should have no power to prohibit entities,
whether government or not, from providing internet service.

Freedom of transaction is a basic human right (whether the Bill of Rights
talks about it or not, read the Preamble to the Bill of Rights and you'll see
the Bill of Rights doesn't create rights, according to the Bill of Rights, it
creates limitations on government from violating those rights.)

Even if you disagree with the above, the First Amendment is unquestionably
part of the constitution and thus this is a violation of freedom of speech
(internet is speech.)

~~~
ThrustVectoring
Freedom of transaction is not a basic human right - there are some markets so
abhorrent that the correct response is to imprison those who participate in
them.

Like, absolute freedom of transaction means that you could participate in
assassination markets. It'd even be structured in a way that the buyer could
avoid paying for performance - simply make a large payment available for
whoever happens to accurately predict the day of death for a certain
individual (and make the predictions expensive enough that you basically have
to kill them in order for it to be a good idea).

~~~
icebraining
A slightly more narrower statement of Freedom of transaction would be "if you
can do it for free, you may do it for money".

Assassination is illegal by itself, paid or not, so using it as an example
just confuses the issue. It's like saying Freedom of Speech is not a basic
human right because you can use speech to order someone to be killed.

