[SLL] Nationwide Internet: melting down?

[Ken Meyer]

I don't know the situation elsewhere with respect to the terms for local
video franchises, but the FCC does, I believe sincerely, wish to promote
competition to reduce rates.  It's just that it hasn't worked in cable any
better than in the telephone services have per the 1996 "reform" Act.  The
FCC approach is to promote competition by removing all the governmental
controls and oversight on the services, which they claim will induce new
entries into the field, but according to me and numerous others, on terms
that will be decidedly consumer unfriendly and net un-neutral.  They could
also "level the playing field" by, say, extending the common carrier
principles to the cable services, but not during this federal
administration.

In fact, the FCC's three-member Republican majority is now trying to put in
place an order that would demand a franchise for new video services be
granted within 90 days of the application (the order's applicability to
renewals is apparently still TBD).  If negotiations fail, the applicant
would be granted an "interim" franchise that would not contain the service
protections such as total build-out requirements and grants of public
channels, etc.  This is such an incredible farce, as anyone can see that
there is absolutely no incentive for any applicant to do anything but sit on
their hands for the 90 days.  The FCC adds insult to our intelligence to the
injury of the order.  Well, of course this is in the courts big time, with
claims that the FCC doesn't have the authority, and even that the action is
unconstitutional.  But, apparently, a stay on the enactment has just been
turned down in the court of first resort, and Congress is clearly wrapped
around the axle on other issues.

In any event, the situation in Seattle is that cable franchises are NOT
exclusive, and city would welcome competition by cable or other purveyors of
video services (some apartment complexes have apparently signed long-term
exclusive agreements though, which should be illegal but apparently are
not).   In any event, Comcas-tition is apparently not about to occur.

This is abundantly evident in the situation that has been brought to light
by the renewal process for Millennium Cable's franchise that is now
underway.  Millennium serves 160,000 potential folks in downtown Seattle and
some areas east and south.  There have been public hearings recently on the
renewal of this franchise, and the public comment on the service that has
been provided is just hair-raising.  Go to this link and watch (RealPlayer)
a swatch of the public hearings at Yesler Terrace on 7/30 (my 2 minutes of
input is close to the very end of this one) and at the Energy and Technology
Committee meeting on 7/25:


http://www.seattlechannel.org/videos/watchVideos.asp?program=EnergyTechnolog
y

Makes you even thankful for Comcast; that's how bad it is.

So, you would think that Comcast would just walk in here and wipe out the
Millennium presence without even breaking a sweat,  but they have declined
to do so.  Why?  Well, Tony Perez, Director of the Office of Cable
Communications, told the council that Comcast made a "business decision" not
to move in there, and that there may be, ah, "gentlemen's agreements"
between the providers not to compete, i.e. collusion in the restraint of
trade, if you could prove it.  Maybe they are just vultures waiting for the
council to deny the renewal to Millennium (which was just acquired by some
outfit named Wave) so they can buy Millennium's plant for pennies on the
dollar.

It is interesting to compare the rates for Comcast's "Basic Cable" package
in Seattle and Tacoma ("basic" is itself disingenuous as it is a package
that is 3x to 5x the cost of the minimum level of service available, which
Comcast calls "limited", even though everyone refers to the minimum level
generically as "basic").  In Tacoma, where there is competition from the
city-owned Click! network, Comcast's rate for "basic" is $20 a month, as I
recall, lower than in Seattle.  The added packages are comparable to
Seattle's rate schedule though.

Well, on the eastside, Verizon is slowly introducing FIOS, though I don't
think they are offering TV yet -- probably (I believe) waiting for the FCC
to scorch the regulatory earth in front of them.  However, Qwest is unlikely
to provide anything comparable in the foreseeable future because they can't
really afford it and because they may also be biding their time, waiting for
the FCC or other jurisdictions to scorch the earth before they move at all.
They did go to the state this legislative session and try to float a bill
for statewide franchising, but it didn't get off the pad.  Again, it was
amusing to see the cable lobby opposing this legislation and arguing FOR
local franchising.

Well, the cavalry may, or may not, just be thundering up the other side of
the hill.  Seattle's IT department and its cable office have been pursuing a
plan for the city to offer FTTH at 25 Mbps SYMMETRICAL, and to build-out the
entire city, starting with the 400+ miles of fiber the city already has
under its control.  However, they would team with private providers in this
effort to keep the cost down (total build-out estimates at $500M -- the cost
of one Sonics arena or one-third the additional cost of putting the viaduct
in a tunnel).  That mode of operation would also be an attempt to at least
quell some of the claims of unfair competition by "the incumbents", who
probably have the court filing papers for a suit already prepared.  This
effort is the outgrowth of the Broadband Telecommunications Task Force (or
Broadband Task Force or Task Force on Telecommunications Innovation), made
up of some pretty heavy hitters.  Its report is here:

	http://www.seattle.gov/cable/docs/SeaBTF.pdf

You may be aware that some states have been gotten-to by the incumbents'
lobbies and have prohibited governments from creating such services.  In
this state, utility districts have been prohibited from doing so, though it
appears that some are grandfathered.  On the other hand, a bill has been
introduced in Congress that would prohibit these prohibitions.  Been pretty
quiet on the western front though.

My intelligence, such as it is, is that a detailed proposal for implementing
this great initiative in Seattle has been submitted to the Mayor.  The staff
seems to believe that he will decide unilaterally whether to pursue this
avenue of creating competition without consideration by the Council, let
alone the citizens.  I don't understand that at all; but it is my jaundiced
opinion, based on quite a bit of advocacy effort, that this city operates on
a patina of democracy and interminable process that is floating on top of a
really autocratic and unilateral administrative foundation.  May be time to
bail.

And if I may be allowed a few sentences of pseudo-political rhetoric: I am
sure there are quite a few died-in-the-wool Republicans on this list, but
the current federal administration, and even the allegedly Democratic Mayor
of Seattle, you may have noticed, have strayed very far from the assumed
traditional Republican principles, and in any event, laissez-faire is
allowing the government/corporate complex to run amok as we are seeing in
the regulation, or not, of our beloved Internet access.

Should you vote in a knee-jerk fashion out of loathing for anything that
someone slaps the label "liberal" on, you are just going to encourage these
people.  Unfortunately, you can only improve things, I assert, by throwing
the bums out to send a message, and hope that when the party picks up the
pieces, they will be reassembled in a more traditional and centrist manner.
Possible example: the R's now criticize the D's for passing deficient ethics
reform legislation that is actually pretty extraordinary considering the
necessary compromises, whereas when they (the R's) controlled Congress,
ethics enforcement was only a sick joke.  Apparently, they got religion in
the process of losing.

Ken Meyer


-----Original Message-----

From: linux-list-bounces at ssc.com [mailto:linux-list-bounces at ssc.com]On
Behalf Of Glenn Stone
Sent: Friday, August 10, 2007 9:46 AM
To: linux-list at ssc.com

Subject: Re: [SLL] Nationwide Internet: melting down?

On Fri, Aug 10, 2007 at 09:11:59AM -0700, Ken Meyer wrote:

>Government (i.e. the FCC) certainly abets the monopolistic qualities of
>cable providers, but how else does it subsidize them, Glenn?

The FCC abets cable's monopoly status.  The local governments *establish* it
by allowing only one franchisee per region; the subsidy is not so much a
direct one as an indirect one, in that cable operators do not have to
compete amongst themselves.  Of course, these days they *do* compete with
sattelite operators for TV, and with telco for everything else, which rather
limits how much they can rook the customers... but truth be told, when you
read the fine print, it only limits the introductory price, not the price in
the fine print.  (Sure it's $25/mo for the first x months.  After that and
forevermore you'll pay about double that.  Quadruple if you want real
customer service.)

ObLinux:  I'm looking forward to seeing the networking ideas incorporated
into the OneLaptopPerChild project making it into first-world, grown-up
PC's... if there were a good mesh network around here, I would so be into
it... the way to "get" monopolies as to treat them as censorship and route
around them.

-- Glenn