TELECOM Digest OnLine - Sorted: ISPs and Telcos Attempt to Stop Public Broadband

ISPs and Telcos Attempt to Stop Public Broadband

Lisa Minter (
Fri, 24 Jun 2005 12:58:23 -0500

by Tom Spring

When tiny north Kansas City, Missouri and several other small towns in
Kansas and Missouri, announced that they planned to offer affordable
high-speed Internet access much the way it does other public services,
local attorney Brian Hall was ecstatic. Though Hall could get DSL
service from SBC Communications, he says that he found the service
unreliable, supplying lower speeds than he expected. But then goliath
Time Warner Cable asked a Missouri federal court to block the city's

Time Warner's initial case was dismissed, but the company appealed the
ruling and vows to stop North Kansas City from offering services it
plans to provide residential customers later this year.

Other cable and telecommunications companies are fighting similar
battles in major cities and rural communities across the United
States, to prevent the municipalities from supplying their residents
with fast, low-cost reliable Internet access, either via wireless or
high-speed fiber wired networks. In places where no laws currently
prohibit a city or town from entering the broadband-provider market,
the companies are lobbying for new legislation that would.

If a municipality can offer Net access at lower prices than most
telephone and cable TV companies, why shouldn't it,
municipal-broadband advocates argue. The opponents counter that cities
would have an unfair competitive advantage and that service and
support might not be as good as that from private companies.

Case for the City

Cities see wireless broadband as a low-cost way to offer low-income
residents Internet access. High-speed offerings are good for local
businesses, schools, and hospitals, they argue, and make the community
a better place to live. And when private industry can't or won't give
the service, how can you blame the city for doing it, asks Jim Baller,
an attorney who represents municipalities.

Lafayette, Louisiana, mayor Joey Durel says that his city "begged" its
phone and cable companies for years to wire it with fiber-optic access
-- to no avail. The city now plans to build its own fiber network, but
Bell South and Cox Communications have filed court motions to stop the
plan. Independence, Kansas is in the same prediciment.

"The practices of corporate telco and cableco are hurting communities
like Lafayette," he says.

Durel says a Lafayette-owned fiber network delivering Internet, cable
TV, and phone service would save residents over 20 percent on their
monthly bills, and would let the city give its schools fast Net

The Opposition

The municipal Internet trend is irking giants such as Bell South,
Comcast, SBC, Time Warner Cable, and Verizon Communications. SBC
representative Marty Richter says basic policy and conflict-of-
interest issues arise when government enters markets where it can tax
and regulate its private-sector rivals, making the competition unfair.

However, cities and towns can't regulate telecom providers or ISPs --
that's up to state and federal agencies. Cities do regulate cable
franchises; but where cities offer such services, they are still
subject to state and federal rules, says attorney Baller.

Though it has acted to block municipal Wi-Fi efforts in Philadelphia,
Verizon says it is prepared to compete with municipalities. Verizon
says it can do a better job of network management and customer
care. "Cities need to go into these projects with their eyes wide
open," says Eric Rabe, spokesperson for Verizon. SBC plans the same
agressive approach against towns in Missouri and Kansas who try the
same thing.

Many of these networks have high up-front costs -- the Lafayette plan
will cost $125 million -- and there will be service and maintenance
costs. If too few users sign up, revenue may not cover upkeep costs,
and the city will lose money. This year, for example, Washington
State's Whatcom County had to sell its unfinished fiber system for
$126,000 after spending $2.3 million on it. Private firms jumped in
and saturated the broadband market, say county representatives.

Besides, "do you really want to call city hall when your Internet
access goes down?" Verizon's Rabe asks.

For Mayor Durel, who says service from his local phone company is
awful, the answer to Rabe's question is yes.

Copyright 2005 PC World Communications, Inc.

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[TELECOM Digest Editor's Note: Here in southeast Kansas, the city of
Coffeyville has been in charge of electrical power for many years.
They've offered to help Independence with the same arrangement, but
Westar, the electric utility for much of eastern Kansas has been
objecting. Independence has thought about fiber, wifi and municipal
broadband for quite a while now, but Southwestern Bell (SBC) has been
fighting us every step of the way. SBC claims 'our DSL service is
good enough for you' and they were the main objectors when Cable One
took over the cable internet service here from Time Warner a couple
years ago.

Of course, Bell's DSL also requires that people be locked in to Bell's
crummy telephone service also, where with the other providers of phone
service here, Prairie Stream and Gage, they are more than happy to
work along with either Cable One or the Dish network, as well as Cox,
the cableco serving Coffeyville. They are all good corporate citizens;
I do not know why SBC has to be so hateful toward our entire community.
I know they fought furiously against allowing Prairie Stream to go in
business here, and they thought 'for sure' the Kansas Commission would
be on their side; imagine their surprise when the Commission gave
approval not only for just Independence, as Prairie Stream originally
started out, but for _any_ community in Kansas where Southwestern Bell
was the telco 'of record'. Then the Commission later said competition
would be allowed in the United Tel/Sprint territory for the rest of
Kansas as well. That should have told SBC where they stand here in
Kansas, but I guess they did not get the hint. Now Prairie Stream has
their little switches all over the state. They have a 2000-line switch
here in Independence for example, which serves our town and elsewhere
in Montgomery County. Great service, and super-cheap rates, local
service (ported through our 'traditional' exchange here in town
[620-331]) and 100 minutes of long distance service as part of the
package. PAT]

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