Incumbent Dirty Tricks In Wilson, NC > Has anyone bothered to read the bill?

reply to Go Tarheels

Re: Has anyone bothered to read the bill?

On the tax issue, the easy answer is to stop collecting taxes from Embarq and TW. The problem with your argument about trash and water, is that there is no one who competes with them in the City limits. You will have 2 direct competitors, not to mention several small independent ISP's that have to compete with gov't backed service. Making it an even playing field is all this does.

Nope - you haven't convinced me. This isn't an Olympic competition or a horse race. All the players do not have to be equal. There are some things a government has the advantage in and one is that they don't pay taxes.

I would really like to see an economic analysis of why Utopia isn't working in Provo as that seems to be the ideal model. Let the government build the 'tubes' and let any ISP/Telco/Cable Company/Content Aggregator that wants to serve those residences. That's an equal playing field.

What I suspect is happening is that the cablecos and telcos realize that they can't compete on content, price and service; that they need the artificial scarcity of being the only supplier in order to run through those annual price increases they've become addicted to.

Even if I were to agree with your point, the tax provision is not the biggie. It is item 3. They want local gov't funds to backup any loss they take in on income. The reason is b/c they would have to end up selling at a loss and paying off creditors with tax money anyhow.

Just like the trash pickup guys, this will eventually run private business (TW and Embarq) out of town if successful as it did with Bob's Trash pickup when they started collecting trash. If that is what the people of Wilson want, then thats that. However with the electrical debacle that Wilson got themselves into (google electricities), I would think most folks would not trust their local gov't to handle another utility.

reply to travelguy
And just as an aside, I'll share the following. It's not germane to the subject at hand as it pertains to a private enterprise, but interesting just the same.

The Phoenix Cardinals NFL team does not allow cell companies to install equipment on their property. Instead of having hundreds of antennas hanging around the stadium with varying levels of coverage, they installed a single common antenna system that provides great coverage everywhere (inside and out) of the stadium.

Anyone who wants to serve that property must contract with the Cardinals, and interface at a common location about a mile away. The Cardinals take things from there.

That kind of model can work...

reply to Go Tarheels
The problem here is that, in order to run Greenlight out of business, the telco/cableco duopoly might well lower prices to below cost for "as long as it takes". Now I'm not saying other utilities should subsidize broadband, but to get the 'net out there Greenlight might need to price the service below cost for a bit, especially if the cableco/telco decide to offer screaming deals to prove their talking point that muni broadband isn't a good thing.

reply to travelguy
"(3) Shall not subsidize the cost of providing communications service with funds from any other noncommunications service, operation, or other revenue source, including any funds or revenue generated from electric, gas, water, sewer, or garbage services, but excluding funds from State or federal grants and other governmental stimulus programs. In complying with this requirement, a city owned communications service provider shall not price any communications service below the cost of providing the service."

I'd guess the main problem is #3. Incumbents cross subsidize all the time. Comcast can offer internet & phone services BECAUSE they had cable tv services in place. Similarly, AT&T can offer TV services on the back of its internet & phone services.

As to Utopia, its main problem is that it can offer services directly (only wholesale) versus competitors that can. Its being held back from the most profitable end of the business - services.

Yep - I can see both sides of the argument. The incumbents do not want to compete against an entity with essentially unlimited funds through taxation. OTOH, the incumbents have already decided that they can't provide the services requested. I've not seen any governments jumping at building a broadband delivery system when a modern system already exists. The current situations are a bit like a little kid grabbing his ball and running home, saying that if he can't set the rules then no one can play.

As to Utopia, like I said a bit further up, I'd really like to read a disinterested third party analysis of that situation. Seems like some BYU business professor could do a great service with that as a grad student project.

I'm not so sure they should be wholesaling anything (if they are) and their objective ought to be to just break even on the infrastructure costs. Let the content/service providers bring the content to Utopia's network and let Utopia manage the physical delivery of the bits to the house.

Shoot - Utopia shouldn't even need to manage connections or system maintenance. Connections could be done by the providers themselves under rules established by Utopia and maintenance could be contracted out as well. Basically a physical plant management contract that someone like Qwest could bid for, if they really wanted to.

reply to iansltx

That's the basic flaw in the the model that assumes the municipality operates a system that will compete with private enterprise. Both parties could conceivably operate their systems below cost for different reasons. There are thousands of privately run water systems in this country and many more publicly run systems, but I'd be willing to bet that there aren't any places where you have a choice.

I don't think the model of a government run cable/internet/phone system is fatally flawed. If that is what a community wants, more power to them. They can fund construction and operation any way they want and it doesn't have to be break even. Just don't expect an overbuilder to come in and compete.

It would be interesting to run the numbers on what it would take to run the infrastructure as a government sponsored enterprise with zero content or retail face, and let whoever wanted to provide services over that network do so. The services companies would trade the capital investment in physical plant for a monthly cost based recovery charge.

But the more I think about it, even if the economics worked I'm not sure they would want to as the barriers to anyone else offering a competing service over the same network would be next to nothing.

reply to travelguy

You're right - forgot that Provo opted out, but it doesn't change the request. Make that "I would really like to see an economic analysis of why Utopia isn't working as that seems to be the ideal model."

Provo is serviced by iProvo which was sold off to a private company.

reply to travelguy