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iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Comcast
| reply to Go Tarheels
Re: Has anyone bothered to read the bill? 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. | |
| said by iansltx: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. Good point. There is nothing stopping Time Warner or any other cable provider from pricing their offering in Wilson artificially low to lure customers from the competition. It would be easy enough for TW to set their prices lower in Wilson and offset the losses in that area with earnings from other areas (pretty much what they are trying to prevent Wilson's Greenlight from doing).
I personally think Greenlight should be beholden to the same laws as any other carrier. They should operate as a independent, self sustaining entity. But it's the incumbent ISP's I'm worried about. They have absolutely no credibility. The proposed bill may be fair but knowing who's behind it and their history is cause for concern. Look at the facts: Greenlight hasn't created any "consumer groups" to lobby their position, they haven't used push polling to "educate" the public and spread misinformation. This has been the ploy of incumbent ISP's looking to prevent competition and protect their piece of the pie.
A quick check of both the City of Wilson's and Time Warner Cable's website shows the real reason why TWC has so much to fear. For $99.85 TWC offers cable, phone and internet (their Lite tier at 768K, amusingly offered as "high speed"). For a mere $0.10 more, Greenlight offers phone, cable (5 channels more than the cable company per their website) and internet (real internet, a 10Mbps symmetrical connection). The only way TWC competes is by lowering prices or offering a similar/better service, something they haven't had to do in a long time.
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1 edit | 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. | |
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