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| Business aspect Now I am going to play the devil's advocate for a moment. I think that part of what TWC and AT&T are concerned about is being able to cover their costs. Now, by far I am not expert for either the telecomm or the cable business. However, AT&T likely has much of their older equipment costs amortized over 20-30 years. I wouldn't be surprised if the cable companies do something similar for their plant and equipment which is quite expensive. Furthermore, they have corporate income taxes (state and federal and they are NOT CHEAP) and then add on top of paying for backbone capacity, power, employee salaries, transportation, benefits (insurance, retirement, pension, 401K, etc) and of course also the cost of trucks and vans to carry technicians to the sites where they work and for the tools they use. You can easily see where all this adds up into a monster mountain of expense in a time of economic thin for a lot of people who are also reducing the services they are willing to pay for (cancelling voice phone service and TV cable service). You can see that might head them in the direction down the road where they can see that (maybe not right right away) down the road they will have trouble making a profit. Then you have to answer to the shareholders, the board of directors, executives, and the CEO. No one wants that (not even me). So you see it does get quite complicated. If a local government that doesn't have the same expenses offers the same or better service at lower cost the private competitors would eventually lose money on service (partly due to spreading costs ahead over many years. a big investment for a private company). The private companies would have continued taxes and expenses that the local government does not. The privates would not be able to compete with that, then they lose business and then they wind up losing money, laying off people, contributing to unemployment, etc. I actually think that all of these things are true. But still, even with all that true why not make the service work to a high level? This is why the municipalities are starting their own systems. Customers want better service at similar cost especially with better availability and most certainly better upstream capability which fiber offers easily and the private ISP's cannot afford to upgrade to due to their longterm amortized costs for copper/POTS/DSL/Docsis1.0/Regular TV head end equipment. | | |
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iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Verizon Online DSL
 ·RoadRunner Cable
·Comcast
| All that said, you've got to think that TWC, which is maybe 500x the size of Fibrant even if Fibrant gets lots of subscribers in their area, has enough economies of scale to minimize equipment costs. Labor and taxes are different, but labor costs are likely similar between TWC and Fibrant when it comes to upgrading plant. Granted, the fact that we're talking about a city competing with a private entity levels the playing field a bit but you'd think that one of the largest ISPs in the world could get a decent deal on DOCSIS 3 etc. that would be capable of at least partially competing with fiber.
What's really funny is that privately-held Suddenlink tends to outdo TWC from a speed perspective these days, despite the fact that SL serves more rural, lower-population areas and has less subscribers overall. 107/5 vs. 50/5... | |
| That is very interesting about suddenlink. Despite playing devil's advocate for a moment I still don't think that the state of NC or the federal government has any business preventing a local government from providing this service IF the majority of local residences want it and also if it is setup to where people have to pay a monthly fee for the service to pay for it (so its not ALL provided by taxes). The point about an elderly person who would never use the service is actually a valid point though. Many of them are on a fixed (social security) income and have no desire for a computer much less for high speed internet. However, the tax expense to build the initial infrastructure spread over a reasonably large population should not be that bad on an individual basis (around 30,000 people in Salisbury and 50,000 in Wilson). Further, it should be up for vote as a referendum in an election. That is fair. In some towns in NC a referendum like that would DEFINITELY fail as the political and social leanings of different towns, counties and cities swing different directions (yes even in a southern state like NC, as the larger cities like Greensboro, Raleigh, Charlotte tend to vote heavily democratic and some other towns too and the rural and small town areas tend to swing toward the red side but even then there are some exceptions). | |
| None of it is provided through taxes. | |
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