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Thursday, 22 May 2014 09:26

For-Profit ISPs Are Trying to Prevent Cities From Offering Faster and Cheaper Net Service

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ainter455(Photo: hdzimmermann)If you want to know what a difference a municipally owned internet service can make, just look to Chattanooga, Tennessee. In an article on CNNMoney entitled, "Chattanooga's super-fast publicly owned Internet," journalist James O'Toole describes how Chattanooga is providing the gold standard of internet access, while commercial Internet Service Providers (ISPs) are leaving consumers in the dust, in terms of speed and service:

Chattanooga, Tenn., may not be the first place that springs to mind when it comes to cutting-edge technology. But thanks to its ultra-high-speed Internet, the city has established itself as a center for innovation -- and an encouraging example for those frustrated with slow speeds and high costs from private broadband providers.

Chattanooga rolled out a fiber-optic network a few years ago that now offers speeds of up to 1000 Megabits per second, or 1 gigabit, for just $70 a month. A cheaper 100 Megabit plan costs $58 per month. Even the slower plan is still light-years ahead of the average U.S. connection speed, which stood at 9.8 megabits per second as of late last year, according to Akamai Technologies.

"It's really altered how we think of ourselves as a city," said Chattanooga Mayor Andy Berke. "We're a midsized, southern city -- for us to be at the front of the technological curve rather than at the tail end is a real achievement."

As federal officials find themselves at the center of controversy over net neutrality and the regulation of private internet service; providers; like Comcast, Time Warner Cable, Chattanooga offers an alternative model for keeping people connected. A city-owned agency, the Electric Power Board, runs its own network, offering higher-speed service than any of its private-sector competitors can manage.

A November 2013 SlashGear.com article states bluntly: "The vast majority of the US is left with some of the slowest broadband internet speeds in the world. The US ranks 31 on the list of speediest broadband countries according to Speedtest.net."

So why aren't municipalities across the nation setting up wireless systems for the 21st century at affordable prices - networks that will, as in Chattanooga’s case, also induce businesses to locate in municipalities with cutting-edge internet?

The answer, of course, is that corporate ISPs are legally stifling public competition. Their goal is to make a bigger profit by creating monopolies with mediocre speeds and high monthly charges. In an article, "ISP lobby has already won limits on public broadband in 20 states," arstechnica.com explains:

It's no secret that private Internet service providers hate when cities and towns decide to enter the telecommunications business themselves. But with private ISPs facing little competition and offering slow speeds for high prices, municipalities occasionally get fed up and decide to build their own broadband networks.

To prevent this assault on their lucrative revenue streams, ISPs have teamed up with friends in state legislatures to pass laws that make it more difficult or impossible for cities and towns to offer broadband service.

Attorney James Baller of the Baller Herbst Law Group has been fighting attempts to restrict municipal broadband projects for years. He's catalogued restrictions placed upon public Internet service in 20 states, and that number could be much higher already if not for the efforts of consumer advocates.

Some state restrictions have been in place for decades. A new wave of state laws were passed in the years after the federal Telecommunications Act of 1996 was passed, Baller told Ars. Another wave of proposals came after a US Supreme Court decision in 2004 that said the Telecommunications Act "allows states to prevent municipalities from providing telecommunications services."

In essence, the for-profit ISPs are restricting competition in the marketplace - from public providers (and remember the internet was largely created through public research) - in order to impose inferior service and higher prices on consumers. Also, to no one's surprise, according to arstechnica.com, the infamous American Legislative Exchange Council (ALEC) is facilitating the passage of laws prohibiting enhanced and less expensive internet service by publicly run entities.

For the purposes of challenging the argument that corporations provide more efficient and less expensive service than government, we have already shown that in the case of the internet in the United States, the private sector is behind the rest of the developed world in speed and cutting-edge services.

What about pricing then? I went through the Comcast process, in which I was offered a price online (the URL may show different pricing based on your location), and found that I would have to pay $89.99 a month in my area for the first year and up to $114.95 thereafter for a speed of 105 mbps. That is one tenth the speed Chattanooga is offering for $70 a month. For a 100 mbps (just 5 mbps less than Comcast), Chattanooga is offering a plan at $58 per month, less than half the Comcast fee after its 12-month first-time user promotion.

What does this comparison reveal? It shows that the for-profit companies want you to pay predatory pricing for a far inferior product. And that product is vital to the future of our nation in terms of business competitiveness.

For-profit companies want to hold this nation back in order to pad their earnings. Such larceny and hampering of the entrepreneurial growth of this nation is nothing less than economic treason.

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