The Bottom of the Internet Pipeline

| January 31, 2013

internetby Tom Campbell

According to the Federal Communications Commission, North Carolina finds itself in the unenviable position of being at the bottom, tied with Mississippi, for having the lowest number of households with basic broadband connections. Too many homes and businesses are stuck with outdated cable and DSL networks because of a lack of competition.

High-speed broadband requires a huge capital investment, costing a million dollars or more per mile of fiber optic cable. Small private-sector companies neither have that capital nor the ability to withstand competition from the large, out-of-state corporations that comprise almost all the players in this broadband field and big companies don’t compete against each other in this virtual monopoly arena.

Neither are these companies investing in and improving their networks at the same pace as they do in states where there is more competition. Wilson, Davidson, Salisbury and Morganton tired of asking providers for high-speed Internet throughout their corporate limits and decided to build their own systems. Not only did these municipal systems improve the speed but also saved customers as much as $250 per year. Customers benefitted from the competition and fled the slower, more expensive provider in favor of the community owned networks, prompting the cable company to improve service and lower their prices in Wilson. To stop the spread of this practice the big companies lobbied to prevent more municipalities from getting into broadband service on the grounds municipalities were able to borrow money at cheaper rates, they were too inept and the public sector should not be in competition with the private sector.

House Bill 129, passed by the legislature in 2011, prohibited municipalities from building community owned networks. It was pay-to-play politics at its worst as big companies like Time-Warner, AT&T, Embarq and CenturyLink reportedly contributed more than one million dollars in campaign contributions to legislators. The big corporate providers got the bill passed and North Carolinians got higher prices, fewer jobs created and slower services.

While generally true that the public sector should not compete with the private sector there must be some exceptions when the private sector cannot or will not provide needed services at competitive prices. Let us remember the first electric service in most towns came from municipally owned power plants and today municipalities provide most water and sewer systems, fire, rescue and police protection.

Governor McCrory has often said high-speed broadband service is part of our infrastructure, like roads, bridges, water and sewer and public buildings. We need to greatly improve our state’s infrastructure, especially ensuring high-speed broadband service. The Internet now plays a major role in our economy and it grows daily as businesses become more dependent on it. Citizens are increasingly turning to the Internet for news, communication, shopping and research. And one reason why many public schools cannot convert to the new technologies of laptop computers and online software is because so many communities do not have high-speed Internet with access for students to do homework and research, putting them at a competitive disadvantage.

This is another example that bigger is not better. We owe it to our citizens to remove barriers, improve speed and service, lower prices and improve competitive broadband services. We cannot afford to be at the bottom of the Internet pipeline.

Category: NC Stateline, SPIN Blog, SPIN This Week

Comments (1)

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  1. David Vernon says:

    This article, though it is correct, understates the degree to which NC residents are lacking broadband. The situation is actually much worse. Many residents (myself included) not only do not have options when choosing a broadband provider, MANY have no options. The FCC has overreported broadband access in NC and possibly across the US. Here are three examples:
    1. The National Broadband maps that show where broadband is available are generated based on US Census blocks. If any street or road in a given block has access, the entire block’s population is counted as having access. So, if a provider like AT&T runs dsl (which counts as broadband)to one street, many more are counted in the survey, even if AT&T has no plans to provide service in the future to the other areas. This situation is happening in my county.
    2. If a provider has limited broadband connections to a neighborhood (example: a neighborhood system may only be capable of 90 houses on a given set of hardware), then there may be a waiting list of customers that have little or no chance of getting broadband, even though they are counted as having “access”. This situation is happening in my county.
    3. AT&T has now announced plans to drop most of its current dsl customers (forget about them adding more, they have stated plans to drop their dsl service (announced Nov, 2012)). Why? They envision wireless access as reaching more people and without the upkeep involved with landlines(or fiber). Sounds good, right? But where are all of the towers, how many towers will be needed, and once again, how will the FCC count “access” once these towers (if they are built) are in operation? We know from our experience in rural areas that holes exist in wireless networks….. and that’s assuming a network is built. AT&T has little or no presence in the wireless footprint in my county. Thanks Verizon, for at least trying.

    Thanks Mr. Campbell for pointing out how AT&T and its competitors are keeping out competition, providing a lower quality broadband at higher prices, and worst of all, deciding which communities will not have any access. Broadband is essential for economic growth and relevance today.

    If you do not agree, I challenge you to turn off your own broadband access for a month and live in a world that my community has been told to accept. Mail me a letter to let me know how your experience turned out.