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Well it’s pretty hard for private businesses to compete against a municipal ISP. A business has to covers its cost with the fees charged to its customers. A m

Well it’s pretty hard for private businesses to compete against a municipal ISP. A business has to covers its cost with the fees charged to its customers. A municipal ISP has to cover its cost with the combination fees charged to its customers and subsidies from local government (which are charged to all citizens through taxes, whether or not they use the municipal ISP). Not exactly an enticing business proposition to compete against a company that gets to charge your customers money whether or not they use the competitors service. So unless the municipal ISP is so horribly inefficient that a private entity can compete with them on pricing despite the lack of subsidies, presence of a municipal ISP will lead to a municipal monopoly. I suppose there is also the case of a municipal ISP that receives no government funding, in which case what is the point of the government here? Also, I have never heard of such an arrangement in practice so when people refer municipal ISPs, they are likely referring to government subsidized ISPs.

subway 8y ago
Rather than a full on ISP, I think I'd prefer to see municipal NSPs. The municipality should be concerned with passing packets within the municipality. When an end user needs packets routed outside the municipality, they engage with an ISP connected to the municipality's network. This ends up operating very similarly to the way CLECs have allowed 3rd party ISPs to provide DSL service. The end user has a modem that attached to the CLEC's ATM network, then a PPPoE connection transits the ATM network to the user's ISP. With a municipal NSP, you effectively acknowledge the municipal cable plant and switching fabric as a natural monopoly, while allowing competing ISPs to provide internet transit.
shkkmo 8y ago
> Also, I have never heard of such an arrangement in practice so when people refer municipal ISPs, they are likely referring to government subsidized ISPs. Did you not read the article? EPB is a government owned company and operates at a profit. They seem to be doing a much better job providing high speed coverage to their customers than large publicly traded companies like Comcast.
- jaredklewis 8y ago
  I can read just fine, thanks. I think EBP is great, but it doesn't really contradict anything I said as EBP received more than $100 million in free federal grants to use in building out its initial fiber optic infrastructure. I'm not against municipal ISPs, but I think government backed businesses are generally going to turn into monopolies, contrary to the parent's comment.
  - shkkmo 8y ago
    > EBP received more than $100 million in free federal grants to use in building out its initial fiber optic infrastructure. A grant is not (technically) a subsidy and I would suspect that the majority of ISPs building infrastructure have received federal grants in some form or another. The difference is that EPB actually provided gigabit speeds instead of taking the money and making excuses. > I think government backed businesses are generally going to turn into monopolies, contrary to the parent's comment. That may be true, but I think they are less likely to become monopolies when they are government owned than when then are owned by a mega-corp. Sure, if you already have several small, privately-owned networks in your area offering gigabit speeds then introducing a municipal competitor may increase your odds becoming a monopoly dominated area. Communities like that are the outliers though and not a valid reason for state legislatures to prohibit municipality owned broadband.
knieveltech 8y ago
Case study in brief: Residents of Wilson, NC were unable to purchase quality high-speed internet access at any price. The incumbent near-monopoly private ISP in the state was disinterested in servicing rural communities to any significant degree, citing "cost of infrastructure" as their primary reason to neglect these markets. Eventually the folks in Wilson got tired of ISDN-equivalent internet access and took matters into their own hands. The municipality floated a bond, contracted to lay fiber, and within a couple years had most of the town wired up with some of the fasted connectivity anywhere on the eastern seaboard. Then (and only then) Time Warner steps in and starts pressuring state legislators to do something because "government shouldn't compete with private industry". HB 129 was drafted, passed the GA, and the governor at the time, while refusing to sign the thing, also refused to veto it. Wilson's ISP was forced to halt expansion despite several other local rural communities interest in getting added to the network. Internet access in eastern NC still sucks, with no remedy in sight.
crdoconnor 8y ago
>Not exactly an enticing business proposition to compete against a company that gets to charge your customers money whether or not they use the competitors service. The less enticing it is to be comcast the better. The government can play a valuable role being a "competitor of last resort" in stagnant markets. I remember when I lived in Singapore (where the government builds a large quantity of social housing at a reasonable quality), the average quality of private housing would be considered stellar elsewhere - simply because the government had set the bar so high.
jellicle 8y ago
The much more likely situation is that a municipal ISP can undercut the competitors on price charged to the public and still throw off a healthy profit to the local government (opposite of a subsidy). Which is why Comcast et al. are so vigorously opposed... they like the current low-competition system.
s73v3r_ 8y ago
"Well it’s pretty hard for private businesses to compete against a municipal ISP." No it's not. All they have to do is provide better service for a good price. Same as any other competitor. "A business has to covers its cost with the fees charged to its customers." Most municipal ISPs are the same.
gowld 8y ago
Local utilities (water, trash, gas, electric) are often provided by municipalities, funded by users. There's no reason they must rely on subsidies from non-user-fee tax sources. USPS is a government agency, and even has a legally protected monopoly on first-class mail pricing, and still gets plenty of competition. What's the point of non-subsidies municipal utilities? Accountability. It uses the structure of government to facilitate cooperative ownership.

subway 8y ago

Rather than a full on ISP, I think I'd prefer to see municipal NSPs. The municipality should be concerned with passing packets within the municipality. When an end user needs packets routed outside the municipality, they engage with an ISP connected to the municipality's network. This ends up operating very similarly to the way CLECs have allowed 3rd party ISPs to provide DSL service. The end user has a modem that attached to the CLEC's ATM network, then a PPPoE connection transits the ATM network to the user's ISP. With a municipal NSP, you effectively acknowledge the municipal cable plant and switching fabric as a natural monopoly, while allowing competing ISPs to provide internet transit.

shkkmo 8y ago

> Also, I have never heard of such an arrangement in practice so when people refer municipal ISPs, they are likely referring to government subsidized ISPs. Did you not read the article? EPB is a government owned company and operates at a profit. They seem to be doing a much better job providing high speed coverage to their customers than large publicly traded companies like Comcast.

jaredklewis 8y ago
I can read just fine, thanks. I think EBP is great, but it doesn't really contradict anything I said as EBP received more than $100 million in free federal grants to use in building out its initial fiber optic infrastructure. I'm not against municipal ISPs, but I think government backed businesses are generally going to turn into monopolies, contrary to the parent's comment.
- shkkmo 8y ago
  > EBP received more than $100 million in free federal grants to use in building out its initial fiber optic infrastructure. A grant is not (technically) a subsidy and I would suspect that the majority of ISPs building infrastructure have received federal grants in some form or another. The difference is that EPB actually provided gigabit speeds instead of taking the money and making excuses. > I think government backed businesses are generally going to turn into monopolies, contrary to the parent's comment. That may be true, but I think they are less likely to become monopolies when they are government owned than when then are owned by a mega-corp. Sure, if you already have several small, privately-owned networks in your area offering gigabit speeds then introducing a municipal competitor may increase your odds becoming a monopoly dominated area. Communities like that are the outliers though and not a valid reason for state legislatures to prohibit municipality owned broadband.

knieveltech 8y ago

Case study in brief: Residents of Wilson, NC were unable to purchase quality high-speed internet access at any price. The incumbent near-monopoly private ISP in the state was disinterested in servicing rural communities to any significant degree, citing "cost of infrastructure" as their primary reason to neglect these markets. Eventually the folks in Wilson got tired of ISDN-equivalent internet access and took matters into their own hands. The municipality floated a bond, contracted to lay fiber, and within a couple years had most of the town wired up with some of the fasted connectivity anywhere on the eastern seaboard. Then (and only then) Time Warner steps in and starts pressuring state legislators to do something because "government shouldn't compete with private industry". HB 129 was drafted, passed the GA, and the governor at the time, while refusing to sign the thing, also refused to veto it. Wilson's ISP was forced to halt expansion despite several other local rural communities interest in getting added to the network. Internet access in eastern NC still sucks, with no remedy in sight.

crdoconnor 8y ago

>Not exactly an enticing business proposition to compete against a company that gets to charge your customers money whether or not they use the competitors service. The less enticing it is to be comcast the better. The government can play a valuable role being a "competitor of last resort" in stagnant markets. I remember when I lived in Singapore (where the government builds a large quantity of social housing at a reasonable quality), the average quality of private housing would be considered stellar elsewhere - simply because the government had set the bar so high.

jellicle 8y ago

The much more likely situation is that a municipal ISP can undercut the competitors on price charged to the public and still throw off a healthy profit to the local government (opposite of a subsidy). Which is why Comcast et al. are so vigorously opposed... they like the current low-competition system.

s73v3r_ 8y ago

"Well it’s pretty hard for private businesses to compete against a municipal ISP." No it's not. All they have to do is provide better service for a good price. Same as any other competitor. "A business has to covers its cost with the fees charged to its customers." Most municipal ISPs are the same.

gowld 8y ago

Local utilities (water, trash, gas, electric) are often provided by municipalities, funded by users. There's no reason they must rely on subsidies from non-user-fee tax sources. USPS is a government agency, and even has a legally protected monopoly on first-class mail pricing, and still gets plenty of competition. What's the point of non-subsidies municipal utilities? Accountability. It uses the structure of government to facilitate cooperative ownership.