Critics of Obama FCC transitioner Susan Crawford have correctly pointed out that she’s made some odd-sounding remarks to the effect that Internet access is just another utility, like water, power, or sewer service. If the intent of this remark is to suggest that everybody needs access to the Internet these days, just as much (or nearly as much) as we need electricity and running water, nobody has much of a problem with this observation, other than standard hyperbole objections.
But utilities in the USA tend to be provided by the government, so it’s reasonable to draw the implication from Crawford’s comparison that the government should be providing Internet access. This interpretation is underscored by her frequent complaints about the US’s ranking versus other countries in the broadband speed and price sweepstakes.
If you continually advocate for more aggressive spending to win a supposed international broadband arms race, you minimize the effectiveness of private investment, and you tout the planet’s fastest and cheapest Internet service as a necessity of life, you’re going to be regarded as either a garden-variety socialist or an impractical dreamer.
Some people have taken this “utility” notion to heart, obviously, and have launched various campaigns to bring publicly-funded Internet service to American towns and cities, with decidedly mixed results. Some small towns like Morristown, TN, (a place where I spent a good deal of my childhood,) have been successful in bringing fiber-to-the-home ahead of their telephone company’s schedule by passing revenue bonds and spending large sums of money. Other towns have been much less successful, creating half-built and poorly run network fragments that have to be sold to private companies to provide any service at all.
Another such example has turned up in Alameda, CA, a little island town south of Oakland. Alameda Power and Telecom built a muni cable system that’s just gone bust:
Comcast Corp. has put in the winning bid to buy the financially strapped municipal cable operation run by Alameda Power & Telecom in the San Francisco Bay Area.
According to a report this week by the muni, Comcast will pay $15 million for the system, which has 9,500 video customers and 6,600 data customers in the community east across the bay from San Francisco.
The municipal utility, which began as an electric company, launched video services in 2001 to leverage its existing infrastructure. However, the cable utility funded its plant and operations with revenue bond anticipation notes. A balloon payment is due next June on those notes of $35 million.
It’s not clear why the Alameda utility felt they had to undertake this effort, as AT&T and Comcast serve the area with perfectly acceptable broadband offerings, but such is life in the Bay Area. There’s no doubt that the system is a real mess. From the presentation to the public utilities board advocating sale we get this summary:
Summary of Telecom System Performance
â€“ Limited by competition with Comcast, AT&T and satellite providers
â€“ Cable subscriptions are declining slowly
â€“ Internet subscriptions are growing slowly
â€“ Labor costs are relatively high compared to non-municipal telecom providers
â€“ Programming costs continue to escalate
â€“ Alameda P&T has cut costs significantly (including 1/3 reduction in staff)
â€¢ Net revenues are now becoming slightly positive, but substantially less than the interest payments on the Telecom system debt
Alameda Power and Telecom is the oldest municipal utility west of the Mississippi, founded in 1887. If any utility can handle the intricacies of financing and operation, these folks should be capable.
One example of a public utility failing to deliver on its promised Internet access service doesn’t prove much of anything, of course. The particular approach to financing this effort was to blame for this failure, and that was doubtless influenced by the current state of the credit markets. The new ballparks on the drawing boards in the Bay Area for soccer, football, and the National Pastime are also in jeopardy. But why in the world do these municipal utilities want to compete with the private sector for services that are at best simply equivalent? The Morristown project is succeeding because it offers a superior service, not a me-too offering at a lower price.
The annals of Muni Wi-Fi are also littered with tales of failure, as Glenn Fleishman points out from his new perch in Ars Technica today. If we’ve learned anything at all from the history of Internet-as-utility, it’s that this strained analogy only applies in cases where there is no existing infrastructure, and probably ends best when a publicly-financed project is sold (or at least leased) to a private company for upgrades and management. We should be especially suspicious of projects aimed at providing Wi-Fi mesh because they’re slow as molasses on a winter’s day.
I don’t see any examples of long-term success in the publicly-owned and operated networking space. And I also don’t see any examples of publicly-owned and operated Internet service providers doing any of the heavy lifting in the maintenance of the Internet protocols, a never-ending process that’s vital to the continuing growth of the Internet. Comcast, for example, recently conducted an experiment to measure the effectiveness of P4P, a location-sensitive variation on P2P file transfer protocols. In a report to the IETF, Comcast finds that download speeds were improved by as much as 80%, a win-win for the ISP and the consumer. The ISP wins, of course, by reducing traffic to and from other networks. While the usual conspiracy theorists are poo-pooing the P4P method because it’s not helpful to pirates (content has to be clearly identified), this is the kind of advance that the Internet deeply depends on. While anybody can build a new application without permission easily enough, making it work well depends on broad cooperation and (frequently) a bit of re-engineering. I don’t see the government-owned and -operated networks helping, do you?
So I’d much rather we continue with private ownership and meaningful government oversight for Internet access than turn the problem lock, stock, and barrel over to the state. But that means we’re going to need some regulators who actually know what they’re regulating, who can take the protocols apart and put them back together again, who don’t depend on staff reports, and who don’t have a pre-determined agenda.
How much longer will we have to wait for that? If the transition team does its job right, not long. But there’s a great deal of uncertainty around this whole procedure. This is the first transition in history that’s had to re-task the FCC toward the Internet and away from TV and radio censorship, so whatever they do is going to be ground-breaking in some sense. So it’s very exciting to watch, especially since the new season of 24 doesn’t start until their work is done.