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Sirota writes: "Once again abandoning the business lobby's typical call for less government intervention, telecom firms have successfully pushed 20 states to pass laws limiting the reach of community-owned utilities like EPB."

File photo, Comcast truck. (photo: unknown)
File photo, Comcast truck. (photo: unknown)


Comcast's Worst Nightmare: How Tennessee Could Save America's Internet

By David Sirota, Salon

17 July 14

 

Chattanooga's public electric utility offers residents lightning-quick connections -- much to big telecoms' dismay

he business lobby often demands that government get out of the way of private corporations, so that competition can flourish and high-quality services can be efficiently delivered to as many consumers as possible. Yet, in an epic fight over telecommunications policy, the paradigm is now being flipped on its head, with corporate forces demanding the government squelch competition and halt the expansion of those high-quality services. Whether and how federal officials act may ultimately shape the future of America’s information economy.

The front line in this fight is Chattanooga, Tennessee, where officials at the city’s public electric utility, EPB, realized that smart-grid energy infrastructure could also provide consumers super-fast Internet speeds at competitive prices. A few years ago, those officials decided to act on that revelation. Like a publicly traded corporation, the utility issued bonds to raise resources to invest in the new broadband project. Similarly, just as many private corporations ended up receiving federal stimulus dollars, so did EPB, which put those monies into its new network.

The result is a system that now provides the nation’s fastest broadband speeds at prices often cheaper than the private competition. As the Chattanooga Times Free Press noted a few years back, “EPB offers faster Internet speeds for the money, and shows equal pep in both uploading and downloading content, with Comcast and AT&T trailing on quickness.” Meanwhile, EPB officials tell the Washington Post that the utility’s telecom services have become “a great profit center” — an assertion confirmed by a Standard & Poor credit upgrade notice pointing out that the utility “is now covering all costs from telephone, video and Internet revenue, as well as providing significant financial benefit to the electric system.”

This is great news for local businesses and taxpayers — but it is terrible news for private telecom companies, who not only fear being outcompeted and outperformed in Chattanooga, but also fear the Chattanooga model being promoted in other cities. In response, those telecom firms have been abandoning the standard argument about the private sector. Indeed, as the Times Free Press reported last week, rather than insisting the private sector has inherent advantages over the public sector, the firms have gone to court insisting “that EPB, as a public entity, would have an edge when competing against private companies, which would be at a disadvantage when facing an entity owned by taxpayers.”

To date, those court cases have been thwarted by EPB. However, it is a different story in state legislatures. Once again abandoning the business lobby’s typical call for less government intervention, telecom firms have successfully pushed 20 states to pass laws limiting the reach of community-owned utilities like EPB.

That’s where Washington comes in. With Census figures showing more than 1 in 5 Tennessee residents having no Internet connection, EPB is now proposing to offer its ultra-fast services to new communities. But it needs the Federal Communications Commission to preempt the Tennessee statute prohibiting the utility from competing with private telecom companies outside its current market.

For EPB, the good news is that FCC Chairman Tom Wheeler has repeatedly pledged that in the name of competition and broadband access, he will support preempting state laws like Tennessee’s. However, in a capital run by money, EPB may still be politically overpowered. After all, as a community-owned utility in a midsized city, EPB does not have the lobbyists and campaign cash to match those of behemoths like Comcast and AT&T. What the utility does have is a solid track record and a pro-consumer, pro-competition argument.

The question is: Will that be enough to prevent Wheeler from backing down or being blocked by Congress? The future of the Internet may be at stake in the answer.

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+33 # Dust 2014-07-18 16:22
Of course! Corporations, like bullies, are quick to claim the moral imperative for whatever will allow them the greatest profit with the least expenditure of resources and no competition. Nobody around but federal regulators? Scream about letting the "free market" operate. Being out-competed because of dinosaur tech, no customer service, and success only due to monopolistic structures and artificial restrictions? Scream that federal regulators are needed.

And finally - make sure that you scream both equally loudly with no shame or clue that you are contradicting yourself.

Bullies, all of them. The sooner that sort of "business model" is torn apart, the better for the entire planet.
 
 
+10 # Texas Aggie 2014-07-19 09:17
Years and years ago Verizon pushed something like this through the PA state legislature. Complaints to my local state senator got a reasonable response in that the law allowed communities to go ahead if Verizon just sat on its butt. However, it is very unlikely that similar provisions are in the laws of other states. Someone needs to push this episode on Wheeler as one of the reasons that everyone needs equal access to the internet and that wealthy corporations need to take their turn like everyone else.
 
 
+4 # Buddha 2014-07-21 16:04
The American people need to wake up, this isn't just telecommunicati ons where a public-owned "utility" can provide a service cheaper and better than a profit-driven enterprise. For example, on MS-NBC they have been highlighting rural North Carolina communities where regional for-profit hospitals are closing because NC didn't expand Medicaid (and because smaller rural communities aren't cash-cows). The Republican mayor is trying to organize a "march on Washington" to solve this...but the solution is for them to sell bonds and build a PUBLIC regional hospital, since the "free-market" isn't going to provide those services. Same out here in California, where widespread residential and business solar implementation is now so hurting for-profit electric utilities, that they are trying to get approval to jack up rates on everyone still without solar to compensate. Solution: public owned utilities, where there is no "profit motive" to feed! We are now in the "Cancer" phase of capitalism, where corporate profiteering begins to "feed on itself" and the society from which it depends. We either need to wake up and adjust, or capitalism will take us all down with it...
 
 
0 # bingers 2014-07-21 22:32
These corporations which had nothing to do with building the internet should be required to give the fastest speeds and cheapest prices to individuals. Then they can scale up costs for corporations which can add their costs into their marketing. But if they overdo it they will go bust. It's time we have a constitutional amendment that favors living flesh and blood people over corporate "people" in every case.

It was originally like that and it's a damn shame the founders didn't think to make that the 11th amendment. Originally any company which put profits ahead of service lost their charter and were forbidden to ever do business again.
 

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