agriculture

In the aftermath of the Comcast/TWC merger being effectively denied by the Department of Justice and Federal Communications Commission, we thought it was a key moment to focus on antitrust/anti-monopoly policy in DC. To discuss this topic, we talk this week with Teddy Downey, Executive Editor and CEO of the Capitol Forum as well as Sally Hubbard, Capitol Forum senior correspondent and expert on antitrust.

We start off with the basics of why the Comcast takeover of Time Warner Cable posed a problem that regulators were concerned with. From there, we talk more about the cable industry and whether other mergers will similarly alarm regulators.

We end with a short discussion of what states can do to crack down on monopolies and the abuse of market power. Along the way, we discuss whether DC is entering a new era of antimonopoly policy or whether this merger was just uniquely troubling.

We learned about Teddy and Sally from Barry Lynn at the New America Foundation, who we had previously interviewed for one of my favorite shows, episode 83.

We want your feedback and suggestions for the show – please e-mail us or leave a comment below.

This show is 24 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Persson for the music, licensed using Creative Commons. The song is “Blues walk.”

Community Broadband Bits Episode 148 – Teddy Downey and Sally Hubbard of the Capitol Forum on Cable Mergers and Monopoly

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Urban real estate investors take note: FTTH has come of age in the multi-dwelling unit marketplace. (MDU). When looking for new homes, many more renters and owners are now considering FTTH a necessity.

Several studies have established that fiber raises the value of single family homes by $5,000 – $6,000 on a home valued at $300,000. A July 2014 survey, commissioned by Broadband Communities magazine and conducted by RVA LLC indicates that similar results influence MDUs. Clearly, access to FTTH adds measurable value to real estate.

The study examined numerous factors related to knowledge, use, satisfaction, and adoption of FTTH related to MDUs. RVA broke down the results by age, economics, and education attained. While some results were surprising, others were predictable. For example, level of education attained is not necessarily consistent with knowledge of the benefits of FTTH. The study reflects that those with a graduate degree did not have the same appreciation for the technology as those with some college less than a four-year degree.

The level of satisfaction when comparing FTTH to cable, DSL, wireless, and satellite options was not surprising. Of course, fiber-to-the-home far out performed any other technology.

The survey also found that access to broadband has become as important as other utilities: 

Overall, survey respondents indicated that broadband was, indeed, their top amenity. This finding confirms other recent polling and provides finer-grained details: For MDU unit owners, access to good broadband is now the top amenity by a large margin. Renters rated broadband second in terms of amenity importance, close behind “in-unit washer/dryer.” Broadband was valued highly in all types of buildings but especially in student housing and in luxury buildings.

FTTH can influence sale value by 3 percent and rental value by 8 percent. The additional revenue to the building owner far outweighs the initial investment:

For an MDU building owner, outfitting an apartment with FTTH would yield $972 more annual rental revenue and $209 more revenue from lower vacancy rates, the survey shows. Having FTTH at the site would also result in a $120 savings in marketing, administration and maintenance stemming from 31 percent lower churn and more word-of-mouth advertising, according to the survey.

In a May 2014 American Planning Association report, Investing in Place [PDF], researchers asked Millenials, Boomers, and Gen Xers to rank their priorities for urban landscapes:

When asked about high priorities for metro areas, Active Boomers cited high-speed Internet access and affordable housing equally at 65 percent each, which was second only to safe streets (79 percent). Millennials ranked internet service third with 58 percent; safe streets cited first with 76 percent and affordable housing cited second with 71 percent. Generation Xers also ranked Internet service third with 51 percent; safe streets was first (69 percent) and affordable housing was second (57 percent).

These same three metro features also were cited in the same order by three of the four different types of communities — urban, suburban, and small town — and each of the four regions. 

Fiber it quickly becoming on par with considerations of floor plan, natural light, and location. From the Broadband Communities survey:

MDU developers and managers should be marketing broadband, especially FTTH broadband, more aggressively. This is especially true given that broadband is the only amenity (in the list respondents used) that cannot be seen with the naked eye. 

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The big news this week was about the fall of the Comcast/Time Warner Cable merger. We like to think it was because of our incredibly brilliant, insightful (also: “witty”, “pithy”, “charming”…) letter to Comcast.

Once Comcast’s Deal Shifted to a Focus on Broadband, Its Ambitions Were Sunk By JONATHAN MAHLER, New York Times

At the end of the day, the government’s commitment to maintaining a free and open Internet did not square with the prospect of a single company controlling as much as 40 percent of the public’s access to it… it didn’t really matter if Comcast and Time Warner’s cable markets overlapped. The real issue was broadband.

Blocking Comcast Is a Start. But if We Want Better Broadband, We Need Much More by Peter Kafka, Re/Code

‘Fast, fair and open:’ FCC Chairman lays out his big picture for broadband, WRAL TechWire

In case you missed it, here is a transcript of Chairman Wheeler’s remarks to Broadband Communities in Austin. 

“Our idea of rock stars would be the leaders of Chattanooga, Tennessee and Wilson, North Carolina.”

Community Broadband News by State

California

Digital debate: SF supervisors mull connecting the masses with citywide broadband network by Joshua Sabatini, San Francisco Examiner

“Fiber broadband lines are exactly the same as highway and roads,” Brooks said. “It’s a thing all governments need to put in as a government service so that all people and all businesses can go nuts on that system, enjoy the system and make loads of money.”

Brooks said The City would ultimately recoup the costs with businesses “chomping at the bit” to use a fast city-owned broadband service, which would charge them less than other private services like Comcast.

“We are way behind the curve and the way to get ahead of the curve is to just build out a public system,” he said.

Maryland

Boone talks Internet expansion by Dorian Mitchell, My Eastern Shore Maryland

“When you see kids in their dad’s pickup truck in the library parking lot on Sundays, trying to connect to the Internet, that’s what we call a Third-World issue,” he said. “That shouldn’t be happening in this country.”

Boone said the project involves a theoretical “ring” of dark fiber-optic cable, starting in the Fairlee area and possibly extending as far west as U.S. Route 301, that would encircle the existing structures in Kent County. This ring would allow a provider to “light” the cable and beam their services all over the county.

“We’re looking to keep the price at zero,” he said. “We’re not looking to create revenue, our goal is to give it (service) away as much as possible without being in the red.”

Massachusetts

Hilltown officials puzzle over broadband costs by Diane Broncaccio, The Recorder

Michigan

VIDEO: Southern Michigan’s Rural Broadband Revolution

In the 1930s, electric cooperatives were formed to bring power and light to the rural space. Today, Midwest Energy Cooperative is again responding to the needs of those who are unserved and underserved as a result of geography by leveraging the utility fiber communications system to offer a true high-speed internet solution to its members. 

Minnesota

Economic Development and Fiber, Pots and Pans

New Mexico

SF [Santa Fe] launches $1M broadband infrastructure project by T.S. Last, Albquerque Journal

“Here’s the government doing what it’s supposed to do: helping out its citizenry,” he said, comparing the project to streets and highways. “It’s one of these things that this is a lot more important than it may appear to be. Improving people’s access to the Internet will help increase what they are able to do and its effects will be felt for a long time.”

New York

Expansion of high speed Internet can help region stay competitive by Elizabeth Cooper, Utica Observer-Dispatch

Broadband for everyone by 2019! The new state budget included a $500 million allocation for the expansion of high speed Internet, and it’s slated to be complete by the end of 2018.

Oregon

Oregon Changes State Tax Law to Lure Google Fiber by Karl Bode, DSL Reports

Other Broadband News

Smart Cities: It’s More Than Broadband by John M. Eger, Huffington Post

Nothing could be more timely or important as this signal to cities that our future, the future of America in the Internet age, depends on renewing, often reinventing, our cities for the global, knowledge economy.

In every study about economic development, the importance of broadband Internet services is mentioned prominently. Given the realignment of power in the world — from nations to cities to individuals — what the city does or does not do can determine their community’s success and survival, or its demise; and as such, will determine the nation’s success or failure.

Look to the States on Broadband by The Editorial Board, New York Times

Bloomberg’s ‘What Works Cities’ Initiative Targets 100 Mid-Sized Metros by Colin Wood, GovTech

The $42 million, three-year program will provide expertise and time to cities that want data-driven solutions for their biggest challenges.

Broadband and Real Estate by Doug Dawson, Pots and Pans

The numbers behind the broadband ‘homework gap’ by John B Horrigan, Pew Research Institute

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The City of Ammon’s municipal fiber network recently stepped in to provide primary broadband access for School District 93 as the state’s educational network went dark reports Local News 8. Watch the video of local coverage below.

When a judge ruled last year that the Idaho Education Network (IEN) contract between the state Department of Administration was void, an education broadband crisis loomed across the state. As the drama played out, however, local networks such as Ammon’s muni, have come to the rescue to keep students connected.

Ammon Mayor Dana Kirkham described an attitude characteristic of municipal networks:

“I think it’s just something we do in the spirit of collaboration, and I think that’s always important because when we talk about the school district and the city it’s all the same people, and so anytime we can keep costs down it benefits everyone involved,” Kirkham said.

CenturyLink and Education Networks of America (ENA) were providers under the contract voided last year. As CenturyLink and ENA cut off service to schools, forcing them to negotiate their own contracts, they have discovered better, more affordable broadband from local providers like Ammon.  A recent Idaho State Journal reported on several school districts:

The state, under the now-void IEN contract, had been paying Education Networks of America more than $6,000 a month for a 20 Mbps Internet service to Rockland School District. The school district will pay less than a third of that cost for a new 100 Mbps service next year.

The State Journal also discovered that numerous school districts had used fiber optic service from local providers but were forced to switch to slower service in order to obtain the IEN reimbursement. In order to get the reimbursement, West Side School District had to switch from fiber from Direct Communications, a local company, to a slow copper T1 connection from CenturyLink:

Once the IEN contract was in place, the Idaho taxpayers were saddled with paying over $8000 a month for outdated copper service to that same location.

[Direct Communications Marketing Director Brigham] Griffin said Preston [School District] was in the same boat. It had been getting fiber-optic Internet from Direct Communications, but had to switch to copper to have the state pick up the tab.

“Preston School District will now receive double their previous speed for about a fifth of the monthly cost,” Griffin said.

Though it is incredibly frustrating to see how Idaho has hurts its schools while funnelling extra tax dollars to CenturyLink, it is not as rare as you might think. Many states have these kind of “deals” with the large phone companies. We have long covered the depressing story in Wisconsin, where AT&T has successfully lobbied to hobble WiscNet, an arrangement that brings tremendous cost savings to local budgets and better connections to schools. 

This is more evidence for a point we have long made: building better networks does not necessary have to cost a lot more. We spend so much money inefficiently that eliminating these crony capitalism deals would free up significant funds to be spent more wisely.

In Ammon, Mayor Kirkham summed up the situation:

“This is always an argument for local control so whenever you have local control, then you aren’t at the mercy of the decisions being made higher up the ladder and so this is one of those instances where you see that being played out,” Kirkham said. 

Video: 

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