Monday, January 16, 2006

Black Ministry notices Bell Policy

Here's a piece I pulled up that seems appropriate for Martin Luther King Day: an editorial focusing on the discriminatory effects of recent decisions by the Bell companies. I've complained long and hard that the real value to the phone companies of eliminating the local franchise systems is to put the cable companies at a dramatic competitive disadvantage by letting the phone companies cream off the most lucrative customers.

What's relatively rare is to hear a black minister make the obvious points about the discriminatory effects of this policy so starkly. (There's a group in Chicago making the same complaint.)

Some of the good bits:

The giant telephone monopolies -- AT&T, Verizon, BellSouth and Qwest -- have launched an unprecedented push to effectively eliminate the only non-discrimination provision in federal law that prohibits redlining by any telecom company providing "video services." They ask legislators to bless a dubious business plan to bring their new TV services only to wealthy neighborhoods...

For the cable industry, that law has resulted in more than a $100 billion investment in new networks and today represents the closest thing we have to a universal broadband policy. Rural communities and inner cities are considered as important as the wealthy suburbs.

But the Bell telephone companies appear to have much meeker goals. With strange fervor, they are insisting that Congress and state legislatures exempt only the Bell telephone companies from the non-discrimination provisions...

As the late C. Delores Tucker, founder of the National Congress of Black Women, argued, it is the "(phone) monopolies that want to trample our civil rights traditions."

AT&T's proposal, for instance, is known as "Project Lightspeed." Months ago, its executives said that its bold new broadband service would be rolled out to 90 percent of its "high value" customers but only 5 percent of "low value" customers. Chaffing at what seemed to be an open admission of redlining, U.S. Rep. Ed Markey, whose subcommittee oversees telecom policy, accused the company of offering "Lightspeed for the well-off and 'snail-speed' for everyone else."

A point of clarification: This essay could lead the reader to think that what was happening is that a federal law was about to be overturned. But that is most emphatically not the case. What the Bells are angling for is new federal laws to be imposed that would forbid local governemnts from demanding that corporations who want to rent municipal property (rights of way, poles, etc.) treat all of their citizens equally.

That really ought to not be something that the feds are trying to prevent us from doing for ourselves. And thats' something we might feel a bit more acutely today.

4 comments:

Anonymous said...

So is what you are saying is that telecoms should be forced to deliver expensive high speed internet to those who can't afford it? Do you really think that makes sense? Wouldn't make more sense to bring them cheaper wireless with low bandwith which they can afford as opposed to expensive highspeed internet which they cann't? HOw is LUS going to handle this same problem?

John said...

No Anono, that's not what I'm saying.

What I, and many others including several black ministerial groups, are saying is that the phone companies should be obliged to serve the entire community with DSL/Fiber Broadband in exactly the same way that country decided that they should with phone service. We mandated universal service then, it was the right thing to do, and the country reaped enormous economic benefits from the decision.

You are simply mistaken if you think that bandwidth costs have to be high. They don't. And BellSouth knows it. That is why they are so panicked at the thought of LUS or any real public utility getting into the business. If you are willing to distribute your costs over 25 years, make the service available to all at a low price and depend on steady income from most of the community over a long period of time to make back your costs it is easy to keep prices low, and penetration high. This is exactly the model the country followed with the telephone network. It works.

In our concrete situation you are simply mistaken in your assumption that bandwidth will be costly in Lafayette. You may not be aware that cable penetration is very comparable and in some instances higher in the poorer parts of our community than it is middle income districts. This is for the simple reason that cable is pretty much your cheapest entertainment medium. Most people at every income level have a landline phone and a cable connection. When LUS starts offering its triple play service at a 20% discount off the incumbents rates it will mean that all those two service households can add high speed broadband for NO additional bite out of their budget. Not all will, some will choose to save that money, but it will, at that point, NOT be because they could not afford to have real broadband in their telecomm budget.

So the assumption that broadband will be "expensive" is simply not true.

Wireless is not a substitute for real broadband. Logically, economically, and technically, wireless only makes sense when hung off a big broadband network. LUS will be in a position to add real wireless capacity (meaning several times the speeds you see in other real-world deployments) for much cheaper than any of its competitors. There are huge benefits for the people of this city and for the long-term viability of our telecomm network in their doing so. If I read the tea-leaves aright that's coming. But it will come as an add-on available cheaply to all, not as an anemic "good enough for poor people" substitute for the real thing.

Anonymous said...

You write "You may not be aware that cable penetration is very comparable and in some instances higher in the poorer parts of our community than it is middle income districts" That is absolutely not true and if you pole statistics on internet connectivity its even more untrue. Remember you theme about bridging the "digital divide". If there is no divide then what are we bridging.

You write: "Wireless is not a substitute for real broadband".

Just go to any coffee house in the country and ask the people sitting in there which they prefer. These are not the poor, these are the upper and middle classes paying 3 dollars for a cup of coffee. The have internet connections at home, yet the choose wireless at another location.

Ask anyone which would they rather have lowband wireless with its moblility or highspeed cable fixed to the wall. The phone on your kitchen is big bandwith and yet people today are opting for low band cell phones. Yes, its not a reliable, yes its not as clear, yes it has its shortcomings. Yet people all over the country are dropping the high band phone.

The truth is LUS has enough fiber in place to make Lafayette wireless today for under $15 million and give it away to the poor for free. Look what LCG did downtown, they opted for wireless right next to the fiber. But then people would have a choice.

Bell who won't give us wireless because they are a greedy coporate profiteers. And LUS won't give us wireless because .....?

Of course I'm not telling you anything you don't already know.

It's ok that you want a government owned monoply for telecommunications in Lafayette, it's ok to believe competition in a free market is not the way to improve our economy, its ok that you want bigger government with more controll and larger budgets. It's ok.

What's not ok is when you villianize everyone who is opposed to what you want. And you wonder why people don't post their names? Try being nice.

John said...

Anono feels like I've not been nice to him. The reader of this discussion may wonder what in the world I did in my response that villainized him. Didn't notice it in the discussion above? No? That's because I didn't. What he's got his panties in a bunch over is the disappointment I expressed in the comments to a post about a recent letter to the editor. (http://lafayetteprofiber.com/Blog/2006/01/standing-up-gene-flyte.html) Anyone who wants can go back over my posts for the last couple of weeks and see my escalating campaign to get him to come out into the open. When he starts accusing people of incompetence who put their reputation on the line each time they defend our community against the pin-stripped legal mafia from one of the world's largest monopolies while protecting his own reputation from any damage by hiding his own identity I feel entitled to be a bit sharp.

If he'll come out of the closet and play fair I'll make a good faith effort to let past transgressions stay in the past.

What's good about this post (trying hard here to be fair) is that it at last responds to the points I made instead of just popping off and taking off. That's a step toward actual conversation. In that vein:

Income and Basic Cable Access: The anonymous person says that is "absolutely not true" that cable rates in poorer parts of the community are comparable to the rates in other parts. The anonymous person is wrong. I cite the abstract of the study "Why do people not subscribe to cable television?" (http://www.tprc.org/abstracts98/kieschnick.pdf)

"We review the literature on the demand for cable television and on the characteristics of cable subscribers and non-subscribers to address two issues. First, what is the influence of household income on household use of cable television... On the first issue, the evidence examined suggests that while household income is an influence on a household’s decision to subscribe to cable television, it is not a significant influence. Rather, household income is a more important determinant of household purchases of premium cable video programming services."

Other studies have consistently shown the same. The difference lies not in whether or not people subscribe to cable at all but in how much of it they can afford. Poorer folks tend to subscribe to basic cable and not the than more advanced services. (Allow me to get a plug in for good old fairness: the local franchise agreement in many cities mandates access to basic cable at an affordable price. Without that clause in the contractual relationship between cablecos and the cities they rent property from what Anono incorrectly assumes might be true; it is cities that have pushed the cablecos to provide affordable basic service for all.) It is true, as the study reiterates, that income does have an effect on advanced services--including broadband services. The basic point of my side of the discussion was precisely that I thought that lowering prices would help bridge the digital divide. On the basis of the evidence I think it should be admitted that it seems that I'm right.

Anono would have readers believe that he's somehow disproved or even disputed my assertion that "Wireless is not a substitute for real broadband" by talking about mobility, coffee houses and middle class people. What he is really uncomfortable with is my assessment that what he is suggesting is that "wireless is good enough for poor people." I simply urge the reader to scroll up and make your own assessment of his words. Please notice that where before he was clear that wireless was slower but cheaper he has now decided that wireless mobility is somehow preferable to real broadband. This shifting basis for argument has been typical of those who've opposed Lafayette's project, if one ploy doesn't work, try the next one.

I repeat, wireless is not a substitute for real broadband. Real wireless is DEPENDENT on real broadband. Wireless will do nothing to reduce the prices the citizens of Lafayette pay for video and voice services. Reducing those prices will do the most for those that have the least--they can have real broadband, voice and cable for the same prices they are currently paying for voice and cable They will not have to settle for slow wireless. Real, full bandwidth wireless (as opposed to the slow, "good enough" kind) will be relatively easy to do off a fiber network. And the bandwidth will be enough to support cellular/wifi phone service at cheap, utility pricing.

If we do it ourselves we don't, any of us, have to settle for less.

Now, finally, Anonymous person wants to stir up a little resentment about "free" wireless that would "only" cost the city 15 million. Free? Really? And where are we getting 15 million "free" dollars? If you do it on top of the fiber build my best guess is that you could pay for a real, powerful wireless cloud with between 5 and 7 million. Unhappily, unless Google comes in and does it for us, it still won't be free. (Don't hold your breath.) I'll repeat what I suggested before and which Anonymous Person ignored: I do think wireless may well be coming from LUS. I don't know this for certain and won't pretend that I do...but it is the way I read the tea-leaves.