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[US] Companies, Government and Community Fiber Rollouts

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  • 13-09-2004 4:36pm
    #1
    dahamsta
    Banned (with Prison Access) Posts: 16,659 ✭✭✭✭


    Companies, Government and Community Fiber Rollouts
    Posted by Hemos on Monday September 13, @09:15AM
    from the tussling-with-the-work dept.

    hype7 writes "Wired is running an interesting article about a number of communities which are dissatisfied with the present communications infrastructure that they are being offered, and are deciding to do something about it. However, many of the corporates who had previously been offering services to these communities have resisted this, with Pennsylvania going so far as to draft law to prevent competition for the communications providers. What is most interesting is that in the communities where the roll outs have taken place, the incumbent providers have "dropped prices to be more competitive … while not changing rates in areas where it continues to have a monopoly". What I don't understand is why can't a public utilities company provide a public utility if their rate payers want it? What's wrong with additional competition? And why should legislative bodies protect telecommunications monopolies?"


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    #2
    Moriarty
    Registered Users Posts: 6,007 ✭✭✭Moriarty


    Aye, that's happening quite a lot in many US states. Utah is a prime example - the state government decided it would be a good idea to create FTTH networks in 13(?) of the major cities in Utah (UTOPIA project). The incumbent telco (one of the baby bells, cant remember which exactly) lobbied incredibly hard for this plan to be ditched in preference for state subsidys for the telco to increase DSL penetration. They also argued that it was a needless duplication of infrastructure and a waste of taxpayers money.

    Remind you of anyone closer to home?

    Last time I checked, ~10 of the citys have decided to go ahead with the network and 2 or 3 have decided to postpone a decision for a year or two.


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    #3
    Ripwave
    Closed Accounts Posts: 2,188 ✭✭✭Ripwave


    As a Dubliner, I have a natural sympathy for the argument that competitors should be allowed to build alternative infrastructure in my area that will undercut the incumbent.

    But I also recognize that when service providers can cherry-pick the areas that are likely to provide the highest rate of return, some other areas are going to be left behind. (Or to say exactly the same thing in a very different way, the areas that generate a high rate of return are effectively subsidising the service in other areas).

    So you need to be consistent on this - if FTTH is to be a "vital national infrastructure" than you can't rely on the market to deliver it - the market will NOT not deliver in areas that are not cost-effective. And if you decide that you will impose an obligation on one company to provide that service in those areas, then you have to protect that company from the effects of cherry-picking by competitors.

    This is true for public transport, electricity, telecommunications and even air transport (where Aer Lingus have dropped or are dropping "social" services, like Unaccompanied Minors, and carrying coffins). It is a complex area, and I know that I have very mixed opinions about it.


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