About once every month or two, The Heartland Institute releases yet another paper lambasting municipal telecommunications networks. This month proves no different with more claims that municipal broadband efforts are financial black holes and renewing the call for market-based solutions. The problems with these reports lies in their blatant manipulation of the facts and complete and total ignorance of why there has been a renewed push for municipal networks in the first place.
This "think" tank out of Chicago seems to come up with conclusions prior to doing any amount of research and simply try to fudge the numbers into doing whatever it is they want them to do. While simultaneously crowing about the need for "market-based solutions", they regularly defend the cable/telco duopoly that has driven competitors out of business, increased rates substantially and limited consumer choice and freedom. What I can't figure out is how they believe that these government-sanctioned monopolies are going to still be the solution to the problem amid their numerous broken promises to both consumers and various governments state, federal and local.
We've already tried to force them to share their networks, but it failed due to underhanded sabotage of competitors through poor service and long delays. Given the expense of building an myriad of competing wired networks and the inadequate coverage and performance of wireless, the only logical solution is to have a wholesaler of the network independent from the retailers of the actual services. To ensure true neutrality, we either have to have a strictly regulated wholesaler or have the government be the wholesaler. The Heartland Institute and their ilk would bemoan either solution as anti-market even though they have come up with exactly zero solutions to the problems we've been facing with decreased competition.
Since deregulation in 1996, the telco market is 90% controlled by a handful of companies: Verizon, Qwest, BellSouth and SBC (soon to again be AT&T). Cable rates have shot up more than 50% since 2000. Broadband speeds were redefined from 45Mbps to 200Kbps as the performance delta between the US and other nations continues to widen. This runs contrary to all of the claims of the industry and libertarian think tanks. Instead of admitting their absolute failure and accepting the incumbents as the gouging monopolists that they are, the solution is more of what already hasn't worked to promote true competition amid entrenched incumbency.
Instead of giving any of the municipal projects a chance to succeed, they declare them instant failures before the build-outs are even complete. Most of the numbers use the initial construction costs to show the projects always running in the red. The question is why they would impose the harsh requirement of instant profitability on a municipal system that nobody in their right mind would impose upon a business. The only answer that seems obvious is that it props up their faulty conclusions that these projects don't work. Instead of giving them time to finish the construction, sign up subscribers and tweak the business models, they're declared to be dead on arrival. This kind of rash and irrational declaration shows that they are little more than ideologues with an ax to grind.
We're fed up with poor customer service from the phone and cable companies. We're tired of paying exorbitant rates for the services we get without any recourse. We're tired of waiting for the promises of the 1996 Telecommunications Act to come to fruition when the exact opposite has been happening. Groups like The Heartland Institute are clueless FUD-spreaders that do nothing but protect greedy monopolies from our righteous indignation. Here's to hoping they go under. And quickly.
