Saving Seattle from the clutches of Internet monopoly

Commentary: A new federal ruling allows Internet providers to "play favorites", loading some websites and content faster than others. Here's how to circumvent that.

On January 14, the United States Circuit Court of Appeals in the District of Columbia ruled that telecommunications and cable companies can “play favorites” among websites, video channels and all other content providers. This decision struck down FCC rules which tried to make the Internet “neutral,” carrying all kinds of content with equal speed.

In other words, if the New York Times pays Verizon (or AT&T, or Comcast or any other company which owns wires) a fee to deliver its content, but Crosscut cannot, www.nytimes.com will zip onto your computer screen rapidly, while www.crosscut.com will ever so slowly and painfully appear. Indeed, if Comcast owns NBC (which it does), NBC’s video content might zoom across Comcast’s wires into homes and businesses, while ABC, CBS, the Seattle Channel and other video feeds stumble slowly onto those same television sets.    

It could get even more interesting when you go shopping. Do you want to buy a book or toys or new shoes? Well, if Wal-Mart pays Comcast and CenturyLink to deliver its content, you might see www.walmart.com rapidly appear on your web browser, while Amazon, Sears and Macys come up slowly — or not at all.  

As the Los Angeles Times headlined, “Bow to Comcast and Verizon, Your Overlords”.

All this wouldn’t be so bad, of course, if we, as consumers, actually had a choice of who delivers our Internet. If you want to buy a car, you have dozens of brands and dealers from which to choose. If you want to listen to radio programming, you have hundreds of different stations with various kinds of programming.

But if you want Internet in Seattle, you can choose from Comcast or Centurylink. Unless you live in the Central District or Beacon Hill. Then the choice is Wave Broadband and (maybe) Centurylink. That’s it.

This lack of choice is not coincidence. Susan Crawford, former broadband advisor to President Obama, stated “The major cable providers in this country do not compete with one another. The operators clustered all cable into regional monopolies during the summer of 1997.” They deliberately do not trespass on each other's turf. 

The telephone companies are almost as bad. Centurylink monopoly evolved of course, from Ma Bell — AT&T — which controlled all telephone service in the United States until 1982, when AT&T was broken up by Judge Green. But the regional Bell operating companies still maintain a de-facto monopoly on the use of their wires in each region to deliver internet service.

So what’s a consumer or a business or a city to do?

For Seattle, Gigabit Squared was the great promise. GB2 would have used the existing fiber optic cable network owned by the City of Seattle. Their plan was to build a super-high-speed network — much faster than Comcast or Centurylink — and to compete with the existing operators. Seattle consumers and businesses would have at least a little more choice.

Gigabit Squared imploded. Poor management, lack of funding, sheer stupidity all contributed.

So what’s next?

Perhaps we should take a lesson from other monopolies. Water service, electricity and the old phone company are all monopolies. It really only makes sense to have one set of water pipes or electric wires going to your house.

But the government heavily regulates — or even owns — those monopolies, which helps to keep downward pressure on rates. Water and wastewater utilities are usually owned by cities, and city council members oversee their operations and rates. City council members have to run for election. Also, there is no need for shareholder profits from rates. In Washington, 60 percent of electric utilities are owned by cities (Seattle City Light and Tacoma Public Utilities) or are public utility districts. Again, no need for shareholder profits. And private electric utilities are regulated by the Washington Utilities and Transportation Commission


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Comments:

Posted Thu, Jan 16, 7:33 a.m. Inappropriate

Personally, I'd like to see Gigabit Squared, or some other reincarnation, be completed. But there are plusses and minuses of having a municipality-owned fiber system.

The plusses are obvious, as stated in the article. Anyone can be a provider. There's net neutrality. And, probably, you pay for what you consume - less for the basics, more if you stream all the time.

The minus are more difficult to assert. With the status quo, Comcast has an incentive to put in better and better cable and fiber, routers, switches, what have you. Maybe Century Link will eventually run fiber to residences. But where is the incentive for a government run entity to keep "competitive"? What keeps management efficient and keeps the entity running in the black?

Still, what we have is pitiful. An unregulated broadband industry sitting essentially in a monopoly situation. Whether through Gigabit or not, I want some competition and choices.

pragmatic

Posted Thu, Jan 16, 9:11 a.m. Inappropriate

What incentive does Comcast have to put in better and better cable and fiber, routers, switches, etc.? Centurylink's DSH is hardly competitive with Comcast's present service, and Comcast has a monopoly on cable service thanks to our godforsaken city council. It has no incentive that I can discern but to gouge us as much as it can, and with a toothless Office of Cable Communications, the sky is the limit. Not only is net neutrality about to go down the drain regardless of any Comcast or Centurylink protests to the contrary, but now Comcast will be even more able to boost its prices for faster speeds than it already is. And if you believe it won't, well, we'll just see.

I'm not sure when Comcast's current 10 year contract expires, but we should all be pressuring our council members right now to negotiate a better deal for us. Ala carte pricing so people like me who don't watch sports or paid programming can opt out and pay for what we watch, not what we don't.

Internet is now akin to a public utility and should be treated as such by the FCC and by our local leaders. Although the city council is always busy working on ways to gouge us--biweekly garbage pickup for the same price, anyone?--they are better than nothing and perhaps those facing election soon will have taken notice of the voters' mood in electing a new face to the council.

I urge those who haven't already to tell the FCC that to protect all of us from the ills suggested in this article, and others not mentioned, to do so right away.

mspat

Posted Thu, Jan 16, 10:51 a.m. Inappropriate

Yes, internet access should probably be regulated, at least for some sort of "basic" service level. I don't watch TV, so Comcast's $100/month price is way over what I'm willing to pay.

As for Comcast, I wasn't particularly implying that they have a lot of incentive (though I think they have some - they do want to stay profitable). Mostly I wanted to point out that putting incentive in a quasi-government operation can be difficult.

pragmatic

Posted Thu, Jan 16, 3:01 p.m. Inappropriate

Mspat:
Thanks for these comments especially regarding the lack of incentive for a monopoly. Just a couple of clarifications: The City of Seattle does give a franchise to Comcast to operate, and I think that is up for renewal in 2015. But under Federal law the City cannot negotiate prices (other than one very basic $12 rate). It also cannot negotiate things like alacarte pricing. I'd like to pay for just the channels I use, but under federal law (Telecommunications Act of 1996) cities and states can't negotiate that.
-bill

Posted Fri, Jan 17, 9:04 a.m. Inappropriate

Thank you, Mr. Schrier, for the clarifications. I didn't know the things you point out. I've never heard of a basic $12 rate. I'd like to know more about that.

So maybe it's our federal representatives we need to pressure for changes in those laws, though I doubt it would do any good. So I guess competition is the only answer, and one that probably won't be pursued. I like TV, but the over the air channels don't have much I'm interested in. Guess I'll need to learn about other possibilities, or learn to like TV less.

mspat

Posted Sun, Jan 19, 12:12 a.m. Inappropriate

One of my brothers back in the Midwest doesn't take cable. I think you might be surprised by how much you can get over the air. Much more than you think.

NotFan

Posted Sat, Jan 18, 9:52 a.m. Inappropriate

Mspat:
Here's the place to learn about the cable basic rate and other information about franchising - City of Seattle Cable Office http://www.seattle.gov/cable/. Their phone number is at the bottom of that page.
Yes, we do need to advocate with the FCC in Washington on this!
-bill

Posted Thu, Jan 16, 2:56 p.m. Inappropriate

Pragmatic:
These are good comments. In terms of the government-run entity and maintaining the network, fiber optic cables, once installed, need very little maintenance and will work for 40+ years at least. But paying for the initial installation is problematic and requires some revenue stream other than just subscriber fees, e.g. a property tax.
-bill

Posted Thu, Jan 16, 5:51 p.m. Inappropriate

Gigabit Squared. Ha ha ha ha ha! You kidder, you!

NotFan

Posted Thu, Jan 16, 9:58 a.m. Inappropriate

Just want to point out that Clear is an internet provider here in Seattle. I used the company for years before I sold my house last fall and paid $30/month. I was happy with the service and the price. People should think about this provider, which is struggling I understand. It has fair if not cheap prices.

Posted Thu, Jan 16, 9:58 a.m. Inappropriate

Just want to point out that Clear is an internet provider here in Seattle. I used the company for years before I sold my house last fall and paid $30/month. I was happy with the service and the price. People should think about this provider, which is struggling I understand. It has fair if not cheap prices.

Posted Thu, Jan 16, 10:47 a.m. Inappropriate

I tried clear for a while. It is potentially a competitor but the infrastructure is too minimal at this point. In my area, the cell sites were so overloaded that, generally, I was getting throughput at about 100Kb/sec. That's only a bit faster than the old dial-up!

pragmatic

Posted Thu, Jan 16, 3:04 p.m. Inappropriate

Adorableone:
Clear or Clearwire (it used both names) has now been purchased by Sprint, primarily so Sprint can use its wireless spectrum licenses to improve cell phone service. I don't know if they still operate as a wireless Internet provider.
Pragmatic is right - Clear's speeds were ok for email but not for streaming TV programs or video. The problem is that each of Clear's wireless towers would serve dozens or hundreds of users, each sharing bandwidth. In CenturyLink's network, for example, each household/user gets its own set of wires and its own unshared bandwidth of 3 to 5 to 7 megabits per second.
-bill

Posted Thu, Jan 16, 6:03 p.m. Inappropriate

Comcast delivers 7 or 8 Mbps down, and takes 5 Mpbs or so up, at its base level. Which is about the same as what Tacoma's municipal system delivers. It's always worthwhile to know what we're dealing with.

NotFan

Posted Thu, Jan 16, 11:20 a.m. Inappropriate

In other words, if the New York Times pays Verizon (or AT&T;, or Comcast or any other company which owns wires) a fee to deliver its content, but Crosscut cannot, www.nytimes.com will zip onto your computer screen rapidly, while www.crosscut.com will ever so slowly and painfully appear.


I'm having a hard time understanding the business model in which a company denies its customers something that they want. Who, exactly, will be happy to pay for such a "service"? I do, however, see an incentive for network operators to ask big users of their networks to help foot the bill for the service. Why should companies like Amazon, Ebay or Netflix expect to hog the capacity of the network providers without ponying up some money to maintain some of the tubes? If anything, it's now the big companies that are going to have to start footing the bill for the service they've been taking advantage of for free. Smaller content providers are actually protected by the elimination of this regulation. "The Internet" is not a monopoly any more than "The Newspaper" is. Why regulate it as one? That only penalizes the individual customer, who must pay for the capacity that the big content providers profit from, since "net neutrality" gives the big content providers a free ride.

dbreneman

Posted Thu, Jan 16, 11:33 a.m. Inappropriate

What I don't understand is why the opposite model isn't good enough. Specifically, The more data I transmit or receive, the more I pay. Most of the cell phone companies already use this model. At this time, I don't think Comcast or century link does (though perhaps at an extremely high quota they do).

But why not? If you stream movies every day, you pay more. Doesn't matter who you stream from. If you just check email occasionally, you pay almost nothing.

With this model, no content provider has any pricing bias. In fact, they have the incentive to do efficient web pages and excellent compression on videos. The internet stays "neutral".

pragmatic

Posted Sat, Jan 18, 11:41 p.m. Inappropriate

The reason that doesn't work is that terrestrial networks have almost infinitely more capacity than cellular networks. There MIGHT be some justification for throttling back ultra-ultra-ultra heavy users, but there are only a handful of cases where this can be justified.

For the VAST majority of terrestrial customers, there is no cost associated with "increased" data throughput. Cellular data networks are a very different animal. They are phenomenally inefficient and slow by comparison to either DSL or coaxial terrestrial networks that we now have.

NotFan

Posted Mon, Jan 20, 3:20 p.m. Inappropriate

Well said, NotFan.
-bill

Posted Thu, Jan 16, 3:13 p.m. Inappropriate

Dbreneman:
You raise good points. The trouble with the variable pricing model - where the New York Times or ABC or Netflix - big guys with deep pockets - pay more, is that it stifles innovation, startup companies, alternative viewpoints. Their content could stream more slowly and not be heard.
Worse, how will the NYTimes or ABC or Walmart raise the funds to pay the network and cable companies? They will raise prices on what you buy or the video you purchase from them. Costs go up for everyone and the profits of the network/cable companies get fatter.
And the final, biggest, problem is when the cable company also owns the content - Comcast owns NBC. So they could make NBC stream faster than CBS and ABC, again getting more viewers and fattening their profits. In my mind that's absolutely unfair competition but now permitted after this court ruling.
The "big companies" won't pay the additional costs. You and I will.
-bill

Posted Thu, Jan 16, 3:29 p.m. Inappropriate

Companies can buy faster download times right now, through services like Akamai. Your assumption seems to be that all network operators will throttle the bandwidth of companies which don't pay for preferred service, but that has never happened in the past, and "net neutrality" has only been adopted as an FCC policy quite recently. End users pay more for faster connections and more bandwidth. Why shouldn't networking companies be allowed to bill large corporations for the same privilege? And if you're worried that an unregulated internet will result in higher prices for consumers, then you seem to be close to agreeing with me that "net neutrality" is in fact corporate welfare for big content providers. Let them pay their own way, and the market will decide who wins and loses, not the FCC.

dbreneman

Posted Thu, Jan 16, 4:46 p.m. Inappropriate

Throttling bandwidth: this *has* happened. Comcast dramatically throttled down bittorrent (I'm pretty sure that was the particular service). From there is where the FCC net neutrality policy came into existence.

I'm sure you're right that network operators will let some nonpayers continue to provide content at full speed. But the temptation to throttle some of them is way too high. Examples given earlier, so I won't repeat.

pragmatic

Posted Fri, Jan 17, 8:04 a.m. Inappropriate

Dbreneman and Pragmatic:
Big corporations always pass along their costs to consumers and business who purchase their services. If and when Comcast, Verizon, etc. charge Netflix, Amazon etc. more, you and I will be paying the bill, not them.
Again my concern is when the network provider also owns the content, e.g. if Comcast buys Netflix just like it bought NBC and speeds up its own content.
-bill

Posted Sat, Jan 18, 11:44 p.m. Inappropriate

A handful of bittorrent downloaders (many of whom are copyright pirates) do use so much bandwidth that throttling MIGHT sometimes be justified. That's about the only type of user I've ever heard of for whom restrictions might be justified.

NotFan

Posted Sat, Jan 18, 12:16 p.m. Inappropriate

"..Dbreneman and Pragmatic:
Big corporations always pass along their costs to consumers and business who purchase their services. If and when Comcast, Verizon, etc. charge Netflix, Amazon etc. more, you and I will be paying the bill, not them."

You have just made an argument for eliminating the corporate income tax. Do you really mean that?

kieth

Posted Thu, Jan 16, 4:54 p.m. Inappropriate

Before making dire predictions about the loss of network neutrality and what the networks will do let's take a deep breath and look at what the court said. A careful reading indicates that the court, while vacating the FCC's 2010 Open Internet rules, did not remove the FCC's ability to act in the future to protect an open Internet. In fact it affirmed the FCC's power to do this but in a diferent way because the court believed that the rules were too broad. It was really the FCC's fault for not classifying Internet access as a commom carrier. Yes companies will try to test the FCC with experimenting with some prioritization of web traffic but the FCC will be able to adjudicate on a case by case basis rather than by the old rulemaking vacated by the court.
As to the idea of a fiber utility to every home. I think that is a non-starter. Power, water, sewer are natural monopoly utiltiies and you can only have one to each home and everyone must have it. But there are choices for broadband. Not great ones but choices nonetheless. Putting costs aside I wonder about the legal premise under which the city of Seattle could enforce an easement and force homeowners to take the fiber connection.

flyaway

Posted Fri, Jan 17, 8:56 a.m. Inappropriate

Flyaway:
You comment about the court decision is excellent. The question becomes whether the FCC will act to implement different rules given the political environment and the fact that the new FCC Chairman is so closely aligned to the industry. We'll see.
In terms of a fiber utility to every premise and forced connecting of homes. You are right - I wasn't clear on this in the article. I would propose having the fiber pass by every premise at no cost to homeowners, and then have the fiber connect to the house (typically in the air from a pole) only if the homeowner wants to use a service.
-bill

Posted Fri, Jan 17, 6:02 a.m. Inappropriate

Huh? I don't get this. I live in Seattle and I have Internet but I don't have, and never have had either of these two: "But if you want Internet in Seattle, you can choose from Comcast or Centurylink. Unless you live in the Central District or Beacon Hill. Then the choice is Wave Broadband and (maybe) Centurylink. That’s it."

JamesD

Posted Fri, Jan 17, 9:06 a.m. Inappropriate

JamesD:
There are other service providers, e.g. CondoInternet, now part of Wave, in condominiums and apartments. And wireless providers, e.g. Verizon LTE, AT&T;, Sprint and T-Mobile. In terms of wired Internet, Centurylink, Comcast and Wave have almost all the market in Seattle.
-bill

Posted Fri, Jan 17, 10:18 a.m. Inappropriate

Great article and comments. The thing that concerns me is the assumption that the city or another government entity can build a fiber optic network, run it cheaply, and it will last 40+ years. In 5 years there will be more ways to access the Internet via wireless connections that we can imagine now, but the taxpayers would still be burdened with paying off a fiber network. Taking tax dollars to speculate in the field of fiber optic construction and network mangement is a bad idea. If we want to risk taxpayer money and Comcast et. al are reaping such huge profits, why not take the property tax money, buy a telcom mutual fund, and use the returns to subsudize people's cable bills ?

rhmxts

Posted Fri, Jan 17, 2:16 p.m. Inappropriate

Tacoma has their own cable system, and wouldn't ya know it, their speeds aren't anywhere near gigabit. Besides, if the "progressives" who run Seattle can't even fix the streets, how could they be trusted to operate a telecommunications network?

NotFan

Posted Sat, Jan 18, 9:57 a.m. Inappropriate

Notfan:
The Tacoma cable system is a hybrid fiber and coaxial cable, just like Comcast's. Fiber to a box/node in the neighborhood and then coax from that box to each home. It won't perform any better than Comacast's.
On such systems the Internet speeds are shared among 50 to 200 homes. So if a cable company advertises, say, 50 megabits per second (mbs) download and 5 megabits upload, that speed is shared among all the homes on a node in a neighborhood. Which is why it can be slow on Sunday nights.
Telephone company DSL is advertised as slower (e.g. 5 megabits download, 2 megabits upload) but that is YOUR speed at your home or business, dedicated to you.
True fiber systems have speeds of 100 or 1000 mbs or more, both ways, up and down. Because there are no copper or coaxial cables involved, which can break, rust, corrode, etc., fiber will be more reliable and deliver better, faster, service.
-bill

Posted Sat, Jan 18, 2:29 p.m. Inappropriate

Bill, if Comcast or CenturyLink ran fiber to someone's house, it would be just as reliable and fast as if the "progressive" clods at Seattle city hall -- you know, the same corrupt, lying a-holes who can't repair a pothole -- did it.

So the city of Seattle has fiber cables. That's a very, very far cry from having a network that can deliver service. It's a little like saying that Seattle has rain, and therefore it has a water delivery system. With telecom, the costs are in the electronics, and especially in the access network, i.e. the last mile to customer premises.

Those costs are no different to the city than to Comcast or CenturyLink, except that Seattle's city government would inevitably pick some under-the-table crony that would charge twice as much and do half the work. I have ZERO faith in the ability of the city government to get any of this done. They can't even do the old-school basics, and now you think they can build and operate a network serving the whole city? Please, don't insult our intelligence with another "progressive" logroll. What, are you angling for a consulting gig? God help us.

Half the city's people live in single family homes. Tell us, Bill, how are we going to be served, and at what cost? Or are you one more in the long line of typical Seattle "progressives" who despises us single-family homeowners, except when it would come time to collect the tax increase needed to build the network that wouldn't serve us? You know, kind of like how the "progressives" hate cars except when it comes time to finance a big chuck of the city's budget through the parking meters, or to bail out the wasteful bus system with high car tabs. Soak the homeowners and drivers, and provide no service. Is that the idea, Bill? Your crowd already operates this way, so why not expect that it would follow the same m.o. with a city telecom network?

This is a city government that can't even put its city council agenda online more than a couple days before the meetings are held, and which doesn't announce other projects and initiatives at all. And we are going to put those clowns in charge of another communications network? What would the slogan be? Here's one: "Delivering bribes to the Seattle City Council at the speed of light."

Oh for God's sakes, how foolish can you "progressives" possibly be? Please do us all a big favor: Pick up a goddamned shovel and fix a pothole. Not only is there plenty of work out there, Bill, but fixing the streets would be a wonderful opportunity for "progressives" to demonstrate that they can do a single thing right.

NotFan

Posted Fri, Jan 17, 8:17 p.m. Inappropriate

Agree. Another idea would be to waive all the taxes that come on our billings. That costs a bare minimum to implement, and brings immediate relief to consumers $$ outgo.

Posted Sat, Jan 18, 1:10 a.m. Inappropriate

Asking any jurisdiction in this state to waive a tax (unless you're Boeing) is like asking a rattlesnake to regurgitate a field mouse.

NotFan

Posted Sat, Jan 18, 10:03 a.m. Inappropriate

Rhmxts:
Your concerns are valid, although cities seem to be able to operate both electric systems (Seattle, Tacoma) and water/sewer systems pretty reliably over the long term.
The trouble with wireless is that all the speed is shared among multiple users. Typically a single wireless tower has 3 sectors - each one facing a different direction. The latest protocol, LTE or Long-Term Evolution, will advertise speeds of 30-40 megabits per second, but that is shared among ALL the users in a sector which might be 50 or 100 or more.
And of course, wireless throughput is affected by trees, walls, distance from the cell tower etc.
Finally, how do telecoms build wireless systems? They run fiber optic cable to the cell site. So if we build a fiber network, we can pop up small wireless sites (microsites) all over the place. That's what many of us do already with WiFi routers connected to our home Internet connection.
Thanks for your skepticism, however. We do need to ask hard questions before embarking on such a venture.
-bill

Posted Sat, Jan 18, 2:51 p.m. Inappropriate

Seattle's electric utility charges much higher prices than it should, given that its fuel is free. The corrupt "progressives" would never consider it, because they are threatened by ideas, but the best thing they could do with City Light is bid out the management and operations to private entities on a 10-year term, with any cost savings earmarked directly for rate reductions.

God forbid that Seattle's "progressive" city government might want to make this a less expensive place to live.

NotFan

Posted Mon, Jan 20, 3:27 p.m. Inappropriate

NotFan:
I understand your comments and concerns here - and the longer one above - about having the city government build the fiber-to-the-premise network. Yes, it might be better to have CenturyLink or a private entity (e.g. Gigabit Squared, Google) build it.
Remember, however, we are just talking about the cables, not the content. The business or homeowner could buy Internet and telephone and security and video from anyone they wanted - Comcast or ABC or KIRO or ADT or CenturyLink or anyone else. The City would NOT provide the service/content or in any way interfere with delivery over the fiber.
Whoever builds the network needs to promise that all content can flow equally across the fiber lines without extra charges for either the content provider or the homeowner. That is "net neutrality" which is the original subject of the article. Will CenturyLink or Google promise that? Verizon and Comcast certainly won't.
How do we get a fiber provider who won't hold businesses and content providers and homes/businesses hostage? The only way I can figure is a municipal fiber utility, but I'm open to your suggestions for alternatives.
-bill

Posted Mon, Jan 20, 9:47 p.m. Inappropriate

First off, there is no evidence that Gigabit Squared is or ever was a real company, "real" being defined as a company capable of building or operating a telecommunications network. Since McNothing went away, Gigabit Squared looks like they've vanished. They haven't built anything in any other cities, to my knowledge. I suspect that they were never anything but a political vehicle for local politicians in a few cities who thought they could do a magic act for the techies and whatever gullible and/or bought-off reporters they could rope in.

As for content delivery, that's just as much a matter of who controls the backbones as it is a matter of who controls the feeder and access networks. The backbone networks biz was highly competitive 10 years ago, but post-telecom bubble consolidation has changed that in a major way. Today, the backbone is an oligopoly, and the standard oligopoly pricing model differs little from the monopoly pricing model: restrict quantity to raise price and generate economic rents above what justified by business risk.

Here's a clue: If you EVER hear a backbone provider complain about capacity constraints for ANY reason other than a concerted cyberattack of some kind, they are lying. We have enough fiber backbone capacity to last until the 29th Century and beyond. Throttling bit-torrents is justified only to the extent that they might clog a shared coaxial access segment. Once you're on fiber, even that issue vanishes.

Bottom line: The same city and state governments that cannot competently build or fix streets and highways could miraculously build a local fiber network and nevertheless find it throttled in various ways before the signals ever reach the local gateways.

And there is still the issue of the city government taxing the 50% of the population living in single family homes for the purpose of building a network that, in the end, would likely wind up serving only the multi-family dwellings that the powers-that-be want to force everyone into, one way or another.

Bottom-bottom line: Neither the city nor the state governments are to be trusted. They're not competent, nor are they honest. Have them do this, and it will be absolutely nothing but a scheme to do what government here does best: Extract from the many to pay off a few well-connected cronies. Singing kumbaya all the way, naturally.

p.s.: The alternative is to do nothing. To the extent that Comcast's 5-7 Mbps (sometimes 10-12 Mbps) down and 5 Mbps up is a problem, it's one that ranks far down the list in a city with much bigger issues to worry about.

NotFan

Posted Tue, Jan 21, 5:25 p.m. Inappropriate

I'm late to this conversation. You make good points. However, you indicate earlier that anyone who runs a core network isn't really worried about maxing out the pipe, so bandwidth caps are a bit of a sham.

Yes and no.

The important thing to understand is that, like roads, broadband providers are really only worried about the highest peak on their system usage. That's like the evening rush hour. Or 'Sunday Night Netflix Traffic' in consumer broadband terms. While most of the time, the capacity is there waiting to be used, you have to ensure all your users are getting adequate access during very heavy peak times.

In the wholesale transport or transit business, there's a system of settlements that ISP's adhere to move each other's data traffic. The cost of these settlements is usually based on the traffic generated on network from the heaviest users (based on the 95th percentile of peak usage). If there are a few extremely heavy users on my network that are utilizing data above that 95th percentile of peak usage, it is going to impact the kind of costs I incur when I purchase data transit for another provider.

This system of settlements helps to generate a pricing signal into the wholesale market - otherwise it would be extremely difficult to measure how much data cost. The pricing signals also help networks determine when and where network upgrades are most important to build out.

For instance, if the 95th percentile of my users only gets me up to about 50% capacity on my pipe, I've got a bit of room to give. However, if I've got some folks running massive data servers cranking out a ton of traffic, and my 95th percentile cranks me up to 80% or 90% of my capacity - well that's telling me I need to upgrade.

Therefore, with the system of settlements in place, there is an actual impact on pricing.

picola30

Posted Tue, Jan 21, 11:25 p.m. Inappropriate

I was heavily involved in "high tech" before I retired. That's a huge category, and I was knowledgeable about some things and clueless about others. Most software pretty much baffled me -- especially databases, which were dark mysteries -- and I never thought personal computers or minicomputers or mainframes were interesting enough to learn about. But telecom hardware and "clean energy" hardware, other way around.

To my knowledge, it's impossible to overstate the carrying capacity of the backbone. We have more capacity than we'll ever use. I was very, very rarely bowled over by anyone's hype, but fiberoptic capacity is an area that I researched pretty extensively, and I'd say I drank the Kool-Aid on that one. Between the upgrades per channel and the multi-color capabilities that began hitting the market 10 or 12 years ago, I was bowled over.

I concluded that the gating factor is the electronics on the ends. When I retired a decade ago that capacity was growing so fast that, in the then-competitive backbone market, the price of OC-3 transport (then the basic unit, probably much higher by now) was declining by 90 percent PER MONTH. This part of what I used to do might be just about the only thing I miss. I used to love talking to the fiber-optic people in the hardware companies and in the telcos. Unlike, say, the DSL equipment makers, the fiber guys didn't routinely lie through their teeth.

That's as geeky as I'll get here. My point is very simple: There is no capacity constraint on the backbone, and there never will be any, absent some "black swan event" like, say, a foreign attack. To the extent that I'm wrong about that -- which I really don't think I am -- the backup is storage, which has seen similar exponential growth.

The only thing that's changed in a fundamental way is consolidation of ownership, which began during Bush Jr.'s administration and continued into Obama's. As you must know, the telecom network is, always has been, and always will be hyper political. Consolidation was allowed because it's an area where there is very serious gigantic money involved, enough to buy off anyone and everyone in sight.

Any provider easily has enough capacity to steam every video simultaneously to everyone, all the time, especially if that video is, say, a movie as opposed to a live event. But even live events are easy, because there aren't all that many of them occurring at once, and buffering can take care of any issues. (Individual videoconferencing imposes less than trivial demands.)

Therefore, any "settlements" are purely political, and pure profit, and these days (in Microecon 101-speak) "economic profit," i.e. oligopoly rents. There are no relevant technology limitations, "relevant" meaning anything that can't be addressed very cheaply. There really aren't many absolute statements that work in telecom, or in life, but the ones I've just made actually do work.

Any limitations, if any, occur in the feeder and access portions of the networks, and mostly in the access networks, because the feeder networks are also fiber, with the same essentially unlimited capacity as the backbones. I don't know who you work for, but I don't deny that you pay settlements. What I'm saying is that those settlements are purely the result of political engineering to facilitate, and now that they've been facilitated, to protect for the purpose of extracting economic profit.

Which leads back to my original point, which is that the city could build a local network, but the pricing power has shifted elsewhere. It's in the backbone, which is why the cable companies are crying bloody murder these days, along with the "content providers." They are every last bit as hostage to the oligopoly backbone providers as the farmers of the 1800s were to the railroads, only these days the F.C.C. has been captured in ways that the I.C.C. was never captured in the railroad days.

Bottom line: Even if I believed that the city knew what the hell it was doing and could build a fiber network (as opposed to owning strands, which is like sitting under the clouds on a rainy day and calling it a water delivery system), that effort would be utterly pointless. That's what I think, anyway, any "settlements" notwithstanding.

This is all rather paradoxical, considering how, back in the day, the "last mile" was the big focus. Think of the last mile as the local farm road to the railroad terminal, circa 1880 or 1890. That road could be as wide and smooth as they could make it, but the railroad held all the cards. The more things change ...

NotFan

Posted Wed, Jan 22, 9:54 a.m. Inappropriate

Notfan -

Well you're right to point out that there are no functional capacity constraints on the fiber itself. That stuff can carry virtually an unlimited amount of data.

However, networks are only as fast as their slowest part, which is often all of the other stuff you have to pack in to data management.

Router and switch hardware fail or become obsolete. Network security protocols get updated (you don't want to run your network without security do you?), additional software-level data management functionality can emerge but must be programmed in correctly, network topologies change and can add additional functional layers of complexity between communications devices. For instance, you've added that 25th customer and now you've got to determine whether or not to purchase a 48-port switch or go with another 24-port switch and somehow manage outbound/inbound traffic from the two.

Now take into consideration that network traffic is usually 'bursty'. Most of the activity happens in discrete chunks. People are usually not streaming video 24/7. So unless you want to try and negotiate a whole 10Mbps, 100Mbps, 1Gbps, 10Gbps or higher commit agreement (probably too expensive for most folks), you use a pricing mechanism like the 95th percentile to ensure that there will always be enough sufficient capacity on the circuit to meet peak demand requirements.

picola30

Posted Wed, Jan 22, 1:04 p.m. Inappropriate

Like I wrote, the technical gating factor is the electronics on the ends of the fiber strands. But when I was researching thst side it, those prices were also plummeting, especially on a "dollars per zillion bits" basis. Of course, when bits are free you'll use more, so you'd be better off to look at "dollars per application," and there the prices were STILL plummeting.

I wouldn't deny that switchrouters fail or that you've got decisions to make on how many ports here and how many ports there. My point was (and remains) that the backbone has infinite bandwidth, and that any meaningful restrictions (including and especially pricing barriers) on that bandwidth are enabled by consolidation permitted by the "regulators." To put it differently: Fiber is infinite, and ports are cheap. Imagine if shirts were free. Would buttons be the gating factor, or could we be reasonably confident that buttons were cheap enough not to worry about buttons?

I could theoretically be persuaded otherwise by a day or two of meetings with the geeks, but based on what I think I learned, and what I think are reasonable (and probably quite conservative) extrapolations, I'm not convinced that bandwidth is an issue anywhere in a fiber network aside from a "black swan" event. And by bandwidth, I include not just fiber capacity, but the routing and management of the traffic. I do not imagine that these things happen by magic. There are real people who make, install, operate, and maintain the gear. In fact, these were always my favorite people: If you want to understand a telephone company, a day with the outside plant guys is worth a week with the CEO.

Therefore, I'd reiterate my view that the gating factor is not technological but rather economic, and in particular the harvesting of "economic profit" (a term of art from Microecon 101 that means profit in excess of business risk, aka "rent extraction") by whatever entity is in a position to do the extraction. To put it differently, you've talked about these pricing agreements on 10 Mbps or 100 Mbps. When multi TERABITS are free, why do these pricing agreements become issues? The answer: Consolidation and the harvesting of windfall profits made possible by oligopoly pricing, which is a simple matter of restricting quantity to increase price. It can only work in the absence of meaningful competition, a condition that "regulators" have allowed to develop.

These days and in the days to come, I believe that the backbone players are in such a strong position that the buildout, by the city, of a fiberoptic network would wind up being a Pyrrhic victory at best. To put it differently, "network neutrality" isn't necessarily a locally-focused thing. You could be "neutral" as all get-out within the city and it wouldn't matter at all if the inter-city railroad was classifying traffic and handling (and charging) differently based on what that traffic is. I pretty strongly believe that this is exactly what will happen, and from what you've written already is happening to some degree.

BTW, I'd really be interested if you'd elaborate on the other issue below. I'm really interested in that one, knowing much less about it.

NotFan

Posted Wed, Jan 22, 2:33 p.m. Inappropriate

Notfan -

I think the point is that data isn't free. Prices are rapidly dropping, but the data isn't free. In fact, these are such large capital projects that building them out assumes a massive up front risk, the financing of which needs to be amortized over many years.

For instance, if it costs $100M to serve 6,000 customers (think Chelan PUD)that is about $16,667 per customer. Assuming people are willing to pay $60 per month for broadband, that's 277 months or 23 years to break even on that investment. Most private companies are not willing to lock in capital for 23 years to see a return.

For Seattle, it is estimated a muni fiber network would have to assume an 80% 'take rate' (market share, effectively) to break-even on a full build municipal build out. That means the private market would only service 20%. I'm not sure what kind of service you would have to offer to people to get them to give up Comcast, Wave, or CenturyLink at levels where combined, they would only serve 20%. If you can't, you're running at a massive loss.

Proponents are correct in pointing out it's easy to measure cost and very hard to measure benefit. There's certainly a public benefit in there somewhere, but how do you arrive at that? And even more troubling, how do you arrive at what the opportunity cost would be for public dollars that could go to fire stations, ambulances, libraries, etc.?

It's not simple. It's very complex.

picola30

Posted Wed, Jan 22, 3:06 p.m. Inappropriate

Local data delivery is certainly not free, but come on, you know that's not what I was referring to. Please re-read what I wrote. I already did too much repetition, so I'm not going to do it again. If you don't grasp my argument above, then you'll never get it.

Yes, it would certainly be expensive for the city, or anyone else, to build a third terrestrial data network here. Worst thing is that, even if they did a decent job of it (highly doubtful, given their track record elsewhere) I don't see ANY noticeable public benefit whatsoever, much less a net benefit, from doing so, for all the reasons I've given.

NotFan

Posted Tue, Jan 21, 5:37 p.m. Inappropriate

Good thoughts, BillS -

With the increasing usage of mobile devices, the former edge of the wired network is going to take a more central role. Thinking about all those wireless access points with a sea of mobile devices surrounding them, there is some real value to be added in the form of carrier-grade Wi-Fi and serving as functional backhaul for small cell sites.

Comcast's Xfinity X1 DVR's have the built-in functionality of carrier-grade Wi-Fi that works independently of the in-home consumer Wi-Fi. These DVR's are essentially a trojan horse (good? bad? indifferent?) into creating a sophisticated Comcast Wi-Fi mesh network for Comcast customers. Now what's the drawback? Same as it's ever been - little penetration into commercial buildings that don't have an HFC plant.

With the defeat of Net Neutrality, it will only be a matter of time before an enterprising enterprise like Comcast goes to the wireless carriers and says, "no more free Wi-Fi handoffs" - we're done with you using our network for your mobile traffic. Now here's a Wi-Fi mesh solution that has the coverage you need to reach your customers.

Then the wireless carrier will say, "oh no, we can no longer offload onto Wi-Fi" - it's time to find ways to shore up revenue streams, we better go to sponsored data like AT&T; has just suggested. It may not be long before our mobile phones may be significantly ad-driven.

picola30

Posted Tue, Jan 21, 11:56 p.m. Inappropriate

Hmm, that's interesting. Would be interested in hearing more. I've gotta say that if my phone becomes ad-driven I'll find it easy to bsckward migrate to one that just makes phone calls. I find the data side of my smartphone barely useful to begin with. In fact, when the "upgrade" option hits later this summer, I'd been thinking of backward migration anyway. There just ain't much useful to me.

But how is Xfinity involved in mobile data? I was exclusively focused on the "telephone" companies, both wireline and wireless, so I'm educable on certain aspects of the cable side. And what's this about DVRs and Wi-Fi? I'm very curious. This is a big gap in my knowledge.

When it comes to data and the cellular network, I'm a big cynic. To be brief, I was never part of the cult of Qualcomm, to put it ever so mildly.

NotFan

Posted Wed, Jan 22, 3:15 p.m. Inappropriate

Notfan -

Well let's look at this. We know that wireless carriers have a limited amount of spectrum that they can operate in and that it is extremely costly to acquire (in the billions). Early on in the smartphone game, handset manufacturers put wi-fi transceivers into the phones, which was great for wireless carriers because a lot of the heavy data traffic could be off-loaded onto the Wi-Fi access point and onto wireline providers' network.

This was generally not too much of an issue because mobile device screen sizes are smaller than video monitors, which means that video files were manageable. However, as smartphone screen sizes have increased and picture quality gone up, those video files have gotten a lot larger. Tablets now regularly stream Netflix, Hulu and other data-heavy services. Still not too much of a big deal, but as more mobile devices begin to use data simultaneously and at higher 4K resolution, wireline providers will naturally want to be compensated for the increasing amount of traffic going across their network.

If the defeat of Net Neutrality were to be upheld by the Supreme Court, it is reasonable to assume wireline providers may want to begin distinguishing the source (and potentially content) of data going across their networks. If mobile started to become a major part of that, wireline operators would look to wireless companies as a source of revenue.

Such a move would squeeze margins of wireless carriers who would have to consider raising rates, reducing services, slowing deployments, seeking revenue elsewhere, such as sponsored data plans.

picola30

Posted Mon, Jan 27, 7:39 a.m. Inappropriate

Picola30 and NotFan:
In your back and forth there are a couple interesting ideas, for examples:

(1) Build a fiber network into neighborhoods and "past" every house, then pop up wireless access points (or multiple) on every block to deliver high speed access to homes and businesses. Would be cheaper than fiber to every home and perhaps take care of most of the need.
(2) Rather than have the City build the fiber network, since NotFan hates and mistrusts government so much, have the City partially fund the fiber network for a third party to build the network. The quid pro quo for City funding is that the third party has to offer equal access to any content provider, including individual citizens as well as KIRO, Comcast, CenturyLink, CBS, home security companies, etc.

The two of you might have given me material for another column!

-bill

Posted Fri, Jan 17, 10:38 a.m. Inappropriate

So, since there are other ISP's in Seattle your statement

"But if you want Internet in Seattle, you can choose from Comcast or Centurylink. Unless you live in the Central District or Beacon Hill. Then the choice is Wave Broadband and (maybe) Centurylink. That’s it."

is not true. Perhaps you could re-word it to something like

"But if you want Internet in Seattle, you can choose from Comcast or Centurylink or one of the many other ISP's in the city. Unless you live in the Central District or Beacon Hill. Then the choice includes Wave Broadband and (maybe) Centurylink. That’s it."

JamesD

Posted Sat, Jan 18, 10:06 a.m. Inappropriate

JamesD:
Agreed, it could be worded better. But Comcast has 180,000 subscribers, Wave has 20,000 or more(including Condo Internet). Not sure about CenturyLink, but similar numbers, I presume. So for most consumers and small businesses in Seattle, two of those three are the choices.
-bill

Posted Mon, Jan 20, 5:55 p.m. Inappropriate

Just because Comcast and Wave have a large number of subscribers does not mean they are the only game in town. Many people I know who go with those two did it because they did not know they had further choices. Statements like yours only feed that obscurity and fuel the corporate maw.

JamesD

Posted Tue, Jan 21, 5:52 p.m. Inappropriate

BillS said this: Whoever builds the network needs to promise that all content can flow equally across the fiber lines without extra charges for either the content provider or the homeowner. That is "net neutrality" which is the original subject of the article.

Political State leaders and WSDOT said this: Let's build the bore tunnel, making traffic capacity smaller than the current Viaduct carries, we'll be able to charge everyone in the entire state extra including drivers and homeowners, and figure out a way to charge a travel tax to visitors who refuse to ride the bus or train too. This we will call the "Deep Bore" where net neutrality matters not a whit.

Perhaps, just perhaps, the 2 mile Boring Bertha story will mean people quit trusting the status quo who lies like a rug about just how much things will cost, and just how few vehicles can travel thru this bore hole.

Sorry to interrupt, I just saw a parallel and took it sideways a bit.

Posted Wed, Jan 22, 1:37 p.m. Inappropriate

If you read my exchanges with picola30 above, you'll see my viewpoint that a city-built network will NOT be able to guarantee the kind of "neutrality" that will matter. Content might flow equally WITHIN a city network, but the minute you click on a site hosted outside the city (i.e., just about all of them), you'll be getting there via players not under the local network's influence or control.

What's even worse is that, if there was ever (as there always is, every day) a knock-down, drag-out fight, who would you want to be your Internet on-ramp: a tiny (in relative terms) "independent" city system with zero power, or Xfinity, a national outfit that swings a reasonably big bat? The inevitable fustercluck that would ensue if the city built a network aside, they wouldn't be doing anyone any favors even if lightning struck and they built it on time and under budget.

Of course, seeing as how the "progressives" don't understand how any of this works and don't want to understand it because magical thinking is so much more fun than complicated and disappointing facts, and given that politicians are "poets" and not "mathletes," we can predict that Ed Murray will soon come up with some report to be produced by this city's biggest and best-funded department, the Earnest But Useless Study Division, a subsidiary of Monty Python Inc. Look for an 80-page, multicolor pdf to be available for download, oh, in a couple years.

NotFan

Posted Mon, Jan 27, 7:33 a.m. Inappropriate

NotFan:
You have made many criticisms of the plan to build a municipal network and some of them are valid. You agree that net neutrality is a problem and that the current existing duopoly takes consumers to the cleaners. But in all your missives I didn't see you make a proposal in positive language for a solution.
P.S. You are also extremely critical of government. So what have YOU done to push for change in government?
-Bill

Posted Mon, Jan 27, 7:34 a.m. Inappropriate

Common1sense:
For the cost of the bore tunnel, the State and City could have built a fiber network serving every home, business and industry in King County, perhaps in the entire Puget Sound region.
Which do you think is the better long-term investment?
-bill

Posted Thu, Jan 23, 7:47 a.m. Inappropriate

Some services should be taken care of by the government - this is not one of them. After the recent SCOTUS ruling it appears the FCC may go back to the drawing board and get it right, hopefully.

Treker

Posted Mon, Jan 27, 4:35 p.m. Inappropriate

Bill Schrier, for the cost of the bore tunnel (even without the vast cost overruns) the State and City could build a fiber network serving every home, business and industry at minimum the Puget Sound area, and perhaps the entire State, completely build a brand new Viaduct, and build at least several 144-car ferry boats.

So yes, the better long-term investment as I've outlined above would be far better than ending up with either the most expensive underground 2-mile stretch of road anywhere in the world (universe anyone?), and/or the most expensive buried bore blade in the universe.

Just so long as WSDOT has nothing to do with any of the above, it can all come un under budget.

Posted Mon, Jan 27, 11:29 p.m. Inappropriate

Common1sense:
Well, there you go. Too bad Mike McGinn couldn't make his points about the tunnel in as succinct a fashion as you did.
Thanks.
-bill

Posted Fri, Jan 31, 2:35 p.m. Inappropriate

Bill, if you are still monitoring this thread, or even if you are not:

Many of these ideas for Seatlle muni broadband are not exactly "new" and were discussed as far back as 2007 when the whole thing was dismissed as "not feasible." There was some truth to that, but the actual reasons were fear of being sued for unfair competition. You were there, even if those ideas never got to your level. That fear is moot today, after the City of Edmonds won their court case against Comcast. Plan B to go to triple play all in at once was doomed too, but on a certain level irresistable of course.

Click in Tacoma is not a good model, then or now. They have been teetering on the edge financially for a long time, nearly went under two years ago, and does not provide the bandwith/cost ratio to justify the prices. The goal of affordability cannot be reached when you still have to go through the Century Link gateway to get to the open internet.

I am surprised no one mentioned that the City has lots of dark fiber backbone already in place, running in all directions. Maybe because it is from City Light and SPU. And where do you think the SPD's controversial mesh WiFi system that is now supposely not being used, came from? Homeland Security money, like the City of Edmonds (only they got all fiber).

It's still really the last mile issue. AND a gateway issue. We have enough OC3 and higher already running close enough within the city borders, that extending it will not cost nearly as much as it would have in 2007. And in contrast to Comcast and CL, the city already owns the poles it's hung on. Comcast leases that space too. Neither Comcast or CL is going to bulid a parallel infrastructure and conduit to support it. Even under their current contract, up for re-newal this year, the city specifically reserved the right to establish it's own service, not limited to existing utility or public safety use. The mayor and the City council have an opportunity to remove a self-imposed barrier this year.

What has not been discussed, is that small business ISP's, who don't also have to go through the Comcast or Century Link nodes, and could instead go though the City's, on a separate channel of course, would actually be the best of all worlds: Lower prices, more competition, genuine net neutrality. The City would only need to have an overriding governor for any runaway usage or necessary security of the overall network.

At least that's the theory. Your thoughts?

Marksp

Posted Fri, Jan 31, 2:37 p.m. Inappropriate

BTW, if anyone doubts the feasilbilty of muni Broadband, see Chattenooga, TN. They are running it as a utility.

Marksp

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