IndyWeek.com has a great article about the city of Wilson, North Carolina and their efforts to develop a publicly owned broadband network. Wilson isn’t the first city to do something like this; in fact, as of April 2008, there were 44 government/municipal ISPs in the U.S. serving 60 cities. But what makes this interesting is how commercial ISPs – Time Warner Cable and Embarq DSL specifically – are reacting to this government-sponsored one-upsmanship. They’ve pushed legislation before the state government that effectively prohibits government-owned competition (not in so many words, but that’s the net effect.) But I won’t bore you with the details that are available elsewhere.
As you can imagine, this is the gateway to any number of intriguing discussions. Should Bend undertake a similar effort? Would cheap, government owned broadband help attract businesses to the area? Is broadband service really a utility? If so, how does it compare to other local utilities, such as Water and Sewer (hmm… flooding issues, anyone?). I could go on and on. But for now, let me just throw down a few bullets:
- Wilson’s fiber network is funded with $28M in bonds
- Wilcon population is 50K (compared to Bend’s 80K)
- The “Fiber to the Home” council website has some great resources and whitepapers. This whitepaper [PDF] in particular is worth a read. In addition to the data on how many municipal ISPs there are, the paper includes these tidbits:
- No municipal ISP has yet “failed”
- Average “take rate” (%’age of potential subscribers that sign up) is 54%
- Most municipal business plans only require a 30-40% take rate to be profitable.
- Many municipalities report increases in home-based businesses, and increased attractiveness to businesses considering relocating to the area.
- Our nearest public network is the one in Ashland (I think?)
One thing I don’t have a good feel for is what the interest for something like this would be locally. Bend Broadband has (IMHO) always been one of the better ISPs in the nation. Do we really need something like this? If so why? What would be the most relevant issues? (And what would it mean to have an ISP that was subject to the whim and mercy of voters???)
My first thought when I read this post was “What a hare-brained socialist idea, give the government more options to take over private business.” Before I sent a reply to that effect, I decided to go on a bike ride and think critically about the concept. After two hours on the bike I had completely changed my mind. The time is ripe for more involvement of the government in providing internet services. I came to this conclusion by comparing the quality of service offered by quasi-governmental agencies versus corporate entities. Let’s take a look.
Mail and Parcel Post
While the phrase “going postal” and the image of Cliff Claven rummaging through the mail prior to delivery have given the USPS a negative image, not many countries can boast that they have a better mail system than ours. The system is highly efficient; letters are delivered anywhere in the country in a matter of days. You can drop a letter for delivery in the mailbox at your house and it will be taken care of. The corporate vendors provide good service at a substantial cost. The deliveries are punctual, but you have to call for home pickup services or drive to their place of business. Give this one to the USPS.
Financial Services
The Oregon Public Employees Retirement System has provided excellent financial performances for their clients. PERS has guaranteed rates of return for their retirees. This level of care is sadly not seen by the corporate entities providing money management services for private companies. If possible, I would turn my pension and 401k money to PERS in a heartbeat with their guaranteed system. Hands down PERS over Vanguard.
Transit Services
Here it is a little dicey finding an apple-to-apple comparison. On one hand I have been stranded for hundreds of hours waiting for an airplane ride that was run by big business. I have yet to wait an unreasonable time for the Bend Area Transit bus. It took some time, but Bend city government was able to develop a small but effective transit system for the community. Solely, on the waiting for a ride issue, I would give this on to the government.
Insurance Services
Primarily SAIF and Liberty Northwest handle worker’s comp insurance services in Oregon. My opinion after working with both is that they are equal. Not great, not even good, but equal.
Highway Services
I can only compare our highways for cars and what could be provided for the information highway. State and local governments do a commendable job of highway and street system maintenance on the roads we use everyday. Granted there are limited funds to fix every pothole, but by and large our roads are in good enough shape to drive the speed limit and then some. I can only assume that governments would have the same level of care for the information highway. It is reasonable to assume that governments will similarly find and repair deficiencies in network service. In addition, the highway patrol and local traffic cops do a first-rate job of providing security on the open road. I think we can all agree that more security is required on the internet. The government will be more than willing to take on the required security tasks for the information highway.
For all of the above reasons, I think that governments, (local, state, and federal) should be taking a larger role in the business of network integration and providing ISP service. Now, time for another bike ride.
Gordon
@Gordon
There are definitely tradeoffs either way.
For example, the NYT has an article about how Time Warner’s attempts to limit/charge more for their broadband services has little to do with the actual cost of broadband – it stems from the increasing cost of the other, non-broadband services they provide.
And then there’s all the B.S. with Comcast playing games with what throttling different types of network traffic.
On the flip side, I wonder how some of the legal issues would play out if the government ran things. For example, would the City of Bend to get caught up in the RIAA’s heavy-handed copyright enforcement lawsuits around file-sharing? At what point does the government decide it’s okay to start sniffing network traffic to look for child-pornography?
On a more pragmatic note, I’m not sure I want to rely on our local city for support if something goes wrong with my network connection. Bend Broadband has been phenomenal in that department… I’m not so sure I’d want to have to deal with a Post Office or DMV-like experience on that front.
Like I said, there are all sorts of intriguing issues here. (In fact, I’m surprised to not have had more comments.)