Obama Promotes Making the Internet a Utility

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Obama proposed making the Internet a utility today to ensure net neutrality. This is something I've been in favor of for a few years now. The Internet is already a utility for the middle and upper class - something to pay for along with your power and water bills. Making it officially a utility would drive service to underserved areas and ensure decent service and rates. Verizon and Comcast slammed the plan while Netflix and net neutrality groups applauded. The Democrats were happy, the Republicans not so much.

In my state, Verizon and Time Warner got together and persuaded the state legislature to ban municipal broadband. They had to act because of the example of Wilson, NC, a city that set up broadband as a utility and provides 20x the bandwidth as Time Warner for similar or lower prices. Wilson was trying to expand into the wider metropolitan area so Time Warner beat them in the legislature.

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@engineer,

Interesting stuff going on in the world of internet service provision.

In addition to stores and restaurants that offer free WIFI now, it's pretty commonly found in the underground malls here and several subway stations offer it (with a plan to expand throughout the system). It seems like we'll soon have free WIFI everywhere there are washrooms.

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@ehBeth,

It's interesting to see what Wilson offers compared to what Time Warner (the local cable provider) offers. You can get 40Mbs upload and download from the city utility Greenlight for $40/month. To get "up to" 30Mbs download, 5Mbs upload from Time Warner in the same city you would pay $60/month unless you got the Internet special, then you could get it for $55.

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It's about time somebody with clout stood up for us.

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@edgarblythe,

I think Internet access is already like electricity and water in that people who do not have it are substantially disadvantaged to those who do. Without affordable Internet, I think students will have trouble doing even basic assignments. My children already work collaboratively on the Internet using Google shared documents at school. For the few who don't have Internet, they can work at school or go to a library, but what a disadvantage compared to students who can sit at home and work.

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I was surprised today to learn that Republican politicians, such as Ted Cruz, are openly calling for the end of net neutrality. I am not surprised they feel that way, but I thought they would try to slip it in, unnoticed.

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@engineer,

What are the pro's and con's of the idea?

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@rosborne979,

The pros are infrastructure rollout, access and cost. Right now, the type of Internet access you get is dependent on what the providers want to give you. If you live in a major metropolitan area in a newly built subdivision of homes of a certain value, you could get fiber to the home. If you are in a reasonably dense middle class neighborhood, you might have the option of DSL and cable. If you are in a poor or rural area, you might be restricted to dial up. As a utility, the municipal service provider is going to speed up high speed deployment to all residents. Wilson, NC is the perfect example. Wilson has around 50K residents making it small potatoes in terms of NC cities (although Wilson is big for eastern NC.) It is the heart of tobacco country but is not particularly wealthy or upscale. But because it has municipal Internet, they have the highest speed service in NC at the best cost. As a utility, they can also use their profits to roll out services equally regardless of "take rate". For businesses that rely on community infrastructure, having a high speed community backbone will one day be as important has having good roads or reliable electricity.

The "cons" come from the companies that currently provide the service. The national ISP's make a mint from providing high speed Internet access. They will argue that without that profit motive, service will suffer, innovation will slow and they will have little interest in expanding their networks. (I disagree with that and I think there are plenty of examples of why those arguments are wrong.)

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Article on Why is the American Internet So Slow.

Quote:

According to a recent study by Ookla Speedtest, the U.S. ranks a shocking 31st in the world in terms of average download speeds. The leaders in the world are Hong Kong at 72.49 Mbps and Singapore on 58.84 Mbps. And America? Averaging speeds of 20.77 Mbps, it falls behind countries like Estonia, Hungary, Slovakia, and Uruguay.

Its upload speeds are even worse. Globally, the U.S. ranks 42nd with an average upload speed of 6.31 Mbps, behind Lesotho, Belarus, Slovenia, and other countries you only hear mentioned on Jeopardy.

So how did America fall behind? How did the country that literally invented the internet — and the home to world-leading tech companies such as Apple, Microsoft, Netflix, Facebook, Google, and Cisco — fall behind so many others in download speeds?

Susan Crawford argues that "huge telecommunication companies" such as Comcast, Time Warner, Verizon, and AT&T have "divided up markets and put themselves in a position where they're subject to no competition."

How? The 1996 Telecommunications Act — which was meant to foster competition — allowed cable companies and telecoms companies to simply divide markets and merge their way to monopoly, allowing them to charge customers higher and higher prices without the kind of investment in internet infrastructure, especially in next-generation fiber optic connections, that is ongoing in other countries. Fiber optic connections offer a particularly compelling example. While expensive to build, they offer faster and smoother connections than traditional copper wire connections. But Verizon stopped building out fiber optic infrastructure in 2010 — citing high costs — just as other countries were getting to work.

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@engineer,

Quote:

As a utility, the municipal service provider is going to speed up high speed deployment to all residents.

That's an assumption but there is nothing in law that requires that to happen.

Changing the FCC category to bring Internet services under Title II (i.e. "making them a utility") does NOT mean that that the ISPs will be required to build out anything.

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@Woodworker766,

But a municipal utility's function is to provide services, so they would quickly move to expand into the entire service area. The idea that the take rate will be low in that neighborhood wouldn't be as big a factor in their calculations. The way this works for power and water is that the high density areas end up slightly subsidizing the lower density areas.

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@engineer,

You are confusing things. To begin with municipal utilities will be pretty much useless in that particular effort. People that live within organized townships and cities pretty much have Internet access. Broadband penetration is to over 70% of U.S. households. It's the people that live in rural areas - outside of organized townships, that don't have service. And there are very, very few towns that are going to increase their own rates so they can build out service to people that aren't within their town.

Anyway, Rural areas got electricity due to the Rural Electrification Act, not because electricity was deemed to be a utility. As for water, can you point to anywhere where your claim is in effect? No one in my town has public water. We're all on private wells - as are millions of others in the U.S..

The only other item I can think of that has fallen into line with the Electric utilities is telephone service. But again, that was due to the formation of the National Rural Electric Cooperative Association which was an off-shoot of the Rural Electrification Act.

So you have to look at cause/effect here. Deeming the Internet to be a utility means it can be regulated as a utility. Then the appropriate government agencies pass laws and/or rules to actually create the regulations. The Congress MIGHT do that and choose to go the Rural Electrification route, or maybe they won't. But there isn't anything automatic that triggers universal service. There is no indication as of yet that the Internet would be a municipal utility. It could very well end up being setup as State level utilities or regional services (similar to the TVA).

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@Woodworker766,

But all of that would be a win, whether set up at the state level or a regional level of if Rural ISP Cooperatives form. It would also be a win letting communities decide if they are going to upgrade to fiber instead of letting Time Warner, Comcast and Verizon decide for them. You don't have to get a two year payback and 40% return on investment before you build out if you are a utility.

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@engineer,

There is nothing that says that any local community is going to have any more say over any of it than they've had all along. Keep in mind here, wireless phone services (ie. cell) is regulated. But local communities have zero control over them. You can't force AT&T, Sprint, etc... to put a cell tower in your community to provide coverage. Local communities can use zoning laws to prevent them from building a tower but that's about it.

*IF* it comes about that the FCC decides to rule that the Internet falls under Title II (i.e. that it is a utility) the most likely scenario would be that all regulatory authority would remain with the FCC, just as has been done with other telecommunications systems.

So is it still a win if the FCC decides that they will be the only regulatory authority and that the only regulation they wish to implement is that ISPs can't provide their "fast lane" services and prohibit them from blocking traffic? That is an entirely plausible scenario... It would essentially reverse the prior Appeals Court decision that struck down the previous "Net Neutrality" rules but do nothing more than that.

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@Woodworker766,

But the local utility would still be driving faster access to their customers faster than the current providers. Also small ISP's wouldn't have any reason to restrict fast lane services. Unlike the big three providers, they don't have a profit motive or any conflicts of interest. In the current system, the local supplier often has a monopoly on service and can pretty much charge what they want. If you have a service that the community counts on for basic needs, setting it up as a utility ensures that the public gets decent service at a fair price.

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@engineer,

What "local utility"? I think you're in for a huge disappointment if you think your local town is suddenly going to get into the Internet business. Does your town have the own cell phone company? Or even landline phone service?

And small ISPs would be under the same restrictions as large ISPs. An ISP is an ISP. I don't see them being allowed to setup services that a larger ISP wouldn't be able to have. And something like fast lanes can't be done by a local ISP alone. The entire idea is to prioritize traffic from end-to-end. That means it has to be prioritized across the entire Internet backbone. You can't get from "Billy Bob's ISP" to Netflix or Amazon without going through Verizon, Comcast, Level 3 or one of the other tier 1 providers.

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@engineer,

Quote:

Obama proposed making the Internet a utility today to ensure net neutrality

Good move but I dont know that Obama has the muscle or the will to make it happen.

Quote:

In my state, Verizon and Time Warner got together and persuaded the state legislature to ban municipal broadband. They had to act because of the example of Wilson, NC, a city that set up broadband as a utility and provides 20x the bandwidth as Time Warner for similar or lower prices. Wilson was trying to expand into the wider metropolitan area so Time Warner beat them in the legislature.

Ya sure, tacoma is way out front, they have a cable company, a power company and a railroad. It has not worked out too great. The economy of the city is very sluggish and it should be great because of where it is, what this city spends its money on has to be part of the problem.

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Nothing is "free".

The link given in the first message of this thread, calls for "free and open internet".

http://www.whitehouse.gov/net-neutrality

Any city that provides "free internet service" in certain areas, that city is using tax payers money to provide such a service.

The place of government is to regulate rather than compete with the private sector. The internet service is similar to the cable service for TV programs and movies. There are "packages" offered to the customer, and the customer has the right to choose what set of options to buy.

Same with phone services, while AT&T charges $90- $120 plus for unlimited calls, unlimited text, plus 4G internet, Super Mobile charges a flat $50 for the same service. Amazingly, lots of people still using AT&T regardless of the high price even when their contracts have expired and are paying month to month options.

This indicates that "price for service" is not imposed but it is the preference of people to certain companies over other companies.

The government is actually pushing hard for people being connected to the internet. With the excuse of a "green world guided system", there are no more printed tax forms provided unless it is required by phone, and in order to find the phone number one must go online... a vicious circle created to force people to use the internet.

The job of government is to facilitate the medium for better communication, and not everybody use internet, so the government is imposing rather than providing.

Having that "utility service" idealized by president Obama, he must compromise himself to provide computers and cell phones for free to every household, as part of the installation of this "free"service in every city of the US.

Reality is that not every family in the US can afford to buy a computer, and I can tell when I visit a public library and I can see people waiting for their turn so they can sit and use the library's computers. So, getting into the internet is not what movies and TV series show but there is a great percent of the population that can't have that service at home for many circumstances, the primary of them is money to buy a computer.

This comment was based solely on the link provided in the first message of this thread.

To conclude, the internet service is already a utility, but can't be free, someone must pay for the service.

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@engineer,

Ah, the govt wants to control everything that would give the people a voice or earn them a buck. Much easier to control your online business. Much easier to turn off in case of a rebellion. And easier to bury the stuff you'd rather people didn't see.

And one provider too. Monopoly. Heh he, Libs aren't capitalists though.

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Obama Promotes Making the Internet a Utility

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