[Cialug] Iowa Municipal Telecom Legisation

[Dave Weis]

On Tue, 22 Feb 2005, Michael Osten wrote:
> On Feb 22, 2005, at 5:55 PM, Dave J. Hala Jr. wrote:
>> On Tue, 2005-02-22 at 17:05, Michael Osten wrote:
>>> On Feb 22, 2005, at 4:43 PM, Dave J. Hala Jr. wrote:
>>> 
>>>> I don't agree that a having a municipal service would limit choice.
>>> 
>>> If a municipal service can operate at a loss subsidize by tax dollars
>>> (which most of them do) how could you possibly expect competition?
>> 
>> Some break even. Some lose money. Some have competitors. I compete
>> against companies that work for free. I'm making a living. Cost is not
>> always the controlling factor.
>> 
>
> When the government comes in and says that you need to give half of your 
> earnings to the government but your competition doesn't you would be able to 
> make that analogy.

It's not earnings, it's profit.

> What you are not understanding that no matter what the competition is at a 
> disadvantage because of regulation.  This is not simple.  This is not a 
> situation where the government is breaking up a monopoly.  It is simply not 
> fair for government to force telcos to build infrastructure based on a 
> utility service regardless of profit potential, regulate and tax said service 
> and then open the market to a unfair competitor offering the same product 
> with no such encumbrances.  Remember that even right now the line between 
> internet and telephone is blurred, and in a few years, it will be one in the 
> same.

But we were talking about munis building out their own network, not using 
LEC facilities. Pricing is set by numbers provided by the LECs on how much 
it costs to build and maintain your facilities. If the numbers aren't 
accurate then the blame would fall to the LEC.

> If there really is such a need for infrastructure, why are the governments 
> taking it over and not deregulating and opting for free market competition? 
> Simple, because no one sees a profit potential with what is involved.

Where there is actual competition, they have been deregulated. In Council 
Bluffs and I would guess Omaha, Cox has taken up to 50% of the POTS lines. 
Qwest is deregulated there. In DM, there are about 3-5% CLEC lines, not a 
hotbed of competition.

>> I agree that a telco and a muni ISP would operate under different sets
>> of rules. However, change is the nature of the beast. Don't take this
>> the wrong way, but have you seen a telco do anything truly innovative in
>> the last five years?  Competition is a good thing no matter where it
>> comes from.
>
> I agree that telco's play technology safe.  But what do you expect?  Throw 
> away billions of dollars of copper in the ground?  Would you like them to run 
> (insert buzz tech carrier medium) every five years to keep up with 
> technology?  You don't, because quit simply, no one wants a $10000 monthly 
> phone bill.  The infrastructure was laid out for phone service with the 
> expectation by both private business and government that it would take *a 
> long time* to pay for it's self.  Without this promise, you probably wouldn't 
> have phone service right now, we'd still be communicating via a telegram 
> office instead of email.

If the telephone companies did what their customers wanted in the first 
place, the municipal/competitive threat would be minimal to non-existant.

I think most of the ILECs would like to return to days like this:

http://www.geocities.com/pelle108/Baltics/KaunasDropwre.jpg
http://www.lib.uconn.edu/online/research/speclib/ASC/SnetExhb/22w.JPG

dave

-- 
Dave Weis             "I believe there are more instances of the abridgment
djweis@sjdjweis.com   of the freedom of the people by gradual and silent
                       encroachments of those in power than by violent
                       and sudden usurpations."- James Madison