Entries tagged as Broadstripe
Seattle has found itself in an odd predicament. Home to the most educated population in the United States and Internet juggernauts, such as Amazon.com, its citizens and small businesses would be hard pressed to differentiate the City from the Country’s most rural communities when it comes to Internet Access. Verizon will roll up to a home in Woodinville – a community with just over 9,000 people twenty miles outside of Seattle – and install their Fiber Optic service (FiOS), but a home in Seattle is considered lucky if it is served by Comcast’s over-subscribed cable service. The situation is far more desperate for the Seattle home located in the part of the City served only by Broadstripe or Qwest. Broadstripe (f/k/a Millenium Digital Cable) has been in bankruptcy since early 2009 and is notorious for its poor quality television and Internet services; Qwest only pretends to provide high-speed Internet and might as well be in bankruptcy. Without a competitive threat, Comcast operates with a minimal investment in their local network so as to extract as much profit as possible from the community.
Seattle is a perfect example of the somewhat rare “market failure”. There exists a more efficient outcome – where participants in the market would expect higher gains – than the existing outcome (to use economics terminology). The higher gains to be expected in an efficient market for Seattle Internet access would be wider availability of higher speeds and lower costs. The sad fact is that – as rare as market failures may be – Seattle is not alone in market failures related to Internet Access. Most communities in the United States are served by incumbent providers who operate as de facto monopolies. Nobody should really be surprised by the slow rate at which those companies deploy new technology.
The answer to Seattle’s Internet access market failure is straightforward. Following years of unsuccessful cajoling of the industry by the City government, Seattle should take the next step and lead the build-out of a municipal Fiber To The Home (FTTH) network. A preliminary feasibility study has already been done – a Seattle Municipal FTTH network would pay for itself. The network would also provide capabilities rarely, if ever, seen on non-municipal networks, such as: equivalent speeds on both the up and down sides of the network (i.e., symmetric bandwidth instead of the asymmetric bandwidth enjoyed on the existing DSL and cable networks); unfettered connectivity between points on the municipal network (i.e., even if your access to Facebook is only a mind numbing 100 Mbps you’ll have the full network capacity – which could be 1 Gbps or more – between your home on Beacon Hill and your office in Pioneer Square); and, not to be underestimated: network neutrality (i.e., the freedom to choose the IPTV provider Hulu instead of the CATV provider Comcast, which may be problematic if you receive your Internet service from Comcast – a company that makes most of its money from video content distribution). Seattle has a good track record in these sorts of endeavors too. They own and operate their own power company (Seattle City Light) and provide power throughout the City at a cost that is only two-thirds the National average per kilowatt hour.