Wilson is a city in North Carolina of about 48,000 people. Its residents were fed up with Embarg, a Time Warner company, and the poor service it was providing for internet, TV, and wireless phone signals. They decided to do for themselves what Embarg would not do for them – provide low cost high-speed wireless services.
Brian Bowman, the city’s Public Affairs Manager: “I have a 10Mbps up/down connection at my house. Can’t get half that from the cable company. I buy it directly from the City of Wilson. After less than a year of residential service, almost 3,000 Wilson citizens are subscribing to Wilson’s fiber optic network. Local businesses can get up to one Gbps.”
Here’s Embarg’s reaction:
Embarg: “We would love to deploy DSL everywhere. We try to make smart financial decisions not only for shareholders but customers. In the very rural areas, sometimes it would take two, three or more years to even pay for the investment.”
This is odd – two or three years to pay for an investment is not outlandish. But Embarg is up against it, in that Wilson can quite easily do for itself what Embarg will not do. It’s not new technology, not rocket science. It’s something any community in the country can and should do. But right wing economics demands that if a private concern cannot make money providing a public utility, the public has to suffer.
So, Embarg and Time Warner did what any free-market loving company would do – the went to the state legislature to shut down Wilson’s city-provided services.
Rather than admit defeat to the pesky local service and go quietly, Time Warner Inc. and Embarq decided to take the fight to the state government, lobbying for several years to get the state government to pass laws to try to destroy the local effort. And sure enough, thanks to a lot of hard work (and money), the cable companies are close to getting their wish — North Carolina’s State Senate have proposed bills to not only effectively crippling or banning the local service, but also to prevent such services from getting funds under the broadband portion of the national Stimulus law.
Says Bowman:
“If the cable/phone companies really want a level playing field, they’d open their books just like we do in the spirit of open meetings and open records law. They don’t want a level playing field. They want to be the only team on the field.”
This is not untypical right wing thinking – private companies know all about free markets, and don’t much like them. They use their money and influence to 1) get regulations protecting themselves from competition; 2) prevent regulations that affect them negatively, and 3) buy access to the commons.
It should come as no surprised that Wilson could provide itself with better service than Embarg, and at a lower price. The rest of the world is years ahead of the American telecommunications industry in providing high speed wireless services. Our companies are too busy in a turf war to think much about customers.
Piece of Mindful 
When I read your bullet points, protecting from competition, sheltering, and buying access, I thought of this article I read earlier today from the Washington Post.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/27/AR2009042700891.html
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Swede – just to be sure, you do see that I get that Democrats and Republicans all play the same games and answer to the same people?
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You forgot to mention where Wilson NC got the $28 million to launch this project (hint: Federal taxpayer money) and what will happen to the service when the taxpayer money runs out (hint: bankruptcy). You didn’t fool anyone with your cheery-picking this story.
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I’m not so sure about that – I looked and looked. I don’t know what “USD” is, exactly.
But you’re right, it was a grant of some kind, not unlike a company being willing to invest in the town and get its money back in 2-3 years. The private sector wasn’t happening, and now the private sector is running to government for protection from evil gubbmint.
You need to focus on the basics – if we can do for ourselves, why bother with private for-profit companies?
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How exactly is a grant like a private investment? Wilson didn’t do it themselves. They did it with other peoples money. There’s no free market in that at all.
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USD = United States Dollars
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Question– If we can do for ourselves, why bother with private for-profit companies?
Answer– You’re not doing anything for yourself when you use government money! Are you kidding? Do you think Wilson NC collected that $28 million to get started in business from the local Internet users? What if every Wilson NC in the country wanted $28 million to start an Internet service business?
This is bogus economics like Thoreau’s Walden Pond. The guy talks up independence and self-reliance but has to borrow a shovel to start work on his little hut which he builds on somebody else’s land.
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Aha! Thanks, Peck. USD – = $$$. Best I could do was “University of San Diego”.
First, even if there were a grant, who the hell cares if they city gets decent service and can pay it back? In fact, they are getting far more than Embarg could offer for far less than Embargo charged even if Embarg were willing to deliver.
Second, there was no grant. They used their own damned money – Wilson money, taxpayer dollars. And yes, Peck, it is possible for a city of 48,000 to raise $28 million. They did it, took care of themselves, provided themselves with excellent service at low cost, and now Time Warner is pissed.
This is perfect. Checkmate.
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I don’t think you have it right. The City of Wilson says, “Wilson tax money does not fund Greenlight (the city-owned Internet service.)” The city claims the system is supported by “almost 3000 households” at about $100 each ($300,000 per month).
It sounds like they got the $28 million from the federal stimulus package or borrowed the money with the idea of paying it back with federal stimulus money. That’s part of what the NC bill is all about—using federal stimulus money and local revenues from gas, electric, water, etc. to create below-cost telecommunication services which drive out free market providers. Read the bill here http://www.ncga.state.nc.us/Sessions/2009/Bills/Senate/PDF/S1004v0.pdf and you’ll get the idea.
Here’s what they’re whining about. From the City of Wilson web site called Save NC Broadband—
Section 160A-329 (b)(3) of SB1004 prohibits municipalities who provide broadband services to the public for a fee from using any revenues to build or operate the system other than those generated by the system. This means municipalities would not be able to use any federal grant money to offset the cost of building or operating their voice, video or data systems. This is in complete contradiction to Pres. Obama’s recent Financial Stimulus (ARRA) law which makes state and local governments, not the private sector, directly eligible for billions in low cost or free capital so they can provide affordable, state-of-the art broadband services to underserved areas of our country.
http://savencbb.wordpress.com/faqs/
Pretty straightforward I’d say. The City of Wilson is using or wants to use federal government money to drive out free enterprise. Not good economics. Then the federal money disappears…
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Sorry Peck – Wilson put its program in place long before there was a stimulus package.
Your idea that people cannot act in their own benefit and forsake investors in providing services to themselves is at the heart of right wign economics. I won’t say it’s wrong, as it is merely your underlying mindset, but it is wrong-headed. You have completely lost sight of what is good for us, replacing it with this far-fetched notion that the only public good that matters is return on investment for private profit-seekers.
In this case, as so many others, private profit-seeking inhibited growth of public assets and services. Wilson was frustrated by Time Warner’s unwillingness to make investments in its wireless system, and simply bypassed them. Time Warner, mindful of its own bottom line, didn’t care a white about Wilson. Now you’re saying that Time Warner’s bottom line is more important than providing services.
Regarding use of stimulus money to build a wireless infrastructure, the market is clearly failing to do so. Let’s bypass them, just as the rest of the world has. Let’s do it ourselves. the technology is in place, the only thing that stops us is private investors. Screw ’em.
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You still haven’t said where the City of Wilson got the $28 million. And you still haven’t said where you’re going to get $28 million for every Podunk town in America to set up their own high-speed Internet services business. But based on what you’ve written already you sound like one of those people who doesn’t know or care where the money comes from as long as YOU get the money.
The private companies in North Carolina as everywhere else deliver the best service they can with the customer base available to them. They could’ve delivered the same services as the City of Wilson or better if somebody dumped a load of free money in their lap. You’re just kidding yourself about what’s going on here. All the City of Wilson is doing is pumping somebody else’s tax money through a fiber optic system. It’s not a viable business model for other communities because it’s not a real business.
And that’s why the State of North Carolina wants to regulate the situation. The state doesn’t want a bunch of federally subsidized businesses run by cities like Wilson that will drive out real businesses only to have the federally subsidized business collapse when the federal money disappears.
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Peck – read carefully: They got it from themselves. It’s interesting that even when companies fail to deliver a product at a reasonable price, even when those same companies go running to government to protect their asses, even when people do better for themselves than companies do for them – even with all that, you still say the free market does best. You’re deluded.
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(Don’t tell me to read carefully. That’s why you’re losing this argument—because I read very carefully.)
I couldn’t find any reference to where the City of Wilson got the $28 million. I’d like you to say exactly where. But for the sake of argument let’s assume they “got it from themselves” like you claim. That means they got it from tax revenues correct? (Or are you going to tell me next they got it from bake sales?)
You’re the guy who’s deluded. The title to this thread–Free Markets at Work–perfectly demonstrates the depth of your delusion. Sure–free markets. Take tax money from every local, state or federal taxpayer (your choice of victims) and use it to start a telecom business to serve only 3000 people. Then cut yourself property and income tax breaks on the business and claim you’re exempt from all laws and regulations governing telecom businesses. If that’s what you call Free Markets at Work you’re hopelessly deluded.
The City of Wilson is running a scam. They’re transferring tax money from a large group of taxpayers and using it to subsidize a small group of Internet users. It’s not a business. And it’s sure not the Free Markets at Work.
End of lesson.
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(Don’t tell me to read carefully. That’s why you’re losing this argument—because I read very carefully.)…End of lesson.
You are such a pain in the ass! You’re saying 1) I’m losing, 2) you’re my instructor. There’s a word for that – you’re overcompensating – your words remind me of the guy with a small dick who drives a Hummer.
If the article doesn’t say they got a grant, then I can only assume that they raised the money for themselves via taxation. $28 million is not out of reach for a town of 48,000. If it was an outside grant, more power to them. If it is tax revenue from a different source, bad.
It’s not stimulus money (it happened before that bill passed).
And it is a given that not everyone in a town of any size is going to support taxation for every project. In fact, on your side, the general practice is to demand services and oppose taxes. So your contention that some will feel dishonored by the city’s initiative is a given.
But majority rules. The people of that town are free to replace their officials and go back to Time Warner, which was offering them such wonderful and reasonably priced service, and TW is perfectly justified in going to the state to prevent the city from exercising any other option but to buy that service from Time Warner. That’s how free markets work. Companies get to coerce people into buying their product.
After all, even when the market doesn’t give us what we want, we have no other option. Citizens acting via their government, we all know, is tyranny.
And please, whoever reads this, recognize the sarcasm.
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Like I said you’ve been schooled. End of lesson.
Your grade for “Free Markets at Work” is D+. It would’ve been a solid C, but you lost points for potty-mouth talk and other infantile expressions of frustration.
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