Yet major telecommunications legislation now moving through Congress lacks a comprehensive vision for how to bring multiple competitive broadband providers to each market offering truly high-capacity connections at affordable prices. Cable and telephone companies hold a cozy duopoly over broadband services with a 98 percent share of the residential market. Not only have we failed to craft policies to bring competitive pressure, we are poised to strip away the nondiscrimination rules that keep network owners from engaging in anti-competitive activity in the Internet content market. Scrapping so-called Network Neutrality rules will not bring us better broadband. But it will guarantee noncompetitive broadband markets for a generation.

To make matters worse, the Federal Communications Commission seems content to ignore the broadband problem and pretend we are moving forward. While the FCC is crowing about an uptick in 1 megabit per second (Mbps) DSL connections, Japanese consumers are paying the same price for 100 Mbps. How long can we afford to be 100 times slower than the rest of the world?

In April, Federal Communications Commission Chairman Kevin Martin published an op-ed in the Financial Times claiming that the United States is “closing in on President George W. Bush’s goal of providing broadband access to every US household.” But Martin failed to mention that President Bush’s stated goal was universal and affordable broadband access by 2007. The United States is nowhere near reaching this target, and the biannual reports generated by the FCC twice a year to monitor progress in the broadband market obfuscate more than they enlighten.

This report by Free Press, Consumers Union and the Consumer Federation of America comes one year after our first report on the state of the U.S. high-speed Internet market. Broadband Reality Check II updates our previous publication and details new empirical research in this area. Among its key findings:

The United States is falling behind the rest of the world in broadband penetration.

• The United States remains 16th in the world in broadband penetration, according to the International Telecommunications Union, and places 21st in the U.N. rankings of “digital opportunity.”

• Fourteen other OECD nations saw higher overall net growth in broadband adoption than the United States from 2001 to 2005.

• The United States has the fourth-highest level of students who have never used a computer among OECD nations — exceeded only by Turkey, Slovakia and Mexico.

• Population density is not a significant determinant of broadband penetration. The most important factors explaining the digital divide among nations are household income and poverty.

• Other countries’ broadband successes can be largely attributed to their successful implementation and use of non-discriminatory, open access policy.

The United States trails the rest of the world in broadband speed and price.

• Consumers in other countries enjoy broadband connections that are far faster and cheaper. U.S. consumers pay nearly twice as much as the Japanese for connections that are 20 times as slow.

• U.S. prices show no real signs of dropping. Cable modem prices are holding constant or rising, and DSL customers on average are getting less bandwidth per dollar than they did just a year ago.

• Increased capacity abroad has made available “triple-play” services — fast broadband bundled with TV and phone service — for less than the cost of most standalone U.S. broadband connections.

• The threat of competition — not government regulation — is the most important factor behind broadband infrastructure investment decisions.

The U.S. broadband market is dominated by regional duopolies of cable and telephone companies that face little competition.

• Despite claims of “fierce competition,” Cable modem and DSL platforms account for 98 percent of the residential broadband market.

• The top 10 broadband providers, each a regional monopoly in cable or DSL, made up over 83 percent of the entire U.S. broadband market.

• A recent Government Accountability Office (GAO) report on broadband shows that the median U.S. household has only two terrestrial broadband services providers available.

• According to the GAO, nearly 1 in 10 consumers don’t have access to any broadband providers.

• FCC data show that over 40 percent of U.S. ZIP codes have one or zero DSL and/or cable modem provider reporting service. ‘Third platform’ alternatives like wireless and broadband over powerline don’t offer viable competition.

• Satellite accounts for approximately one-half of 1 percent (0.5%) of all advanced service residential broadband connections.

• Mobile wireless accounts for roughly one-hundredth of 1 percent (.01%) of all advanced service residential broadband connections. Fixed wireless comprises less than one-half of 1 percent (0.5%).

• 99.8% of mobile wireless broadband connections are used by businesses, not consumers. And nearly all of these exceed 200 kilobits per second in only one direction.

• Broadband over powerline (BPL) accounts for about one-hundredth of 1 percent (.01%) of all advanced service residential broadband connections.

• The combined market share for all of these alternative technologies has decreased over the past five years.

America’s digital divide — between rich and poor and urban and rural areas — shows no sign of closing.

• Those living in urban areas are nearly twice as likely to have home broadband access as their rural counterparts.

• Rural broadband deployment continues to lag behind urban deployment. U.S. farm households have home broadband access at nearly half the level of all U.S. households nationwide.

• Approximately one out of 10 households with incomes below $30,000 reported having broadband access, while broadband connections were in six out of every 10 households with incomes above $100,000.

• The price of broadband service, and not necessarily the lack of a home computer, is the key barrier to broadband adoption by low-income households.

The FCC uses misleading and meaningless measures of broadband coverage and competition.

CDE now has an opportunity to enhance the service we offer to this community. CDE currently has 125 miles of fiber optic telecommunications lines up and working. The benefits of this technology are evident to us in providing better electric service to our customers. Customers whose homes and businesses are connected to the fiber optic network can monitor their electric usage in real time from the comfort of their home or office. Electric meters are continuosly read using the fiber connection at the meter. Since there will no longer be a scheduled meter reading time, customers can choose the day of the month their bill is due. Outages are recognized as soon as they occur, whether the customer calls CDE or not. The ability to monitor the voltage delivered to a customer allows certain problems to be addressed before the customer is affected. Meter readings for transfer of service from one customer to another are available without CDE having to send an employee to the premises.

CDE would like to connect every home and business in Clarksville with fiber to the home technology. In addition to the enhanced electric service benefits, CDE will also be able to use the fiber network to provide other services to those who choose to do business with us. A fiber to the home system can provide video services, Internet access at speeds not currently offered by other providers and other telecommunications services. One can think of the fiber connection at every electric meter as a pipe carrying data to and from the home. Each application or service uses part of the capacity of the pipe. Fiber optics is the most current technology and offers the biggest data pipe available – at an affordable price.

The community benefit of having affordable access to high-speed data services at every home and business is tremendous. Some of these benefits include improved educational opportunities for our students, better healthcare, public safety innovations, and economic development opportunities for our community. Clarksville will be one of only a few cities in the nation to provide this service to all its citizens.

The proposition to build this fiber optic system will be presented to the citizens of Clarksville on the ballot of the November 7 election. I hope you will weigh the benefits of this system and then express your opinion by voting on the referendum. And I hope you will vote yes.

Kenneth R. Spradlin
CDE President

This article is from a press release from CDE’s web site.

Clarksville will be voting in November, to authorize CDE to form a Telecommunications Authority. I encourage everyone to vote yes on the referendum.

CDE wants to build this network to enable them to read meters, turn on and off electricity for overdue customers, and real time monitoring of the local power grid all from the central office. Once installed these cables can also be used to provide cable television, on-demand video, worldwide video-conferencing, multiple community access TV channels, high speed Internet, and other services, which are not currently offered by Bellsouth or Charter Communications.

CDE is not trying to make a profit, only to cover their costs in providing these services, and this should result in low costs for the consumers. This stands in stark contrast to Charter and Bellsouth, who are for-profit companies and must constantly increase their profit margins in order to encourage new people to invest in their company, at the expense of their customers.

The Clarksville (TN) Department of Electricity wants to be that area’s next broadband provider, and residents will get their say in the matter with a November referendum. The CDE, a municipal provider of electricity, wants to connect all 51,500 customers to a fiber-optic network. “(The referendum) will either let us to begin offering (telecommunications) services, or it will not,” said Ken Spradlin, general manager of CDE. “The impetus for us is for our electrical system.” Spradlin adds that the additional telecom services will help recoup the cost of installing and maintaining the network. City and county government offices are taking advantage of 125 miles of already existing fiber optics… – Broadband Reports

The quote referencing Clarksville Online is in the second part of their article. 

Our first article on this subject was Clarksville Department of Electricity requests to provide additional services. After that Clarksville Online author Tom Paine posted a rant entitled Charter Sucks.

We have had two people who posted comments against the CDE referendum. One turned out to be a Charter employee trolling against this plan in support of his employers interests, the other was the 2006 President of the “Friends of Clarksville”. I rebutted both of their comments in depth.

I sincerely hope that CDE starts to clear the air by releasing more information for the public very soon!

And every time you try to get a response from them, you are back to square one: you have to navigate a phone menu that resembles chinese water torture more than anything else. If and when you do get a human being, it’s a whole new world — you have to explain all over again what the problem is. And they will want you to make yet another appointment.We did finally have a tech show up when we were at home. After doing some checks he told us that the problem was in the line outside the house. Along the way, he told us he was not too happy with the service department at Charter, himself. He was a nice guy and seemed genuinely interested in helping us out. He placed a call and told us they should have a tech out the next day to check out the lines coming into the house.

When I came home the next day and saw a Charter truck heading up the street I foolishly thought that they had found and fixed the problem. No such luck. We did pick up some of the channels we were missing, but then others we had had turned up missing. And lately the broadcast stations like NBC, CBS, NBC, and NPR are getting really bad. Along with still missing channels we should have.

Which brings me to the moral of this whole rant. Charter is a monopoly here in Clarksville. They have no competition so, evidently, they don’t have to worry about whether we customers are satisfied with their service. The message I’m getting from all this is, “If you don’t like our service, put up a dish!”. Which, if it weren’t for my need of a broadband network connection (I telecommute a couple of days a week), I might just consider.

Perhaps Clarksville/Montgomery County should consider instituting it’s own cable service, as does a number of cities throughout the country. Could be a good source of revenue. And at the very least, maybe it would scare Charter into being more responsive to its subscribers.

The current providers of these information services, Charter Communications and Bellsouth, have no natural incentives to make the expenditures which are necessary to modernize their systems, and to provide us with the quality and levels of service we require. They have made an uneasy truce with each other, neither wishing to rock the boat by actually competing.

Competition in this vital sector of our economy should be fierce with many different players all seeking to provide us with the most reliable and highest level of service possible. The reason that this is not happening is that FCC rulings have declared that Cable based Internet services are a information service and not a telecommunication service, and other rulings reclassified DSL Internet service as one as well. This removed requirements that they open their networks to competitors. This means that for broadband Internet access and high-end telecommunication services you are stuck with only two cost effective options, cable from Charter, and DSL from Bellsouth.

I have had dealings with these companies and their offerings and have been unhappy with both. The frequent outages, repair times are excessive, businesses are charged punitive rates (The same 3MBS connection that I get at home for 40$ per month would cost a business $200-300 per month), and the prices we pay continue to rise even as their associated costs decline.

The Clarksville Department of electricity wishes to form a telecommunications authority in order to offer these types of services. They propose that they build a city-wide fiber network, fiber optic connections would be extended to all homes and businesses in the city.

They want to do this primarily because they could then check meters, disconnect and reconnect service, and manage other electricity functions from their central office. However, being realistic they also understand that it would also allow them to provide telephone, cable television, on-demand video, video-conferencing, community access TV channels, high speed Internet, and a number of other services some of which are currently not available in Clarksville. This would also bring competition to the currently stagnant local Telephone and Cable TV markets.

The city council voted to allow the Clarksville Department of Electricity to proceed and it passed however, they did not have the percentage of votes in favor that the state requires before they will create the enabling legislation.

I believe that the city council has approved a voter referendum to be placed on the November ballot. Charter Communications, Bellsouth, and their front groups will oppose this, and they will probably attempt to prevent it from happening at all. It is not in their best interest to have real competition occur in our city, their markets. However it is in our best interests. I strongly encourage everyone to vote yes, on this question when the time comes. In the mean time, talk to your friends, neighbors, acquaintances, and your elected representatives, as you can be sure that Charter and Bellsouth will both be talking to theirs.

For some updated information see the Charter Sucks! article