I thought competition was healthy in a capitalistic society

Discussion in 'Off Topic' started by easternnc4me, May 4, 2018.

  1. easternnc4me

    easternnc4me Happy to be here Charter Member

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    Ok. Going to be a little long winded and most of you won't care about this. If nothing else read the article linked below and watch part 1 of the documentary linked at the bottom. I don't live in Pinetops so I don't get Greenlight service but it pisses me off. Pinetops and Macclesfield buy their power from Wilson. A few years ago, Pinetops officials approached CenturyLink about upgrading their services and SuddenLink about expanding into Pinetops. Both declined.

    "Suddenlink’s service area ends about two miles outside of Pinetops town limits. Nevertheless, Suddenlink wasn't willing to bring cable service to Pinetops. CenturyLink didn't want to make investments to upgrade the community's old DSL solution; the community had no options from national providers."

    Article link here: https://muninetworks.org/content/suddenlink-plans-pinetops-deployment-greenlight-must-go

    Wilson couldn't get the internet providers to upgrade their services in Wilson, so it created it's on internet service called Greenlight. Since Pinetops buys it's electricity from Wilson, the town officials approached Greenlight about provided internet service to Pinetops. It was approved by the FCC (read article linked above).

    People started dropping CenturyLink and signing up for Greenlight. CenturyLink took notice and sent a lobbyist to Raleigh to try to stop it. According to what one town official told me, the lobbyist told the legislature that the FCC overstepped them and that a "Municipality is not suppose to be in competition with private business." The state of North Carolina used tax payer money to sue the FCC. The FCC backed off. Pinetops town officials went to the legislature to attempt to keep Greenlight. The big telcoms were there as well. The Pinetops officials (two of them) were given 2 minutes to speak. The 5 telcom lobbyist were given 2 minutes as well. As relayed by a town official to me "After the meeting we all went out into the atrium. We (town officials) were standing around talking and they (telcom lobbyist) were all huddled around and kept looking over at us. It reminded me of the floor of the stock exchange where every where you looked deals were being made. Finally one of the guys from Suddenlink walks over to us and says Suddenlink is interested in bringing internet to Pinetops."

    So, if I am understanding this correctly, CenturyLink had no interest in upgrading their services and SuddenLink had no interest in providing services to Pinetops until Greenlight came to town. One of the town officials commented he found it interesting that CenturyLink has a problem with Greenlight being in town but has no problem with SuddenLink coming in and taking its business. This is bad for Pinetops, but poor Macclesfield is going to be hung out to dry. Greenlight had not yet brought services to Macclesfield and because of this probably won't. Most of us are sure that SuddenLink will only provide service to Pinetops and will not expand into Macclesfield. These small towns are dying.

    A documentary about this will be coming out in the future. In the meantime here is a trailer for part one of it"

    https://vimeo.com/ondemand/donotpassgo
     
  2. 9outof10mms

    9outof10mms Knows Jiggawatts

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    Utilities have one of the strongest lobbying undercurrents that I've ever seen in the local/state arena. They wiggle their way into being forced down people's throats where they want to be, and preventing anyone else from entering said throats where they don't want to be.

    Infrastructure is expensive, especially in areas where it is not currently--in this case, where there is no line to just simply upgrade. Trenching or boring new lines is hell. Just look at what Google went through, and what AT&T continues to go through in Charlotte. Then because of the difficulty with putting in new underground utilities, these over the air comm utilities are trying to squeeze into play in NC and want to attach an ugly antenna everywhere they can.

    It's a quagmire, to say the least.

    The company that successfully gets OTA wireless internet to take flight will be the winner. No installation at your house. Just a special router and login credentials, and you're in. Maybe a cell tower every 5 miles or so. No trenching, digging, or boring for miles on miles, hitting gas lines, pissing people off with digging up the right-of-way...just flick a switch and there is internet/"cable" TV...already floating around in the air and every bit as fat as fiber lines. That's the future...
     
  3. easternnc4me

    easternnc4me Happy to be here Charter Member

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    I agree that it is an expensive undertaking, but it was one the Greenlight took upon themselves when the telcoms had no desire to. According to one town official, SuddenLink had stopped running lines for a brief period of time because they ran out of money. Greenlight in Wilson hired some of the engineers that SuddenLink layed off. It's just infuriating that a telcom lobbyist got the state, using tax payer money, to sue the FCC to halt a service that taxpayers wanted. I do agree with you that wireless high speed is the future. The question is how long will it take. These small towns are dying in the meantime. Three of four years ago I was reading an article where experiments were being done with providing internet through the electricity supplied to your home from light companies. Simply plug into electrical outlet., Haven't heard any more on it so I guess it wasn't viable but it would have been nice.
     
    Last edited: May 4, 2018
  4. 9outof10mms

    9outof10mms Knows Jiggawatts

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    The part I forgot to add was that it doesn't surprise me in the least bit that the companies conspired to put the kibosh on the public provider. Not one bit. In fact, I'm surprised they let it get that far.
     
  5. easternnc4me

    easternnc4me Happy to be here Charter Member

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    Macclesfield was in talks to get Greenlight service next. My exact comment to the Mayor was "Once folks start dropping CenturyLink and signing up for Greenlight, CenturyLink will try to put a stop to it." And so they did.
     
  6. JimB

    JimB Picking it up slowly. Benefactor Charter Life Member

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    You have to admit that it is unfair for a municipality, using taxpayer funds, to compete with a private company. Not saying that private is better or worse than public, just that it’s not fair to create such a market and that it will ultimately not work. Other thing to remember is that municipalities often do a poor job with utilities. There are many failed municipal internet companies with very very few successes.

    If suddenlink is building into the town then Centurylink will either upgrade their network or lose most customers. It seems from your story that CLink is okay with losing customer to Suddenlink but not okay losing them to Greenlight. This is because they don’t actually care about losing the customers in either town, and Suddenlink doesn’t care about winning them, they both only care that the NC law preventing new municipal utilities be upheld so that large cities don’t restart efforts to deploy wireless and fiber networks using taxpayer money.

    Suddenlink is owned by Altice, a large French company. They have a ton of debt. In order to make the Suddenlink acquisition they had to reduce expenses in the US by $400mm annually, and they have done so. In spite of this they still need to reduce their debt load so are trying to sell operations in other parts of the world. They provide a good level of service in many markets, but I would be skeptical about any timeline for new construction.
     
  7. noway2

    noway2 Senior Member Charter Life Member

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    This is one of those areas that I believe the municipalities need to tell the telcos and even Raleigh to just go pound sand and build their own infrastructure regardless of what some stupid "law" says.

    @JimB last time I heard, corporations have no divine right to profitability. Life isn't fair. Tough on them. Too bad.
     
  8. CZfool68

    CZfool68 Int'l Man of Mystery Charter Member Sponsor Supporting Member

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    "You have to admit that it is unfair for a municipality, using taxpayer funds, to compete with a private company."

    This made me think of our monopoly run school system.

    This struck a nerve also. Think you may have hit naino head.

    "Other thing to remember is that municipalities often do a poor job with utilities."

    I would have just cut out the 'with utilities.' :D
     
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  9. JimB

    JimB Picking it up slowly. Benefactor Charter Life Member

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    So more government is good? You think that additional government intervention in the market is good? You want taxpayer dollars to be used to provide services that the market will also provide? You want cities to ignore laws passed by the state? The consequences of these actions seem out of proportion with the benefits provided.

    Sure there is a timing issue, the towns want service today even though it isn’t yet economically viable, but they’ll have a market solution in a few years. FWIW, my company serves more than 50 of these small towns today, providing voice and internet service; I would never invest to build a market knowing that the city might become a competitor, dealing with inspectors and rights of way would make it impossible even if you ignore the fact that the city has access to low-cost taxpayer-subsidized capital.
     
  10. DLam

    DLam Happy to be here

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    actually, I would contend that in a vast majority of instances, municipalities do a damned good job with utilities. It is one of the few things that government gets right. (that could be that most government run utilities (water, sewer, and in some instances electricity) are run at the local level, and these utilities are set up as enterprise funds, which do not rely on taxpayer funding (that means they are self sufficient). Utility budgets are also completely separate from general fund budgets for the day to day operation of the rest of the municipality, and it is not legal for municipalities to "confiscate" funds from the utility side to enhance their general fund budget. Some utilities for water and sewer take this even farther by setting up Public Service Districts with governing boards separate from and not responsible to town and county councils to operate said utilities.

    as an afterthought, some of the poorer run utilities are the private sector companies, at least in my local area. The private sector utility companies (water and sewer) seem to have more environmental accidents and citations than the municipal run utilities.
     
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  11. easternnc4me

    easternnc4me Happy to be here Charter Member

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    The city of Wilson could not get their local cable/internet provider to upgrade their services. It obtained $28 million to create its on. I am well aware that the only reason CenturyLink and SuddenLink have an interest is to prevent it from happening elsewhere. Having said that, as noted in the article in my original post, neither company had any interest in upgrading/providing service to Pinetops. So are you saying that it is fine for these small towns that are slowly dying to go without these services even if an alternative is available simply because the telcoms don't want them to? As for a market solution in a few years, it has BEEN YEARS. Read the article. The town of Pinetops approached the telcoms years ago. Do you think it is okay that the state, using taxpayer dollars, to sue the FCC get services stopped that the taxpayers (Pinetops citizens) wanted? It's the proverbial "I don't want it but you can't have it." As far as not being economically viable, it seems like it was for Greenlight. As for your comment that you would never invest in a market knowing the city might start its own service, CenturyLink and SuddenLink didn't want to until Greenlight started attracting more customers.
     
    Last edited: May 4, 2018
  12. CZfool68

    CZfool68 Int'l Man of Mystery Charter Member Sponsor Supporting Member

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    Question I may have missed in the OP, but where did this $28m come from?
     
  13. 9outof10mms

    9outof10mms Knows Jiggawatts

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    The argument of the internet being a basic necessity (on the level of roads and water) is gaining traction. I could go either way on that argument, but if you believe it is a basic utility/infrastructure necessity, then it makes sense to allow municipalities to provide it. If it's just a profit enterprise, then no, they shouldn't be in it.

    Regarding poorly run (anything): it almost always leads back to poor leadership at some critical level. More often than not, I've seen that problem be allowed to fester because no one gave half a crap from the public. The best they could do was complain on the internet. Never would they put real pressure on the municipal body to provide service that was competent. Not at all poking holes in what is being done here (complaining about municipalities' ability to manage something)--I'm just saying the vast majority of folks don't put the investment into fixing something that is often fixable.

    Take Ray Lyman, for instance:
     
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  14. noway2

    noway2 Senior Member Charter Life Member

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    It should be up to the people, not the corporation. The stupid corporation has made it clear that they don't want to serve the area. Saying that we have to mandate corporate solutions is just as bad as saying that it must be government. If the corporation can't compete and win against the government, then obviously the corporate solution isn't the best.

    This was also nothing but a case of a corporation buying politicians to the detriment of the population. Privatize the profits, socialize the losses I say. Corporations shouldn't be benefiting from playing games like that, they should be put out of business and their CEO sent to a gulag.
     
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  15. 9outof10mms

    9outof10mms Knows Jiggawatts

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    For common services that are widely/typically provided by private entities, probably not. But when said private entities refuse (or say it'll take XX amount of time) to bring service to an area that is asking for it, I don't see what the problem is.
     
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  16. easternnc4me

    easternnc4me Happy to be here Charter Member

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    "The city of Wilson invested an initial $28 million to build the network after failed attempts to interest private companies to offer the high-speed service. Other municipalities, primarily rural towns, did the same."

    http://www.govtech.com/local/Wilsons-NC-Greenlight-Attracts-National-Attention.html

    "Wilson took on roughly $35 million in debt to start Greenlight. Aycock says the city is about nine years from paying off its debt, helped by annual revenue surpluses since 2010."
    https://www.indyweek.com/indyweek/w...ting-for-its-page-to-load/Content?oid=4331118

    As for exactly how, that may be a question for Wilson officials.
     
  17. CZfool68

    CZfool68 Int'l Man of Mystery Charter Member Sponsor Supporting Member

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    No, that's cool. Just wondered if they took a grant or used a debt instrument. Figured they didn't have $28m lying around.
     
  18. JimB

    JimB Picking it up slowly. Benefactor Charter Life Member

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    I can’t do multi quoting from my pad, sorry about that.

    In general I believe that government run efforts are not as good long term as private businesses constrained only by market forces. Once you allow a government funded “company” you eliminate other competition pretty much forever, so while you might get what you want today, you’re stuck with it forever. In my opinion it is better to bribe companies to come in and compete than to build a municipal network.

    Google fiber is a great example of this, although I think they did it without bribes, their motivation is somewhat complicated, but nonetheless what they wanted was fiber deployment in urban areas. They made a big splash, scared the crap out of investors in incumbent providers, and sparking huge capital investments. Wilson could likely have done better for itself by creating a grant or loan program for a new competitor or two.

    Always best if the bribes eventually go away, that’s a whole different challenge because nobody volunteers to give them up!

    Of course the network in Wilson is funded by “excess revenue” which means higher taxes, and those are also really hard to eliminate.
     
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  19. GoWolfpack

    GoWolfpack Member Benefactor Charter Life Member

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    I wonder how different things would be if CenturyLink regional headquarters was still in Tarboro. Probably no different at all.
     
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  20. noway2

    noway2 Senior Member Charter Life Member

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    I work for a government run utility. Overall, according to industry standard metrics, our production output relative to cost to produce is well above average. There are private companies that contract with organizations such as ours to operate their facilities. In many cases they can come in, harvest some low hanging fruit in terms of efficiency improvements and make a profit. We've already done those things and are finding creative ways to innovate for additional improvement. What also happens is that they tend to neglect capital improvements and defer maintenance, which in the short run leads to profitability at major expense in the future. The problem is that the corporate entity plays the short game while we're playing the long game. We also don't have the overhead of profit and outrageous executive compensation and our billing rate is matched to our costs.
     
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  21. JimB

    JimB Picking it up slowly. Benefactor Charter Life Member

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    Municipal electric utility I presume. For lots of reasons those entities, and especially those that operate their own generation, seem to be much better run than similar communications entities. I attribute this in large part to how long these power businesses have been around and to the inability of regulators to adequately manage the rate-of-return communications companies as the communications business changed over the past few decades. Not saying that power has been stagnant, because it has not, but it hasn’t experienced the revolution that communications has.

    Not sure which company you work for, or even in what state, but do you know if you’re recovering all of your costs plus permitted return from your customer base, or are you getting a portion of your revenue requirement from subsidies? I don’t know the electric subsidy programs well enough to know how to look this up, and I believe that it may vary by state.

    Someone mentioned Broadband over power line, so let me ask you a question. I understand that it’s not very promising in the US because the company needs to build fiber around each transformer since the data won’t go through the transformer for technical reasons, and that given the number of transformers and similar devices in the network that it’s probably not materially more expensive to just deploy fiber. That’s what I heard from the team at Duke Power working on it many years ago, otherwise haven’t confirmed it.

    FWIW, my company is beginning to talk to both municipal and cooperative power companies about how we can partner to deliver communications services in underserved markets. They have the ability to deploy most of the network infrastructure, and in fact need to deploy it for internal purposes, but designing it to provide retail services and then managing a retail communications customer base is outside their wheelhouse. It’s looking promising, although there are many issues to navigate.
     
  22. RedneckFur

    RedneckFur Senior Member Supporting Member

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    Personally, I think corporate monopolies should be outlawed. If you have to use the courts and govt to bully the customers into buying from you, you've got no business in business.

    These telecom issues have been going on for years. Giving sub-standard service for constantly rising prices. Refusing to connect areas because it requires an investment up front. If the citizens of a municipality decide that they want a service, and are willing to pay for it, more power to them.

    Keep in mind, if it wasn't for the govt's rural electrification programs in the 1930's, chances are there would be some of us today who still didn't have electricity because it "wasn't profitable" to run a wire a few miles down our country road. There could potentially be entire states out west where only the urban areas had power at all.
     
  23. JimB

    JimB Picking it up slowly. Benefactor Charter Life Member

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    I don’t follow, you’re saying that monopolies are bad, and also that without regulated monopolies we’d have large portions of the country not served by power companies. I can only reconcile these by assuming that you want government to provide all services...and I doubt that is what you mean!
     
  24. noway2

    noway2 Senior Member Charter Life Member

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    Correct, at least in terms of if you're thinking of running the communication over the power cables. In theory, the cables should be able to transmit data in addition to power. The problem you run into is that data, in order to have bandwidth needs to transmit on signals that operate at high frequency - symbols or cycles per second. Most data is encoded as either a frequency or phase shift from a reference sine wave. The higher the frequency of the reference, the more symbols or peices of information you can transfer per unit time. The problem you run into with transformers is that they are big inductors. An inductor acts as a frequency sensitive linear element whose impedance (resistance) to the signal is directly proportional to the frequency. Consequently, when you try to run a high frequency signal on the power line it gets blocked at the transformer. This is why it is more feasible to run fiber for data; fiber also being really immune to electrical disturbances.

    This is the same problem the telephone companies ran into when they started running DSL and what limits it's effectiveness. Its both the inherent inductance of the wire and that they used to place inline inductors and ferrite beads on the lines. It blocks the digital transmissions.

    The classical theory is that in certain circumstances monopolies may be more efficient but that they need to have some sort of regulatory oversight to prevent runaway greed. Energy utilities fell into this market. Somewhere back in the 90s they started this bright idea of "deregulation" and claimed competition would be better. What ended up happening was false competition and higher prices for the consumer. Sure you can theoretically buy your electricity or natural gas from some other supplier - but then your local utility still has to deliver it as they've got the physical infrastructure and then they get to surcharge you for the supply. I remember when the deregulated the natural gas in OH. The first year afterwards my bill tripled and the following year it doubled. In essence this fake competition caused my bill to go up six fold and my options were extremely limited.

    "Free markets" are an illusive model that doesn't really exist. The idea that supply and demand will perfectly regulate the best market outcome only holds in certain circumstances, chiefly that where there is perfect competition. When you start introducing other variables, the simple models break down rapidly.

    With regards to some of these utilities, when they are operating on the basis of maximum profit they are making the determination that it is more profitable to refuse to serve certain markets, regardless of the consumer demand, keeping in mind of course that these customers can't afford to pay $5 per kilowatt hour or some ridiculous charge. Consequently, if it weren't for another force, such as government saying you will serve these areas, or else, or otherwise subsidizing these areas, they would remain unserved and the only people who would have such services would be the high density locations such as cities.
     
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  25. 9outof10mms

    9outof10mms Knows Jiggawatts

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    Damn, man. You go ride a train and get all high level and stuff.
     
  26. noway2

    noway2 Senior Member Charter Life Member

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    My wife would shake her head and say, "engineers."
     
  27. JimB

    JimB Picking it up slowly. Benefactor Charter Life Member

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    @noway2 you and I are on the same page re regulation vs market forces. Just last week I argued to a state commission that it is ineffective to subsidize competitors in a market also served by a rate-of-return carrier...that it makes no economic sense. The commissioners seemed to have a very hard time understanding, and other competitors were pissed at me for screwing up the windfall for them and us.
     
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  28. noway2

    noway2 Senior Member Charter Life Member

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    I had to do a bit of Google-Fu here but yes, that makes sense.
     
  29. easternnc4me

    easternnc4me Happy to be here Charter Member

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    That was me. Three of four years ago I was also hearing about WISP- Wireless Internet Service Provider that would use cell phone towers, etc to install the equipment on. Haven't heard anything else on that either. Let me tell you about a recent experience with CenturyLink. I currently have the fastest speed available in my area ...20Mbps. I use to have 10 and it was TERRIBLE EVERY TIME IT RAINED IT WOULD GO OUT. A few times after a heavy rain it was out for one to three days. As soon as 20Mbps was available I upgraded. Centurylink had to run another line as it required a bonded pair. Since then it has not been as bad. My sister in-law lives in front of me and my sister behind me. First of the year my sister wanted to upgrade from 10 t o 20. Website said it was not available. I knew it was wrong because I had it. I called a friend of mine who works for CenturyLink. According to him, some of the older installers around here had retired and CenturyLink was behind on work orders. 20Mbps required more time to install so that is why the website said it was unavailable. "Give it a few weeks for them to catch up and she should be able to get it." Week before last we checked and sure enough , it said 20Mbps was available for her She scheduled an install time and paid $208 upfront (first month service, technician repair fee, and modem. She was buying instead of leasing the modem). Technician came out Monday. Said the lines were older and he would have to see what he could do but it would be the next day. He came out Tuesday. Couldn't get her connected to 20Mbps due to "the wiring is old.' Know what he did? Installed a separate 10Mbps line. Not what she signed up for. So now she has 10Mpbs upstairs and 10Mbps downstairs. Here is what I am going to guess what will happen. In the near future, they will start billing her for the cost of two 10Mbps lines ($45 per line) instead of the cost of one line. I'm pretty sure they will try it. Another example. My mother further out in the country than we are. She wanted to check internet. Plugging in her address info she gets on CenturyLinks website we get "Congratulations! You qualify for high speed internet. 1.5Mbps available for $45/month." Now, I understand the country is slower, but who here thinks 1.5Mbps is high speed? It's ridiculous.



    I would hope it would have made some difference, but as you stated probably not.
     
    Last edited: May 4, 2018
  30. easternnc4me

    easternnc4me Happy to be here Charter Member

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    centurylink.png

    Numerous instances of people around here paying for CenturyLink and getting subpar service. Paying for 6Mbps and getting 1-2, internet going out constantly, etc.
     
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  31. JimB

    JimB Picking it up slowly. Benefactor Charter Life Member

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    There are a number of WISPs that are still in operation, but they have mostly failed. I believe that the largest is Rise Broadband, fka JAB, they acquired about 150 small WISPs and rolled them up. I don’t think even they make much money, company has been for sale a number of times with apparently limited interest.

    The issue for WISPs is that it is really hard to provide quality service at a reasonable price. The installation at the home is expensive, the equipment is expensive, and the performance can be limited by a number of things. We’re rolling out a wireless product later this year that’ll provide 25meg service for up to 5 miles as a baseline but deliver up to 100meg at 5 miles for any necessary commercial installation. We believe that we can do this and meet customer needs for the next few years at a lower cost than if we deployed fiber. If we’re wrong, then I expect another competitor will install fiber and eat our lunch...you’ll know cause I’ll start selling guns.
     
  32. fishgutzy

    fishgutzy Senior Member

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    When I lived in MA, a brave legislator, actually a democrat which makes it even if more brave, proposed ending the Local Franchise Agreement requirement to provide service in any town/city and have just a one permit for the state. He saw the requirement to get 350 different permits that take years to "negotiate" with greedy local bureaucrats. Said local bureaucrats screamed about "I thought you guys supported local control?" The big cable companies liked the status quo because in nearly every jurisdiction there was no competition.
    The local bureaucrats are so corrupt and greedy, that Boston did not get high speed broad band to the homes until almost a decade after nearly all the suburbs had it. We didn't get high speed until we moved out of Boston in 2001 to Lowell. Then I realized my computer was now the bottle neck.
    Big town or small, bureaucrats seem to care more about their own power. It is not just the companies. I can understand a company's reluctance to upgrade at great expense for very little return. But our legislators need to grow spines and kick those a-holes in the nuggets.
    FWIW, Greenlight is no great shakes from what I hear. Not very good customer service. Municipally run utilities generally suck worse than the private companies.
     
  33. easternnc4me

    easternnc4me Happy to be here Charter Member

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    I know several people who have Greenlight and everyone of them love it and say the customer service is top notch. To each his own I guess.
     
  34. fishgutzy

    fishgutzy Senior Member

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    sounds like they improved.
    My reference punts was comments by friends who live in Wilson from a few years ago.
    I used to drive from Greensboro to Wilson a couple times a month to train on weekends. But when a 3rd doctor told me I had to setup training in martial arts I finally did.

    Sent from my SM-G935V using Tapatalk
     

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