FAQ: Why should semo.net get to profit off the city cable's network?
Similar questions are:
Shouldn’t the city benefit from the network they put in?
The simple answers are:
Without profit incentives, no private business would compete. And without competition, there is no assurance of lowest price.
Because the citizens should benefit from this network…not the city
If you go to a concert at the Black River Coliseum by an independent promoter. If the concert is a success, both the promoter and the band profit from the use of city property. If the concert is not a success, the city still gets its basic costs covered for the use of their facilities. Do you walk away from the concert thinking…that promoter shouldn’t get all those profits, it should be the city’s money! No, typically not.
The city provides many different infrastructures for its citizens to profit. The roads are built and used by private businesses to profit. The airport is a city property but used by private businesses for profit. The baseball fields and parks are rented for businesses or organizations to use for profit. The Black River Coliseum is used by private businesses where profits are made.
But remember, profits ARE NOT guaranteed. A risk is assumed by the private entity. What is necessary, is that the base cost to provide the infrastructure is set to keep the city from having any risk from their investment.
In my opinion, the cable network should be the same as other city-owned infrastructures. Businesses should be allowed to use that infrastructure at a rate which covers all costs and needs for future growth. That has been at the center of this entire debate: City Cable justifying what are its basic costs to provide this service without risk. That’s also why we’ve consistently requested an industry analyst to come and discern that answer rather than internal city employees.
The more competition on the network, the better the price for the consumer and, typically, the better the price the more the network grows.
The background info below will justify the next statement:
Our low price and faster speeds are the reason we are being kicked off the network. Because we could profit off less income than MyCityCable, they chose not to trim their budgets like we had and decided to eliminate competition from their network. The ultimate loser is the citizen-consumer.
Why should any ISP profit off the city cable’s network?
Because competition drives down the price, and that is best for the citizen.
I received a call from David Presley, City Cable Manager, who was very upset that we were undercutting their price so aggressively and providing so much bandwidth to the customer. For comparison, MyCityCable sells 1/4 megabit service for $29.95 and 1 megabit service for $44.95. Our prices were aggressive, but who really wins: the citizen.
The decision to use MyCityCable was encouraged by our consultants because their research had determined many people did not know they had a choice on the network. They were right as more than one person per day began switching from MyCityCable to semo.net. Within weeks of that migration, City Cable decided to block semo.net from new signups and switchovers back on May 14th.