FAQ: Why Should The City and City Cable Be Handcuffed With Open Access?

Aug 03, 2010

Similar questions are:
Comcast and Charter don’t open up their network, why should the city?

The simple answers are:
Because unlike private business, the city should not be profit-driven but citizen-centered.
And, choice is always good from the consumer, but rarely good for the provider. The more providers; the stiffer the competition; the better the price.

I understand the reason for this question and the confusion behind it. The difference is who owns the network. In our case, the citizens own the cable network.

Let me pose the question from the other side:
When the government profits off of its citizens, isn’t that a tax?

A private company strives to provide a unique and quality service in order to drive profits. But a government entity should not be driven by profits, they should be driven by the greater good of the people it serves.

I don’t believe that any citizen wants City Cable to be driven by profits. We want the price to be as low as possible and still provide the very best service available.

There are many parts to the Internet picture:

  1. Connection from the customer to the ISP (often called the “last mile”)
  2. Support of the physical link from the cable plant back to the customer
  3. Physical link from the Internet Provider to the Internet (often called the “middle mile”)
  4. Bandwidth from the Internet provider to the Internet
  5. Support of the customer’s computer, network and the end-to-end service
  6. Email and other services that are provided to the customer by the Internet provider

In the current equation of Open Access, City Cable provides items #1 & #2. The ISP buys #1 & #2 from City Cable and adds to it items #3, #4, #5 & #6 for the final product. There is a base cost to provide #1 & #2 and a formula can show how much more needs to be added for future growth. That is, again, the basis for this discussion.

I’ve said that City Cable has consistently refused to show how they calculate the expenses to provide #1 & #2 above. But let me share with you a conversation regarding some of those expenses:

City Cable pays about $42,000 each year to attach their fiber and cable boxes to the telephone poles. At one point in our discussion back in December, Mr. Presley stated that all $42,000 should be included as an Internet expense because if they didn’t have any cable TV customers, the Internet would still have to pay that $42,000. I object, of course, stating that the city required that City Cable install a Cable TV plant, not an Internet service. And since the Internet was “added” later, the entire $42,000 is required for what was voted and should only be assigned to Cable TV, but at the very least divided between the two entities. They came back a few weeks later and said that they decided to assign 33% of the pole charges to the Internet. I asked how they arrived at 33% and the answer was, because there are twice as many TV customers as Internet customers. But even that number is somewhat flawed because if a customer has both TV and Internet at their home, they are counted twice. And the average income provided by a Cable TV customer dwarfs that of an Internet customer and, to be fair, the cost to provide is also much higher. BUT AGAIN, this is why an outside industry analyst needs to be making these decisions rather than City Cable. Certainly the analyst would ask both sides for their input and come up with an answer on each expense.

Again, because the goal for Internet service should not be profit driven but citizen centered, it made sense for the network to be shared so that the citizens had choice. Where I personally believe the city took a mis-step is the decision to merge MyCityCable with City Cable. MyCityCable should exist, however, it should exist as an open access customer on the network. I advocated this position in 2002 and still hold it today.

A separation between City Cable (the network provider) and MyCityCable (the city’s ISP) would have kept the financial records cleaner, and, probably kept the entire Open Access argument from ever being a problem today. There would be no confusion then, whether ANY internet provider was costing the city money.

The heart of this Open Access debate has been how much does it cost to run the Internet portion of this network. City Cable

The Federal stimulus monies designated for rural broadband is specifically required to be “an open-access network” allowing multiple vendors. The first monies granted to Missouri was to an electric coop in North-central Missouri, Ralls County. The project, when completed, will allow multiple ISPs and multiple Cable TV providers on the infrastructure. The network will be maintained by the Electric Coop, but the ISPs and TV providers have to “compete” for the customers. One of those providers will also be the Electric Coop. Choice is good for their citizens.

Why should the city and City Cable be handcuffed with Open Access?
Because competition and Open Access are best for the citizens of Poplar Bluff, the true owners of the network.

  1. Bob

    If cable infrastructure is near capacity how will eliminating resellers solve the problem? Isn’t competition good for the consumer? Will all customers of other than mycitycable migrate to them and possibly pay higher prices and contribute to a monopoly?
    Isn’t all cable tv/internet transmission via city cable? Does this also mean that new subscribers for Cable TV will be restricted due to capacity?
    Doesn’t it surprise anyone why the Satellite TV companies are mass advertising for customers. If they are successful City cable losses customers and also profit.
    Satellite internet is really not a viable alternative choice for businesses in our city.
    It only seems logical to me that IF capacity is nearing maximum, all citizens and the City would benefit by implementing upgrades.
    How is eliminating open access going to benefit the citizenry of Poplar Bluff? We already have some of the slowest internet access speed in the country.

    And lastly, Mycitycable should be a separate entity rather than be treated as a “utility” and tied to some bizarre political or personal agenda. Or we could be driven back to the dark ages of Dial-up that our neighbors outside of the city suffer through.

  2. Sandbox Referee

    Isn’t it true that the physical cable infrastructure is nearly at capacity and a significant amount of money will have to be spent in the next few years to upgrade it? Money that City Cable won’t have unless they eliminate the resellers and bring in more money.