If they can’t find money to repair the roads and subways, a muni broadband network is going to get even less funding / oversight.
That said, I think it’s total BS when laws are passed that prevent the establishment of municipal broadband networks. It probably works for some cities, but it definitely would not for many.
My city's track record isn't quite as awful as yours, I think -- but even if it were, I'm not sure that would be any worse than what I have to put up with right now from Comcast.
At least if the local municipality is in charge, you have some amount of ability to reform any mismanagement. With the private sector in the absence of real competition, you have none.
This is not true. Manhattan, for example, had multiple cable providers for a very long time, until they were merged/bought.
Chicago currently has multiple cable providers: Comcast and RCN. Possibly a third.
There is no requirement for a city to give all of its territory to one company other than poor negotiating skills.
The goal with these rules is to make sure being wealthy isn’t a prerequisite to having access to communication services. If we didn’t have these rules, forget about broadband in poor neighborhoods (much less rural areas).
Edit: capitalism overall isn’t broken; but it is broken in some industries with unique market features (health care, telecom, etc). I don’t think it’s a contradiction at all to have some industries more or less socialized while maintaining a capitalist economy overall...
As for me, I find it interesting that the most regulated industries always tend to be the ones that are the most dysfunctional. Your example of health care is a perfect poster child.
Health care needs to be more or less socialized — the sales pitch for any non-emergency medical procedure is effectively “pay me or stay sick / die”. There is no way to price discriminate that maximizes profits without introducing moral hazard by withholding treatment from people who can’t afford it.
Now you say, "Hey guys, allowing people to not be medically treated is immoral, so let's force people to provide a service because that is totally moral."
In both scenarios, you're trying to argue for something but you're not being consistent with your logic. You're picking and choosing data points and circumstances without being consistent across the board.
#1 is the universal coverage requirement — anyone receiving a local monopoly from a municipality has to agree to make service available in the entire city. Many poor or low-density neighborhoods are not profitable for even a single company to serve, much less multiple companies. Overbuilders have no such requirement to even provide the potential of service in low-income areas, so none do. A side effect of this is that overbuilders can’t approach the level of efficiency that the monopolists can (see #4) and none can be much more than a nuisance to the incumbents as long as they remain overbuilders.
#2 is that in the wealthier / denser areas of a city that can support more than one provider, there are typically 2-5 providers offering speeds of 100+ mbit. The local monopolists therefore rely on the profits from the wealthy areas to cover the losses from the poor areas.
#3 is that it’s really hard to get investment to overbuild unless it’s a wealthy area. Telecom rollouts are expensive and require taking on significant debt. For every additional overbuilder serving an area, your ratio of [households served] / [households subscribed] and the amount of overhead you have to recoup for each customer goes up. Investors will not loan you money if they think you won’t make it back.
#4 is that telecom services are a scale business where you need vertical integration to be viable. TimeWarner Cable had their backbone network with TimeWarner Telecom. That was fine until both companies split and the infrastructure was owned by two different companies. TimeWarner Cable then had to build their own backbone — which lowered their credit rating, which made every subsequent debt offering more expensive. They were trapped in a cycle where they needed to invest badly, their network was slow so they couldn’t raise prices much, but borrowing was so expensive for them it turned into a death spiral. And that’s how the #4 cable provider in the country was able to buy the #2 provider — Charter was simply more vertically integrated through Liberty Media and had a better balance sheet.
The “take rate” (how many households of the total subscribe to broadband internet — directly correlated with household income) of a neighborhood largely determines how many companies serve the area. The overall take rate of the wealthiest cities is sufficient to support at most 3 broadband providers serving a given household; in the poorest cities the government has to subsidize access for even a single company to serve the area.
Capitalism and abuse of position go hand-in-hand. I would argue that abuse of position is the fundamental driving force behind capitalism.
(These rules largely do not apply to wireless.)