© 2004 ePrairie
The Tri-City Broadband initiative from three western Chicago suburbs
is again trying to pass a referendum in the November election to
provide municipal fiber to its residences and businesses. Batavia,
Geneva and St. Charles will vote once more if citizen group Fiber
For Our Future can list it on the ballot.
Comcast and SBC will again come out to squash this initiative because
it sets a scary precedent for them: the permanent loss of subscribers
for telephone, television and Internet services. It also opens the
door for others to follow in other cities.
Fiber For Our Future wants to see this broadband initiative pass.
Annie Collins, the chairwoman of this group, stated in a recent
Kane County Chronicle issue: "We’re doing this because
every resident and business has been victimized by two arrogant
businesses. They have used their money and marketing machines to
lie to residents and mislead the voters of the Tri-Cities."
“We deserve this,” Collins said in reference to the
fiber infrastructure. Her comparison of existing and proposed infrastructures
is interesting. Paying $8 for a gallon of milk that’s typically
$1 per gallon does not make sense. Why would you pay the premium
on a commodity? Would you pay it because the $8 version is still
delivered by a guy on a wagon with a reliable horse?
Maybe a better analogy is one where you go from Chicago to San
Francisco in a covered wagon versus flying in a Boeing 777. The
ticket for the four-hour plane flight is $119. The cost in time
and money in the covered wagon is weeks (not to mention the perilous
problems “along the trail”).
The traditional “transportation company” doesn’t
fully understand the benefits of the airplane and has everyone buffaloed
that its horse-and-buggy approach is the way to go. “It was,
it is and always will be” is the mantra that they promote
until they get their act together to offer their next-generation
transportation platform (a railroad).
The problem that most subscribers have is that they don’t
realize that the Boeing 777 has been around for several years. It’s
not an unproven concept. The fear that SBC and Comcast want to promote
is one where the covered wagon train is the tried and true approach.
Take it or Leave it to Beaver
It sounds like SBC and Comcast were really shaken the first time
this referendum was offered in April 2003. If they weren’t,
why did they spend so much money defeating it?
They came out with big money and the referendum didn’t pass
because they flooded local newspapers with negative ads. It’s
funny how they skimp on service and aren’t responsive, yet
when it comes to fighting a competitive service, money and resources
flow like Niagara Falls.
Since then, service has increased both in the offering of DSL services
from SBC and service in general from Comcast.
This is a strong departure from their usual monopolistic view of
a “take it or leave it” marketing approach where quality
of service isn’t part of their working vocabulary. Maybe more
suburbs should seek a referendum for developing or granting a competitive
service because it does have a direct impact on the level of service
they will receive.
There have been many complaints to villages in the Fox Valley area
(northwest of Chicago) on the quality and cost of cable services
Standard cable service with one premium channel soared in a year
from $48.47 a month to $64.99 a month (you had to switch to digital
cable in order to get a movie channel). If you tried to stay with
analog cable, the programming selection was so bad you wound up
watching “Leave It To Beaver” for $51 a month as they
stripped off anything worth watching (including The History Channel).
They forced the upgrade.
A Web site in nearby Chicago municipality Dundee has a separate
section that deals with poor cable service and has prompted new
meetings with Comcast. Some residents have been so turned off by
the bad service and recent price increases that they have literally
turned off the Comcast service and have gotten a dish instead.
Once you do go to satellite service, Comcast sends you a $300 offer
to get rid of your dish. What a lame marketing strategy: do nothing
to retain loyal customers and then try to win them back with some
cash after you tell them that the increases to monthly service and
the cutting of programming is policy that cannot be changed.
They also cut out their senior rates. If you had them before, you
retained them, but anyone now turning 65 is stuck with the same
In the Kane County Chronicle article, Comcast had some more observations:
“Comcast also has increased its services to residents in the
area since last year's vote,” Comcast spokeswoman Patricia
Andrews-Keenan said about the question of whether creating such
a utility is the best use of local funds. "Is there really
a need to duplicate those types of things? Is that the best use
of the municipality? Shouldn't they be providing service for the
elderly or education?"
Real Motivation or Real Greed?
I love how these spokespeople always have the people in mind. It
seems like all these PR people go to the same school of civil cajoling.
Hopefully, the people voting on the Tri-City Broadband referendum
will be smart and disregard Comcast’s whining.
When you really look at what she said, it is clear that Andrews-Keenan
is oblivious of the Telecom Act of 1996, which promoted competition
in the Telecom area. “Is there really a need to duplicate
those types of things?” Does that sound like someone still
immersed in a monopoly mindset? Ours is good enough. We don’t
Diverse competition is what makes the industry move forward rather
than monopolies with antiquated business models. Comcast’s
gold-plated buggy whips are not what the consumer wants to buy any
This is Big News Somewhere Else
Lots of people on the west coast are watching what’s happening
here. We have more attention being focused on the Tri-City initiative
from west coast media than our own Chicago media. That’s because
Chicago just doesn’t get it yet. Many solid technology initiatives
get overlooked in favor of some political scandal, painted cow exhibit
or some other fluff news piece. But that’s another column.
There should be a lot more media coverage as this is cutting-edge
stuff. It’s not so much with the applying of the technology
(which is proven). The issue is going from a 19th century business
model for monopoly communications to more of a 21st century approach
using municipal fiber infrastructure that can be used by any content
The applications are endless with new capabilities for home services,
telemedicine, high-speed video and so many other new services. It’s
not as risky as some of the PR people try to paint it to be. Once
the infrastructure is in place, it can be used by any carrier wanting
access. This opens up competition. They will pay access fees.
It may become a profit center for municipalities just like a water
treatment plant or other asset that generates money. Worst case,
if no one subscribes, the municipal infrastructure can be sold to
an interested party. Comcast, SBC, AT&T and many others would
jump at this because it would be state-of-the-art fiber and not
If they did the calculations again, they would find that the infrastructure
costs would be cheaper due to large price drops for certain optical
components and the industry itself, which has about 10 times more
supply than demand. If an infrastructure project like this was put
out to bid, local hotels would be full of fiber-optic companies
and construction firms.
“Wagons ho” has to be replaced with “please note
the cabin exits” and “all aboard” is not good
enough when “beam me up, Scotty” is already a proven,
James Carlini will be speaking at a National Regulatory Services
Conference in Bonita Springs, Fla. on understanding technology issues
when automating SEC compliance functions. The conference will be
held from April 13 to 16. More information can be found here.
James Carlini is an adjunct professor at Northwestern University.
He is also president of Carlini & Associates. Carlini can be
reached at firstname.lastname@example.org or 773-370-1888.