What a disaster.

Wasn't the city willing to go for us to go into debt to the tune of $500 million for this fiber optic network? I smell tram!

This article is from Capitalism Magazine, and they don't have an agenda, do they? I'm not totally discounting the article but, really, would you expect to ever see an article highlighting a government success in such a magazine?

Being a well informed observer from So. Or. I can assure you the article is not biased. If the City Council could retract it's decision to implement this financial nightmare it surely would. Much better for a private business to fail than the city of Ashland.

You know I read this and then I went back and read an article on the Big O online from last Friday. It's the one where the City says it has decided NOT to build a fiber optic network. Dan Saltzman is quoted as saying it doesn't make sense for the City to build a fiber optic network. Am I misreading the article or has something changed since last week?

The article is at: http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1195185323189390.xml&coll=7

Greg C

Wait I think I get it now. This is WIFI deja vu. The City wants to sucker some private entity to buld the fiber network with the vague promise that if they build it the City will take part. Ok.

Uh never mind.

Greg C

It isn't just Capitalism Magazine reporting about Ashland's money losing fibre optic project. I remember reading about this in another newspaper account as well.

I might add that I monitor the profits and losses of Comcast. Even for this private monopoly they do little better than breakeven. Even when they do report a profit, they sink even more capital into expanding their services. The payoff is always said to be just around the corner. Comcast's share price (symbol CMCSA) is now about where it was over three years ago.

If a private monopoly can't make much money providing fibre optics, I doubt public entities competing with private entities can do much more than lose money.

I have a question that maybe someone here can answer. If the gov't can't do it and the private sector can't do it, who can bring high speed to us? What will it take? According to this article in USA Today we are behind most of the developed world in terms of speed and cost for internet access. I can guess where the city may be coming from. However, I also distrust most everything the city council proposes based on its track record. These guys have never found a plan that they couldn't manage to screw someone over with, and I really think they need some ritalin before they suggest some things, But the question stands, is there any way we could get this built without the city priming the pump? What if we offered to name it the Cesar Chavez Onramp to The Information Super Highway we could get it done.

“…is there any way we could get this built without the city priming the pump?”

Roy, “priming the pump” is often just another name for drowning citizens in debt.

One suggestion is for the city to get out of the way. Rather than keep collecting utility franchise fees that bear little relationship to the actual cost of giving right of way access to cable and fiber, just charge for actual costs. That goes for existing telephone and electric wires. This would lower the cost of providing all these services, expand demand, and make it more likely that faster broadband will come to the city from one or more private operators.

******This would lower the cost of providing all these services, expand demand, and make it more likely that faster broadband will come to the city from one or more private operators.*****

So Steve can you cite a major City where this approach has already worked?

Greg C

"So Steve can you cite a major City where this approach has already worked?

No Greg, I haven’t done the research. I just applied econ 101 analysis to the problem: high costs dampen demand, low costs enhance demand. The failure of government sponsored broadband such as that in Ashland point to one or more of several conclusions. Either those governments are incompetent to build and manage such a system successfully, or the demand for such systems simply isn’t there at any reasonable price, or a combination of these and other factors.

I simply suggest that Portland is clearly charging more to let private utilities use its infrastructure than necessary to recoup costs, so let’s try lowering those costs and see what happens. Portland prides itself on being an innovator, so let’s innovate here. Worst case, rates for existing services may decline or not rise as rapidly.

Greg C, while I haven’t done the research, you might want to look at the 90-page report alluded to in the article linked at the top of this post:

Wi-Fi Waste: The Disaster of Municipal Communications Networks

It includes a number suggestions (starting on page 37) for how cities and states can encourage broadband and other telecom development.