Chattanooga vs. Kabletown

From the Seufert Files, June 30, 2014

theodore-roosevelt-waving-his-hat-everett
“It is necessary that laws should be passed to prohibit the use of corporate funds directly or indirectly for political purposes; it is still more necessary that such laws should be thoroughly enforced. Corporate expenditures for political purposes, and especially such expenditures by public-service corporations, have supplied one of the principal sources of corruption in our political affairs.” Theodore Roosevelt

I recently read with great interest about the ultra-high-speed Internet service available in Chattanooga, Tenn. Chattanooga, as it turns out, boasts of the fastest Internet speeds in the Western Hemisphere.

The average Internet speed in the United States is 9.8 megabits per second, according to a study by Akamai Technologies. Chattanooga’s service can reach speeds of up to 1,000 megabits – or 1 gigabit – per second. With a typical high-speed broadband connection, it could take nearly a half-hour to download a two-hour movie. In Chattanooga, the same download could take less than a minute.

Ironically, faster Internet service was just a secondary benefit for the city. Chattanooga’s network of fiber-optic cables was built primarily to enable a smart grid to manage electricity more effectively, particularly during inclement weather. So instead of taking days to restore electricity to residents following an outage, it takes Chattanooga only a few seconds.

You might think such impressive technology was provided by one of the major telecommunications companies. You would be wrong.

The city of Chattanooga has its own publicly run Internet, cable, and telephone service. This has led Comcast to sue the city-owned utility twice. The company has also spent millions on a public-relations blitz to discredit the city’s publicly run service.

Chattanooga’s investment in telecommunications infrastructure, meanwhile, has attracted businesses big and small, from around the nation and the world, to the midsize city.

Subsidized skyscrapers

That raises a question: Why hasn’t Philadelphia, Pittsburgh, Reading, Erie, Scranton, or Lancaster followed Chattanooga’s lead?

The answer is money and politics.

Back in 2004, Gov. Ed Rendell signed House Bill 30, which amended the Pennsylvania public utilities code to limit competition from municipalities that wanted to provide telecommunications service to residents. The bill effectively gave companies such as Verizon and Comcast unchallenged authority across the state.

A year later, construction began on the Comcast Center in downtown Philadelphia. It’s furosemide online canada important to note that Pennsylvania taxpayers contributed $43 million to building the tower.

But it’s not as if Rendell had close ties to Comcast, right? That would be unethical.
As it happens, the executive vice president of Comcast, David Cohen, served as Rendell’s mayoral chief of staff from 1992 to 1997. Cohen is no partisan, though – at least not when it matters. Last year, he endorsed Gov. Corbett for reelection and hosted an event that raised more than $200,000 for the Republican’s campaign.

Comcast, by the way, is building a second skyscraper in Philadelphia. Not surprisingly, Pennsylvania and Philadelphia taxpayers will once again be subsidizing the construction to the tune of about $40 million.

Why does Comcast’s construction need to be subsidized by taxpayers? The company certainly isn’t hurting financially. In 2013 alone, it brought in more than $64 billion in revenue.

Illusion of choice

Don’t worry, though. All this is sure to pay off. It’s not as if Pennsylvanians are unhappy with the services Comcast provides.

Hold on a second: They are unhappy?

Of course, whether the issue is customer service, affordability, Internet speeds, or channel customization, you would be hard-pressed to find much love for Comcast in Pennsylvania. But both Democrats and Republicans largely ignore this collective discontent. If elected officials aren’t actively working to help Comcast, they’re too complacent or too afraid to challenge its dominance. That Pennsylvania ranks fifth among the states in corruption, according to a recent study by researchers at Indiana University and the City University of Hong Kong, suggests it’s particularly vulnerable to the influence of powerful special interests.

Publicly run telecommunications services like those in Chattanooga pose a threat to Comcast’s market dominance. But like Chattanooga, I believe Internet service should be a basic public utility, just like water and electricity. Without these things, economic mobility is severely hampered.

I’m a free-market capitalist in the truest sense: I want choices. Choice creates competition, which in turn creates better products for consumers.

It has become abundantly clear, however, that politicians and corporations have perverted the meaning of free-market capitalism to serve their own interests. They’ve provided American consumers with the illusion of choice while protecting the wealth and advantages of a select, privileged few. Until that changes, citizens will continue to be cheated.