The status of Internet provision in the United States is pitiful. Speeds here are dwarfed by countries such as South Korea. Most people, because they’re a bunch of statists, blame this state of affairs on the Internet Service Providers (ISP). But the real culprit is the entity they use to maintain their near monopolies: the State.
Whenever an ISP’s near monopoly status is about to be threatened by a new competitor they run to the State for protection:
Charter Communications has sued the local government in Louisville and Jefferson County, Kentucky, in order to stop a new ordinance that gives Google Fiber easier access to utility poles.
Charter’s complaint in US District Court in Louisville on Friday (full text) is similar to one filed earlier by AT&T. Like AT&T before it, Charter wants to stop Louisville Metro’s One Touch Make Ready ordinance that lets new entrants like Google Fiber make all of the necessary wire adjustments on utility poles instead of having to wait for incumbent providers to send work crews to move their own wires. Charter alleges that the ordinance violates its Fifth Amendment property rights and could cause service outages for its customers if Google Fiber’s installers make mistakes.
Charter’s challenge to the One Touch Make Ready ordinance alleges a violation of Fifth Amendment property rights and state utility laws. The Louisville ordinance gives Google Fiber “a government-sanctioned license physically to invade, take possession of, move, and interfere with [Charter’s] property,” the complaint said. While Charter owns its wires, the poles are owned by AT&T and the Louisville Gas & Electric Company, and wires are placed in public rights-of-way.
These lawsuits are always amusing. It’s always entertaining to see what kind of excuse established ISPs can come up with to keep new ISPs out of their territory. In this case Charter is arguing on the grounds of property rights. What makes this argument laughable is that Charter doesn’t own the poles in question. If anybody has grounds to complain about how the poles can by use it’s AT&T and the Louisville Gas and Electric Company. And even they wouldn’t get mush sympathy from me because they fall under the live by the State, die by the State clause.
The live by the State, die by the State clause is what I use to describe companies that have thrived due to government protections suddenly finding themselves the target of government regulations. AT&T, for example, enjoyed a long period of having a literal monopoly on telecommunications granted to it by the State. It begrudgingly surrendered that monopoly as part of a deal with Congress to allow it to enter the computer market. Today AT&T likes to complain whenever a regulation doesn’t go its way.
Charter, like most ISPs, is where it is today due to government protections. Namely state and municipal protections against competition. Through zoning and utility laws state and municipal governments have artificially restricted the number of ISPs that can operate in their territory. With few competitors Charter was able to rake in more cash without having to provide increasingly better service. Now those protections are being taken away and its crying foul. Meanwhile I can’t help but laugh. I’m not above admitting to enjoying when karma comes around and bites these politically connected companies in the ass.