This is a good news/bad news story. The good news is, cable companies are starting to challenge telco dominance in health care communications. According to Bloomberg, they are “ramping up sales staffs to sell broadband access and related services to regional hospitals and doctors’ offices, trying to squeeze more money out of a network they used to use mainly for carrying TV signals.”

The bad news, of course, is that as we transition to digitized medical records, our medical system will be increasingly dependent on the cable/phone duopoly. All companies cited in the article anticipate substantial revenue growth from the health care sector in coming years. Unfortunately, increased revenues to the telecommunications providers means any efficiencies are unlikely to translate into lower health care costs.

Compare this to OneCommunity’s HealthNet, which is driving down costs for health facilities across Northern Ohio by providing affordable access to their gigabit network.

OneCommunity is a non-profit entity that owns and operates its own fiber infrastructure and also promotes interconnection among public and private networks in the region. Its own network is carrier neutral, meaning any service provider can lease access. It connects more than 1,500 entities in 22 counties, including some 65 hospitals. As we've written here, OneCommunity has created enormous cost savings by allowing health care entities to communicate directly with one another, avoiding Internet transport fees.

The Coalition for the New Economy — which works to ensure “that investments in broadband networks are used efficiently and effectively”— wrote Tuesday that “funding for government-owned broadband networks is very often duplicative,” and “diverts local funds from public safety and education. ... Christopher Mitchell of Community Broadband Networks tells the Independent that official U.S. government policy believes “we can have proper competition if every competitor builds their own network, and that is not at all supported by reality.”

These numbers are likely to grow even starker as the 30 percent of Americans without any kind of Internet access come online. When they do, particularly if the next several years deliver subpar growth in personal income, they will probably go for the only option that is at all within their reach: wireless smartphones. A wired high-speed Internet plan might cost $100 a month; a smartphone plan might cost half that, often with a free or heavily discounted phone thrown in. The problem is that smartphone access is not a substitute for wired. The vast majority of jobs require online applications, but it is hard to type up a résumé on a hand-held device; it is hard to get a college degree from a remote location using wireless. Few people would start a business using only a wireless connection.

The bigger problem is the lack of competition in cable markets. Though there are several large cable companies nationwide, each dominates its own fragmented kingdom of local markets: Comcast is the only game in Philadelphia, while Time Warner dominates Cleveland. That is partly because it is so expensive to lay down the physical cables, and companies, having paid for those networks, guard them jealously, clustering their operations and spending tens of millions of dollars to lobby against laws that might oblige them to share their infrastructure.

A common misconception is that local governments award exclusive (or monopolistic) franchises to cable companies and that is why the US has so little cable competition.  However, no local government has done this since the 1996 Telecommunications Act 1992 Cable Act made the practice illegal.

But even before the '96 Telecom Act '92 Cable Act, local governments tended to award non-exclusive contracts to cable companies because they wanted more competition, not less -- as illustrated in this article about Cox preparing to renew its franchise agreement with New Orleans.

Federal laws and Federal Communications Commission decisions also have sharply curtailed the city's negotiating ability. Even if other companies were seeking permission to provide cable to local customers, said William Aaron, a legal adviser to the council on telecommunications issues, council members could not arbitrarily refuse to renew the Cox franchise. The council could do that only on the basis of certain limited criteria, such as that the company has not lived up to the terms of the 1995 agreement. Cox has had a nonexclusive franchise to operate in Orleans Parish since 1981, meaning that other companies also can apply to provide cable services, though none has done so. The franchise was renewed in 1995.

“Access to the internet is akin to a civil rights issue for the 21st century,” said David Cohen, Comcast’s executive vice president. “It’s that access that enables people in poorer areas to equalize access to a quality education, quality health care and vocational opportunities.”

"Quite frankly, people in lower-income communities, mostly people of color, have such limited access to broadband than people in wealthier communities."

In the process of knitting a baby blanket, a whole ball of yarn became tangled into this mess. . . .

. . . reminding me of the time, in the early eighties, when I was the second cable administrator appointed in the U.S., and found myself peering into a hole in the street filled with a similar looking mess—only made of copper wires, instead of yarn.

Why talk about yarn and copper wire in the same breath on a site dedicated to community broadband networks? Because it was the intersection of ‘art and cable’ that got me started in the ‘telecommunications policy’ arena, the same kind of thinking that continues today in our tangled telecom discussions: Is it content or conduit, competitive, entertainment, essential, wireless, landline, gigahertz, gigabits?

I transferred from the Recreation Department to launch the city’s cable office as an experienced government supervisor with a Masters in Theater. My employer and I thought cable TV was the ‘entertainment’ business and I had the requisite mix of experience and skills to manage one of the first franchises awarded in 1981.

Yikes. Imagine my surprise on discovering that cable was a WIRE LINE UTILITY using PUBLIC LAND, which each citizen pays TAXES to buy, upgrade and maintain! And, our three-binders-thick, cable franchise was a ‘legal contract’ containing the payment terms for use of our public rights-of-way, as well as protection of local free speech rights. I was thirty years old, a property owner who had never thought about who owned roads, sidewalks and utility corridors.

Rights-of-way are every street plus about 10 feet of land on each side. That land belongs to everyone in the community. Rights-of-way are a shared public asset—sometimes called part of our common wealth.

The Netflix Techblog has released a graph of performance by Internet Service Provider - which I modified to demonstrate the Looming cable monopoly as identified by Susan Crawford (and recently discussed here by Mitch Shapiro).

The trend is unmistakable.  There are 2 distinct groupings - the cable providers all beat the DSL providers (Verizon is in the middle, likely due to its fast FiOS speeds averaging with much slower DSL connections).  At the very bottom is Clear's 4G WiMax - you know, the superfast wireless that is the key to fast broadband!  

Communities need to read this chart and take a lesson: the future of broadband is not pretty if you do not have a network that puts your needs first.  Cable broadband speeds are increasingly more rapidly than DSL, meaning a local monopoly on high speed broadband, with DSL slowly becoming the modern dial-up.

Frontier has been bitten by the same disadvantage many communities face when building their own networks -- little market power means having to overpay for everything. When Frontier bought millions of Verizon rural lines, it bought a few FiOS connections as well. But not enough to gain any bargaining power with channel owners. So Frontier had to raise the costs of its video services up for 46%. Lest anyone feel too sorry for Frontier, they are doing just fine. It is their customers who suffer. But it is a reminder that the issue of scale and market power are barriers to all competition, not just community networks. If we want to have real competition in this country, the Congress and the FCC need to stop ignoring the problems caused by massive players distorting the market. This unregulated market is an invitation for big players to join together and screw everyone else.