[com2kid]

> You can’t “compete” with a municipal service.

Sure you can.

The inherent costs to provide services is similar, but Comcast can amortize costs over a larger customer base. If Comcast is at all competent (a huge if!) then they should have overall lower costs, even taking (probably reduced) profits into account.

Customer service needs to be provided, a mailing center to send out hardware, a billing system, technicians and installers need to be trained and dispatched, payroll for all said employees, and all the other costs of running a business that should, in theory, scale to Comcast's advantage.

And of course Comcast can offer quicker upgrades in service. By bringing resources to bear, they should be able to iterate on technology faster than a municipal provider can.

Comcast also has the advantages of bundling services, another way to recoup costs and compete vs the municipal provided service.

A well ran national company with should be able to put up one heck of a good free market fight going up against a municipality. The real question becomes, is Comcast able to put up that fight?

[wildmusings]

Municipal services usually don’t have to turn a profit, since they can make up the shortfall with tax revenue. You’re missing that crucial point. You can’t effectively compete against someone who can operate at a loss in perpetuity.

I don’t know what the specifics are in this case, but if they allow the municipal service to be funded by tax revenue, then it’s incredibly unfair.

[com2kid]

> Municipal services usually don’t have to turn a profit, since they can make up the shortfall with tax revenue. You’re missing that crucial point. You can’t effectively compete against someone who can operate at a loss in perpetuity.

This is more of a problem of how things look like they are funded.

Customers still pay the same price, but instead of $60 for Internet service, it may be $50 for Internet and $10 somewhere else. Or of course the city can tax the heck out of one subgroup of people and redistribute the funds.

I'd actually be OK-ish with a law saying that municipal broadband has to be self funded after initial rollout, I imagine that would maintain sufficient competition.

[wildmusings]

>Customers still pay the same price, but instead of $60 for Internet service, it may be $50 for Internet and $10 somewhere else. Or of course the city can tax the heck out of one subgroup of people and redistribute the funds.

No, in your scenario, customers pay $50, and EVERYONE pays $10, including those who use a private competitor.

The customers of a private competitor that also gets $60 of revenue per customer, would actually be paying $70. $60 for their own service, and $10 to subsidize the municipal service.

And even if you have some magic source of tax revenue that is not the citizens (or heavily tax some subgroup as you suggest), the municipal service is still charging $10 less to get the same revenue as the private service.

[com2kid]

> No, in your scenario, customers pay $50, and EVERYONE pays $10, including those who use a private competitor.

That is why I proposed the municipal broadband system be self funding, preventing any market distortion.

I admit I wasn't clear about it, and you are correct that in a scenario of anything other than 100% of the population switching over to the municipal provider, a subsidy effect does occur.

[collinmanderson]

Yeah, I'm curious what the actual price per customer will be. Comcast may still offer lower prices.