|Boston Region: Locals Take On Cable Giants|
Municipal Utilities Expand Offerings
By Robert Preer, Globe Correspondent | October 13, 2005
Norwood Municipal Light Department is expanding its broadband offerings to include voice over the Internet. Braintree Electric Light Department will soon add video-on-demand to its cable lineup. Taunton Municipal Light Plant, already an Internet provider, is exploring a cable television venture.
Several municipal electric companies south of Boston are entering the high stakes hyper-competitive world of telecommunications. And in the process, these staid local monopolies are going head-to-head with some of the nation's biggest companies.
Their rivals are world-class: Comcast, a $20 billion firm and the largest cable provider in the United States, and Verizon, a $70 billion telephone company with 10 million subscribers, now about to make a big push into cable television.
Many other firms compete in the telecommunications field, which has become scrambled in recent years by the convergence of the technologies that underpin cable television, Internet, and telephone. The major players include satellite television providers, wireless telephone companies, and wireless Internet services. Google, the Internet search giant, is widely rumored to be planning a wireless Internet service.
But the municipal utilities feel they have the edge. ''We've been here over a hundred years," said William Bottiggi, general manager of Braintree Electric, which was founded in 1892. ''We can offer these services because people know us and trust our reputation."
''We are well received by the community. That's the beauty of being a municipal," said Darryl Hanson, broadband development manager for Norwood Light.
The fast-changing business requires companies to stay abreast of technology.
''This is a very competitive field," said Verizon spokesman Jack Hoey. ''This is not the electric business."
Comcast spokesman Marc Goodman said his company views municipal utilities as one of many different competitors. ''Comcast faces competition in all areas of our business. What sets Comcast apart is that our products and services are unmatched," he said.
The municipal electric companies, which were established in the late 1800s to convert hazardous gas street lamps to electricity, say they remain undaunted.
''We are capable of keeping up with the technology," said Bottiggi. ''We don't have the economy of scale that they do, but we are doing quite well."
Comcast, Braintree's private cable provider, launched video-on-demand last year. The electric light department will have it available shortly, according to Bottiggi. Both Braintree Light and Comcast offer high definition services and digital video recorders.
Prices offered by municipal companies, which do not have to turn a profit or return money to shareholders, tend to be lower, although comparisons are difficult because services are not identical.
Comcast's standard digital cable costs $49.59 a month in Braintree, while Braintree Electric Light's service is $47.10. Norwood will soon be the first municipal cable company in the state to offer telephone service over the Internet, known as Voice Over Internet Protocol. The system was due to be turned on early this month.
Hanson said Norwood Light officials saw Vonage and other voice Internet services signing up customers. They realized that they could offer the same service with a minimum investment.
Braintree has been a pioneer among municipal electric companies in the United States in telecommunications. The electric department was one of the first in the country to launch a cable television service in a community that already had an established private provider.
In 1999, Braintree began offering high speed Internet, and a year later launched a cable television service, challenging incumbent AT&T Broadband, which would later be acquired by Comcast.
The municipal company appears to be holding its own, with about 5,100 cable television subscribers in the town, which has between 12,000 and 13,000 households. Comcast is believed to have a similar number of subscribers in Braintree, although the company does not disclose detailed subscriber numbers.
The Washington, D.C.-based American Public Power Association is holding a conference in Boston this month on broadband, and attendees are scheduled to tour Braintree's facilities.
Taunton Municipal Light Plant has for several years been exploring the possibility of offering broadband services, but so far has not decided to go forward. The utility serves Raynham and parts of Bridgewater and Lakeville as well as Taunton.
There are about 2,000 municipal power companies in the United States, including 40 in Massachusetts. Other towns south of Boston with municipal electric companies are Hingham, Hull, Mansfield, and Middleborough.
According to the American Public Power Association, 621 public power companies offer some form of broadband service for television, Internet, or telephone.
Officials of Hingham Municipal Light Plant considered getting into broadband but decided against it. ''We don't have the infrastructure in place," said its general manager, John Tzimorangas. ''It would cost us quite a bit of money to offer it."
Not all of the ventures have been successful.
Middleborough Gas and Electric offered local and long distance telephone service for five years before abandoning it last year. The utility, which had signed up only 350 customers, found it could not keep up with falling prices and other changes in the field.
''We learned some valuable lessons about the competitive nature of the industry," said Sandra A. Richter, communications manager for the utility. ''We have learned that we have to focus on our core services."
Electric companies have been able offer telecommunications services because the fiber optic cables they have been installing for transmission of electricity also carry voice, data, and video.
Municipal electric utilities and private companies agree that competition should mean better services and lower prices.
''Competition is a good thing for the consumer," said Bottiggi. ''It keeps us on our toes."
Verizon plans to roll out its broadband Internet and cable television service in Greater Boston over the next year.
State Senator Michael W. Morrissey of Quincy, chairman of the Legislature's Committee on Telecommunications, Utilities and Energy, said the competition is much needed. ''There are a lot of us who would like to see more competition," he said.