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Updated: 41 min 35 sec ago

Electricity as utility. A model for the internet?

Mon, 2014-11-10 04:00

 

Update 11/10/2014: President Obama made a statement this morning calling for "free and open Internet," citing the 4 million comments sent to the FCC regarding net neutrality.  

For context, read on.

As Federal Communications Commission chair Tom Wheeler moves closer to releasing new rules on net neutrality and internet "fast lanes," many open internet advocates have been calling for the FCC to reclassify internet service providers as "common carriers."

Doing so would effectively turn them into public utilities like power, gas and water services, and thereby subject them to more strict regulation.

But some of those utilities themselves started out as products sold on the open market, just like internet service. So how did they get regulated as public utilities? For the best comparison with the internet's current situation, look at how another "new" technology went from market good to public good: electricity.

In the case of electricity, it starts with Edison.

With a patent for the first practical light bulb in 1879, Thomas Edison needed an actual market of people who could use his invention, meaning a way to get power to his customers. In 1882 his Edison Illuminating Company constructed the first central power plant in the United States, the Pearl Street Station in New York.

The catch with early direct current power plants, however, was that they couldn't generate power at very high voltages. The power couldn't travel that far along the copper wires without weakening the further it went. But as electricity gained popularity and more appliances were created to use it, numerous companies began building power plants to supply electricity to individual neighborhoods, each station selling power to customers within a small radius.

This is where goverment regulation entered the picture, in the form of municipal franchise agreements. Those agreements allowed the companies to dig up streets and build infrastructure. In exchange, they had to meet certain price caps and service standards. These controls, usually administered by city governments, were in fact very weak.

The large investment costs usually prohibited one company from owning all the power stations in a single city at first, but the different firms would often compete over customers in areas where their services overlapped. As companies were able to expand their reach, customers in large cities like New York and Chicago actually experienced a sort of golden age of price wars with many local companies competing against each other.

The competition was short lived, however, as single companies gained monopolies over large cities and increasingly advancing technology made for high barriers of investment in infrastructure needed for a new competitor to enter a market. The market for internet service providers is kind of at the same point right now in terms of barriers to entry, as telecom and cable companies have consolidated to a certain extent, buying up smaller regional ISPs. This has made it pretty much unfeasable for new competitors to get in the the game without considerable resources.

The old municipal franchises that governed electric companies also became prone to corruption from city politicians. In the early 1900s, an entrepreneur named Samuel Insull who had exploited the economies of scale to dominate the Chicago market argued along with other electric utilites that they were "natural monopolies," that resulted from the inherent barriers to competition in large markets.

State governments attempted to regulate these monopolies with legislation, but power barons like Insull were able to outmaneuver the efforts by restructuring their businesses with holding companies that were not covered by the reforms. By the late 1920s, the Federal Trade Commission was investigating the holding companies for market manipulations.

It wasn't until the onset of the Great Depression, and the strong reforms of the New Deal that power over electric utilites was taken away from the holding companies in the form of the Public Utility Holding Company Act and the Federal Power Act of 1935, transferring much of the regulatory power over eletricity over to the federal goverment.

This was significant not because power utility monopolies were split up, but that the "natural monopolies" were in fact legitimated; they could exist, but they had to be under government control. The federal legislation, along with other New Deal legislation, actually provided for the creation of a number of government monopolies over public goods.

As it stands now, internet service providers are sort of stuck in between being a wholly private good or a heavily-regulated public utility. Until recently, the FCC has successfully imposed on ISPs to treat all content the same in terms of speed of access, but they haven't set caps on how much they can charge or set standards for quality of service as are required of utilites like water and power.

The federal government has also subsidized ISPs to the tune of $200 billion to build a fiber broadband infrastructure for schools and low-income regions, which many activists contend they never completed. Following the model of electic utilites, further government investment could hypothetically result in internet infrastructure owned by the government itself.

It's unclear whether the internet will go along the same route to regulation as a utility, but with nearly a third of Americans having no choice for their internet service provider, the circumstances are starting to look very similar.

What it's like to drive a car powered by natural gas

Mon, 2014-11-10 03:00

America’s natural gas production shows no signs of abating. And increasingly, the question is: What to do with all of it?

One proposed solution is to drive cars on it, which is possible. But likely?

Marketplace’s Scott Tong conducted a test drive on a recent reporting trip to Michigan:

As soon as I land at the airport, the dual-fuel truck is waiting. This Ford F-150 burns gasoline and natural gas. The vehicle drives the same, except there’s just one switch to flip on the alternative fuel.

The benefit of natural gas? Let’s talk a bit of chemistry. Natural gas is one of several hydrocarbons: ethane, propane, butane…

“Natural gas is the simplest one,” says John DeCicco of the University of Michigan Energy Institute. “It’s just one carbon atom with four hydrogen atoms. And because it just has one carbon, it burns very cleanly.”

When it’s burned, natural gas emits half the amount of greenhouse gas CO2 than gasoline.

DeCicco joins me as we drive to a nearby gas station. There, commercial driver John Duffiny is filling up at a special pump for his natural gas van.

“It drives great,” Duffiny says. “Just like a gas motor. You punch it, you get to 80 miles an hour in [a]  minute. I shouldn’t say 80 … 70 miles an hour.”

And on this day, the fuel costs 30 percent less than gasoline, per unit of energy.

Now here’s the rub: First, I can’t work the natural gas station hose. It looks different. It goes into a different place in the vehicle. And the pump has a problem with its compressor.

To fill a natural gas tank, the fuel has to be pushed in, or compressed. Hence the term “compressed natural gas,” or CNG. It’s like filling a tire with air. Natural gas is similarly gaseous. It’s not a liquid.

“Think about filling up a balloon,” DeCicco says. “You have to blow it up. And what this pump is doing is the same thing.”

Another trade-off: the tank is really big. See, the fuel is less dense, less concentrated.

“The vast majority of people who want pickup trucks aren’t going to want to lose a bunch of their bed space,” DeCicco says.

Today, many buses and large trucks figure all these trade-offs are indeed worth it. They have space for extra-large fuel tanks. And since they often drive long distances, the savings add up.

But the rest of us, not many are sold on the idea yet. Of a billion vehicles in the world, 1 percent or so burn natural gas. 

Winter is coming: Why forecasters love a good vortex

Mon, 2014-11-10 02:00

The polar vortex is back. It hit the northern U.S. on Sunday, is sweeping down through the Midwest, and will then move out to the East Coast. Temperatures could drop by 40 degrees and bring some all-time daily lows. 

Directly in the path of this cold air mass is the city of Brainerd, Minnesota. City administrator Patrick Wussow is not panicking. When I called him, he was actually chuckling. 

Wussow had not yet heard that the area would be struck by a vortex. The city had not made any special preparations for the cold weather, nor did people in town seem overly concerned. He says: “It's business as usual, preparing for the weather whichever way it comes—cold or warm.” 

When similar weather patterns brought on historic cold temperatures in December and January last year, the media popularized the phrase “polar vortex,” and for good reason. It makes for a big weather story, and that buzz creates revenue for weather news outlets. This vortex is a top story on sites like Accuweather.com. CBS News tells readers to prepare for “the sequel.” The NY Daily News calls it a “scary weather phenomenon.” 

Dave Changnon is a professor of meteorology at Northern Illinois University. He says one of the reasons forecasters love a good vortex is that it is predictable, so it makes for an easy story. “It's not like a snow storm,” he says “where forecasters sit there and say, 'oh, we are going to get buried with two feet of snow' and then all the sudden it misses.” If the weather patterns show a polar vortex is coming, it is coming. 

People have pretty short weather memories says Changnon, so they forget that these vorticies are nothing new. They are a reoccurring and documented part of the weather pattern, and he says people in their 40s should remember similar cold weather in past Novembers. 

This vortex is a little unusual, Changnon says, because it is appearing earlier in November than most. But for that reason, he says it won't be anywhere near as cold as last year's vorticies. Changon says people in the affected areas should just prepare for temperatures that feel more like January instead of November. 

 He, for one, plans to wear a scarf and coat.

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