Wednesday, January 29, 2014

Whether it's broadband or telegraph, it's too expensive (a century apart)

The front page of the Jan. 29, 1914, edition of the Bemidji Daily Pioneer.
The front page of the Jan. 29, 1914, edition of the Bemidji Daily Pioneer.

It’s not a secret that Internet prices in the United States are out of line with those in other developed countries. In fact, Americans pay more per megabyte than anyone else in the world with access to broadband.

This is on top of having our Netflix stream slower than elsewhere; in 2012 the average download speed for American connections was just 12th in the world.

(It should be noted here that the United States' speed problem is one of having some areas with great speeds, but low performers dragging the rest of the country down.  For example, if Vermont and New Hampshire were countries, they would have the second and third-highest average download speeds in the world. California, home of Silicon Valley, also suffers from this diffusion on a micro scale, having fast service in urban cores while most of the state’s land area remains unserved or underserved.)

Wow. It must be completely unprecedented that the country where a revolutionary new telecommunications technology was invented trails the rest of the world in terms of costs and efficiency. Right?

Nope. A century ago, people were complaining that US telephone and telegraph rates were too high. It seems that the more things change, the more they stay the same.

One-hundred years ago today, the Bemidji Daily Pioneer in Minnesota ran a column one article by Illinois Congressman Clyde Tavenner noting several areas where the United States trailed significantly in terms of costs compared to what was then the "developed" world.

As examples, the United States ranked:

  • Last of 16 countries in average cost to send a telegram (44 cents vs. 9 cents in top-ranked Luxembourg);
  • Only 14th lowest in terms of costs per local phone call (2.1 cents vs. 0.4 cents in Norway);
  • Last in average costs of a long-distance call (60 cents vs. 8 cents in Sweden for a call to a place 100 miles distant [in 15th place was Hungary, with 39 cents for that same call]).

The whole screed was apparently a call from the Congressman to nationalize the home phone service, then (as now -- what breakup?) dominated by American Telephone & Telegraph. Apparently, per Tavenner, Ma Bell was engaged in an "evident attempt to stave off government ownership by its willingness to submit to every government demand" (wire-tapping included?).

Tavenner was obviously a proponent of government ownership of the telephone system, noting that the one place where American service was superior than most of its contemporaries (other than Japan) was in its government-owned postal service.

"Our privately owner telegraphs and telephones fall far below the standard of efficiency and cheapness set by the European government service," Tavenner wrote.

The government never did buy AT&T, although it did cause it to break up in the 1980s -- before the telecommunications giant reformed like a melted T-1000.

Tuesday, January 7, 2014

SSF Ferry ridership getting better, but still not quite up to par

The South San Francisco ferry terminal. Photo credit: Chris Stevens, via Flickr.

Ferries are great. They're one of the best bargains with which to tour a waterfront city.

In some areas -- such as Sydney, Seattle, New York City -- they're also a vital link in regional mass transit systems. Not so much in the San Francisco Bay Area. Here ferries may be convenient, but they're also expensive and redundant.

With BART, multiple bridges and an active bus system crossing the Bay, ferries are mostly a novelty -- and a costly one at that.

While Oakland and Marin ferries to San Francisco get decent passenger numbers, an 18-month-old ferry from Oakland to South San Francisco has been struggling to find riders. It started off with much fanfare, but once the novelty (and free first-week rides) wore off, ridership dropped and costs continued to mount.

One reason is that because the service is heavily geared toward those commuting to SSF from the East Bay, those who live in South San Francisco itself find it quite difficult to board the ferry. There is no real transit service from the bulk of South San Francisco to the ferry terminal, located on the far east side of the city, save for an inconvenient, infrequent shuttle that does not share any stops with mainstream SamTrans lines. Nor are there any sidewalks on the main walk to the terminal.

Ridership, as one might expect suffered, dropping to an average of just 136 passengers per day -- subsidized to the tune of more than $80 per trip -- in the ferry's second financial quarter.

So far the ferry, which costs commuters $7 each way, has tallied big bills. These include a new ferry terminal that cost about $26 million and a $2.6 million annual operating subsidy funded mainly by San Mateo County Measure A sales taxes. And, whether it hemorrhages money or not, the ballot measure authorizing the SSF Ferry requires it be funded for a minimum of five years, according to Joe Hurley, director of the San Mateo County Transportation Authority.

But in the first quarter of Fiscal Year 2013-2014, a couple exogenous events bumped up ridership. First, a short strike by BART workers in July, then a brief closure of the Bay Bridge during the week leading up to Labor Day. Also in July, a big change as Genentech, the biotech titan that dominates the east side of South City, began to offer fully subsidized rides for all its employees.
The results?

Ridership levels

As this graph shows, ridership has grown to about 332 riders daily, on average -- about double what it had been a year earlier.

"I think we're moving toward the right direction," said April Chan, a planning a development officer for the San Mateo County Transportation Authority, which partially funds the SSF Ferry. "It's not there yet, but much better than in our last report."

Some members of the Authority's Citizen's Advisory Committee (disclaimer, your blog author is a member of said committee) said that the progress has been insufficient.

"This is not even close to acceptable," said CAC member Jim Whittemore at the CAC's monthly meeting on Tuesday. "I understand it's new and they're trying things ... but it's not good enough and needs to get better soon."

With the jump in ridership, the government subsidy has effectively fallen to "just" $33.72 per rider, per trip (below). By contrast, the median subsidy for a bus ride in San Mateo County is around $8 per passenger, with the largest subsidy for a regular SamTrans route being about $19 (for line 359, which is about to be cut).

Cost per passenger

Fringe benefits that come from a ferry system shouldn't be overlooked, said CAC member John Fox. For example, Fox pointed out that the agency that coordinates ferries in the Bay Area is called the Water Emergency Transportation Authority.

"I don't think you can compartmentalize this as a farebox recovery ratio," he said. "You have to fold in that this was for natural disaster preparedness."

The upward ridership trend is promising, but it remains to be seen how much of it was permanent and how much was the result of the BART strike. Moreover, unless Genentech keeps up its subsidy, ridership will drop precipitously. I like the concept of a ferry to the town I live in, but I'd rather see the money invested in a more cost-effective manner.

Update (Jan. 21, 2014): The Transportation Authority released addition figures after the initial blog post showing that ridership has dropped even further post-BART strike resolution. In December, the South San Francisco Ferry averaged fewer than 250 riders per day. Granted, December is a light month in most transit systems, but ridership had also dropped significantly in November, as shown in the graph below:

Line graph showing SSF Ferry ridership from July 2012 to December 2013