The telecoms are masters of destroying competition through legislative means. They utterly destroyed DSL competition during the dawn of broadband (my first company sold to independent ISPs; I watched them all wither and die within the span of about four years, as broadband took over and they were prevented from competing by shady behavior by AT&T and Verizon), and now they're trying everything at their disposal to continue to deliver poor service at high prices without effective competition.
The difference this time is that Google is bigger than they are, and not quite as much of a pushover in the legal domain. It's still an uphill battle, and consumers are still going to be the ones to suffer under pathetically poor quality and expensive Internet service (the US is something like 14th in quality/speed/price in the world for Internet service, despite it having been invented here, and despite having vastly more infrastructure investment at all levels).
The best thing that could possibly happen for the Internet in the US would be the swift and total annihilation of anti-competitive companies like AT&T, Verizon, and the major cable companies, leaving room for innovators to step in and fill the void. But, that won't happen...they're too good at stacking the deck to remain in leadership positions in the market, despite delivering terrible service on nearly every front.
So if Google is looking to spend a billion dollars, they can make several times as high a return putting that into their software and services operations than into building fiber. But ultimately, Internet companies are reliant on the physical infrastructure to provide their service. That puts them in an odd situation: they need someone to build those pipes, but they'd rather not do it themselves because that's not an efficient use of their capital.
So has it occurred to you that nobody wants to step in and compete, not because of the regulatory hurdles,[1] but because no investor wants to pour billions of dollars into an industry that's about as good at making money as airlines?
[1] After all, investors pour tons of money into highly regulated industries like pharmaceuticals, because the return on investment justifies it.
That's an interesting line of argument, but Google IS investing in the field and IS being tripped up by regulatory, rather than technical or capital hurdles.
Just because the cable cos piss away the money at various layers of the organization does not mean that they're providing service at a reasonable rate.
Whether it goes to CEO salaries, midlevel salaries, overstaffing and organizational fiefdoms, or to lawyers suing competitors.. at the end of the day they charge a huge amount of money to deliver lousy service. Saying "Hey, we're so incompetent that we're not even that profitable!" at the end does not make me more sympathetic.
Where is Google being tripped by by regulatory hurdles? Google's whole M-O with Google fiber is to demand waiver of regulatory requirements that everyone else has to comply with, in particular build-out requirements.[1]
This story is actually a great example of how Google is not being held back by regulatory hurdles. Google apparently got the municipality here to pass a "fast-track" ordinance that let's it move AT&T's equipment on AT&T's utility poles often without even notifying AT&T. The federal pole attachment regulation here is totally reasonable: utilities must provide non-discriminatory access to poles, but telecommunications providers must follow procedures for requesting access and providing notice.
[1] I happen to think build-out requirements are a dumb idea, but they're a policy choice to cross-subsidize internet service for poor neighborhoods, not a "regulatory hurdle."
I only read the article, not the brief, but it sounds like they're objecting to Google touching the pole at all (AT&T's property) without working with AT&T.. if it were a matter of moving around AT&T's actual equipment, I'd be with you, if it's a matter of touching the pole, and AT&T has some long dragged out process of 'notification and consent', I can see why Google wants that ability.
RE: Build out requirements, funny story since I was at the table for one of these contracts once. We took it as granted that we'd keep the buildout requirement intact but if I analyze the politics of it.. tell someone they can't have cable and you have a guaranteed vote against you, but give EVERYONE a $5 higher bill and nobody will know to blame you.
AT&T is challenging the municipal ordinance. That ordinance allows a new attacher (Google) to "relocate or alter the attachments or facilities of any Pre-Existing Third Party User as may be necessary to accommodate Attacher's Attachment[.]" The new attacher must only provide 30-days notice if it determines that the work will cause or reasonably be expected to cause an outage.
The existing process is prescribed by federal law. 47 C.F.R. 1.1420. Under that process, when an attachment is requested by a new attacher, the utility pole owner (usually the power company), must give everyone else using the pole notice of the new attachment and specify a date for competing the necessary make-ready work that is within 60 days of the notice. That gives the existing attacher the opportunity to modify its attachment to accommodate the new one so that the utility or the new attacher does not need to move its equipment.
Under the federal regulations, for the poles AT&T doesn't own, they don't even need to consent. They're just given the opportunity to move their equipment before someone else handles it.
Most of the cost of laying fiber is passing a neighborhood. Fiber provides live and die by their uptake rate--the percentage of the houses they pass that actually subscribe. Build out requirements tank your uptake rate, because in most cities large segments of the population simply cannot afford to subscribe. If the provider is forced to build into those neighborhoods anyway, they have to raise prices everywhere else, which further reduces their uptake rate.
So think about that from a prospective competitor. Maybe 20% of the neighborhoods in say Baltimore would be willing to pay enough for fiber service for it to be worthwhile challenging Comcast in those areas. But if I'm forced to build out everywhere--in a city where a quarter of the population is below the poverty line--there's no chance it makes economic sense for me to do so. I'd have to raise prices so much in profitable neighborhoods that I'd never be able to compete with Comcast.
This is, by the way, why Baltimore city doesn't have FiOS despite being in the heart of Verizon's FiOS area. And it's also why nobody else will build fiber here either, despite the city desperately courting providers.
Averages probably aren't so useful there, though. Like Canada - the average population per square mile is insanely low, but actually the vast majority of the population live clustered close to the US border.
It seems to me that the median number of people per km excluding all the 0 kms would be most useful, but difficult to work out (hint hint if you are really clever and know where this is hint hint kissy kissy?)
That must be why the US tax payer paid $2000 each to have the telecoms industry lay fibre optic to every home but they just kept it and didn't lay the cable.
Nobody in the conventional telecom industry with conventional capital and operating cost structures thinks it's profitable. Just as nobody using Sun servers and Oracle could have built the Google search engine. Evidently Google has learned how to turn communications infrastructure into a cheap commodity platform. Starting with leaving out the deep packet inspection crap, perhaps.
Nowhere in this story is the number "billions" used.
Second, google's strategy is not to invest billions, but seek subsidies or exceptions to municipal access fees by specifically targeting communities that decide to change rules that have existed for decades.
Finally, never forget that the new competitor's main monetization tactic is harvesting your usage data & selling your data.
I am all for increased competition, but fuck Google. They are the devil.
For what it's worth, it's not hyperbole. I truly find their sanctimony around "privacy" and encrypting everything as a serendipitous complement to a business plan that is abhorrent. >> Be civil. Don't say things you wouldn't say in a face-to-face conversation. Avoid gratuitous negativity.
I'd say all of the things I've said face to face. It isn't gratuitous. Maybe not everyone agrees with my position, but I value companies where there isn't a need to distinguish between users and customers.
I could have avoided a profanity. I could have kid gloved it by saying people are entering into a faustian deal. I'm not perturbed that I didn't.
"If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place."
We use the information we collect from all of our services to provide, maintain, protect and improve them, to develop new ones, and to protect Google and our users. We also use this information to offer you tailored content – like giving you more relevant search results and ads."
The ads that they present to you are based on the data they collect about your behavior. They generate revenue on those ads.
This is a Pedantic distinction that exists only if you think an ad revenue model is compatible with your values.
It is like google employees who still argue that their harvesting of wifi mac addresses (w/o permission) was ok because they were just out there for anybody to collect.
There will be people who agree with you, but there are people like me who find this position abhorrent and exploitative. You are in the same community of businesses as payday loans.
> The ads that they present to you are based on the data they collect about your behavior. They generate revenue on those ads.
Thing that has nothing to do with your claim
> This is a Pedantic distinction that exists only if you think an ad revenue model is compatible with your values.
No, the distinction is crucial. Is totally different selling data than selling ad space
> It is like google employees who still argue that their harvesting of wifi mac addresses (w/o permission) was ok because they were just out there for anybody to collect.
Google employees didn't argued that because the harvesting of MAC addresses has been done by every company that does geolocation with wifi and has nothing to do with the real problem with Google Street View data collection
> There will be people who agree with you, but there are people like me who find this position abhorrent and exploitative. You are in the same community of businesses as payday loans.
What I think about ads as a business has nothing to do with your wrong claim about Google selling the data so you can stop trying to look in a higher moral ground.
somewhat agree. In 2006, I the co-owner of a PCO (Private Cable Operator) [1]. We ran under the radar for many years using the same loop holes for "right of way" and "inside wiring" laws. There are a couple little known facts or not so well understood laws which is why I slightly disagree with you and seems relevant to the article too.
1. There is right of way in many subdivisions to which the likes of AT&T can't keep me out of. It's illegal and monopolistic. One of my business partners was a home builder which was one of the angles but not the only one.
2. When a cable company or telephone company runs cable from a pedastal to your residence, you legally own that cable run. If it's a single family home, it's your property. The same is nearly true if you live in a Condo or an apartment with the difference being the property own owns the cable from the pedestal to the building and you own what is called the "inside wiring" which is the point of entry of the apartment/condo to your rented space.
And these two laws allowed us to compete for a long time against the bigger Cable companies, including going into locations where they were well established and kicking them out in the case of Apartment complexes and Condos.
Our typical modus operandi was to go into MDUs (Multi Dwelling Units) and offer the property owner revenue share contract in exchange for exclusive rights to the property; something the incumbents don't do. This only works with MDUs not municipalities.
There are a lot of PCOs (Private Cable Operators). Maybe not enough to make a dent just yet, but I firmly believe this can continue. Comcast has good lobby power with FCC. They lobby for strict/stupid laws that attempt to create barriers to entry to try and keep the smaller PCOs from doing what we did...
Ugh. As a prospective tenant this sends me running the other direction. I don't want to be forced into some backwater provider if it turns out they suck so I skip any apartments with these types of arrangements.
In my experience, the little companies with the exclusive rights provide far worse service than the large telcos. At least with the large telcos, I generally have a choice between Verizon Fios and AT&T or Comcast cable. When I've lived in buildings/neighborhoods with exclusive contracts, I've been stuck with one tiny company and the service was universally terrible.
It's an interesting problem. I used to work for a PCO.
A lot of developers do a really shitty job on the wiring, which is often why in these exclusivity agreements the PCO also negotiates to do the in-home wiring themselves. But these properties were built 10, 20 and 30 years ago when utilization was a lot less and infrastructure simpler. Often these contracts are not renewed (aggressive price competition from the incumbent provider) so it's not cost effective to do any upgrades until contract renewal time.
Then you have overutilized nodes and shitty service.
Actually it does. Exclusive contracts are how these companies stay in business. The larger providers hyper-aggressively price compete. I've seen 50/50 internet in a Triple Play for $30/mo - for 2 years. Nobody can compete with that pricing.
If it's just replacing a telco monopoly with an exclusive contract, isn't that just as bad (from a consumer perspective)? The whole point was that telcos ought to compete based on speed, reliability, and customer service, not on obtaining the favor of property owners & municipalities.
>Our typical modus operandi was to go into MDUs (Multi Dwelling Units) and offer the property owner revenue share contract in exchange for exclusive rights to the property; something the incumbents don't do. This only works with MDUs not municipalities.
they must have caught on, because they certainly do this in some markets. I know first hand of this in Downtown Los Angeles.
It's very common where I live (Charleston, SC). You cannot find an MDU that doesn't have an exclusive agreement, and many apartment management companies force you to have some basic Comcast TV plan as a part of your lease, even if you only need internet.
It doesn't help that the US is not a real democracy. For instance, the Green Party actually has in its platform many telecom and media reforms, including breaking up the big monopolies.
But you wouldn't know it, because apparently US citizens are only allowed to vote for 2 parties - ever. When the US gets proportional representation and takes money out of politics, then we can start discussing real solutions to problems.
Until then you're only going to get a "right" and a "left" argument for what benefits Corporate America, the real "People" the government listens to.
Counterpoint: if a third party can't get its act together for the clusterfuck of a Presidential election we're about to experience, it may not be entirely the system's fault.
You "can't get your act together" as a third party in a First Past the Post system. The winning strategy is always to vote for the 2 biggest parties. And the media not only strongly favors the two parties and cuts everyone else out from the discussion, but they also cut out any "grassroots" activist that is anti-establishment (unless you're already a media celebrity like Trump, which ends up getting them higher ratings).
43% of Americans are Independents, and only 29% D and 23% R. And yet most of them still end up voting D or R - do you think that just happens because they end up liking the D or R, or because it's a systemic problem that always forces them to vote for the "lesser evil"?
If you don't think this is not just a problem, but a catastrophic one for US democracy, then the media has brainwashed Americans more than I thought.
I agree with your tone, but sadly even in parliamentary systems with third and fourth parties like the UK and Canada, there is a strong bipolar two-party emphasis. And even worse the two parties that do capture power (in Canada the Liberals and Conservatives and in the UK Labour and the Conservatives) have themselves tended towards a rather homogeneous ideological mean, easily poaching policy from each other and rarely altering things that the previous party's gov't had enacted. A fairly standard neo-liberal consensus has settled over all western democracies that even the brutal crisis of 2008 couldn't shake, despite some rather horrible dysfunctions -- stagnant economic growth, growing wealth inequality, endemic poverty that doesn't go away, and a staggering slow moving long term environmental crisis that is going to make our children loathe us. Only in the periphery, in places like Greece, etc. have there been significant alterations to the political consensus, and that was quickly and efficiently snuffed out by the actions of the more "sensible" European mainstream...
In the end -- there's only one way of doing political-economy right now within the confines of western capitalist democracy. All the capital-P Politics is theatre around the margins.
What is really needed is genuine proportional representation, not FPTP (like in Britain). Another problem is that with three parties, voting for the third may siphon off votes from its nearest analogue (i.e. the NDP and Liberals in Canada under Harper).
People assumes that the underlying structure of a political party is an effective mechanism for getting power simply because a couple of parties have a lot of power. But at the grass roots political parties are just very pretentious social clubs. Trying to compete on that level seems prone to failure.
It is much easier to try and influence the direction of one of the incumbent parties by taking over the leadership (Trump) or just purchasing influence. So you get parties that are completely detached from the underlying ethos that their members naively assume exists. But actually a large party has no more ethos than a golf club or a frat house.
Numerous countries in Europe have spent the last ~50 years as rumbling political disasters while having dozens of political parties. See: Italy, Greece, Spain, Portugal and a lot of others.
I've seen absolutely no evidence, anywhere on earth, that throwing more political parties at a problem solves the problem. If your culture is dysfunctional, no amount of political parties will save you.
For example in Europe you end up with the worst kind of extremists directly involved in running government, or others that get very near to doing so. Such as (supposedly former) neo-nazi parties as in Sweden or France, or literal neo-nazis as in Greece.
I would argue that the two party system in the US has provided dramatically greater stability than the numerous party systems in Europe, while keeping nearly all fascist, socialist and communist nuts out of the government. It leads to less dynamism, but far greater stability and less radicalism than what you see across Europe.
Where is this "radicalism" you're seeing in Europe? You're also talking about maybe 1 or 2 out of 30 or 40 countries, while the US is just one country.
How about you compare it to countries like Germany or Sweden or Switzerland? Countries that not only have multiple parties and proportional representation systems, but also allow their citizens to create their own laws through referendums.
There is evidence, you just never looked for it. Here is some evidence for the multiple ways in which proportional representation is better than FPTP:
The two-party system is not "stable". Look what's happening with the gridlock in Washington right now. The country is also becoming incredibly partisan and divisive, which is very toxic for democracy. Proportional systems lead to consensus and "bridge building".
And if we take your logical conclusion to the extreme, then a Chinese-like one-party system would be the "best" as it would be the most "stable". People need democracy. Why do you think 43% of Americans are registered as Independents now, and only 29% as Democrats and 23% as Republicans? Because they feel so represented by the two-party system?
That more than anything shows a huge systemical problem in the US in how elections are done. Almost half of the country doesn't feel represented by Democrats and Republicans, but you're saying that's ok because it's "bring stability".
Also, just two recent examples of the extreme corruption in the two parties that only happens because they know people don't have any other choice but support them (Dem base supporting Dems, and Rep base supporting Reps, and Independents being forced by the FPTP to pick one of those two):
Wake up Americans, you have no real choice within the two-party system. They're playing with you and giving you the theater of "democracy" in the primaries while they keep pulling the strings for who they want to win.
There are some interesting cracks opening up in the two party system. Probably the most notable is the open or blanket primary, where the two candidates getting the most votes in the primary run in the general election. I believe these are currently the case for most offices in Washington and California. In both states this was established by referendums.
The fact that Alphabet is just above AT&T in that list is what gives me hope that this time it will be different. It's a nasty business, and I hate that Google has to participate in bribery in order to be allowed to innovate on behalf of consumers, but the alternative of having AT&T writing the laws is far more awful (and is why we're in the mess we're in when it comes to Internet service in the US).
In 15 years when the search engine have failed to evolve because Google is a monopoly and has no incentive to keep improving it, you may have a different perspective.
I am not defending AT&T, just pointing out that corporations do not care, and all of them (even Google) ultimately seek profit margins at the expense of others.
In 15 years when the search engine have failed to evolve because Google is a monopoly and has no incentive to keep improving it, you may have a different perspective.
LOL, Wut?
I don't think you appreciate what it takes to maintain and improve a search engine these days. For example...
Remember when link farms were big? They were doing this to boost their score for the existing PageRank algorithm. All search engines had to detect this, to determine in an automated fashion (because the web is waaaay too big) when to ignore that crap.
And in a related issue.... spam. Fifteen years ago, guys like me were trying to fight it using regular expressions to filter our inbox (Spamassassin). It was a losing battle, even then. We've needed the very best machine learning to try to keep our heads above water. The spammers are constantly improving what they're doing too.
The search engine looks the same (simple one-line text box), but the infrastructure behind it has vastly changed, and continues to rapidly evolve. Go read the Spanner and F1 papers... that stuff certainly didn't exist at all when Google started.
I'm confident there will come a day when I'm ranting about Google and their anti-competitive practices (and not just, or even most importantly, on the search engine front) and rent-seeking. Google will be scary when they achieve the soulless status of T or VZ.
Uh, some of us started complaining about search engines failing to evolve a decade ago, guess we were before our time! Or at least too early to market.
I know, right? Google's in blatant violation of the Sherman Antitrust Act, but rather than use it, the White House let a paid Google shill be in charge of the FTC, which is supposed to enforce it.
It is really time for Google, Apple, Microsoft to lawyer up and lobby, threaten and arm twist politicians into kicking ass of these telecom companies. At the end of the day Data-speeds are going to be bottleneck for their profits.
Google and others should have invested massive money to maintaining their political bitches. If they had we would have had better privacy today. If DoJ has to courage to ask Apple to hack their phones it is probably because in past companies like ATT complied without putting up a fight.
It's really naive of you to think Google of all companies is interested in strong privacy protections. Their singular income source is based on keeping a secret profile on everybody on the internet - it would be akin to cutting the brunch they're sitting on.
Another case of the government intervention in the free market hurting the consumers, since large corporations will always be better than consumers at hijacking the legislative/legal system to their benefits.
If you have the only poles in town (because the local government said there is only enough space for one pole line) then you have effective monopoly over lined communication.
The solution to this of course is Georgian rent over space, in this case a rent over the only space in town that poles are allowed to be erected, which would be quite expensive, thus making their monopoly position untenable.
Or you know - have the government own the poles and sell access to anyone who wants to run lines. Private roads are impractical except in limited circumstances (that require a huge number of public roads to enable). Infrastructure like this is similar.
Under federal law, utility pole owners are required to sell access to poles on a non-discriminatory basis. There is no doubt that Google is allowed to run their fiber on the poles. The lawsuit is over provisions of the federal law that provide for a notice/"make ready" procedure for new attachments. Under that procedure, Google would file a request to use the pole, and the pole owner would have 145 days to notify everyone else using the pole and move equipment as necessary in order to get it ready for Google's attachment. Here, the municipality passed on ordinance allowing Google (and those similarly situated), to bypass that procedure and move other companies' equipment already on the poles in the process of putting up its own.
That can work but you have to do a much better job of outlawing all forms of government-protected monopolization and its half-way equivalents. Otherwise what you end up with, are local governments that want to cut deals for extra cash with AT&T et al. Local governments are supposed to not be allowed to cut monopoly deals today, but they still conspire with big telco to rig the game any way they can.
People always like to say private roads are impractical, but that is 1970's thinking. Today all we need is a common standard for toll readers like most states have for their internal highway toll system, and people could drive on toll roads and be automatically billed, and your GPS can factor in the toll costs in your travels (just as they do now - in most GPS navigation apps, you can elect to avoid toll roads).
The comparison to utility lines is not particularly relevant, though. If I want to travel over a road, I just need to bring my car and do it once. If I want to run gigabit fiber over phone poles, it is building a road on a road - the fiber cable is itself a road, build on the infrastructure transit center of phone poles.
The more apt comparison is that I want to send data over said fiber channel - it is the functional equivalent to wanting to drive my car along a road, the only real difference is the marginal cost of that traversal is so insignificant on the fiber line (the cost of beaming light along it in a fixed data path) that you may as well disregard it, whereas cars have significant per-distance and per-usage costs associated.
But roads and coax / twisted pair / fiber lines are really great comparisons to roads. They have usage limits, they can become congested, but when they are underutilized they are effectively wasted. It seems like something private enterprise would actually be good at, if not for the fact possessing the road or cable line grants yourself an untenable market position giving yourself a monopoly. But public transit authorities demonstrate very poor ability to adapt to consumer demand for expanded roads where there is great congestion, because they aren't profiting off road traffic and are not incentivized directly to fine the maximum tradeoff of value against consumer satisfaction - there are many degrees of separation between the funding of road construction, the maintenance of the road system, and the consequences of your "customers" being dissatisfied. Usually, the only ways dissatisfied customers who dislike the public road network can demonstrate their demand is by moving or voting out politicians - if those were the same barriers to faster Internet speeds, we would probably be as bad off as we are now with telecom monopolies.
You buy the land from individuals and pave it. Eminent domain is relatively rarely used in most road construction - at least in the Northeast, almost every road here used to be a dirt trail two hundred years ago.
There is a natural equilibrium between consumer resistance to selling their land and market demand for roads. If you did not have eminent domain being used to compel home sales for new roads, you get this chain of events:
1. Existent road usages increases and grows congested.
2. Private road companies start offering residents to buy their lots to build new roads, because there is now a profit motive off building new roads, and one of two things happens:
A. They can build the road, increasing capacity, making money, and spurring economic growth.
B. They cannot build the road, and the area withers as businesses and people migrate away to avoid the congestion.
Either way, congestion solves itself, and for the landowners the optimal time to sell would be to sell to a road company - it means your land is at peak value, when demand for new infrastructure is high enough to justify investment, which means your property is as valuable as it is going to get.
It is important to remember when talking about things like private roads that we look at it through the biased lens of a society that has been erected on public roads, where you get told how much you get when your house gets eminent domained and the best you can do is appeal to a court that is also a part of the same state that took your land.
I would also imagine that a lot of homeowners associations would emerge naturally, that make it a stipulation of living in the neighborhood that in the event of sufficient demand for new road construction you be willing to sell at some multiple of inflation-adjusted property value, to guarantee that everyone has some price rather than having holdouts who just refuse for any amount. But it would still be your decision to move into such arrangements, and a lot of people probably would not, but businesses would likewise strongly consider the growth prospects of neighborhoods without strong homeowners association sale bindings on property in the area and avoid regions where they know it is unlikely infrastructure expansion could organically keep pace with demand.
> Another case of the government intervention in the free market hurting the consumers
Your statement is worded as if this is the expected outcome whenever there is government intervention in to a market. I'm not sure if I perhaps misinterpreted that, because your conclusion suggests further regulation. Regulation (from government intervention) doesn't ruin a market - bad regulation does. Just like all private companies are not like Enron - some governments have regulated the telecom market to increase competition.
It's easy to critique the failings of regulation because there are so many examples. Good regulation in my limited observations is very difficult. In my experience, the best regulations are from independent groups such as IEEE. IEC-60079 (Explosive Atmospheres) for example is a great set of rules and regulations from my perspective. As a manufacturer it would likely increase costs, and pure market thinks may suggest that the safest/cheapest manufacturer would win. However that simply doesn't happen in the real world as there are many more variables that our simple models account for.
I'm afraid I'm not sure what Georgian rent over space means, so I can't comment there. However I believe you have effectively suggested more regulation - rather than encouraging further free market, which I would agree with.
Any time there is a monopoly (poles in the ground), it must be controlled with appropriate regulation to ensure the system isn't abused. I lean towards government owned and privately operated/maintained in these scenarios - however that too has it own set of dangers.
> because your conclusion suggests further regulation.
no it suggests fewer regulations
> Regulation (from government intervention) doesn't ruin a market - bad regulation does.
This is the same argument as communism has never been tried argument and that Mao, Stalin et al were doing 'bad communism'.
>some governments have regulated the telecom market to increase competition.
Regulation increases barrier to entry and therefore can not possibly increase competition. Almost all monopolies are the result of government intervention in the market.
>the best regulations are from independent groups such as IEEE. IEC-60079
Im not sure if this regulation is mandated i.e. it is enforced or not, but if it isn't then it's not really comparable to regulation from the government.
> Good regulation in my limited observations is very difficult.
Not surprising.
>However I believe you have effectively suggested more regulation
It's not. It is simply asking the holder of space to pay its rent value.
>Any time there is a monopoly (poles in the ground), it must be controlled with appropriate regulation to ensure the system isn't abused.
The only reason poles in the ground is a monopoly is because there are regulations that stop people from putting more poles in the ground. Do you suggest that the solution to regulations is more regulations?
>This is the same argument as communism has never been tried argument and that Mao, Stalin et al were doing 'bad communism'.
No, sure some regulation is bad, but a lot of regulation is very good. For example, a lack of food safety standards led to terrible things for consumers in the early 20th century.
The problem with the whole idea of government regulation being always bad is that that's only the case if consumers have perfect information, are able and willing to choose any provider, and there aren't economies of scale.
>a lack of food safety standards led to terrible things for consumers in the early 20th century.
and now we have a situation where a little girl gets raided for selling lemonade without a license.
Transfat has been banned in europe but in many other countries, manufacturers are responding to consumer demand by removing transfat from their products without needing to be coerced by the government.
It is not necessary for the government to intervene. Consumers can take care of themselves.
>The problem with the whole idea of government regulation being always bad is that that's only the case if consumers have perfect information,
And how does the government know more than the consumers? Are they privy to secret information?
> we have a situation where a little girl gets raided for selling lemonade without a license.
So one bad law invalidates government?
> Consumers can take care of themselves. [...] how does the government know more than the consumers? Are they privy to secret information?
They can, but this goes to the "perfect information" theory that you blithely dismissed. How does the government know more? Two possibilities: 1) As a unit, it doesn't, but actual people running the government have seen negative consequences and, acting as our representatives, regulated against them, or 2) The government employs people whose job it is to assess risks and plan accordingly. What do you know about mudslide prevention or sewage treatment, for instance?
> [regarding choice of vendors:] which they are in a free market
How so? A completely free market requires a willing buyer and a willing seller operating on the same set of information and meeting on a level platform. Much like the "uniform law of frictionless," this can never happen in real life. I am always at a negotiating disadvantage with a large service provider or even with someone who is an expert in his field and I not.
> [regarding economies of scale:] you need to clarify this.
It is not efficient, for example, to have multiple power lines serving a single structure. Nor water, nor roads, nor sewer, and, increasingly, nor Internet access wires. The regulation of such utility structure prevents pictures such as this: https://i.kinja-img.com/gawker-media/image/upload/hphmtnyak5...
Economy of scale, in many instances, means that only a monopoly is profitable but having two competitors would not be so. Garbage pickup, for instance. Or firefighting.
I believe that's what OP was getting at: some things government does well--or at least contracts for a monopoly--on our behalf. Other things, like telecommunications regulation, are unduly influenced by actors with more information and completely different incentives than their alleged customers.
Bad laws prove that government intervention is bad and we ought to limit its power.
>They can, but this goes to the "perfect information" theory that you blithely dismissed.
I already addressed this issue. What is so special about the government that allows it to have more information than consumers? Nothing. Any information government can obtain for consumers can be obtained by consumers themselves.
>but actual people running the government have seen negative consequences and, acting as our representatives, regulated against them,
Actual consumers running their lives have seen negative consequences and, acting out of their own interest, decided against them.
No need for a government middle man
>2) The government employs people whose job it is to assess risks and plan accordingly. What do you know about mudslide prevention or sewage treatment, for instance?
Consumers can also employ people whose job it is to assess risks and plan accordingly. I don't know about mudslide? I buy a booklet from a risk assessment/engineering consultant/geological consulting firm and they tell me what I need to know. Again, no need for government middleman.
> A completely free market requires a willing buyer and a willing seller operating on the same set of information and meeting on a level platform.
This is not true at all.
A free market does not require people operating on the same set of information. It just needs lack of intervention. I can buy an apple for $2 from a seller I don't need to know how much he bought it from, from whom, when etc. There is no requirement for a symmetry of information.
> I am always at a negotiating disadvantage with a large service provider or even with someone who is an expert in his field and I not.
As said, a free market does not require sellers and buyers to have information parity. A seller who believes he is at a disadvantage can simply 1) choose to not enter any deal 2) obtain more information. He decides what choice is appropriate. Sellers have every incentive to educate buyers and be honest, as doing so would make it more likely that they will get a mutually beneficial deal.
>It is not efficient, for example, to have multiple power lines serving a single structure.
Humans are not hive-minded engineers. The point of a free market is not to maximise efficiency in provision of all services, although it does a pretty good job anyway, but to provide maximum choice and lower price for consumers. Even if there can efficiently be only one power line in town, the fact that there are multiple providers would increase the negotiating power of the consumers.
> Garbage pickup, for instance. Or firefighting.
A market might not be big enough for 2 players, but that doesn't mean that the government should mandate who the sole provider should be.
>Transfat has been banned in europe but in many other countries, manufacturers are responding to consumer demand by removing transfat from their products without needing to be coerced by the government.
And none of that would have happened if REGULATIONS hadn't forced those companies to add trans fat labeling! The decline in trans fat usage correlates very strongly with the labeling requirement.
>and now we have a situation where a little girl gets raided for selling lemonade without a license.
Source, I'm actually curious?
But the real point is that yes, overarching government power is bad. But so is overarching corporate power. There seems to be this belief that the free market is perfectly self correcting, which in theory is true, but in practice isn't. There's a power differential between (large) corporations and individuals in their ability to organize, act, and finance their goals. As a result, large corporations will always be implicitly more powerful than groups of people, even quite large groups.
>And how does the government know more than the consumers? Are they privy to secret information?
Well, yes, essentially. A corporation has no reason to allow me, a private consumer to inspect it. I will have no way to verify that this cheese I'm getting is real or filled with sawdust. So you say, a corporation pops up that inspects the cheese and gives it a seal of approval. Perfect now I can trust my cheese. But how am I to know whether or not the cheese manufacturer is bribing the cheese-authenticating-company?
Or how will the cheese-authenticating-company even get off the ground, it needs to buy thousands of dollars in chemical testing and lab equipment. I have no incentive as a consumer to pay such a company if I think my cheese is fine. So the only chance such a company has of being successful is once consumers realize there is a major problem with the quality of cheese, by which point its too late.
Compare this to the FDA, who can say "let us inspect you and your food" and have the force of legal consequence for saying "no". Then, they're funded by taxes, meaning that even if I personally have no reason to pay them because I think my cheese is fine, I still pay a few dollars to keep the FDA around making sure my cheese is up to snuff.
>manufacturers are responding to consumer demand by removing transfat from their products without needing to be coerced by the government.
And the only reason we know about the contents of food is because of government mandated ingredient lists and labels. Without such government regulations, we'd be even more in the dark about the contents of food.
>which they are in a free market
Sure, if they are willing to spend time and effort to compare and investigate a (technically infinite in a true free market) number of products. Most consumers aren't willing to do this, even if they are able. Take open source software. I'm a user of various pieces of OSS. I've never audited any of the pieces of open source software I use. I could, but I don't have the time and am unwilling to develop the expertise to judge the python interpreter or LibreOffice or openSSL. And that's in an otherwise perfect situation, where I have full access to information. What about when I don't, or when there are 500 minor forks of openSSL that all do things slightly differently and I need to choose the best one for me. A perfect free market isn't feasible, there's too much information to work with.
I mean hell even if openSSL develops as the major one and everyone uses it, now we've got a near-monopoly, and someone who realizes that there's a problem in openSSL that they are unwilling to fix, and lets say its a fundamental issue, well now they have to build something new from the ground up, but it also has to match openSSLs api exactly because otherwise it will never be adopted, the cost of conversion is too high. And it'll take time for information about the problem to spread, and time to develop the alternative, and time for adoption to occur, and...this person needs to make money while developing this alternative somehow.
And that's in a situation with perfect information, extremely low market barriers, and a generally good natured monopoly who isn't acting to intentionally stump out competition.
>you need to clarify this.
Entering a market that has a natural economy of scale is nearly impossible unless you have a huge amount of resources already to throw at the problem. Take telecom. Telecom sucks in the US. We've broken up telcos because they're such natural monopolies, and awful. The only real company competing with telcos right now are internet based alternatives, and google, which is also an enormous company and piggybacked off of prior work by the telcos (dark fiber) to do what it is doing.
There's no way I could compete in that market, even if I promised services thousands of times better than current options. I don't have the resources to purchase 100ft of underground fiber cable, much less lay it.
>>some governments have regulated the telecom market to increase competition.
>Regulation increases barrier to entry and therefore can not possibly increase competition. >Almost all monopolies are the result of government intervention in the market
In the UK regulation was introduced stating that the monopoly phone company had to lease access to customer phone lines to other companies on the same terms as themselves. Since then we've gone from a monopoly DSL provider to having a choice between twenty or thirty providers almost everywhere. I'd call that a regulation which has increased competition.
The best thing that could possibly happen is informed citizenry. We REALLY do not need to worry about laws and regulations and instead begin to vote with our dollars where we can. If we started to shift our money in a concerted way, companies will begin to behave.
Edit: I would like a site where we can fund independent researchers who can truly tell us what is in our best interest as consumers, then we can follow accordingly.
"We REALLY do not need to worry about laws and regulations"
Laws and regulations shape the marketplace, and determine which vendors you can vote with your dollars. In the absences of a free-market, there is no option to vote with your dollars. It's like voting in an election where the potential candidates have been preselected by an oversight board (see Hong Kong)
This is untrue. Leverage shapes market and it is being proven that laws and regulations are malleable. Unfortunately, this cascades down from regulation, to law, to rights.
While Taxis and regulatory controllers found it difficult to challenge Uber on the ground after it had occupied every state and municipality, for better or for worse only enforceable laws provide leverage to exert behavior or the perception of such an enforcement.
Taxis and regulatory controllers found it difficult to challenge Uber because they didn't operate a taxi service - they were operating an entirely new market which hadn't been envisioned and had little to no regulation around.
I guarantee you Uber / Lyft would have been shut down hard if they had tried to take street hailing - for 50+ years law/regulations controlled who you could hail a taxi from, and so little to no competition on quality/service took place in that marketplace.
BTW, I'm not saying this is completely and absolutely true for all markets (though, ironically, you chose one where it is pretty much an absolute) - but the more and more regulation you see around a market, the less and less flexibility new competitors have to come in and disrupt.
Zenefits is an interesting case that straddles this though - in Utah, there was some regulation that made life difficult for them, and with effective lobbying by A16Z, the regulation was changed to allow Zenefits to compete there. And, of course, we've seen ares where they've discovered they really do need to comply with the law - though in most of those scenarios the requirements were so minimal (and probably reasonable) that they weren't much of a barrier to competition - just a minimal level of qualification (like having a drivers license, background check, and insurance for Uber)
This is the best approach in theory. In practice you might be stuck in the middle of nowhere with Comcast as your only choice if you want to be a modern human being.
Are you at all familiar with the history of consumer Internet in the US, and the role AT&T, Verizon, and later Time Warner and Comcast, have played in it and the laws that regulate it?
I'd recommend you read up on municipal broadband, and the war the telecoms have waged against communities doing an end run around their shoddy and expensive service.
Likewise, look at the hoops they've forced Google to jump through to achieve even modest fiber rollouts. Google is among the biggest companies in the world. The only thing saving Google Fiber is that they are not some scrappy startup, but one of the most powerful companies in the world; without that power and economic clout, they would die a horrible death at the hands of AT&T's attorneys and pet legislators, as nearly every one of the thousands of independent ISPs did in the 90s and early 2000s.
Innovation in consumer internet service has been thoroughly strangled by the telecoms and cable companies. They've divided up the turf, come to some gentleman's agreements with each other about pricing and access, and now we're all just here to feed the cash cow. If ever there was a classic case of collusion (and, hell, I might even call it racketeering) among modern "legitimate" businesses, the telecom and cable business is it.
If you believe the lack of innovation and poor service is merely that no one is "competing", I'd encourage you to give that market a go. There's no competition, after all. It should be easy, right?
If I had few Billions I would certainly give it a go. Independent ISPs relied on legacy Telco infrastructure as opposed to doing their own build outs. Google has enough $ and
resources to compete they just don't really care to do it (look at the $ they allocated to google fiber). Apple can buy out any of the mentioned companies with cash on hand several times over but they are not interested in competing in this market. So in reality yes none having resources necessary to compete is interested in competing. In my area an independent provider is doing a fiber build out it slow and expansive for them (the area has comcast monopoly) yet none is preventing them from doing the actual build out.
Is the independent provider in your area using existing poles and/or utility tunnels, rather than erecting/digging their own? If so, why is that okay for them but not for Google?
what do you think makes it expensive? I can assure you that the fiber cable itself is cheap, the equipment to install the cable is inexpensive, and even the labor required is not that expensive. lawyers and red tape/delays/time are very, very expensive.
> The investment per connection of a full fiber access line to the home replacing all copper or coax is between 850 and 1100 Euro (1,143-1,479 USD) in the Netherlands, all-included. The equivalent number in the USA as quoted by Verizon is in the same ballpark per home connected.
> But wouldn’t the investment level of the access line be elevated by the fact that fiber cabling is used? That appears to be not the case. The investment in access infrastructure, i.e., stringing or digging new cables, consists mainly of labor, not materials (exceptional conditions excluded). In dense cities, the bill of materials is as low as 20 percent.
It cost Verizon about $1,000 to pass each house, and $500 to hook up a house that's already passed. But in areas with competition from cable, at best they can hope to get 30-40% of houses they pass to subscribe. So you pass three houses to connect one (3 x $1,000 + $500 = $3,500). And that's for the company that is in many places the wireline incumbent.
Building permits and labor is their main expense it's not really prohibitive though from what I've seen they will have way higher ROI then say a datacenter and unlike a datacenter they basically have 0 competition.
If you upgrade every house from copper wire that can pull 10 mb/s down to gigabit fiber, all of your backbone network needs to get boosted. That's not cheap.
True, but once that glass is hooked up, we can use it for the next 40+ years and just swap out transceivers. No more need to upgrade the stuff in the ground. As for backhaul, you can cram 8Tbps+ over each individual fiber, if you need to (like they do for undersea links). So, every X years, you just swap out the racks in some IDF and get 10x-100x the backhaul capacity. In the near term, 1Gbps it plenty for home use. We can drop ship you a 10Gb setup in 2025 when you need it.
Not cheap in absolute dollars, but not expensive in the grand scheme of things. Backhaul and IP transit are fairly small expenditures compared to the last mile. There's the 90/9/1 rule of thumb for expenses in last mile/backhaul/IP transit.
Furthermore a gigabit fiber customer does not on average use 100x more bandwidth than a 10M copper customer. There is only a small multiple.
Could very well be true. I'm mostly going off what I was told by relatives of an ex-girlfriend, who were fairly high up in ATT engineering and loved to brag about how much captial expenditure and investment into infrastructure ATT was making.
I suspect that the networks are already woefully underprovisioned for the level of traffic they are already selling. I'm supposed to have 25/5 cable internet, but I've never been able to get more than about 20% of that in practice.
> Likewise, look at the hoops they've forced Google to jump through to achieve even modest fiber rollouts.
What "hoops" have companies forced Google to jump through to achieve Fiber rollout? Almost all the resistance to Google Fiber has been from municipalities that are not willing to waive build-out requirements, which Google demands as part of the package of "fast track" permitting necessary to be a fiber city.
Most of the comments are discussing broader issues that aren't actually part of this particular lawsuit. Those issues are certainly more interesting than the narrow issue that this lawsuit is about, so I can understand why everyone wants to talk about them. Nevertheless, we should have at least some discussion about the actual lawsuit, so I'll have a shot at it. :-)
I took a look at AT&T's court filing (there's a link in the article to it for those who want more detail). They make two main arguments.
The first argument is that under FCC rules an entity with existing attachments is entitled to written notification if someone else's attachment is going to affect their facilities. They then have 60 days to modify their attachments to accommodate the new attachments. If they do not complete the work on time to accommodate the new attachments, then the entity wanting the new attachment can go ahead and do the work themselves.
Under the municipal ordinance the new attacher only has to provide notification if they think that their work is likely to cause a customer outage. If not they can simply go in themselves and move or modify the existing attachment.
This is at odds with the FCC rules, and AT&T argues that this should invalidate the municipal ordinance.
The second argument AT&T makes is that while the Federal law does allow states to override FCC pole attachment rules in some circumstances, Kentucky state law vests such power exclusively in the Public Service Commission of Kentucky (and they cite Kentucky court cases confirming that this includes the power to regulate pole attachments). Thus, AT&T argues, the municipal government does not have authority to enact its ordinance.
These actually seem like pretty decent arguments. I'm curious what counterarguments the defendants will raise.
There is an actual physical basis for AT&T's position. When a pole line is designed, the poles and guys are designed for certain criteria (power poles are NESC and/or RUS plus any state specific regulations). If someone wants to attach to the same pole then the pole may not support the new attachment per NESC (for power poles) or the guying may need adjustment. Reviewing the new attachments can take time, 60 days is not unreasonable.
Along with this, the poles may need to be surveyed depending on how long the poles have been installed. Poles installed a long time ago may not have drawings and that means a field visit to collect the information.
If the party wanting to attach to a pole provides sealed drawings from an engineer that the attachments have no adverse effect, then it is usually a quick review of the submitted attachment package to make sure everything is in order.
While you're not wrong...all of the issues you mention are, in general, issues that have to be dealt with. Those issues are, however, all addressed as part of the permitting process to be allowed to attach to the poles.
What's at issue in Louisville is the make ready process after the permit has been issued (after it has been determined that the poles have enough room and are strong enough to handle the new wires).
Publications just need to continue to follow these stories, and print relevant details. The rest will take care of itself.
Investors with large stakes in AT&T, and board members, need to take a look in the mirror and ask themselves whether the CEO's compensation is in line with his ability to ask his legal department to sue people / companies / governments, or is it in line with his ability to make at&t a great company that accomplishes amazing things for its customers.
I read a book a long time ago about AT&T Bell Labs. I think it may have been "Three Degrees Above Zero", but I am not sure now.
Something that impressed me a great deal at that time was the testing that AT&T used to do with utility poles, to ensure that it withstands the vagaries of nature and time in all types of climatic zones.
Everything was designed to last 40 years. That's why the last electromechanical switch installations were not torn out until 1995. They were old, but functional, as designed.
Do you see hardware today being designed to these specs? A company investing in 40 year quality equipment would quickly be brought under new management, since they clearly are not focused on maximizing returns for this quarter.
Bell Labs was spun off from AT&T into Lucent 20 years ago. A shell of its former self is now owned by Nokia, by way of a variety of mergers and acquisitions.
My understanding is that telephone, cable, and power providers share the poles. Don't the power companies usually own the poles? So if they added internet providers to the list of companies authorized to share the poles, AT&T wouldn't have grounds for complaint. Since internet providers (such as AT&T) already share the poles, this seems like a reasonable move.
In my neighborhood we had 2 competing cable providers for about a decade, and they managed to share the poles (along with the phone company and the power company) without any problems (or at least, any problems that made the news).
In this case some poles are owned by AT&T and some are owned by the electric company.
I expect that this is common. The telephone system and the commercial electricity distribution system were developed at about the same time, and I believe that in many cities telephones were widely deployed before electricity. (I wonder if this is why the phone system provided its own power rather than relying on power being available at the customer premises?)
The Master Switch by Tim Wu [0] goes into great detail about how AT&T invented this racket 120+ years ago and has been perfecting their fleecing tactics since. I particularly enjoy the opening of the book at a 1916 top hat banquet celebrating just how filthy rich their monopoly has become under Theodore Vail.
The Idea Factory by Jon Gertner [1] however asserts that the AT&T monopoly allowed Bell Labs to essentially invent the entire information age, but that without the official monopoly, we no longer see the huge investments in basic research, and commensurate major break throughs.
TFA isn't clear about this, but I suspect that all of the poles in question are actually owned by LG&E who operate the electrical lines that hang from them. So "...its utility poles" in the title should actually be "...the same utility poles it uses". There probably is some dumb FCC rule that supports ATT's position here, because after all those rules are written by ATT. One hopes that courts would decide FCC don't govern how LG&E's poles are used. If any agency would, surely it would be DoE?
As others have mentioned, the poles in Louisville are owned mostly by a mix of AT&T (about 40%) and our local power utility (Louisville, Gas & Electric; LG&E) (about 60%).
But pole ownership really isn't relevant, here. The right for new companies to attach to the poles isn't in doubt, and isn't part of this dispute.
The dispute here is part of the make ready process...who has the right to rearrange the wires already on the pole to make space for the new attacher? Even the right to have the space made available isn't in doubt...it's merely who does the actual work of making it available.
Having worked at a CLEC in the mid-2000s, I can well imagine the pain involved in ATT "making ready" a utility pole. If they have a 60-day window, then in the typical case, on day 58 they'll bounce your work order with some nonsensical reason code. So you hurry to follow up with your service rep that day, but she'll have to "investigate", which will take until the weekend, and then you'll get a "just resubmit it" on next Tuesday. Then if you're lucky the made_ready status in the database will change sometime in the next 60 days. At no point will a tech actually visit the pole in question. They just figure that it's right and proper for a competitor of theirs to have to wait three months to serve a customer.
> TFA isn't clear about this, but I suspect that all of the poles in question are actually owned by LG&E who operate the electrical lines that hang from them
TFA article says, "Most of the poles used by AT&T in the area are owned by AT&T or Louisville Gas & Electric".
"This lawsuit is not about Google. It’s about the Louisville Metro Council exceeding its authority."
Uh huh. I'm sure that if Louisville Metro Council passed an ordinance beyond their remit about soup kitchens serving the homeless AT&T would be right in there.
There comes a point when the self-serving lies become so transparent it's offensive that they'd even say them.
The difference this time is that Google is bigger than they are, and not quite as much of a pushover in the legal domain. It's still an uphill battle, and consumers are still going to be the ones to suffer under pathetically poor quality and expensive Internet service (the US is something like 14th in quality/speed/price in the world for Internet service, despite it having been invented here, and despite having vastly more infrastructure investment at all levels).
The best thing that could possibly happen for the Internet in the US would be the swift and total annihilation of anti-competitive companies like AT&T, Verizon, and the major cable companies, leaving room for innovators to step in and fill the void. But, that won't happen...they're too good at stacking the deck to remain in leadership positions in the market, despite delivering terrible service on nearly every front.
Not that I'm bitter, or anything.