I've spent most of my career (15+ years now) building and maintaining private regional ISPs that compete with big TelCos, with considerable success. It's surprisingly feasible to start an ISP in your garage with a few thousand dollars and grow it to a few hundred customers just by providing decent customer service and a working product. If you've ever been curious about what it takes to get started with something like that I'm happy to answer questions - here or email in my profile.
For community benefit, do you think you could give us a quick summary of the stages involved? Specifically, how does one go about leasing a connection from a larger Telco? Doesn't this normally cost 10 of thousands of dollars per month?
Sure! For the better part of 2015 my job was to fly in to specific markets in the US and spend 2-4 days building a plan for a wireless ISP network that would be built a few months later. I'll summarize the process that I used, perhaps that will be helpful?
First I should explain that my experience is in fixed wireless networks[0] more than fiber.
First, I would spend some time on Google Earth looking for good neighborhoods to serve. A good neighborhood is typically a dense suburban development with low tree growth. Then I look for potential places to put the access points to serve the area - you really need line of site (no trees) to each home to provide good service. Water tanks, mountains/hills, office buildings and even residential homes make good access point locations. Often you can negotiate a rooftop lease with a place like that for a few hundred dollars a month (or even less). You can also use commercial cell phone towers, but they're more like 1-2k/month. You really want to be able to see a few hundred rooftops within 5-10 miles of your access point location to make it worthwhile.
Next you need to figure out how to get service to your access point location, like you mentioned. You really only need a few hundred mbps circuit to start though, a 1gbps circuit will last you up to a few hundred customers at least. Your first circuit shouldn't cost more than 2k to maybe 3.5k / month. The hard part is finding it in a place where you can then get it delivered to your access point location. Sometimes you get lucky and find an office building near a suburban neighborhood that already has a fiber demarc in the basement - that's a slam dunk. More often you have to lease space on an office building in the city, buy your fiber circuit there, and then use a high capacity wireless backhaul to relay the service to your access points. I would usually just drive around the main roadways looking for the orange stickered fiber whips to see where the fiber lines run, then call the company to get pricing. (can't find a photo at the moment, I'll keep looking.)
Then, you just start building and signing people up. Lot's of people make the mistake of trying to go cheap on the customer install, many WISPs start by trying to install their customers with in-home radios rather than putting them on the roof. That doesn't work. Regardless of the type of equipment you use, you have to put a good radio on the roof with a reasonably high gain directional antenna pointing to your tower. The other common early pitfall is to try to use regular WiFi devices for your network. WiFi is designed to work well in buildings / office parks, not so much outside and long-ish distances. Ubiquiti equipment is a good start and very cheap, although there are better ones.
The hardest part about signing up customers is paying for their equipment up front. You're looking at 250-350$ per customer installation (including amortizing infrastructure build) if you're in an area where the incumbent is really bad you can sometimes charge some of that to the customer. The ROI isn't too bad even if you eat that cost - less than a year - but it can be hard when you're starting out.
The next hard part is jumping over the scaling humps. You'll need a staffed support center and NOC before you're fully able to afford it, for example. Disclaimer - this is what I'm working on know, providing a variety of the backend services that these WISPs usually need / benefit from but can't afford to build on their own.
How much would it cost to actually dig a line to the nearest Internet peering exchange? Just to build an underground backbone fiber line itself, in terms of cost/mile?
And how different is that from a neighborhood underground line?
This would be for Washington DC suburbs - Germantown, MD.
I mostly want to know about the backbone-level work. We already have pretty fast Verizon FIOS, so I'm trying to figure out what it would take to go to the next level - 10gbps, etc..
Once you start looking at trenching fiber you're looking at 10ks to 100ks. Not really my specialty, I would be looking at doing it wirelessly but yeah if you need 10gbps there's not a good wireless option right now. You can get up to 2gbps reliably on licensed wireless links, but in that area (lots of rain?) You'll need short links (3-4 miles tops) and big dishes.
Reminder: Check if in your city, the municipality has empty cable tunnels to each building – in many cities, that’s a thing, and you can pull your fiber through there with a simple RC car, and usually use them for free.
I'm not sure how much of this is the trench itself but I asked a local ISP about how much it would cost to connect the apartment building I live in to the municipal owned (and shared) fiber located ~200ft down the street.
I was told $15000, "most" of which was the trenching.
Sounds about right. Great opportunity for wireless, though - If there's line of sight along that 200ft you could put up a wireless link for ~$2-3k and get fiber speeds to the whole complex.
Yes you could do ubiquiti for considerably cheaper, probably even less than $500. I was thinking at least an airfiber to get up to gbps speeds and have a little more reliability, but yeah you can definitely go cheaper.
Really? This is a ~70 unit building. Is it really possible to get gigabit to all occupants with a single wireless link? The fastest I'm seeing seem to be ~6Gbit and for a building this size I'd expect we'd need at absolute least 10ish.
Yes, absolutely. If you put up a 1gbps wireless link everyone in the complex could do 1mbps speedtests at nearly any time.
If you were to bring in unlimited bandwidth to your complex and look at a traffic graph of the usage, those 70 customers would only use more than 100mbps for maybe one hour out of the day, probably more like 20 minutes. If you had a 1gbps link feeding them, you would only be slowing them down at all for at most one hour a day, and even then you wouldn't be slowing them down in any noticeable way. It only takes at most a few dozen mbps to stream a 4k movie, for example. There would almost certainly never be a time when one of your customers could not stream a 4k movie.
If it made you feel better you could sell it as a 900mbps product, or even a 500mbps product. Above 100mbps for residential it's really all marketing anyway - there are no services that a residential customer uses that provide a noticeably different experience at 1gbps vs 100mbps.
EDIT: Consider also that the fiber line you'd be connecting to is probably at most 10gbps, and might only be 1gbps. Residential / muni fiber networks (including Google Fiber) are using at best 10gbps fiber circuits to feed entire neighborhoods with thousands of subscribers.
A big (perceived by management) problem in my particular complex is phone and TV. Would you recommend VoIP for phone? What would you recommend for TV? Sticking with cable? Is there someone who resells cable over IP or something like that?
Netflix is good but a lot of people still want their sports.
There is SlingTV that works pretty well. I use that at home. I don't think they'll do a white-label, though. I also ran in to a guy last year who was starting a company selling some TV services that could be white labelled, specifically for small / regional Internet service providers ... I'm not sure that I still have his information, but I'm going to the same conference where I met him last year in a few weeks, if I run in to him (or someone doing the same thing) I'll post it here.
And yes I would recommend VoIP for phone, there are several companies that will provide white-labelled VoIP service that works pretty well. You can connect it directly in to the wiring in the apartment so they can plug regular phones in to any jack in the house.
EDIT: Email in my profile, feel free to hit me up there if you'd like to continue this conversation.
Good question. Usually if you just make scheduling an uninstall part of the cancellation process you don't lose too much equipment. The most expensive stuff is on the roof, so sometimes you can schedule to pick it up even if they're not home. Or you can always try to ask for a deposit on the equipment.
I know Ubiquiti (and Ruckus?) serve the market for this type of equipment, did you have better luck with one or the other (or someone else) for the equipment?
Could you make a simplified cost of expenses for getting started? What would you say the risk level is of spending all that money and not at least making it back? What is the likelihood of actually getting to hundreds of customers, and what would you say is the net annual profit in those situations?
Varies dramatically by situation, of course, but I'll lay it out as best as I can. TL;DR: It seems like about 300 customers is kind of the sweet spot if you're going for a lifestyle business - few enough customers that you can probably manage it yourself or with a little part time help, and enough to pay yourself around 6 figures.
Breakdown:
Fiber circuit, up to 1gpbs, 2-3k/month. Should support up to 500-700 customers at least.
Backhaul - $2k-12k each. Usually need about 1 for every 300-500 customers depending on network topology.
Access Points - $200-$600 each. One for every 30-50 customers.
Switching / routing hardware - $300-$1200 should cover up to 500 ish customers.
Per customer expenses:
$200-$350 - customer CPE equipment and install accessories (cat5 cable, etc.)
$3-$10/month - billing/customer management software, 3rd party phone support (if you do that), other misc stuff.
Then you need a ladder and tools and a vehicle that can carry them for doing installs and maintenance.
Obviously the risk depends on the competitive landscape. I've seen some people start by selling an apartment complex or office building or similar on an exclusive / semi-exclusive deal to provide service to the whole complex (which you can do considerably cheaper per customer than the above numbers) and use that to cover the basic expenses and expand from there, that's a good way to do it. In most places in the US people are unhappy enough with Comcast et al to give something else a shot. One issue is that people are usually in year contracts so you have to wait that out. If you have an existing consultancy or some community goodwill that you can leverage in to a customer base that decreases the risk, obviously.
Can you explain a bit more to help me understand how 1gbps is enough for 500 customers? I would have imagined that during peak times, you might have, say, half of your customers streaming video at the same time, which is only 250KiB/s for each customer before any overhead.
How is the connection shared between customers? Can one kid downloading blu ray rips over NNTP eat half of that 1gbps?
A conservative oversell ratio is 4:1. I've seen them as high as 100:1 in older communities. Also, counterintuitively, with some exceptions, the higher the speed you promise, the greater your oversell rate can be.
4:1 on a 1Gb connection gets you 4Gb/s. Divided into 500 connections is 8Mb/s per connection. I've fought this battle before on HN, but everyone does not need a 150Mb/s connection. Yes, some people do, but most do not.
I haven't checked recently but last time I looked an HD Netflix stream used about 5mb/s of bandwidth. I think your assumption that half of your subscribers would be streaming video is a bit on the high side -- in some communities it may be accurate but not most by my observations. For planning, I would say 10%, maybe 20% tops.
If you're selling a 100Mb/s to residential customers, you could probably even oversell at 8:1 or higher, since their usage compared to total will be much lower.
Your oversell rate will also heavily dependent on how much your base is commercial/business customers. Residential use is peanuts during business hours, business use is peanuts during residential hours. So you can almost oversell by a factor of 2x over your normal rate for business vs residential, and it's also been my experience that as a whole, businesses use far less bandwidth than residential.
There are some outliers that will really skew your numbers. If you sell a 100Mb/s connection to a college that is providing it to their dorms with 1000 students, you can almost guarantee they will be nearly continuously saturating their connection.
Edit: adding answer for 2nd question.
For the most part, without any throttling or queuing users downloading will get an equal share of the bandwidth available. 10 simultaneous users would get 100Mb/s, 100 simutaneously downloading users would get 10Mb/s each.
Upload is what will kill your bandwidth. One user saturating your connection with outbound traffic will slow everyone down.
But most ISPs queue/rate limit customer traffic. It's integrated into most commercial wireless equipment and routers. On top of that, depending on what technology you use, CPE(customer premise equipment) generally doesn't have the ability to pull more than 100mb/s. Some are lower, a few can go up. I'm not a Mimosa fan yet, but there is a guy woth a usually well informed blog[1] that sings their praises in providing multi-hundred megabit service to residential customers. My experiences with Mimosa gear have been such that I can't recommend them right now, but they have potential.
Yup, this is exactly right. The way I usually look at is this - if I put 100 customers on a link that had unlimited bandwidth and then watch the max usage on that link, how high will it spike and for how much time? The current situation is that 100 customers won't spike to more than around 400-500 megs for more than a few minutes a day. But that number goes down the more customers you aggregate, to the point that 600 or 700 customers won't spike to more than 1gpbs for more than a few minutes a day. So if you buy a 1gbps link to serve them, you're only slowing things down for a few minutes a day.
How much throughput do you need and how reliable does it need to be? Also are you in an area that gets a lot of rain? If you need something highly reliable and high throughput 6ghz licensed is probably your best bet, but it won't be particularly cheap compared to unlicensed. You could try 2.4ghz, but if 5ghz is swamped then the other unlicensed bands probably are as well. There's also 5.2 through 5.4 ghz, but they also might be swamped and you have to do dfs, meaning your link can (and probably will) shut off for a minute at a time every time it thinks it hears weather radar. There's also 3.65ghz that could be an option. (I'm assuming you're in the US, if not much of this probably isn't applicable.)
EDIT: I have a few other ideas/suggestions depending on your situation. Email in my profile if you'd like to continue the conversation.
My friend did this in the mid-90's. He had a T1 to his house (this was circa 95-97) and ran an ISP from his actual garage. It was all modem based at the time of course. Didn't think anyone could compete with the big TelCos but I'd gladly switch if I could. I'm in NYC and it seems to me that the major players here have a stronghold on the business. I could be wrong though. I have verizon fios now and it's just ok. Better than TimeWarner that I had for years until I moved.
Yeah, I don't know that 'compete with' is the right word ... it would take a tremendous amount of work, time and money for someone to get enough customers for the big telcos to even notice. But you don't really have to be big enough to be on their radar to be successful - a few thousand customers is nothing to a Comcast, but it can make a healthy profit for a small business.
If you're in Manhattan check out Stealth Communications. They're the only way to get gigabit for a decent price, they have a direct franchise agreement with the city and own the fiber lines.
there are many micro / local ISPs offering wireless connections in third world countries. i consulted for one in bolivia and helped start up one in serbia
i consulted them on biz and sales side so i don't remember their gear, but i remember both had quite a basic setup that worked pretty well. mind you, it was in urban areas (a 600k city in bolivia and a 2m city in serbia). serbian guys gone as far as building a file sharing network and setting up game servers
In the US I've had the most luck in fairly dense suburbs outside of major cities. If you get too rural it's hard to get the density where it needs to be to have decent profit margins. I honestly don't think there's any reason it couldn't work in urban areas in the US, just a different set of constraints. But it does seem to be less common.
WISPs have higher latency/loss than wired, correct?
Also, how would you go about making an ISP for a dense urban area with no real higher-than-everything-else structures? Like, say you wanted to build out fiber in Berkeley: there is dark fiber going down the middle of the city, you'd need to get a physical wire from the cable to some room where you split it out in to other cable bunches? Is most of the difficulty in doing so from the difficulty in physically putting down wires?
> WISPs have higher latency/loss than wired, correct?
Not necessarily, depends on what equipment is used and what the topology of the network is. It's not impossible to get 40-50ms latency on WISP networks out to Google, which is similar to what I get on Comcast.
To your second point - my specialty is wireless, but the reality is that wireless doesn't work everywhere. If there really is no single location that can see at least a few hundred homes with full line of sight then wireless probably isn't the answer. So then you're looking at fiber, and I think you're exactly right - the difficulty is in getting that wire down the last mile from the center of town (or whatever) to the customer. Sorry I don't know Berkley very well.
Can't speak to a whole system perspective however radio tends to propagate faster than fiber. There was a story a while back about some HFT firm wanting to install a giant tower in a small town outside London to get lower latency into the exchanges.
How do you make ends meet as a small ISP considering the razor-thin margins and cutthroat competition ? How do you convince consumers to switch to your service when there are dozens of alternatives ?
> How do you make ends meet as a small ISP considering the razor-thin margins and cutthroat competition ?
Are the margins really razor thin? I always thought I've been getting price raped for years. $100/mo to provide a service that's just a pass through doesn't seem like thin margins.
I think the big gripe most people have is that competition really isn't cutthroat, and that's the issue. The big cable co's have de facto monopolies and can charge whatever they want, because it's so expensive to run lines through the ground. The FCC has traditionally been very friendly with WISPs because we 1) promote competition in markets where there often isn't any and 2) can get out in to rural areas better/faster than telcos. (As long as we stay within RF broadcast restrictions and abide by DFS, etc ... they get testy quick if you're not staying in bounds.)
>I think the big gripe most people have is that competition really isn't cutthroat, and that's the issue.
Wut ? There are 13 fiber ISP's that offer service at my address alone, then there is a cable ISP and at least a dozen or so DSL providers. You can get gigabit fiber service for €1/day.
> The big cable co's have de facto monopolies and can charge whatever they want, because it's so expensive to run lines through the ground.
Why would you need to run lines, the fiber is already there and completely open for anyone to use. The fees for access are the same for everyone no matter how big/small you are so you have a level playing field.
In the U.S. there aren't 13 fiber ISPs in any market. These are the markets grahamburger is talking about. Here, stateside, there is not a lot of competition among ISPs.
I know nothing of costs, but the convincing part is easy on the fringes of N Phoenix. 10's of thousands of people historically have paid good money every month to the tele-monopoly for sub-standard inet(40 year old copper delivering >200ms latency @ 1.2mb/s down on good day, if it hasn't rained recently). In the past 2 years two startups have started providing 10mb/s + wireless packages for equivalent prices and people are jumping at the new option as fast as they can "unbundle" their albatross inet from their monthly tele-monopoly bills.
> I know nothing of costs, but the convincing part is easy on the fringes of N Phoenix.
The convincing part is the hard part at least where I live. There's 13 different ISP that offer fiber service, a cable ISP and a dozen or so DSL providers. You can get gbit service starting at €1/day.
With about two dozen ISP's available at most locations and several different plans per ISP it has become so difficult for consumers to choose that several websites have popped up allowing you to compare all the different options available at your address.
Do you realize just how good you have it? Do you realize how shitty and monopolized internet access is in the US, compared to the (presumably) Nordic or eastern-European fiber paradise you are fortunate to live in?
We're still trying to solve the 'last mile' problem.
Perhaps if the Guv gives out a 3rd round of billions of dollars for rural connectivity it may actually happen. Or the 'free' monies will be squandered. Again.
The irony for Phoenix suburbs & county islands is these areas haven't been "rural" since the urban sprawl encompessed them in the 90's. Yet, the baby bell won't invest in infrastructure where people have no choice but to pay top dollar for pre-existing shit.
Depends on the area, I'm in the US Rocky Mountain area and they're very common here. In my experience they're more common in suburbs / rural areas than urban areas.
There was a really small one that serviced half of my apartment complex in Pleasant Grove, Utah back in 2006 or so. A colleague who lived in the same complex told me about them. I called to see if I could sign up and the guy came out to my apartment and told me that because my apartment faced the inner courtyard, I wouldn't get good service, so he couldn't sign me up. :\
The ONLY internet access available was provided by the apartment complex itself. I think they had a few T1s split between a couple hundred units. Even 10 years ago, that was still embarrassingly bad. It was unusable in the evenings or weekends. You could do a traditional ARP spoof and read everyone's traffic. Really bad stuff.
I had no option but to deal. I set up a VPN to protect and compress my traffic and spent weekends at the homes of friends and family.
These days, I hear wireless ISPs are far more versatile and reliable. They're great options for people who get stuck like I was (as long as your apartment points the right direction!).
Even my hometown in very rural Northern Ontario (New Liskeard, ON) has had a regional WISP for over 10 years (http://www.parolink.net/). From what I remember, the trickiest part for them is many homes were surrounded by trees. So if you didn't already have a TV antenna tower, you were out of luck.
Yup I know the guys at Utah Broadband :) I worked at Rise broadband (used to be Digis) for about 10 years, if you know Utah Broadband you've probably heard of them? Vivint was doing some of this in Utah as well, I spent a few years with them.
It should be noted that it's not like this ISP is shutting down, it's just being barred from serving customers outside its county. This action shuts off service for about 200 people, but the ISP will continue to serve over 7,000. Still pretty bad, but not as bad as the headline makes it seem.
How are government sponsored protectionist laws like this even legal? It's very frustrating.
Edit: For further context, both towns wanted the service, which makes it even more frustrating. If Wilson made its service private there'd be no issue.
Can a private enterprise be government owned? I guess not? How about a tiny startup with one person operating billing and they call it a "private-public partnership"?
> There are laws in about 20 states that restrict municipal broadband, benefiting private ISPs that often donate heavily to state legislators.
I'm not that clear on how US politics and 'lobbying' works, but why don't you just call it what it is - a bribe? In this case 200 families will be back to slow speeds and poor service ISP (who no doubt will be putting their prices up) just because said ISP has enough spare cash to bribe the politicians. How is that fair?
As long as it's not "this favor for this donation", it is legal in the US and not considered a bribe.
It's not even a bribe when constantly give donation but threaten to stop them if the legislator doesn't follow your wishes [0]. The DOJ was petitioned to investigate but refused to even look into it, so, (by fiat, or rather lack of it) it is legal.
This seems like a fairly clean cut case of corruption. It's amazing how external money can drive legislation and political action. Why would these politicians ever try to block this on their own accord? Do they really fear a government monopoly that much? Or maybe they just love small government (with the exception of the military/military contractors, which need to be bigger of course).
I love small government. But if certain infrastructure makes more sense at a municipal level ideology should go out the window. We don't have a lot of private roads because it just doesn't make sense, the normal competition driving efficiency model falls over because the most efficient solution involves only one road per route ( over simplifying here ). I think the same maybe true with the local loop of consumer level internet connections.
A big difference is that roads are (roughly) a government monopoly—reudcing competition while these municipalities are adding competition.
The idea is that in poorly functioning markets the government can step in with an alternative, especially one that is obligated to at least break even in order not to stifle innovation, to restore the market.
This really ought to be a bipartisan idea. I beleive the Roosevelt institute his written on this, let me find a link.
Traditionally, such laissez-faire views would distinguish government constraining itself and government constraining the private sector, approving of the former and not the latter.
But I'm down to look at both the same way (especially when, as I wrote, government is constrained not to indefinitely run at a loss so as to play by more similar rules).
That said, I know of little historical evidence that market competitiveness restores itself in the absence of external meddling. The fact is in telecom we are coming off a history of official monopoly, competition, and then a near-reformation of the monopoly without the increased regulation to go with it. So it sure as hell looks as if we backed off the controls and market-based approaches failed.
Now it could be that post-deregulation and trust-busting, there was still too much regulation, but again I don't often see laissez-faire views claiming that government entry into the marketplace must be allowed.
A middle ground that I'm more receptive to is that a never-interfered-with market will always self-correct, but past interference interference may have distorted the market into an otherwise-unreachable state where self-correction is not possible.
In that case we should with heavy intrusion try to force the market into a good state, and then slowly easy off the controls carefully monitoring to see if such self-correction does occur.
Economic pontificating aside, with wired networks I think there is a legitimate public interest in fewer redundant wires (like roads), and too much incumbency advantage with the amount of infrastructure required, for me to put much faith in market-based approaches. Wireless networks on the other hand largely avoid those problems so I think that's a better area for them.
This is basically how govt works in the US. want it to change? Form a non-profit in these states, collect money, and donate it to campaigns to overturn these laws.
One thing to point out that I think people are missing is that the ruling was that a government could not operate a business in a different jurisdiction.
It has nothing to do with free market or net neutrality concerns.
It still seems weird. I can think of many small municipalities around here that can't quite do things on their own. Sharing water, fire, police, electricity, sewer, gas, roads, busses, trains, schools, hospitals and garbage services with a larger town seems pretty reasonable. I mean, as long as it's not forced on any of the participants.
The internet must be really dangerous in some way to require the special regulation.
edit
"Electric is provided with a contract with the City of Wilson, however Pinetops owns and maintains all distribution lines to Pinetops citizens and businesses." [1]
"Wilson decided not to appeal the court decision and voted to terminate the service agreement with the town of Pinetops, Wilson's city spokesperson, Rebecca Agner, told Ars today."
The agreement looks like it was between the two towns. I wonder how it's fundamentally different than electricity.
I haven't read the ruling, so I'm talking a bit out of my ass here; however, that's rather nonsensical approach considering that many areas of the country have multi-jurisdictional systems in place for services. As an example, arguably the largest and most well known being the Port Authority of New York and New Jersey, but is just one of many many examples[1].
Further, these type of multi-jurisdictional systems are becoming ever more important as cities continue to grow and encompass other counties (never mind other states), and the creation of (as well determining who pays for) infrastructure becomes an ever more important issue.
There could be an argument to be made that telecommunications infrastructure is a different beast than traditional mass transportation, highways, etc. However, I reject that notion out of hand as this has not been even been the first type of new infrastructure that the US has dealt with in it's history (electricity, original telecommunications (telegram/telephone) being the most obvious.)
But let's not beat around the bush, the law and the ruling are nothing more than typical bought and paid for members of a different level of government (NC is not a home rule state, and the current Republican run legislature already has a long history of gross overreach into municipal matters) creating less competition so that oligopolistic entities can make a large amount of money on the backs of the public. Time Warner Cable (Spectrum now I guess) owns the NC legislature, lock stock and barrel.
How is lobbying still legal in the USA? Isn't it clear as day corruption, where you pay for influence over the government? I thought Americans valued freedom?
Rather than being pedantic like most of these replies which describe lobbyings definition, but to take your intent to mean" lobbying in which large amounts of dollars change hands between special interests and politicians in which case the politicians are then passing laws (sometimes written by the lobbyists themselves) that directly benefit these special interest groups, often at the cost of the public at large.
To answer you, I'll ask my own question: Who makes the laws? As long as the foxes guard the hen house, we should expect no change. As long as politicians can quit their jobs one day, and get a $500,000/yr salary working for the lobbyists the next day[1], we should expect no changes. There are very clear and very obvious problems in how our government works. In my opinion, as silly as allowing the banks/Wall Street to regulate themselves, allowing Congress to regulate themselves is equally as bad. Until this is no longer the case, clear cut bribery will continue in the home of the free. (because freedom isn't free, somebody's got to buy the politician off.)
[1] To be honest, you can't do this today, you must wait (I could be wrong here, this is from memory, too lazy to look up the current law) 2 years before becoming a lobbyist after working in Congress/Fed Gov't, however, this law has had negligible impact at best.
Isn't there disproportionate power there now? Large amounts of money can be used to employ full time lobbyists. These full time lobbyists mean you can pay for influence that the ordinary citizen would not have the resources to achieve.
The freedom for an individual (a minority) to out-buy popular, widely held, value-backed ideas (the majority) with one's own money is about as American as it gets. What is the government's role if not to protect minorities from the will of the majority?
Lobbying is well-protected by the First Amendment to the United States Constitution. It is considered "core political speech," or, alternatively protected under the right to petition the Government for a redress of grievances.
There's an entire body of First Amendment law out there for you to study if you're particularly interested.
Net neutrality IS a government assisted monopoly but in the favor of consumer instead of provider. I don't think people who support net neutrality will be able to bring arguments in support of free market policies for ISPs.
> Net neutrality IS a government assisted monopoly but in the favor of consumer instead of provider
Can you explain how that works? Who, exactly, is the monopoly referenced in that sentence?
It sounds like you mean that whatever is being referenced by the identifier "net neutrality" (guessing recent FCC decisions, but it is not clear) tilts the market towards consumers in ways that you believe are anti-free-market, but that has nothing to do with monopolies or antitrust.
If that is what is meant, I completely disagree - it is the legacy telco/cable companies who need a refresher in antitrust issues. They are the only ones I see using the government to restrict competition. Putting a floor on baseline requirements offered by market participants (such as actually offering the service advertised, or not extorting cash from third-party internet ventures) has nothing to do with restricting competition, any more that mandating lead-free paints in cribs or seatbelts in cars. (Yeah, I know some people still rant about seatbelts, but not on antitrust grounds.)
It has to do with constraining market participants who have already had a long history of preferential government treatment to not leveraging that into yet more ways to extract rent.
> I don't think people who support net neutrality will be able to bring arguments in support of free market policies for ISPs
Au contraire. Net neutrality supports market efficiency, the same way that building a national highway system did. Incumbents want to raise their margins by decommodifying their services to confuse the market.
Now, creating regulations itself is inherently anti free market (just as collecting taxes to build highways was). Perhaps in the future we'll have ISP startups competitively bonded with prospective subscribers, and private covenants assuring what types of traffic will pass (although why would subscribers choose anything other than "all", given the majority expense of a last-mile ISP is the fanout). But until that prospect is even on the horizon, it's a moot point. Any proponent of free markets, even a dedicated ancap, should support the approach that results in markets actually functioning freer.
I love your logic, highly persuasive and I tend to agree. My only concern has been and will remain until proven otherwise, that like many things "Government", Net Neutrality while having the best of intentions will slowly be eroded by corporate interests and lobbyists. Eventually destroying it's original intent, and leaving us in a worse, or much more complicated position than when we started. Hopefully not.
I agree, and I think pretending that incumbent ISPs have free market virtues is that erosion happening right in front of us!
Personally, what I think we really need are better protocols designed to resist inspection by transit providers. The end to end principle fundamentally arose from engineering efficiency concerns, and its original implementation was never meant to be resistant to intermediate parties. But now that the industry is popular and computation has gotten cheap, the expense of a DPI box is dwarfed by the increased profit an SP can make by selling discrete "services" just like the Ma Bell good old days.
Such protocols also need to be widely adopted, so that ISPs can't just block them and still retain 95% of users.
> Net neutrality IS a government assisted monopoly
The definition of monopoly ("the exclusive possession or control of the supply or trade in a commodity or service") makes this clearly false. Net neutrality is a policy, supported by legislation that gives the FCC the power to enforce that policy. In no way is that related to monopolies.
Another analogy would be a policy of "No letter-carrier may open or tamper with the content of their customers' mail."
Or perhaps "No company may dump doomtoxin into a river."
Both affect the market, but neither establishes a monopoly and the companies "harmed" are simply being prevented from doing ethically-dubious things that may harm others.
The analogy would be that no letter carrier may charge more (or deliver slower/faster) packages from particular suppliers.
The consumer and supplier are both welcome to pay for faster service for all their packages but a particular supplier cannot be singled out just because of who they are or what they sell.
Down the path to The Perfect Metaphor lies madness.
For example, people on both ends are paying their respective ISPs for traffic in both directions, and ISPs can artificially favor the content of their own sibling-companies without a payment occurring.
The important thing here is that such policies are not monopoly-grants, and their net effect is the opposite, to deter monopolies.
Right, I'm not quite how you make the leap that "Net neutrality IS a government assisted monopoly".
It does seem to me that net neutrality makes it effectively impossible for ISPs to differentiate, because they're all compelled to sell the same product - dumb pipes. This will likely make it difficult for two ISPs to exist in the same market, but it doesn't preclude competitors from entering the market at such time as the prevailing ISP becomes abusive. In other words, it's not worse than the status quo.
> It does seem to me that net neutrality makes it effectively impossible for ISPs to differentiate, because they're all compelled to sell the same product - dumb pipes.
If ONLY they viewed themselves as a dumb pipe, I could actually shop on relevant metrics—price, availability, bandwidth, latency—and I would be happy to switch to the best available ISP in the market. As it is, it's actually very difficult to find any numbers on availability, bandwidth, and latency.
Instead, I'm forced to compare prices and offerings. The offerings are actually an UPPER bound on bandwidth, rendering comparison meaningless for comparing ACTUAL bandwidth. The pricing advertised is often not for internet but some "bundle" of varied services, most of which will drastically increase in price after the first year, and only one of which (broadband internet) I actually want. For instance, I see ads for FiOS all over the damn place—successfully suckering me in, I might add—but in spite of living in residential, downtown city for the last eight years of my life I've never actually found a place I can actually get fiber.
ISPs are already impossible to differentiate in terms of actual value. Selling dumb pipes can only improve.
I am a bit surprised to hear the view that NN would make it impossible for ISPs to differentiate. Many companies sell the same product and manage to differentiate themselves. If you took away the customer service aspect of Dell, what reason have they to exist?
Price and customer service is a good starting point for differentiate companies. Latency is an other point, since no ISP can have zero hops to every other ISP in the world, regardless of NN. The Internet is designed with routers in mind, and each router adds to the latency. Sadly there is currently little competition on latency, except of the world of stock trading.
For companies, there is the world of BGP. High reliability, anycast, and so on. Not something I see much competition on either. Providing network solutions for companies is something that ISP's don't tend to do (here in Sweden at least), yet much at the network edge could be provided by an ISP if they wanted to offer it.
Even 'dumb pipes' aren't equivalent. Here it's either IPv4 only (telekom.de), CG NAT IPv4 plus IPv6 (Kabel), or the small ISP I'm with (/28 static IPv4, /48 IPv6).
"Net neutrality IS a government assisted monopoly"
It seemed to be the opposite to me. A monopoly is a single supplier that dictates everything, esp price and service. Net neutrality is more like free market where it blocks artificial restrictions to boost benefits for consumers.
There used to be a consideration of monopolies that tried to hold them back from "Restraint of Trade" (https://en.wikipedia.org/wiki/Restraint_of_trade). The wikipedia page hints that it has been subsumed into modern "competition law" but really it feels like it's dropped away completely as a consideration.
Once you sell a internet connection to a customer, it seems to feel like a restraint of trade if you start messing with the traffic of some companies but not others.
Though I suppose it's not clear how this applies between state governments and cities.
The point become regulations are actually a firewall for incumbent. The more regulation you have the up-start is unlikely to enter and complete. Uber brought disruption through rough-shodding taxi regulation.
Not all regulations are the same in nature or effect. The introduction of regulation that introduce restrictions on who can compete has eliminated nearly all competition and most innovation in them. Most areas have 1 or 2 providers that charge high prices for low speed and service. The regulations like net neutrality that eliminate restrictions on what users can do increase innovation in the space.
Government assisted monopoly is basically using government's coercive power to deny a party to chose from alternatives.
When government forces ISPs to be "neutral" an forgo the additional revenue it essentially denying the ISPs to exercise their innovation to benefit the voters.
There is no difference between government mandating net neutrality and government banning Uber to help local Taxi companies.
I think people mistake net neutrality for fairness because they think a lot of people benefit.
Yes, net neutrality is not fairness, it's an attempt to use more regulations to fix a problem caused by previous regulations, that monopolized the whole market.
Followed by a more expensive subpar service. I typically lean towards getting governmetn out of most business, but these muni ISPs have always struck me as more grassroots democratic very american bootstrap sort of thing and commercial ISPs who fail to serve their customers exhibiting very anti-american behavior.
If the major telco and cable companies weren't consistently the most hated companies in the country...well, these things wouldn't spring up. There wouldn't be sufficient drive among people to make it happen; it's hard to get something done in government. So, the fact that it has gotten done in a number of municipalities should be taken as a warning sign for just how poorly existing providers are doing their job.
Internet is a necessity for participating in the modern economy. So, companies that provide it, particularly when they hold a monopoly or are part of a duopoly, wield a tremendous amount of power; or, maybe even worse, when they have a strong enough hold on a given region but opt not to provide broadband to some of their service area, making it nearly impossible for some rural folks to even have broadband. They've shown themselves unworthy of being trusted with such power, over and over again. It's unfortunate that legislators in NC are complicit in that abusive behavior.
These companies are doing their job perfectly. Extracting as much money out of their assets as possible.
It would be ridiculous for them to waste any money by investing into their infrastructure unless it enables them to compete better, increasing revenue and profits.
They are acting in exactly the way you'd expect given how the economy is designed. The problem are the rules politicians have setup which are designed for a free market not for monopoly/duopoly situations. The only option you have here is realistically is letting local government provide internet.
This way internet becomes part of the services municipalities provide and they compete with each other in being an attractive location for businesses and citizens, so they're incentivized to provide good and cheap internet. At least as cheap and good internet as other places anyway.
Telcom companies are actually given government incentives to provide servies in uncovered areas. Sadly they can also monopolize the way they get some of the incentives by applying for and thus blocking out other competitors from getting the same funds for the same areas. They also manage to tie up the gov't in application processes (or rather the the gov't allows itself to be tied up in these applicaion processes for incentives). It's true these companies would rather continue collecting more money for less services, increasing profits. Dosen't make capitalism so dark a concept. These are unique situations because telecoms get to operate within the framework where they can fight and get cancelled a homebrew ISP project in a community. Spending resources fighting rather than actually building services with their profits. Pretty sad.
Wilson established its internet service before the law went into effect, and probably paniced the monopolies into getting the law passed, since their service was so utterly superior and cheaper in cost to anything the monopolies offered. Wilson only barely managed to get grandfathered in; the law also prohibits any new government provided internet service. Example: Chapel Hill, NC was busy designing public WIFI service, but has abandoned that to the incumbent Time Warner Cable monopoly WIFI. Oh, you don't have a TWC account? Sucks to be you.
My opinion: the legislature is totally corrupt. The only silver lining is that Google is (a) a "private" concern and (b) is coming to me in a few years. AT&T is also competing right now, but their "fiber" turns into ADSL a few hundred yards from the customer. The non-Research Triangle Park areas of the state are screwed until Google can provide competition. It would be far better for counties/cities to start that competition now.
I did a tiny bit of research this evening, because this sounded so crazy.
My opinion: People on the edge of wilson county should petition to redraw the county line. Eroding the tax base might scare the legislature into being a tiny bit more sane.
This is pretty much what my town does for their public electric utility.
I moved from larger town A (has an electric utility, a lot of trucks, linemen, and a yard full of transformers and cable spools) to smaller town B and noticed that while the billing address changed pretty much everything else stayed the same. Town B might have one linemen, but I see town A's people and trucks every time there is a major project and town B's substations are fed from a substation run by town A.
The Vick Family Farms predicament was described in a recent New York Times article. The business has used Greenlight's faster Internet to support a high-tech packing plant that automatically sorts sweet potatoes by size and quality, with each spud tagged with its own bar code. “We’re very worried because there is no way we could run this equipment on the Internet service we used to have, and we can’t imagine the loss we’ll have to the business,” farm sales head Charlotte Vick said.
Potato-sorting and tagging does not require internet access.
Maybe software updates? Remote monitoring/control? Something really off the wall like sweet potato classification by cloud-based neural network computer vision?!
I suspect the regulators who wrote the laws that are preventing this are wise to your idea and its the actual right of way that they are going after. The only advantage that a municipality has over a private company or not-for-profit, is a monopoly on the control of rights of ways in their geographic area. That's why municipality is can do this- private entities would have to get their permission to install a network. And it would come at high cost.
I wonder if the necessary prerequisites for a free market will ever become common knowledge. This approach of just not regulating markets in the hope that a free market magically appears seems insane to me. It is like hitting a screw with a hammer and hoping the screw turns into a nail before the hammer connects. It never happens and you'll always get a huge fucking mess everyone somehow is surprised about.
Health care is the best example. The only thing unexpected and worrisome about it is that the executives at pharma companies have just now realized that they can increase prices this way. Doesn't exactly speak well for their knowledge of economics.
Saw a great talk recently that explained there is no such thing as a free market.
Any market needs government oversight and laws to exist. It needs government (courts) to enforce contractual obligations. It needs infrastructure to deliver goods (roads) and to run businesses (power; water; garbage; police).
All successful markets have rules. The so called "free market" proponents simply lobby for the rules to be changed in such a way that those at the top make more money; they are almost never lobbying for extra actual net freedom, but just a different skew to the rules so that they can take home still more of the profits.
Part of it is terminological confusion, which is, to some extent, deliberate.
The original definition of "free market", as defined by Smith, was all about free competition. In other words, a market with monopolies, cartels, and other forms of collusion or regulation that inhibit competition are not free, and this applies to monopolies and barriers to entry that arise naturally. Other classical economists generally used that definition.
Smith also explicitly stated that an unregulated market will usually result in a monopoly, and that government intervening to prevent that is not a bad thing (while also calling against tariffs, government-protected monopolies etc).
At some later point, the laissez-faire crowd basically asserted that 1) Smith was wrong (in that unregulated markets can be monopolized), and on the contrary 2) any government regulation makes market less competitive, and therefore 3) the only free market is unregulated market, effectively conflating the two terms.
For those who don't subscribe to laissez-faire economic theories, it makes sense to continue using the traditional definition, and carefully distinguish the two.
Sounds like a pro-government propaganda. Illegal market places exist and operate successfully despite breaking laws, hiding from the police and not having anyone to enforce contractual obligations.
When only people who are willing to risk imprisonment participate in those markets, violence is to be expected, no? Extrapolating that to what would happen in an actual absence of law seems unsound.
That would explain the violence but not the cartels.
In legal markets, monopolists have many other non-lethal but highly effective methods to eliminate competition without actually providing a better service - as shown in this article.
(And yes, there are ways that work perfectly well without government intervention either, e.g. technical lock-in.)
Violence is only one expression of lawlessness. Price fixing, divvying up retail locations to minimize competition, etc are other more subtle things that happen.
It all depends on your definition of "successfully". They are successful in a sense that they exist, and that money continues to flow. It doesn't mean that the social effects of such a market are beneficial. Many illegal markets are highly monopolized, often coercively (e.g. "if you try to sell here, we'll shoot you").
Even online illegal markets have coercion. Remember all that assassination stuff around Silk Road?
But I also seriously doubt that most illegal markets are online. Even first world countries have actual physical black market networks for illegal goods. And if you venture into a country where corruption is routine (which is where most of the world lives), illegal markets are literally right around the corner - drugs, fake IDs, firearms, you name it.
(Personal side note: it can be a very... eerie... experience when you happen to run into such a thing by accident, and realize just how close it was all the time.)
And most of those physical markets definitely have coercion aplenty.
There is a difference between free markets and unregulated ones. An unregulated market is unlikely to be a free market, turn into one or stay one.
Most self-proclaimed free market proponents aren't advocating for free markets at all and couldn't care less about free markets, they just want an unregulated one in which they can do whatever they want.
Free markets are a tool, they don't always work (infrastructure, health care, other natural monopolies) and require careful maintenance in form of anti-trust regulation.
The reason for that is simply that most of the time people aren't just making claims, they're referencing claims - just like I have. The arguments and evidence you think my comment is missing, isn't actually missing it's just implied.
The claims I made specifically are essentially just repeating what Adam Smith wrote in The Wealth of Nations in the 18th century. This is fairly basic economics.
Also not sure what the curriculum in the US (or elsewhere) is like but I learned about this in high school (well, at a Gymnasium which is supposed to be more advanced but still). I wouldn't bother to provide arguments, evidence or any kind of proofs in a discussion involving high school mathematics either.
I think I probably agree with something near your point, but I don't think your examples work. This case - where laws block the sale of internet services - isn't a case of not regulating markets in the hope that a free market magically appears. Rather, it's just bad law.
Healthcare is also not an example of not regulating markets; rather, it's one of the most regulated markets in the USA. Some of the regulations are net-harmful, leading to problems like the gigantic prices of monopolized products.
I think you're mistaken about high prices for monopolized pharmaceuticals being a new phenomenon. Are you referring to the EpiPen, Daraprim, Alcortin A, Novacort, and Aloquin price hikes? But high prices are typical in monopolized pharmaceuticals. For example, Harvoni costs $32,000 in the USA, while its generic version costs $900 in India. This kind of price difference between the monopoly price and non-monopoly price is common.
All that aside, I agree that we can often do better than just not regulating industries. Much care should be taken to craft helpful regulations, and perhaps some kind of technology or institution can be developed to inhibit regulatory capture.
The problem isn't monopolized pharmaceuticals, other countries deal with that as well nor is it too much regulation, it's too little.
Other countries simply accept that there is a monopoly and that therefore the prices will be sky high, if they allow the companies to just set the prices to whatever they want, so these governments set prices and negotiate or empower consumers.
The situation in the US would be very different, if you had nationwide insurance agencies and medicare negotiating drug prices and being able to say no to drugs that provide little to no benefit.
I think the framing of regulation as a spectrum of less to more is unhelpful. We don't need more regulation, we need better regulation. Some better is more; sometimes it's less.
> Other countries simply accept that there is a monopoly
There wouldn't be, if not for IP law
> that therefore the prices will be sky high, if they allow the companies to just set the prices to whatever they want
They can only set the prices so high because they have a government-enforced monopoly on those products due to IP law
The US needs to focus on further opening markets. Make the markets more easily accessible to competition. That means reducing the regulatory restrictions to something reasonable and, like you suggest, opening all markets for competition from everywhere.
I would love to be able to just buy catastrophic healthcare insurance for unforeseen or accidental injuries or illnesses, and just paying for healthcare checkups out-of-pocket. But is that option open to me? Not really.
I'm open to considering the idea of implementing a nationwide single payer system but I'd prefer it to be handled on a per-state basis first to test how it would work, and what kinds of unforeseen consequences it would have.
I have nothing to add other than my voice of agreement about the clear corruption of these laws.
What is the benefit, to the people of North Carolina, of restricting municipal ISP growth?
What rights are being protected by these laws?
I am disgusted by the clear disregard of the people of NC's interests, but also by the lack of action by the people themselves.
I don't how how the actual law is written but maybe the Muni could just supply dark fiber and allow private ISPs to provide the actual broadband service.
Good. The fewer coercively funded projects like these the better.
To describe this as "community" broadband as some commentators do is really propaganda. Consider how absurd it'd sound if someone spoke of a "community Air Force".
So long as there are levers of control, people will attempt to exploit them. The government at every level, should have no power to prohibit entities, whether government or not, from providing internet service.
Freedom of transaction is a basic human right (whether the Bill of Rights talks about it or not, read the Preamble to the Bill of Rights and you'll see the Bill of Rights doesn't create rights, according to the Bill of Rights, it creates limitations on government from violating those rights.)
Even if you disagree with the above, the First Amendment is unquestionably part of the constitution and thus this is a violation of freedom of speech (internet is speech.)
>The government at every level, should have no power to prohibit entities, whether government or not, from providing internet service.
Sure they should. You're being ridiculous.
The first amendment doesn't mean anyone can do anything because you can pretty easily cast a wide net and classify everything as speech.
I can't freely express myself with a firearm and shoot anybody I don't like.
Likewise, governments can regulate commerce. They're generally doing a pretty bad job when it comes to the Internet in many cases, but it's very much not a first amendment issue.
Freedom of transaction is not a basic human right - there are some markets so abhorrent that the correct response is to imprison those who participate in them.
Like, absolute freedom of transaction means that you could participate in assassination markets. It'd even be structured in a way that the buyer could avoid paying for performance - simply make a large payment available for whoever happens to accurately predict the day of death for a certain individual (and make the predictions expensive enough that you basically have to kill them in order for it to be a good idea).
A slightly more narrower statement of Freedom of transaction would be "if you can do it for free, you may do it for money".
Assassination is illegal by itself, paid or not, so using it as an example just confuses the issue. It's like saying Freedom of Speech is not a basic human right because you can use speech to order someone to be killed.
The government (the state of North Carolina) is simply choosing not to go into the Internet business. The municipality is just an organ of the state government. So it's the government telling itself what to do. Why should that not be permitted?
