Really, he's calling for the FCC to prevent rent-seeking by local ISP monopolies by allowing the option of municipal networks. It's a really good idea; you can tell because of how stridently Comcast/Verizon/AT&T oppose it.
I definitely agree, and this is one reason I advocate against overly harsh or vindictive rules that are unbalanced against ISPs because of our feelings about AT&T, Verizon, Comcast, Time Warner - it would bite us later if we have a massive shift to municipal broadband. Sure, we can change the law, but we would have regulations in place that could interfere with the government entering the market, we might have gotten the big providers to agree to stricter rules if we promised never to try municipal broadband. This could be a perfect storm for conservatives, because they can wave their arms about how "liberals" are always asking for regulation and now that a "liberal industry" is regulated we don't like it and blah blah.
I far prefer to just obsolete the big providers and to implement internet as a real public utility. Even if private companies end up contracted to provide it in some cases, those would be regulated monopolies, not regulated free market businesses.
I far prefer that we build the case that even a city's own infrastructure would unlikely work without the internet, and that they should have at least some infrastructure that does not rely on commercial providers.
San Francisco's water power plant on the Russian River is a great example of this, it provides power for muni trains and electrified buses, maybe _some_ streetlights and a few other public things. If we have a full PG&E failure, we might still have running trains and lit streets. I'm not sure it doesn't all flow into the same grid, SF being one of the oldest power grids, but if that isn't fully the case now, there is enough power independence to ensure that such a thing would work.
> it would bite us later if we have a massive shift to municipal broadband.
Municipal broadband doesn't mean shutting out ISPs. If done right, it means that the municipalities own the last mile infrastructure and charge a per-customer rate to ISPs that serve residents. But what that does is significantly lower the bar for ISPs to offer service. It can cost millions of dollars to build out that infrastructure in a city/town and that's assuming you have right of way to actually lay the fiber. If the city does that itself, then ISPs only need to connect the city's infrastructure to the larger internet...something that's significantly cheaper.
The Comcasts of the world would still be free to offer service to customers. But they'd have to compete with the smaller ISPs on equal footing and without the giant markups they have today.
Thanks for explaining this important point. Competition outside of the last mile would be good for everyone, and the last mile infrastructure makes a lot of sense to run as a utility.
That's exactly what I was trying to get across, if I did so poorly, I apologize.
This is _precisely_ the discussion I want to have.
Transit is not the same as interconnect, we should have some private competition, but if an entire city is all AT&T and Comcast, I'd rather just have it be municipal fiber.
I have no problem with AT&T, Comcast, Verizon, etc.. running their businesses over a combination of private and municipal networks.
That's a pretty big if. There's a very real possibility that the same municipal governments that granted the cable monopolies in the first place, will either license the network to an ISP that will either become Comcast-like (monopoly lazyness does that), be bought by Comcast or actually just simply is Comcast (remember, the municipalities have a "good working relationship" with Comcast) or they will setup their own ISP, which might get off to a decent start, but will either make money, and then go on to be milked hard, or it will lose money, and will have to fight with the fire service and the water utility over every last penny for infrastructure upgrades ("What do you mean you need a $5000 router? I have a $30 router at home and it works just fine! In fact, I'll go to Best Buy myself and get you a few of those tomorrow. What the next item on the agenda?").
But IF they do it right, it would be a great solution.
Here's what I foresee actually happening: these networks will work great for 10 years or so. But eventually the maintenance costs will catch up, and you'll have service outages that take days to fix because it's run by lazy government workers with a guaranteed pension. Customers will complain, but nothing will happen until the city goes broke (as happens to nearly every city every decade or so). So the city auctions off the telecom infrastructure to private buyers for pennies on the dollar or spin it off as a new private entity. The net result is the same: the taxpayers will have subsidized the construction of yet another redundant telecommunications network owned by private money.
The reason I'm pretty sure that this is what will happen is because this is exactly what's happened to most of the municipally-owned utilities across the nation. Chances are that your gas company or electric company are privately owned (water/sewage tends to remain municipally owned because it's simply not profitable under any scenario that preserves basic sanitation). The city hits a budget crisis and starts looking for assets to sell, and utilities are huge capital assets that can bring in a lot of cash relatively quickly.
The useful life of fiber installs can be even shorter than 10 years in specific cases [1].
What if the municipality owned, laid, and maintained the physical conduit/poles/enclosures but not the actual network physical plant itself, which is then deliberately designed to be replaceable so commercial providers fish through the cabling they want to municipally-owned physical hubs that are equipped and operated by the providers? The municipalities already have the resources and staff to do so relatively competently from water, wastewater and electrical grid deployment and maintenance. Most of the cost of last-mile deployment is the physical laying, but if that is shifted to a public utility while fishing cables (at most) is left to the providers, then might the providers see dramatic increased incentives to compete on quality of service and price?
Except you almost never want to pull fiber when you can help it (fiber is far more fragile than copper). In the scenario you describe, instead of burying a conduit, you would just bury a jacketed fiber bundle containing hundreds of fiber threads, even if you only need a couple dozen right now. This is where the term "dark fiber" comes from. Also, in this scenario, if a fiber cable "goes bad", you can just swap out another, unused cable.
Regardless, the architecture you propose would be incredibly expensive for ISPs to implement on any large scale - so much so that it would create significant barriers to entry for any new entrant, and a big incentive for horizontal consolidation. Ideally, the utility ISP would provide route tunneling from a specific port on their demarc switch representing a home to a specific provider at a NOC at the edge of their network. This does create some bottlenecks, but it's better than having 5 ISPs have to put 1,000 switches all over a city just to cover all the homes. Coverage is the entire problem that causes a monopolistic situation - so let the shared service provider worry about coverage.
Even still, I'm not sure of the value that ISPs provide in such a scenario. It seems like a commoditized service with very little in the way of competitive advantage - which means that advertising dollars will be the biggest differentiator (similar to how it is today).
Good points, thanks for contributing your domain knowledge. So the issue seems to remain: fiber can be made in different ways to accommodate different signaling technologies, and what we lay down into the ground and run through buildings today might not be what we want to use 5/10/15 years from now. Is there a potential way to economically mitigate that, and at the same time turn Internet access into a public utility so the bulk of the initial capital costs are somehow only paid once by the utility?
When you are dealing with a city of millions does it really seem right to fish one wire at a time? That means terminating the wire at the home too. With multiple ISP's how many of them would need access to the "Main St" section at a time? The cost of booking a time, sending a worker out to fish and terminate possibly kilometers of wire per customer as each customer signs up would be a logistical nightmare. Then what happens when the customer leaves you for the other guy? Never mind the cost differential of running one wire vs bundle of wire.
This is how UTOPIA in Utah is run. There are a myriad of ISPs to choose from, and the pricing is excellent ($70/mo for gigabit from Xmission, for example).
That's kind of how it works in the UK, with BT being that last-mile provider for every UK ISP.
Let me tell you: BT sucks. They are technically a private company, but operating with all the ills that a large governmental monolith has accumulated over decades. With the system you're proposing, you're basically creating a BT. Hopefully it's a small, city-specific BT so at least if one city has a very shitty infrastructure you can move to another city to avoid it... but still. Caveat emptor...
BT is not the last-mile provider for every UK ISP. For starters there's Virgin (cable), but there are also a growing number of smaller providers that bypass BT/OpenReach to provide both fibre and wireless services (LTE in particular) without it.
And while I agree with about BT as a whole, OpenReach - the subsidiary of BT that handles the last-mile network - is very different from BT as a whole even though they certainly share a lot of history and baggage. For starters, OpenReach is vastly more tightly regulated (leading to, for example, all prices being publicly available on their website), but OpenReach is also subject to a lot of additional scrutiny and pressure from the 500+ companies that rely on their network to provide services, especially because many of said 500+ companies are directly competing with Virgin for business.
The baggage of BT is also less of an issue simply because while most ISPs uses OpenReach for their backhaul services (relying on OpenReach to provide an IP connection from the subscriber to the ISPs network), OpenReach also provide raw access where the ISP can put equipment in BTs exchanges and get a direct physical connection to the subscribers line, and a number of providers have and do make use of this to provide faster connections than what OpenReach offers for backhaul.
With LLU unbundling the only limitation provided by OpenReach is down to physical constraints of a network they inherited and was not endowed with enough cash to somehow instantly upgrade.
But most ISPs are not willing or able to cover the costs even of taking advantage of the LLU unbundling, which should illustrate that there really isn't a willingness for most to pay for much faster rollouts of higher speeds.
4 out of 5 of the places I've lived in London had DSL but no cable, so for 80% of my experience in London BT was the onyl last mile provider available.
And yes, there are some new developments, there is some hope in the horizon.
Meanwhile, I regularly see tweets from people in, say, Norway, with gigabit internet access.
Yes. But the way the system in the UK works is the worst of both worlds. Openreach is a private company (a subsidiary of BT I believe), which has been granted a monopoly and as a result has to be constantly audited by the government at great expense to ensure that they are not making too much profit or favouring some ISP's over others. As a result, the way they make a profit for their shareholders is by being as tight as possible about everything that has no regulated minimum requirement.
For example, the broadband service in my town suffers from random slowdowns where everyone's speed drops from 8mb/s down to 0.1mb/s for days at a time. As a town we have been complaining about it for years but nothing ever happens as we have no power over Openreach because they are a private company and are not answerable to us and they also have a de facto monopoly on the infrastructure so we can't take our business elsewhere.
At least if broadband was provided by the local council, we could complain to our local councillor when it's not working. This system works fine for other infrastructure, e.g. if the council haven't gritted the roads we phone our councillor and she gets on to the right department, gives them a row and they sort it out.
As it is, most broadband infrastructure improvement projects in the UK are government driven any way. I don't see the point of Openreach existing as a private company, seems like extra unnecessary bureaucracy which exists purely for the dogmatic reason that private companies are supposedly always more efficient, a claim which I have never seen any serious peer reviewed research to support.
If anyone can explain why this is not a stupid system, then I'm all ears.
I don't understand why people are using monopoly to describe ISPs. Looking at http://www.broadbandmap.gov, can anyone find one city without multiple broadband providers?
For wired connections my zip code shows 4 providers. This was exciting since there is only 1 right now that is equipped for high speed internet.
The other 3 are dedicated business telecom companies and do not offer residential service.
It appears broadbandmap.gov doesn't differentiate between residential and business.
Looking at the wireless I was excited to see Wimax offered in my zip code according to the site. When I go the provider's map of coverage I only see a small section of the metro area covered and it doesn't include my zip code.
It appears broadbandmap.gov doesn't include the actual wireless coverage provided.
This is one of the real issues with the FCC's collection of this data. Broadband providers don't report where they have customers they are providing service, they report areas that they "cover", where "cover" may just mean an intention to provide service. It may also mean that broadband (>3Mbps) is available, for the low low price of your first born.
There's also a potentially anti-competitive slant to this: There are government subsidies available to provide coverage to unserved areas, which might help a small ISP or competitor move into the area. But if we say we cover it...
And of course, if one person in a zip code can get it, everyone can.
I could give you my old Zip code, it would include a small city that had DSL providers and Cable. Where I lived there was one provider, 3mb DSL. That finally showed up about 4 years ago.
Even with 3Mbps, that's still sufficient for vast majority of Americans. Netflix, like the guy said, recommends only 3Mbs. Heck it requires only 0.5MBps[1]
Ooh, that's funny. I guess you've never lived in apartments where your choice is between up-to-100mbit Comcast or 768K DSL from ATT. I guess LTE is also a choice for high speed if you want to use less than 5GB per month.
In my ZIP, four of the entries are cell phone providers (don't count), AT&T DSL which is listed as 10Mbps+ (I had it; it was only 900kbps), one that is business only (dedicated lines), and a "fixed wireless" provider that is pretty slow and expensive ...and Comcast, which is what I have because it's the only >5Mbps solution available to customers in my neighborhood. I live 15 minutes away from Google's main campus, so it's not like I'm in the sticks or something.
I'm looking at the telephone pole near my house and there are only two wires coming off it: one from Comcast and one from the phone company. And the phone lines can't do more than 1mbps.
Why don't they count? AT&T and Verizon are also broadband providers. They're not dial up services. Isn't that the definition of broadband? The cell providers are listed under "Advertised Speeds Above 3 Mbps Data" or above. Just because Comcast has the fastest service doesn't mean it has a monopoly on broadband services. The vast majority of the American population don't need 100Mbps+ anyway. If they did, there would be more competition in that market.
The expense and severe limitations of cellular data service rule it out as an equivalent or practical home ISP. It is superior to satellite based service, but that's not saying much.
For my home, 2.5mi from the Capital Building in Washington State, I'm offered four wired broadband providers:
1. Comcast, "advertised 100mbps to 1gbps" (true enough, although you can only get 150mbps, so I'm not sure if that's bracketing)
2. CenturyLink, "25-50mbps" (CenturyLink's own website says "Our systems indicate that our High Speed Internet is not currently available at your service address." I tried several other streets in the area that indicated that none of them had availability either.)
3. Platinum Equity LLC, "10-25mbps" (err, Platinum Equity is an investment firm - oh, one of their portfolio offers "T1 and Bonded T1" lines to businesses)
4. Integra Telecom Holdings, "3-6mbps" (a Vancouver telco that does business fiber).
Select "wired" and you're back to what FireBeyond said. One provider. As I replied to you earlier in another thread, cellular internet isn't equivalent, nor is it priced comparably.
re: EDIT: I didn't DV you but you shouldn't be surprised. There probably isn't a single HN'er without direct experience shopping for an ISP, and thus few without the knowledge that the many promises of "broadband" service are often mere pie in the sky.
But the argument here is "broadband monopoly" not "wired broadband monopoly", which municipalities have direct control over on who gets to lay cables. The "broadband monopoly" argument should stop since American consumers aren't limited to one broadband provider.
Anyway, one of the wired ones that's listed (CenturyLink) does residential internet from what I can tell[1]. Another wired one that's also listed for residential in Olympia is MegaPath (owned by Platinum Equity, another wired one)[2].
>But the argument here is "broadband monopoly" not "wired broadband monopoly"
No, to repeat myself, cellular wireless ISP service is neither functionally equivalent to other wired nor even to other wireless ISP service offerings. Cellular offers include low data throughput limits, and are not priced comparably. If there were two DSL offerings and one was priced higher for a lower level of service that would also not be reasonably considered a competitive market situation.
As for CenturyLink in Olympia, Wa. the poster already replied that Century Link do not offer service to his/her residence.
I'm not going to audit the claim about Megapath, but instead just assume that FireBeyond was truthful and correct when they said that Megapath did not offer residential services to their address.
Are you going to claim that AT&T offering (typically) a 10GB cap / month (without huge overages) is a realistic broadband offering?
Also - yes, I'm aware CenturyLink does home internet. Not at any of four addresses, including mine and major streets in 98501 where it says they are available according to the original site.
Megapath (the one I found) does residential - in theory. After inputting my service address (and I'm in the heart of the residential area, in a division less than ten years old), here are my options:
1. "Symmetric Ethernet: 6.0M to 45.0M (* Requires Business Account)"
2. "SDSL: 192k" (fairly sure that doesn't meet any current definition of "broadband")
3. "T1: 384k to 3.0M (* Requires Business Account)"
I wouldn't call that a realistic residential broadband offering.
Apropos of anything else, it's as much as you can't just blindly point at broadband.gov and say "look, healthy marketplace!".
Technically, I have four, maybe five choices, only one of which is practical.
Wireless - Poor reception, technicians unable to connect to uplink/head-end equipment
Cellular - Too expensive, data caps, and poor reception (really).
DSL - I used this for four years at my home and was generally satisfied with my private DSL reseller's service. I only left because their service only allowed 1.5Mb, which was no longer satisfactory. Ironically, AT&T now offers 6Mb/s service in my area but DSL resellers apparently aren't permitted to resell "U-verse" even though it is provided via an industry standard protocol, ITU G.992.3
Cable - I have cable now 15Mb, the highest speed they offer. They keep promising to roll out higher speeds, but have yet to do so.
Satellite - Does that count as broadband? Not for me. High latency and low uplink speed rules it out, and expense.
This is an especially crazy situation for me considering that I live near a major internet backbone corridor (0.5mi from my home).
So, strictly speaking there is no monopoly, but the result is hard to distinguish from that of a monopoly/cartel situation.
That site has... Interesting data. It seems to be granulated based on zip code. It shows, for mine:
1 cable provider
2 ADSL providers
It shows FiOS also, but I can almost guarantee that there is no residence within this zip code that can get it. So, the real question is, how much do you consider ADSL "broadband"?
Considering most urban ADSL runs at 15/1Mbps standard it very much is broadband. I guess American providers just like having larger distances and thus lower speed on their wires, but there's nothing wrong with ADSL.
There are loop holes to getting in the database. The wireless providers aren't selling w data rate at every location, they sell a package that can reach that rate in the right locations.
Likewise, why are speeds so low still if there is all that competition? Once the wiring is done, it should be fairly inexpensive to upgrade performance and that should be a pretty clear competitive edge. Are they colluding? Or is it really somehow a noncompetitive market?
I've been in Comcast country a couple times, as soon as there were even whispers of not renewing their franchise, comcast just magically upgraded everyone's performance, I saw that twice. No fee increase.
Something like DSL or satellite service is not comparable with others (it's too inferior). As well as a capped service is not comparable. Discarding all that you get something that is clearly a monopoly. Plus several companies which do offer something substantial but operate in collusion are essentially a monopoly anyway.
Real competition is for example Google Fiber or some other small ISP on the scene. That's when you starting getting 1 Gbps for less than $100. But such cases are quite rare still.
Going by your definition, does Apple have a monopoly on phones since every other phone is inferior? Just because one broadband provider has greater speeds than the others, it doesn't mean it has a 'broadband monopoly'. Again most Americans don't need 100Mbps+. They are fine with 25Mbps. Netflix only requires 3Mbps.
Now the "cable monopoly" is a separate issue entirely. Comcast has superior speed in some areas because the municipalities create bottlenecks that keep new wires from being laid (like charging exorbitant fees to do so). See, http://www.wired.com/2013/07/we-need-to-stop-focusing-on-jus...
Apple has a lot of monopolistic (anti competitive) problems, not just in attitude but in practice. A perfect example is their ban on alternative browsers on iOS. So bringing Apple doesn't help your cause.
> Again most Americans don't need 100Mbps+.
That's a pile of trash and song that monopolists like to sing to justify their unwillingness to upgrade their networks (since if there is nowhere else to turn, their inferior networks will be used for crazy prices anyway - users simply will have no choice). They start singing a very different song when they face actual competition. They quickly forget their previous claims that no one needs more bandwidth and start offering it. Which just demonstrates how sick the current ISP market is.
I.e. imagine you are trying to find a transport service, and local transportation company tells you that their horse and buggy service is just fine, because no one needs anything better (didn't everyone use it for hundreds of years already?). And then their competitor actually builds a railroad... You get the idea - that's exactly what's going on with ISPs now.
This is a very valid concern, but what if a private small business provides me an encrypted broadband connection over municipal fiber, which saddles the city / county with the _physical_ problems, and sacrifices a little bit of latency and total bandwidth to keep my relationship with my transit provider separate from my municipal interconnect provider.
Obviously there are continued risks with the crypto arms race, but if Google is being beam-split by the NSA, why would we choose a solution that uses more power, provides less overall individual freedom, costs more, and is slower, to guard against a bogeyman that's getting in anyway.
This is my concern, in the Snowden/NSA age. While few ISPs are willing to go to the mat defending their customers' privacy, I am absolutely certain that when it comes to governmental providers, it will never happen.
If you live or have an office in SF, my understanding is that you have PG&E. At least once per decade for several decades, there have been impassioned efforts to implement municipal power in SF, to transfer all of the PG&E assets and staff to SFPUC - not easy to implement perfectly, but an equitable goal.
Now that I've left SF after living there most of a decade, and I live in the east bay, I think it's also a concern that SF gets to own a power source so far away, because of the historical timing of when it was implemented.
The SF Bay Area's intertwining municipalities are a major impedance to certain types of progress, but I also think they are a valuable alternative to a region like NYC where you have a massive city with areas that aren't really like one another.
Anyway, my understanding is that the water power plant supplies muni and other SF public purposes, such as possibly some street lights. I know, though, when I lived in the TL, and we had a power outage, the street lights would go out, so this may all flow together and be metered, rather than be separate, redundant systems.
Who cares? The Feds here are not in the business of bandwidth provision; they're acting to counterbalance the elephantine mass of Comcast by preventing them from overpowering municipal politics.
I think the idea was that if Disney can get the government to essentially destroy the idea of 20th century work entering the public domain, they could probably get the government to act against an open internet.
They can do this now. Municipal ownership of some of the pipes isn't going to stop what is essentially an orthogonal fight from happening at a higher level.
Yeah - I think the point was that if the pipes are owned by the same government that's already in the pocket of hollywood, then the laws (more likely regulations written by bureaucrats, not laws passed by elected officials, but..) against torrenting/pirating/distributing would be easier to get written and enforced.
A huge portion of broadband in the US is already owned by Hollywood. At least we have a theoretical voice in the federal government's policies. Still, the ideal is for local municipalities to own the last-mile fiber, like they do with power, water, sewers, and streets most places.
Well, then, you switch to Comcast/Verizon/&c. if these issues are important to you. Big ISP will be forced to compete for your business, rather than buying your acquiescence with franchise agreements and big steak dinners at your state capital. I fail to see any way in which this isn't a good thing.
That might not actually be the case. You can't bring a First Amendment complaint against Verizon, but you can certainly bring one against your state-run or municipal ISP.
A thought that occurs to me is that if the government is providing internet access, various pressure groups will leverage that for various kinds of censorship.
Why is my government providing access to porn? To religious sites? To sites that violate copyright? To sites that contain many sorts of 'unsavory' content? Allowing children uncensored access to many things?
I don't know how those complaints would fare, but I'm absolutely certain they'd be made.
It seems to me that the right level for government to be involved in these sorts of questions is the municipality itself, rather than running back to Federal statute. Which is, again, orthogonal to preventing Verizon-owned statehouses from passing laws preventing municipal broadband networks.
This is a very light touch intervention to increase market-based competition. How much more quickly would there be privately owned fiber networks if consumers had the option of going to City Internet for $150/GB/s?
A tax-funded road built with the explicit the purpose of giving access to all three of these? Did the places exist there before the road, and if so, how did people get to them? Are the places located very close to each other or just coincidentally on the same road that stretches a long distance?
So I take it that you are agreeing that there is no fundamental difference between a road and the internet, when it comes to people complaining about the government using tax dollars to facilitate access to undesirable places?
Not sure what the downvotes were for. What I asked were honest questions about the road that was described. I think that are many similarities and differences between a road and the internet with regard to whether they should be tax funded.
It's definitely an issue that will be raised, so I don't know why you're downvoted. Ideally, people would realize that it's roughly the equivalent of using public electricity for unsavory things.
Except that filtering/censorship/monitoring don't have to work at the municipal level.
The UK's (big) ISPs are already required to 'offer' Internet filtering to all customers, collect activity logs, and prevent access to certain torrent sites.
None of them have had a problem implementing this at a national level.
(Setting up a DNS blacklist/redirect isn't hard - you do it in your network/backbone gateways, which aren't anywhere near your subscribers.)
So the premise is then any government infra to provide broadband must come with equally stringent protections on monitoring the content, similar to how government infra to provide deliveries has warrant requirements to inspect those deliveries.
However, we know that government policy is to record all meta-data, forever, without a warrant. HTTP/2 can't come fast enough, but even that doesn't really hide enough meta-data to trust the government with the pipe. E.g. You can tell fairly well what static pages on a domain someone is visiting by simply correlating the size of the response packets.
Of course, they are already doing all of this already, so maybe the ship has sailed... I think the best model is that the government provides the fiber, the L2 and above service is provided by a private entity. It certainly doesn't do much to prevent mass-collection or censorship, but it's marginally better than the Fed actually providing Layer 2.
This is already an issue faced by other government entities that provide access to the internet. See libraries. Their solution is to leave it open because it's not their place to censor. Parents already have (I assume faulty, never checked it out myself) software solutions to block "unsavory" content.
The public library a few hundred feet from my residence heavily and ridiculously censors its internet access. The censorship is provided by a third party and getting a site whitelisted is practically impossible to achieve.
The ability to encrypt torrent traffic (requiring encryption is tremendously easy to do through the guis I use, and might even be the default in many clients) combined with the American reflexive response to government censorship leads me to think this won't be as big an issue as you imply.
If you use a tracker, anyone on that tracker can get your IP address. Not to mention querying the DHT and busting everyone with a matching hash. I once downloaded a file with all the encryption buttons checked (Deluge interface) and some enforcement agency still sent a warning notice to my ISP with my IP address.
They're not the only possibilities - for example they can refuse it but not police it, they can refuse it and police it, they can allow it but discourage it somehow (eg rate-limiting), I'm sure there are more if someone cared to thing about them for a minute.
> I personally think its rather unfair to ask a for-profit company to compete against a tax funded service.
Why? If the Free Market Fundamentalists are correct, the for-profit company should have it all over the tax-funded service, because the company would be interested in efficiency and technological advances and so on, as opposed to just being a... welfare... thing... like the US Post Office and everything else which, per dogma, Does Not Work.
> You can prevent rent-seeking by repealing any "sponsored" laws that protect their monopoly.
Like the property laws which prevent others from using the wires they pay to put in, or do you think three cable companies should mean three completely separate sets of coaxial cables running everywhere in town?
The vast majority of local municipalities have to balance their budget. And their options for credit are vastly more constrained. And they have essential services that can not go unfunded.
A private company that thinks it can be profitable can go to a bank. A city will probably have to have a bond on the ballot. And a city can't really get out of things like road repair, law enforcement, etc (they can subcontract, but they still have to provide service) whereas a private company can sell of or shut down any unprofitable aspect of it's business.
So on the surface, comcast or whomever has a lot more leeway then a city.
The issue is, a service like last mile broadband is not incredibly profitable, for a telecom. But if a city can do it, or have a local company do it and it doesn't cost too much (they can waive fees for running cable, or whatever) then it may pay for itself, at least in part, because not only do they benefit from whatever they collect in fees, but broadband can increase local tax revenue (a house with 1000mb/s internet is worth more then a house with 2mb internet).
I think the parent is asking/claiming that public options are almost universally less desirable than the product of self-interest in the presence of competition, so their main effect is just to ensure that the private would-be monopolies need to actually provide a good service.
In domains like Internet infrastructure and health insurance which are empirically pretty terrible when there's no public option, I think there's a lot to be said for that argument.
Is it "fair" for a monopoly to have to compete against an organization that has nearly infinite resources but terribly inefficient operating ability? I don't know. Maybe yes, maybe no. Is it fair to huge ISPs to impose net neutrality on them? Maybe yes, maybe no. But it's no less fair for them than not having net neutrality would be for companies who want to use that infrastructure. It's certainly no less fair than life would be for a child who can't afford access to health care in a black market-like total laissez-faire economic system. I'd prefer to live in an imperfect implementation of capitalism that tries to regulate out negative externalities when possible (despite often failing) and provide as much fairness for as many people as possible, to one that provides so much "fairness" to certain corporations that they can make the game unfair for everyone else, people and companies alike.
> I think the parent is asking/claiming that public options are almost universally less desirable than the product of self-interest in the presence of competition, so their main effect is just to ensure that the private would-be monopolies need to actually provide a good service.
Well, actually, I'm claiming that a Free Market alternative should be able to win even if the Free Market includes the government.
Nobody is guaranteed to win, and I don't think a public option would necessarily be odious, but if someone's so gung-ho about competition, they shouldn't be scared of competing with a government.
Edit: OK, yes, I was mocking the Free Market Fundamentalists in my post. Fair's fair, they mock the government and the moderates, often using japes invented by Ronald Reagan (peace be upon him).
Right. Free market alternative should be able to beat government, so in cases where the free market isn't producing acceptable results, rather than forcing them to change through legislation, government can just compete with them until they beat the government.
> Because unlike companies, governments¹ can function long-term even if they don't balance budgets.
Except that shouldn't matter if the private company can compete on technology and service.
If your opponent has unlimited funds but the customer service policies of the DMV and the technological acumen of, uh, some very-non-technical government office of your choice, shouldn't you win?
The local government has plenty of other advantages. For one, they have a vested interest in not imposing costly requirements on themselves, while they continue to do so to private ISPs. In other words, they set the rules that everyone has to play by (ie you must cover this entire area, event the parts where no one can afford your service) while preferentially setting better rules for themselves. In the same way, I wouldn't be surprised if they can get permits and other government imposed roadblocks out of the way faster.
ISPs can vote just like everyone else. Even more so, in fact, because they can influence others to vote their way by buying ads. Governments are constrained by those votes. ISPs therefore have leverage over the way in which governments have leverage over them; they just need to convince their potential customers to vote their way, much like they need to convince their potential customers to become actual customers.
I've had recent experience with the DMV, Charter, and my doctor: of the three, I was treated most professionally and with least wasted time, at the DMV.
The hidden assumption is that by favoring, or at least not opposing, municipal broadband, you are supporting the total ban of competing networks, subsidizing network infrastructure with property taxes, five-year plans, gulags, etc etc.
> I personally think its rather unfair to ask a for-profit company to compete against a tax funded service.
But if last-mile links are a natural monopoly (or at least demonstrably low competition markets), how do we get better broadband than we have now? We have data points from other nations that seem to indicate that publicly owned or open-access last-mile links create market conditions that deliver broadband more efficiently - both in lower cost and higher bandwidth. There is still competition - it just shifts to different market boundaries.
Okay, so you could to break down the ISP vertical into companies that only supply service and companies that only do the last-mile infrastructure. It would allow the government to regulate the industry without being involved in the supply side of things.
One other option is to opt for a consumer ownership model where the each home pays for the bit of fiber that connects them to the neighborhood hub or w/e.
I would be happy with either (particularly the first) but politically the chances of something like that, which almost certainly would require legislation -- and would without question require a Sherman act prosecution from a Justice Department with some actual spine -- are approximately nil.
The UK did this with British Telecom (BT). In a word, it sucks. It creates confusion for consumers:
* "I get internet from Twinkle but they say they can't repair my line."
* "I signed up for service with Floyd's Internet but a truck showed up at my house that says Ben's Broadband."
* "Decker offered me fast fiber, but when I called to sign up, they said WestLane only has copper to my home and they aren't allowed to run the fiber."
The names have been changed to protect the guilty, but the experiences are real.
OpenReach (the BT subsidiary operating the line network) has a clear (available on their website) policy for how their engineers should interact with people that includes guidelines for informing ISP-customers about who they are and who they represent (OpenReach and the end-user ISP) and how to deal with customers in a way that represents the ISPs well (the customer of OpenReach is the ISP - they're a service delivery company working on behalf of the ISP, not the end-user).
A few years ago some of this may have been confusing, as customers used to have to deal with BT directly, but now "everyone" knows about BT/OpenReach handling the installation on behalf of a lot (not all) ISPs, and every ISP I've had in the last decade has explained this to me when I signed up, and these days customers do not have to deal directly with BT other than OpenReach engineers. And people are used to outsourced service companies dealing with utilities. E.g. I get power from Npower, and over the years a dozen different companies have done meter readings on their behalf where I live.
As for your "Twinkle" and "Decker" examples, blame your ISPs that have decided to use this as an excuse for their own problems. In the Twinkle example, the ISP is a customer of OpenReach, not you, it is their responsibility to deal with OpenReach, not yours. If they're trying to push OpenReach in front of them, that's their bad customer service.
As for your "Decker" example, it's Decker's fault they've not checked coverage prior to making promises they can't keep. And "aren't allowed to run the fiber" == "we've decided (as most, but not all, UK ISPs) that OpenReach provides a good enough network for us, so we won't make any investment in rolling out our own, sorry". Nothing prevents UK ISPs from trying to build competing networks, other than the capital investments needed, and the low projected rate of return for most of them outside of the most densely populated city cores.
The relative lack of competition for OpenReach is a good demonstration that the market doesn't share your assessment of them. Many are unhappy with them, but not unhappy enough to pay for anything better.
They did it in Sweden too (Telia/Skanova) and I haven't heard any such complaints. Just because something can be poorly implemented doesn't mean it has to be.
Living in the uk all my life and having switched adsl providers pretty much every 12 months for the past 10 years I can honestly say the above is utter nonsense. Yesterday bt wholesale can be a pain sometimes (the company that manages the lines and exchanges) but then they are bt; they've always been awful at this sort of thing. Ever since ISPs have been taking advantage of llu though things are much better, especially if you use a provider who has their gear in the local exchange already.
I still find it strange that the U.S., which is such a bastion of the free market is so anti-free market In regard to internet ISPs.
I think that kind of structural split you mention first could be a nice low-regulation/high effectiveness solution, at least compare to other alternatives. However, I haven't seen any kind of willingness to impose that kind of regulation by agencies for at least the past two or three decades. As a matter of fact past structural regulatory market walls have been getting consistently removed in other industries.
I find it a quite amazing situation. It's a good demonstration that US politicians are not interested in free market competition. In Europe, this structural split was a key part of the de-regulation of the telecoms market.
In the UK alone, OpenReach, the BT subsidiary that inherited the last mile network, counts more than 500 companies as customers that provide telecoms and ISP services to end-users. Many of them are business focused or offer only specific subsets of services, but there are a huge number of nationwide ISPs using OpenReach's services.
Especially because the starting point is very simple: You can start out using their "backhaul" service which lets you integrate with OpenReach a couple of places and be able to offer broadband nationwide in the UK and have OpenReach provide you with IP connections to each customer for you to do whatever you want with. You can then if you want "graduate" to local loop unbundling where you put equipment in local exchanges as/when demand justifies it, allowing you to connect directly to the local loop (line) of each of your subscribers, which allows you to offer services in excess of what OpenReach does (e.g. some ISPs offer higher speeds).
Once you go the LLU route, you can turn around and offer backhaul services yourself if you wish, in competition with OpenReach.
If even that isn't enough, and you have the capital, you can look at laying your own lines. E.g. in some cities we're starting to see alternative fibre connections to many apartment buildings etc. as providers are capitalising on the density to bypass OpenReach.
So it encourages competition massively by creating a very low barrier to entry, while allowing larger providers to compete with OpenReach itself.
Looking at some of the other complaints re: OpenReach, the best setup might be municipal ownership/oversight of the last-mile, but with operations contracted out to private companies. That way you can split the network ops among vendors, or periodically reassess effectiveness of the private companies.
Do other countries also have problems with their roads and bridges being in disrepair? How about their water mains, do they break and wash out streets on a regular basis?
US local governments do not seem to have a good record of maintaining public infrastructure, so why would public internet be any different?
The problem is that you have an asymmetry in resources between e.g. local officials who might want to stand up a fiber network and a company the size of Verizon, who very badly do not want this to happen. You need countervailing size, and in the US only the federal government has it.
The problem of asymmetry of resources exists in all domains that have high sunk costs. To reduce monopolies, using your logic ("you need countervailing size") the government would have to get involved in all of the other industries like shipping, oil refining, TV networks, etc.
Instead, why not change the law (if needed) to prevent monopolies from happening?
Shipping and oil refining are different. If you apply capital to over come the cost barrier of entering those businesses, you can still access customers and potentially put all that capital to work generating profits.
With last-mile internet, if you lay in a redundant competitive network in a neighborhood - the capital efficiency of both networks goes down, with no mechanism to make that capital work more. You're limited to the houses in the neighborhood. So in that case you have high cost barriers, and natural monopoly conditions limiting how well that capital can be used to generate return...
If all the gas stations in an area are owned by Exxon & priced too high, the customer drives their car elsewhere. There is a very, very high capital barrier to entering the market, but customers still hold choice.
You can probably observe some region-locking effects short of monopoly by relate the cost of gas in come areas with ability to choose alternatives. e.g. Driving in the middle of nowhere, there are few gas stations and the cost of gas is high. Redundant stations aren't built in competition to one another along those stretches because the volume of traffic isn't high enough along the 'network' of the road, but within the range of the typical car, some will drive on and others will be forced the stop. So even that isn't as airtight a natural monopoly as last-mile internet.
The government already does, for regional monopolies (power, water, sewer, transportation, etc.)
The problem isn't that the government should prop-up start ups in this specific industry to prevent a monopoly, but that the government should embrace communications as a regional monopoly - i.e. own the utility infrastructure and reduce costs for the entire economy.
Obviously they can't nationalize the current companies, but they can start building public infrastructure.
Because some markets will tend towards consolidation ,especially things involving networks, because the economies of scale are so important to costs. So , left to their own devices, the unregulated market would always tend to a monopoly.
Friendly reminder to people of HN. Please don't downvote to disagree. Is your objective to discourage dissenting opinion? Seriously? That's not healthy for a community.
Isn't there Sherman act already? Why can't it be applied to ISPs? I.e. there are existing laws which can put an end to anticompetitive behavior of ISPs, but no one applies them. So why would adding more laws improve anything?
Well anti-trust law are mostly applied on case by case basis. I believe the un-official term for judging is "workable competition". I don't know whether the ISP market passes that definition.
There are also various prohibitions about collusion. And that's a major problem with ISPs, i.e. even if there are several in the area they agree not to compete and hold prices high for example. I never saw anyone applying these laws to ISPs so far. Not sure why that is, may be government is too much in their pocket to actually apply existing law.
> I personally think its rather unfair to ask a for-profit company to compete against a tax funded service.
Those for-profit companies have been granted extremely valuable rights-of-way by the municipal governments without needing to negotiate individually with each and every landowner whose property they cross with their lines. Their networks wouldn't be nearly as valuable if they had to negotiate and potentially (gasp!) share revenue with landowners.
Those for-profit companies have been at it for a while, and it's clear they don't provide acceptable services. Maybe they should have thought about this situation a little earlier? Then none of this would be necessary, nor even considered.
Regardless, this issue is a municipal government's decision-making. If a municipal government doesn't like how their ISPs are acting, they should be able to do something about it. There's no reason for it to be _illegal_, even if it is a bad idea in some places: the local government should be able to do what they think is best for them.
Also, if ISP's have so little trouble making obscene profits, there should be little risk of the government failing to do the same.
Maybe private companies shouldn't run the physical infrastructure - maybe it should be a public utility. In today's society, you need gas, electric, water and internet (which has replaced phone).
We can have for-profit companies in those industries, sure, but if the taxpayer is footing the bill for some of the research, then some of the fruits of that research ought to go back to the taxpayer.
