Another strategy to this (not exclusive of other strategies) is to encourage municipal ISPs, or even go further and roll out federal ISP infrastructure ala the federal highway system.
I've always thought that this would be well within the rubric of the USPS. The constitutional mandate for a postal service was drafted at a time when the internet could not have been conceived of. I would argue that the intent of the constitutional mandate was to establish communications and not necessarily paper mail per se. I think if the founders were alive today they would say that ISPs were the sort of thing that was intended. I.e., have the USPS start acting as an ISP, and charging for it like it would mail services.
I'm not saying that private ISPs should go away, just that I'm sick of this government handout to companies that want to have their cake and eat it too. No net neutrality? Fine. But then allow public ISPs--no, actively fund public ISP infrastructure--and allow for unfettered lawsuits against private ISPs for content going over their pipes. Also, take away right of way to private ISPs, and let citizens and municipalities charge arbitrary amounts for anything going over their property.
The next step beyond the mail was the telegraph and then the telephone. Those were built out by private companies, but operated under a regulatory regime called "common carrier," which protected the network owner from liability so long as it charged and carried traffic from all parties equally.
These days, that concept is called "net neutrality" in the context of the Internet, and I suppose you may have heard it mentioned in the news recently once or twice. (I think it was a mistake to rename common carrier, but too late I guess.)
Personally, I think that private buildouts are a better way to go than a government-funded network infrastructure. Private industry is better at investment and product development than the government, and any enterprise that generates a profit contributes to the long-term economic sustainability of innovation. A government-run economy becomes starved for capital and innovation slows way down; that is why the Soviet Union lagged U.S. technology and why Cubans still drive 50-year-old cars.
But privately run networks need regulation to deliver the results that citizens want. Railroads needed it, telephone companies needed it, airlines needed it, and yes, ISPs need it. And if that is thwarted, then sure, let municipalities take a swing at it. My town is looking into muni fiber now, and I'm in favor of it because the local service from Comcast is so bad and so expensive and there seems to be no other way to do something about it.
>The next step beyond the mail was the telegraph and then the telephone. Those were built out by private companies
Yes, and no.
The electric and telephone companies built out the cities and big population centers, but left 50%+ of the nation without service. Much like today's ISP's would like to do.
Some places only got wired because they formed local electric co-ops and what were called "rural telephone" cooperatives.
Even then, it wasn't always enough, and the feds had to add a Universal Service Fee to every phone bill to redirect that money to the big telephone companies so they would serve the entire nation, and not only the most profitable areas.
The idea that the industry should self-fund universal coverage is massively distortionary. If we want everyone to have electricity and broadband (an admirable goal), that's fine. The government should build electricity and broadband to places that don't have it (and I'd posit they should do it in a cost efficient way, e.g. with wireless).
Forcing the places that do have it to subsidize the places that don't have it, however, is incredibly destructive to competition. It prevents smaller entrants, and entrenches incumbents. Those are the only entities that can afford to both operate an infrastructure business and run a money-losing government service on the side. It is, in fact, why we're in this mess to begin with. It was municipalities that granted cable franchise monopolies (before that was made illegal), to ensure universal build-out.
>The government should build electricity and broadband to places that don't have it
Except every time a government tries to do just that, the ISPs sue to stop it. Even if they have no plans to provide the service, themselves. They don't want the precedent.
It's not that they're suing directly, but getting laws passed which block municipal internet. You don't have to sue if you can write the laws. This has happened in 20+ states already.
"An appeals court on Wednesday sided with the telecom industry, and with North Carolina and Tennessee, in a major decision that upheld the ability of states to pass laws that restrict municipalities from offering broadband internet services."
And here's an argument for why they're doing it. It's all about never allowing taxes to be collected to be spent on something that benefits, well, anyone. Basically since government is inherently bad and can't do anything right, it will cost too much money and they won't work and only private companies have the "expertise" to run "an internet":
Note that the majority of states have no such laws, including the largest. Additionally, only a fraction of the state laws impose more the perfunctory barriers to municipal broadband: https://www.google.com/amp/s/motherboard.vice.com/amp/en_us/.... For example, Washington is on that list of 20. But the only requirement there is that municipalities have to be “code cities” (basically, be big enough to use its own municipal laws and codes). Pennsylvania is also included, and there a city only needs to prepare a proposal to its incumbent, which the incumbent has 60 days to accept or reject (in which case the city can go build its own). The Utah law implements exactly the system folks on HN espouse, where the government builds the system but a private company must be the one to sell service directly to consumers.
Putting up these laws as a reason for the limited deployment of municipal broadband is misleading. Most stages have no legal barriers, and for most of the states that do, the barriers aren’t really significant. They don’t explain why New York, LA, San Francisco, Baltimore, Philadelphia, Boston, Seattle, etc., don’t build their own municipal systems.
Aren't those places already some of the best-served in the country? I don't live there, but it was my impression that the biggest cities already had good options, and it was smaller cities and towns that had more trouble with private ISPs. That seemed to be what the earlier commenter was suggesting too.
All taxing and subsidization is distortionary; but some methods are less distortionary than others. Imposing a tax on "everybody" and using it to pay for a public service dampens economic activity, but at least doesn't distort one industry relative to another. Imposing special, industry-specific taxes, however, dampens demand and investment in that industry relative to the rest of the economy.
Take tobacco taxes, for example. We put special taxes on tobacco because we don't want people to smoke, and we want to discourage people from smoking. Taxing tobacco effectively raises prices, which reduces demand. Various governments employ similar taxes to discourage things like soda, sugary foods, etc. This is a well-understood concept: you put extra taxes on things you want to discourage (relative to the rest of the economy).
Paying for rural telecom by putting a special tax on telecom service achieves exactly the same effect. It increases the price of service, reducing demand and reducing investment (relative to the rest of the economy, which does not bear that tax). But in theory, telecom infrastructure is something we want to encourage, not discourage.
It's even worse when you impose a general public obligation on individual service providers. For example, instead of paying for universal healthcare with general tax dollars, you could simply direct hospitals to treat poor people for free. Nobody does that--they pay for the broad public benefit with equally broad public taxes. But we do it for telecom--we tell companies that in order to be allowed to offer any service in a city, they must shoulder the burden of building out infrastructure even to neighborhoods where few people could afford to subscribe (i.e., neighborhoods that can only be served at a loss). That essentially makes it impossible to have a "minimally viable ISP." You can't compete with an incumbent by stealing away customers neighborhood-by-neighborhood. If the government simply let companies build infrastructure where it was profitable, and built subsidized infrastructure itself using general tax dollars where it was not, you could have that sort of competition.
> you could simply direct hospitals to treat poor people for free. Nobody does that
Actually, I believe that's exactly what happens in the US with emergency departments. Although it supports your point about such a practice being distortionary, it also draws attention to the fact of the sheer complexity of all this.
That's mostly what bothers me about seemingly-simple statement or analogies about economics (or, really, economic theorizing in general), that the reality is far more complex and interconnected.
It's not just emergency departments. I worked for a hospital system in Maine. We provided a significant amount of free care (emergency and otherwise) to those with a qualifying income level as part of a state program.
Yes. And when a program's benefits outweigh its costs, it seems weird to say that the program is a damper on economic activity.
In other words, if Option A is "get zero dollars", and Option B is "spend $1 to get $2", it is unfair to complain about B's "cost" (spending $1) in isolation.
The way electricity works is by allowing the electrical company to charge everyone (across their whole network) such that they make a max of 10% (depends on state) above their current amortized expenditure. The idea being, if an electric company wants to make more money, it has to spend more money. And it's fixed how much money they can charge (it's based on total network cost). Think of it as a semi-non-profit, which can only make 10% profit.
So, what it does is constantly relay wires, build out to rural areas, etc. and thereby extend their network and keep it up-to-date (wires only last 30 years anyway). This I think is what we need to companies such as Comcast.
There's decades of precedent on how to do utility regulation, and that is one of the models. (It's called the rate-of-return model.) It was used for telecom for a long time, but has lots of problems. On one hand, it can encourage gold plating (spending money on infrastructure that isn't helpful because there is a guaranteed return on capital investment). On the other hand, political pressure can drive the return rate below the optimal level.
Your post actually highlights the problem. What makes 10% the proper profit margin? BT OpenReach, the U.K.'s regulated infrastructure monopoly, has a profit margin of double that. That number becomes a political football, and the political result probably isn't what most people on HN would want. People are happy with 25 mbps DSL; they're not going to vote to raise Internet rates to drive returns high enough to incentivize investment in replacing everything with fiber. That's exactly what you see in other rate-regulated utilities. People don't vote to replace lead pipes that poison kids, because they would rather have cheaper water rates; they don't vote to replace sewers that leak raw sewage into rivers when it rains, because they'd rather have cheaper sewage fees.
There is no market for sewer service—most everywhere, the government runs the service and sets rates in response to voter pressure. My point is that the same voters who vote to keep lead water pipes and overflowing sewers, because they want to minimize their water and sewer bills, will not vote to deploy cheap fiber everywhere (or not set rates high enough to continue to maintain and upgrade it). For most people, especially the older people who disproportionately vote, a 25 mbps connection is fast enough, and they’d rather have cheaper service than better service.
>A government-run economy becomes starved for capital and innovation slows way down; that is why the Soviet Union lagged U.S. technology and why Cubans still drive 50-year-old-cars.
This assertion of causality is sorely lacking in accuracy. Your examples alone are sufficient for highlighting this.
Being among the most ‘government-run economy’ on earth at the time, the astounding innovation achieved within the Soviet Union is the most glaring contradiction. Cuba is just an awful case study subject, due to so many drastic incongruencies, but let’s remember technological innovation has been fairly low on Cuba’s priority list. If it weren’t their access to the world’s selection of material and media resources would have likely remained open. And this access was very obviously the reason they are driving old cars. Those are just two factors I will assert are far more useful in this sort of prediction.
While of course the correlation is circumstantially critical to varying degrees, many other measurements are better predictors of rich innovation environments.
The even shittier thing is, assuming your muni get the efforts going, it's not uncommon for comcast to all of a sudden have a competing product at a cheaper rate. Where the didn't have bandwidth they suddenly can support the increased rates due to competition. It's just nuts.
>Those were built out by private companies, but operated under a regulatory regime called "common carrier,"
No. "Common Carrier" classification under Title II of the Communications act of 1934 comes more than 30 years after the introduction of the telephone, much longer than the telegraph. More than that, it could be argued that that, along with the Kingsbury Commitment were the contributions that led to an AT&T incumbency in the first place.
"Common Carrier" classification under Title II of the Communications act of 1934 is just one implementation of the legal concept of common carrier, which dates back to transportation systems in England. (warning: simplified)
No issue with what you're saying here. The primary point I wanted to emphasize was that our application of regulations to the telephone system is not in line with whom I was replying to said, that there was around a 30-40 year gap.
It's open for discussion whether government is better at providing essential services like healthcare, water, fire, police, electricity, and internet. I assert that it is, but I respect different views.
Right. What it really boils down to is a private entity more efficient at delivering a service than the 10% or so profit margin it requires to operate. The more profit margin a company requires, the more efficient over a government implementation it needs to be; so if a company requires a 20% margin, it needs to be 20% more efficient to break even with a government run entity of the same nature.
There are other aspects such as a company can't run without a profit and proper cash flow for nearly as long as a government entity can, because the government entity is subsidized. Also a government entity is much more susceptible to political winds (budget cuts) than a private entity may be.
There's also the aspect that a government-run program can be subsidized so that those who can't afford it can still use it.
Private entities are far less likely to provide that on their own. And when government starts subsidizing business or giving tax cuts for behavior, then things get wonky, too. Like when the company pockets the money, and doesn't provide the service. Like what happened with broadband:
I think your point is generally spot on, but I wanted to nitpick at this one:
> airlines needed it
No, they didn't. Regulation of fares, routes and market entry of new airlines kept prices artificially high until airlines were deregulated in the late 70s. Quoting from Wikipedia (https://en.wikipedia.org/wiki/Airline_Deregulation_Act#Effec...):
"A 1996 Government Accountability Office report found that the average fare per passenger mile was about nine percent lower in 1994 than in 1979. Between 1976 and 1990 the paid fare had declined approximately thirty percent in inflation-adjusted terms. Passenger loads have risen, partly because airlines can now transfer larger aircraft to longer, busier routes and replace them with smaller ones on shorter, lower-traffic routes."
If you push the fare comparison back to 1972, before the Arab Oil Embargo, rather than 1979, the heart of the Iranian embargo, the fare picture changes markedly.
A jet airliner's takeoff weight is over 50% fuel.
Robert Gorden inThe Rise and Fall of American Growth:
surprisingly, the period of most rapid decline in the real price of air travel occurred before the first flight of a jet plane. As shown in figure 11–10, the price of air travel relative to other goods and services declined rapidly from 1940 to 1960, declined at a slower rate from 1960 to 1980, and has experienced no decline at all in its relative price between 1980 and 2014. The growth rate of passenger miles traveled has mirrored the rate of change of the relative price except with the opposite sign, because lower prices stimulate the demand for any good or service.
The accompanying figure shows not merely a modest rise, but a sharp spike in airline pirces in 1979.
I'd disagree. Government is much more efficient at funding capital projects. Public companies are largely incapable of sustaining them at scale.
The Bell System was built through implicit subsidy of capital expenses, by the allowance of monopoly, favorable tax treatments of convertible bonds, and a regulatory regime that locked in profit.
When it comes to core infrastructure, government run is better than state run. The government is incentivized to provide service and pricing that maximizes the public good while a private company has to maximize its own profit.
You could strictly regulate to fix this but eventually you end up with a funny pseudo government agency which has to fund itself. As I understand it (not American) this is what the Bell system ended up becoming.
I think a combination of the 2 is warranted. I'd hate to see it entirely controlled by the government because they tend to be more likely to install backdoors while private companies would push back to protect their users.
With 5G networks I would think there is a lot less digging up streets so municipal plans are more feasible.
Cubans drive 50 year old cars because their closest neighbor, who is also a superpower, has been enforcing sanctions on them for decades. It's disenguous to try and measure how a system works then another party is putting their foot on the scale.
As for private buildouts being better than government funded infrastructure, that is only true as long as profit is your single measure of "better".
When it comes to services that we don't want any downtime for and want everyone to have access to, then government funded infrastructure has done better than capitalist forces. Water and electricity are both services we want everyone to have access to that as uninterrupted as possible. It's still not perfect as situations like Flint or industrial water usage in California pulling out water without paying enough to be sustsinable, but a capitalist system for those services would lead to many not being able to pay enough for access and going without as well as interruptions in service as companies push their systems to the bone for efficiency or go out of business
>> Cubans drive 50 year old cars because their closest neighbor, who is also a superpower, has been enforcing sanctions on them for decades. It's disenguous to try and measure how a system works then another party is putting their foot on the scale.
There are a myriad of reasons for the embargo on Cuba. Let's not sugar coat this fact just to use it as an example of "American imperialism".
The reason they drive classic cars has nothing to do with the embargo:
After Fidel Castro assumed power in 1959, he imposed a new law that prevented anyone without government permission from importing foreign automobiles. That turned Cuba into a car museum in the making, sealing the island off from the automotive future.
You should also keep in mind it was possible to get a new car imported, but you needed government permission to do so. This meant only the rich, celebrities and professional athletes were allowed to do so, keeping the majority of the population fending for themselves to keep their old decaying cars alive and working.
Yeah. I think markets are amazing when you have the right conditions such that you get plenty of sellers, plenty of buyers, and switching vendors is easy.
But the US market mostly doesn't have plenty of sellers. You really want at least 3 to get good competition, and that's very rare:
My first choice is strong competition, and I live in one of the few US areas that have that. It's great! I have a gigabit both ways for less than my mobile bill. But my clear second choice is locally owned municipal broadband that can be held accountable by the people.
My very last choice is a local monopoly owned by a giant national corporation, because then we get the the worst features of communism (incompetence, poor service, abysmal customer support) and the worst features of capitalism (high prices, exploitative behavior, use of profits to buy legislation).
The question is not what is best, but how much competition do you need to beat a government-run service? Here in D.C., with Uber/Lyft versus Metro, that number is just two. Indeed, even a giant national monopoly is probably better than your typical government service. Even Windows 95 was better than most of the public services in D.C.
Depends on the government, I suppose. And your criteria for comparison.
Broadband in particular is very infrastructure-ish. It's much more like a water utility or traffic lights than a service business like on-demand personal drivers. Many governments run infrastructure quite well.
I've lived in several major cities: Baltimore, D.C., New York, Philadelphia, Atlanta, and Chicago. Out of those, I might trust Chicago to run municipal broadband. For the others, I'd pick Comcast any day of the week.
Ok. I've lived in Grand Rapids, Chicago, Sydney, London, and San Francisco. I'd trust all of them except maybe Chicago. People have different opinions and different experiences.
You’d trust the people who run BART and CalTrain with your broadband? BART’s on time performance is 87% arriving within 5 minutes of schedule for all trains. In a place that basically has no weather. In Chicago, 83% of trains arrive within a minute of schedule during rush periods.
Neither BART nor Caltrain is run by the city of San Francisco. And I think broadband is much easier to run than an overloaded, underfunded transport system.
If you're going to keep setting up straw men, could you make them more relevant? Thanks.
Not that I disagree with your premise, but as someone who's never livd in America's most corrupt city, what is it about Chicago that inspires so much confidence with regard to municipal broadband?
Midwestern sensibility? DC Metro defines “on time” during the am rush as headway + 2 minutes, so a train can be 10 minutes late and still “on time.” Even then it hits only 87%. In Chicago, 83% of L trains arrive within a minute of schedule. And Chicago is dealing with a hundred year old system and tons of snow, while DC’s system dates to the 1970s and the climate is mild.
Like I said, I know very little about the region. While I certainly laud WMATA for upgrading the cars, I definitely agree that service quality is declining enough that if I need to be in DC for something promptly, I'll usually leave 30 minutes early, and then wonder why I didn't just drive in the first place.
A better approach might be a government managed last mile (i.e. cable from a central data center to your home/business), but not the ISP itself.
That way ISPs can continue to compete for your business, but the market would be significantly less restrictive because the ISP only needs physical equipment at the data center and upstream of it.
The biggest thing stopping ISP competition today is that local markets don't want the road dug up ten times to lay different cables. So instead lay them a single time, and re-sell access.
The ISPs would pay a fee to use the government cables from the data center to the end user (and equipment). That fee would be used to expand and maintain the network.
Other countries have done this with huge success. It wouldn't even put ISPs out of business, they can use this network just like their competitors.
I tried reading this in Wiki and it wasn't very clear. Are the last mile fibre? Do government owns it or are they like infrastructure owned by companies like electricity and water where there are requirement for them to open up? Do ISP only manage the fibre connection from Node / Curb? Who owns this Node / Curb?
Are there any single major companies that owns the backbone? And Submarine cables?
Most of the last mile is copper, because population density is thin. But in the cities fibre is being rolled out (goal is 87% by 2022).
Crown Fibre Holdings owns the new fibre network (I think Chorus owns all the copper, not sure) but Chorus manages most of it (by contract); Chorus is a crown partner company, and they are regulated and forbidden from certain activities - they were split off from Telecom, a private company.
I don't know enough about the backbone to usefully comment, except that there are at least 3 fibre networks running along the major road I live near.
For a long time there was only one submarine cable with any serious bandwidth (Southern Cross Cable), but aparently according to Wikipedia a new one to AUS was rolled out in March 2017 and another one to Hawaii this month.
Seems the logical way to go, but Provo, UT tried that and it became so politically toxic that the city wound up giving the network away to Google and swallowing the debt.
If you look at EPB being forced to pull out of neighboring areas and the actions of other states to prevent muni / utility Internet projects, it's pretty clear that America doesn't want to solve the last mile problem unless it involves preserving the incumbent's market position.
Perhaps. I'd prefer it not to--I'd rather have an ecosystem with private and public competition, and one with net neutrality regulation. But it seems to me the discussion is generally really lopsided, with little to no acknowledgment of what ISPs get from the public. If the ISPs really want unfettered competition, then I say fine--but I think, as you say, if we really took competition seriously the consequences would be far more dire for them than I think people realize. The problem is the scope of what real competition would entail is often obscured, because what they get from the public is just sort of assumed to be a given and off the table.
Private public doesnt work, its even worse then a market economy. Only public providers will bring internet to people further and further away from main cities, while private companies will focus on the densest areas of the biggest cities.
We have all of that in Germany already. It doesnt work, laying fiberglass or even copper outside of major cities is just not a reasonable thing to do in a market economy. Same as its not worth while to send a postmen every day, or even every week, to a small village. This is something that needs to be financed through a shared burden, otherwise you have the situation, that large part of your country dont have DSL yet. With private companies siphoning of easily provided customers, the public is stuck with a gigantic burden to provide the absolut minimum to people.
Agreed, we do give a lot to private companies in order to get the benefits of their products, and they're constantly pushing for more. I just feel that the internet as a utility is still too new for us to know exactly what the right regulator regime is or the optimal role of government in actually providing internet services.
Ideally regulation would be more reactive than proactive. Rather than defining explicitly the terms and services that ISPs must provide, we'd let them compete with each other and try different products and business models. The government would only step in when they do something that turns out to be harmful. The trick would be to actually step in where needed and not just let anything go.
This could be done even at a block association level with 5G/wifi or maybe even 4G.
4G/5G/Wifi is critical to undermining the incumbent ISPs. Urban and heavy to medium suburban rollout could be rapid.
Perhaps google should buy T-Mobile to get access to cell towers as a start... take the licenses from Nextel/Sprint for ISP-level data delivery, and keep T-Mobile for regular coverage.
Of course, I haven't tracked the status of T-Mobile / Nextel / Sprint's spectrum rights in a long time.
But google or a consortium could provide turnkey solutions to doing block / neighborhood / community / village / city wireless ISP that actually works.
And provide the legal backing when the prolific army of telecom lawyers come knocking to shake down smaller operations.
Or balloons. Weren't there supposed to be balloons?
I'm not sure if Google wants to get in on that game. They might now that net neutrality is a thing of the past. From what I understand their few entries into spectrum bidding were mostly to get the incumbents to up their bids.
This (1) would not happen; (2) would be awful. Utilities and infrastructure are state and local issues. The states and cities that would build public broadband infrastructure are in dire financial straits and can't afford it. You invoke "government handouts," but for decades the government has been loathe to get into the business of building broadband. All the "handouts" you hear about are intra-industry transfer payments: a special tax is levied on telecom service in urban areas to subsidize telecom service in rural areas. It doesn't cost the government anything, it just moves money from mostly urban ISPs to mostly rural ISPs.
Even if there was the money for it, you wouldn't want it. Public Internet in the U.S. does not look like "fiber for everyone." Instead, it would be 25 mbps DSL for everyone. It would be that way for the same reason we build six-lane highways to far-flung exurbs while public transit in urban areas decays, and why we continue to use lead-piped water systems in order to keep water rates extremely low. Our political situation tilts things heavily toward favoring coverage over quality.
Over the last 10 years, my private-sector broadband speeds have gotten 10 times faster, even as bandwidth usage exploded. But my public-sector subway ride has gotten slower (and more jerky when they turned off automation), even as ridership went down. It seems absolutely insane to me that anyone would want to put the people responsible for the latter in charge of the former.
> I would argue that the intent of the constitutional mandate was to establish communications and not necessarily paper mail per se.
A minor point, but if the federal government wanted to run an ISP (inside or outside of the USPS), they don't need anything new in the constitution to do it.
If the Interstate Commerce Clause can be used as justification to create the departments of Agriculture, Education, Energy, Health/Human Services, Housing/Urban Development, Labor, and Transportation [1] as well as the FBI and just about everything else, I can see no reason why it couldn't be used to create a national ISP.
As to whether it would be a good idea, I don't have a strong opinion.
1. Some might argue the Department of Transporation is justified under article I, section 8, paragraph 7 (not paragraph 3), though I don't think either theory has ever been tested
* I'm sick of this government handout to companies that want to have their cake and eat it too*
So you're advocating a federal subsidy so Google (4x the market cap of AT&T) and Netflix don't have to deal with the problem themselves? It is like fighting corporate welfare for big companies with even bigger corporate welfare for even bigger corporations.
This the end of innovation in online videos: "When companies like Netflix, which today closed with a market cap of almost $158 billion, can’t necessarily get enough negotiating power to ensure that consumers have direct access to them, no startup can ever hope to compete. America may believe in its entrepreneurs, but its competition laws have done nothing to keep the terrain open for them. Those implications are just beginning."
Sounds like this is the end of TV and Online video watching as we know it. Oh well, time to start reading books again ~ they'll never be able to take that from us.
I just fail to see how Comcast or Verizon are going to be selling you their internet connection if you won't be able to connect to the things you want to connect to (like Netflix, iTunes, YouTube) through them. Especially on higher plans, people buy a lot of bandwidth so that they can stream videos, that's how ISPs up-sell to them. If they start throttling, they'll be selling an empty bucket, and it's not going to be very easy.
To me it seems like this might just revive competition between ISPs, by separating those who do the shady things and those who don't.
I'm curious how this is going to play out, it may not be all bad.
Exclusive franchise agreements are illegal for eg cable. They have been illegal for a quarter of a century.
You'll find that nearly all examples commonly presented of the lack of competition, are not due to market lock-out, it's due to the high cost and time required to gain approval to build in a given town or city. The combined cost, with pre-existing competition entrenched, is a very large disincentive. Google Fiber didn't grind to a halt on their build-out because they couldn't legally access markets, it's because it's painfully expensive and very slow.
There are three solutions to the problem: new technology that bypasses (low earth orbit satellite, wireless); lower the total cost to enter markets and compete; mandate shared access to existing infrastructure (and ideally simultaneously lower the other market entry costs).
Upton Sinclair's "It is difficult to get a man to understand something, when his salary depends upon his not understanding it" seems relevant here.
It's illegal, but it's also murkey enough that it can be made effectively exclusive through permitting delays, etc.
If the incentives were flipped (say, a federal road fund multiplier that scaled with average speed * number of options), I feel like we'd have a lot more competition.
As is, in the contracts I've read, they're essentially "ISP gets a non-exclusive franchise right in exchange for paying local government x% of their fees from the area, and both parties agree that the portion rebated to the local government may not be separately itemized on the bill."
Which sets up some pretty perverse incentives for most part-time commissioners.
Normally when infrastructure is expensive to deploy and wasteful to duplicate like this we turn it into a utility (Water, Electric, Sewer, Roads, Telephone, etc...).
Through insane amounts of regulatory capture. You could hardly hope to get government under greater private control with an overwhelming military coup.
We've gone far beyond reducing regulation to ensure that innovation is possible--we've restructured regulation to ensure that doing business is practical only for the major industry players who now write our legislation.
This does not include wireless broadband options. Could the competitive situation be better? Absolutely. But it is, in fact, the "norm" to have a choice.
That means nearly half have a single (or no) option. Further, for many who have two choices, the decision is between not-actually-very-Fast DSL or a single cable provider.
In Mountain View I had only shitty DSL or shitty cable. Both sucked and cable was very expensive. (This may be different now. My experience was 8 or so years ago.)
I happen to be lucky to have actual high speed Comcast now, with an option for FTTH from Centurylink, plus DSL. Most people’s options are not so good.
The FCC definition of broadband is 25mbps, not 8mbps.
There was a proposal to roll that back, however it didn't succeed.
You'll find that companies like Verizon do not call their slow DSL services "broadband." In Verizon's case they say: "High Speed Internet (DSL) service."
You'll see they can't call their actual service broadband if it's not up at 25mbps. Instead they throw the "broadband" term around on other things on the page, such as "broadband routers" and they call themselves a "broadband provider" (referring to their FiOS offering).
My two choices are Comcast or shitty DSL. And, the DSL isn't actually "competition" in any conceivable way. It's like saying that the gas station is competition to a super market for food.
My two choices are my rural-telepohone co-op - or satellite. I'm not complaining b/c my ISP seems fine, but there isn't anyone else to run to if I'm unhappy. I don't consider satellite an option.
If we count satellite, doesn't everyone in the US have "access" to broadband?
The study limited to 100 MBPS. It should have included more tiers like 200, 300, 500, and 1000 to provide a better picture. Once you go past 100 MBPS, there tends to be only one widely available choice per region. This choice is either Comcast or Verizon.
I live in a city with multiple providers. Some lucky ones even have choice of FIOS, along with fast cable from two providers and slower DSL.
It doesn't matter for cord-cutters and people like me, who just want to pay for a $30 / month 100 Mbit internet connection without TV, cable, wireless data, HBO, etc. I've lived in several countries outside the US (including 'developing' ones, and this seems possible everywhere but N. America).
None of the providers will sell a $30 / month vanilla internet connection. Either you can get the absurd $20 / month 1Mb down (which they were required to provide for low-income families) or the next higher speed includes Cable, premium channels, rental boxes, etc. You aren't getting out of it without paying $60 / month which ends up being $70 after all the taxes and fees, increasing to $75 next year, etc.
We live in a place that supposedly has multiple wired providers. However, if you want more than about a megabyte a second, your "choice" is comcast. DSL exists but is maybe 20x phone line modem speed.
But we have a "choice" of providers, so we're competitive! This is in sfbay peninsula.
Is a choice between two providers a meaningful enough number for spontaneous commercial differentiation and competition to produce access which provides good value for consumers, and a level playing field for online competition?
That chain of causality is the argument for the benefits of deregulated market-based competition.
I'm not sure the linked report provides much evidence of that. Especially in the context of streaming video, the proportion of households that have 3+ providers for a 25mbps connections appears to be less than 20%. Excluding wireless connections (expensive and unreliable) that number appears to be less than 10%.
Yep after moving from MI to NoVA the contrast is night and day my house has both Verizon FIOS and Comcast 2 Gigabit options available and a bunch of smaller providers.
It's infeasible when there's enough political money from the nationwide ISPs to make installing a new network prohibitively expensive.
Comcast, ATT, and Spectrum's ceiling of profit is the difference between the cost of delivering services and the potential cost of installing a competitive network.
And it's far easier to increase the latter than innovate and decrease the former.
What smaller competition will be capable of laying copper or fiber to its constituents? Even cities are, in many cases, rendered incapable of providing competition.
And, for the record, wireless is not a viable competition for copper, let alone fiber. The available bandwidth by the most cutting-edge offerings is too low and latency is too high.
the hypothetical here is that Comca$t is going to artificially throttle Netflix and give you mandatory free (paid) access to their own streaming platform.
all a WISP has to do to compete is offer more bandwidth than the throttle allows with no bandwidth shaping at a competitive price.
If all that the internet was was streaming video, sure. It's not, though.
The WISP also has to be resilient against Comcast removing the cap at a lower price (at least until the WISP folds). And against being bought out by Comcast. And against Comcast's lawyers and lobbyists (the wireless spectrum being a government controlled and finite resource).
you make it sound like competing with comcast is impossible. it might be difficult, yes, but if you have less-than-shit policies in your state/muni lots of options tend to pop up.
i live in Utah, and i have several ISP options pretty much anywhere along the Wasatch Front, including fiber and wireless. i can't speak for anywhere else, but its not like its impossible.
They could first start small – municipalities, LANs, HOA-based WANs, consolidating slowly. It's like you're saying that no ISP progress will ever be made if someone is not using existing AT&T networks.
I don't want gigabit access to youtube and netflix. I want gigabit access to the services that don't exist yet because you can't build them until lots of people have gigabit access. If the only ISPs in America are the ones who only offer gigabit access to youtube and netflix, then I better start learning Korean[0], because those hypothetical services will not be built in America.
0: "It is important to note that 100 Mbit/s services are the average standard in urban South Korean homes and the country is rapidly rolling out 1Gbit/s connections or 1,000 Mbit/s, at $20 per month" https://en.wikipedia.org/wiki/Internet_in_South_Korea
Here's some possible scenarios that illustrate what could play out:
- They could zero-rate their own offerings, making them available at a very low price and not counting them against data usage.
- They could offer no-cost access to some of their own offerings with a compatible, captive piece of equipment (e.g. handset, modem, cable box).
- They could charge third-parties more per unit of data for interconnect, creating financial pressure on them that makes third-parties consider no longer interconnecting with that provider. This will make customers choose between having that particular ISP or having access to that particular content provider. Some portion will choose to stay with the ISP, likely cancelling any ongoing subscriptions to the content provider.
They can also make partnerships to zero rate or accelerate partners, netflix pays a little more than hulu and now it costs to watch hulu but not netflix. So now you're picking winners based on who already has money.
>> I just fail to see how Comcast or Verizon are going to be selling you their internet connection if you won't be able to connect to the things you want to connect to (like Netflix, iTunes, YouTube) through them.
It will be more subtle than that. They will have some seemingly high limit with all sorts of exceptions in fine print. It will be like your typical Verizon plan where you sign up for a $50/mo plan and magically get a bill for $112/mo and all sorts of exceptions, nuances, and backstabbing legalese.
> It will be like your typical Verizon plan where you sign up for a $50/mo plan and magically get a bill for $112/mo and all sorts of exceptions, nuances, and backstabbing legalese.
Do you have more than just a flippant accusation about this? I ask because I have a verizon plan that somehow includes no backstabbing or exceptions, and I consisitently pay what I'd expect to.
I can't even buy internet in my city (with 2-3 competing ISPs) without having to bundle cable. It's cheaper to get the internet / cable bundle because they want to up-sell on-demand videos, HD, recorder box rentals, etc. which is only possible with a cable TV bundle.
Comcast and friends are not going to let the cord-cutters get away with $30/month 100Mb down sans media, as is possible in the rest of the world, it seems.
The only way I will believe that we haven't been fleeced by the FCC / end of net neutrality is if there are more choices in the end: If I can get a $30 / month 100Mb standard internet connection without any media content, while those who binge watch Netflix, Prime, Youtube, sports, etc. have to pay more for the massive bandwidth and distribution costs of all that consumable media, I'd be willing to concede that maybe the FCC was right.
But I'm guessing that this won't happen: I'll still be paying high prices even though I don't want all the media content, and those who do will end up paying even more.
This type of comment implies you think the world is static. I'm not saying that this good, but what makes you so sure market and social forces won't produce a better model?
To me this is just a temporary setback, and a reminder why we need to focus on developing new technologies, like a "truly decentralized internet", blockchain, cryptography, and more.
It almost feels like a the death throws of a monster that will do a lot of damage is it goes down, but will ultimately be overthrown by the better forces in the world.
Edit:
"Truly decentralized internet" is a loaded phrase, so I'll expand a bit. The fact that we see small companies and municipalities beginning to develop their own ISPs is a positive trend in the right direction.
Mesh networking has the potential to happen. Most WiFi chipsets in theory support short range mesh, and the gear from Ubiquity and others, not to mention SDR also have this potential. In fact, I'd hypothesis that the basebands in most cell phones have the hardware capability to participate in mesh typologies. The right software could enable some very interesting things. I could be totally wrong here about the HW capabilities. Anyone care to chime in?
Layer proper digital identities, and something like TOR as a first class citizen, and you start to get a pretty nice picture.
None of those technologies matter when your access to them is blocked.
When it comes to access, you have copper, fiber, and radio. The latter is not really competitive to the first two, both of which require significant up-front investments with no promise of revenue to pay those investments back.
Remember Google Fiber? Where's that now? Shut down with a marketing-speak comment that says "its purpose was fulfilled."
> Remember Google Fiber? Where's that now? Shut down with a marketing-speak comment that says "its purpose was fulfilled."
Is this true? They just started offering services in my city a few months ago. I can't get it yet, but it seems like they're expanding at least in some locales.
Moving away from Google Fiber is starting to look like one of the worst decisions Google has ever made. Time will tell exactly how rough it gets for them without a competitive ISP infrastructure in place.
They might not be expanding, but I wouldn't call it shut down. I have an active account and they're providing my internet service in KC. This was set up this past February.
I was going to reply with some cynical remark about how the hole we are digging is deeper now than ever, and would take radical changes to climb out of, but I really like your positive spin on this. I'll try to consider it from that perspective moving forward.
Remember, we're not meaningfully in a hole "deeper than ever", because there isn't an "ever". As much as it may feel like the Internet has been around forever, this is all new ground, for everybody, and surprises may yet be around the corner. I guarantee you in 2018 that the "FANG" acronym will be out of date. I don't know which of them may or may not be in there, and I don't know who may get added, but the landscape will be different.
> This type of comment implies you think the world is static. I'm not saying that this good, but what makes you so sure market and social forces won't produce a better model?
They already are: multiple low or modest cost, high speed satellite providers are targeting the US market for deployment in the next four or five years.
The dumber Comcast and AT&T are about the situation, the more money SpaceX is going to make on Starlink. Amusingly, Comcast is probably going to help get us to Mars.
Regardless of the rampant cynicism about competition (plenty of which is warranted), the low earth orbit competition is coming fast. Nothing can stop it at this point.
> They already are: multiple low or modest cost, high speed satellite providers are targeting the US market for deployment in the next four or five years.
Hoping satellite will solve your bandwidth problems is wishful thinking of the worst sort. There simply isn't enough spectrum, and thus bandwidth, to go around.
So your premise is multiple companies, with ultimately a decade of preparation, regulatory effort, and build-out, are set to spend billions of dollars on a non-market. All because they just didn't understand physics can't be beat.
Oh sure, amazon_not, I'll take your word for it. Since when does SpaceX know what they're doing.
I'm not saying there won't be A market. I'm saying there won't be THE market you are hoping for.
Satellite has it's uses, but replacing terrestrial broadband networks isn't one. The satellite industry is littered with roadkill, bankruptcies and wasted billions. It's not the first time somebody would be wrong.
Is it? Startups manage to continue to exist on the Google Play Store and on the iOS App Store, even though Apple and Google directly compete with many of their offerings. Consumers basically have just two choices for mobile platform, but somehow that's enough competition to keep the kind of behavior you talk about in check.
Difference is mobile platforms, as their name implies, are not geographically locked. There aren't android or apple only counties, there are however Comcast or Spectrum only counties. This means the cost of switching is too high to really be considered in competition.
More than half of households have two or more broadband providers at 25 mbps+; with 5G, the typical household is going to have 2-4 such providers. Two providers isn't a highly competitive market, but it's the same level of competition as exists for mobile platforms, and that seems to work fine.
Only if you exclude wireless options, which is becoming an ever-less rational thing to do. (15% of households making over $100k/year have ditched wired broadband in favor of wireless, and that number is growing rapidly.)
Also, the question is which households have options? I strongly suspect its the households in wealthier metro areas and suburbs. Competition for households that are the largest sources of potential revenue is going to drive the market. It's exactly like mobile devices--a huge fraction of the market has just one choice of smart phone platform (Android), because Apple doesn't sell cheap phones. But competition between Android and iOS in the mid-range and high-end drive the behavior of the market.
> Only if you exclude wireless options, which is becoming an ever-less rational thing to do.
Maybe some day wireless will become a meaningful substitute for wireline broadband, but that day is not here yet. Thus it's very much the rational thing to do to exclude it.
All books are now sold with a small display attached that gives you a URL. The book is magnetically sealed until you take out your phone, navigate to that URL, and watch an ad.
Sometimes a market cap of $158 billion causes everyone to want to get a share of the pie.
In other words, if Netflix was not so successful and making so much money, the pipelines would not be so interested in squeezing a dime from that sector.
yeah. yet, the consumer side demand for such content is well established now.
i can't help but wonder what kinds of workarounds consumers will invent (against all regulations and attempts to defeat them) to pass that content around.
consumers might embrace Netflix's old-school disk-mailing tactics. or maybe Netflix will re-embrace that.
or some sort of illegal low power local extended WiFi networks?
actually that's interesting. DVDs may make a comeback.
A whole new industry may open up: Taking previously online content (like YouTube videos, perhaps a set of related ones) and compiling them into DVDs that you can binge watch.
Ace Stream works really well for watching live broadcasts.
On demand video would be more difficult though since not everyone is watching the same content at the same time.
I'm not sure. I believe it's pretty good but I've only ever used it to watch Formula 1 streams (since F1TV most likely won't be available in my country until next year).
Unless you compare the latency to a live broadcast, you'll never know how bad the latency is.
Most P2P systems are terrible, which makes them pretty useless since you can hear who scored from your neighbor seconds or even minutes before you see it.
Is there any chance that Comcast will stop carrying Google ads? That has to be some quantity of traffic - a few dozen kb on every page load in every browser and app on every network connection. For a 100 kb ad to show 100 times on 5 devices at 100 houses is 500 gb
Since I work for a startup ISP I am praying that AT&T will be dumb enough to prioritize their content over others.
You're going to make TNT fast and Netflix slow? You've got to be kidding. The amazing PR team at Netflix will be all over this and users will revolt. It will open up opportunities for the small guys to compete.
By all means big ISPs, please cripple a huge part of your service that is very important to your customers. I'll be rich in no time (and my customers will be happy).
What we really need is preventing existing ISPs from having a regional monopoly. In order to do that, the congress has to change the law so the ISPs have to share the cables they own in a building like phone lines, or someone has to make a technological break through that solves the last mile problem. Also, this is a US specific problem that doesn't exist in places like S.Korea or Japan.
Lobbying the government to restore net neutrality is far cheaper than building out an ISP.
Also, 5G is coming by the end of this year with at least two providers (Verizon and T-Mobile) and once that happens, ATT and Comcast won't have as much stranglehold on the ISP market, so NN may not matter anymore.
I don't see how 5G changes anything. Wireless providers were exempt from net neutrality even when it was in force and have a long history of tiered usage and throttling.
Having wireless providers who are able to provide landline-level speeds means that many markets will go from having one or maybe two real ISP options to having three or four. Competition means that if the benefits of net neutrality are desirable, customers will prefer an ISP (wireless or otherwise) that provides those benefits.
Of course, most actual counterexamples to net neutrality are seen as positives (free Netflix or Hulu with usage not counted towards a data cap) rather than negatives, so it might not work out.
I really don't get why people think this is possible. Even with microcells and loads of spectrum, you might be able to get 2gigabit/sec of internet per cell, which would be enough for perhaps a couple hundred streams (not including all the other internet services people require all the time).
Considering most cells right now serve thousands if not tens of thousands of devices, there is simply no way that wireless broadband will ever be able to service that, unless you have hundreds of femtocells, but at that point you might as well just deliver fibre to the home as you'll be a few metres from the premises.
5G really changes nothing of this. Shannon's law dictates this and we are close to topping out on it in terms of radio efficiency.
5G changes things dramatically. 5G deployment will be heavily focused on small cells. That means you can go to higher frequencies, because you don't care as much about propagation, and you've got much more bandwidth available at higher frequencies. So cell size goes down, users per cell goes down, and bandwidth per cell goes up.
That still ends up being massively cheaper than FTTP. Getting fiber into peoples' houses is an incredibly labor-intensive and high-touch process. I just had fiber installed at my house. It took half a day to run fiber down the main road about 1/3 of a mile to my subdivision. Another half day to run it 200 feet down my residential road. Almost a full day to dig under my driveway into my house. And a solid half day to install the CPE. With small cells, you'd basically only have to do the first step. You could've installed a small cell serving hundreds of people in the time it took to retrofit just my house.
5G might end up cheaper than FTTP, but I wouldn't get my hopes up on it being massively cheaper.
Higher frequencies will require either line of sight or very short distances to the small cell. The small cells themselves will incur costs both CAPEX and OPEX.
Basically the only part 5G will replace in a FTTP network is the drop. And that's where the density and the topography is cooperating. Whereas if you install a fiber drop, you'll be set for 20+ years and you won't have to install, maintain and power a small cell forever.
You’re not just getting rid of the drop, but also the last 100 meters or so through the subdivision. Moreover, the drop and CPE install is 30-40% of the cost of deployment.
Also, fiber is not fire and forget. Just the other day a tree took out the cable to my house. Buried cable has less maintenance, but also much higher initial costs, increasing the cost advantage of wireless for the last 200m.
Like I wrote in the grandparent, it's a density thing. How many subscribers have line of sight (or close enough) for the 5G small cell to work? At some point it's going to be more cost effective to do FTTP.
The CPE cost is negligible. You can pick one up for $20. True, the drop will cost you, but it has a far longer lifespan than the small cell. It's not like the small cell, it's installation, permits, engineering, pole rental or tower, power, etc. are free either.
Like I stated earlier, 5G may be cheaper than FTTP. Or it may not. It may not even be available in your area due to insufficient density. Even if 5G is cheaper, it's not going to be massively more cheaper.
Sorry, how is this any different to LTE on 3.4GHz or 2.6GHz? There is literally nothing different between 4G and 5G on this. 4G deployment on 3.4 or 2.6 could equally be said to be focussed on small cell, but we also have massive worldwide deployments on 450, 600, 700 and 800MHz. So is LTE also about long range?
24GHz will require line of sight. I can't see how this is going to work for anything more than cell backhaul or fixed wireless access in very rural areas (without trees)?
At relatively short distances (hundreds of meters), enough radio waves bounce around in the environment to still make it to the receiever. https://spectrum.ieee.org/telecom/wireless/smart-antennas-co.... You need beam forming antennas to take advantage of this fact.
>5G really changes nothing of this. Shannon's law dictates this and we are close to topping out on it in terms of radio efficiency.
10 to 15 years ago that is what I thought. Until Massive MIMO. Some of the crazy stuff we are doing now in Wireless tech was literally dimmed theoretically impossible when I did some very early work on 3G in University. It doesn't break Shannon's law, we just find many ways around it.
Many doubt Massive MIMO will ever work, including industry expert. I doubt it too, if anyone remember something similar called pCell many years ago. It turns out it did work. It was originally created and based on TDD, we could do 128 x 128, or even 1024 x 1024 antenna. Sprint are doing 64 x 64 / 128 x 128 works on their Network already. [1] But there is a cost, power etc involved but the tech works. We thought this crazy thing would not work on FDD, which is what majority of the world uses, it turns out they have found ways around it too. Both Ericsson and Huawei's solution is much better then some originally thoughts. Not as elegant or as effective as TDD but it still works.
We have small cells, this time it actually works as advertised. Combined with LAA in 5Ghz Spectrum.
5G provides an order of magnitude increase in capacity. It also makes some backend services cheaper to run, there are already a few countries started price war in bid to attract more customer on their network as they have more capacity resources.
I still remember a few years ago, when my friend were installing her first fibre installation at her home. It was such as hassle with cable layering, ONT modem etc. She was very frustrated and asked a simple question that stuck me at the time. Why cant we all use mobile. Mobile is enough for me, why cant my home PC uses 4G too? Will there be someday where they sent me a "Modem" with SIM card in mail I plug it in and it will work?
I thought she was crazy. That is not possible, what makes her think that? You told me 5 years ago ( That is 8 - 9 years from today ) Smartphone wasn't a thing, now everyone has it and we are watching video on it already. Surely 10 years from now that should be possible right?
I said no, it is not possible. I had Shannon's law in my mind. I had me BiTorrent downloading Terabytes of data in my mind. Cell tower contention in my mind. Now I am not so sure.
If there is more demand for cell service the cell companies will build more towers. Lower the power levels and use higher frequency bands to reduce interference.
By your numbers, 200 clients x $50/mo $10k revenue per mo for a tower. A new cell tower costs $150k, so it pays for itself in 15 months.
It can take years in the UK to add a new cell tower. Apply to the local govt for planning, then more applications to dig the road up for fibre. And then you need a power connection which often aren't trivial or quick to get. $150k sounds unbelievably low.
You have to remember that the denser you install towers, the shorter and less obtrusive they need to be. I.e., you don't need to be nearly as high if you only need line of sight over one mile instead of ten.
Do what Verizon did in Boston. Get the local government to give you access ostensively for FTTH broadband like FiOS then go "psyche!" and use the fiber to run cell towers.
Are these providers actually going to compete with landline ISP's? My landline ISPs over the last couple of years have had monthly data caps ranging from 256gb to 1tb. My cell plan currently throttles me after I exceed 6gb... That's two orders of magnitude that my wireless provider would have to increase the cap in order to compete with the landline ISP.
> During a roundtable, VP of network support Mike Haberman, some other Verizon folks, and the assembled journalists agreed that an average data cap in the vicinity of 180GB/month would satisfy the average consumer.
> "That shouldn't be a problem with 5G. What does 4K video use? Think about how many 4K TVs you can put on a service that's a true 1 gigabit to your house," Haberman said.
The average Netflix user watches 40-50 hours per month, and its going down: https://techcrunch.com/2017/12/11/netflix-users-collectively.... Netflix says 7GB/hour for 4K (~350 gigabytes), but HEVC will halve that number. That's under 180GB, and that's assuming all streaming is 4K, which is far from the case.
That is per account not per person. For a typical household, all other bandwidth usage pales in comparison to Netflix. Youtube, etc., streaming at HD or lower resolutions isn't going to move the needle much compared to the 4K streaming in the calculation above.
Hmmm. I'm on T-Mobile, but I share the plan with my brother and he's the one who actually cares about this stuff. Maybe I don't get throttled at 6gb, but I just lose a discount. Either way, I'm definitely incentivized to stay under 6gb on T-Mobile.
Verizon really really wants to be your main provider. Once they can provide you with a 1gbps wireless service, they will compete on price and data caps with your local wireline ISP to win your business.
I think the idea is better fixed WISP options which could potentially replace cable internet. If Verizon/T-Mobile suddenly have a home internet option based on 5G, then Comcast gets competition.
That is tough to do. I lived in a city where there wasn't any cable and the DSL sucked. A few WISPs were the only real game in town. They weren't bad - until evening when everyone started to stream. They upgraded several times over the years, but it is still a rough business to try to broadcast out so many streams at once. I had it pretty good because my WISP had a tower on my roof and I was hard wired to their backhaul. For everyone else in the neighborhood it was slower.
Just wondering. Would it matter if they win on state level if the traffic is slowed down on its route in another state? Also do the states even have the authority if the federal government wants to enforce the states to get rid of NN?
State level matters because if you for example get NN restored in California, New York, and Texas, it's cheaper for the ISP to do NN everywhere then to try and figure out all the traffic destined to or coming from a customer in California, New York, or Texas.
Last mile is really the only thing in question here.
1. Because that's where there's a real lack of competition
2. Because traffic going long range is already "slowed down" even with net neutrality. If you are paying a CDN, they likely have paid for higher priority "leased lines" between their data centers, while the rest of the traffic goes over the "regular internet" (keep in mind that the "leased line" and the "regular internet" here are probably the same fiber, the distinction is legal, because under net neutrality carriers are still allowed to charge differently for "leased lines")
Netflix seems to be hedging their bets by partnering with T-Mobile, the company aiming to bring 5G wireless to the US. As for Alphabet, I'm submitting this comment via my 1Gbps synchronous Google Fiber internet connection. Google seems to have stalled rollout of Fiber, however.
My understanding of Google Fiber is that they ran into to many headaches from existing telecom companies while trying to expand their fiber infrastructure. Instead of continuing to fight such an uphill battle they are trying to make a wireless approach work.
I haven't heard much recently from their more standard wireless attempts (other than Loom being used in Puerto Rico) but they did invest (jointly with Fidelity) $1 billion into SpaceX. The assumption is the SpaceX investments are specifically to support the SpaceX Starlink constellation which if successful could bring wireless internet to pretty much all of the planet.
Every little town in America is a battleground of government blessed monopolies for physical access. Trying to do a large rollout for Google Fiber probably turned into a bigger hassle than they expected.
Would be nice if there was a nationwide building code for cities which stipulates fiber optic to the premises with absolute minimum connection speeds of 1Gbps synchronous and ideally 10Gbps. Completely unrealistic but I can dream.
1) It would help break up local ISP monopolies. Yes, internet is a bit of a natural monopoly, but if we can't have NN then lets start breaking ground for new fiber,
2) Google will need to lobby for changes in local regulations that prohibit local ISPs... which helps the local ISP startup market.
> 2) Google will need to lobby for changes in local regulations that prohibit local ISPs... which helps the local ISP startup market.
Google won't do that because of its political ties. To open up local ISP competition, you need to get rid of things like build-out requirements, loosen permitting requirements, reduce the ways people can stall installation of Fiber huts for NIMBY reasons, etc. Google will happily push for waivers of those requirements (as it did in every Fiber city), but cannot politically justify lobbying to eliminate those requirements for everyone else.
That sounds exactly backwards. Google argued for net neutrality because they said it benefits everyone, not just them. And it does benefit everyone. Google doesn't have to justify things politically. At the same time, Google doesn't always do everything it can in the public interest, it sometimes does things that primarily benefit itself.
Net neutrality is something that Google can reconcile with its other political affiliations. The stuff that's required to reduce barriers to broadband deployment at the state and local level is not. Take build out requirements for example (the idea that ISPs should be forced to build service to areas where people can't afford to subscribe to it). Google can't lobby to get rid of build-out requirements generally, even though it would massively help broadband deployment. It's a meat-and-potatoes Democratic issue at the state and local level. So instead of lobbying to get rid of them, it simply sought waivers of those requirements in every Fiber city. (And even then, it got pilloried for it: https://www.huffingtonpost.com/alex-salkever-/is-google-fibe...).
Yes they're also hedging their bets by getting distribution via Xfinity - I can watch Netflix through my Comcast cable box. This essentially reduces them to a "channel" ala HBO (albeit a deep channel).
People have made endless points about how ISPs and last-mile providers will hurt the consumer and the small video startup. I don't dispute those.
But, IMHO, independent of that, the behavior of Alphabet has been less and less charitable to the little guy over the last few years too, especially in the area of android app development. (e.g. they recently eliminated their "free-forever" policy on the use of android map/location/place APIs in apps).
To me it seems that now, in one more way, the internet landscape is more fully dominated by giant corporations. Even more of the little players will be permanently confined to nickel-and-dime sidelines.
There's an incredibly ironic undertone to an article suggesting two of the world's largest global monopolies should expand their reach to better be able to beat other, smaller regional corporations.
Or better yet, we can work toward a future (no later than 2021, I hope) when net neutrality can be brought back into force just as it was from 2015-2017 by FCC action or perhaps with more staying power via legislative action. Ground taken once can be taken twice.
If we resign ourselves to the current legal landscape we hand a victory to these corrupt players.
That said I'm sure the tech giants will want to hedge their bets.
We're going to need a new president before such a bill could be signed, but it's good news that political will seems to be moving (ever so slightly) toward net neutrality.
Just go the Finland route, and declare high speed internet access a basic right. Maybe add it onto the constitution. That should pave the way for getting back NN and keeping it for good.
Doesn't this very story with handicapped anti-trust that let AT&T run amok teach us, that conflating ISP with media / video distribution is hurting the end user?
So no, they should not become ISPs, but they can help independent ISPs break current sick oligopolies.
Working anti-trust would simply forbid ISPs from owning media businesses.
Everyone is worried about video and rightly so, or maybe is just being used as an example, but my question is: Could ISPs prevent in any way Software Updates? Could they block (for example) a patch that would fix a bug allowing them to mim web requests to inject lets say, ads?
Just a reminder that this is only a problem in the USA, and Netflix and Alphabet are international companies. Now the USA is a big market, but it's not the only one.
Technically now that net neutrality is gone, everyone who routes your packets can ask for money for them to pass through their network not slowed down and de-prioritized.
So becoming an ISP if you are a high traffic Web company changes nothing, unless you also own entire network from source to destination.
What would seem to make sense for Netflix would be use more HDD/SSD caching of videos, similar to how a DVR for Tivo works. There really isn't a huge reason to live stream Netflix movie/show content. It's not live video.
The Netflix subscriber user could download up to 30 or 40 Netflix shows in advance from their Netflix queue (sort of like the original 'Netflix by mail' queue) over LTE at midnight under some sort of LTE multi-cast deal with AT&T or Verizon. Or maybe lossless transmission over standard POTS/DSL or Dish Satellite.
TV's would be one (of many) limiting factors here. Most consumer televisions have, relative to most other computing devices, low processing power and disk space. Plus you have to factor the additional bandwidth load of downloading a 4K television show that you may not watch and then multiply that cost by 30 or 40.
Yes, it would be like a Netflix box (maybe branded under their Roku brand name) that's similar to Tivo. A Tivo Bolt Premier can be had for $299 with a 1TB drive.
The key is signing a lower cost deal with Verizon/ATT LTE or Dish Satellite to do some sort of the multicast broadcasting similar to Over the Air broadcasting but over the internet. Or do unicast transmissions but during off peak hours and blast it out over the LTE/Satellite network over the span of a week between the hours of 1AM to 5AM. The Netflix Top 100 is probably like 95% of what people are watching.
That way not everyone is congested from 5PM to 11PM every night and the mobile operators have additional revenue from existing wireless/satellite infrastructure.
Agreed. Caching the video to a Netflix DVR would likely only be guaranteed to work with Netflix's own content. But isn't creating all its own content Netflix's plan?
I don't think ISPs have any power in this situation at all. They are just delivery mechanisms when it comes to providing internet connectivity.
All of the power lies within Google, Netflix and other content providers.
Google could one day deny access to all of its services for all Comcast customers. If all of the content providers / big sites band together and do this, then there would be no value in paying for a Comcast internet connection.
I'm sure this would never happen but that's all it would take for real change to happen.
> I'm sure this would never happen but that's all it would take for real change to happen.
Interestingly, this kind of thing happens with some frequency in cable channels and various TV providers. I'm not quite so sure this is as far fetched as "would never happen".
I think it'd take some fairly well-demonstrated bad behavior by one or a handful of ISPs before sites would go there, but I think this could be possible.
Wait a minute. Couldn't Google do this even with net neutrality? If I put a web server on the public internet, I'm perfectly free to refuse connections arbitrarily. It's only ISPs, who are routing traffic, that are required to route everything the same under NN.
> Couldn't Google do this even with net neutrality?
Sure, but it is clearly not within Google's business interests to reduce their customer base arbitrarily. Cutting off access from specific ISPs would basically be a nuclear option for them.
Isn’t there a chance a subsequent administration could “reinstate” net neutrality? If so what’d that mean for Comcast, AT&T, etc.? Or are there ways such a move could be blocked?
I wonder if a bunch of Internet companies (Netflix, Alphabet, etc) could gang up and collectively block an ISP...? Could give them quite interesting leverage in negotiations.
I don't know, if suddenly all Google services completely disappeared for all Comcast users, I have a feeling that Comcast would bend over backwards to make them stop.
Nothing about that would be against net neutrality rules. I can already start a website and make it accessible only to specific ISPs by whitelisting only the subnets I want.
They don’t even need to do that: just making e.g. Netflix or YouTube display a message like “Your experience is bad right now because your ISP is trying to double-charge for your traffic. Click here to call them…” would get an enormous amount of leverage.
Google actually already has something like this in place for YouTube.
Not specific to net neutrality (or lack thereof), but if they detect that your access to YouTube is slow due to network congestion on your local ISP, there's a popup that essentially names and shames your ISP by redirecting you to this:
I wonder how much the ISPs will invest based on the current regulatory rules. Net neutrality could be revived, especially in a few years after the next U.S. presidential election.
Businesses usually want certainty so that they can invest in the future. In the state where net neutrality is repealed, there is far more uncertainty; it could be revived any time. If the ISPs accept the state that net neutrality is implemented, there is stability and certainty going forward.
I am more than happy on two events, seeing if the FTC truly does resume their role as watch dog and prosecutor and seeing what Congress may end up doing.
With regards to all the panic and irrational reactions, we got to 2015 before the FCC decided to rewrite some rules and not others and we did fine. The FTC with FCC cooperation did work.
there are more than two sides to this argument and why we favor content providers exclusively over service providers would need to be addressed as well.
even some of the big high flying rollouts stalled or stopped when the rules first changed but it was fun watching many of them dance around the reasons.(FIOS and Google fiber pretty much are nothing). 5G is not a valid excuse. People decry the lack of high speed internet (the definition changes based of the techs savvy of who you talk too) but as someone who does a lot of road trips you would be amazed where you cannot get a cell signal and how often it happens
Your comment misses one of the two key points of the original post: the level of consolidation between ISPs and content providers is unprecedented and the merger between AT&T and Time Warner makes that even worse. Competitors which are solely ISPs or solely content providers will not be able to compete due to the advantage this newly vertically integrated company has in both arenas. The article is saying the only way to avert the catastrophe of a complete monopoly over both content and Internet access is for companies like Google and Netflix to "fight fire with fire" by becoming vertically integrated ISP/Content companies themselves.
This is not a case of market dominance through technological innovation, which is generally hard to predict, but rather a completely predictable result of old-school vertical monopoly. It's Econ 101 stuff and is not specific to the Internet at all.
Comcast acquiring Fox would also mean they gain control of Hulu -> that would make things really interesting for Netflix, and narrow it's moat - especially if Comcast starts bundling Hulu with it's internet services.
I have some friends who work at Netflix and it's crazy how far the executive team foresaw how Netflix would grow. I know they put a lot of resources early on into Open Connect which was to handle working with ISPs.
I worked at Netflix when OpenConnect was introduced and I don't remember anyone internally thinking it was unnecessary (though, even at the time, the company was large enough that you didn't know everyone). Quite contrary, this was the era of the 250GB / month cap from Comcast and we could observe clearly that they were throttling Netflix traffic. OpenConnect, the ability to deploy the CDN directly into the internal network of these ISPs served multiple purposes--not the least of which was to expose the fact that they were holding Netflix for ransom. So, to say that was the executive foreseeing things is a bit of revisionist history. It doesn't lessen the impact or importance of OpenConnect; but, it grew out of a very real impasse with a very large ISP.
Ultimately, Netflix did end up paying Comcast in 2014 and, surprise surprise, the throttling stopped.
Can Netflix and Alphabet ‘reverse’ the problem and block the ISP that throttle them?
I imagine some consumers would rather change ISP than stop using Netflix/google. (I would but that’s my UK perspective)
I brought this up a while back on HN. It looks like in the most optimistic case you are looking at 20 Gbps per spacecraft and 200 spacecraft over the continental US for Star Link. So you are looking at 4 Tbps capacity for the entire country. What sort of capacity does the US have right now? It seems like 4 Tbps is very far off, like the level of a single large city. Heck, you can get 10 Gbps service to your home in Chattanooga, TN.
Update: Cisco predicts 847 Tbps in 2021 and "busy" up to 5.0 Pbps globally. US looks like 242 Tbps with "busy" up to 1.7 Pbps. So if Star Link has 200 space craft over the US by 2021, it could handle about 1.5% of the US non-peak usage.
Starlink will only be most useful in remote areas, as you'll be sharing the satellites above you with fewer people. In municipal areas terrestrial will always win.
This is what happens when cable companies are the ISPs - if they give you enough bandwidth to no longer subscribe to TV, they won't be able to sell you data twice.
Let's face it... Internet access is an essential utility similar to roadways, sewage, water, electrical, and gas.
Our municipality will likely just create a bond measure to run city-owned fiber direct to all homes and business, and put the ISP backbone operations up for bid (contingent on net neutral management).
Interesting that wireless services was left out of the conversation. Given it's massive growth in urban areas, and the fact, there are many options for most populations. Video is hardly a high bandwidth use case. Cultivation of victims.
I don't understand why this is turning into such a massive panic. The internet wasn't cut up into throttled tiers pre-NN, and who exactly is going to be paying for internet if it doesn't deliver what they want?
Why do people have so little faith in the market? Why is the answer MORE regulation, when regulation and regulatory capture are what got us into this monopolized mess in the first place?
What about the fact that 5G is on the horizon? That powerful people like Elon Musk have spoken publicly about building alternatives to fiber/cable based internet?
1. Monopolization has increased in markets in general (see: ATT-Time Warner merger).
2. ISPs have realized what they can do with their increased monopolies, and have started developing technical strategies for doing so.
3. Regardless of this, these companies are getting certain things from the public, such as right-of-way. They act like they owe nothing to the public, which is a lie.
It's a logical mistake to assume that behavior of ISPs in the past is what they will do in the future.
I'll start respecting the arguments against net neutrality when:
1. Private citizens and government entities are allowed to charge arbitrary rates for ISP lines to go over their property.
2. ISPs are legally responsible for the content of any and all packets going over their infrastructure.
3. All legal challenges / obstacles to public / municipal ISPs are dropped and eliminated.
1. ATT and Time Warner didn't really compete prior to the merge.
2. ISPs have realized that basically every business is dependent on them to access their customers. Why wouldn't you try to extract value from that?
3. Hand-wavy feelings doesn't mean anything in government outside of impassioned speeches. They owe the public nothing other than providing their service according to the contracts they made. Large organizations where every individual has their own incentives don't really have feelings or a sense of duty.
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1. This is already true, as it turns out private citizens largely don't actually own the land where the poles are and governments don't want to charge.
2. You would hate this world. Content can't be encrypted because there might be illegal content contained within. All your traffic will need to be scanned and scrutinized. P2P is basically dead. Any site with user-generated content will be blocked. Sites will have to make legal agreements with ISPs to be whitelisted for strict content moderation.
3. Blocking municipal ISPs is not as mustache-twirlingly evil as people make it seem. Some ISP goes to a town where it would normally not be profitable to operate and makes a deal with city in exchange for exclusivity. The risk that the citizens of that town would just form a municipal ISP funded by tax dollars and undercut them once the market is established has a real cost which is going to be paid in one way or another.
> who exactly is going to be paying for internet if it doesn't deliver what they want?
So if your choices are: (a) no internet at all or (b) internet but without access (at least at any reasonable speed) to any sites except for Facebook, Google, Reddit, Amazon, eBay, Netflix, which will you choose?
>who exactly is going to be paying for internet if it doesn't deliver what they want?
Everyone?
The problem is choice. Last-mile internet connectivity in the US is a natural monopoly, just like electricity (more so; at least there is the possibility of solar for electricity).
Our regulatory bodies seem more interested in enabling monopolies (or duopolies at best) than helping to provide choice. It is that simple: regulation and choice, or market freedom and monopoly.
See elsewhere the Shannon's law problem of wireless internet.
---In 2001, there were 9300 ISPs in America, handling the majority of US internet subscribers.
----By 2010, most of America was supposed to have a fiber optic service to the home as every state cut a deal to have the state utilities upgraded to fiber and to charge local phone customers.
---And every merger made the situation worse.
Unfortunately, the companies essentially lied about the deployments while competition was shut down, not through market forces but through a takeover of the FCC.
The FCC, in 2005, removed the right of small ISPs to use line sharing to offering service, and the competitors were removed by getting rid of the wholesale arrangements, both of which started when the Telecom Act of 1996 opened the networks to competition.
By combining the 'Broadband' service, which is Title II, with the Internet Service, an “information” service -- when the FCC mushed these 2 services together, they became, together, an information service, which stopped the obligation to rent the utility networks
– This caused Net Neutrality.
---7000 small ISPs were put out of business and then AT&T and MCI were put up for sale-- and merged.
Documented in: ‘The Book of Broken Promises: $400 Billion Broadband Scandal”-- a free download. https://bit.ly/2M7KzTE
The FCC is currently erasing all the remaining laws and regulations on the telcos, claiming 5G will fix everything. With a range a few blocks and requiring a fiber optic wire -- what this is really about is that we'll have a few companies in control with no more regulations or obligations -- and whatever they give us-- we will have to be thankful for.
My take -- this has gone too far and we need to start to break up AT&T again.... and separate the companies from the wires.
And, we also need to go after the billions in cross-subsidies where the companies have been able, with the help of the FCC, to manipulate the accounting to dump most of the expenses into the state utility to make their other services 'profitable'.
These 2 recent articles supply a short history of the mergers and the commitments that were never completed for broadband and competition; the second is the Verizon New York 2017 financial report -- published MAY 31, 2018
---“The Mergers that Created ATT & Verizon Were Failures. Time to Break Up AT&T…Again.” https://bit.ly/2JM5zRB
and
---“How Did Verizon NY, the State Utility, Lose $2.6 Billion in Just 2017? The FCC’s “Zombie” Rules.” https://bit.ly/2sLj2i0
I summarized the findings. So far, NO regulator has bothered to examine this new financial report and no reporter has bothered to dig into it.
We've all been played. Most people don't understand how we got here or that the FCC and telcos have actually rewritten the history-- it is said that the winners write the history.--We can't let this stand.
Netflix et al doesn't have to be ISPs... We need to reopen the networks for competition—wireline and wireless and let the customer choose which ISP to use over the networks customers paid multiple times to have upgraded.
And AT&T and Verizon should be separated from these utility networks—ie, all of the wires which would include all the fiber that was built for wireless, FiOS, etc).
No more tracking, blocking, prioritizing of their own affiliate companies, overcharging, and letting the networks deteriorate.
I have a hard time getting excited about a world where every new business has to be fully vertically-integrated because their competitors are all being dicks to one another.
Healthy competition only amongst those who have the resources to compete in all markets at once...
It doesn't seem to be enough to offset the gains from the efficiency of scaling horizontally. Each product or service, when provided or assisted by computers, requires fewer and fewer humans which are the most difficult to scale up, so an organization can set that up and then move up and down their supply chain. It might be a temporary benefit though, because once it's big player vs big player they won't be able to easily extract value (or one of them will kill the other and get even bigger, which is bad for the rest).
it's healthy in the sense that the giants are pitted against each other.
it's unhealthy in the sense that the little player is basically locked out.
it's also unhealthy in the sense that the big players will be incentivized to unite in an unholy alliance against the masses for the sake of increased profitability.
I've always thought that this would be well within the rubric of the USPS. The constitutional mandate for a postal service was drafted at a time when the internet could not have been conceived of. I would argue that the intent of the constitutional mandate was to establish communications and not necessarily paper mail per se. I think if the founders were alive today they would say that ISPs were the sort of thing that was intended. I.e., have the USPS start acting as an ISP, and charging for it like it would mail services.
I'm not saying that private ISPs should go away, just that I'm sick of this government handout to companies that want to have their cake and eat it too. No net neutrality? Fine. But then allow public ISPs--no, actively fund public ISP infrastructure--and allow for unfettered lawsuits against private ISPs for content going over their pipes. Also, take away right of way to private ISPs, and let citizens and municipalities charge arbitrary amounts for anything going over their property.