One reason cable companies won’t willingly compete against each other(washingtonpost.com) |
One reason cable companies won’t willingly compete against each other(washingtonpost.com) |
Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors" [1]
Cable companies regularly adjust prices based on the entrance of competitors (Google Fiber), or when a cable company enters a new market, prices are initially low to prevent competition and then slowly raised to a much higher level. The excuses for vast differences in rates in metropolitan cities are usually paper thin, but accepted by the media and government at face value. Cable companies also operate secondary businesses with a conflicting interest to their cable operations (Cable TV packages now directly competes with Broadband Internet, also see: NBC/Comcast), not unlike Standard Oil's purchase of many railways and control of shipping lanes. This arrangement vastly stacks the deck in favor of cable companies, and further cable company "cooperation" with state and national officials have created new restrictions on municipal competition.
Cable companies are our 21st century Standard Oil.
[1] https://en.wikipedia.org/wiki/Standard_Oil#Monopoly_charges_...
Back when oil was getting to be useful, lots of people discovered it. Usually, it was in a remote area. The only way to make money off it was to get it to a refinery and then the market. Standard Oil bullied and bribed the railroads into giving them preferential rates and charging high rates for competitors. It's exactly like what cable companies would like to do by subverting net neutrality, give preferential treatment to the traffic that profits them most. It's just information instead of oil, which is even more insidious since it can control the public discourse.
But nobody is really stepping forward to lay residential fiber. Google is the exception and it's because they're one of the only companies with enough money to survive a war of attrition with the incumbents, and even then it's only in a handful of places.
It's prohibitively expensive to have twelve companies each run a different strand of fiber to every house. And you only need one. The key is to a) get one instead of zero and then b) put competition on the other end of the fiber. Have one company (or municipality) be the regulated monopoly that provides only the physical layer, and then let all willing providers compete to terminate the fiber and provide internet/TV/phone service.
Separating the natural monopoly (the physical layer) from over the top services is the key to preventing monopoly abuse. The entity that does that should do only that.
Hell, 5-6 generations on, Rockeffelers are still filthy rich.
Do you have any evidence that cable companies wanted to charge for preferential treatment for traffic? I've seen that claim repeated a lot but never with evidence.
Cable is a network technology with value defined somewhere between Sarnof's, Metcalfe's, or Tilly-Odlyzko's laws. Scale, and dominating local coverage, matter.
Oil is an extractive mineral resource with very low direct costs vs. use value. Absent some form of central contrl, the price has tended to fall far too low. In the aftermath of the East Texas oilfield discovery of 1930 (the biggest on the mainland lower 48), prices fell fist to $0.13/bbl, then to $0.02/bbl. That's barrels, not gallons.
The governors of Texas and Oklahoma called out their state national guards, and the Rangers in Texas, and seized wellheads at gunpoint to cut supply. The quota system imposed, run by the highly innaccurately named Texas Railraod Commission, lasted until 1972. Daniel Yergin's book The Prize covers this in detail.
A similar control program applied to strategic minerals was created after WWII, originally called the Hobard list, and remains in effect as part of the Defense National Stockpile Center.
Raw material and networking economics differ.
It is entertaining how the stalwart protectors of free markets oppose them when it becomes too inconvenient.
The US acts as if one unregulated carrier is enough in cable.
https://www.opensecrets.org/orgs/recips.php?cycle=2014&id=D0...
Relatedly, it's depressing just how cheaply you can buy the house/senate.
I would never want to live without high-speed mobile Internet (which can provide the equivalent of cell service), but is it really a necessity to live? I was a boy before cell phones even existed, and anyone outside academia and a few tech companies had the Internet, and life was fine.
It's certainly extremely convenient, but I don't think it's a necessity.
> plus some who believe that the poor ought to be excluded from using basic infrastructure anyway
Do you have evidence for that statement?
I'd wager that the short term (~10 years) consequences would be vastly superior service for every day citizens. In the long term, not certain but I suspect it would be much of the same as long as the municipal provider had ever-increasing speeds as one of their primary purposes/guiding principals.
I'm not a communist but I think evidence shows that municipal broadband outperforms both telecom and cable operators in all terms of performance from costs to speeds to reliability.
This suggests the interesting possibility, that it may be worthwhile for the neighbors in a street to build their own cable and just give it to a competitor of the cable provider.
Similar things happen with turf wars. If I install services in one community then the incumbent can simply lower prices to match mine very easily. At the end of the day I've spent a bunch of money and may not gain any of my competitors customers. Even if my competitor is still paying off infrastructure in that region and may now be running at a lose the companies are so large one community isn't going to make a difference.
Even if you offer faster services the majority of people don't care, they just want to be able to watch Netflix as cheap as possible.
I don't think cable companies are at a Nash equilibrium, but they may be at other forms of equilibrium that I'm not familiar with. Also this game is iterated so there are other (crucial) dynamics at play that I am not familiar with.
[1] https://en.wikipedia.org/wiki/Subgame_perfect_equilibrium
This assumes that all costs stay proportionately the same, _and_ that there is no other competitive advantage than price.
- bringing back all help desk type jobs that were offshored. All of our call center jobs were in the US until recently and some idiot started outsourcing some of them. We are bringing them back immediately. - EPON fiber build outs everywhere (we realize fiber is better than cable but there is existing cable infrastructure and the protocol can support 1gig/s with the current DOCSIS 3.1 standard so for now we are both upgrading the cable system and building fiber EPON) - no data caps in any form - getting rid of DVRs and having both live video and on demand/saved video stream from servers over IP
I would place us as much more techie friendly than ATT but less so compared to Google. Most of the problems with peoples cable service come from poor install jobs, if you have a problem with lost packets or dropping video please be persistent in getting a tech that is knowledgeable on how to troubleshoot line issues.
p.s. use namebench to find the best DNS servers for your area and use those instead of ours.
So, FCC wants them to enter a territory to increase competition, and Charter says "we want to reduce competition down the road buying the competitor". FCC should simply make it a requirement, that Charter should be forbidden from buying competitors in that market. That's all, problem solved.
And Charter must be really stupid to claim they want to reduce competition when talking about monopoly restricting conditions for the merger.
I'd love to have a third player in the game to add more pressure to keep the prices low.
A coaxial cable is displayed for a photograph in front of a Time Warner Cable helmet in Manhattan Beach, California, U.S., on Monday, August 12, 2013.I'll buy that. For a dollar.
Setting up infrastructure is extremely expensive especially in cities where allot of the European population lives. The US has a different problem where only 4% of the population lives in a major cities so ISP's have to lay allot of infrastructure and historically the more or less remain around their original starting zones and creep out very slowly.
Fiber/Coax infrastructure in the US should be done on a state and municipal levels and then offered to ISP's at a fixed price to recoup the costs via a tender based on the cost to the end consumer
That requires a rather narrow definition of "major cities".
[0] https://en.wikipedia.org/wiki/National_Broadband_Network
As an off-topic aide: was "I'm not a communist" tongue in cheek? Or would such an infrastructure project be actually seen as "communist" &/or undesirable just for it's oversight?
Edit: terminology, link
In other words, the same number of subscribers now have to pay for 4x the infrastructure costs.
> In other words, the same number of subscribers now have to pay for 4x the infrastructure costs.
In other words, building into each others' territories raises the cost of serving customers while putting downward pressure on pricing. The executives recognize that and try to avoid it.
If the cable companies and telecommunications companies had competing services when they were building their networks in the 20th century, I imagine that they likely would have avoided overlapping service areas too.
Except... that is all they have. All they have ever had. And as the population has risen, they have no budget to deploy more servers to meet demand, so every night the speeds crash and you have intermittent outages. Especially on weekends. They are running 20 year old switches that have to handle Netflix loads on a nightly basis.
So you go to town council meetings to find out whats up and it turns out that over 15 years later they still owe some ~3 million on the original bill of 22 million, and the whole town is 10 million in the red (with a population of 3 thousand) so it cannot spend money on practically anything.
So main street is like driving on a cobble trail with potholes that go unfilled for years, and school taxes are the highest in five surrounding boroughs and its still not enough for them.
Sure, you can be certain they got ripped off with whomever they bought the original deployment from back then, given its just coax and not even fiber, and the municipal ISP is only a small piece of general budget mismanagement, but it is a reflection on how bad in general politicians are at budgeting, and nobody should ever be surprised when someone cannot make a reasonable budget when they are doing it with other peoples money and they have no consequences to themselves besides possible reelection issues.
IMO, it is just a more fundamental reflection that politics and political office as it is arranged in the states is both systemically intentional and attracts people who are not technical, not actuarial, and often lawyers and other "people" persons who can talk big to get elected and then go into an echo-chamber of self-reinforcing superiority with all the other elected officials such that they never attract the kind of critical thinking or knowledge to approach anything close to municipal... anything, really, with any degree of competence. They just defer to their friends friend at a teleco wiring company or a water treatment operator or a civil engineering corps and get turned into a money faucet for terrible results. I'm not saying every government has to behave that way, but at least from my observations all the ones I have been under have, at best, been incompetent, and have often been of malicious intent towards its own citizens at their expense for corporate donors and insiders to their social circle. But it is certainly systemically intentional.
Municipal broadband just replaces one monopoly with another -- one that doesn't even have profit as a requirement, since it is also a taxing authority.
I think that you'd see the same phenomenon as in any country which socialised an industry: at first things are — as you guess — much the same, because the same people keep coming to work in the same buildings, operating the same machines according to the same processes &c. But the rate of innovation lowers, and eventually you get the equivalent of a Soviet grocery store (https://www.youtube.com/watch?v=oOBFMMbUFI8): something much better than what you had before, but nowhere near as good as you could have had.
So after a decade or two of municipal broadband, you can expect that you'll have better broadband than when you started, but far, far, far worse broadband than where there is competition.
Now, if the debate is between a public and a private monopoly, I honestly don't know which is worse. Possibly the public monopoly, because its employees are unfireable, but — I don't know.
Infrastructure has massive capital costs. If roads were owned by car dealerships and only permitted cars of their associated brands to drive on them that would be somewhat analogous to having multiple communication providers lay duplicate fiber (and just as wasteful).
Cable and ILECs are acting perfectly rationally by not competing with each other; there is little to gain when you can just squeeze your captive customer base for more money.
Fiber is fiber. The government could setup a public benefit corporation tasked with delivering fiber broadband last-mile infrastructure and keeping up with the latest innovations. If they fail to follow through, the courts can force them to follow the PBC charter.
If you want to leave maximum room for innovation (with resulting higher costs) the PBC could only be responsible for terminating fiber on both ends and any ISP who wants to compete would have to install an ONT on the customer site and light the fiber at the exchange. Then the ISP can replace equipment to wring faster and faster speeds out of the fiber if they want.
You can go the other way and task the PBC with lighting the fiber and delivering packets. It makes the process of starting an ISP much easier but you're reliant on the PBC to keep up with potential 10GB upgrades in the future. That sure would be a nice problem to have though...
Now the problem with this argument is that we're not living in that generation. We're living in the present generation, where a decent, if not high speed internet is absolutely essential in order to progress. Can you still live without internet in the present generation? Sure. But is there a remote chance that such life would be comfortable and painless? Absolutely not. Not even a chance.
So, with so much dependence, it stands to reason a country's businesses can be a bit more competitive and efficient if they have high-speed, low-cost Internet. The Internet part is necessary for most even if other attributes aren't. They're certainly useful, though, as they increase capabilities and profit simultaneously.
http://2010-2014.commerce.gov/blog/2011/12/30/look-ahead-201...
http://www.wired.com/2015/07/google-facebook-amazon-lobbying...
It'll be interesting to see how the lobbyist wrangling behind the scenes works out. The tech industry is the new kid on the block, especially in terms of their presence in Washington DC, and it takes time to build up relationships and influence in politics. It's not quite as quickly scalable as the tech industry is used to, but they also have vastly more resources.
http://sunlightfoundation.com/blog/2014/11/17/fixed-fortunes...
A few years ago YouTube got similar treatment on Time Warner -- they funneled everything to a YouTube point of presence on the TWC network that was over saturated. You could modify DNS and use and alternate URL and watch 1080p video with no lag.
Verizon also started limiting aggregate Netflix traffic. Through conincidence, it happened to start happening when they launched a video service.
aDSL used to be unbundled, too. And while it was unbundled, speeds were increasing.
aDSL speeds have been pretty flat since they removed the requirement, even though newer DSL technologies are available.
Playing devil's advocate here.
How would they increase adsl speed if it's very much distance-related? It tops out at 24Mbps and even then in ideal conditions.
Those newer DSL technologies require laying fiber closer to the customer and that's a nontrivial investment.
When my house was built in 1890 it did not have electricity, and all rooms were illuminated by gas lights. As of last year, it has gigabit fiber. Infrastructure can change. It helps to have locals take action, and citizens have to be vocal.
Well, here in Canada they're mostly fiber also -- but it still works. See, for example, https://www.teksavvy.com/ and https://www.start.ca/ ... "TPIA" is what they're called.
In looking them up, I stumbled on mailing lists for TPIAs hosted by Torix. Realised at that point that TPIAs have a lot in common with Canadian IXPs -- both put pressure on prices from Canadian ISPs, TIPAs by consumers and IXPs from businesses/services aghast at how much certain folks charge. See https://cira.ca/sites/default/files/cira-ixp-overview-web.pd... for more on IXPs. I wonder if there's a book on this somewhere, or what ISPs think. Rogers Cable peers with Torix, so it's not exclusively smaller players, in fact I'd say it's the everybody-but-telcos club but I'm sure telcos and US players are welcome if they cared to... (let's pretend they simply are unaware of the ahem, savings...)
The rest of Europe isn't that much different. WW2 caused a major shift of population to major cities while in the US it didn't while the US population is still very urban they size of cities/towns is smaller in general.
Also i really hate when people compare the US to a specific EU country the US is bigger than Europe go out of major cities in Europe and you'll have shitty internet, there are towns and cities in Germany where the best you can get is a 10mbit DSL and it's not a unique case in Europe.
(Edit: fixed 25 for 19, accidentally added a city twice)
[0] https://en.m.wikipedia.org/wiki/List_of_English_districts_by... [1] https://en.m.wikipedia.org/wiki/List_of_United_States_cities...
https://en.wikipedia.org/wiki/List_of_United_States_cities_b...
This one is more sensitive to noise, but still pretty different than what you quote: The top 5 metro areas have 56.9 M
https://en.wikipedia.org/wiki/List_of_North_American_metropo...
This is a nonsensical statistic to use, irrespective of whether the numbers of right or wrong. Imagine taking the UK and copy-pasting it 10 times. Make the new deca-UK a single country, let's call it 10UK.
Obviously, 10UK has exactly the same proportion of people living in "major cities" as the original UK. Obviously, the infrastructure serving the 10 copies of each major city is equally affordable for a country with 10x of everything (or even more affordable, due to more economies of scale).
But the 10 largest cities of 10UK are the 10 copies of London, and thus the proportion of people living in the 10 largest cities of 10UK is equal to the proportion of people living in the single largest city in the UK. Clearly, this is the wrong number to use to estimate anything related to the problem at hand.
This is one of those rare situations where avoiding the wrong conclusion requires zero knowledge of the world; cognitive ability on its own is sufficient. In other words, you are demonstrably stupid.
Most of that has come from legislation that forced the monopolistic owner of copper wires to let competition use them.
Hence VDSLx is usually rolled out only as part of an FTTC deployment, where the ISP needs to roll out new fibre (rather than copper) to the caninet/junction box, and in most cases install DSLAM units in those cabinets also.
For the ~70 million figure, see here:
https://en.m.wikipedia.org/wiki/List_of_metropolitan_areas_o...
> A combined statistical area (CSA) is composed of adjacent metropolitan (MSA) and micropolitan statistical areas (µSA) in the United States and Puerto Rico that can demonstrate economic or social linkage. The OMB defines a CSA as consisting of various combinations of adjacent metropolitan and micropolitan areas with economic ties measured by commuting patterns.
https://en.wikipedia.org/wiki/Combined_statistical_area
For instance, the "Washington-Baltimore-Arlington, DC-MD-VA-WV-PA Combined Statistical Area" (which is not part of the top 5 cities) includes all of Hampshire County, West Virginia
https://en.wikipedia.org/wiki/Hampshire_County,_West_Virgini...
a Google image search confirms that this is a very rural area.
https://www.google.com/search?safe=off&site=&tbm=isch&source...
It's fairer than you'd think. There were some articles in the last few years (summarized at Ars Technica, I think) about how the US is really, really average at delivering residential network bandwidth at a decent cost, compared against a wide variety of countries.
The thing that struck me about it was that the countries in the comparisons varied a lot politically (highly regulated vs. largely free market, etc.) and in terms of varying population density. I think the main conclusion I drew was that there isn't really one simple explanation for why we're pretty mediocre at this. We just have a crappy system.
Is this even true?
I'm not doubting your statement so much as just honestly curious, since getting access to the Internet in the US, from my experience, has been significantly worse than other places in the world where I've lived. In most of the EU, Asia, and in Russia, getting Internet was a breeze for my partner and I whenever we moved, and the speeds were usually, if not always, exactly as advertised.
For example, my partner and I live in Russia, and for some time, she did contract work as a chemist in Pereslavl, around 100 km north of Moscow. It was a remote and small town by any definition, but it had I believe 4 different internet providers and the options were all clearly laid out with simple pricing, and the pricing on the sites was the same as the pricing on our monthly bills.
Comparing this to when I've attempted to help friends prepare to move within the US and looking at ISPs, getting Internet in the US is a complete nightmare. The major ISPs often aren't able to give you an accurate pricing offer without first inputting an actual address onto their website, and very often the tool is broken or for whatever reason returns that the property is in the service area, even if the property already has a current connection from said ISP. (checking to ensure my parent's were getting a fair price from their ISP, for example, had both Charter's website and their sales representative inform me that Charter was not available in their neighborhood and address, despite them having used Charter's service for ~7 years.)
After that, it's introductory deals with the actual pricing buried in fine print on another page. Constant push to try to bundle land-line and media services, representatives insisting you need to rent a modem/router combo from the company when their own website has information on providing your own modem/router. While I do realize not all modems are created equal, that was not the pitch given to people I know or to family while I was present and helping them set up Internet.
I don't know, it just seems like virtually everywhere else, even if the speeds in major US cities are comparable, the entire "experience" of shopping around and getting Internet access is just better. The only place in the US where I've lived and it wasn't a pain to get service was when I lived in Tacoma, WA and used one of their municipal services. Aside from some occasionally goofy DNS issues, the service was lovely, competitively priced with Comcast, and their reps were also really fantastic. They also were very good at quickly getting information customers on known outages; their automated support line would switch to a special greeting informing the caller of a known outage, which saved a heck of a lot of time when storm damage or another random event disrupted service.
For another $10 I could go to 200. For another $20 I could go to 300.
Note: I can't get unrestricted Gigabit for around $30 almost anywhere in States because companies don't want it to exist.
[1]: https://en.wikipedia.org/wiki/List_of_countries_and_territor...
[0] http://arstechnica.com/information-technology/2016/05/how-th...
https://en.m.wikipedia.org/wiki/Los_Angeles_metropolitan_are...