Internet speeds would be much higher, and prices much lower if ISPs had to compete for business instead of using the current “divide and conquer” model. This is why Europe and South Korea have such high internet speeds. The providers have to compete for business there.
We need to end all exclusivity deals for internet providers and make them compete on an open market. The players in every other industry need to compete. Competition drives innovation and lowers prices. You can buy any brand of car almost anywhere in the US. We don’t have “Subaru counties” or “Chevy counties” where you can only buy that brand of car.
I think this may turn out to be more complicated than you think.
Europe and South Korea have higher speeds and lower prices because they have a higher population density, making public utilities of all sorts cheaper than they are in the United States.
You can debate requiring greater competition for internet services all you want, and frankly I doubt you’ll find many people who would disagree that cheaper, better quality things are preferable. But the facts have to be straight first.
I can see that playing a part, but if that were broadly true then high density areas of America would have comparable speed/prices. But they don’t, as far as I can tell. Apparently Kansas City is the best we got. Don’t let them talk smack about you, Missouri.
http://krugman.blogs.nytimes.com/2007/12/01/the-myth-of-low-population-density/
The population density argument is a red herring, many people in the US live in large metro areas. It costs something like $500 per home to set up the infrastructure to allow fiber optics, plus another $500 or so to wire up each house.
I believe those figures are from Kansas city, in a place like NYC where there are a lot of apartment buildings and more density the costs could (but may not) be lower.
Google built fiber optics to ‘shame’ the major providers into providing better service. Apparently shame is not a good motivator.
Chattanooga TN with a population of about 180k set up fiber optics for $70/month. So even smaller sized cities can do it. A mid sized city in Tennessee has better broadband than San Francisco, NYC, LA, etc. Population density is a red herring. The real reason is lack of competition plus anti-competitive practices. Broadband providers get states to pass laws saying they will not allow public networks. Or they sue the hell out of any public or private entity that tries to enter the market.
I don’t have a way to magically create competition but it would do much more for us than Net Neutrality.
Well, telecom companies aren’t exactly raking in huge profits, nor are other companies frothing at the mouth to enter what is (according to progressives who don’t cite numbers) a wildly profitable market. So I will choose to believe that there is some other factor that makes the market uncompetitive–perhaps its government regulation that stifles free entry, or perhaps regulation that drives up the cost of prices, or perhaps the fact that the US is less urbanized. I’m not just going to say its due to corporate greed and the 1%.
Agree we need competition, and we need to make sure the laws don’t prevent it. I don’t know if this is still typical, but I seem to recall municipalities awarding the area to one provider or another, on the basis that they could only allow so many tenants on the poles. Am I remembering that right? If so, is it still typical practice?
That said, I doubt it’s an easy business case to make that you’re going to run lots of lines to then compete for the customer base that’s probably nearly 100% served by an existing provider.
I’m wondering about the potential for cellular-based wifi. Then you’d lower the infrastructure costs and make competition easy- anyone know if this is practical?
IIRC, we don’t have enough bandwith.
ISPs make great money in their business. This is from six years ago so somewhat dated but nothing much has changed for them in the interim so no reason to think they aren’t doing at least as well as this.
Seems like a pretty good business to me.
And you are absolutely correct that it is government that stifles free entry into the market. But NOT because the government is putting in onerous rules but because the government, at the behest of cable companies, are passing laws that protect the cable companies.
Out in the sticks it is expensive to provide broadband. It is simply not worth building if there is competition, there are just enough customers for one service provider. the ISP’s know this and instead of overbuilding their network over a competitors they will tend to build it in a new territory. Competition here would result in slower internet growth in these areas.
Cooperation could work where competition would fail however, if they can jointly build it and maintain it and allow the user to chose what provider they want.
What is working for many here is wireless cellular, which may be a better option then wired. It’s easier to maintain a tower then the utility lines to the houses. Not idea due to data caps, but 4g speeds are pretty impressive, and in the sticks there is plenty of bandwidth.
Perhaps you could quote these precise ‘government regulations’ ?
There’s no point in having the best internet speed and quality in the world if that internet is censored by one’s ISP.
What prevents ISPs from competing for business now?
In most cases it’s the upfront infrastructure costs. The only two sectors I’m aware of that already have that in place are cable and telecom. For historical reasons, those are generally limited to one of each per market.
So, best case for most markets (like mine of STL), you have two choices: cable or DSL via telecom. And that requires that you be eligible for the DSL services - typically within a certain distance of the closest office. If you’re more suburban or rural forget it - it’s cable or nothing.
So now we’re either waiting for a new player with a lot of money to invest (read: Google) or public spending on the infrastructure for either a public ISP or private competition using public wires (which many states are now legislating against to protect existing providers).
Personally I think I would support the later approach - public spending on the infrastructure at the municipal level with private entities providing the internet service over the public wires. Similar to the approach taken in some areas regarding electric utilities. The quicker we start approaching internet connectivity as a public utility the better.
Thanks.
Whack-a-Mole’s Ars link on this says of the Kansas effort:
“In its key operative language, it says that municipalities can’t provide telecommunications, cable, or broadband services, period, and they can’t make their facilities available to private sector entities that would otherwise use them to provide telecommunications, video, or broadband services,” he said. “When you think about that combination, what do you have left? You can provide for your own internal needs, there’s an exception for that, but that’s pretty much it.”
That could lead to the amusing situation where local government uses it’s own cheap municipal broadband solely for itself at 60Mb, whereas everyone else around has the expensive commercial lines at 5Mb.
I agree in principal that competition is best, but knowing my history I’m not sure that’s true. The phone company and electrical utilities brought their services to rural Americans in the early 20th century only in return for monopoly protection from the government. Otherwise I bet there’d still be hicks living in the dark in parts of the country. So maybe the solution is for the government to grant Comcast a monopoly on cable internet in return for ensuring everyone has access to the internet at decent prices and broadband speeds?
Or, like others have said, simply have a public option. I believe any public option should prioritize rural areas, though. If all you’re doing is giving the folks on Main street a third option (after cable and DSL), the benefits are questionable.
This is my understanding of the problem. Municipalities bargained away future competition for short-term rates and service.
If there is good competition then the ISPs that are censoring the internet will be out of business in short order*.
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- Unless, by censoring the internet and funneling users to their sites, they are able to offer a cheaper price. Then it’s a win-win solution; low-income users can purchase a limited internet they can afford while others can buy the internet service they want.
Well, you already haven’t got ‘good’ competition. You’re lucky in the US if you’ve got a duopoly. The Market’s not changing that anytime soon.
Anyway, how’s it a win solution for low-income people to have a censored internet ? As opposed to the freer more open internet of their betters ? An ISP that funnels major commercial sites that can afford the extortion imposed by the ISP, and makes minor commercial sites, who can’t, inaccessible, won’t do anyone any favours.
Censorship of anything legal is always a hinderance to the market.