Internet providers need to be subject to competiton

[Deeg]

@Claverhouse

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.

It is my opinion that if we could remove the barriers to entry then we would foster better competition.

@Claverhouse

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.

An analogy might be automobiles. Most people need to buy a car to get to work. Rich people get to work in Beamers, Caddies, and Infiniti’s. Poor people get to work in beaters. The nice cars are better (they start every day) but the beaters, which are affordable, are better than nothing. If we legislate that ISPs can’t “censor” the traffic then they don’t have the opportunity to charge lower prices for censored users; everybody pays the same (higher) price, which is like requiring everybody to buy a BMW. I’d prefer to give the ISPs (and therefore the users) a number of options.

This, of course, requires decent competition.

[The_Joker_and_the_Thief]

@Whack-a-Mole

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.

Thanks for the numbers. I checked more recent data and it looks like you are correct; Comcast’s revenue from high speed internet has grown about 6-9% a year since the article was posted. The article, however, doesn’t seem to distinguish between revenue from broadband internet and from all internet access, which could make a difference. I couldn’t find any data on the costs of Comcast’s high-speed internet service. Obviously government regulation to block competition and increase profits is bad. I don’t think many people will dispute that.

@Claverhouse

Perhaps you could quote these precise ‘government regulations’ ?

I’d be happy to. Here’s Comcast’s description of the regulatory burden that adversely affects their business, taken from their 2014 10-K filing. Bolding added for clarity.

We provide high-speed Internet services over our cable distribution system. Our high-speed Internet services are subject to a number of regulatory obligations, including compliance with the Communications Assistance for Law Enforcement Act (“CALEA”) requirement that high-speed Internet service providers (“ISPs”) implement certain network capabilities to assist law enforcement in conducting surveillance of persons suspected of criminal activity, and the FCC is considering new requirements for ISPs.

In February 2015, the FCC adopted new open Internet regulations but the text of the order has not been released yet. The FCC announced that the order reclassifies broadband Internet access service as a “telecommunications service,” making it** subject to common carrier regulation** under Title II of the Communications Act. The FCC, however, has indicated that the order will forbear from a number of utility-style regulations, such as rate regulation, tariffs, and unbundling requirements. The FCC also announced that the order adopts rules that bar ISPs from blocking access to lawful content, applications, services or non-harmful devices; prohibits ISPs from impairing or degrading lawful Internet traffic on the basis of content, applications, services, or impairing or degrading the use of non-harmful devices; prohibits ISPs from favoring some lawful Internet traffic over other lawful traffic in exchange for consideration (i.e., no paid prioritization); prohibits ISPs from prioritizing Internet content and services of their affiliates; establishes a new general conduct standard that prohibits ISPs from unreasonably interfering with or unreasonably disadvantaging the ability of consumers to select, access, and use the lawful content, applications, services, or devices of their choosing or of edge providers to make lawful content, applications, services, or devices available to consumers; and expands the FCC’s current Internet transparency rules. In addition, the FCC explained that the agency has now asserted jurisdiction, for the first time, over Internet traffic exchange, so interconnection arrangements will now be subject to a statutory requirement that all charges, practices, classifications, and regulations for and in connection with interconnection must be just and reasonable. All of these requirements will be subject to FCC enforcement and potential third-party claims for damages or equitable relief.

…

Separate and apart from the new rules, Comcast is currently bound by the FCC’s original “open Internet” regulations adopted in 2010 as a condition of the NBCUniversal Order and the NBCUniversal Consent Decree for the remainder of the term of those orders. These regulations require that we disclose information regarding network management, performance and commercial terms of the service (the “transparency rule”); bar us from blocking access to lawful content, applications, services or non-harmful devices; and bar us from unreasonably discriminating in transmitting lawful network traffic.

In January 2015, the FCC redefined what connection speeds and other service characteristics constitute “advanced telecommunications capability,” increasing the downstream speed from 4 Mbps to 25 Mbps. The definition of “advanced telecommunications capability” has been used by the FCC in the past to determine whether broadband Internet services are being deployed to all Americans in a reasonable and timely way. Under the relevant statute, because the FCC has determined that “advanced telecommunications capability” is not being deployed in a reasonable and timely manner, it has regulatory authority to adopt new regulations that might conceivably accelerate deployment of such services. The FCC reportedly is considering relying in part on this authority to adopt new open Internet regulations. The FCC also could use this authority to adopt other measures affecting our broadband business.

The NBCUniversal Order and NBCUniversal Consent Decree include various conditions and commitments requiring us to expand our broadband service areas, to continue to offer all of our high-speed Internet service speed tiers on a stand-alone basis at reasonable market-based prices, to maintain a high-speed Internet service of at least 12 Mbps downstream across most of our footprint, and to not discriminate in how we treat “specialized services” (defined as services we provide over the same last-mile facilities as our high-speed Internet service, but not including our high-speed Internet service, video services or voice services). We have taken a number of steps to comply with these conditions.

Congress and federal regulators have adopted a wide range of measures affecting Internet use, including, for example,** consumer privacy, consumer protection, copyright protection, defamation liability, taxation, obscenity and unsolicited commercial email.** For example, in 1998, the Internet Tax Freedom Act was enacted in an effort to promote use of the Internet, and it has been extended several times, but is scheduled to expire in September 2015, unless it is extended again.** State and local governments also have adopted Internet-related regulations. Furthermore, Congress, the FCC, and certain state and local governments are considering proposals to impose customer service, quality of service, expanded copyright protection requirements, taxation, child safety, privacy and standard pricing regulations on high-speed ISPs**. It is uncertain whether any of these proposals will be adopted. The adoption of new laws or the application of existing laws to the Internet could have a material adverse effect on our high-speed Internet business.

[Flyer]

@Wesley_Clark

The Myth of Population Density and the High Cost of Broadband

The myth of low population density - The New York Times

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.

Major cities in the US have far LOWER population densities than many major cities in other countries.
The following list gives people per square kilometer, for some reason:

Seoul/Incheon
16,700

Taipei
15,200

Madrid
5,200

London
5,100

Tel Aviv
5,050

By contrast, Los Angeles–the most densely-populated American city–ranks 90th in the world at 2,750. New York is 2,050. Dallas/Ft. Worth & Houston, with about 8 million residents between them, are 1,150.

City Mayors: Largest cities in the world by population density (1 to 125)

Seoul is 6 times more densely-populated than LA.

In other words, your cavalier dismissal of population density is wildly incorrect.

[filmstar-en]

The way the US market has developed seems to encourage competition between suppliers of infrastructure. In many cases that is a choice between the local cable company and local telephone company.

In Europe they decided that that was not enough to get a competitive market. They decided that the companies who own the cables and the telephone wires should be obliged to allow any other company to install their own equipment and connect any customer onto a competing network.

Customers have a choice of dozens of competing broadband suppliers providing many different deals.

The US market is stalled until either city governments themselves start laying wires or Google fibre comes to town.

I believe this situation came about in the US because of some not very well thought out regulations governing telecoms and cable companies.

Whether this situation will change anytime soon is debatable. That poorly provisioned duopoly that overcharges its customers has a strong vested interest to fight any change in the courts.

Here is a video that compares the European experience with the US:

Need To Know | PBS

Legislators really have to work hard to get a framework of regulation that ensures competition and grows the market. This process did not work well in the US.

Ultimately, every developed economy will have a fibre network into every home to replace the copper. That will cost a LOT and is it is hard for telcos or cable companies to justify the investment unless the government encourages it. It is somewhat easier in countries like South Korea where a lot of population live in apartment blocks and the government has a clear strategy that regards fast internet access as a key utility necessary for an advanced economy. If you want economic development from businesses that rely on the Internet extensively, they are not going to set up shop any place that does not have a good connection.

I am wondering if Googles fibre and the efforts of various city governments around the US to create a fast internet infrastructure is evidence of how this deadlock might break?

[Steve_MB]

@The_Joker_and_the_Thief

I’d be happy to. Here’s Comcast’s description of the regulatory burden that adversely affects their business, taken from their 2014 10-K filing. Bolding added for clarity.

By all means, get rid of CALEA – if the authorities have legitimate grounds for investigating someone’s communications, let them get off their butts and plant keyloggers. This would have the effect of forcing them to focus on specific individual targets rather than fishing-expedition sweeps, a bug for them but a feature to the rest of us.

As for the complaints about regulations against blocking or throttling lawful content, would they like cheese with their “waaa, the big bad gummint is making us actually provide the service we sold” whine?

[Nametag]

@Flyer

Major cities in the US have far LOWER population densities than many major cities in other countries.
The following list gives people per square kilometer, for some reason:

Seoul/Incheon
16,700

Taipei
15,200

Madrid
5,200

London
5,100

Tel Aviv
5,050

By contrast, Los Angeles–the most densely-populated American city–ranks 90th in the world at 2,750. New York is 2,050. Dallas/Ft. Worth & Houston, with about 8 million residents between them, are 1,150.

http://www.citymayors.com/statistics/largest-cities-density-125.html

Seoul is 6 times more densely-populated than LA.

In other words, your cavalier dismissal of population density is wildly incorrect.

That list is crap. Los Angeles is probably the LEAST densely populated of the U.S.'s major cities. The densest, as everyone should know, is New York, NY, with 10,194/km². Manhattan’s population density is 25,846/km². This incredible discrepancy is due to the ridiculous figures of 17,800,000 for New York’s population and 8,683 km² for its land area - the entire city of New York only has an area of 786 km². The figures in the list are for an entire metropolitan area – I can’t tell which, but U.S. Census areas on that scale include parts of New Jersey, with large expanses of less developed suburbs and countryside in between. Similarly, San Francisco, America’s second most densely populated city, has about 850,000 people in an area of 120 km² or 7,022/km².

[Wesley_Clark]

@Nametag

That list is crap. Los Angeles is probably the LEAST densely populated of the U.S.'s major cities. The densest, as everyone should know, is New York, NY, with 10,194/km². Manhattan’s population density is 25,846/km². This incredible discrepancy is due to the ridiculous figures of 17,800,000 for New York’s population and 8,683 km² for its land area - the entire city of New York only has an area of 786 km². The figures in the list are for an entire metropolitan area – I can’t tell which, but U.S. Census areas on that scale include parts of New Jersey, with large expanses of less developed suburbs and countryside in between. Similarly, San Francisco, America’s second most densely populated city, has about 850,000 people in an area of 120 km² or 7,022/km².

Chattanooga has a population density of 472 and they have 1gbps broadband for $70/month. If anything a high density area like Manhattan should be cheaper since it will cost less to build the infrastructure (I assume).

The argument is still a red herring. Kansas City and Chattanooga have much lower population densities than many large cities. Google is expanding into salt Lake city and Austin which again have lower pop densities than major cities.