
Big Cable says investment is flourishing, but their data says it's falling - luu
http://www.vox.com/2014/5/12/5711082/big-cable-says-broadband-investment-is-flourishing-but-their-own-data
======
meric
"The industry is acting like a low-competition industry, scaling back
investment and plowing its profits into dividends and share buybacks and
merger efforts."

Most US industries are in a similar state (plowing profits into dividends and
share buybacks and mergers). What's happening is companies are seeing there
will be more benefit to their share holders to borrow money against their
existing capital and paying that out as dividends than to risk that borrowed
capital to make new investments. This is happening because the Federal Reserve
has pushed the interest rate to near zero, at the same time people are over
leveraged (since money has been so cheap for so long) and don't have the money
to increase their spending in the future, which reduces the chance new
investments will pay off.

EDIT: This website tends to be very pessimistic, but I found the following
article informative and would illustrate my point well:
[http://www.zerohedge.com/news/2014-05-12/writing-wall-and-
we...](http://www.zerohedge.com/news/2014-05-12/writing-wall-and-we-should-
all-read-it)

~~~
cookiecaper
I once heard a professional investor say that if you're buying stock that
doesn't pay dividends, you're not investing, you're speculating.

~~~
couchand
Then again, as long as we're appealing to authority, Warren Buffet isn't a fan
of dividends.

------
Strilanc
Also, _on top of_ being cumulative and using different periods, the chart just
directly visually lies.

The pixel height difference between the 78.2 and 148.8 bars is ~110px for
70.6B$. But between 148.8 and 210 it's 198px for 61.2B.

So the pixel difference increases despite the money difference decreasing. I
have no idea how this can be justified. It makes the right side of the chart
look more steep than the rest instead of less (except the left-most part).

~~~
Strilanc
They dabble in scaling 2-dimensional objects by radius instead of the area,
but not quite by radius. A ~40% (cumulative) increase in dollars is shown as a
~70% increase in pixel area (which is a ~30% increase in radius, not ~40%).

------
dba7dba
I am just amazed at the lies and stupidity these people are pushing all so
that a few people at the top can buy a few mansions/private-jets. Little do
they realize what kind of damage they are doing to the competitiveness of
America's economy.

US flourished as it did partly because of open/affordable road system.
Physical goods and people and ideas were able to move about freely and hence
the economy grew.

Now it's all about the internet access. The goods people buy are often sent
over internet connection and people/ideas flow the best when internet is
working.

And here we are, with the few cable companies that we have doing their best to
hamper flow of idea over the internet, the lifeblood of our economy.

~~~
deciplex
The ruling class in America no longer gives a flying shit about the health of
the American economy or its competitiveness or any other such nonsense. They
are in a resource-extraction phase and from the look of it they are just
getting warmed up.

Whether that works out it anyone's best interest in the long run is forgotten
as everyone at the top is just scrambling to grab whatever they can.

So, what they "realize" has nothing to do with it.

~~~
ryanhuff
Considering that the "ruling class" are running companies that are operating
in an increasingly global economy, how can they not be concerned about
(global) competitiveness?

~~~
deciplex
The ruling class are largely not in executive positions at companies.

------
EricDeb
I love the grand total of one option I have for broadband internet at my
apartment.

~~~
kokey
Why do you only have one option?

~~~
makosdv
I only have two: Brighthouse (basically TimeWarner) or AT&T Uverse. In the US,
most broadband companies are issued local monopolies or duopolies on service,
so there's little or no competition.

~~~
rayiner
As 'dublinben points out, the granting of exclusive cable franchises has been
illegal under federal law since 1992.

So why is there so little competition? Because municipalities make it
unattractive for companies to compete. American cities are totally
dysfunctional when it comes to socioeconomic conflict, and it plays out in a
way where building infrastructure becomes a huge political battle:
[http://www.crainsnewyork.com/article/20140219/TECHNOLOGY/140...](http://www.crainsnewyork.com/article/20140219/TECHNOLOGY/140219845/mayor-
pushes-verizon-to-discount-fios-for-poor). If you want to bill fiber in New
York City, you can't just operate like a regular business, targeting the most
profitable customers. You have to play in this insane socioeconomic
battleground with a civil rights lawyer breathing down your neck turning a
simple business into an economic justice issue. Or you go into San Francisco,
and your fiber upgrade gets stymied because people don't like how the boxes
look: [http://www.fiercecable.com/story/judge-orders-att-halt-u-
ver...](http://www.fiercecable.com/story/judge-orders-att-halt-u-verse-
construction-san-francisco/2011-11-16).

~~~
selmnoo
We already have a tremendous amount of socioeconomic problems when it comes to
housing; only those who are privileged enough to be able to afford housing
near good schools, good communities can get good education and a stable/safe
life, etc., why let the internet be a repeat of this? I say good on those
cities trying to make things fair. It might make the difference of the next
Zuck being from a middle-class household who in fact has the same speed and
experience on the internet as everyone, rather than another privileged
Harvard-educated brat who has the familiarity with the new and the fast, who
is better able to see the frontier of internet technologies and is thus able
to innovate without as many obstructions.

The current way, the rich are in some way subsidizing fast internet for the
poor, and telecom companies are deprived of high profits. That is excellent.

~~~
rayiner
Depriving the telecom companies of profits just means that investors will take
their capital somewhere more profitable, like peddling advertising to kids:
[http://ycharts.com/companies/FB/profit_margin](http://ycharts.com/companies/FB/profit_margin).
Shareholders will do things like encourage Verizon to sell off all its
wireline assets to get rid of less-profitable business lines and unionized
workforces: [http://www.dslreports.com/shownews/Goldman-Sachs-Wants-
Veriz...](http://www.dslreports.com/shownews/Goldman-Sachs-Wants-Verizon-to-
Sell-All-Landline-Assets-117774).

As for cross-subsidization, it's bad because it obscures the trade-offs that
are being made. I'd be happy to pay tax money to subsidize internet for low-
income households. But I want that on my tax bill, not my cable bill.

~~~
selmnoo
> I'd be happy to pay tax money to subsidize internet for low-income
> households. But I want that on my tax bill, not my cable bill.

But you know it as well as I do that that's not happening. I had to hear it
from my grandma, Rush Limbaugh, and about 4 or 5 neighbors on my street about
Sandra Fluke having the nerve to suggest contraceptive drugs be included as
part of healthcare - can you imagine the kind of outrage you'd see at the idea
of people's internet being put on your tax bill? That's never happening, it's
not a politically viable solution, full stop. Heck, I know even very smart and
educated people who like to regard the internet as a waste of time with
nothing of worth.

> Depriving the telecom companies of profits just means that investors will
> take their capital somewhere more profitable, like peddling advertising to
> kids:
> [http://ycharts.com/companies/FB/profit_margin](http://ycharts.com/companies/FB/profit_margin).

You're very correct there. Personally, I'm convinced that Facebook is a house
of cards that will soon fall
([https://www.youtube.com/watch?v=oVfHeWTKjag](https://www.youtube.com/watch?v=oVfHeWTKjag))
and I hope and pray that it does so very soon. And that it'll take down a lot
of others too, with it. I have no good answers here, I just people were a
little more assertive in spewing away anything with the FB logo. Let's hope
all of this advertising model is a passing phase and we get over it.

------
coldcode
Oldest tricks in the chart book. Why do people lie in such an obvious manner
and think no one will notice?

~~~
fux0r3d
Because the majority of people will not notice, and many of us live in a
majority-rule society. You can't fool all the people all of the time, but pay
the right ones and the rest will fall in line.

~~~
georgemcbay
Actually it is worse than that, most people do notice the lies but feel
powerless to stop it. Mostly because they actually are powerless to stop it.

~~~
tragic
Indeed. You can write a letter to your congressman. Comcast can write a
cheque.

------
sirdogealot
> in the years that broadband service has been subjected to relatively little
> regulation, investment and deployment have flourished

Perhaps they are referring to the majority of the years/graph between 1997 and
2008? Which if they were, would make that statement true.

Even by saying that investment has increased overall between 1997 and 2013
would be true imho.

~~~
dublinben
It's impossible for cumulative investment to not increase over time.

~~~
AnthonyMouse
In theory it could remain flat, but you would only expect that as a precursor
to bankruptcy.

------
jsz0
This is cable industry trade data not really something intended for the
general public. Dollar amounts aren't going to provide the context required to
understand this data. For example over the last 5 years most cable MSOs have
gone mostly/all digital which has reclaimed hundreds of megahertz's of
spectrum. As a result spending on plant/infrastructure upgrades has slowed.
The costs of the digital migrations wouldn't be classified as broadband
investments even though it's directly related. Also in this time span most
cable providers completed their transition to DOCSIS 3. Big upfront cost but
less expensive to scale out over time. Soon they will have another big upfront
cost for the DOCSIS 3.1 transition.

------
727374
Least controversial HN post... EVER.

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nessup
why is this not getting upvotes? awareness about telecom/broadband bullshit
needs to be going up these days, if anything.

~~~
ryguytilidie
It's #2 on the front page right now...

