
Why is broadband more expensive in the US? - a_w
http://www.bbc.co.uk/news/magazine-24528383
======
nostromo
A friend and I once decided to look into how much it costs to lease the
communications space on public utility poles. This is the space well below the
power lines that the cable and telephone companies lease from your local
government. Read more here:
[http://www.annsgarden.com/poles/poles.htm](http://www.annsgarden.com/poles/poles.htm)

Truth is, almost nobody at the local level has any idea how one could go about
doing this. Even though they are publicly owned poles and communications
companies pay rent to use them, the cities have no mechanism on how to
actually rent pole space to any company other than the phone company and the
cable company.

I think we could see a resurgence of local ISPs and even metropolitan area
networks if city governments would take up this one issue -- open up the
utility polls to more companies and publish the rental rates for the poles. As
a bonus, they could even earn more tax proceeds.

~~~
afuchs
Aren't most utility poles and conduits owned by the utility companies? Look up
"poll attachment."

~~~
nostromo
In my location the city owns the utility. If you have a private utility like
PG&E or ConEd, I'm not sure.

------
loser777
As a college student it's hilarious how big the discrepancy is between
residential on-campus broadband and off-campus housing "broadband". While in
the dorms, I measured around 600mbps down/200mbps up (this service didn't seem
to add any considerable amount to housing cost). I now live the same distance
from my classes/buildings, but technically off-campus and pay $53 a month for
5mbps down/768k up DSL. Usually I would have the slightly better (but still
terrible option) of 20mbps down cable, but another cable provider has a
monopoly on my apartment building. I stick to DSL because that's actually the
better option, believe it or not.

This isn't even in some remote area of the US or something like that.
(Westwood, Los Angeles, California.)

~~~
sliverstorm
_this service didn 't seem to add any considerable amount to housing cost_

It's rolled into tuition. The dorm access is basically a hangers-on to the
typical University model, wherein the school acts as its own ISP with a direct
tap into the infrastructure.

~~~
quink
It's funny because fibre is near enough cheaper to maintain and run than
copper is these days.

It's just that the copper is already there and the telco that'll say 'go capex
blast-off' when you're not going to pay them thousands of dollars in some way
or another is a rare telco indeed.

------
a3n
Because, in general, this supposed consumer's paradise is actually a corporate
paradise. "Consumers" aren't the driver, corporations are, and consumers are
only "protected" in the sense that cattle are protected.

Why else would drugs be prohibitively expensive in the US, and the exact same
drug be an almost insignificant cost to patients right next door in Canada?
You might say that pharmaceutical companies need to recoup their development
cost. That might even be true. But they're doing it by charging the US
consumers more than other countries.

Why else would SIM cards and healthy competition not be the norm in the US
cell phone market? I'd love to take the phones out of my sock drawer and use
them, instead of buying a new phone when I switch carriers.

As for broadband, fundamentally they charge so much because they can. Very
little competition, usually the only game in town (Comcast has the cable
option in my area, with DSL available here and there.) And Congress never met
a bribe they didn't like.

"US consumers are our most important resource."

~~~
antihero
The "free market" is only as free as the consumer.

------
SwellJoe
I didn't need to read this article to know why. I watched it happen.

My first company sold web caching proxy hardware and software support (all
Open Source based on Squid). 95% of my customers for the first several years
of operation were independent ISPs. I had maybe 200 of them as customers in
the 7 years the company existed, many became friends. When "deregulation" took
place in the telephone, cable, and broadband market...at the beginning of the
DSL/cable Internet revolution, the last mile became impossible to bridge for
ISPs without an agreement with either a telco or cable operator (before that
modems could call across the country without any explicit involvement of the
telco...though higher speed modems did require data center presence at the
telco level). The government required telcos and cable operators to resell the
last mile to independent service providers at a fair rate; they were supposed
to charge the same thing it cost them to provide the service to their own
broadband divisions.

So, independent ISPs were offered a DSL link to their customer for, say,
$23.50 per month, which is what the telco says it costs them to build/maintain
that DSL link and make a modest profit. Great, right? Problem is, whenever
ISPs tried to setup a DSL link, the telco would drag their feet. They would
take months to deploy service for an independent, or claim they didn't have
the hardware in place for that customer, or screw up the installation several
times. But, that was just the beginning. The telcos would _also_ send out
mailers to those very same customers, offering DSL internet at special
introductory prices...$19.95/month, for instance. Yeah, cheaper than the base
cost for the line they're charging independents (which doesn't include all the
other stuff an ISP has to provide). And, despite having told those customers
they couldn't get DSL or having experienced months of delays, the moment the
customer called up the telco, DSL would be up and running within a couple of
days.

I'd been hearing about it from my customers, and then I had it happen to me. I
tried two different independents...they worked hard to get me service, and
finally gave up, apologizing for the inability to deliver. After 6 months of
delays, I received one of those mailers from the telco. I called the telco,
and had DSL a few days later. Same circuit they'd refused to install service
on as recently as a month before.

When I started my first company, there were thousands of independent ISPs.
Some of them were _really_ good. Some of them were _really_ successful. Most
of them died during the switch to broadband. It wasn't an accident. They were
killed off by the old monopolies, and our regulators were complicit in the
process.

I'm not arguing for more regulation, really, but when the only way to get to
your customer is through a state-enforced monopoly, the state better do their
damned job. Or, we end up with the mess we have today: Among the worst
Internet service at the highest prices in the modern world. How is that
allowed to happen in the nation that invented the Internet?

All the arguments about distance and density are moot when talking about major
cities; San Francisco is very dense. There's not reason for broadband to cost
$99 for reasonable speeds, when it costs a third that for more bandwidth in a
couple dozen other nations, including places that are less dense.

This process didn't kill my company directly (I was able to pivot successfully
to serving enterprise, education, and government customers, and I had my best
year the last year it was in operation), but it made it so un-fun that I
didn't want to do it anymore. The kind of people I wanted to work with were no
longer in the business. The smart ones sold out to bigger companies, the
stubborn ones clung desperately to their dialup business or spent all their
money trying to go to WiMax and bypass the telcos. Almost none of them
survived as independent ISPs.

Some of the bigger ones brought lawsuits against the telcos. I don't know what
became of them, but the companies that did it are mostly gone, so I guess we
know how it turned out.

~~~
ZeroGravitas
> I'm not arguing for more regulation

Yes you are. But something in the American psyche makes it very hard to admit
this, so you end up with utterly useless regulations and very little desire to
enforce the ones you have.

~~~
SwellJoe
The problem, as I see it, may be that only one or two entities have a legal
right to build and operate that last mile of connectivity. So, customers are
"owned" by one telco and one cable company (maybe two cable companies in some
places). Those companies are territorial, even when they are legally bound to
share the line.

But, yes, more regulation would be one way to solve it. Another way to solve
it may have been to _not_ create massive monopolies on that last mile so many
years ago, or not allowing those monopolies to simply print money at the
expense of consumers and any competitors. I'm not sure about which is the
better approach. But, the current approach of government picking one company
to destroy all others is a truly awful middle ground.

~~~
ZeroGravitas
It sounds like (at least in this case) the correct type of regulation is in
place (I'd heard that the USA favoured building multiple competing networks a
la CDMA vs GSM) but if they can flagrantly ignore the rules to put people out
of business then clearly whoever is overseeing the regulation has no power to
enforce it (or has suffered extreme regulatory capture and doesn't want to).

------
maratd
The problem isn't density, as some have mentioned. It's structure.

In the US, the pipes are owned by the providers. Those pipes were built out
with subsidized funding or exclusive contract guarantees. In other words, it
becomes very difficult for a competitor to come in and build pipes, because
their competition already got the leg up.

A better structure would be where all the pipes are public property and the
town hires outside firms to upgrade/maintain them. Much like roads. Providers
pay a fee to the town for access to them and for usage. An unlimited number of
providers can enter the market. Users pay the providers. Competition between
providers reduces prices.

P.S. NYC is somewhat moving toward this with their WiFi project.

------
nazgulnarsil
tl;dr Supply limits due to high barriers to entry due to regulatory capture by
ISPs.

------
mathieu45
I think the basic problem is the structure of the industry and the kind of
people who are in it. In USA, by and large the telco business is a mafia
business. That is what is fundamental is control of the territory. This is
clear when a state is divided into two parts: one for Verizon and one for ATT.
It is clear when one reason given is the costs of "right of way" that needs to
be paid to the city: it is a deal between mafia groups. Simply think about it:
if you are interested in high tech, where do you go in the USA? Certainly not
to the telco. Now ask the same question in France, where do you go? Maybe in
telco. The reason is that some countries like France, South Korea, Germany,
etc. did not have a big tech sector. Also very little start up culture. But
they understood the importance of the tech sector and they did what they could
to unblock it by breaking the local mafia. So, the end result is low cost
internet. It did only marginally help the creation of a tech sector, but that
is what they could do.

------
skittles
UK is smaller than Oregon. Oregon has a population of 3.9 million. UK has a
population of 63.2 million. It is cheaper to get Internet to concentrations of
people (more income per line).

~~~
nubbie
Yeah, Australians have it rough. ADSL2 here costs anywhere between $40-$100,
those living a little further from the exchanges get speeds as low as 1.5mbps,
and this is in Sydney. I can't imagine what it's like in country Australia.
It's a real shame our government decided it's a good idea to CUT investment on
broadband.

~~~
deevus
I was wondering where Australia was in the article graphs. Speed: crap. Price:
stupid.

------
firemanx
I live in central WA and pay $80 for 100mb symmetric. We have local public
utility districts in the central counties of the state that are all
interconnected by local fiber optic networks. It's pushed the price of
internet access way, way down.

~~~
spoon16
Can you shoot me an email at eric@spoon16.com. I'd like to learn about the
type of work you are doing in Central WA.

------
spikels
A: Because our government prevents competition by granting monopolies in
exchange for revenue and political support.

------
joshuaheard
I live in Paris and have a basic bundle with Orange, the main telco in France.
I pay over 60 euros a month (about $90). This is the same as the American
average according to the article. I don't know where you can get a bundle in
France for 35 euros (about $25).

I think the numbers are skewed by their use of a purchasing power multiplier.
Everything costs more in Paris, so the price of broadband is relatively less
compared to places with a lower cost of living. However, based on my
experience, the broadband prices are the same, which is what you would expect
to see.

~~~
rtpg
...what? a package deal from SFR/Free/whoever is 30 euros a month. Also $35 is
25 euros

[http://www.free.fr/adsl/freebox-
revolution.html](http://www.free.fr/adsl/freebox-revolution.html) 30 euros a
month bundle.

~~~
Udo
> Also $35 is 25 euros

Not really if you consider VAT and generally higher prices. If you compare a
random US city with pretty much any place in the northern EU, $ and € are
exactly equivalent.

------
raverbashing
Well, here's the thing

The BS with the last mile happens in Germany and France as well. Maybe not as
worse, but to get Telekom (the public company of Germany) to set up the last
mile for some other company takes around 1 or 2 months.

Now let's evaluate what may be the issue with price/speeds:

\- People outside of US/Canada use less bandwidth heavy services, because of
piracy laws

\- Bigger countries demand more infrastructure (and if you have countryside
places with high cost/low speed this skews the average)

Now, pay 99 a month for broadband in SF? Ridiculous

~~~
quink
Ah, you think Germany is bad? In Australia we have the choice of Telstra for
phone.

Well, in Germany Deutsche Telekom used to run HFC as well, until they were
forced to sell it off by the EU back when they were privatised.

That didn't happen in Australia. And so we have the choice of Telstra for HFC
as well.

There's another HFC network that was built by Optus, with the anticipation of
Telstra overbuilding about 22% of it. Telstra overbuilt to a level of 80% dual
coverage.

So that's pretty much killed Optus' HFC network, which is about to shut down,
NBN or no NBN, quite soon.

No wonder then, given all that, that last time we moved it took about 5 weeks
just to get the phone line in. In fact, it's a shitfest _every_ _single_
_time_ _anyone_ _moves_ _in_ _Australia_. And the newly elected Coalition's
thing is not likely to be going to fix this, at all.

------
liongeek
Why doesn't romania appear in the list? Here we have 50mbps at $9 100mbps at
$12 500mbps at $15 1gbps at $18

I think these are the best rates in the world, right?

------
shirro
I would rather be in Kansas than Oz. I was only a couple of years from FTTH
before the luddites got elected.

~~~
quink
But VDSL2 is cheaper AND can be done sooner, is what the review near enough
headed by the incumbent telco, Telstra, will say. And that's all that matters.

Even if it does cost more simply within ten years because of the difference in
maintenance.

------
ams6110
I pay $80/month for internet + basic TV from comcast. It's just BARELY worth
it for me; I've been tempted more than once to cancel it but haven't. There's
no other choice for me, other than satellite which is far more expensive.

~~~
xur17
Are you in a location where an antenna would work? I have one set up for
watching locally aired TV shows and local sports now and then. Most of my
viewing has shifted to Netflix / Hulu, so this works great for me.

If you aren't a huge sports fan, it's worth a shot, and OTA channels are 720p
or 1080i, and uncompressed.

~~~
newman314
It doesn't change the fact that you pretty much need cable for internet access
of any decent speed.

~~~
mindslight
At least for the first few seconds while you're in "turbo boost" before the
throttling starts. And of course if you actually use this bandwidth for any
length of time, you'll run over your quota and they'll extort you or cancel
your service anyway.

More than anything, I blame the poor ISP market in the US on this exact
attitude that nothing besides cable is sufficient. Infrastructure is just not
at the point where we have the class of connection you're trying to take for
granted, and continually choosing only the absolute fastest provider while
whining about their policies and prices is being willfully out of touch with
the realities of current technology.

$55/mo will get you 12M/1M ADSL2+ from an ISP like Sonic.net, which is owned
by a _real person_ who even makes crazy statements like "We delete user logs
after two weeks. Your Internet provider should, too". You can double that by
easily bonding two lines, and/or enable Annex M for increased upload
bandwidth. And they aren't particularly concerned with how much traffic you
generate, either.

While these nameplate speeds are a bit slower than what you're used to seeing
in cable companies' large print, keep in mind that 12Mb/sec will let you
download 100GB/day, and 5Mb/sec (dual Annex M) will let you upload 42GB/day.
When you compare these numbers to the usage caps and expectations of cable
companies, you can see they're mostly selling an illusion.

------
Philadelphia
I'm more curious about the difference in the cost of men's haircuts and loaves
of bread that they mention in the opening...

------
BIair
Weird, neither the article or the comments seemed to answer the question, "Why
is broadband more expensive in the US?"

------
rogerthis
Have you seen the price of broadband in Brazil?

------
p1mrx
South Korea may be inexpensive, but they're among the worst in the world when
it comes to IPv6 deployment (0.00%, versus 4% in the United States):

[http://www.google.com/intl/en/ipv6/statistics.html#tab=per-c...](http://www.google.com/intl/en/ipv6/statistics.html#tab=per-
country-ipv6-adoption)

~~~
quink
I cannot possibly think of what actual relevance there is in _that_.

Not least of all because if I don't have IPv6, there's plenty of ways to do
that, even from the end-user perspective, with no support from your ISP, no
capital expenditure and no great ongoing cost, if any at all.

Now let me know how I can get let's say 100 Mbps upload speeds as easily as
hooking into IPv6 assuming I have 1 Mbps at the moment.

~~~
p1mrx
The Internet is an IPv4/IPv6 dual-stack network. When the topic is Internet
access, IPv6 is relevant by definition.

The fact that Korea has shown no interest in following the IETF standard
suggests that they're willing to balkanize the network. High-speed broadband
will become meaningless if you have to jump through hoops to reach the
Internet.

~~~
quink
Or maybe South Korea, being a rich country and all, has 2.3 IPv4 addresses per
capita available, likely to be enough for a while yet, and there's always the
possibility to buy more.
[http://en.wikipedia.org/wiki/List_of_countries_by_IPv4_addre...](http://en.wikipedia.org/wiki/List_of_countries_by_IPv4_address_allocation)

And it has a very domestically oriented Internet. If IPv6 really matters, and
there's hardly going to be much one can access via IPv6 but not IPv4 for a
while yet, I can tunnel through and get IPv6 somewhere and vice versa. I can't
tunnel myself a 100 Mbps upload speed when I only have 1 Mbps.

And all that's assuming that South Korea isn't doing IPv6 at all. Maybe they
just haven't got as much of an incentive compared to, let's say, China with
0.25 IPv4 addresses per capita.

