
Why is broadband more expensive in the US? - Libertatea
http://www.bbc.co.uk/news/magazine-24528383
======
workhere-io
_" We deregulated high-speed internet access 10 years ago and since then we've
seen enormous consolidation and monopolies, so left to their own devices,
companies that supply internet access will charge high prices, because they
face neither competition nor oversight."_

This should be a wake-up call for people who believe in the free market's
ability to further low prices and good products. In reality it is often up to
governments to prevent monopolies from forming and ensure that there is enough
competition.

~~~
cones688
Or control the infrastructure on which it relies.

Here in the UK we have a wholesale company (BT OpenReach) which is strictly
regulated that provides all telephone lines, providers can then "rent" off
those cables. This allows for a massive variety of competition and broadband
packages from £5 a month.

This also allows a funnel for the govt to invest if required, say laying fibre
to remote communities rather than having to rely commercial interests to, who
never would.

~~~
Nux
A massive variety of crap, mostly. The only thing that gets close to well
connected countries in Europe is BT's Infinity. The rest are just pathetic
ADSL offers or throttled-to-hell cable offers (Virgin, now UPC).

~~~
cones688
to repeat what Dasmoth calls out - BT Infinity is just fibre laid by Openreach
it is available to any operator (Sky etc), BT have just a great job of
branding it like you can't get fibre on other providers - except you can.

[http://www.sky.com/shop/broadband-talk/fibre-
optic/](http://www.sky.com/shop/broadband-talk/fibre-optic/)
[https://sales.talktalk.co.uk/product/fibre](https://sales.talktalk.co.uk/product/fibre)
[http://www.plus.net/home-broadband/package-guides/fibre-
opti...](http://www.plus.net/home-broadband/package-guides/fibre-optic-
broadband/)

~~~
Nux
Mea culpa for not reading properly and thanks for explaining it. It's a shame
more ISPs aren't doing it, I for one have not heard of anyone else but BT.

~~~
vertex-four
The relevant press release from Ofcom (the telecoms regulator, for those
outside the UK): [http://consumers.ofcom.org.uk/2010/10/supporting-the-
uk%E2%8...](http://consumers.ofcom.org.uk/2010/10/supporting-the-
uk%E2%80%99s-super-fast-broadband-future/)

BT Retail has just been really good at advertising it, the rest of the ISPs
don't seem to have branding budgets to compete.

------
exelius
No; it has more to do with the way that US cities are very spread out, how
right of way must be established on a neighborhood-by-neighborhood basis, and
as a distant third the lobbying / political power of the telecoms.

Nothing is really stopping new entrants from joining the market -- other than
the fact that deploying a broadband network in the US is really, really
expensive. In Europe or Asia you can much more easily obtain a license to run
cable across a wide area encompassing a whole city; in the US those rights are
split between dozens of different municipalities, some of which don't have the
resources to approve requests.

Additionally, US telecom regulation requires that if you're going to cover a
city, you have to cover the WHOLE city; or at least you can't discriminate
based on income. This is why Verizon has slowed FiOS deployments to new
developments only -- it's a way to be able to only roll FiOS out to wealthy
customers. People in the ghetto don't buy broadband, but if you want to roll
out in a US city today, you have to make it available to them anyway.

~~~
jseliger
_Nothing is really stopping new entrants from joining the market -- other than
the fact that deploying a broadband network in the US is really, really
expensive_

Actually, a lot is: Google "cable franchise agreements" or "city broadband
franchise agreements" and you'll find that many if not most cities and
counties either forbid or make prohibitively expensive real competition. Here
is one news article about a lawsuit related to them:
[http://stopthecap.com/2012/06/19/court-invalidates-
existing-...](http://stopthecap.com/2012/06/19/court-invalidates-existing-
cable-franchise-agreements-in-texas-twc-unshackled/) .

Many states are also passing telco-financed laws prohibiting local
municipalities from creating Internet access as a utility. Examples:
[http://www.infoworld.com/d/the-industry-standard/big-
carrier...](http://www.infoworld.com/d/the-industry-standard/big-carriers-go-
political-kill-local-broadband-235797) or
[http://www.slate.com/blogs/moneybox/2013/12/30/municipal_bro...](http://www.slate.com/blogs/moneybox/2013/12/30/municipal_broadband_s_death_by_lobbyist_san_antonio_has_the_fiber_they_should.html)
.

~~~
ipsin
I live in California and was hoping to lobby my municipal government to
bargain for better service when our cable franchise came up for renewal.

What I learned was that this bargaining power had been transferred to the
state level in 1996. When I talked to those who'd been in charge of the
process previously, they claimed the state CPUC served as a rubber stamp.

[http://www.cpuc.ca.gov/PUC/Telco/Information+for+providing+s...](http://www.cpuc.ca.gov/PUC/Telco/Information+for+providing+service/videofranchising.htm)

If you live in California, the CPUC is, theoretically, the organization you
want to lobby. When I tried to get a roadmap for broadband expansion in my
area, I did not have much luck.

~~~
spikels
This drives me crazy. The whole reason they are given a decades long monopoly
is so they build the infrastructure. Once it is built there is absolutely no
good reason to renew the monopoly. It's like continuing to pay on your 30 year
mortgage after 30 years!

And when local governments had this power they renewed the cable monopolies
anyway?! In 2005 San Francisco, for $8 million upfront and $500k a year, the
SF government sold Comcast exclusive rights to SF's 800,000+ residents for 4
years. And this has effectively been extended indefinitely.

This is a good example of the difference between the public and private
sectors.

[1] [http://www.sfgate.com/bayarea/article/SAN-FRANCISCO-Board-
pa...](http://www.sfgate.com/bayarea/article/SAN-FRANCISCO-Board-panel-OKs-
Comcast-deal-2650404.php)

------
67726e
The link above is more or less blogspam. Here is the full article it links to:
[http://www.bbc.co.uk/news/magazine-24528383](http://www.bbc.co.uk/news/magazine-24528383)

------
gdrulia
Whenever there is article about internet prices I always see a lot of mistakes
in calculations, question is just why? I am Lithuanian, living in London for
the last 4 years. When I left Lithuania at 2010, you could have got 100mbps
internet with unlimited traffic starting from £25 per month. Now you can get
plan for same 100mbps internet for barely £12.5. Plus no contract, no traffic
controlling, so you can keep your torrents 7/24\. In the mean time in UK, I
just last Summer finally got the upgrade to super old-school ~6mbps internet,
now speeds reach 60mbps for a price ~£40 per month, and there is a regulation
of traffic, so any weekend or evening internet can slow down for torrents.

In a nutshell at 2014 this what you get in UK vs Lithuania:

BT - UK: 60mbps > £40 > regulated traffic > plus contract 12/24 month.

Meganet - LT: 100mbps > £12 > non-regulated traffic > no contract.

------
rayiner
This chart is meaningless for several reasons.

1) It's well-known that U.S. providers achieve closer to advertised speeds
than European providers. That's why the U.S. does way better in Akamai's tests
of actual bandwidth than the OECD's study involving advertised bandwidth. The
U.S. is currently 8th for highest average internet speed in Akamai's most
recent state of the internet: [http://www.akamai.com/dl/akamai/akamai-
soti-q313.pdf?WT.mc_i...](http://www.akamai.com/dl/akamai/akamai-
soti-q313.pdf?WT.mc_id=soti_Q313) (see page 13).

2) It's not adjusted for price level in each country. Many things are cheaper
in Hungary or Slovenia than the U.S. Internet service isn't a commodity good
like an iPhone where everything is assembled in China. Internet infrastructure
is put down and maintained by (often unionized) U.S. workers earning U.S.
wages, and sold to customers also earning U.S. wages.

3) It ignores the cost of government subsidies:
[http://bits.blogs.nytimes.com/2009/03/12/the-broadband-
gap-w...](http://bits.blogs.nytimes.com/2009/03/12/the-broadband-gap-why-do-
they-have-more-fiber/?_php=true&_type=blogs&_r=0) ("There are only a handful
of major projects worldwide to build fiber lines to homes that don’t involve
significant government aid of some sort, Mr. Burstein said, including
Verizon’s FiOS and Iliad’s fiber network in some large French cities.").

~~~
bestdayever
US ISPs regularly get government subsidies. Hell they took 200 billion to
start building fiber in 1996, then they didn't do it.

~~~
rayiner
First, the $200 billion number is a total fabrication. It was derived by
projecting how much more profit telecoms made after deregulation in 1996 than
they would have had as tightly-regulated utilities. It's not money actually
invested. The states never had that kind of money to invest.

Second, to the extent that tax breaks, etc, were handed out, it wasn't
combined with the kind of political will you see in European countries or
Asian countries. In South Korea, wiring Seoul up with fiber is a politically
tractable proposal. In the U.S., wiring New York and Chicago and LA up with
fiber is a political non-starter. In the U.S., rural votes count about 2x as
much as urban votes, so to the extent that broadband appears on the political
radar, it's all about making sure people in rural Kentucky can get DSL, not
making sure people in major cities can get fiber.

------
ck2
In many US cities, internet is a duopoly, so everyone is squeezed.

My ISP raises its price $5/mo every year.

I pay $50 for 5mbps with 100GB monthly cap.

Five years ago it was half the price.

They are making a killing.

------
batmansbelt
Canada is not shown. If memory serves, we'd be worse off than USA.

Strange to depict Australia, but not Canada.

~~~
sp332
Canada is between Austria and Hungary on the graph.

------
sailfast
Something I don't see addressed in many of the discussions around broadband
(and a question I have) is how infrastructure already in place impacts the
cost to provide faster service.

Obviously countries that skip the middle steps and go straight to, say, mobile
phones without wiring up the country on hard lines have a better capability
for less sunk cost. How much is this phenomenon impacting current US
broadband? Are we still using crappy cable wiring from the 80s, or are we just
being taken to the cleaners because we can? Appreciate anyone that may have
more insight or experience taking a crack at the question.

~~~
breischl
We definitely have some problems with old infrastructure, particularly when
you're talking about phone lines and DSL. Some houses still have really old
lines running to them and even older lines inside them (I swear my previous
house had phone cable from the 1940's). Tearing out and replacing all that
stuff is quite expensive. This is sometimes called the "last mile problem."
[1]

On the other hand, mobile phones are not a great analogy. Going straight to
mobile allows you to skip digging up all the streets in town, but any sort of
wired internet you have to put the wires somewhere. Putting in fiber right off
the bat is certainly better, but you still had to do all that digging and
installing.

[1]
[http://en.wikipedia.org/wiki/Last_mile#Existing_delivery_sys...](http://en.wikipedia.org/wiki/Last_mile#Existing_delivery_system_problems)

------
Fuxy
Lol. Wonder why they never bothered to put Romania on this cart. Is it because
they have the best prices (1) at the moment?

[1] [http://www.rcs-rds.ro/internet-digi-
net/fiberlink?t=internet...](http://www.rcs-rds.ro/internet-digi-
net/fiberlink?t=internet-fix&pachet=digi_net_fiberlink_1000)

If you were wondering yes 60RON is about £12.

------
vixen99
Slightly off topic but I wonder why Romania was not included seeing that it's
often quoted as having the fastest and cheapest internet in Europe.

[http://www.bne.eu/story5565/Romania_ranks_first_in_CEECIS_fo...](http://www.bne.eu/story5565/Romania_ranks_first_in_CEECIS_for_internet_speed)

------
rikkus
It says that more competition would drive prices down. Is there more
competition in Korea, Denmark and The Netherlands?

I don't actually know; it'd be interesting to find out!

~~~
skrebbel
In the Netherlands, cable providers are essentially monopolists in their
areas. On ADSL and fiber (where that is available), however, there's about 15
competitors or so. So, seems like it does.

~~~
berryg
Situation in The Netherlands is complex. There is competition between
techniques, ADSL, Cable and Fiber. But realistically, ADSL is becoming too
slow, fiber is still to expensive. And cable currently hits the sweet spot.
But, cable companies are merging and basically there are now only two major
companies who are talking with each to merge together. Thus creating an almost
monopoly on cable.

------
crazy1van
This article doesn't live up to the title. It is just a chart of prices
followed by basically "because monopolies" with nearly no supporting evidence.

------
kellros
South Africa would have made that chart look totally out of proportion :) I
believe 1Mb/s is going for around $35-$60/month

------
wil421
Some of those countries listed are smaller than the state I live in (area not
population).

Also, I believe that in the US we have much higher data caps for home
internet. My cap is 300GB a month from Communistcast I cant find the reference
now but I remember reading about some places in Europe on giving something
like 50GB a month. Sure you may have a faster connection but you will blow
through your data cap faster.

~~~
Oletros
I don't know any Spanish or Italian broadband ISP that caps the connection

~~~
wil421
Here is one instance for Germany starting in 2016:
[http://www.zdnet.com/deutsche-telekom-tweaks-plan-to-
bring-i...](http://www.zdnet.com/deutsche-telekom-tweaks-plan-to-bring-in-
broadband-data-caps-throttling-in-2016-7000016889/)

Here is British Telecom:
[http://bt.custhelp.com/app/answers/detail/a_id/10495/~/bt-
br...](http://bt.custhelp.com/app/answers/detail/a_id/10495/~/bt-broadband-
usage-policy)

And finally here is a list on Wikipedia:
[http://en.wikipedia.org/wiki/List_of_cable_Internet_provider...](http://en.wikipedia.org/wiki/List_of_cable_Internet_providers#Europe)

Thanks for picking two countries that dont have caps. I guess I shouldve been
clearer.

------
richbradshaw
Glad I live in the UK - that graph shows why our internet is so amazing and so
cheap!

~~~
seanalltogether
I wonder which regulations in the UK allow for it to be so cheap. Where I live
in Belfast, our only high speed internet option is Virgin, so it might as well
be a monopoly as far as we're concerned, and yet we only pay the equivalent of
about $30 a month for internet and +200 channels.

Maybe part of the tv license fee is going towards infrastructure costs?

