I think you’re mis-interpreting the overbooking ratios. My understanding is that a 20:1 ratio means that for 1 mbit you can serve 20 customers 1 mbit.
Your point still stands though. That means if 1 mbit cost $1 then it costs $0.04/customer.
The real cost is in deploying the wires and countless studies have shown the ROI on that, especially given the exorbitant rates, is typically 5 years or less per hookup. Can you imagine how much Comcast etc have made per house they’ve run coax to? The ROI must be mind boggling.
The author of the book that makes that claim has a tendency to exaggerate. Here is some discussion of his earlier book, when it was just $200 billion he was claiming: https://news.ycombinator.com/item?id=7709556
Right. So what can be done about telcos taking that money, and giving it to shareholders instead of delivering the infrastructure they committed to? Very little. That money is gone.
It can be observed that they are a hostile party who have no place in our local communities and are not welcome. They can have their exclusive contracts to pole access and provision of telecom services revoked by municipalities who then construct an ISP as a regulated public utility like water or power. A private company runs the utility, one legally required to base their fees upon the actual cost of providing the service (which guarantees it drops as fast as tech costs drop - fast), has to appeal to a utilities commission if they wish to raise rates, while providing legitimate justification based upon an increase in the cost of providing the service, etc.
Overnight government would be able to mandate universal service availability, and count on citizens having Internet access. That would mean being able to close physical government offices and let the clerks work from home. Billions saved right off the bat. It would mean less spying, as municipal people are not going to just bend over when the feds show up, they will actually demand to see a warrant - unlike any large American company who derives large amounts of their own income from being granted government contracts. It would mean no ridiculous upcharging for "business" connections (just like we don't charge restaurants more for tap water because they make soup out of it and sell it). It would also mean no more asynchronous connections which only exist to prop up the expensive business connections. It would mean an ISP that serves as infrastructure that improves society in a multitude of ways rather than a luxury good fed off of by a greedy tick that was lucky enough to hold exclusive sway over pole access rights and telecom rights when their single biggest competitor, the Internet, appeared on the scene.
Letting companies like Comcast, Time Warner, etc run ISPs is sheer madness. They are media distribution companies. Their empires were built on that. And the Internet makes media distribution worthless. Any clever kid can run circles around them and provide a better service. And we let them have their hands on its throat?
The very government you expect to mandate universal service availability is the government that approves exclusive franchise agreements with predatory cable/internet providers.
Unless you're ready to run for local office and champion municipal/coop internet, or find incumbents who support your cause, you will not succeed.
> Any clever kid can run circles around them and provide a better service. And we let them have their hands on its throat?
A bit of an exaggeration of course; running an ISP is hard, and the margins are razor thin unless you have regulatory capture. It can be done, but that's a governing issue. See what I said above.
>A bit of an exaggeration of course; running an ISP is har
I think you misunderstood me. I did not mean to say that being an ISP was something a clever kid could pull off. I meant to say that a clever kid can run circles around the established players when it comes to media distribution. That clever kid can upload whatever media needs to be distributed to a CDN and it's done. The entrenched players have to manage maintaining a byzantine maze of distribution agreement contracts that they entered into long ago, invent ways in which they will prevent becoming a "simple dumb pipe" (as they call it), manage how the availability of the content will affect the success of their other media properties, etc.
And you are correct about the municipalities being the ones who granted those exclusive contracts originally, and that is where change needs to happen. And it has in a few places! A friend of mine works for a municipal ISP in Florida. But.... each and every single municipality that has ever tried to go that route faces years and years of protracted litigation. Comcast and their compatriots litigate vigorously in their attempt to prevent the establishment of municipal ISPs. Many municipalities simply can't afford to spend 10 years and $100 million just to get out of a contract they foolishly agreed to that gave exclusive rights to providing telecom services to a company for 99 years (a common arrangement).
I misunderstood, thanks for clarifying. Agree that anyone can be Netflix/do media distribution these days with transcoding + storage + CDN all commodities now.
The marginal cost of a new 20Mbit customer when you have 500+ customers is 1 Mbit upstream bandwidth. However, you can't really get just 1 Mbit at those scales so it's closer to 100 extra customers cost 100Mbit.
According to NRTC [1] fiber deployments to the premises cost approximately $800/deployment. Ignoring uptake, operational expenses etc that’s $13/mo per deployment to recover cost in 5 years.
I have no idea what the average consumer pays their residential provider but I would estimate it’s over $100/mo on average. It seems like it would be fairly easy to get return in 5 years. These are numbers for fiber.
In San Francisco Sonic charges $50 + taxes for 100Mb/s fiber service, and they're profitable. IIRC, the CEO of Sonic has hinted their connection cost per house is closer to $400 (at least during a roll-out in an SF suburb), though I can't find any references.
They forced AT&T's hand, which began rolling out their service in the city about a year later. AT&T charges $70 or more, I think.
It's cheaper to do this stuff than the big companies let on. The problem is that they can make even _more_ money investing in other services and products, like cellular and cable TV. Worse, fiber eats into their cable TV profits and jeopardizes their wet dreams about 5G cellular data plans.
[1] It's $40 + $10 router rental, or $50 if you have your own router. But $50 for the service alone isn't promotional, whereas the $40 + rental is technically promotional and might become $50 + rental down the road.
Less of that three digit cable bill goes to the company than you might expect. Content providers don't give it away for free. ESPN is notorious for eating a huge % of the bill.
Your point still stands though. That means if 1 mbit cost $1 then it costs $0.04/customer.
The real cost is in deploying the wires and countless studies have shown the ROI on that, especially given the exorbitant rates, is typically 5 years or less per hookup. Can you imagine how much Comcast etc have made per house they’ve run coax to? The ROI must be mind boggling.