I've always thought that this would be well within the rubric of the USPS. The constitutional mandate for a postal service was drafted at a time when the internet could not have been conceived of. I would argue that the intent of the constitutional mandate was to establish communications and not necessarily paper mail per se. I think if the founders were alive today they would say that ISPs were the sort of thing that was intended. I.e., have the USPS start acting as an ISP, and charging for it like it would mail services.
I'm not saying that private ISPs should go away, just that I'm sick of this government handout to companies that want to have their cake and eat it too. No net neutrality? Fine. But then allow public ISPs--no, actively fund public ISP infrastructure--and allow for unfettered lawsuits against private ISPs for content going over their pipes. Also, take away right of way to private ISPs, and let citizens and municipalities charge arbitrary amounts for anything going over their property.
These days, that concept is called "net neutrality" in the context of the Internet, and I suppose you may have heard it mentioned in the news recently once or twice. (I think it was a mistake to rename common carrier, but too late I guess.)
Personally, I think that private buildouts are a better way to go than a government-funded network infrastructure. Private industry is better at investment and product development than the government, and any enterprise that generates a profit contributes to the long-term economic sustainability of innovation. A government-run economy becomes starved for capital and innovation slows way down; that is why the Soviet Union lagged U.S. technology and why Cubans still drive 50-year-old cars.
But privately run networks need regulation to deliver the results that citizens want. Railroads needed it, telephone companies needed it, airlines needed it, and yes, ISPs need it. And if that is thwarted, then sure, let municipalities take a swing at it. My town is looking into muni fiber now, and I'm in favor of it because the local service from Comcast is so bad and so expensive and there seems to be no other way to do something about it.
Yes, and no.
The electric and telephone companies built out the cities and big population centers, but left 50%+ of the nation without service. Much like today's ISP's would like to do.
Some places only got wired because they formed local electric co-ops and what were called "rural telephone" cooperatives.
Even then, it wasn't always enough, and the feds had to add a Universal Service Fee to every phone bill to redirect that money to the big telephone companies so they would serve the entire nation, and not only the most profitable areas.
Forcing the places that do have it to subsidize the places that don't have it, however, is incredibly destructive to competition. It prevents smaller entrants, and entrenches incumbents. Those are the only entities that can afford to both operate an infrastructure business and run a money-losing government service on the side. It is, in fact, why we're in this mess to begin with. It was municipalities that granted cable franchise monopolies (before that was made illegal), to ensure universal build-out.
Except every time a government tries to do just that, the ISPs sue to stop it. Even if they have no plans to provide the service, themselves. They don't want the precedent.
Do you have any citations?
There are lots of citations:
"An appeals court on Wednesday sided with the telecom industry, and with North Carolina and Tennessee, in a major decision that upheld the ability of states to pass laws that restrict municipalities from offering broadband internet services."
And in Colorado:
And here's an argument for why they're doing it. It's all about never allowing taxes to be collected to be spent on something that benefits, well, anyone. Basically since government is inherently bad and can't do anything right, it will cost too much money and they won't work and only private companies have the "expertise" to run "an internet":
Putting up these laws as a reason for the limited deployment of municipal broadband is misleading. Most stages have no legal barriers, and for most of the states that do, the barriers aren’t really significant. They don’t explain why New York, LA, San Francisco, Baltimore, Philadelphia, Boston, Seattle, etc., don’t build their own municipal systems.
Taxes are how the government funds those sorts of things, and taxes are collected from everybody. So the subsidization still happens.
Take tobacco taxes, for example. We put special taxes on tobacco because we don't want people to smoke, and we want to discourage people from smoking. Taxing tobacco effectively raises prices, which reduces demand. Various governments employ similar taxes to discourage things like soda, sugary foods, etc. This is a well-understood concept: you put extra taxes on things you want to discourage (relative to the rest of the economy).
Paying for rural telecom by putting a special tax on telecom service achieves exactly the same effect. It increases the price of service, reducing demand and reducing investment (relative to the rest of the economy, which does not bear that tax). But in theory, telecom infrastructure is something we want to encourage, not discourage.
It's even worse when you impose a general public obligation on individual service providers. For example, instead of paying for universal healthcare with general tax dollars, you could simply direct hospitals to treat poor people for free. Nobody does that--they pay for the broad public benefit with equally broad public taxes. But we do it for telecom--we tell companies that in order to be allowed to offer any service in a city, they must shoulder the burden of building out infrastructure even to neighborhoods where few people could afford to subscribe (i.e., neighborhoods that can only be served at a loss). That essentially makes it impossible to have a "minimally viable ISP." You can't compete with an incumbent by stealing away customers neighborhood-by-neighborhood. If the government simply let companies build infrastructure where it was profitable, and built subsidized infrastructure itself using general tax dollars where it was not, you could have that sort of competition.
Actually, I believe that's exactly what happens in the US with emergency departments. Although it supports your point about such a practice being distortionary, it also draws attention to the fact of the sheer complexity of all this.
That's mostly what bothers me about seemingly-simple statement or analogies about economics (or, really, economic theorizing in general), that the reality is far more complex and interconnected.
Yes. That's why we have no interstate highways to move goods around, spurring commerce.
Yes, taxes to pay for roads do indeed discourage economic activity.
This is a cost.
And the benefit that we get is the roads.
And in this case the benefits outweigh the costs.
But just because the benefits outweigh the cost doesn't mean that the cost doesn't exist.
Yes roads have benefits. They also have costs.
The benefits are greater than the costs, but we should be aware that the costs still exist.
And the benefits outweigh the cost.
In other words, if Option A is "get zero dollars", and Option B is "spend $1 to get $2", it is unfair to complain about B's "cost" (spending $1) in isolation.
So, what it does is constantly relay wires, build out to rural areas, etc. and thereby extend their network and keep it up-to-date (wires only last 30 years anyway). This I think is what we need to companies such as Comcast.
Your post actually highlights the problem. What makes 10% the proper profit margin? BT OpenReach, the U.K.'s regulated infrastructure monopoly, has a profit margin of double that. That number becomes a political football, and the political result probably isn't what most people on HN would want. People are happy with 25 mbps DSL; they're not going to vote to raise Internet rates to drive returns high enough to incentivize investment in replacing everything with fiber. That's exactly what you see in other rate-regulated utilities. People don't vote to replace lead pipes that poison kids, because they would rather have cheaper water rates; they don't vote to replace sewers that leak raw sewage into rivers when it rains, because they'd rather have cheaper sewage fees.
I'm not sure how not having cheap fibre to ge doorstep is an externality.
This is one reason why the have nots tend to vote for candidates the haves dislike, no?
This assertion of causality is sorely lacking in accuracy. Your examples alone are sufficient for highlighting this.
Being among the most ‘government-run economy’ on earth at the time, the astounding innovation achieved within the Soviet Union is the most glaring contradiction. Cuba is just an awful case study subject, due to so many drastic incongruencies, but let’s remember technological innovation has been fairly low on Cuba’s priority list. If it weren’t their access to the world’s selection of material and media resources would have likely remained open. And this access was very obviously the reason they are driving old cars. Those are just two factors I will assert are far more useful in this sort of prediction.
While of course the correlation is circumstantially critical to varying degrees, many other measurements are better predictors of rich innovation environments.
No. "Common Carrier" classification under Title II of the Communications act of 1934 comes more than 30 years after the introduction of the telephone, much longer than the telegraph. More than that, it could be argued that that, along with the Kingsbury Commitment were the contributions that led to an AT&T incumbency in the first place.
It's open for discussion whether government is better at providing essential services like healthcare, water, fire, police, electricity, and internet. I assert that it is, but I respect different views.
There are other aspects such as a company can't run without a profit and proper cash flow for nearly as long as a government entity can, because the government entity is subsidized. Also a government entity is much more susceptible to political winds (budget cuts) than a private entity may be.
Private entities are far less likely to provide that on their own. And when government starts subsidizing business or giving tax cuts for behavior, then things get wonky, too. Like when the company pockets the money, and doesn't provide the service. Like what happened with broadband:
> airlines needed it
No, they didn't. Regulation of fares, routes and market entry of new airlines kept prices artificially high until airlines were deregulated in the late 70s. Quoting from Wikipedia (https://en.wikipedia.org/wiki/Airline_Deregulation_Act#Effec...):
"A 1996 Government Accountability Office report found that the average fare per passenger mile was about nine percent lower in 1994 than in 1979. Between 1976 and 1990 the paid fare had declined approximately thirty percent in inflation-adjusted terms. Passenger loads have risen, partly because airlines can now transfer larger aircraft to longer, busier routes and replace them with smaller ones on shorter, lower-traffic routes."
A jet airliner's takeoff weight is over 50% fuel.
Robert Gorden inThe Rise and Fall of American Growth:
surprisingly, the period of most rapid decline in the real price of air travel occurred before the first flight of a jet plane. As shown in figure 11–10, the price of air travel relative to other goods and services declined rapidly from 1940 to 1960, declined at a slower rate from 1960 to 1980, and has experienced no decline at all in its relative price between 1980 and 2014. The growth rate of passenger miles traveled has mirrored the rate of change of the relative price except with the opposite sign, because lower prices stimulate the demand for any good or service.
The accompanying figure shows not merely a modest rise, but a sharp spike in airline pirces in 1979.
Among Gordon's economic specialisations is the aviation industry.
The Bell System was built through implicit subsidy of capital expenses, by the allowance of monopoly, favorable tax treatments of convertible bonds, and a regulatory regime that locked in profit.
You could strictly regulate to fix this but eventually you end up with a funny pseudo government agency which has to fund itself. As I understand it (not American) this is what the Bell system ended up becoming.
With 5G networks I would think there is a lot less digging up streets so municipal plans are more feasible.
As for private buildouts being better than government funded infrastructure, that is only true as long as profit is your single measure of "better".
When it comes to services that we don't want any downtime for and want everyone to have access to, then government funded infrastructure has done better than capitalist forces. Water and electricity are both services we want everyone to have access to that as uninterrupted as possible. It's still not perfect as situations like Flint or industrial water usage in California pulling out water without paying enough to be sustsinable, but a capitalist system for those services would lead to many not being able to pay enough for access and going without as well as interruptions in service as companies push their systems to the bone for efficiency or go out of business
There are a myriad of reasons for the embargo on Cuba. Let's not sugar coat this fact just to use it as an example of "American imperialism".
The reason they drive classic cars has nothing to do with the embargo:
After Fidel Castro assumed power in 1959, he imposed a new law that prevented anyone without government permission from importing foreign automobiles. That turned Cuba into a car museum in the making, sealing the island off from the automotive future.
You should also keep in mind it was possible to get a new car imported, but you needed government permission to do so. This meant only the rich, celebrities and professional athletes were allowed to do so, keeping the majority of the population fending for themselves to keep their old decaying cars alive and working.
If it is government-funded, then the people own it not some bloated corporation.
But the US market mostly doesn't have plenty of sellers. You really want at least 3 to get good competition, and that's very rare:
My first choice is strong competition, and I live in one of the few US areas that have that. It's great! I have a gigabit both ways for less than my mobile bill. But my clear second choice is locally owned municipal broadband that can be held accountable by the people.
My very last choice is a local monopoly owned by a giant national corporation, because then we get the the worst features of communism (incompetence, poor service, abysmal customer support) and the worst features of capitalism (high prices, exploitative behavior, use of profits to buy legislation).
Broadband in particular is very infrastructure-ish. It's much more like a water utility or traffic lights than a service business like on-demand personal drivers. Many governments run infrastructure quite well.
I've lived in several major cities: Baltimore, D.C., New York, Philadelphia, Atlanta, and Chicago. Out of those, I might trust Chicago to run municipal broadband. For the others, I'd pick Comcast any day of the week.
Turning toward actual data, in general, the US's water quality is good: https://en.wikipedia.org/wiki/Drinking_water_quality_in_the_...
In the US most water systems are run by local governments, and generally it works out fine.
If you're going to keep setting up straw men, could you make them more relevant? Thanks.
Like I said, I know very little about the region. While I certainly laud WMATA for upgrading the cars, I definitely agree that service quality is declining enough that if I need to be in DC for something promptly, I'll usually leave 30 minutes early, and then wonder why I didn't just drive in the first place.
That way ISPs can continue to compete for your business, but the market would be significantly less restrictive because the ISP only needs physical equipment at the data center and upstream of it.
The biggest thing stopping ISP competition today is that local markets don't want the road dug up ten times to lay different cables. So instead lay them a single time, and re-sell access.
The ISPs would pay a fee to use the government cables from the data center to the end user (and equipment). That fee would be used to expand and maintain the network.
Other countries have done this with huge success. It wouldn't even put ISPs out of business, they can use this network just like their competitors.
Edit: A colleague just mentioned to me that New Zealand doesn't have net neutrality and doesn't need it for this very reason.
Are there any single major companies that owns the backbone? And Submarine cables?
Crown Fibre Holdings owns the new fibre network (I think Chorus owns all the copper, not sure) but Chorus manages most of it (by contract); Chorus is a crown partner company, and they are regulated and forbidden from certain activities - they were split off from Telecom, a private company.
I don't know enough about the backbone to usefully comment, except that there are at least 3 fibre networks running along the major road I live near.
For a long time there was only one submarine cable with any serious bandwidth (Southern Cross Cable), but aparently according to Wikipedia a new one to AUS was rolled out in March 2017 and another one to Hawaii this month.
If you look at EPB being forced to pull out of neighboring areas and the actions of other states to prevent muni / utility Internet projects, it's pretty clear that America doesn't want to solve the last mile problem unless it involves preserving the incumbent's market position.
That would make private ISPs go away.
We have all of that in Germany already. It doesnt work, laying fiberglass or even copper outside of major cities is just not a reasonable thing to do in a market economy. Same as its not worth while to send a postmen every day, or even every week, to a small village. This is something that needs to be financed through a shared burden, otherwise you have the situation, that large part of your country dont have DSL yet. With private companies siphoning of easily provided customers, the public is stuck with a gigantic burden to provide the absolut minimum to people.
Ideally regulation would be more reactive than proactive. Rather than defining explicitly the terms and services that ISPs must provide, we'd let them compete with each other and try different products and business models. The government would only step in when they do something that turns out to be harmful. The trick would be to actually step in where needed and not just let anything go.
4G/5G/Wifi is critical to undermining the incumbent ISPs. Urban and heavy to medium suburban rollout could be rapid.
Perhaps google should buy T-Mobile to get access to cell towers as a start... take the licenses from Nextel/Sprint for ISP-level data delivery, and keep T-Mobile for regular coverage.
Of course, I haven't tracked the status of T-Mobile / Nextel / Sprint's spectrum rights in a long time.
But google or a consortium could provide turnkey solutions to doing block / neighborhood / community / village / city wireless ISP that actually works.
And provide the legal backing when the prolific army of telecom lawyers come knocking to shake down smaller operations.
Or balloons. Weren't there supposed to be balloons?
Even if there was the money for it, you wouldn't want it. Public Internet in the U.S. does not look like "fiber for everyone." Instead, it would be 25 mbps DSL for everyone. It would be that way for the same reason we build six-lane highways to far-flung exurbs while public transit in urban areas decays, and why we continue to use lead-piped water systems in order to keep water rates extremely low. Our political situation tilts things heavily toward favoring coverage over quality.
Over the last 10 years, my private-sector broadband speeds have gotten 10 times faster, even as bandwidth usage exploded. But my public-sector subway ride has gotten slower (and more jerky when they turned off automation), even as ridership went down. It seems absolutely insane to me that anyone would want to put the people responsible for the latter in charge of the former.
A minor point, but if the federal government wanted to run an ISP (inside or outside of the USPS), they don't need anything new in the constitution to do it.
If the Interstate Commerce Clause can be used as justification to create the departments of Agriculture, Education, Energy, Health/Human Services, Housing/Urban Development, Labor, and Transportation  as well as the FBI and just about everything else, I can see no reason why it couldn't be used to create a national ISP.
As to whether it would be a good idea, I don't have a strong opinion.
1. Some might argue the Department of Transporation is justified under article I, section 8, paragraph 7 (not paragraph 3), though I don't think either theory has ever been tested
So you're advocating a federal subsidy so Google (4x the market cap of AT&T) and Netflix don't have to deal with the problem themselves? It is like fighting corporate welfare for big companies with even bigger corporate welfare for even bigger corporations.
Sounds like this is the end of TV and Online video watching as we know it. Oh well, time to start reading books again ~ they'll never be able to take that from us.
To me it seems like this might just revive competition between ISPs, by separating those who do the shady things and those who don't.
I'm curious how this is going to play out, it may not be all bad.
That is definitely not the norm. Most people won't be able to simply switch to the least nasty provider.
As well as making exclusive franchise agreements illegal.
You'll find that nearly all examples commonly presented of the lack of competition, are not due to market lock-out, it's due to the high cost and time required to gain approval to build in a given town or city. The combined cost, with pre-existing competition entrenched, is a very large disincentive. Google Fiber didn't grind to a halt on their build-out because they couldn't legally access markets, it's because it's painfully expensive and very slow.
There are three solutions to the problem: new technology that bypasses (low earth orbit satellite, wireless); lower the total cost to enter markets and compete; mandate shared access to existing infrastructure (and ideally simultaneously lower the other market entry costs).
Upton Sinclair's "It is difficult to get a man to understand something, when his salary depends upon his not understanding it" seems relevant here.
It's illegal, but it's also murkey enough that it can be made effectively exclusive through permitting delays, etc.
If the incentives were flipped (say, a federal road fund multiplier that scaled with average speed * number of options), I feel like we'd have a lot more competition.
As is, in the contracts I've read, they're essentially "ISP gets a non-exclusive franchise right in exchange for paying local government x% of their fees from the area, and both parties agree that the portion rebated to the local government may not be separately itemized on the bill."
Which sets up some pretty perverse incentives for most part-time commissioners.
We don't do that for Internet because...
We've gone far beyond reducing regulation to ensure that innovation is possible--we've restructured regulation to ensure that doing business is practical only for the major industry players who now write our legislation.
This does not include wireless broadband options. Could the competitive situation be better? Absolutely. But it is, in fact, the "norm" to have a choice.
In Mountain View I had only shitty DSL or shitty cable. Both sucked and cable was very expensive. (This may be different now. My experience was 8 or so years ago.)
I happen to be lucky to have actual high speed Comcast now, with an option for FTTH from Centurylink, plus DSL. Most people’s options are not so good.
Very true. In one city where I have a house, the choice is 4 megabit DSL for $60/month, or 300 megabit cable for $101.
Both are considered "broadband" by the FCC because the DSL is "up to" 8 megabits. But they are not equivalent services.
There's also a wireless ISP, but it's $95/month for 5 megabits.
There was a proposal to roll that back, however it didn't succeed.
You'll find that companies like Verizon do not call their slow DSL services "broadband." In Verizon's case they say: "High Speed Internet (DSL) service."
If you look at Verizon's DSL page:
You'll see they can't call their actual service broadband if it's not up at 25mbps. Instead they throw the "broadband" term around on other things on the page, such as "broadband routers" and they call themselves a "broadband provider" (referring to their FiOS offering).
If we count satellite, doesn't everyone in the US have "access" to broadband?
It doesn't matter for cord-cutters and people like me, who just want to pay for a $30 / month 100 Mbit internet connection without TV, cable, wireless data, HBO, etc. I've lived in several countries outside the US (including 'developing' ones, and this seems possible everywhere but N. America).
None of the providers will sell a $30 / month vanilla internet connection. Either you can get the absurd $20 / month 1Mb down (which they were required to provide for low-income families) or the next higher speed includes Cable, premium channels, rental boxes, etc. You aren't getting out of it without paying $60 / month which ends up being $70 after all the taxes and fees, increasing to $75 next year, etc.
But we have a "choice" of providers, so we're competitive! This is in sfbay peninsula.
Is a choice between two providers a meaningful enough number for spontaneous commercial differentiation and competition to produce access which provides good value for consumers, and a level playing field for online competition?
That chain of causality is the argument for the benefits of deregulated market-based competition.
I'm not sure the linked report provides much evidence of that. Especially in the context of streaming video, the proportion of households that have 3+ providers for a 25mbps connections appears to be less than 20%. Excluding wireless connections (expensive and unreliable) that number appears to be less than 10%.
Comcast, ATT, and Spectrum's ceiling of profit is the difference between the cost of delivering services and the potential cost of installing a competitive network.
And it's far easier to increase the latter than innovate and decrease the former.
And, for the record, wireless is not a viable competition for copper, let alone fiber. The available bandwidth by the most cutting-edge offerings is too low and latency is too high.
all a WISP has to do to compete is offer more bandwidth than the throttle allows with no bandwidth shaping at a competitive price.
The WISP also has to be resilient against Comcast removing the cap at a lower price (at least until the WISP folds). And against being bought out by Comcast. And against Comcast's lawyers and lobbyists (the wireless spectrum being a government controlled and finite resource).
i live in Utah, and i have several ISP options pretty much anywhere along the Wasatch Front, including fiber and wireless. i can't speak for anywhere else, but its not like its impossible.
0: "It is important to note that 100 Mbit/s services are the average standard in urban South Korean homes and the country is rapidly rolling out 1Gbit/s connections or 1,000 Mbit/s, at $20 per month" https://en.wikipedia.org/wiki/Internet_in_South_Korea
- They could zero-rate their own offerings, making them available at a very low price and not counting them against data usage.
- They could offer no-cost access to some of their own offerings with a compatible, captive piece of equipment (e.g. handset, modem, cable box).
- They could charge third-parties more per unit of data for interconnect, creating financial pressure on them that makes third-parties consider no longer interconnecting with that provider. This will make customers choose between having that particular ISP or having access to that particular content provider. Some portion will choose to stay with the ISP, likely cancelling any ongoing subscriptions to the content provider.
It will be more subtle than that. They will have some seemingly high limit with all sorts of exceptions in fine print. It will be like your typical Verizon plan where you sign up for a $50/mo plan and magically get a bill for $112/mo and all sorts of exceptions, nuances, and backstabbing legalese.
Do you have more than just a flippant accusation about this? I ask because I have a verizon plan that somehow includes no backstabbing or exceptions, and I consisitently pay what I'd expect to.
Comcast and friends are not going to let the cord-cutters get away with $30/month 100Mb down sans media, as is possible in the rest of the world, it seems.
The only way I will believe that we haven't been fleeced by the FCC / end of net neutrality is if there are more choices in the end: If I can get a $30 / month 100Mb standard internet connection without any media content, while those who binge watch Netflix, Prime, Youtube, sports, etc. have to pay more for the massive bandwidth and distribution costs of all that consumable media, I'd be willing to concede that maybe the FCC was right.
But I'm guessing that this won't happen: I'll still be paying high prices even though I don't want all the media content, and those who do will end up paying even more.
To me this is just a temporary setback, and a reminder why we need to focus on developing new technologies, like a "truly decentralized internet", blockchain, cryptography, and more.
It almost feels like a the death throws of a monster that will do a lot of damage is it goes down, but will ultimately be overthrown by the better forces in the world.
"Truly decentralized internet" is a loaded phrase, so I'll expand a bit. The fact that we see small companies and municipalities beginning to develop their own ISPs is a positive trend in the right direction.
Mesh networking has the potential to happen. Most WiFi chipsets in theory support short range mesh, and the gear from Ubiquity and others, not to mention SDR also have this potential. In fact, I'd hypothesis that the basebands in most cell phones have the hardware capability to participate in mesh typologies. The right software could enable some very interesting things. I could be totally wrong here about the HW capabilities. Anyone care to chime in?
Layer proper digital identities, and something like TOR as a first class citizen, and you start to get a pretty nice picture.
When it comes to access, you have copper, fiber, and radio. The latter is not really competitive to the first two, both of which require significant up-front investments with no promise of revenue to pay those investments back.
Remember Google Fiber? Where's that now? Shut down with a marketing-speak comment that says "its purpose was fulfilled."
Is this true? They just started offering services in my city a few months ago. I can't get it yet, but it seems like they're expanding at least in some locales.
"For most of our “potential Fiber cities” [...] we’re going to pause our operations and offices"
They haven't hit play; haven't hinted at hitting play.
They already are: multiple low or modest cost, high speed satellite providers are targeting the US market for deployment in the next four or five years.
The dumber Comcast and AT&T are about the situation, the more money SpaceX is going to make on Starlink. Amusingly, Comcast is probably going to help get us to Mars.
Regardless of the rampant cynicism about competition (plenty of which is warranted), the low earth orbit competition is coming fast. Nothing can stop it at this point.
Hoping satellite will solve your bandwidth problems is wishful thinking of the worst sort. There simply isn't enough spectrum, and thus bandwidth, to go around.
Can't beat physics.
Oh sure, amazon_not, I'll take your word for it. Since when does SpaceX know what they're doing.
Satellite has it's uses, but replacing terrestrial broadband networks isn't one. The satellite industry is littered with roadkill, bankruptcies and wasted billions. It's not the first time somebody would be wrong.
Also, the question is which households have options? I strongly suspect its the households in wealthier metro areas and suburbs. Competition for households that are the largest sources of potential revenue is going to drive the market. It's exactly like mobile devices--a huge fraction of the market has just one choice of smart phone platform (Android), because Apple doesn't sell cheap phones. But competition between Android and iOS in the mid-range and high-end drive the behavior of the market.
Maybe some day wireless will become a meaningful substitute for wireline broadband, but that day is not here yet. Thus it's very much the rational thing to do to exclude it.
In other words, if Netflix was not so successful and making so much money, the pipelines would not be so interested in squeezing a dime from that sector.
i can't help but wonder what kinds of workarounds consumers will invent (against all regulations and attempts to defeat them) to pass that content around.
consumers might embrace Netflix's old-school disk-mailing tactics. or maybe Netflix will re-embrace that.
or some sort of illegal low power local extended WiFi networks?
A whole new industry may open up: Taking previously online content (like YouTube videos, perhaps a set of related ones) and compiling them into DVDs that you can binge watch.
Who knows, maybe we'll build local networks off the public internet.
Most P2P systems are terrible, which makes them pretty useless since you can hear who scored from your neighbor seconds or even minutes before you see it.
You're going to make TNT fast and Netflix slow? You've got to be kidding. The amazing PR team at Netflix will be all over this and users will revolt. It will open up opportunities for the small guys to compete.
By all means big ISPs, please cripple a huge part of your service that is very important to your customers. I'll be rich in no time (and my customers will be happy).
That theory is not supported by history. Netflix will pay, because they can. New video streaming companies will have no chance.
Here's a NPR PlanetMoney episode on it.
No can do. We already had that law and it was revoked in the Brand X decision.
Also, 5G is coming by the end of this year with at least two providers (Verizon and T-Mobile) and once that happens, ATT and Comcast won't have as much stranglehold on the ISP market, so NN may not matter anymore.
Of course, most actual counterexamples to net neutrality are seen as positives (free Netflix or Hulu with usage not counted towards a data cap) rather than negatives, so it might not work out.
Considering most cells right now serve thousands if not tens of thousands of devices, there is simply no way that wireless broadband will ever be able to service that, unless you have hundreds of femtocells, but at that point you might as well just deliver fibre to the home as you'll be a few metres from the premises.
5G really changes nothing of this. Shannon's law dictates this and we are close to topping out on it in terms of radio efficiency.
That still ends up being massively cheaper than FTTP. Getting fiber into peoples' houses is an incredibly labor-intensive and high-touch process. I just had fiber installed at my house. It took half a day to run fiber down the main road about 1/3 of a mile to my subdivision. Another half day to run it 200 feet down my residential road. Almost a full day to dig under my driveway into my house. And a solid half day to install the CPE. With small cells, you'd basically only have to do the first step. You could've installed a small cell serving hundreds of people in the time it took to retrofit just my house.
Higher frequencies will require either line of sight or very short distances to the small cell. The small cells themselves will incur costs both CAPEX and OPEX.
Basically the only part 5G will replace in a FTTP network is the drop. And that's where the density and the topography is cooperating. Whereas if you install a fiber drop, you'll be set for 20+ years and you won't have to install, maintain and power a small cell forever.
Also, fiber is not fire and forget. Just the other day a tree took out the cable to my house. Buried cable has less maintenance, but also much higher initial costs, increasing the cost advantage of wireless for the last 200m.
The CPE cost is negligible. You can pick one up for $20. True, the drop will cost you, but it has a far longer lifespan than the small cell. It's not like the small cell, it's installation, permits, engineering, pole rental or tower, power, etc. are free either.
Like I stated earlier, 5G may be cheaper than FTTP. Or it may not. It may not even be available in your area due to insufficient density. Even if 5G is cheaper, it's not going to be massively more cheaper.
In the US, almost all LTE deployment is below 2 GHz.
> Learned mmWave signals can penetrate materials such as significant foliage, glass and even walls better than initially anticipated.
10 to 15 years ago that is what I thought. Until Massive MIMO. Some of the crazy stuff we are doing now in Wireless tech was literally dimmed theoretically impossible when I did some very early work on 3G in University. It doesn't break Shannon's law, we just find many ways around it.
Many doubt Massive MIMO will ever work, including industry expert. I doubt it too, if anyone remember something similar called pCell many years ago. It turns out it did work. It was originally created and based on TDD, we could do 128 x 128, or even 1024 x 1024 antenna. Sprint are doing 64 x 64 / 128 x 128 works on their Network already.  But there is a cost, power etc involved but the tech works. We thought this crazy thing would not work on FDD, which is what majority of the world uses, it turns out they have found ways around it too. Both Ericsson and Huawei's solution is much better then some originally thoughts. Not as elegant or as effective as TDD but it still works.
We have small cells, this time it actually works as advertised. Combined with LAA in 5Ghz Spectrum.
5G provides an order of magnitude increase in capacity. It also makes some backend services cheaper to run, there are already a few countries started price war in bid to attract more customer on their network as they have more capacity resources.
I still remember a few years ago, when my friend were installing her first fibre installation at her home. It was such as hassle with cable layering, ONT modem etc. She was very frustrated and asked a simple question that stuck me at the time. Why cant we all use mobile. Mobile is enough for me, why cant my home PC uses 4G too? Will there be someday where they sent me a "Modem" with SIM card in mail I plug it in and it will work?
I thought she was crazy. That is not possible, what makes her think that? You told me 5 years ago ( That is 8 - 9 years from today ) Smartphone wasn't a thing, now everyone has it and we are watching video on it already. Surely 10 years from now that should be possible right?
I said no, it is not possible. I had Shannon's law in my mind. I had me BiTorrent downloading Terabytes of data in my mind. Cell tower contention in my mind. Now I am not so sure.
By your numbers, 200 clients x $50/mo $10k revenue per mo for a tower. A new cell tower costs $150k, so it pays for itself in 15 months.
> During a roundtable, VP of network support Mike Haberman, some other Verizon folks, and the assembled journalists agreed that an average data cap in the vicinity of 180GB/month would satisfy the average consumer.
> "That shouldn't be a problem with 5G. What does 4K video use? Think about how many 4K TVs you can put on a service that's a true 1 gigabit to your house," Haberman said.
I don't see that 180GB lasting long at all...
(WISPS in rural areas are a bit different)
Are they going to cap me at 1000GB like Comcast, also?
Also, I suspect that state-level legislative initiatives are going to be much easier to win than trying to sue executive agencies.
1. Because that's where there's a real lack of competition
2. Because traffic going long range is already "slowed down" even with net neutrality. If you are paying a CDN, they likely have paid for higher priority "leased lines" between their data centers, while the rest of the traffic goes over the "regular internet" (keep in mind that the "leased line" and the "regular internet" here are probably the same fiber, the distinction is legal, because under net neutrality carriers are still allowed to charge differently for "leased lines")
I haven't heard much recently from their more standard wireless attempts (other than Loom being used in Puerto Rico) but they did invest (jointly with Fidelity) $1 billion into SpaceX. The assumption is the SpaceX investments are specifically to support the SpaceX Starlink constellation which if successful could bring wireless internet to pretty much all of the planet.
1) It would help break up local ISP monopolies. Yes, internet is a bit of a natural monopoly, but if we can't have NN then lets start breaking ground for new fiber,
2) Google will need to lobby for changes in local regulations that prohibit local ISPs... which helps the local ISP startup market.
Google won't do that because of its political ties. To open up local ISP competition, you need to get rid of things like build-out requirements, loosen permitting requirements, reduce the ways people can stall installation of Fiber huts for NIMBY reasons, etc. Google will happily push for waivers of those requirements (as it did in every Fiber city), but cannot politically justify lobbying to eliminate those requirements for everyone else.
But, IMHO, independent of that, the behavior of Alphabet has been less and less charitable to the little guy over the last few years too, especially in the area of android app development. (e.g. they recently eliminated their "free-forever" policy on the use of android map/location/place APIs in apps).
To me it seems that now, in one more way, the internet landscape is more fully dominated by giant corporations. Even more of the little players will be permanently confined to nickel-and-dime sidelines.
If we resign ourselves to the current legal landscape we hand a victory to these corrupt players.
That said I'm sure the tech giants will want to hedge their bets.
So no, they should not become ISPs, but they can help independent ISPs break current sick oligopolies.
Working anti-trust would simply forbid ISPs from owning media businesses.
So becoming an ISP if you are a high traffic Web company changes nothing, unless you also own entire network from source to destination.
The Netflix subscriber user could download up to 30 or 40 Netflix shows in advance from their Netflix queue (sort of like the original 'Netflix by mail' queue) over LTE at midnight under some sort of LTE multi-cast deal with AT&T or Verizon. Or maybe lossless transmission over standard POTS/DSL or Dish Satellite.
The key is signing a lower cost deal with Verizon/ATT LTE or Dish Satellite to do some sort of the multicast broadcasting similar to Over the Air broadcasting but over the internet. Or do unicast transmissions but during off peak hours and blast it out over the LTE/Satellite network over the span of a week between the hours of 1AM to 5AM. The Netflix Top 100 is probably like 95% of what people are watching.
That way not everyone is congested from 5PM to 11PM every night and the mobile operators have additional revenue from existing wireless/satellite infrastructure.
All of the power lies within Google, Netflix and other content providers.
Google could one day deny access to all of its services for all Comcast customers. If all of the content providers / big sites band together and do this, then there would be no value in paying for a Comcast internet connection.
I'm sure this would never happen but that's all it would take for real change to happen.
Interestingly, this kind of thing happens with some frequency in cable channels and various TV providers. I'm not quite so sure this is as far fetched as "would never happen".
I think it'd take some fairly well-demonstrated bad behavior by one or a handful of ISPs before sites would go there, but I think this could be possible.
Sure, but it is clearly not within Google's business interests to reduce their customer base arbitrarily. Cutting off access from specific ISPs would basically be a nuclear option for them.
This is more than just video content. It's access to critical internet websites.
Nothing about that would be against net neutrality rules. I can already start a website and make it accessible only to specific ISPs by whitelisting only the subnets I want.
Not specific to net neutrality (or lack thereof), but if they detect that your access to YouTube is slow due to network congestion on your local ISP, there's a popup that essentially names and shames your ISP by redirecting you to this:
Businesses usually want certainty so that they can invest in the future. In the state where net neutrality is repealed, there is far more uncertainty; it could be revived any time. If the ISPs accept the state that net neutrality is implemented, there is stability and certainty going forward.
With regards to all the panic and irrational reactions, we got to 2015 before the FCC decided to rewrite some rules and not others and we did fine. The FTC with FCC cooperation did work.
there are more than two sides to this argument and why we favor content providers exclusively over service providers would need to be addressed as well.
even some of the big high flying rollouts stalled or stopped when the rules first changed but it was fun watching many of them dance around the reasons.(FIOS and Google fiber pretty much are nothing). 5G is not a valid excuse. People decry the lack of high speed internet (the definition changes based of the techs savvy of who you talk too) but as someone who does a lot of road trips you would be amazed where you cannot get a cell signal and how often it happens
This is not a case of market dominance through technological innovation, which is generally hard to predict, but rather a completely predictable result of old-school vertical monopoly. It's Econ 101 stuff and is not specific to the Internet at all.
Apparently a lot of people (internally too) called them out it was unnecessary but it's paying dividends back now.
Ultimately, Netflix did end up paying Comcast in 2014 and, surprise surprise, the throttling stopped.
I'm as troubled by the zeitgeist's two proposed solutions, more big companies or more big government, as I am by the merger.
Update: Cisco predicts 847 Tbps in 2021 and "busy" up to 5.0 Pbps globally. US looks like 242 Tbps with "busy" up to 1.7 Pbps. So if Star Link has 200 space craft over the US by 2021, it could handle about 1.5% of the US non-peak usage.