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This the end of innovation in online videos: "When companies like Netflix, which today closed with a market cap of almost $158 billion, can’t necessarily get enough negotiating power to ensure that consumers have direct access to them, no startup can ever hope to compete. America may believe in its entrepreneurs, but its competition laws have done nothing to keep the terrain open for them. Those implications are just beginning."

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.




I just fail to see how Comcast or Verizon are going to be selling you their internet connection if you won't be able to connect to the things you want to connect to (like Netflix, iTunes, YouTube) through them. Especially on higher plans, people buy a lot of bandwidth so that they can stream videos, that's how ISPs up-sell to them. If they start throttling, they'll be selling an empty bucket, and it's not going to be very easy.

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.


You must live in one of the few places in the US where high-speed internet is available through multiple providers.

That is definitely not the norm. Most people won't be able to simply switch to the least nasty provider.


If the FCC really wanted to promote competition instead of profits, they could mandate nationwide access to utility poles & shared conduit.

As well as making exclusive franchise agreements illegal.


Exclusive franchise agreements are illegal for eg cable. They have been illegal for a quarter of a century.

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).


Thanks for the correction! (And as also noted here: https://news.ycombinator.com/item?id=8066340 )

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.


Normally when infrastructure is expensive to deploy and wasteful to duplicate like this we turn it into a utility (Water, Electric, Sewer, Roads, Telephone, etc...).

We don't do that for Internet because...


I still don't really understand how exclusive franchise agreements /aren't/ illegal, given antitrust laws.


Through insane amounts of regulatory capture. You could hardly hope to get government under greater private control with an overwhelming military coup.

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.


That's the status quo with net neutrality, it's repeal may or may not have an effect on it. It's going to be interesting to watch.


More than half of US households have multiple wired broadband providers: https://arstechnica.com/information-technology/2017/06/50-mi...

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.


That means nearly half have a single (or no) option. Further, for many who have two choices, the decision is between not-actually-very-Fast DSL or a single cable provider.

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.


>for many who have two choices, the decision is between not-actually-very-Fast DSL or a single cable provider

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.


The FCC definition of broadband is 25mbps, not 8mbps.

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."

https://techcrunch.com/2018/01/18/fcc-report-keeps-faster-de...

If you look at Verizon's DSL page:

https://www.verizon.com/info/dsl-services/

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).


Broadband used to be symmetric (reference to e.g. T1 or E3). Now it is asymmetric. Without mentioning the upload speed, it can be anything.


My two choices are Comcast or shitty DSL. And, the DSL isn't actually "competition" in any conceivable way. It's like saying that the gas station is competition to a super market for food.


My two choices are my rural-telepohone co-op - or satellite. I'm not complaining b/c my ISP seems fine, but there isn't anyone else to run to if I'm unhappy. I don't consider satellite an option.

If we count satellite, doesn't everyone in the US have "access" to broadband?


Depends. Does satellite do a minimum of 25mbps?


Yes. With the usual caveats.


Ie. terrible latency and terrible upload speed.


The study limited to 100 MBPS. It should have included more tiers like 200, 300, 500, and 1000 to provide a better picture. Once you go past 100 MBPS, there tends to be only one widely available choice per region. This choice is either Comcast or Verizon.


I live in a city with multiple providers. Some lucky ones even have choice of FIOS, along with fast cable from two providers and slower DSL.

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.


We live in a place that supposedly has multiple wired providers. However, if you want more than about a megabyte a second, your "choice" is comcast. DSL exists but is maybe 20x phone line modem speed.

But we have a "choice" of providers, so we're competitive! This is in sfbay peninsula.


Is it?

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%.


A scant majority is not "the norm" - you're using a term that has no statistical meaning. A duopoly labeled as choice is specious.


If your list of options can be counted on a persons digits then the market is inefficient.


Yep after moving from MI to NoVA the contrast is night and day my house has both Verizon FIOS and Comcast 2 Gigabit options available and a bunch of smaller providers.


But that's my point, it will give a smaller-sized competition more chances to differentiate, since users might start looking for something better.


It's infeasible when there's enough political money from the nationwide ISPs to make installing a new network prohibitively expensive.

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.


What smaller competition will be capable of laying copper or fiber to its constituents? Even cities are, in many cases, rendered incapable of providing competition.

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.


the hypothetical here is that Comca$t is going to artificially throttle Netflix and give you mandatory free (paid) access to their own streaming platform.

all a WISP has to do to compete is offer more bandwidth than the throttle allows with no bandwidth shaping at a competitive price.


If all that the internet was was streaming video, sure. It's not, though.

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).


you make it sound like competing with comcast is impossible. it might be difficult, yes, but if you have less-than-shit policies in your state/muni lots of options tend to pop up.

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.


On what infrastructure? Pigeon carriers?


They could first start small – municipalities, LANs, HOA-based WANs, consolidating slowly. It's like you're saying that no ISP progress will ever be made if someone is not using existing AT&T networks.


I don't want gigabit access to youtube and netflix. I want gigabit access to the services that don't exist yet because you can't build them until lots of people have gigabit access. If the only ISPs in America are the ones who only offer gigabit access to youtube and netflix, then I better start learning Korean[0], because those hypothetical services will not be built in America.

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


Here's some possible scenarios that illustrate what could play out:

- 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.


They can also make partnerships to zero rate or accelerate partners, netflix pays a little more than hulu and now it costs to watch hulu but not netflix. So now you're picking winners based on who already has money.


>> I just fail to see how Comcast or Verizon are going to be selling you their internet connection if you won't be able to connect to the things you want to connect to (like Netflix, iTunes, YouTube) through them.

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.


> 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.


I can't even buy internet in my city (with 2-3 competing ISPs) without having to bundle cable. It's cheaper to get the internet / cable bundle because they want to up-sell on-demand videos, HD, recorder box rentals, etc. which is only possible with a cable TV bundle.

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.


This type of comment implies you think the world is static. I'm not saying that this good, but what makes you so sure market and social forces won't produce a better model?

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.

Edit:

"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.


None of those technologies matter when your access to them is blocked.

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."


> 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.


"[...] we have reshaped the landscape — these innovations are becoming more commonplace"

"For most of our “potential Fiber cities” [...] we’re going to pause our operations and offices"

https://arstechnica.com/information-technology/2016/10/googl...

https://fiber.googleblog.com/2016/10/advancing-our-amazing-b...

They haven't hit play; haven't hinted at hitting play.


Moving away from Google Fiber is starting to look like one of the worst decisions Google has ever made. Time will tell exactly how rough it gets for them without a competitive ISP infrastructure in place.


They might not be expanding, but I wouldn't call it shut down. I have an active account and they're providing my internet service in KC. This was set up this past February.


I was going to reply with some cynical remark about how the hole we are digging is deeper now than ever, and would take radical changes to climb out of, but I really like your positive spin on this. I'll try to consider it from that perspective moving forward.


Remember, we're not meaningfully in a hole "deeper than ever", because there isn't an "ever". As much as it may feel like the Internet has been around forever, this is all new ground, for everybody, and surprises may yet be around the corner. I guarantee you in 2018 that the "FANG" acronym will be out of date. I don't know which of them may or may not be in there, and I don't know who may get added, but the landscape will be different.


I don’t know how knowledgeable you are about this, but if you’re up to scratch, you should hash out some actual ways this could be done..


I don't want to be pedantic, but doesn't this comment imply that there will big changes and hence the world is non-static?


> This type of comment implies you think the world is static. I'm not saying that this good, but what makes you so sure market and social forces won't produce a better model?

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.


> 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.

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.


So your premise is multiple companies, with ultimately a decade of preparation, regulatory effort, and build-out, are set to spend billions of dollars on a non-market. All because they just didn't understand physics can't be beat.

Oh sure, amazon_not, I'll take your word for it. Since when does SpaceX know what they're doing.


I'm not saying there won't be A market. I'm saying there won't be THE market you are hoping for.

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.


Is it? Startups manage to continue to exist on the Google Play Store and on the iOS App Store, even though Apple and Google directly compete with many of their offerings. Consumers basically have just two choices for mobile platform, but somehow that's enough competition to keep the kind of behavior you talk about in check.


Difference is mobile platforms, as their name implies, are not geographically locked. There aren't android or apple only counties, there are however Comcast or Spectrum only counties. This means the cost of switching is too high to really be considered in competition.


More than half of households have two or more broadband providers at 25 mbps+; with 5G, the typical household is going to have 2-4 such providers. Two providers isn't a highly competitive market, but it's the same level of competition as exists for mobile platforms, and that seems to work fine.


Sorry, you're looking at that wrong - almost half of US households only have a single choice for ISP. That's not competition, it's a travesty.


Only if you exclude wireless options, which is becoming an ever-less rational thing to do. (15% of households making over $100k/year have ditched wired broadband in favor of wireless, and that number is growing rapidly.)

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.


> Only if you exclude wireless options, which is becoming an ever-less rational thing to do.

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.


The current mobile landscape is far from fine. It could be a lot worse, but it’s not great.


None that could ever be an existential threat to the gatekeepers tough; that only happens on the open web. Which is about to be a lot less open.


Maybe. But it seems good enough. People aren’t clamoring for an alternative in the mobile space for example.


I think that’s because the web exists and is accessible on your phone. YC didn’t have to talk to Apple or Google for me to type this on my iPhone.


All books are now sold with a small display attached that gives you a URL. The book is magnetically sealed until you take out your phone, navigate to that URL, and watch an ad.


Oh goodness! This actually sounds like something that could literally happen. Given how things are going..


Sounds like a fun way to spend an afternoon figuring out how to defeat the lock.


My angle grinder says hi.


It's a flimsy plastic lock and all you need is a cheap pair of snips, but now you're under arrest for "defeating anti-piracy protections."


quick patent it!


Sometimes a market cap of $158 billion causes everyone to want to get a share of the pie.

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.


yeah. yet, the consumer side demand for such content is well established now.

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?

dunno.


actually that's interesting. DVDs may make a comeback.

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.


Hopefully blurays!


I could see a revival in P2P tech for doing real time video.

Who knows, maybe we'll build local networks off the public internet.


P2P isn't very useful for real time video.


Ace Stream works really well for watching live broadcasts. On demand video would be more difficult though since not everyone is watching the same content at the same time.


What's the latency like? Live broadcasts are hard enough to keep realtime without mixing in P2P problems like buffering and limited upstreams.


I'm not sure. I believe it's pretty good but I've only ever used it to watch Formula 1 streams (since F1TV most likely won't be available in my country until next year).


Unless you compare the latency to a live broadcast, you'll never know how bad the latency is.

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.


With your last sentence you were obviously referring to this...

https://www.nytimes.com/2009/07/18/technology/companies/18am...


Is there any chance that Comcast will stop carrying Google ads? That has to be some quantity of traffic - a few dozen kb on every page load in every browser and app on every network connection. For a 100 kb ad to show 100 times on 5 devices at 100 houses is 500 gb


Isn't there a new Fahrenheit 451 movie coming out soon?


Yeah, it's an HBO production.


FYI: innovation can happen outside of the US.




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