> The New York law requiring Internet providers to offer cheap plans to people with low incomes will take effect on Wednesday this week following a multi-year court battle in which the state defeated broadband industry lobby groups.
I don't like these types of mandates because it distorts the market. Politicians get to say "we provided X people with internet service and we didn't use a dollar of tax payers' money". Which sounds nice, but you can't really get something for nothing. This will increase costs for ISPs and likely increase prices for others. How much? Who knows!
If politicians feel that low income New Yorkers deserve reduced cost or free internet, give them a voucher for internet. Better yet, figure out how much of a voucher they would need and give them a check. Let them decide whether they want to buy internet, or better food or housing or whatever else. Or if you go the voucher router, giving them options lets ISPs compete for this. Don't think taxpayers should pay? Make a special ISP tax and give it to these people to make it budget neutral.
Not to mention the red tape and abuse this will create. I really don't want me ISP to track my income.
What they decided on is the worst possible option as it results in hidden costs and bad incentives. The only people its good for (compared to the alternatives), is politicians who can by dictate just seemingly create free things for people for no cost.
A profit is not a cost, and despite what finance bros think lower profits are also not a cost.
It is perfectly possible to supply 1000Mbps symmetrical fiber service to end users for $20/mo because numerous self-sufficient non-profit municipal broadband organizations in the United States are doing just that.
This is 2.5% the capacity for 75% the money. If ISPs can't figure out how to do that profitably, they deserve to fail.
After several decades of taking public money to build out their networks, ISPs can give back a little by very slightly lowering their margins when serving low income residents.
> It is perfectly possible to supply 1000Mbps symmetrical fiber service to end users for $20/mo because numerous self-sufficient non-profit municipal broadband organizations in the United States are doing just that.
Probably depends on a lot of things, but my local municipal broadband is an open provider model, my provider charges $95/month and the municipal network takes $59 of that (as of Jan 1 2023). The municipal network doesn't provide IP transit, just gets my bits to my ISP's office. Where in the US is it $20/month?
> This is 2.5% the capacity for 75% the money. If ISPs can't figure out how to do that profitably, they deserve to fail.
Most of the actual cost is maintaining a line to customer premises. My municipality charges ISPs $49/month for 100m and $59/month for 1G, although there's not a real difference in operating costs; either the fiber is up or it's down, and the truck roll to fix an issue is the same. There's maybe an argument that a 100m customer can't/won't cause congestion on the municipal network because (as implemented on my local network), the biggest oversubscription is 48 customers on a 10G uplink. A 25mbps plan would have the same basic costs for my municipality as a 100m plan, although it might actually be trickier because they couldn't just use an ethernet speed setting somewhere in the path to limit speed.
I suspect incumbent broadband providers have some cost advantages over my municipal system, because incumbents have better take ratios, but I honestly doubt they can actually cover costs of just providing a line with service to a home in their territory for $15/month or $20/month.
While sometimes direct monetization of the benefits is a better solution, in this particular case it is not. First of all government in this case doesn't want to give some cash to to the poor, it wants to provide them with access to information. So instead of giving people cash, then verifying if they are spending it on the internet, they are streamlining process for it. And second, direct monetization of benefits won't work in this case. Essentially government is taking some cost out of ISP pocket and redirecting it to the poor ISP customers. But if they monetized same process, the government wouldn't know who to give that money. They would need to additionally track if a poor person is a subscriber or no, and where is he currently located at all times, to know which ISP's money should be redirected to whom. It is way more work for almost no benefit.
That wasn't a crucial point of my argument. I disagree but everything I said still applied if you replace increase costs to decrease profits. And there is a response to these things, like increased costs. This is pretty uncontroversial basic economics.
Even that doesnt matter. Just do it directly so you know exactly how much the subsidy is worth. Tax their profits and transfer it to the people. It's simpler, more visible, less unintended consequences
Forcing someone to provide a service at below market price is not direct.
It would be more direct by taking the market price for these goods and purchasing them directly. Then you have a line item that perfectly encapsulates the subsidy and the transfer and you can reason about it.
> Tax their profits and transfer it to the people. It's simpler, more visible, less unintended consequences
How is that simpler? I'm assuming by "transfer it to the people" you're talking about a subsidy paid out where the customer pays $15 and the municipality then pays the balance, but why should they? The data networks the ISP is paywalling access to were in large part already funded by the taxpayer. And besides-which, that doesn't put a cap on the price the ISP can charge at all, and in fact gives them a reliable avenue to now help themselves to either the pocket books of the people it's meant to be benefitting, or the state coffers, neither of which is a good solution.
And as to the market effects, I mean genuinely, have you ever purchased internet service? Because I have since I moved out of my parents house in the mid 10's, and I assure you as a sysadmin and pretty techy person, in that time, I needed ONE (1) service call to address an issue in their wiring, and apart from that, to my knowledge, I was basically 100% profit, minus whatever expenses go into maintaining the trunk, and my price went from about $70 per month to within shouting distance of $200 over the course of 3 years, and then stayed there for the subsequent four years, for pretty middle of the road service at half a gig down and about 35 MB up. So I guess by your logic, there must've been a hell of a lot going up further up the trunk to justify me paying ballpark $7,000 over those months.
Or, more likely, the CEO wanted another yacht.
Edit: This stuck in my craw so I googled a bit, and the biggest provider of fiber service in New York is Verizon FIOS, who posted a profit last year of EIGHTY. BILLION. DOLLARS. So you'll forgive me if I have doubts that even if we presume they're losing their shirts on this $15 per month program for qualifying low income folks on a per-address basis, that they're going to go under about it. I think they'll manage just fine.
For any price, I'm sure you can arrange for fiber construction, but it's not going to be cheap. From personal experience, not many people are willing to pay tens of thousands of dollars on fiber construction to get 1g symmetric, and then pay a hefty sum monthly.
> It is perfectly possible to supply 1000Mbps symmetrical fiber service to end users for $20/mo because numerous self-sufficient non-profit municipal broadband organizations in the United States are doing just that.
You are considering only short run marginal cost, not long run; i.e., you're not factoring things like amortizing infra build-out. if repaying that is restricted to a smaller pool of customers, prices for them will go up. worse, this intentionally affects only large, national ISPs, so NY state is effectively leeching off customers in other states to subsidize a NY-only social program. there should be a credible challenge under the commerce clause because of this.
> I don't like these types of mandates because it distorts the market.
Internet access is more or less a “natural monopoly” because of right of way issues and cost to build just like electricity and gas and water. Those things have always been regulated and had price controls.
> Politicians get to say "we provided X people with internet service and we didn't use a dollar of tax payers' money". Which sounds nice, but you can't really get something for nothing. This will increase costs for ISPs and likely increase prices for others. How much? Who knows!
And what happens when ISPs can charge whatever they want - again a natural monopoly - should the subsidies increase,
> Internet access is more or less a “natural monopoly”
Finally someone with some economic sense. Natural monopolies don't get to dictate prices or conditions of services. That's something that monopolies, have to be content with. If you put yourself in a position where no one can realistically compete with you, you can't complain that the state makes sure that the consumers aren't harmed by the lack of options.
Also, before someone says "that's only for cables", I'd point out that useful electromagnetic-spectrum bands and orbital-paths are finite collective resources as well.
This is a lot of words. Do you think Internet should be a utility, or not? Obviously: yes. You enjoy water, schools, roads and power. Trash removal in NYC is free, and it's better for that community than being private. But also, you work in tech or something. More customers, less money being paid on meaningless rents. And fuck Comcast, right? Think critically. We don't need ISPs, and little about that ecosystem resulted in innovation that mattered historically.
Compare this to California regulating how much insurance companies can charge. IN that case, its lead to horrendous side effects where insurance companies are leaving the state, dropping customers, etc because they will literally lose money on the policies, which has lead to bad outcomes. Id rather that the state actually pay for the things it wants and not put in a bunch of hidden taxes that have strong distortions on principle.
Private companies looking for profit and leaving when they notice that is not profitable is not a undesired thing. If your margins depend on you screwing your customers, your business model shouldn't exist. California will figure something out, maybe making high density residences easier to build, would make a difference. Also, that's not exactly why they are leaving, they are leaving because the state forces them to pay the insurance if an "act of god" (systemic risk, like a wildfire) happens.
The risk of fire has clearly massively increased thanks to climate change. California's rules literally dont allow them to charge prices that account for this. California has an insurance plan of last resort that is now billions underwater, which is a clear sign of the issues at play.
Its not that these insurance companies are screwing their customers; rather at the rates that California requires they charge, these houses should not exist because they are a net negative to society unless their insurance costs more.
I agree on the dense housing. So many of these burns are in areas that we shouldn't have built.
Call me when these type of indirect unfunded mandates ever succeed at squeezing blood out of the corpo stone, or when they don't end up entrenching the existing corpos.
Broadband is indeed a market failure in many places. The answer is to create direct competition in the form of municipal fiber, not to cheer on weasely half-baked approaches that just solidify the positions of the monopolist dinosaurs.
> "you have to provide them service even though you'll lose money on these customers".
So if you're not yet convinced, fuck Comcast right? Yes! I want Comcast to lose money! I fucking hate Comcast more than anything, almost everyone who isn't working there does. There are things I can imagine never doing, like working for a tobacco company (fuck them too), and working for Comcast. It's okay to sometimes have limits. You can step on some toes without worrying about the ass they're connected to that you might have to kiss later. I will never kiss Comcast's ass. Laissez-faire absolutists do not arrive at economically or socially optimal outcomes all the time.
Not particularly, as long as they have a monopoly/duopoly, because that acts as a giant pile of free money which can pay for these things.
If we had some kind of mechanism in place that resulted in aggressive competition, then maybe "you have to provide service for $15-20" would be a problem.
I think it would be quite a bad idea for the city to pay the asking price to this kind of monopoly/duopoly, because that rent will get jacked up extra high.
For real. In my area, you can choose between xfinity or comcast and if you don't like those hope you enjoy satellite for way too much money and awful latency.
Spoiler for the uninformed: Xfinity and Comcast are the same entity.
How? A broadband provider either has to create infrastructure costing billions hidden like water utilities or use over the air internet which has it own limitations based on spectrum and not all spectrum being usable for data transmission.
Not really, not unless we enforce last mile unbundling. There's not going to be multiple fiber lines run to every house in my neighborhood for the same reasons why there aren't multiple power lines or multiple water lines or multiple sewer lines.
It should be a utility. I'd like the government to eminent domain all internet infrastructure and resell bandwidth to ISPs at fair prices.
I would in fact enjoy a great deal of schadenfreude. The carriers pocketed giant government handouts but did not make the commensurate improvements in infrastructure those were intended to fund.
Assuming this covers all of NYC's population (8.2 million), that's pretty cheap - $1.22/week. I'm paying $160/quarter, so that's $13.33/week or over ten times the cost to a private company. I assume that my prices are regulated locally in some kind of private/public partnership deal.
We can't have true competition with utilities, because we'd need six sets of pipes into every apartment just to have six competing providers, so the government needs to step in and regulate utilities, because they are a natural monopoly.
> Which sounds nice, but you can't really get something for nothing.
This is hyperbole. First, nobody's getting something for nothing. Second, the eligibility is limited. Besides, this is hardly the first time a price regulation has been applied to a failing market.
Vouchers don't work since the ISPs will just raise the price to take into account the increased purchasing power.
Just adding the burden to the ISPs of offering service at a fixed price will let ISPs compete for who can do it the most efficiently and raise the prices for other customers the least.
But in general I agree with the concept of "just give people enough money so they can afford a base standard cost of living", but in the US specifically that seems very anathema to the culture, they're always trying to control how poor people spend their money (see "food stamps" something I've never seen anywhere else) so unless you do the same thing across the board, just giving one single targeted handout will not have the desired effect.
What hidden costs? Taxes? Probably the top 5 thing I'd love my taxes to go to.
I think the downsides will be obvious: their internet is super cheap but not really fast. In other words, not too dissimilar to 3/4/5g plans with phones almost everyone has. No one's gonna be streaming Netflix and any Youtube over 360p on this plan.
If we're arguing that the Internet is a public need, then I don't see the downsides here. use slow internet to get lower income people on their feet. They hopefully rise up and then grab jobs that can allow better internet in the long term.
The hidden costs are the price increases that ISPs add to customer bills to “make up for it.”
Now, I’m not saying that’s right - I actually agree with your premise - nor am I saying that any ISP truly has a marginal cost of each customer (especially given their engrained habit of oversubscribing their infrastructure) that they need to “make up for.” I’m just clarifying the “hidden costs” that GP seems to be mentioning.
IMO, this would be better handled as an explicit tax that’s passed onto customers of the ISP. If every bill came with a line item adding $0.50 charge for “underprivileged broadband access program,” nobody would complain. Phone bills already include these kinds of line items. And at least this way it would be clearly delineated rather than masked in a future price increase.
>price increases that ISPs add to customer bills to “make up for it.”
This implies that ISPs won't do price hikes to begin with. My bill went up $5 over 2024 alone. Not even an announcement or anything. They'll make up whatever excuse they want, similar to CA's increase in wages to fast food workers: "we'll have to fire staff or shut down if we pay workers $4/hr". All the major chains are still around a year later. Some tried the AI drive thru thing, but they all reverted back.
> this would be better handled as an explicit tax that’s passed onto customers of the ISP.
I agree. Itemized lists should definitely be a default, and not something inaccessible at worse, and needing to poke a company for at best.
Subsidising doesn't make the market more efficient. As a capitalist American you should have said "we need more competition!"
In France Free dropped the price from something like 45$ to 15$/month, and then they did the same with mobile plans and a 2$/month plan that still exist today.
Recently the senate invited the CEO and asked them why they don't increase their prices. The CEO got mad at them for even asking the question, being proud of proposing low prices while still making a lot of money gave back a lot of consumption power to the people according to them
Commercial ISPs are a 1980s idea when few people wanted the service.
Municipal networks, even if last mile only, are the only sensible modern approach where everyone deserves to have access to the service.
Then you can layer different national providers on the framework for individual and commercial contract service and then you can realistically talk about a municipally operated "best effort" /free/ service for everyone else and for those who cannot afford anything.
Right on! You're not even covering the half of it. Incumbent dinosaur ISPs will fight this kicking and screaming, but after they have their tantrums they will embrace it because it keeps new competition out of the market. This general pattern of "unfunded mandates" creates time bombs that become entrenched and impossible to fix (look at the catastrophe of the healthcare industry)
If you want to actually screw big cable (and you should), support the direct action of municipal fiber. The funds for the build out don't even need to come from the general tax fund - with the popularity of such services in 2025, municipal bonds are more than sufficient.
Is there a real market? I'm not int the US, but from reading things like these when they come up, people usually complain about the lack of choice. No competition, no market. No market, there is nothing to distort.
> Price increases are to be capped at 2 percent per year, and state officials will periodically review whether minimum required speeds should be raised.
2% is below current inflation rates, so this could potentially go haywire super easily.
New York has been here before; the subway was fixed to a nickel for four decades, which ended up bankrupting the private subway companies and set the stage for the underfunded, deferred maintenance of future decades, which New York is still working through the backlog for nearly a hundred years later.
While I agree that people getting internet in this day and age is _basically_ a necessity (and thus the govt should interfere when needed to make that happen), doing it in this way is the worse possible implementation. Was it necessary in this case? I don't know.
First, foster competition. I don't know the NY landscape, but in the West Coast, it's not uncommon for a residency to have effectively a single option for ISP. Ensure consumers have options (incentivize creation of new ISPs? Stop allowing big corporations to buy small ones? break up big corporations and force them to compete?)
Second could the government offer public internet? (ie, be a player in the market).
Only as a last resort should these types of heavy hand price enforcements should be taken.
There is not much competition in most neighborhoods in NYC, only in the nicer (more wealthier) neighborhoods. This is badly needed for this city.
>> First, foster competition.
The ISPs don't really compete. They lock in certain areas and then harvest it over the years.
>> it's not uncommon for a residency to have effectively a single option for ISP.
Same here. My building has options for Verizon FIOS and Charter/Spectrum and I count myself lucky. Thats usually not the case. In many places I've rented you're stuck with one provider.
>> Second could the government offer public internet?
A municipal ISPs proposal would be challenged in the courts by these ISPs. This scheme is less invasive to the marketplace than that, no?
What are you imagining, a dozen companies constantly tearing up the streets to lay down yet another run of fiber to everyone's homes?
Once you get to a certain density, things like 5G or Starlink or whatever aren't going to scale. It doesn't make capital sense to have a bunch of companies run practically identical lines to every home.
Line sharing / unbundling / open access, whatever you want to call it is the way for this to work. Ideally, separate companies for last mile access and IP transit.
Drop the customer traffic off somewhere in the region, and let 3rd party ISPs pick it up from there.
> Only as a last resort should these types of heavy hand price enforcements should be taken.
Yep, because capital-intensive businesses like ISPs will so generously compete among themselves and the market will identify the one most willing to drive its own price down and get even below the level of the program's lowest-mandated price. All of that competition will surely help their subscribers!
I can feel that free market itching for the opportunity here, any day now.
I meant absurd in a good way. Given my internet is also powering my professional line of work, I'd still probably pay $80/month for double the speeds. But it's great others can get some actually decent internet for a small fraction of the cost.
Really depends where in CA. I'm in SF and pay ~$50 for 300Mbps (Comcast), but my parents across the Bay get symmetrical 10Gbps (Sonic) for the same price!
They are, yes. But my choices here are basically Comcast or AT&T (yes, I'm in a suburb). I'm just choosing my poison. I was using the comparison as a good thing for NYC rather than trying to criticize them when my internet prices are comparatively bad.
Some good news is that they seemed to have upgraded the speeds to 600Mbps at some point in the last 2 years. Not out of gouging land, but better.
Thats all suburbs with one real provider. I used to pay $160/m for uncapped 200Mbs with Cox. Then Google Fiber came to my neighborhood and now i pay $100m for 2Gbit.
I'm paying $30/mo for 10 Gbps in Japan, paying $100/mo for 400 Mbps sounds crazy.
I get that the last mile infrastructure costs a lot to lay down especially in the U.S. with your crazy local politics, but once that pipe is there the bandwidth to fill it should be cheap.
I'm in Oregon and paying $65/mo for symmetrical 1Gb plan which seems more in line with those prices if you scale them linearly. But I have my choice of multiple providers here, so they compete.
>"any recurring taxes and fees such as recurring rental fees for service provider equipment required to obtain broadband service and usage fees.
Where I am (outside NY) low income broadband is a thing, and the taxes and fees are included in the $15/~$25 a major telecom provider offers. The alternative provider to them advertises a $20 month special, but when you check into it the taxes and fees for that provider add on about 100% to the bill. Advertised mbps in the US, is sort of another sorely needed conversation.
Assuming you're in the U.S., the FCC has adopted new broadband labeling transparency requirements meant to address exactly this sort of thing. They went into effect last year.
This is fantastic. We need more controls like this to put the screws on the obscenities that are modern telecoms. What would be the next great step to take is to mandate local loop unbundling like was done with copper. The fiber should be publically owned and privately owned providers have the option of a handoff to deliver their service over that local loop. But I'll take one minor win at a time.
Hopefully the users most interested in these benefits can start to get them as soon as possible. Any bit helps for those where $20 is actually a big stretch.
Internet access is so important it should be available for low or no cost to basically everyone. Price caps like this are a half-assed fix because the providers are incentivized to make finding, ordering and having that service as painful as possible.
It's a bit like rental price controls. Look at all the vacant rent stabilized units in NYC. The real solution to housing is for the government to provide housing, not force discounts onto the private sector.
The real solution to this is for municipal broadband for the last mile. There is absolutely no reason why Internet access is as expensive as it is in the US. The only reason is rent-seeking national ISPs.
Didn’t see in the article what they define as “low income”. As a general rule of thumb I don’t like government and bureaucracy interfering with free market, however I see the potential benefits here. Glad they excluded smaller ISPs with less than 20k customers.
ISPs aren't really a free market, they are more like natural monopolies because it's virtually impossible to compete given large capex costs, long dated infrastructure projects, etc
Given the lack of competition, this is precisely the kind of non-free market in which government regulation is not only fine but advisable.
Given the "free market" as of late, I would love if the government "interfered" more so people can get basic services that is standard in every other country. It's more a question why some of these were privatized to begin with.
200Mbps is barely enough for TV streaming if you are on Comcast (Xfinity). You need 500.
I have tried 300 and had issues once in a while, 500 works fine. That is because with Comcast, you will never get 200Mbps, no matter what the plan, at least were I live.
you are often throttled. But you shouldn't be a a point where 200Mbps (advertised) is only giving you 100 Mbps or less in practice.
You probably need to check out the devices on your network and the quality/locations of any wireless setup you have. It was part of the reason I upgraded from trying to manage with an extender that gave me maybe 80 Mbps at best in the worst points, to a mesh network that has me utilize around 170 Mbps.
I use Comcast and I still have 100 criticisms about the company. But it hasn't been the worst network I've had to deal with.
This article brings way more questions than it answers like:
1. Starlink has more than 20K customers, can I get Starlink at home?
2.
A) What if I live somewhere remote and the nearest cable is 20 miles from home?
B) If Verizon has cable but I want Xfinity, should they be forced to dig 20 miles to my home?
C) I am waiting more than 14 days for this 20-mile cable to come to my home and I am running out of patience. How long can they stall this?
3. Will there be a cap on how many customers can access the $15 plan per ISP?
What if we all hate Verizon and make a hidden Facebook group where we all choose to go to Verizon for this cheap internet (for example)?
4. If someone is already locked into a long-term contract with a higher price, can they switch immediately to the $15 plan without penalty?
5. Will the $15 plan include unlimited data, or can ISPs impose data caps?
So far in the article I saw only bandwidth requirements—no mention of data caps or latency.
6. What happens to customers if their ISP gets an exemption after initially offering the $15/$20 plan?
I am sure the lawmakers had good (PR) intentions here, and probably my questions are already answered, but this article is in pure Ars style.
I'm not even from the USA, I'm just curious how these things work.
Edit: Formatting and swapped ISP names in the examples
I don't like these types of mandates because it distorts the market. Politicians get to say "we provided X people with internet service and we didn't use a dollar of tax payers' money". Which sounds nice, but you can't really get something for nothing. This will increase costs for ISPs and likely increase prices for others. How much? Who knows!
If politicians feel that low income New Yorkers deserve reduced cost or free internet, give them a voucher for internet. Better yet, figure out how much of a voucher they would need and give them a check. Let them decide whether they want to buy internet, or better food or housing or whatever else. Or if you go the voucher router, giving them options lets ISPs compete for this. Don't think taxpayers should pay? Make a special ISP tax and give it to these people to make it budget neutral.
Not to mention the red tape and abuse this will create. I really don't want me ISP to track my income.
What they decided on is the worst possible option as it results in hidden costs and bad incentives. The only people its good for (compared to the alternatives), is politicians who can by dictate just seemingly create free things for people for no cost.
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