I also live in an area that will never see high-speed internet. We were sold out by both the feds and our state legislators. You can argue that perhaps these government officials were misled or uniformed, but I remain dubious.
We were able to construct an interstate highway system. We were able to wire this country with electricity. We were able to wire it for telephones. The only reason we can't wire it with fiber is because of poor government management of eminent domain. We should kick most of those responsible out of office. To see a bunch of yahoos on TV telling me we need the road paved when most of their constituents don't have enough bandwidth to get high-quality instruction over the web? Or to work over the web? It's the Information Age, bozos. Something is wrong somewhere.
The worst part? I do not expect this to get fixed any time in the next couple of decades. Not only is it broken and hurting, but there's no political incentive to fix it. In fact the incentives run the other way.
But I don't live there, so maybe I've been misinformed.
We also have good pipes to the main POPs in Asia.
Regardless, free-market capitalism is not predicated on freedom from government intervention; in fact, a government is necessary in order to protect the freedoms of the individual. That should be the purpose of the government: protecting the freedom of its citizens. Creating an environment that allows voluntary trade of goods and services to exist. Not picking winners or losers. Not imposing regulations that create monopolies. Not encouraging bad behavior by banks. Not rewarding bad decisions by auto manufacturers. Not being in bed with unions and corporations alike.
Here's how I think about it: What can one corporation do to a person? Not much. What can one government do to a person? Take away his freedom, imprison him, and / or kill him. Would I rather have flawed, power abusing individuals the power to impose their will over an entire country, or just their company? Would I rather centralize power in a way that is not accountable to anyone, or would I rather have power be decentralized and much more accountable to me?
No one is arguing for no government. But we are looking at the present state of affairs and the reasons we got here, and then looking at the past and seeing what happened then and why... and we're realizing that, for the most part, more government is bad.
Estonia (relatively) recently adopted policies supported by Milton Friedman. Along with that and being freed from the USSR, Estonia's economy is growing rapidly. Estonia adopted a flat tax rate that has been decreasing steadily over time. Estonia has extremely low public debt, free trade, a budget surplus, and had, in 2011, 5x the GDP growth of other EU countries (although they recently adopted the euro :( ). Estonia is doing quite well compared to the rest of the EU, despite all their damn economic freedom.
Regardless, how is "not many have tried it, therefore it doesn't work" an argument? On the other hand, one doesn't have to look very far back in history to see where too much government involvement into the economy (and therefore every day life) leads.
You just did!
Demanding even a shred of evidence for a dubious claim is not the same as claiming that it doesn't work. It's a request for evidence, rather than just hot air.
As to Estonia, it's GDP per capita, is only 67% of the EU average and 17% of that of Norway, a socialist country. It does have high internet speeds, though, so you gotta get 'em props.
Estonia was annexed by the USSR. It's only been a free economy since 1990. Norway didn't have to deal with that.
More importantly, oil. Norway has oil. Being one of the largest exporters of oil in the world gives it a huge boost.
So I don't really get your point. Estonia still has one of the fastest growing economies in the EU, which is what really matters.
And how are you going to eliminate corporations if you have anarchy? You would have to enact legislation backed by force, because a lot of people are not going to agree. Is a bit like some of the arguments I have with mates where they say they want to institute anarchy and ban money. To which I usually point out that firstly, banning money sounds a lot like an imposed law and that secondly, irrespective of my views on monetary systems and that they can probably be improved upon, if anyone tried to ban money, the first thing I would do is start a currency just to annoy them.
 My view on money is that eventually it will be obsolete for acquiring many everyday goods, but remain for luxuries for a very long time, but the point at which I expect this to start to occur is still a reasonably long way off. The key technology that could start bringing this about is a fully automated farming and delivery chain driven off solar. I am mostly keeping a close eye on Brazil as the most likely candidate for schemes like this to be tried first, given the rapid economic development, political climate, and existing food security schemes like that in the city of Belo Horizonte. http://www.unesco.org/most/southa10.htm
Note, I am not against money per-se as I think that it was a vast improvement on what it replaced, I just think that it doesn't have the lowest economic friction for acquiring any abundant items that have negligible ongoing costs.
I think that's a different issue. Corporations exist because of the law. Corporations shield the owners from personal liabilities, including debt. It is the law which prevents me from going after the owner of a failed company which owes me money.
So if there were no law, or no enforcement of the law, there would be no companies.
All the ideas of trying to bring about anarchistic statelike systems seem to neglect the issues that sometimes hierarchy is very useful and can also be extraordinarily deadly if used aggressively.
We could, if we wanted to, and through the law, eliminate corporations. In that case, you could still have organization run as partnerships or other means. This does not require anarchy in order to achieve.
If there were pure anarchy, with no government, then we would de facto have no corporations. That because we wouldn't have property ownership, limited liability, contract enforcement, and the other aspects which make corporations "exist."
That's why I suggest that getting rid of "immortal amoral virtual [corporations]" can be done without anarchy.
Anarchy does not necessarily imply a society with a lack of structure or law.
But, as David Graeber put it, that's the point. The people who invented the anarcho-capitalist philosophy of self-ownership, or natural ownership of one's "liberty", mainly did so because they wanted to explain how one could trade away that very liberty for money.
I think that the future really is in wireles communications. What's the point of laying down fiber if in 10 years we can get wireless at the same speed?
Of course I'm assming that telco will actually compete in tthat domain... but considering how easy it is to switch serfices, I think it can only get more disruptive.
Laying fiber once is long enough to last at least 100 years (based on what we know now). Should we not lay fiber just because wireless may eventually be as fast?
A good decision now is better than the best decision later.
If you tried to go all the way with your argument, only a few urban centres would be left with decent infrastructure. And of course infrastructure needed to support those (parasitic) centres (what with food and the like).
A rather gloomy picture of society, if you asked me.
Well, I do ask that question about every service in rural areas. There are advantages to living in the countryside - traffic, clean air, cheap housing. If I'm expected to subsidize rural broadband, why aren't rural people expected to subsidize my housing costs?
If cheap, fast broadband is really important to you, why don't you move somewhere it's available?
Back home, my Verizon bill will be $120 every month with one iPhone 5 and one LTE iPad sharing the same data plan (breakdown: $40 for iPhone 5, $10 for iPad, $70 for unlimited talk/text + 4GB shared data (or, replace $70 with $100 for 10 shared GB data for a grand customer abuse total of $150 every month)). You can't seem to even get non-unlimited voice/text anymore. Let's not bring up the $35 fee per device they charge to "activate" it either -- I don't want to headasplode in this room (it has white walls).
Data only, please. For under $3/GB, please. RFN, please, not in another 10 years.
Quite a few people actually. The former is rarer, but there is an increasingly large portion of the populace that doesn't use iMessage (considering it's proprietary to Apple). Sure, you can work around using Google Voice to SMS/Call over data, but that isn't for everyone.
The only thing I use Google Voice for is the one or two friends still using dumbphones.
If you're in U.S.…
Or was that just supposed to be a jab at Whatsapp for no apparent reason (and a bit out of context)?
"Having an app" for various OSes is not called interoperable. Going back to e-mail analogy, one can expect to use any e-mail client, and to send messages to users of any e-mail server. Without any need to use one kind of client and being restricted to communicate with users of one e-mail server only. The same thing should be in the field of instant messaging, and such thing is already possible with XMPP.
Those who proliferate non interoperable networks (Whatsapp, iMessage or whatever) - are plain wrong and should be ashamed doing it in this day and age.
Looking at history - e-mail had to overcome the same problem. At some point, major public e-mail services were walled, like AOL and Compuserve not being interoperable. Luckily today for e-mail such thing is unimaginable. But with IMs - it just persists. And in big part, those who create new walled networks can be blamed.
I have a prepaid mostly-data SIM for $30/month via T-Mobile prepaid (http://prepaid-phones.t-mobile.com/).
Maybe we'll see more consumers move that way around Google's (rumored) November 5th phone launch.
If I were to want a plan with AT&T that offered me what I have now (450 minutes a month, 2 GB of data and unlimited texting) I'd still be out 90 USD per month whether I purchased my own device or not because AT&T doesn't do discounts for bring your own device customers (T-Mobile contract customers can get a discount for bring your own device, or at least that was the case when I was a customer with them. Knocked $20 off the price off a contract).
I'd be more than happy to purchase a phone outright and pay MUCH less per month.
My sister has an unlimited data plan, 400 minutes a month and unlimited texting for a grand total of 40 EUR in The Netherlands with T-Mobile. She doesn't talk much, but texts and iMessages a crap ton and uses about 6 GB's of data on average listening to streamable music and online radio stations. At the current exchange rate that is 50 USD. Do note that her phone is subsidized as well, also it comes unlocked so she can move carrier when her contract is up without issues.
I pay 90 USD and get only 2 GB of data a month.
How does this even make sense?
$45 price point seems unbelievable.
According to the t-mobile reps I spoke to, their refarming project will only be finished in a few cities by the end of 2012 (LA allegedly included, although in the past t-mobile reps also promised this would be done by September so YMMV). The nationwide project will take all of 2013, so don't hold your breath. I'm about 30 days away from dumping them and going with Straight Talk.
And usually their non contract plans are cheaper. They do offer another 5 GB plan for $30, but with 100 minutes / month for calls.
I guess Americans lucked out on amazingly low hardware prices, so that's why you have to get ripped off on data plans :-)
Back in the States, I paid $50/month for T-Mobile's unlimited-everything monthly/no-contract plan. There was an additional $10 fee for international calling, if I wanted it. This plan was later grandfathered out, leaving the only similar plan being one where you get on a contract and buy a new, SIM-locked device. Before it was grandfathered out, Consumer Reports ran an article on the under-appreciation of no-contract SIMs in America.
Where I am now (Northern Israel), the government passed a law against lock-in contracts last year. As a result, there has been a "cellular revolution". My new SIM, which might arrive in the mail today, costs 99 shekels per month (roughly $25 USD, but the shekel has been tending to rise against the dollar faster than the Central Bank can buy American bonds to keep it down). It includes unlimited calls, text and data, including international (to my American family) for no additional cost.
The internet service I have here, coupled to minimal public-access television service, is 10 Mb/sec download speed for 65 shekels ($16.25 USD) per month. The providers of physical internet infrastructure (cable and DSL) are also separated here from ISPs. A competitor to my DSL company offers 100 Mb/sec for 20 shekels ($5 USD) per month, but isn't available everywhere. This DSL company will upgrade you to 20 Mb/sec if you catch them offering a sale.
By contrast, a minimal cable package of public-access channels and broadband internet back in the USA cost about $45/month, before you've paid any other bills, and it gave you about 3-5 Mb/sec.
(Admittedly, these prices reflect household incomes being lower here, since the average worker's salary is something like $28k/year and most households have two working parents. But the way America has been going, those kinds of numbers are now typical there too, but without prices having gone down.)
So yeah. America gets gypped because its government consistently refuses to do anything about telecom infrastructure. It's pretty sad, considering how little you actually have to do to get decent results.
What about wifi? This month I've cancelled my $70/mo 6GB data/150 min talk service with Fido (Canada) and switched my iPhone to a prepaid SIM. Mostly because I've realized that 99% of the time I need data I am very likely to be reading, coding, or otherwise consuming, in which case I'm probably at home, at a friend's place, at a café, or generally a wifi equipped spot.
It's not a real solution if you do need data everywhere you go, but I recall reading that wifi is much cheaper to build a larger infrastructure from; hence all the city-wide wifi projects I suppose. Can anyone with an insight chime in?
As a kid in Germany every household with a radio or TV had to pay a fee to operate those devices and there was a constant barrage of ads reminding new households to register and pay up. I'm assuming there are also other taxes that flow into building communications networks in Europe.
In American terms: The TV license pays for PBS programming, it's not a subsidy for Comcast to lay cables.
Wikipedia saith that, as of 2007, 93.5% of the Federal contribution to the Interstate Highway System was funded by gas and vehicle taxes.
And it notes that 1/6th of gas taxes and other user fee-like financing mechanisms are diverted toward public transit.
My favorite example: the price of books in the US and Canada. Just grabbed a random recent hardcover off my shelves. It's labeled "USA $25.95 Canada $32.50". I believe that price differential got established back when the US dollar was worth $1.25 Canadian -- but it still exists, even though the two currencies are now roughly on par. It's the exact same product with what is effectively a 25% markup for Canadians for no good reason.
I thought that our 19 cents/gallon tax on gasoline is what is used for road repairs etc. Is this not the case?
And here: https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State...
$25 billion received via gas taxes at the federal level in 2006 (60% spent on roads). $70 billion spent by feds in 2012.
The 'local loop' to the home is provided by Openreach(BT) who have to make connections available to any company at an appropriate rate. There are also cable TV networks in many towns and cities.
My postcode says 'not currently in plans for rollout' so we are stuck on ADSL over copper for the foreseeable future.
The amount of fees and the costs I pay in America versus what I would pay in The Netherlands is absolutely mind-boggling.
Are you including health insurance? I'm pretty sure that I'm paying significantly less in taxes in the UK than I would be in the US with federal and state taxes plus health insurance.
Your employer might pay for health insurance, of course, but someone is paying.
I'd also like to see a fairer comparison here. If telecommunications infrastructure in these leading countries was subsidized by tax dollars, as the following article suggests they were, those payments should also be figured into the price of internet. These numbers are harder to get, but you're right that omitting them is disingenuous.
Still, the broadband connection is subsidized by the gov, so somewhere there are taxes being collected to pay for it. But does it justify the 4 fold price markup in the US ? I don't think so.
I'm not aware of paying anything extra for fees, nor being forced ads.
Why doesn't NYC have 100 MBit to the home, when Singapore (population 5 million) does, and can get it for US$50/month?
Looking now, Cablevision serves the New York tri-state area. Their fastest rate is $45/month for "50 Mbps for downloads and up to 8 Mbps for uploads." Comcast has a much larger range. They offer 50 Mbit for $115/month and 100 MBit for $200/month.
Telia is a Swedish ISP. They offer 100Mbit for $50/month and 100/100 for $60. That's for the cities. So we see that a Swedish ISP can provide higher bandwidth, for cheaper, than two of the ISPs in the biggest metro area in the US.
I then pulled up Telia's numbers for the town of Skurup, population 10,000 in the Swedish countryside. They are limited to 30Mbit, also for about $50/month.
The south of Sweden is densely packed, for Sweden, with 290 people/sq mi in the county. The country is 54/sq. mil. That's about the same density as Pennsylvania. Is it possible to get 100 megabit to your home in Pittsburgh? For under $100/month? Likely not. Why not, when it is possible in mid-sized Swedish cities?
I hate sites that start playing video without my asking. Doubly so ones with loud noise. I have sound on my computer for things that really need to get my attention. Not because some site wants to interrupt me and everyone around me.
I wish there was a way to vote this link down so that other people who will be similarly jarred wouldn't have to experience it.
Then on Plugins, select 'Click to play'.
Why do you expect websites to conform to your expectations? There is nothing inherent about the web that suggests it would. You'll save yourself a lot of trouble by being proactive rather than waiting for the world to catch up to your standards.
You mean the user of the website? Well yes I would darn hope they would!
The author hasn't provided any reason for us to believe that prices or services should be comparable between countries. First and foremost, prices are dictated by the value that people attach to a product. If Americans value, say, TV more, than economics would predict that Americans would therefore pay more for it.
And I think that the examples of telephone prices are cherry-picked based on structural differences, or just plain wrong. Communications rates have plummeted since then. I remember back in '84 people would say, "you've got a long-distance call from Xyz". Today, nobody cares if it's long distance.
In the late '80s, when my wife immigrated from China, she could only afford to talk to her parents every month or so, because the international phone rates cost several dollars per minute. Today she talks to her dad -- with video! -- on a whim, because it's free. And the price of telephone-quality audio is negligible (~$0.02/minute).
The real problem with US telecommunications is that the market is not really competitive. We have four national cell carriers who appear to be pretty big on collusion, and most places only have one or two options for high-speed home internet access.
This is false. The relationship between cost and price is weak.
At the expensive end, prestige brands push prices of goods to the stratosphere (think women's handbags).
At the cheap end, it's still quite common for prices to decline below cost. For example, consider cell phones or video game consoles, and of course the old standby example, razors. Each of these products is sold below production costs, but by using lock-in, the vendor can recover the loss through sales of proprietary goods later (monthly fees; licenses in game sales; razor blades, respectively).
It's true for video game consoles, occasionally, but the consoles are not very useful without games, which they make plenty of money on. The overall average price paid by customers over the lifetime of their purchases is correlated fairly well with the cost of making the stuff. The same goes for razors, printers, and whatever else you care to find that follows this model.
In any case, these are the exception, not the rule. The price of things I normally buy, like food, clothes, gasoline, electricity, and yes, electronics, are strongly based on their costs.
Prestige brands can be sold well above cost precisely because luxury brands become less competitive. Cheap handbags are basically fungible, but luxury ones aren't. When people want an LuxuryCo handbag, they want that, not an equivalent knockoff brand.
When it comes to telecommunications, you can see this happen in competitive markets like hosting providers. The price you pay for a server is pretty strongly linked to the cost of running that server. Dialup ISPs followed the same curve, ultimately ending up with service that was basically free (often ad-supported) because it cost so little to provide, because dialup was a competitive market. Home broadband generally isn't in the US, resulting in prices which can substantially exceed the costs of running the service. In places with more competition, prices more closely match the costs.
To quote the All-Knowing Wikipedia:
"In perfect competition, any profit-maximizing producer faces a market price equal to its marginal cost (P=MC). This implies that a factor's price equals the factor's marginal revenue product."
Of course, you never get perfect competition in the real world, but that's just my point: to the extent that prices don't match costs, it's because competition isn't perfect. The less competitive a market, the less the correlation between prices and costs.
(please interpret these questions as being investigative rather than argumentative; I see something compelling in your argument, but I'm not sure I completely buy it. I want to understand better)
I understand what you're saying about a market in which consumers would be willing to pay more. The higher prices are a flag waving, showing profit opportunity to other potential competitors. Those others will enter the market and force down prices until the profit margin to be had reaches a level lower than they'd be able to get if they invested their resources into a different market.
But I've got a vague thought in my mind that I can't quite work through, having to do with demand level (as opposed to actual quantity demanded). It seems to me that if the amount that consumers would like is huge, then the degree to which demand pulls on the equilibrium is much greater. Ordinarily, a supplier's production limit is how much they can get the consumers to purchase. But if demand is so great that consumers will buy everything that can be produced (due to input resource constraints, or long lead times in building production capacity or something), then producers can continue to sell at prices that are high relative to production costs.
Where's the hole in that logic? I see the potential for one in my caveat about input resource constraints: if there's a high-profit item whose production and sales are bounded only by resource availability, then presumably the producer will attempt to buy more of that resource, thereby raising its price. Thus, the underlying cost of production would rise to meet the price (rather than the price declining to meet the cost, as previously argued).
But what about the other barriers to entry, such as the time necessary to build a factory? The fact that a new factory must be built does not mean that the market's not free.
Markets are very very rarely perfect. Everything you have described above is a barrier to entry in the given market: it will make the market take longer to reach equilibrium, if the market ever reaches a natural equilibrium at all. Keep in mind though over time supply becomes elastic - if you're making a killing selling deodorant, you can bet that competitors will take notice and open up their own deodorant factories. Or you can expand your own production and make more profit.
> Where's the hole in that logic? I see the potential for one in my caveat about input resource constraints: if there's a high-profit item whose production and sales are bounded only by resource availability, then presumably the producer will attempt to buy more of that resource, thereby raising its price. Thus, the underlying cost of production would rise to meet the price (rather than the price declining to meet the cost, as previously argued).
"Resource availability" is a tricky thing. Generally as a resource becomes more valuable, more opportunities open up to produce it. See oil drilling: at first, the oil was under the ground in so much pressure that it would gush to the surface. People in Spindletop TX gathered oil by putting out buckets in the early days. Now we have to do seismic surveys use complex drilling techniques to get oil. What makes those techniques profitable? The current high price that oil commands.
This is why supply and demand are modeled as linear relationships. Cost of production generally increases per unit as more units are sold and the producer starts running out of ways to produce. Demand generally decreases as something becomes more expensive per unit.
However, both are more flexible (elastic) in the long run. Let's say you produce widgets and there's a sudden surge in demand. You can't expand your stock overnight. But you can open a new factory in a year increasing your supply. On the other side, if you are a consumer and gas prices double tomorrow, there's not much you can do immediately besides fill up your tank. But six months from now, you might set up a carpool or start biking to work.
All of the examples you give were studied in my microecon class (take a look at supply elasticity, which sounds like what you're describing here). If you'd like to learn more (and are in the position to do so) I'd highly recommend taking such a class.
I want to add that capital investments required to enter a market aren't usually an absolute requirement to produce the item at all, but just a requirement to be able to do so at a competitive price. You can almost always throw money at the problem and increase production, even if just marginally. For example, iPhone production is probably completely maxed out right now, but if for some reason it was worth a billion dollars to Apple to produce one unit beyond their current capacity, they could come up with a way to build an extra one that didn't involve spending months building a new factory first.
"This is false. The relationship between cost and price is weak."
Actually, this is true and is a well-documented and understood microeconomic concept. The more competitive a market (i.e. more firms, lower barriers to entry etc.) the more cost will dictate price. In this particular example, the market is not perfectly competitive, but the firms competing, (Verizon, Etc.) are not making significant profit margins.
This is a pretty good explanation, but a little searching will provide other wording which can help better understand the concept. http://www.investopedia.com/exam-guide/cfa-level-1/microecon...
(Though your basic point is still quite valid.)
And in a free market, the price signal that creates would incentivize other suppliers to start offering more, which would push the price down until it was roughly equal to the French rate. Why doesn't that step happen?
It would seem that the French are more sensitive to price changes than Americans. That is, as price increases in France, it's hitting a sharper decline in quantity demanded than would be observed in the American market.
I don't know what the actual numbers here are, just that this is micro-economic theory as I understand it.
But in any case, I disbelieve (at least in part) that telephone rates (I don't know about other services) are higher in the USA. I base this on my experience of having just bought two years of domestic service for well under $10/month, and with international calls being cheap to the point of negligible. Moreover, with skype and other services being free, the bottom falls out of any comparison.
The reason the French rates are so low is because they have competition. I couldn't start an ISP in my area if I wanted to because Verizon owns the phone lines and Comcast owns the cable lines. I would need to lay everything by hand, but even that I would consider not being much of a problem anymore - if you took every "town" of 3k+ in the country you could easily have local ISPs lay fiber channels and fiber to the home for everyone in each community and pay it off with $60 a month service considering the per foot cost of fiber cable is lower than the going rate of coaxial was back in the 70s when cable tv took off.
It is purely a fixed game. You can't introduce competition to the system so you can't make a prediction on the reactionary effects of American consumers because that isn't happening in the first place.
On the topic of phone rates, I paid $250 for a 2 year 5000 minutes prepaid tracfone. It is the best cellular rate I could get considering I infrequently call anyone via traditional means and not over some VOIP service.
Time to crack the whip and restore sanity in these markets. The telcos have become a law unto themselves.
Internet is a terrible commodity, because so much of the cost of connectivity is wrapped up in laying lines and buying server farms than actually maintaining the infrastructure. And that is really what it is - there is a reason roads aren't private, and why no other animal ever evolved wheels. Some things are best done collectively, and I usually lean libertarian but infrastructure is something you can't effectively leave open to free markets or give to private monopolies, because they are so easy to take through monopolistic practices.
As to cable and high speed internet / cable. Most locations prohibit completion, artificially limiting which company's can sell cable in a given area. They had a rather tough fight getting off the ground even for an incumbent like Verizon.
That is why the cartel of providers is as bad as it is in the US - most localities sold their phone and cable lines to private businesses so they never had to recoup the costs of laying lines, and thus no one can compete with them because they had an unfair advantage from the get-go, and they have their hands in the pockets of every local and state government to keep anyone else from even getting permits to try putting down fiber. Sonic and Google are two rare exceptions to that rule.
However there is a grain of truth in here - while Europe had MUCH higher internet / phone / cable costs 10 years ago, from what I've learned from my friends over there the price has dropped dramatically. While 'regular' plans are comparable to US plans, the budget operators are incredibly cheap.
It's been a similar situation in Australia. We had incredibly high costs, and for many years the value of our internet went BACKWARDS - as the price went up, our data was also heavily restricted. However that trend finally reversed and it's much better value now. When I left Australia I had a 200gb 100mbit internet plan with a home line for $78 a month (and that included a cable modem).
I have to say I was pretty shocked at how poor the choice and value is in the US after moving here, particularly in Silicon Valley. Fast internet (> 30mbit) is incredibly unaffordable, and there is huge pressure to have to bundle with cable TV (which I don't want or need).
And what's up with the phone plans here?! The only reason I'm not absolutely screaming about it is I'm on a shared plan with my wife - if I were trying to get a phone just for myself the costs would be insane.
The biggest kicker is trying to find a good prepaid with data SIM - in Australia you can walk into any 7-11 and buy a SIM card for $2 and then get on a $2/day unlimited phone/data prepaid plan (i.e. you just charge up and then every day you use it another $2 is taken off your tab). There is NOTHING like that here.
I'm not sure if it's because of a lack of competition or what - in Australia all networks are now (roughly) compatible with each other, so if you buy a phone on one network it'll work on another. Then you have many many resellers who buy the network access wholesale from the big providers and then resell it. Same for the internet market. That's the only thing I can think of - the US needs to get this happening ASAP.
I have a $30 100Mbps plan, and if I want to download 10 TB in a month, there is no additional charge for that.
Mobile plans cost around $20-25 and are tipically capped at 3GB per month.
But don't worry, we're still complaining very much, that the lines are too slow and expensive.
T-Mobile does a plan like this in the U.S., though data is "unlimited" with an asterisk, and you have to order the SIM online. $2 for 2G speeds data, $3 for a limited "4G" allowance. http://prepaid-phones.t-mobile.com/pay-by-the-day-cell-phone...
So, what you're saying is that you have a $45 unlimited phone with 2 GB/month data?
Nearly all phone carriers in the US offer 'unlimited' plans which really boil down to hard- or soft-caps between 3-5 GB/month. It's terrible false advertising.
All this infrastructure for this network was build in the past 15 years and it is national. Romania is as big as Oregon State.
In my opinion the prices in US for triple-play are as the article states very very high.
But to compare prices in the USA with those in eastern Europe doesn't seem right. In nominal terms, the GDP per capita of the USA is 6 times that of Romania, and 4 times by purchasing power parity.
I would pay double or triple what I used to pay verizon for 25/25 symmetrical service before moving to NYC. Does anyone know of a provider that can offer something like this for less than $150/mo in NYC??? I'm considering getting a VPS just to tunnel to so I can access my home services at a steady domain...
In my area anyways, I can go to my TWC "PayXPress" portal (e.g: your online billing control panel) and on their support page they list links for compatible hardware.
Another suggestion: instead of bridge mode, look for an option called "RG Passthrough" or "Gateway Passthrough" or even just "RG enable"... then get your own router and wire the router's WAN port to the 1st ethernet port on your cable modem.
My motorola surfboard SBG-6850 has this option; and it works while bridge mode fails. I only use it because they want $5/mo to enable wireless on my cable modem. That's right, they want $5/mo to enable some hardware I already have.
My $50 Linksys WRT54GL goes years between resets and then it is only because I am moving.
Of course in a few years the big three will purchase them ala Fido and PCS and it will back to the status quo, but in the meantime I am enjoying sane cell phone rates.
My experience with Wind is that the reception is my city (Ottawa) is terrible at best. I'm considering switching to Moblicity.
Revenues last year were $110,875.
Earnings (profit after expenses including depreciation): $2,404
Profit margin was 2.16% for 2011.
Walmart did about 3.5% for 2011.
Aleyan has a very valid question which is much more interesting than the original story. I would love to hear some people's opinions on why it is so expensive to provide highspeed internet.
The video ends with the author explaining that it is due to a cartel of 5 or 6 companies getting together to fix prices with "non-compete" agreements. Where is the government? In bed with them. There is your answer.
I didn't realize the difference was as big as it was though. It's surprising because even though internet/tv is sort of expensive here, it isn't at all cost prohibitive for the majority of Americans.
Never mind the fact that we have seen several examples of big cable doing everything they can to prevent new infrastructure from being built because they would have to compete with it. Adding insult to injury is that many times this is against small towns that big cable has written off as not worth the investment in the first place. Thankfully I think we're finally seeing a shift against this kind of thing.
But even then there are still complaints over the pricing part. If an area doesn't have the infrastructure then that's fine, charge a proper fee for what they do have access to. I'm sure there are plenty of examples of people paying $30 for 10Mb service while an hour down the road people are paying $30 for 2Mb service.
This is just internet though, pricing structure over cable TV is seriously screwed up but not just because of cable companies. The companies that create the content have a big hand in that fiasco as well.
Europe has more regulation to ensure portability across markets, as well as smaller regions, fundamentally divided by national boundaries. This sizing leads to smaller required capital investments, allowing more competitors and less customer lock in. Collectively this results in a more competitive market.
Vs. the US where the cost of spectrum auctions alone lock-out everyone but the largest x companies. With few other competitors, it's logical for the companies to rely on open pricing signals to avoid competition on price.
Population density (population/km2)
So many countries that are far LESS densely populated than the US - and MORE densely populated - have much cheaper Internet. It does not seem to be the deciding factor.
Take California, it's 93.3 /km^2, New York State is 159.2 /km^2, New Jersey is 459 /km^2, and DC is 3,886 /km^2.
It comes down to the local bureaucratic hurdles and initiatives. I really support the idea that fibre/internet links should be a utility and not a resource controlled by a single entity. Look at comcast as an example, they are ONLY auto-upgrading plans in FIOS service areas. How this isn't looked at as a severe lack of competition or fundamental problem with our oversight of them I can't entirely fathom.
So while you can get better connectivity in the city than in the suburbs, the question you should ask is why NYC is worse than many Swedish cities or, say, Singapore, where 100 Mbps is about $50/month.
One annoyance I have is with Comcast that they are only upgrading plans "for free" in FIOS areas.
Canada is bigger and we've had several new entrants to mobile phone business who've set up their own networks to cover the largest cities in Canada. I think the key is that they're not covering everything (they roam on other networks). Wind Mobile (my provider) regularly offers $40/mo for unlimited nationwide talk/text and 5GB/mo (throttled after the cap an no overage charge). Mobilicity has something similar, but with a $22.50 promo price.
The catch is that "unlimited" means within the parts of their network: regions around the major cities in Canada.
Another company could come along and do a similar scale rollout along the east or west US coasts. I think the difference is that these new operators got to buy up some spectrum back in 2008 because Industry Canada set aside 40 MHz of AWS spectrum for new entrants in an effort to bring more wireless competition to Canada (back then, our three monopoly operators had 94% of the market) [ http://www.dwpv.com/en/Resources/Publications/2009/Flash-Dec... ]. I recall Google bidding on some US spectrum back in 2008. Did anything ever come of that? Did anyone aside from the big networks get any spectrum?
Edit: Looks like Google didn't win any spectrum. [ http://en.wikipedia.org/wiki/United_States_2008_wireless_spe... ] I'm not familiar enough with the US market to know if any of the winners are upstarts.
Edit: You might also be talking about home internet. I have 25 Mbps for $33/mo (it can actually go up to 300 Mbps for $103/mo). Unlike in mobile, my provider Novus is (I believe) reselling service from one of the big networks. (The only other one I know by name is TekSavvy, but I believe there's several of them in different parts of Canada.) I'm not sure if there are similar resellers in the US. Our resellers had some legal battles to allow them to offer this service [ http://en.wikipedia.org/wiki/Usage_Based_Billing_(UBB)#Usage... ], so maybe the legal requirements on the network holders is also a contributing factor for increased US prices.
Greater regulatory uniformity also probably helps a lot.
And then there are things like the New York metropolitan area having 3 times the population of Sweden, while many other states are many times the size of Sweden (so a U.S. national carrier needs to specialize in both serving much higher and much lower density than a Swedish national carrier).
I'm not insisting that the wildly varying density makes the actual provision of service particularly harder, but combine it with many different regulators and no strong overall regulator and it isn't surprising things are a mess.
The most expensive part is the "last mile" or hooking individual buildings up to the grid. What I propose is that the Federal government build fiber to each and every public school and university.
From there, leave it up to the individual state, county, and city governments to see if they want to front the real cost, which is the last mile.
You could even make it like the New Deal and only hire chronic unemployed workers (unemployed >6 months) and train them to lay the fiber. These newly trained workers can then be hired by the local governments who choose to complete the last mile from the national backbone.
It would at least give the unemployed work, the schools access to information, and let the rest of us to decide whether or not to pay the real cost.
In the '90s, Iowa put down* fiber that runs right through our town, and these companies were able to tap in and offer it, first to businesses and in a central area, and then later to any homeowner that wants it, thanks to a grant to offset the cost of installation (but only if they offered service to the entire town, probably less than 20 square miles). I pay $70/mo including a local phone number and the money stays local.
Then fewer people would believe these articles about "why you will never get fiber" - arguably that's false, since it is only necessary to move to a city that has it.
If the '49ers moved to California for gold, it's not so far-fetched to have a mass migration away from these backwards, oppressive places that still only have high prices for slow speeds.
The result is that the entire service area – which consists of mostly farms, and some small town areas – have had DSL connections for more than a decade and they have been working to roll out fibre to those locations for the past few years.
If the citizens are going to pool their money to build infrastructure anyway, what advantage does the government model bring over the co-operative model?
Luckily, there is some decent competition in the wireless internet space. As technology continues to improve there, more people will have access to decent internet speeds wirelessly and the wired infrastructure will feel pressure to catch up. Hopefully more options for unlimited data plans will also become available in the near future.
As far as the absurd amount TV providers are charging for HD TV, DVR services and the like. Technologies like Netflix, Hulu, Apple and others are providing more internet-based services that provide this type of On-demand service at a much more reasonable price. I hope more content will become available on these types of services as more people realize how much better of a user experience it is over watching normal network TV (even with DVR).
So - I guess another question might be, how do we make Community owned broadband an attractive option across the country?
The US is a big country but it's not the problem of sprawl/distance/density or any of that stuff. The problem is that the US is essentially made up of fifty states that each have their own laws and regulations. Even then these states are broken up into counties (or equivalents) that may also have their own laws and regulations. Now toss in there the different deals and contracts that the different companies have with each of these entities. There's a reason why one neighborhood only has provider A while the next neighborhood down only has provider B.
Granted, there are things like this on the federal level too.
At some point it'll probably take an act of Congress to get the courage to say that the current system is not acceptable and detrimental to the country's future. What will probably have to be done is some kind of mass movement to convert the system to some form of municipal-based service similar to electricity and water in most areas. But even that system doesn't work out well for everybody.
Anecdote alert: I recently moved from a stateside provider to one in Germany. A dedicated server, quad core, 8 gigs, 1TB transfer out was running me around $120 a month from my usual provider.
The German host has me set up on the same CPU, but with 32 gigs and 10TB transfer out for less than $80.
400% more memory and 1000% more bandwidth for a $40/mo reduction in cost. The pricing on stateside dedicated servers wasn't out of the ordinary either. If anything, I've seen virtual servers be on the same level, with dedicated servers even more absurd.
In the UK I can get a sim and monthly plan for my iPhone for around £6, which gives me what I need. In Australia it's about $30 for a month. In the US it was either H2O at $50 a month or StraightTalk from Walmart for $45. I recently moved my girlfriends grandfathered AT&T iPhone plan on to StraightTalk for a saving of about $50 pm. A 2 gig limit on data compared to her grandfathered unlimited, but thats OK.
The US is expensive. No doubt about it.
I'm not saying this is the whole (or even the main part) of the explanation, but it needs to be taken into account at least. In my opinion it certainly wouldn't excuse poor service in towns with 100k+ people.
When it comes down to it, internet access is crucial now, and it does enable other parts of the economy to flourish. If the government needs to step in to give it a push, it seems worth it in this case? After all, what is a government for if not planning for the long-term when individuals and corporations can't?
Same with cable.
I can't recall one month when my parents, both highly educated and cautious, aren't griping about some "strange" or "unknown" charge creeping up into their phone bill. They've even tried different plans on different networks over the years to find the most economical package for the family. When I ask them which network they like the best, they always reply with, "it's not about which network is the best, but about which one sucks the least."
And internet? I'm tired of hearing how overseas ISPs are just better (speed to cost ratio) than the ones here. I guess I'm just crossing my fingers waiting to see what happens with Google Fiber, but I seriously hate putting all my eggs in one basket.
Local government doesn't allow competition against the big company they have some form of agreement with.
Big company buys them out to shut them down so they don't have to compete with it.
Big company crushes them via pricing reduction (until competition is gone so it goes back up), sicks the lawyers on them (doesn't matter if valid or not, defending oneself in court is expensive), or a highly expensive negative PR campaign.
It all depends on the state, county, and/or city. What can work in one area might not be feasible or legal in other areas. It's a huge multi-headed issue in the US.
Oddly, local government has no say over it. As long as you can legally place antennas and/or dishes in the right spots, you can do whatever you like. You can run on crappy 2.4GHz or 5GHz radios or use more fancy FCC leased spectrum 30GHz-60GHz radios or even line-of-sight optical lasers. You will typically run a 20Mbps to 1Gbps connection to an apartment/condo complex then feed individual units from there (i.e. each customer isn't getting their own wireless connection unless you are a fancy business paying for that level of service).
Big companies don't care much about tiny ISPs here and there. What's more likely is the biggest of the tiny ISPs will buy you to goose their numbers.
If your tiny ISP is aggressive in servicing buildings, you may see Comcast running counter promotions against your pricing. Welcome to the free market.
* Right of way laws in localities make it difficult to deploy cabling of any sort. Starting a network operator is incredibly difficult legally even if you have the capital. Also, counties often grant monopolies to particular cable companies and do not allow other operators to enter the market.
* It's a popular economic thought (and apparently one the FCC subscribes to) that CLEC/wholesale style systems do not incentivize network infrastructure maintainers to keep pace with technological advancements. As a result the FCC has granted control to vertically integrated operators like ATT/Verizon/Comcast.
Our prices are terrible and guaranteed to go up each year.
But with cellphone companies, there are usually three or four of them and prices are still bad. So I am not sure why the market doesn't "correct itself".
Point being there's not as many carriers as you think their are.
The market will eventually correct as phone, cable, and internet services continue to be individually picked off by best of breed pure plays that create simple service with transparent business models. May take a while, but it will happen.
The question I have is whether or not wireless carriers pay for spectrum in other countries. Verizon paid over $17B for spectrum, and that money is going to have to come from somewhere.
Prior to 1984 Business telephone users cross subsidized Residential users, both thru higher local access rates, and higher LD rates.
My first phone call was an automated telemarketer. 98% of my calls after that were also telemarketers of one form or anther. Ads started stressing me out, and I ceased being so nice to cold callers.
The landline lasted maybe two months before I figured a cell would be cheaper and less annoying.
But they're working on it, they say.
So they expect the ISPs to just eat up a 7k difference which will take over 1-2 decades to recoup?
My "triple play" in NC, US was $140, that's with 6Mbps internet (at the time), HD digital cable with no premium channels, and digital phone with unlimited calling in US and Canada.
I "downgraded" to 30Mbit Internet. Added Netflix and Amazon Prime for TV and Vonage for phone, saving $50/mo. in the process. I still feel gypped.
I have TWC in the midwestern US; $65 (up from $50 after the introductory offer lapsed) for 35Mbps/5Mbps.
I don't even want faster speeds than that; I just want something resembling symmetrical. I'd be perfectly happy with 15Mbps/15Mbps.
I'm waiting for an ISP to offer "x Mbps" and an unlocked modem that lets you divvy up your bandwidth however you want.
Hell. I'm waiting for an ISP to offer an unlocked modem.
I beg your pardon?
2) Minimum wage in the US: The cost of labor in the US is quite high hence it costs more to build out infrastructure than it does in other countries.
Why do NYC, SF, Boston, Chicago, and LA all still have the same shitty service as the rest of the country? SF is far more dense than the totality of any European country and only has the same monopolistic, overpriced, underperforming, punitively-capped service as the rest of the US (except for the lucky people who live in the 20 webpass buildings.)