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It's not that the bandwidth is expensive; it's the cost to deploy everything. If there was preexisting conduit/fiber in the ground and all we had to do was plu

It's not that the bandwidth is expensive; it's the cost to deploy everything. If there was preexisting conduit/fiber in the ground and all we had to do was plug two cables together, I'd be able to charge $25/m too. I've never been to the UK, but I believe your population density is a lot higher than that of the US; which is where all of our costs originate (interconnecting the customer to our network).

martinald 10y ago
I don't think that's the reason really. The main reason I can see is that Comcast (or cable internet) has no real competition. I don't understand why that is. AT&T, Verizon etc seem to have given up on competing. Verizon stopped their rollout of FTTH a while back nearly entirely, though it has restarted very slowly. AT&Ts VDSL based UVerse solution is way too sparse, with very long cable runs. Compare this to BT in the UK where most VDSL2 runs they are doing are <500m. They're now looking at GFast to push fibre even closer to customers, getting copper runs down to ~200m. Ok, so this may be caused by low population density, but I'm not entirely convinced. It must be way cheaper to dig trenches in suburbia USA as many of the places don't even have sidewalks to dig up and then expensively refill, you could just trench along the side of the road.
- ajosh 10y ago
  One other reason is that counties have the land rights. They negotiate with the big Telco's like Comcast, Verizon, Cox, Charter, etc and then issue a monopoly or duopoly in the county for a fixed period of time - usually 10 years at once. The Telco can offer a few things like fiber connectivity between county buildings, tax payments, etc. By doing that, they secure the rights to the area. Given the federal system of the United States, this is a difficult thing to stop. This makes true market-based competition within most areas very difficult to achieve.
  - rayiner 10y ago
    > One other reason is that counties have the land rights. They negotiate with the big Telco's like Comcast, Verizon, Cox, Charter, etc and then issue a monopoly or duopoly in the county for a fixed period of time - usually 10 years at once. They do not do that. It's illegal under federal law. Pole and conduit owners are required to rent out access at non-discriminatory rates: https://www.law.cornell.edu/uscode/text/47/224 https://www.law.cornell.edu/uscode/text/47/224. The reason companies don't overbuild is because it's expensive and there isn't any return. FiOS came to my building in Baltimore. I was the only person on my floor to switch away from Comcast. Even these days, people choose their broadband provider based primarily on the TV package.
    - mschuster91 10y ago
      > They do not do that. It's illegal under federal law. But they most certainly can impose enough bureaucracy and other hurdles to make renting factually impossible. Or simply both the incumbent provider and the county employ just a single FTE (or less!) to handle permits, and one can't do anything about it. All while following the letter of the law, because there's nothing in the law that says "county has X days to deal with the permit else it is being automatically granted".
      - rocqua 10y ago
        That feels easily litigated to me. The law probably makes some statement like 'will make available'. You then go to court showing that the opportunity to rent isn't available even though there technically is a service.
        tnorthcutt 10y ago
        "easily" "litigated" Those two words do not go together.
        zer0t3ch 10y ago
        > easily litigated Nothing in the US is "easily" litigated, especially not when you're up against a multimedia conglomerate and a portion of the government itself.
  - kevin_thibedeau 10y ago
    We do in theory have competition for DSL service but the telcos just conspired to let their cable plant rot to make that undesirable.
    - martinald 10y ago
      But why though? It seems really silly. Even in a hyper competitive market like the UK, the incumbent telco still makes a fortune off home broadband service. In the US AT&T and Verizon seem to have given up and want to just do cellular to make money and let their copper plant rot. They are gifting the entire market to Comcast et al.
    - shambolic 10y ago
      No, we don't. The Brand X decision killed unbundling for DSL.
- rootsudo 10y ago
  Verizon stopped competing because they are transitioning from a wired and wireless company to solely wireless. They have no interest in holding onto their old POTS, and FCC required them to service it. Cost of the Telcom union, employers and pension adds up, not to mention infrastructure. They avoid all this by wireless voice, cellular communications. Still under the FCC though.
  - zer0t3ch 10y ago
    They could just try not having jacked prices and offering good packages. Their customer-base would skyrocket and revenue would more than cover costs.
tomarr 10y ago
It's interesting that this is always the american response whenever the broadband comparisons are made. I don't mean this in a negative way, but it's a very persistent argument and I wonder if there's some external factor that pushes it (telcos/media/other). I think this is definitely a factor - but it's vastly overstated. The USA is more urbanised than many European countries at 80%, so there's definitely quick wins for the vast majority of the population. The big difference I see is the way these services are regulated. In the UK for example, the physical infrastructure associated with the last mile is owned by a company that just manages this, with regulated prices linked to asset investment required. Services are then resold to Internet Service Providers who provide the IP services and compete on price and other factors. The capital costs of providing the infrastructure are restrictive and the advantage of competition does not outweigh the cost of having multiple last-mile infra. Note - I've used some simplifications on the ownership and extents of infraco/telco ownership, but the concept holds.
- sethhochberg 10y ago
  We do have some examples of this kind of structure in the US - for example, in Manhattan, NYC, a company called "Empire City Subway" has maintained general telecommunications conduit an a license from the state for over a hundred years. http://www.empirecitysubway.com/ http://www.empirecitysubway.com/ Unfortunately, this kind of thing is rare here.
  - chrishacken 10y ago
    Their rates are surprisingly reasonable. For example, I mentioned that leasing conduit from the utility here is $3/ft/yr; those rates are as low as $0.6909/ft/yr, significantly cheaper.
- rayiner 10y ago
  The effect of density is not overstated. States' average bandwidth in the Akamai rankings line up closely with population density. I live in Maryland (one of the most densely populated states, though half the density of the U.K.) and most of the urban areas have fiber available (the exception being Baltimore city, for political reasons). Even if you live in an urban area, the prevalence of rural areas (and poor urban areas), has an impact on you, because the US supports rural telecommunications through various internal cross-subsidies instead of direct support. The regulatory regime plays a role too, but it's more complicated than your simplistic presentation. In the U.K., the last mile infrastructure is owned by a single company (BT Openreach), but equally importantly, the government ensures it is a quite profitable company. Much more so than American utilities. That was a conscious part of the BT privatization: designing a rate structure that would ensure prices high enough to create adequate incentives for investment.

martinald 10y ago

I don't think that's the reason really. The main reason I can see is that Comcast (or cable internet) has no real competition. I don't understand why that is. AT&T, Verizon etc seem to have given up on competing. Verizon stopped their rollout of FTTH a while back nearly entirely, though it has restarted very slowly. AT&Ts VDSL based UVerse solution is way too sparse, with very long cable runs. Compare this to BT in the UK where most VDSL2 runs they are doing are <500m. They're now looking at GFast to push fibre even closer to customers, getting copper runs down to ~200m. Ok, so this may be caused by low population density, but I'm not entirely convinced. It must be way cheaper to dig trenches in suburbia USA as many of the places don't even have sidewalks to dig up and then expensively refill, you could just trench along the side of the road.

ajosh 10y ago
One other reason is that counties have the land rights. They negotiate with the big Telco's like Comcast, Verizon, Cox, Charter, etc and then issue a monopoly or duopoly in the county for a fixed period of time - usually 10 years at once. The Telco can offer a few things like fiber connectivity between county buildings, tax payments, etc. By doing that, they secure the rights to the area. Given the federal system of the United States, this is a difficult thing to stop. This makes true market-based competition within most areas very difficult to achieve.
- rayiner 10y ago
  > One other reason is that counties have the land rights. They negotiate with the big Telco's like Comcast, Verizon, Cox, Charter, etc and then issue a monopoly or duopoly in the county for a fixed period of time - usually 10 years at once. They do not do that. It's illegal under federal law. Pole and conduit owners are required to rent out access at non-discriminatory rates: https://www.law.cornell.edu/uscode/text/47/224 https://www.law.cornell.edu/uscode/text/47/224. The reason companies don't overbuild is because it's expensive and there isn't any return. FiOS came to my building in Baltimore. I was the only person on my floor to switch away from Comcast. Even these days, people choose their broadband provider based primarily on the TV package.
  - mschuster91 10y ago
    > They do not do that. It's illegal under federal law. But they most certainly can impose enough bureaucracy and other hurdles to make renting factually impossible. Or simply both the incumbent provider and the county employ just a single FTE (or less!) to handle permits, and one can't do anything about it. All while following the letter of the law, because there's nothing in the law that says "county has X days to deal with the permit else it is being automatically granted".
    - rocqua 10y ago
      That feels easily litigated to me. The law probably makes some statement like 'will make available'. You then go to court showing that the opportunity to rent isn't available even though there technically is a service.
      - tnorthcutt 10y ago
        "easily" "litigated" Those two words do not go together.
      - zer0t3ch 10y ago
        > easily litigated Nothing in the US is "easily" litigated, especially not when you're up against a multimedia conglomerate and a portion of the government itself.
- kevin_thibedeau 10y ago
  We do in theory have competition for DSL service but the telcos just conspired to let their cable plant rot to make that undesirable.
  - martinald 10y ago
    But why though? It seems really silly. Even in a hyper competitive market like the UK, the incumbent telco still makes a fortune off home broadband service. In the US AT&T and Verizon seem to have given up and want to just do cellular to make money and let their copper plant rot. They are gifting the entire market to Comcast et al.
  - shambolic 10y ago
    No, we don't. The Brand X decision killed unbundling for DSL.
rootsudo 10y ago
Verizon stopped competing because they are transitioning from a wired and wireless company to solely wireless. They have no interest in holding onto their old POTS, and FCC required them to service it. Cost of the Telcom union, employers and pension adds up, not to mention infrastructure. They avoid all this by wireless voice, cellular communications. Still under the FCC though.
- zer0t3ch 10y ago
  They could just try not having jacked prices and offering good packages. Their customer-base would skyrocket and revenue would more than cover costs.

tomarr 10y ago

It's interesting that this is always the american response whenever the broadband comparisons are made. I don't mean this in a negative way, but it's a very persistent argument and I wonder if there's some external factor that pushes it (telcos/media/other). I think this is definitely a factor - but it's vastly overstated. The USA is more urbanised than many European countries at 80%, so there's definitely quick wins for the vast majority of the population. The big difference I see is the way these services are regulated. In the UK for example, the physical infrastructure associated with the last mile is owned by a company that just manages this, with regulated prices linked to asset investment required. Services are then resold to Internet Service Providers who provide the IP services and compete on price and other factors. The capital costs of providing the infrastructure are restrictive and the advantage of competition does not outweigh the cost of having multiple last-mile infra. Note - I've used some simplifications on the ownership and extents of infraco/telco ownership, but the concept holds.

sethhochberg 10y ago
We do have some examples of this kind of structure in the US - for example, in Manhattan, NYC, a company called "Empire City Subway" has maintained general telecommunications conduit an a license from the state for over a hundred years. http://www.empirecitysubway.com/ http://www.empirecitysubway.com/ Unfortunately, this kind of thing is rare here.
- chrishacken 10y ago
  Their rates are surprisingly reasonable. For example, I mentioned that leasing conduit from the utility here is $3/ft/yr; those rates are as low as $0.6909/ft/yr, significantly cheaper.
rayiner 10y ago
The effect of density is not overstated. States' average bandwidth in the Akamai rankings line up closely with population density. I live in Maryland (one of the most densely populated states, though half the density of the U.K.) and most of the urban areas have fiber available (the exception being Baltimore city, for political reasons). Even if you live in an urban area, the prevalence of rural areas (and poor urban areas), has an impact on you, because the US supports rural telecommunications through various internal cross-subsidies instead of direct support. The regulatory regime plays a role too, but it's more complicated than your simplistic presentation. In the U.K., the last mile infrastructure is owned by a single company (BT Openreach), but equally importantly, the government ensures it is a quite profitable company. Much more so than American utilities. That was a conscious part of the BT privatization: designing a rate structure that would ensure prices high enough to create adequate incentives for investment.