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It would be nice if there was more focus on how to make our regulatory landscape more competitive to enable new ISP competition and innovation, instead of worry

• AnthonyMouse 10y ago
  Here's the rundown. The cost of providing last mile internet service is dominated by fixed costs, meaning costs that are the same regardless of whether you serve 10 or 20 customers on a particular street, and regardless of how much data those customers transfer. These costs are not small; creating the capacity to serve a million households will cost north of a billion dollars. There are some policies that can knock that cost down some. The best one is to require conduit to be installed in the road anywhere it doesn't exist when road service is done. We should enact this policy. It will save us a lot of money. But it's hard to get passed because the cost is in current-year tax dollars to install conduit and the benefit is in much lower long-term costs for power distribution and telecommunications. And it "only" lowers costs, it doesn't change the competitive dynamic. The nature of the problem is this. If you have one telecommunications company then you have one piece of fiber in the ground, and when some idiot with a backhoe cuts the fiber, they need to send a truck out to fix it. If you have three competitors then there are three pieces of fiber, all next to each other, owned by different companies, all get cut at once, so you need three trucks. If you have ten competitors you need ten trucks. Most of the costs of operating last mile infrastructure share this horrible scalability. Meanwhile if you have ten competitors then each competitor has 1/10th as many customers, so the cost per customer is ten times as high. This is why last mile telecommunications is called a natural monopoly -- having a single provider will give you half the cost of having even two. So that is the source of the problem, how do we fix it? The answer is to isolate the natural monopoly to the fullest extent possible. Let it be a monopoly but let it be nothing else. Some entity (the government, a nonprofit, Comcast) owns the fiber in the ground but they do nothing else. They don't offer retail internet service, they don't offer TV service, their only job is to maintain the physical infrastructure and lease wholesale capacity to third party providers at uniform rates. Then you have plenty of competition, because anyone can lease capacity and offer service, no one has any undue advantage over the others because the rates are uniform and published, and the monopoly provider can't give any advantage to its own over-the-top offerings because it doesn't have any.
  • ClassyJacket 10y ago
    >Let it be a monopoly but let it be nothing else. Some entity (the government, a nonprofit, Comcast) owns the fibre in the ground but they do nothing else. They don't offer retail internet service, they don't offer TV service, their only job is to maintain the physical infrastructure and lease wholesale capacity to third party providers at uniform rates. This is a good idea and is precisely what Australia is doing. It's called the NBN. The problem is, it was fibre to the home from 2009 - 2013, then a conservative government got in and now they're deliberately running it into the ground, by spending more money to do it with copper phone lines instead. Just for the sake of partisan politics and not keeping Telstra/Foxtel happy. Instead of a gigabit-fibre-to-the-home network, they're going to still be installing new 25Mbit/s connections in 2020 (yes, really), that have no potential for upgrades. They also changed the "uniform rates" part, so that the big companies get a big discount and small ISPs just straight up get charged more for the same thing. It was a great plan, 10% of homes got fibre! It just got screwed up by an actively malicious government gaining power. Luckily if you had Telstra cable before, or in your street, you can keep it. (Not if you had Optus cable though, then you're bumped down to VDSL). And there's those few areas with fibre, and new apartment buildings still get fibre. So as a young person who hasn't settled into a long term house, I have the luxury of making sure I at least get cable. Sucks for the 60% of the population that are stuck with horrible old unreliable copper lines that can't be upgraded tho. Here is a previous thread on the matter: https://news.ycombinator.com/item?id=13613308 https://news.ycombinator.com/item?id=13613308 That being said, I'd still prefer this to the mess the US has, and the concept of having a publicly owned utility own fibre everywhere and providing access to ISPs is a great one. Just do it with fibre, not ancient technology. Look to New Zealand's UFB for an actually good example, with gigabit fibre just about everywhere.
    • AnthonyMouse 10y ago
      The nice thing about this is that in concept it doesn't require any involvement from the central government at all. The monopoly part is purely local. Any municipality can issue a bond to fund the network and then use the subscription revenue to repay the bond. This is exactly what was happening in multiple US cities until the ISPs lobbied to kill it at the state level. Presumably we could have it back if people would make enough noise in favor of it.