4 ms·

I'm quite ignorant on how the industry has gotten to this state. I don't understand why the cable companies are private in the first place. Wasn't the infrastru

I'm quite ignorant on how the industry has gotten to this state. I don't understand why the cable companies are private in the first place. Wasn't the infrastructure they leverage heavily subsidized by the public? There are no consumers I can think of who are against net neutrality if given the option, yet it's still a battle. What can we do about this? I'm not asking rhetorically.

rhino369 9y ago
>Wasn't the infrastructure they leverage heavily subsidized by the public? Not directly so, no. If anything they get taxed very heavily because they are an easy target (because they can't pick up and leave. Some argue that some local governments signed exclusivity deals, which can be considered an indirect subsidy. But that was usually only one side of the quid pro quo. In exchange, the cable company had to wire up poor neighborhoods, submit themselves to price regulation, etc. But exclusive deals were banned before cable internet was even invented.
amelius 9y ago
Greed (state sells right to place land lines), lobbying, ignorance and lack of interest of consumers.
dsr_ 9y ago
How did we get here? History. The original cable companies were community antenna television (CATV) providers. They would find high ground with good signal reception, or make it with antenna masts, and send an amplified signal to their subscribers. The service was relatively cheap and very desirable in areas where putting up your own antenna wasn't useful. Towns easily granted licenses to their local companies to put up wire on the telephone poles. The first added services were satellite channel reception and local channel insertion. These cost little to add. Then pay channels were invented - HBO among the first. In order to differentiate non-subscribers from subscribers, the cable companies came up with a clever idea: they would add a transmission to each pay channel that would interfere with the signal. Subscribers would get a notch filter that would cut out the interference. It was easy when you only had one channel to block or allow, but handling several meant multiple filters. It was much cheaper to maintain a few sets of multiple-filter enabling devices than to customize them for every subscriber, and that's where tiers of channels originally came from. All of these things were handled by more or less local companies, and towns and cities didn't have a problem handing them pole access. But the companies consolidated into larger franchises, 800 becoming 20 or so companies covering populations of a million or more subscribers each and 82 much smaller businesses. The top five have about 235 million people in their coverage zones. The next five cover 43 million. And the next ten have about 15. Now, once you have wired infrastructure covering that number of people, coupled with a tradition of granting local monopoly access to the wires, you get to hire lawyers and lobbyists who convince legislatures to make your traditional de factor monopoly a de jure monopoly. So that's how we got here. What can we do? Mostly what we have to do is to make net neutrality and infrastructure reform a priority for our state legislators and congressional reps and senators. Talk to them about your concerns. With Republicans, concentrate on arguments about enabling small business innovation and improving the economy. With Democrats, use arguments about freedom and consumer rights. Talk to your neighbors. Nobody wants a high cable bill, and the only way to lower it is to break the monopoly.
- blackflame7000 9y ago
  Excellent historical summary. I wonder, in your opinion, how do you envision new VHF/UHF technology impacting wired monopolies? Do you see it shaking up the local wired monopolies or do you expect airwave frequencies to be snatched up by the big guys in order to maintain status quo (ie limited choices)?
  - exelius 9y ago
    That's generally how telecom works. You can always try to compete against the big guys, at least for a while, but in the long run they will own you one way or another. It's not an accident that the two biggest wireless companies are also the two biggest wireline telecom companies (and both former parts of Ma Bell). Why? To build a telecom, you need billions in capital. To raise that much capital, you need shareholders with deep pockets. If you do very well with those investments and threaten the big telecoms, they'll just buy you out. Those investors with deep pockets will be happy to sell for a profit.
    - chii 9y ago
      What if the investors are the people that are going to be using the service? Like a co-op?
      - exelius 9y ago
        Eventually, the scale advantages when it comes to things like network upgrades will plow you under. Let's compare Comcast (30 million subscribers) with a local cable operator (and let's say it's a co-op with 50,000 subscribers): If Comcast wants to upgrade from DOCSIS3 to DOCSIS3.1, they have to come up with an upgrade / migration plan for probably 3 or 4 different configurations of their CMTS platform. Let's say this costs $10 million per platform, so $40 million overall. Spread across 30 million customers, that works out to about $1.25 per customer. If the local co-op wants to upgrade from DOCSIS3 to DOCSIS3.1, they have to come up with one migration plan for their single CMTS platform (this includes things like lab equipment, etc because you absolutely have to test and tweak this stuff). But the local co-op probably doesn't have a bunch of on-staff CMTS integration experts, so they have to hire an integrator at probably 1.5x the cost Comcast would pay. $15 million across 50,000 subscribers is $300 per subscriber. Tell a co-op board that they have a choice: a one-time $300 fee across all the customers to cover the upgrade, raise prices by $10/mo, or accept a buyout offer from Comcast who will perform the upgrade for free. And this is just for one component of the system. Costs are simply higher across the board, and that has to get passed along to customers. Scale matters in telecom. A lot. A lot of the investment is in non-variable costs, or at least costs that scale logarithmically to number of customers rather than linearly. Comcast/AT&T/Verizon can afford to undercut any smaller competitors because their scale enables a cost structure with much lower overhead maintenance costs.
0x4f3759df 9y ago
If your an optimist you can wait for SpaceX to deliver Internet via satellite.
- mmagin 9y ago
  There already are satellite internet services. They're expensive (beyond a little bit of included data usage) and high-latency. How's SpaceX going to change that?
  - marksc 9y ago
    > They're expensive (beyond a little bit of included data usage) and high-latency. How's SpaceX going to change that? Very many lower cost lower orbit satellites. The plan is to double the amount of active satellites in orbit (4425 new satellites) in the next few years, resulting in half of all satellites being SpaceX internet satellites that cost an order of magnitude less than current satellites.
  - 0x4f3759df 9y ago
    Allegedly, their latency is "as low as 25ms".
  - Crespyl 9y ago
    IIUC, existing services use geostationary orbits, which accounts for a lot of the cost and latency. The new plan is to use a large number of satellites in LEO, with receivers able to switch to whichever are currently in view. Lower orbits are cheaper, and latency should have a better lower bound.

rhino369 9y ago

>Wasn't the infrastructure they leverage heavily subsidized by the public? Not directly so, no. If anything they get taxed very heavily because they are an easy target (because they can't pick up and leave. Some argue that some local governments signed exclusivity deals, which can be considered an indirect subsidy. But that was usually only one side of the quid pro quo. In exchange, the cable company had to wire up poor neighborhoods, submit themselves to price regulation, etc. But exclusive deals were banned before cable internet was even invented.

amelius 9y ago

Greed (state sells right to place land lines), lobbying, ignorance and lack of interest of consumers.

dsr_ 9y ago

How did we get here? History. The original cable companies were community antenna television (CATV) providers. They would find high ground with good signal reception, or make it with antenna masts, and send an amplified signal to their subscribers. The service was relatively cheap and very desirable in areas where putting up your own antenna wasn't useful. Towns easily granted licenses to their local companies to put up wire on the telephone poles. The first added services were satellite channel reception and local channel insertion. These cost little to add. Then pay channels were invented - HBO among the first. In order to differentiate non-subscribers from subscribers, the cable companies came up with a clever idea: they would add a transmission to each pay channel that would interfere with the signal. Subscribers would get a notch filter that would cut out the interference. It was easy when you only had one channel to block or allow, but handling several meant multiple filters. It was much cheaper to maintain a few sets of multiple-filter enabling devices than to customize them for every subscriber, and that's where tiers of channels originally came from. All of these things were handled by more or less local companies, and towns and cities didn't have a problem handing them pole access. But the companies consolidated into larger franchises, 800 becoming 20 or so companies covering populations of a million or more subscribers each and 82 much smaller businesses. The top five have about 235 million people in their coverage zones. The next five cover 43 million. And the next ten have about 15. Now, once you have wired infrastructure covering that number of people, coupled with a tradition of granting local monopoly access to the wires, you get to hire lawyers and lobbyists who convince legislatures to make your traditional de factor monopoly a de jure monopoly. So that's how we got here. What can we do? Mostly what we have to do is to make net neutrality and infrastructure reform a priority for our state legislators and congressional reps and senators. Talk to them about your concerns. With Republicans, concentrate on arguments about enabling small business innovation and improving the economy. With Democrats, use arguments about freedom and consumer rights. Talk to your neighbors. Nobody wants a high cable bill, and the only way to lower it is to break the monopoly.

blackflame7000 9y ago
Excellent historical summary. I wonder, in your opinion, how do you envision new VHF/UHF technology impacting wired monopolies? Do you see it shaking up the local wired monopolies or do you expect airwave frequencies to be snatched up by the big guys in order to maintain status quo (ie limited choices)?
- exelius 9y ago
  That's generally how telecom works. You can always try to compete against the big guys, at least for a while, but in the long run they will own you one way or another. It's not an accident that the two biggest wireless companies are also the two biggest wireline telecom companies (and both former parts of Ma Bell). Why? To build a telecom, you need billions in capital. To raise that much capital, you need shareholders with deep pockets. If you do very well with those investments and threaten the big telecoms, they'll just buy you out. Those investors with deep pockets will be happy to sell for a profit.
  - chii 9y ago
    What if the investors are the people that are going to be using the service? Like a co-op?
    - exelius 9y ago
      Eventually, the scale advantages when it comes to things like network upgrades will plow you under. Let's compare Comcast (30 million subscribers) with a local cable operator (and let's say it's a co-op with 50,000 subscribers): If Comcast wants to upgrade from DOCSIS3 to DOCSIS3.1, they have to come up with an upgrade / migration plan for probably 3 or 4 different configurations of their CMTS platform. Let's say this costs $10 million per platform, so $40 million overall. Spread across 30 million customers, that works out to about $1.25 per customer. If the local co-op wants to upgrade from DOCSIS3 to DOCSIS3.1, they have to come up with one migration plan for their single CMTS platform (this includes things like lab equipment, etc because you absolutely have to test and tweak this stuff). But the local co-op probably doesn't have a bunch of on-staff CMTS integration experts, so they have to hire an integrator at probably 1.5x the cost Comcast would pay. $15 million across 50,000 subscribers is $300 per subscriber. Tell a co-op board that they have a choice: a one-time $300 fee across all the customers to cover the upgrade, raise prices by $10/mo, or accept a buyout offer from Comcast who will perform the upgrade for free. And this is just for one component of the system. Costs are simply higher across the board, and that has to get passed along to customers. Scale matters in telecom. A lot. A lot of the investment is in non-variable costs, or at least costs that scale logarithmically to number of customers rather than linearly. Comcast/AT&T/Verizon can afford to undercut any smaller competitors because their scale enables a cost structure with much lower overhead maintenance costs.

0x4f3759df 9y ago

If your an optimist you can wait for SpaceX to deliver Internet via satellite.

mmagin 9y ago
There already are satellite internet services. They're expensive (beyond a little bit of included data usage) and high-latency. How's SpaceX going to change that?
- marksc 9y ago
  > They're expensive (beyond a little bit of included data usage) and high-latency. How's SpaceX going to change that? Very many lower cost lower orbit satellites. The plan is to double the amount of active satellites in orbit (4425 new satellites) in the next few years, resulting in half of all satellites being SpaceX internet satellites that cost an order of magnitude less than current satellites.
- 0x4f3759df 9y ago
  Allegedly, their latency is "as low as 25ms".
- Crespyl 9y ago
  IIUC, existing services use geostationary orbits, which accounts for a lot of the cost and latency. The new plan is to use a large number of satellites in LEO, with receivers able to switch to whichever are currently in view. Lower orbits are cheaper, and latency should have a better lower bound.