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ISPs Say They Don’t Make Enough Money

634 points by davegauer 8y ago

soreally 8y ago
If ISPs are so profitable, and the current government is falling for their lies, then ISPs are probably a great investment? You could buy some Comcast stock (NASDAQ: CMCSA) - it's a bargain right now, down 20% in the past year. Compare vs. the NASDAQ composite index, which is up 20% in a year. Actually, the more I look at it, they might actually be a good investment after this 2018 correction. I do not have any vested interest in Comcast, but I might make a very small investment after reading this article.
avgDev 8y ago
They aren't only lying about not making enough money. They are "lobbying" to keep up this charade. Many European nations have much cheaper and faster access to the internet with many more ISPs. I don't see a logical reason why US can't have the same.
- stochastic_monk 8y ago
  It’s the same reason we can’t have cheaper, better healthcare. Our government is controlled/lobbied/influenced by people who stand to profit.
  - Joeri 8y ago
    Lobbying is a thing in europe also, but if politicians are too blatant about it they get voted out of office. All americans seem to agree the problem with their government is crooked politicians. Why do people keep voting those people into office?
    - cavanasm 8y ago
      The American view on this seems to largely be that the crooked politicians are the ones OTHER people elect. Since our national level laws and policy are set by representatives of much smaller localities, we can love OUR guy, and think everyone else is a no good crook.
    - dasil003 8y ago
      I would suggest that it's not because their crooked per se, but because getting into office requires an extraordinary fundraising and PR effort that takes all their time. With the rise of finance and technology, the systems in our modern civilization are incredibly complex and difficult to understand, and the only thing legislators know about issues is what lobbyists tell them. There are no effective lobbyists for anything that is not making someone a lot of money, because it's really hard to compete with well-paid professionals. So even with the best of intentions, the system conspires against legislators getting an informed yet neutral viewpoint on how policy will affect the myriad systems that make up our society. As if that weren't enough the anti-intellectual streak in America tends punishes anyone who tries to bring in more nuance and public research to difficult questions.
      - rectang 8y ago
        > not because they're crooked per se If it walks like a duck, and quacks like a duck, is it not a duck? The end result in terms of narrow corporate interest winning out over overwhelming public sentiment is indistinguishable from bribery.
        dasil003 8y ago
        And yet the solution to each is wildly different.
    - jermaustin1 8y ago
      Because the crooked politicians usually bring something back to their constituents. And people vote on their local politician. So the US Senate is usually filled with moderate voices (since they have to appeal to millions of voters) while the House of Representatives is filled with crazies who were elected by an order of magnitude less than senators. Then you have the incumbency effect which makes it pretty hard to lose your next election so long as you have name recognition and a gerrymandered district, unless something really crazy happens with you (sex scandal, fake-news, corruption indictments, going to prison, etc), and even then sometimes the effect is still strong enough to elect you to office before you have to be removed and have the State Governor appoint an UNELECTED replacement who will then have the incumbency effect bestowed upon themselves. All in all, the US makes it hard to elect people who will "progress" and not just "maintain". And don't get me started about off-year elections, special elections, primaries, voter ID laws and various other legalized voter suppression (felons, poor people, minorities), and a plethora of other ways that we use to confuse citizens about voting.
      - scarface74 8y ago
        Because the crooked politicians usually bring something back to their constituents. And people vote on their local politician. In the South, all you have to do is show up in a church, professs your love for God (before you sneak off with your mistress) and Guns and claim you are protecting the country from the evil Muslims and illegal immigrants and you are sure to win an election. Yes I know the same is true for liberals - claim that the government will give everyone a job and free college education and "tax the rich" to pay for it.
    - macintux 8y ago
      Among the other reasons provided, there's a huge challenge the US faces that Europe doesn't seem to: a lack of choice. Our two-party system does not lend itself to voting out crooks.
    - jessaustin 8y ago
      Everyone who is blaming stupid voters is part of the problem. The news industry colludes with politicians and bureaucrats to ensure that voters never have a real choice. Even fake choices like Trump, Sanders, or Stein are brutalized by the press. (Trump figured out that if he inspired enough ire he could be on TV all the time: expect to see this tactic again.) Our betters conspire at every turn to give us the choice between Coke and Pepsi. If we thirst for anything else we're welcome to move.
    - jdietrich 8y ago
      Most European countries have strict campaign finance limits. In the UK, no party can spend more than £19.5m on their national campaign, plus £10,000 to £16,000 for each candidate's local campaign. They're required to provide accounts and receipts for all of their campaign activities and can forfeit the election or face criminal charges if they overspend. That's chump change in American terms - the last presidential election cost about six billion dollars. With strict campaign finance limits, lobbyists are far less influential. Candidates hardly think about fundraising, because any money raised over their spending limit is useless to them. A lobbyist might be persuasive, they might provide a lot of compelling evidence, they might make the case that a particular policy would be popular, but they can't offer a pseudo-bribe in the form of a massive campaign contribution.
      - tim333 8y ago
        It used to be like that in the US, eg see "Jimmy Carter says when he ran against Gerald Ford, he didn't raise any money" http://www.politifact.com/truth-o-meter/statements/2013/feb/26/jimmy-carter/jimmy-carter-says-when-he-ran-against-gerald-ford-/ http://www.politifact.com/truth-o-meter/statements/2013/feb/... It's amazing it's got as messed up as it is. Someone really needs to fix that.
    - glitcher 8y ago
      I often get the feeling that our best minds and potential leaders either don't go into politics, or can't survive the brutal realities and shortcomings of the current political system. So basically we are doomed to constantly repeat all of these problems until something significant changes.
    - s73v3r_ 8y ago
      Because we all disagree on who the crooked politicians are. Congress as a whole has abysmal approval ratings, but people don't vote on Congress. They vote for their individual Representative and two Senators. When you ask people about their particular representation, those approval ratings are much higher.
    - arca_vorago 8y ago
      Long story short, it's because of abuse of tribalism by the two parties. I'll give you a good example: the 92 presidential debate. Ross Perot, a third party candidate got almost 19 percent of the vote! So what did the two parties do? They worked together to takeover the debates so they could keep third parties from ever getting that close again! Then couple that with carefully crafted lies, usually based on identity politics, that encourage and foment tribalism and division, add in the corrupt primary system, among other spices like blackmail and three letter surveillance of Congress, and you get what we have. This is why it angers me so much every time someone says "both parties are just as corrupt" and is met with a thousand "ways $theotherone is actually the bad one but $ourparty is the only one looking out for the people" and derision for even stating it out loud. After years of pondering this issue I have come to the conclusion we need to, over multiple election cycles, focus on getting third parties and independents who are fully transparent about funding into office, and enough to take away the majority from both parties, hopefully under a coalition of some sort, which would force both parties to come to the table in a more adult like manner. Make no mistake, all three branches of government have suffered similar corruption, but the legislative is supposed to be the closest to the people, so I think it is the place to start (well really the state congresses are) So many of the unconstitutional things which our gov does that goes unchecked is due to both sides of Congress violating their oaths. If we had a congress worth a damn we could use them to self correct...
      - theonemind 8y ago
        You get two parties naturally out of the winner-take-all system. Some European governments and other governments that got to learn from our mistakes (by forming constitutional republics later in history) have real multi-party systems, which you get much more easily with actual proportional representation.
  - scarface74 8y ago
    That's only part of the reason. True, the lobbyists keep the politicians voting for the status quo, but the "we hate socialism, we have the greatest healthcare system in the world" propaganda has enough of the population fooled to keep the politicians in power.
  - deleted 8y ago
    [deleted]
- eeZah7Ux 8y ago
  Even in EU they do things that would be unacceptable for other products: - Year-long locked in contracts. No trial period. - Zero guarantees whatsoever on bandwidth and latency. - No third-party, legally recognized, quality certification/monitoring organizations. - Little guarantees against traffic inspection, DNS sniffing & so on. - In some countries it's legal to sell ADSL as "fiber". - Sharing your uplink with a neighbor can be prohibited by contract. I know it's nothing new, but that's not an acceptable argument. It's about time we raise our expectations.
  - ghba66 8y ago
    >- Year-long locked in contracts. No trial period. Here we get a 14-day trial period. >- Zero guarantees whatsoever on bandwidth and latency. Technically impossible to give such a guarantee. >- Little guarantees against traffic inspection, DNS sniffing & so on. How do you guarantee something like this? Let anybody in the datacenters...? >- Sharing your uplink with a neighbor can be prohibited by contract. That's normal, otherwise they'd lose tons of money. I mean here you can get 300/300 really cheap, that's more than enough for, let's say, 10 neighbours. But then how do you expect them to cover the investment?
    - smallbigfish 8y ago
      > >- Little guarantees against traffic inspection, DNS sniffing & so on. > How do you guarantee something like this? Let anybody in the datacenters...? Spell it in the contract and put people in jail if they break it.
    - saagarjha 8y ago
      > Technically impossible to give such a guarantee. Every other service provides five nines or whatever or your money back…
    - eeZah7Ux 8y ago
      >>- Zero guarantees whatsoever on bandwidth and latency. > Technically impossible to give such a guarantee. Not at all. You pick the right oversubscription ratios, monitor the network and give guarantees on the 95%/99% percentiles. It's done in datacenters all the time. >>- Little guarantees against traffic inspection, DNS sniffing & so on. > How do you guarantee something like this? Let anybody in the datacenters...? Just like in many other fields: external verification, rewards for employee and customers reporting malpractices and so on. Also, encourage your customers to use DNS over HTTPS, VPNs, Tor instead of saying nothing or even discouraging it. >>- Sharing your uplink with a neighbor can be prohibited by contract. > That's normal, otherwise they'd lose tons of money. That's not an argument. The large majority of goods and services in existence can be shared and, very often, even re-sold and there are specific laws against contracts for exclusive use. It's up to the ISPs to find ways to bill people accordingly (and it's easy to look at what carriers and datacenters ISP do...).
- xstartup 8y ago
  The regions in Europe which have cheaper/faster access have either community managed infra or high population density/cheap power. Does the US have that?
  - Fnoord 8y ago
    Swedes in say Stockholm have had quick internet access for ages but high population is a relative term. I am sure cities such as New York and Los Angelos are high population compared to Stockholm or cities in The Netherlands. Also, I wouldn't say we got so much choice here in NL. There's basically one cable company: Ziggo (aka Liberty Global, owned by an American) and basically one DSL company: KPN. You can't even always get both (meaning usually Ziggo has a monopoly), and KPN actively hampers fiber because VDSL2 is "viable". Mobile-wise there's traditionally 3 players, rest are MVNO. Now with 4G, the third player (T-Mobile) is actually the best and there's a fourth player as well (Tele2). And 4G has a relatively low latency (especially on T-Mo's network which I personally don't have though). The two big players are once again KPN and Vodafone (joint venture with Ziggo called VodafoneZiggo). Vodafone just bought Unitymedia in Germany and Eastern Europe from Liberty Global, btw. The problem is that a lot of the cable infrastructure (traditionally owned by the municipalities or small corporations) has been sold very cheap to companies which have all ended up being bought by Liberty Global. The government has done it completely wrong. They should've kept owning the networks, but leasing access to companies. After all, the government owns infrastructure such as roads and rails as well.
- sametmax 8y ago
  Exactly. But they did the same in France 10 years ago. Then the ISP named "Free" started to sell an offer 3 times cheaper and WOW, suddenly everybody matched the price. So not only competition on price is possible for ISP, it's actually necessary for the clients. It's wont benefit the existing ISP, obviouly, so it must be done no matter what they say.
  - Someone1234 8y ago
    Hard to compete when local government is so corrupt they won't let you run physical cables to people's homes.
    - xstartup 8y ago
      Not really. If you are in a democratic but corrupt country. Make local people aware that you want to offer the service and this service can only be offered if the government lets you lay cable. Start laying cable and offer your people service. Offer them a good deal and ask them to protect your cables in return. You'll be amazed how good communities are at protecting their assets, provided they realize the benefit of keeping it in shape. Then bring those people in front of government to vouch for you.
      - sametmax 8y ago
        Yeah, digging holes in roads without a permit. Not hard at all.
        Declanomous 8y ago
        I assume in most places the cables are put on poles. Have you ever seen poles in some cities? It look like a 200 foot tall bird is using them to build a nest.
        sametmax 8y ago
        Genuine question: can you put fiber on poles ? Since it breaks so easily, I would assume it's buried only.
- rectang 8y ago
  The supposed "deregulation" of the ISP market by the FCC is merely picking the members of the current telecom oligopoly as winners. Killing net neutrality isn't about choice, it's about enriching telecoms because they have bought our government. Thanks, Citizens United, for making corporate speech so much more powerful than individual speech!
  - craftyguy 8y ago
    Congress could pass legislation to override the Citizens United decision but, lol, who am I kidding.
- patricius 8y ago
  I come from one of those nations. There could be many explanations for why things are the way they are in the US and not in some other nations. Maybe federal or state legislation makes it more expensive for competitors to compete. Maybe there are geographical challenges that make it more expensive. Or one of a thousand other explanations.
- gnicholas 8y ago
  How do these European nations compare on population density? I live in suburban silicon valley and have been surprised to see how much cheaper internet is for friends of mine who live in cities — even cities like NYC, which are equally expensive otherwise. (i.e., they're not just jacking up the price for folks in Silicon Valley because most people can afford it.) I pay $30 for 12/3 Mbps service; my city friends pay roughly the same for 100/10 Mbps service. This leads me to believe that population density is a big factor here.
  - monocasa 8y ago
    Sweden has lower population density than the US, but much better internet. I think population density is a weak signal for competition in the US market, and that's what you're seeing.
    - MrFantastic 8y ago
      95% of Swedes live in the tip. I doubt upper Sweden has good coverage being that it's a barren tundra.
      - monocasa 8y ago
        You'd be wrong. Sweden has a program to essentially guarantee everyone access to broadband coverage, even (and especially) those who live in rural areas.
      - stephengillie 8y ago
        This map is from Finland in 2016, and shows only a few regions have >90% 100mbps availability. https://m.imgur.com/wU5WXBV https://m.imgur.com/wU5WXBV
        monocasa 8y ago
        To be fair, in the US (which is what we're comparing all of this to), broadband is defined as 25Mbps up/3Mbps down.
- briandear 8y ago
  In my area of France, I have one provider, Orange, and a top speed of .8mbs up and 10mbs down. “Cheaper and faster” in some places, more expensive and slower in other places. Not everyone lives in Paris.
nasredin 8y ago
Tired of the same news every week. Nothing is gonna change at least until Trump is out of office and given his judicial nominees and appointees maybe even decades after. Sad but true. Maybe Musk's satellites will help, but even Google failed here, so remain pessimistic.
- toomuchtodo 8y ago
  It's definitely disappointing, I feel that, but don't give up hope! I'd encourage you to engage with your local community to work towards a coop/municipal broadband provider to help alleviate the problem, or even go so far as to start your own wireless ISP. One person cannot solve this problem, but each of us doing a small part where we each live does move the needle. You are going to need to get involved, and there is going to be a time commitment. Prepare accordingly. https://muninetworks.org https://muninetworks.org https://startyourownisp.com/ https://startyourownisp.com/ https://www.nytimes.com/2016/08/08/technology/how-to-give-rural-america-broadband-look-to-the-early-1900s.html https://www.nytimes.com/2016/08/08/technology/how-to-give-ru... https://www.reddit.com/r/Entrepreneur/comments/2ftsf7/i_own_a_wireless_isp_ama/ https://www.reddit.com/r/Entrepreneur/comments/2ftsf7/i_own_...
  - jethro_tell 8y ago
    All those links are already clicked for me.
    - toomuchtodo 8y ago
      If those resources are not sufficient, let me know what the gaps are so I can add more.
      - jethro_tell 8y ago
        Funding, time mostly. I ran a small copper ISP/Collocation company for a few years and I miss it, but I'm not quire there to build my own.
- 8y ago
shmerl 8y ago
There were some profit margins of big ISPs published - they are insane, and near monopoly situation makes it pretty bad, when ISPs rip off users left and right.
peterwwillis 8y ago
Yikes, this article is so myopic. They treat large "ISPs" as if they are a single independent entity. The largest ones are owned and operated by gigantic corporate interests, and their sales figures are part of a broader plan, and thus so is pricing. The profits of "EPB Fiber Optics" don't go towards paying for content rights worth billions of dollars a year. The larger the network, the more expensive it costs to maintain and upgrade. Of course a tiny regional co-op ISP doesn't cost much to run. They don't have 25 million customers in 21 states, or 145,000 miles of fiber in 39 states. I mean, jesus, this article goes all over the place. It's saying provisioning isn't expensive, and suggests that deployment cost is lowered by changing building codes to require conduit. How does that affect the 91 million homes that already exist? The article states that net neutrality "prohibits [ISPs] from charging unjustified fees on Internet services". No, it doesn't. They can charge whatever they want for their services. They will increase the price of internet services whether or not net neutrality exists, because it is not getting any cheaper to run a giant ISP that is responsible to the shareholders of a media conglomerate. If the author really thinks the only reason big ISPs charge high fees is because they're mean and greedy, they really are going to lose this fight, mainly from a lack of critical thinking skills.
- jethro_tell 8y ago
  Well it's actually quite a bit cheaper to do data in volume, buying dark fiber or laying it your self will give a much better return if you can use it all. Generally referred to as Economies of Scale. It goes for most businesses.
  - peterwwillis 8y ago
    It's cheaper to do things in volume, but you still have to compare the scale. If the tiny ISP has 100 miles of fiber, they still look really good on a balance sheet because they haven't had to deal with infrastructure 1,450 times larger. Because it's a much smaller set of problems they can be much more efficient.
    - heavenlyblue 8y ago
slg 8y ago
I am no fan of ISPs, but this is a silly argument to make. There is no "enough" when it comes to capitalism. Your problem should be with either the politicians for believing these arguments or with our entire economic system, not with ISPs for lobbying on their own behalf in this manner.
- ovao 8y ago
  We can still try to hold ISPs accountable for lying (or even misrepresenting) to elected officials, which is what the EFF is attempting to do.
- scarface74 8y ago
  Internet access requires laying cables and huge up front costs and is to a large degree a "natural monopoly". In cases of a natural monopoly, even classic pro capitalist free market economists believe in regulation. On the other hand, Comcast seems to be deaf to competition. I live in an area where AT&T offers 1 gigabit up and down for $70 all in and Comcast still tries to sell 1Gbps up/35mpbs down for $135 and it's capped. I consistently get 940/940 on AT&T. Comcast couldn't get near the promised speeds during peak time when I had them years ago.
- avgDev 8y ago
  I don't have a problem with ISPs. They are doing what is legal, and it makes logical sense. Spend $xx on lobbying save $xxx. The problem is much bigger than ISPs in my opinion. There is anti-intellectual movement in the US right now. Uneducated population does not understand the difference between a fact and an opinion. The government should be hiring educated people, some professors for example that understand subjects related to laws. There should be 0 trust in lobbyist.
  - JustSomeNobody 8y ago
    > Uneducated population does not understand the difference between a fact and an opinion. Do not let educated people off so easily. Plenty of them have this same problem.
  - rukittenme 8y ago
vuln 8y ago
Aren't most if not all of Large ISPs public companies? They answer to the shareholders... Their business model revolves around making their shareholders the most amount of money possible. The company answers to the shareholders. A Municipal ISP are mostly non/low profit, they have no share holders to pay out. No one looking for their 'investment' back as capital, just people looking for stable internet. The Muni ISP answers to the customers.
- knieveltech 8y ago
  Fun Fact: In many parts of the US it is "illegal" for municipalities to run an ISP.
  - mgkimsal 8y ago
    There's little 'fun' about that 'fact', especially for some of us folks in more rural areas... :/
    - knieveltech 8y ago
      I appreciate your situation. I verbally chewed on every staffer Bev Purdue could cajole into answering the phones during the run-up to HB 129 passing in North Carolina. Alas, in these parts rednecks vincit omnia.
      - gowld 8y ago
        Slurs are not acceptable on HN.
        knieveltech 8y ago
        You claim a slur has been used? Please point it out.
- patricius 8y ago
  The money has got to come from somewhere. If you want the municipality to run an ISP, then you either have to tax the citizens for the services or take funds from somewhere else. Either way, can we be sure that good intentions from democratically elected local politicians will be enough to somehow make Internet service cheaper than what the private sector is able to provide?
pishpash 8y ago
What's this "enough"? No for-profit entity makes "enough" money. It's a concept that doesn't exist. Put in real competition and supply-and-demand takes care of "enough".
refurb 8y ago
A lot of ISPs are public companies, so not sure why EFF didn't just dig up their 10-K filings? Sonic.net is a pure broadband provider with pretty good introductory deals for 1Gbp internet in the Bay Area.[1] 2017 Revenue - $477M 2017 Net income - $64M 2017 Profit margin - 13% 13% isn't bad. It's more than low margin businesses, but doesn't seem egregious to me. [1]https://www.last10k.com/sec-filings/sonc/0000868611-17-000050.htm#s25116AD284A52DF0AF7209AA5F359A14 https://www.last10k.com/sec-filings/sonc/0000868611-17-00005...
- montasaurus 8y ago
  It looks like that 10-K is for Sonic the fast food chain. I believe Sonic the ISP is still a private company.
montasaurus 8y ago
We have an ISP in San Francisco and it really is a great business. Lots of long lasting recurring revenue and very low recurring costs--bandwidth is actually one of our smallest expenses. The biggest hurdle is really tapping in to the tribal knowledge on how to set up and run an ISP. You've got networking, provisioning, how to buy bandwidth, even what type of power plugs you need to have in your rack (spoiler: there are multiple and they are not all compatible). Besides the cost of initial deployment and setting up new customers, there's not a whole bunch you need to spend money on. We really like the business, and more people really should start their own. The numbers make sense in a bunch of different markets and scales. If you deploy with fixed wireless, it brings the costs down to the 10's of thousands of dollars range. Laying fiber is obviously a lot more expensive, but not really necessary in most circumstances. We're working on helping more people start ISPs-launching here on HN next week, but TechCrunch wrote about the project just now: https://techcrunch.com/2018/05/10/necto-looks-to-help-individuals-get-their-own-local-isp-businesses-off-the-ground/ https://techcrunch.com/2018/05/10/necto-looks-to-help-indivi...
- belltyler 8y ago
  Potentially relevant, I remember seeing this a while back: https://startyourownisp.com/ https://startyourownisp.com/ HN Discussion: https://news.ycombinator.com/item?id=16160394 https://news.ycombinator.com/item?id=16160394
  - montasaurus 8y ago
    This is a great guide--I highly recommend reading it if you're interested in the space. We met Graham (the author) and he really knows his stuff.
  - grahamburger 8y ago
    Oh Hi! Author of https://startyourownisp.com/ https://startyourownisp.com/ here. Happy to answer questions.
    - rrcaptain 8y ago
cbhl 8y ago
I wish that the EFF had actually taught people the math of running an ISP, rather than just writing a puff piece. Here's Comcast's Form 10-K for 2017: https://www.cmcsa.com/static-files/111ba611-eb85-4edc-9000-3907c84697d8 https://www.cmcsa.com/static-files/111ba611-eb85-4edc-9000-3... Yes, the majority of the expense for Internet is definitely the upfront cost of equipment (physically putting in the cables). Cable companies borrow lots of money in order to do this -- Comcast's Form 10-K shows that they have 64 billion dollars of debt. In order to get bank loans that big, you need to show that you can pay it back. But they only have 3.4 billion in cash; the way they keep their balance sheet from falling apart is knowing you pay your monthly cable bill ("Receivables, net" of 8.4 billion). Comcast had 41 billion dollars of "Residential" revenue last year, but only 14.7 billion dollars of that was for Internet. The big expense line item is 13 billion on "Programming" (aka, TV stations from the other conglomerates, for people who haven't cut the cord yet). There's also 6.4 billion on tech support, and 2.5 billion on customer service. If you keep looking further, you see they spent 3.4 billion on "customer premise equipment" (which is probably cable modems and set-top boxes), and another 2.4 billion on "scalable infrastructure", which is the actual "paying money to make your internet better". The balance sheet shows ~38 billion on property and equipment, so maybe Comcast is upgrading, say, 5-10% of their network in a given year? In my opinion, Comcast's real long-term business risk is the shifting revenue mix from Cable to Home Internet means that Comcast gets smaller cash flows, so there's less money to upgrade the equipment every year. That can't possibly look great for shareholders.
- matthewmcg 8y ago
  Makes sense. Comcast does everything they can to get you to add legacy cable to your Internet only service.
- electricEmu 8y ago
  The 10-K for 2017 is great. You pointed out some great reasons the infrastructure and programming sides could be split. > Cable companies borrow lots of money in order to do this -- Comcast's Form 10-K shows that they have 64 billion dollars of debt. In order to get bank loans that big, you need to show that you can pay it back. But they only have 3.4 billion in cash; the way they keep their balance sheet from falling apart is knowing you pay your monthly cable bill ("Receivables, net" of 8.4 billion). I wonder would these look like split out into "internet infrastructure", and "media infrastructure". I bet it would be a stable business with low, but expected, returns, and another with lots of volatility. As a United States Citizen, I wouldn't mind providing subsidies and incentives for an internet company to expand internet connectivity. I do take offense to a media company taking subsidies to _also_ expand a media empire with those funds. > Comcast had 41 billion dollars of "Residential" revenue last year, but only 14.7 billion dollars of that was for Internet. Yes, a split out company would have a smaller market cap. That's actually larger than I expected! > The big expense line item is 13 billion on "Programming" Exactly. Get that shit out of my internet provider. In my opinion, the American Public's real long-term business risk is the over consolidation of businesses. That means that Comcast gets to continue posting record breaking profits while offering shitter services, meanwhile expanding their media empire.
erikb 8y ago
I feel that if you put this in front of a CEO of an ISP he will really not understand it. It is so very, very common in business world that you find an argument to ask for more money, which is why you will ask for more money. The question for business people is not the truthfulness of the reason, but how believable it sounds. And if you try to counter that with truth and succeed you will really irritate these business people. Because now they need to go and find another good-sounding reason to ask for more money. Truth or not, that is really invisible to them.
- wiz21c 8y ago
  ahhh the difference between price and value....
juliangoldsmith 8y ago
I agree with the EFF on a lot, but there was a dearth of numbers in this article. Does anyone know of any numbers to actually back up, for instance, the 80% claim that the writer makes regarding the cost of initial buildout? Additionally, how would that apply to each individual ISP? The article also asserts that, "a small handful of massive and extraordinarily profitably Internet service providers (ISPs) are telling state legislatures that network neutrality would hinder their ability to raise revenues to pay for upgrades and thus force them to charge consumers higher bills for Internet access". Does anyone have an actual example where this has happened? I'd expect the author to at least throw in a link to a news article somewhere. Almost every article the author has written for the EFF is related to Net Neutrality, I'd think he'd have plenty of resources to show us. Also, while I'm not entirely sure how EPB built their network out, Sonic is a terrible example even by the information given in the article. First of all, when almost the entire cost of starting your business is already paid for you, you're doing to have lower costs than someone who actually has to build conduit to lay fiber. On top of that, Sonic's service seems to be entirely concentrated in an extremely small, very high population density area. When you have 2000 customers on a single city block, you're going to have a lot lower costs than a company that has one customer every quarter mile.
makecheck 8y ago
ISPs routinely invest in things that I didn’t ask for: “helpfully” trying to resolve my web typos to their own ad servers, trying to inject pop-ups into HTML streams, wanting to install unnecessary software to “use the Internet”, expecting me to rent equipment that could be bought, etc. Meanwhile, there is little evidence of investment in things I actually expect an ISP to do. No upgrades to quality of service (except that fateful day when Google Fiber came to town and “miraculously” everything improved practically the next day). Not even an option to have cheap, basic Internet, which you know damned well they CAN do; instead, ridiculous things like “only if bundled with a landline phone” (WHAT?!?). One mystery fee after another. Absolute garbage service, everything from “we will arrive between 1 and 5” meaning “we showed up at 11:30 and you weren’t there, reschedule”, to phone calls about service outages that they seem to be utterly clueless about. A single customer probably gives them at least $1000 a year, what the hell do these people do?
- defterGoose 8y ago
  And then on top of those things they have the audacity to refer to things like developing new pricing models as "innovation".
  - r00fus 8y ago
    I always read "innovation" as rent seeking opportunities when a company says it.
everybodyknows 8y ago
WISP coverage map for the US: https://uwn.com https://uwn.com
camdenreslink 8y ago
These guys operate as legal monopolies, have received huge tax breaks, and provide bad service.
Proven 8y ago
For some reason the EFF likes to mess around with other people’s property. If an ISP isn’t owned by your you have no say in how it’s operated. If you don’t like now it’s operated, hit the bricks and beat it.
sjg007 8y ago
Nobody makes enough money... news at 11.
kingludite 8y ago
Imagine what it costs to build roads, have drinking water, sewage or electricity. ISP = tiny boxes. The starting cost should be a lot higher.(could be a lone) That way we don't have to rent forever. We don't hook up your house to the sewage system for free either. After you sink many thousands into the sewer it gets rather amazingly cheap.
kexx 8y ago
:DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD joke of the month. thank you
- dang 8y ago
  Please don't do this here though.
fox238 8y ago
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634 points by davegauer 8y ago

If ISPs are so profitable, and the current government is falling for their lies, then ISPs are probably a great investment? You could buy some Comcast stock (NASDAQ: CMCSA) - it's a bargain right now, down 20% in the past year. Compare vs. the NASDAQ composite index, which is up 20% in a year. Actually, the more I look at it, they might actually be a good investment after this 2018 correction. I do not have any vested interest in Comcast, but I might make a very small investment after reading this article.

avgDev 8y ago

They aren't only lying about not making enough money. They are "lobbying" to keep up this charade. Many European nations have much cheaper and faster access to the internet with many more ISPs. I don't see a logical reason why US can't have the same.

stochastic_monk 8y ago
It’s the same reason we can’t have cheaper, better healthcare. Our government is controlled/lobbied/influenced by people who stand to profit.
- Joeri 8y ago
  Lobbying is a thing in europe also, but if politicians are too blatant about it they get voted out of office. All americans seem to agree the problem with their government is crooked politicians. Why do people keep voting those people into office?
  - cavanasm 8y ago
    The American view on this seems to largely be that the crooked politicians are the ones OTHER people elect. Since our national level laws and policy are set by representatives of much smaller localities, we can love OUR guy, and think everyone else is a no good crook.
  - dasil003 8y ago
    I would suggest that it's not because their crooked per se, but because getting into office requires an extraordinary fundraising and PR effort that takes all their time. With the rise of finance and technology, the systems in our modern civilization are incredibly complex and difficult to understand, and the only thing legislators know about issues is what lobbyists tell them. There are no effective lobbyists for anything that is not making someone a lot of money, because it's really hard to compete with well-paid professionals. So even with the best of intentions, the system conspires against legislators getting an informed yet neutral viewpoint on how policy will affect the myriad systems that make up our society. As if that weren't enough the anti-intellectual streak in America tends punishes anyone who tries to bring in more nuance and public research to difficult questions.
    - rectang 8y ago
      > not because they're crooked per se If it walks like a duck, and quacks like a duck, is it not a duck? The end result in terms of narrow corporate interest winning out over overwhelming public sentiment is indistinguishable from bribery.
      - dasil003 8y ago
        And yet the solution to each is wildly different.
  - jermaustin1 8y ago
    Because the crooked politicians usually bring something back to their constituents. And people vote on their local politician. So the US Senate is usually filled with moderate voices (since they have to appeal to millions of voters) while the House of Representatives is filled with crazies who were elected by an order of magnitude less than senators. Then you have the incumbency effect which makes it pretty hard to lose your next election so long as you have name recognition and a gerrymandered district, unless something really crazy happens with you (sex scandal, fake-news, corruption indictments, going to prison, etc), and even then sometimes the effect is still strong enough to elect you to office before you have to be removed and have the State Governor appoint an UNELECTED replacement who will then have the incumbency effect bestowed upon themselves. All in all, the US makes it hard to elect people who will "progress" and not just "maintain". And don't get me started about off-year elections, special elections, primaries, voter ID laws and various other legalized voter suppression (felons, poor people, minorities), and a plethora of other ways that we use to confuse citizens about voting.
    - scarface74 8y ago
      Because the crooked politicians usually bring something back to their constituents. And people vote on their local politician. In the South, all you have to do is show up in a church, professs your love for God (before you sneak off with your mistress) and Guns and claim you are protecting the country from the evil Muslims and illegal immigrants and you are sure to win an election. Yes I know the same is true for liberals - claim that the government will give everyone a job and free college education and "tax the rich" to pay for it.
  - macintux 8y ago
    Among the other reasons provided, there's a huge challenge the US faces that Europe doesn't seem to: a lack of choice. Our two-party system does not lend itself to voting out crooks.
  - jessaustin 8y ago
    Everyone who is blaming stupid voters is part of the problem. The news industry colludes with politicians and bureaucrats to ensure that voters never have a real choice. Even fake choices like Trump, Sanders, or Stein are brutalized by the press. (Trump figured out that if he inspired enough ire he could be on TV all the time: expect to see this tactic again.) Our betters conspire at every turn to give us the choice between Coke and Pepsi. If we thirst for anything else we're welcome to move.
  - jdietrich 8y ago
    Most European countries have strict campaign finance limits. In the UK, no party can spend more than £19.5m on their national campaign, plus £10,000 to £16,000 for each candidate's local campaign. They're required to provide accounts and receipts for all of their campaign activities and can forfeit the election or face criminal charges if they overspend. That's chump change in American terms - the last presidential election cost about six billion dollars. With strict campaign finance limits, lobbyists are far less influential. Candidates hardly think about fundraising, because any money raised over their spending limit is useless to them. A lobbyist might be persuasive, they might provide a lot of compelling evidence, they might make the case that a particular policy would be popular, but they can't offer a pseudo-bribe in the form of a massive campaign contribution.
    - tim333 8y ago
      It used to be like that in the US, eg see "Jimmy Carter says when he ran against Gerald Ford, he didn't raise any money" http://www.politifact.com/truth-o-meter/statements/2013/feb/26/jimmy-carter/jimmy-carter-says-when-he-ran-against-gerald-ford-/ http://www.politifact.com/truth-o-meter/statements/2013/feb/... It's amazing it's got as messed up as it is. Someone really needs to fix that.
  - glitcher 8y ago
    I often get the feeling that our best minds and potential leaders either don't go into politics, or can't survive the brutal realities and shortcomings of the current political system. So basically we are doomed to constantly repeat all of these problems until something significant changes.
  - s73v3r_ 8y ago
    Because we all disagree on who the crooked politicians are. Congress as a whole has abysmal approval ratings, but people don't vote on Congress. They vote for their individual Representative and two Senators. When you ask people about their particular representation, those approval ratings are much higher.
  - arca_vorago 8y ago
    Long story short, it's because of abuse of tribalism by the two parties. I'll give you a good example: the 92 presidential debate. Ross Perot, a third party candidate got almost 19 percent of the vote! So what did the two parties do? They worked together to takeover the debates so they could keep third parties from ever getting that close again! Then couple that with carefully crafted lies, usually based on identity politics, that encourage and foment tribalism and division, add in the corrupt primary system, among other spices like blackmail and three letter surveillance of Congress, and you get what we have. This is why it angers me so much every time someone says "both parties are just as corrupt" and is met with a thousand "ways $theotherone is actually the bad one but $ourparty is the only one looking out for the people" and derision for even stating it out loud. After years of pondering this issue I have come to the conclusion we need to, over multiple election cycles, focus on getting third parties and independents who are fully transparent about funding into office, and enough to take away the majority from both parties, hopefully under a coalition of some sort, which would force both parties to come to the table in a more adult like manner. Make no mistake, all three branches of government have suffered similar corruption, but the legislative is supposed to be the closest to the people, so I think it is the place to start (well really the state congresses are) So many of the unconstitutional things which our gov does that goes unchecked is due to both sides of Congress violating their oaths. If we had a congress worth a damn we could use them to self correct...
    - theonemind 8y ago
      You get two parties naturally out of the winner-take-all system. Some European governments and other governments that got to learn from our mistakes (by forming constitutional republics later in history) have real multi-party systems, which you get much more easily with actual proportional representation.
- scarface74 8y ago
  That's only part of the reason. True, the lobbyists keep the politicians voting for the status quo, but the "we hate socialism, we have the greatest healthcare system in the world" propaganda has enough of the population fooled to keep the politicians in power.
- deleted 8y ago
  [deleted]
eeZah7Ux 8y ago
Even in EU they do things that would be unacceptable for other products: - Year-long locked in contracts. No trial period. - Zero guarantees whatsoever on bandwidth and latency. - No third-party, legally recognized, quality certification/monitoring organizations. - Little guarantees against traffic inspection, DNS sniffing & so on. - In some countries it's legal to sell ADSL as "fiber". - Sharing your uplink with a neighbor can be prohibited by contract. I know it's nothing new, but that's not an acceptable argument. It's about time we raise our expectations.
- ghba66 8y ago
  >- Year-long locked in contracts. No trial period. Here we get a 14-day trial period. >- Zero guarantees whatsoever on bandwidth and latency. Technically impossible to give such a guarantee. >- Little guarantees against traffic inspection, DNS sniffing & so on. How do you guarantee something like this? Let anybody in the datacenters...? >- Sharing your uplink with a neighbor can be prohibited by contract. That's normal, otherwise they'd lose tons of money. I mean here you can get 300/300 really cheap, that's more than enough for, let's say, 10 neighbours. But then how do you expect them to cover the investment?
  - smallbigfish 8y ago
    > >- Little guarantees against traffic inspection, DNS sniffing & so on. > How do you guarantee something like this? Let anybody in the datacenters...? Spell it in the contract and put people in jail if they break it.
  - saagarjha 8y ago
    > Technically impossible to give such a guarantee. Every other service provides five nines or whatever or your money back…
  - eeZah7Ux 8y ago
    >>- Zero guarantees whatsoever on bandwidth and latency. > Technically impossible to give such a guarantee. Not at all. You pick the right oversubscription ratios, monitor the network and give guarantees on the 95%/99% percentiles. It's done in datacenters all the time. >>- Little guarantees against traffic inspection, DNS sniffing & so on. > How do you guarantee something like this? Let anybody in the datacenters...? Just like in many other fields: external verification, rewards for employee and customers reporting malpractices and so on. Also, encourage your customers to use DNS over HTTPS, VPNs, Tor instead of saying nothing or even discouraging it. >>- Sharing your uplink with a neighbor can be prohibited by contract. > That's normal, otherwise they'd lose tons of money. That's not an argument. The large majority of goods and services in existence can be shared and, very often, even re-sold and there are specific laws against contracts for exclusive use. It's up to the ISPs to find ways to bill people accordingly (and it's easy to look at what carriers and datacenters ISP do...).
xstartup 8y ago
The regions in Europe which have cheaper/faster access have either community managed infra or high population density/cheap power. Does the US have that?
- Fnoord 8y ago
  Swedes in say Stockholm have had quick internet access for ages but high population is a relative term. I am sure cities such as New York and Los Angelos are high population compared to Stockholm or cities in The Netherlands. Also, I wouldn't say we got so much choice here in NL. There's basically one cable company: Ziggo (aka Liberty Global, owned by an American) and basically one DSL company: KPN. You can't even always get both (meaning usually Ziggo has a monopoly), and KPN actively hampers fiber because VDSL2 is "viable". Mobile-wise there's traditionally 3 players, rest are MVNO. Now with 4G, the third player (T-Mobile) is actually the best and there's a fourth player as well (Tele2). And 4G has a relatively low latency (especially on T-Mo's network which I personally don't have though). The two big players are once again KPN and Vodafone (joint venture with Ziggo called VodafoneZiggo). Vodafone just bought Unitymedia in Germany and Eastern Europe from Liberty Global, btw. The problem is that a lot of the cable infrastructure (traditionally owned by the municipalities or small corporations) has been sold very cheap to companies which have all ended up being bought by Liberty Global. The government has done it completely wrong. They should've kept owning the networks, but leasing access to companies. After all, the government owns infrastructure such as roads and rails as well.
sametmax 8y ago
Exactly. But they did the same in France 10 years ago. Then the ISP named "Free" started to sell an offer 3 times cheaper and WOW, suddenly everybody matched the price. So not only competition on price is possible for ISP, it's actually necessary for the clients. It's wont benefit the existing ISP, obviouly, so it must be done no matter what they say.
- Someone1234 8y ago
  Hard to compete when local government is so corrupt they won't let you run physical cables to people's homes.
  - xstartup 8y ago
    Not really. If you are in a democratic but corrupt country. Make local people aware that you want to offer the service and this service can only be offered if the government lets you lay cable. Start laying cable and offer your people service. Offer them a good deal and ask them to protect your cables in return. You'll be amazed how good communities are at protecting their assets, provided they realize the benefit of keeping it in shape. Then bring those people in front of government to vouch for you.
    - sametmax 8y ago
      Yeah, digging holes in roads without a permit. Not hard at all.
      - Declanomous 8y ago
        I assume in most places the cables are put on poles. Have you ever seen poles in some cities? It look like a 200 foot tall bird is using them to build a nest.
        sametmax 8y ago
        Genuine question: can you put fiber on poles ? Since it breaks so easily, I would assume it's buried only.
rectang 8y ago
The supposed "deregulation" of the ISP market by the FCC is merely picking the members of the current telecom oligopoly as winners. Killing net neutrality isn't about choice, it's about enriching telecoms because they have bought our government. Thanks, Citizens United, for making corporate speech so much more powerful than individual speech!
- craftyguy 8y ago
  Congress could pass legislation to override the Citizens United decision but, lol, who am I kidding.
patricius 8y ago
I come from one of those nations. There could be many explanations for why things are the way they are in the US and not in some other nations. Maybe federal or state legislation makes it more expensive for competitors to compete. Maybe there are geographical challenges that make it more expensive. Or one of a thousand other explanations.
gnicholas 8y ago
How do these European nations compare on population density? I live in suburban silicon valley and have been surprised to see how much cheaper internet is for friends of mine who live in cities — even cities like NYC, which are equally expensive otherwise. (i.e., they're not just jacking up the price for folks in Silicon Valley because most people can afford it.) I pay $30 for 12/3 Mbps service; my city friends pay roughly the same for 100/10 Mbps service. This leads me to believe that population density is a big factor here.
- monocasa 8y ago
  Sweden has lower population density than the US, but much better internet. I think population density is a weak signal for competition in the US market, and that's what you're seeing.
  - MrFantastic 8y ago
    95% of Swedes live in the tip. I doubt upper Sweden has good coverage being that it's a barren tundra.
    - monocasa 8y ago
      You'd be wrong. Sweden has a program to essentially guarantee everyone access to broadband coverage, even (and especially) those who live in rural areas.
    - stephengillie 8y ago
      This map is from Finland in 2016, and shows only a few regions have >90% 100mbps availability. https://m.imgur.com/wU5WXBV https://m.imgur.com/wU5WXBV
      - monocasa 8y ago
        To be fair, in the US (which is what we're comparing all of this to), broadband is defined as 25Mbps up/3Mbps down.
briandear 8y ago
In my area of France, I have one provider, Orange, and a top speed of .8mbs up and 10mbs down. “Cheaper and faster” in some places, more expensive and slower in other places. Not everyone lives in Paris.

nasredin 8y ago

Tired of the same news every week. Nothing is gonna change at least until Trump is out of office and given his judicial nominees and appointees maybe even decades after. Sad but true. Maybe Musk's satellites will help, but even Google failed here, so remain pessimistic.

toomuchtodo 8y ago
It's definitely disappointing, I feel that, but don't give up hope! I'd encourage you to engage with your local community to work towards a coop/municipal broadband provider to help alleviate the problem, or even go so far as to start your own wireless ISP. One person cannot solve this problem, but each of us doing a small part where we each live does move the needle. You are going to need to get involved, and there is going to be a time commitment. Prepare accordingly. https://muninetworks.org https://muninetworks.org https://startyourownisp.com/ https://startyourownisp.com/ https://www.nytimes.com/2016/08/08/technology/how-to-give-rural-america-broadband-look-to-the-early-1900s.html https://www.nytimes.com/2016/08/08/technology/how-to-give-ru... https://www.reddit.com/r/Entrepreneur/comments/2ftsf7/i_own_a_wireless_isp_ama/ https://www.reddit.com/r/Entrepreneur/comments/2ftsf7/i_own_...
- jethro_tell 8y ago
  All those links are already clicked for me.
  - toomuchtodo 8y ago
    If those resources are not sufficient, let me know what the gaps are so I can add more.
    - jethro_tell 8y ago
      Funding, time mostly. I ran a small copper ISP/Collocation company for a few years and I miss it, but I'm not quire there to build my own.
8y ago

shmerl 8y ago

There were some profit margins of big ISPs published - they are insane, and near monopoly situation makes it pretty bad, when ISPs rip off users left and right.

peterwwillis 8y ago

Yikes, this article is so myopic. They treat large "ISPs" as if they are a single independent entity. The largest ones are owned and operated by gigantic corporate interests, and their sales figures are part of a broader plan, and thus so is pricing. The profits of "EPB Fiber Optics" don't go towards paying for content rights worth billions of dollars a year. The larger the network, the more expensive it costs to maintain and upgrade. Of course a tiny regional co-op ISP doesn't cost much to run. They don't have 25 million customers in 21 states, or 145,000 miles of fiber in 39 states. I mean, jesus, this article goes all over the place. It's saying provisioning isn't expensive, and suggests that deployment cost is lowered by changing building codes to require conduit. How does that affect the 91 million homes that already exist? The article states that net neutrality "prohibits [ISPs] from charging unjustified fees on Internet services". No, it doesn't. They can charge whatever they want for their services. They will increase the price of internet services whether or not net neutrality exists, because it is not getting any cheaper to run a giant ISP that is responsible to the shareholders of a media conglomerate. If the author really thinks the only reason big ISPs charge high fees is because they're mean and greedy, they really are going to lose this fight, mainly from a lack of critical thinking skills.

jethro_tell 8y ago
Well it's actually quite a bit cheaper to do data in volume, buying dark fiber or laying it your self will give a much better return if you can use it all. Generally referred to as Economies of Scale. It goes for most businesses.
- peterwwillis 8y ago
  It's cheaper to do things in volume, but you still have to compare the scale. If the tiny ISP has 100 miles of fiber, they still look really good on a balance sheet because they haven't had to deal with infrastructure 1,450 times larger. Because it's a much smaller set of problems they can be much more efficient.
  - heavenlyblue 8y ago

slg 8y ago

I am no fan of ISPs, but this is a silly argument to make. There is no "enough" when it comes to capitalism. Your problem should be with either the politicians for believing these arguments or with our entire economic system, not with ISPs for lobbying on their own behalf in this manner.

ovao 8y ago
We can still try to hold ISPs accountable for lying (or even misrepresenting) to elected officials, which is what the EFF is attempting to do.
scarface74 8y ago
Internet access requires laying cables and huge up front costs and is to a large degree a "natural monopoly". In cases of a natural monopoly, even classic pro capitalist free market economists believe in regulation. On the other hand, Comcast seems to be deaf to competition. I live in an area where AT&T offers 1 gigabit up and down for $70 all in and Comcast still tries to sell 1Gbps up/35mpbs down for $135 and it's capped. I consistently get 940/940 on AT&T. Comcast couldn't get near the promised speeds during peak time when I had them years ago.
avgDev 8y ago
I don't have a problem with ISPs. They are doing what is legal, and it makes logical sense. Spend $xx on lobbying save $xxx. The problem is much bigger than ISPs in my opinion. There is anti-intellectual movement in the US right now. Uneducated population does not understand the difference between a fact and an opinion. The government should be hiring educated people, some professors for example that understand subjects related to laws. There should be 0 trust in lobbyist.
- JustSomeNobody 8y ago
  > Uneducated population does not understand the difference between a fact and an opinion. Do not let educated people off so easily. Plenty of them have this same problem.
- rukittenme 8y ago

vuln 8y ago

Aren't most if not all of Large ISPs public companies? They answer to the shareholders... Their business model revolves around making their shareholders the most amount of money possible. The company answers to the shareholders. A Municipal ISP are mostly non/low profit, they have no share holders to pay out. No one looking for their 'investment' back as capital, just people looking for stable internet. The Muni ISP answers to the customers.

knieveltech 8y ago
Fun Fact: In many parts of the US it is "illegal" for municipalities to run an ISP.
- mgkimsal 8y ago
  There's little 'fun' about that 'fact', especially for some of us folks in more rural areas... :/
  - knieveltech 8y ago
    I appreciate your situation. I verbally chewed on every staffer Bev Purdue could cajole into answering the phones during the run-up to HB 129 passing in North Carolina. Alas, in these parts rednecks vincit omnia.
    - gowld 8y ago
      Slurs are not acceptable on HN.
      - knieveltech 8y ago
        You claim a slur has been used? Please point it out.
patricius 8y ago
The money has got to come from somewhere. If you want the municipality to run an ISP, then you either have to tax the citizens for the services or take funds from somewhere else. Either way, can we be sure that good intentions from democratically elected local politicians will be enough to somehow make Internet service cheaper than what the private sector is able to provide?

pishpash 8y ago

What's this "enough"? No for-profit entity makes "enough" money. It's a concept that doesn't exist. Put in real competition and supply-and-demand takes care of "enough".

refurb 8y ago

A lot of ISPs are public companies, so not sure why EFF didn't just dig up their 10-K filings? Sonic.net is a pure broadband provider with pretty good introductory deals for 1Gbp internet in the Bay Area.[1] 2017 Revenue - $477M 2017 Net income - $64M 2017 Profit margin - 13% 13% isn't bad. It's more than low margin businesses, but doesn't seem egregious to me. [1]https://www.last10k.com/sec-filings/sonc/0000868611-17-000050.htm#s25116AD284A52DF0AF7209AA5F359A14 https://www.last10k.com/sec-filings/sonc/0000868611-17-00005...

montasaurus 8y ago
It looks like that 10-K is for Sonic the fast food chain. I believe Sonic the ISP is still a private company.

montasaurus 8y ago

We have an ISP in San Francisco and it really is a great business. Lots of long lasting recurring revenue and very low recurring costs--bandwidth is actually one of our smallest expenses. The biggest hurdle is really tapping in to the tribal knowledge on how to set up and run an ISP. You've got networking, provisioning, how to buy bandwidth, even what type of power plugs you need to have in your rack (spoiler: there are multiple and they are not all compatible). Besides the cost of initial deployment and setting up new customers, there's not a whole bunch you need to spend money on. We really like the business, and more people really should start their own. The numbers make sense in a bunch of different markets and scales. If you deploy with fixed wireless, it brings the costs down to the 10's of thousands of dollars range. Laying fiber is obviously a lot more expensive, but not really necessary in most circumstances. We're working on helping more people start ISPs-launching here on HN next week, but TechCrunch wrote about the project just now: https://techcrunch.com/2018/05/10/necto-looks-to-help-individuals-get-their-own-local-isp-businesses-off-the-ground/ https://techcrunch.com/2018/05/10/necto-looks-to-help-indivi...

belltyler 8y ago
Potentially relevant, I remember seeing this a while back: https://startyourownisp.com/ https://startyourownisp.com/ HN Discussion: https://news.ycombinator.com/item?id=16160394 https://news.ycombinator.com/item?id=16160394
- montasaurus 8y ago
  This is a great guide--I highly recommend reading it if you're interested in the space. We met Graham (the author) and he really knows his stuff.
- grahamburger 8y ago
  Oh Hi! Author of https://startyourownisp.com/ https://startyourownisp.com/ here. Happy to answer questions.
  - rrcaptain 8y ago

cbhl 8y ago

I wish that the EFF had actually taught people the math of running an ISP, rather than just writing a puff piece. Here's Comcast's Form 10-K for 2017: https://www.cmcsa.com/static-files/111ba611-eb85-4edc-9000-3907c84697d8 https://www.cmcsa.com/static-files/111ba611-eb85-4edc-9000-3... Yes, the majority of the expense for Internet is definitely the upfront cost of equipment (physically putting in the cables). Cable companies borrow lots of money in order to do this -- Comcast's Form 10-K shows that they have 64 billion dollars of debt. In order to get bank loans that big, you need to show that you can pay it back. But they only have 3.4 billion in cash; the way they keep their balance sheet from falling apart is knowing you pay your monthly cable bill ("Receivables, net" of 8.4 billion). Comcast had 41 billion dollars of "Residential" revenue last year, but only 14.7 billion dollars of that was for Internet. The big expense line item is 13 billion on "Programming" (aka, TV stations from the other conglomerates, for people who haven't cut the cord yet). There's also 6.4 billion on tech support, and 2.5 billion on customer service. If you keep looking further, you see they spent 3.4 billion on "customer premise equipment" (which is probably cable modems and set-top boxes), and another 2.4 billion on "scalable infrastructure", which is the actual "paying money to make your internet better". The balance sheet shows ~38 billion on property and equipment, so maybe Comcast is upgrading, say, 5-10% of their network in a given year? In my opinion, Comcast's real long-term business risk is the shifting revenue mix from Cable to Home Internet means that Comcast gets smaller cash flows, so there's less money to upgrade the equipment every year. That can't possibly look great for shareholders.

matthewmcg 8y ago
Makes sense. Comcast does everything they can to get you to add legacy cable to your Internet only service.
electricEmu 8y ago
The 10-K for 2017 is great. You pointed out some great reasons the infrastructure and programming sides could be split. > Cable companies borrow lots of money in order to do this -- Comcast's Form 10-K shows that they have 64 billion dollars of debt. In order to get bank loans that big, you need to show that you can pay it back. But they only have 3.4 billion in cash; the way they keep their balance sheet from falling apart is knowing you pay your monthly cable bill ("Receivables, net" of 8.4 billion). I wonder would these look like split out into "internet infrastructure", and "media infrastructure". I bet it would be a stable business with low, but expected, returns, and another with lots of volatility. As a United States Citizen, I wouldn't mind providing subsidies and incentives for an internet company to expand internet connectivity. I do take offense to a media company taking subsidies to _also_ expand a media empire with those funds. > Comcast had 41 billion dollars of "Residential" revenue last year, but only 14.7 billion dollars of that was for Internet. Yes, a split out company would have a smaller market cap. That's actually larger than I expected! > The big expense line item is 13 billion on "Programming" Exactly. Get that shit out of my internet provider. In my opinion, the American Public's real long-term business risk is the over consolidation of businesses. That means that Comcast gets to continue posting record breaking profits while offering shitter services, meanwhile expanding their media empire.

erikb 8y ago

I feel that if you put this in front of a CEO of an ISP he will really not understand it. It is so very, very common in business world that you find an argument to ask for more money, which is why you will ask for more money. The question for business people is not the truthfulness of the reason, but how believable it sounds. And if you try to counter that with truth and succeed you will really irritate these business people. Because now they need to go and find another good-sounding reason to ask for more money. Truth or not, that is really invisible to them.

wiz21c 8y ago
ahhh the difference between price and value....

juliangoldsmith 8y ago

I agree with the EFF on a lot, but there was a dearth of numbers in this article. Does anyone know of any numbers to actually back up, for instance, the 80% claim that the writer makes regarding the cost of initial buildout? Additionally, how would that apply to each individual ISP? The article also asserts that, "a small handful of massive and extraordinarily profitably Internet service providers (ISPs) are telling state legislatures that network neutrality would hinder their ability to raise revenues to pay for upgrades and thus force them to charge consumers higher bills for Internet access". Does anyone have an actual example where this has happened? I'd expect the author to at least throw in a link to a news article somewhere. Almost every article the author has written for the EFF is related to Net Neutrality, I'd think he'd have plenty of resources to show us. Also, while I'm not entirely sure how EPB built their network out, Sonic is a terrible example even by the information given in the article. First of all, when almost the entire cost of starting your business is already paid for you, you're doing to have lower costs than someone who actually has to build conduit to lay fiber. On top of that, Sonic's service seems to be entirely concentrated in an extremely small, very high population density area. When you have 2000 customers on a single city block, you're going to have a lot lower costs than a company that has one customer every quarter mile.

makecheck 8y ago

ISPs routinely invest in things that I didn’t ask for: “helpfully” trying to resolve my web typos to their own ad servers, trying to inject pop-ups into HTML streams, wanting to install unnecessary software to “use the Internet”, expecting me to rent equipment that could be bought, etc. Meanwhile, there is little evidence of investment in things I actually expect an ISP to do. No upgrades to quality of service (except that fateful day when Google Fiber came to town and “miraculously” everything improved practically the next day). Not even an option to have cheap, basic Internet, which you know damned well they CAN do; instead, ridiculous things like “only if bundled with a landline phone” (WHAT?!?). One mystery fee after another. Absolute garbage service, everything from “we will arrive between 1 and 5” meaning “we showed up at 11:30 and you weren’t there, reschedule”, to phone calls about service outages that they seem to be utterly clueless about. A single customer probably gives them at least $1000 a year, what the hell do these people do?

defterGoose 8y ago
And then on top of those things they have the audacity to refer to things like developing new pricing models as "innovation".
- r00fus 8y ago
  I always read "innovation" as rent seeking opportunities when a company says it.

everybodyknows 8y ago

WISP coverage map for the US: https://uwn.com https://uwn.com

camdenreslink 8y ago

These guys operate as legal monopolies, have received huge tax breaks, and provide bad service.

Proven 8y ago

For some reason the EFF likes to mess around with other people’s property. If an ISP isn’t owned by your you have no say in how it’s operated. If you don’t like now it’s operated, hit the bricks and beat it.

sjg007 8y ago

Nobody makes enough money... news at 11.

kingludite 8y ago

Imagine what it costs to build roads, have drinking water, sewage or electricity. ISP = tiny boxes. The starting cost should be a lot higher.(could be a lone) That way we don't have to rent forever. We don't hook up your house to the sewage system for free either. After you sink many thousands into the sewer it gets rather amazingly cheap.

kexx 8y ago

:DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD joke of the month. thank you

dang 8y ago
Please don't do this here though.

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