6 ms·

I would say the strongest example is wired telecom, which may not be a national monopoly but is certainly a local monopoly across nearly the whole country. The

by _bxg1 7y ago

I would say the strongest example is wired telecom, which may not be a national monopoly but is certainly a local monopoly across nearly the whole country. The way the companies divvy up territory to avoid competition is probably what keeps U.S. prices so much higher than, say, Europe. I wonder if a case could be made for it being a cartel. But yes, cellular and satellite providers have started to provide a saving grace of disruption in that market. We'll see if it ends up being enough.

treis 7y ago
Look at profit margins though. Apple and Facebook are consistently 30%+ and Google is 20%+. Verizon, Comcast, and the rest of the telecoms are in the low to mid teens or worse. That's pretty close to the S&P 500 average margin. So while it appears that wired telecom is a monopoly they don't make money like monopolies. Compare Google Fiber with Google Plus. Google had people literally begging them to put Fiber in but backed off because they couldn't make (enough) money. Plus was a hugely important project for them but they canceled it because they couldn't beat Facebook. We've seen major tech companies take aim at the monopoly/duopoly product of a rival and they've all failed: Microsoft poured billions into Bing, Maps and mobile for little market share Google couldn't dent Facebook with Plus Amazon and Facebook's phones fell flat
- notsureigetit 7y ago
  > Google had people literally begging them to put Fiber in but backed off because they couldn't make (enough) money. Was that the reason, or was it because the other telecom companies were lobbying to keep Google from accessing rights of way and expanding to other cities. (One failed example:[0]) In many jurisdictions, the cable and telecom companies are attempting to make it illegal for municipalities to install their own government-run internet because they really don't want to compete. It's ridiculous. [1] Had Google been allowed to compete like in other industries, they probably would have crushed the telecom companies. But they weren't allowed to. [0] https://en.wikipedia.org/wiki/Google_Fiber#Reactions https://en.wikipedia.org/wiki/Google_Fiber#Reactions [1] https://arstechnica.com/tech-policy/2017/10/another-state-lawmaker-has-proposed-banning-municipal-broadband-networks/ https://arstechnica.com/tech-policy/2017/10/another-state-la...
  - treis 7y ago
    >Was that the reason, Yes. > or was it because the other telecom companies were lobbying to keep Google from accessing rights of way and expanding to other cities. (One failed example:[0]) A failed lobbying example is terrible evidence compared to the sweetheart deals Google got and the lengths cities went to attract Google (from Wikipedia): The initial location was chosen following a competitive selection process.[18] Over 1,100 communities applied to be the first recipient of the service.[19][20] Google originally stated that they would announce the winner or winners by the end of 2010; however, in mid-December, Google pushed back the announcement to "early 2011" due to the number of applications.[21][22][23] The request form was simple, and, some have argued, too straightforward.[24] This led to various attention-getting behaviors by those hoping to have their town selected.[24] Some examples are given below: Baton Rouge, Louisiana supporters remade the Supertramp song "Give a Little Bit" to "Give a Gigabit". Greenville, South Carolina utilized 1,000 of their citizens and glow sticks to create "The World's First and Largest People-Powered Google Chain."[25] From an aerial view, the title "Google" was colorfully visible. Topeka, Kansas, temporarily renamed itself "Google". A small plane bearing a banner reading "Will Google Play in Peoria, IL?" flew over the Google campus in Mountain View, California.[26] The mayor of Duluth, Minnesota, jokingly proclaimed that every first-born child will be named either Google Fiber or Googlette Fiber.[27] The city of Rancho Cucamonga, California, dubbed their city, "Rancho Googlemonga".[28] One of the islands in Sarasota, Florida, was temporarily renamed "Google Island".[24] Municipalities and citizens have also uploaded YouTube videos to support their bids. Some examples: A YouTube video in support of Sarasota, Florida, used the Bobby McFerrin song "Don't Worry, Be Happy".[24] A video for Sarasota was uploaded through Facebook’s video service.[24] Comedian and United States Senator Al Franken made a YouTube video to support the bid of Duluth, Minnesota.[29] Ann Arbor, Michigan, has its own YouTube channel[30] featuring a David Letterman-style Top Ten list delivered by town VIPs such as Mayor John Hieftje and University of Michigan President Mary Sue Coleman. Ann Arbor also held a city-wide GoogleFest,[31] kicking off with a gathering of hundreds of participants dancing and chanting "Ann Arbor Google Fiber, ain't Nothing any finer."[32]
    - monocasa 7y ago
      All those examples are cool, but how do they practically solve the base issues that Google ran into wrt to right of way and easements. All of those examples are the kind of thing that municipalities do because it's easy and doesn't actually address any of the base issues.
- creato 7y ago
  > Verizon, Comcast, and the rest of the telecoms are in the low to mid teens or worse. That's pretty close to the S&P 500 average margin. I would want to see the margins for just operating high speed internet service. I suspect their overall margins are lower because their financial picture is clouded by things like cable TV and content costs. A big reason why telecoms suck is precisely because if you just want high speed internet, they force you to buy all their bullshit content as well (for me, it's cheaper to buy internet + cable TV than just internet!), and they make it hard to buy that content any other way. The main action I'd like to see taken against telecoms is to force them to spin off their content businesses (and they never should have been allowed to buy them in the first place).
  - rayiner 7y ago
    The opposite is true. Video service enables companies to charge enough to justify broadband deployment. That’s why Google and Verizon offer video over their fiber service even though they don’t really have their own content. Verizon won’t expand FiOS into Baltimore because it can’t get a television franchise from the city without agreeing to onerous build-out requirements. Without video revenues FiOS isn’t really viable.
    - creato 7y ago
      Google Fiber charged $70/mo for internet, and $130/mo for cable TV [1]. Standalone TV streaming services are also around $50/mo (e.g. hulu [2], youtube live TV packages [3]). Something doesn't add up. If it costs $50/mo to get cable TV content, why does it cost me $-10/mo with comcast? 1. https://www.tennessean.com/story/money/tech/2016/04/11/google-fiber-move-signals-higher-prices-plans/82917614/ https://www.tennessean.com/story/money/tech/2016/04/11/googl... 2. https://www.hulu.com/live-tv https://www.hulu.com/live-tv 3. https://tv.youtube.com https://tv.youtube.com
    - _bxg1 7y ago
      That may have been true at one point, but cable is on its last leg now. And streaming services (for now) go over all networks.
  - 7y ago
- buddylw 7y ago
  Why do profit margins matter at all here? It's only a signal that there is a problem if margins are very high because there is no guarantee that an entrenched monopolistic company will be efficient or make a strong profit. If you want to do a comparison compare consumer internet cost vs performance to places with a healthy and regulated market for internet service. Also, by this logic Amazon could never be regulated. It doesn't make sense.
  - treis 7y ago
    >Why do profit margins matter at all here? It's only a signal that there is a problem if margins are very high because there is no guarantee that an entrenched monopolistic company will be efficient or make a strong profit. If they were really wasting ~20% of their revenue someone would buy them or do a hostile takeover.
    - AngryData 7y ago
      Unless they are spending most of that "wasted' money on capturing markets and paying legal firms to stomp out any potential competition. Or the constant advertising campaigns for services that me and many others have never had access to. I see comcast commercials every day, ive never lived in an area with comcast available. Just because they aren't making huge profits doesn't means they are spending that money on providing services. Why risk innovation when stomping out competition is much more straight forward and predictable?
      - treis 7y ago
        Do you have any numbers showing that any of these companies spend somewhere in the neighborhood of 20% of their revenues on capturing markets and legal firms?
        mjevans 7y ago
        If they are in a low competition (natural monopoly) market, maybe open books on where the money is going should be a regulatory requirement.

by _bxg1 7y ago

treis 7y ago

Look at profit margins though. Apple and Facebook are consistently 30%+ and Google is 20%+. Verizon, Comcast, and the rest of the telecoms are in the low to mid teens or worse. That's pretty close to the S&P 500 average margin. So while it appears that wired telecom is a monopoly they don't make money like monopolies. Compare Google Fiber with Google Plus. Google had people literally begging them to put Fiber in but backed off because they couldn't make (enough) money. Plus was a hugely important project for them but they canceled it because they couldn't beat Facebook. We've seen major tech companies take aim at the monopoly/duopoly product of a rival and they've all failed: Microsoft poured billions into Bing, Maps and mobile for little market share Google couldn't dent Facebook with Plus Amazon and Facebook's phones fell flat

notsureigetit 7y ago
> Google had people literally begging them to put Fiber in but backed off because they couldn't make (enough) money. Was that the reason, or was it because the other telecom companies were lobbying to keep Google from accessing rights of way and expanding to other cities. (One failed example:[0]) In many jurisdictions, the cable and telecom companies are attempting to make it illegal for municipalities to install their own government-run internet because they really don't want to compete. It's ridiculous. [1] Had Google been allowed to compete like in other industries, they probably would have crushed the telecom companies. But they weren't allowed to. [0] https://en.wikipedia.org/wiki/Google_Fiber#Reactions https://en.wikipedia.org/wiki/Google_Fiber#Reactions [1] https://arstechnica.com/tech-policy/2017/10/another-state-lawmaker-has-proposed-banning-municipal-broadband-networks/ https://arstechnica.com/tech-policy/2017/10/another-state-la...
- treis 7y ago
  >Was that the reason, Yes. > or was it because the other telecom companies were lobbying to keep Google from accessing rights of way and expanding to other cities. (One failed example:[0]) A failed lobbying example is terrible evidence compared to the sweetheart deals Google got and the lengths cities went to attract Google (from Wikipedia): The initial location was chosen following a competitive selection process.[18] Over 1,100 communities applied to be the first recipient of the service.[19][20] Google originally stated that they would announce the winner or winners by the end of 2010; however, in mid-December, Google pushed back the announcement to "early 2011" due to the number of applications.[21][22][23] The request form was simple, and, some have argued, too straightforward.[24] This led to various attention-getting behaviors by those hoping to have their town selected.[24] Some examples are given below: Baton Rouge, Louisiana supporters remade the Supertramp song "Give a Little Bit" to "Give a Gigabit". Greenville, South Carolina utilized 1,000 of their citizens and glow sticks to create "The World's First and Largest People-Powered Google Chain."[25] From an aerial view, the title "Google" was colorfully visible. Topeka, Kansas, temporarily renamed itself "Google". A small plane bearing a banner reading "Will Google Play in Peoria, IL?" flew over the Google campus in Mountain View, California.[26] The mayor of Duluth, Minnesota, jokingly proclaimed that every first-born child will be named either Google Fiber or Googlette Fiber.[27] The city of Rancho Cucamonga, California, dubbed their city, "Rancho Googlemonga".[28] One of the islands in Sarasota, Florida, was temporarily renamed "Google Island".[24] Municipalities and citizens have also uploaded YouTube videos to support their bids. Some examples: A YouTube video in support of Sarasota, Florida, used the Bobby McFerrin song "Don't Worry, Be Happy".[24] A video for Sarasota was uploaded through Facebook’s video service.[24] Comedian and United States Senator Al Franken made a YouTube video to support the bid of Duluth, Minnesota.[29] Ann Arbor, Michigan, has its own YouTube channel[30] featuring a David Letterman-style Top Ten list delivered by town VIPs such as Mayor John Hieftje and University of Michigan President Mary Sue Coleman. Ann Arbor also held a city-wide GoogleFest,[31] kicking off with a gathering of hundreds of participants dancing and chanting "Ann Arbor Google Fiber, ain't Nothing any finer."[32]
  - monocasa 7y ago
    All those examples are cool, but how do they practically solve the base issues that Google ran into wrt to right of way and easements. All of those examples are the kind of thing that municipalities do because it's easy and doesn't actually address any of the base issues.
creato 7y ago
> Verizon, Comcast, and the rest of the telecoms are in the low to mid teens or worse. That's pretty close to the S&P 500 average margin. I would want to see the margins for just operating high speed internet service. I suspect their overall margins are lower because their financial picture is clouded by things like cable TV and content costs. A big reason why telecoms suck is precisely because if you just want high speed internet, they force you to buy all their bullshit content as well (for me, it's cheaper to buy internet + cable TV than just internet!), and they make it hard to buy that content any other way. The main action I'd like to see taken against telecoms is to force them to spin off their content businesses (and they never should have been allowed to buy them in the first place).
- rayiner 7y ago
  The opposite is true. Video service enables companies to charge enough to justify broadband deployment. That’s why Google and Verizon offer video over their fiber service even though they don’t really have their own content. Verizon won’t expand FiOS into Baltimore because it can’t get a television franchise from the city without agreeing to onerous build-out requirements. Without video revenues FiOS isn’t really viable.
  - creato 7y ago
    Google Fiber charged $70/mo for internet, and $130/mo for cable TV [1]. Standalone TV streaming services are also around $50/mo (e.g. hulu [2], youtube live TV packages [3]). Something doesn't add up. If it costs $50/mo to get cable TV content, why does it cost me $-10/mo with comcast? 1. https://www.tennessean.com/story/money/tech/2016/04/11/google-fiber-move-signals-higher-prices-plans/82917614/ https://www.tennessean.com/story/money/tech/2016/04/11/googl... 2. https://www.hulu.com/live-tv https://www.hulu.com/live-tv 3. https://tv.youtube.com https://tv.youtube.com
  - _bxg1 7y ago
    That may have been true at one point, but cable is on its last leg now. And streaming services (for now) go over all networks.
- 7y ago
buddylw 7y ago
Why do profit margins matter at all here? It's only a signal that there is a problem if margins are very high because there is no guarantee that an entrenched monopolistic company will be efficient or make a strong profit. If you want to do a comparison compare consumer internet cost vs performance to places with a healthy and regulated market for internet service. Also, by this logic Amazon could never be regulated. It doesn't make sense.
- treis 7y ago
  >Why do profit margins matter at all here? It's only a signal that there is a problem if margins are very high because there is no guarantee that an entrenched monopolistic company will be efficient or make a strong profit. If they were really wasting ~20% of their revenue someone would buy them or do a hostile takeover.
  - AngryData 7y ago
    Unless they are spending most of that "wasted' money on capturing markets and paying legal firms to stomp out any potential competition. Or the constant advertising campaigns for services that me and many others have never had access to. I see comcast commercials every day, ive never lived in an area with comcast available. Just because they aren't making huge profits doesn't means they are spending that money on providing services. Why risk innovation when stomping out competition is much more straight forward and predictable?
    - treis 7y ago
      Do you have any numbers showing that any of these companies spend somewhere in the neighborhood of 20% of their revenues on capturing markets and legal firms?
      - mjevans 7y ago
        If they are in a low competition (natural monopoly) market, maybe open books on where the money is going should be a regulatory requirement.