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I can totally understand people’s reluctance to government run internet. The biggest argument I see is that the government can compete unfairly against private

I can totally understand people’s reluctance to government run internet. The biggest argument I see is that the government can compete unfairly against private companies because they don’t have to make a profit. Usually when this debate about government run internet comes up, there’s two discrete options: the private sector ISP and the government run ISP. However, there’s an option that rarely gets mentioned: the public infrastructure + private ISP model. I used to live in middle-of-nowhere central WA, and they had fiber internet all the way back in mid 2000’s. This was a town of <20k people. Other smaller towns around the region also had access to fiber as well. Basically it worked like this: the county public utilities district was responsible for laying the fiber and connecting it to the building. Once the fiber is hooked up, you can call any one of a dozen or so ISPs to provide you with service. As a side note, because of this relationship between the ISPs and the public utilities district, some ISPs also operated point-to-point wireless networks to reach customers outside of the fiber network. The ISPs would typically place a tower with several radios at an existing customer’s site, in exchange for free service. These tower sites were usually connected directly to fiber for minimal latency. I mention this because I don’t see how these wireless networks would have been viable without a public fiber network backing them.

stjohnswarts 6y ago
"Unfairness" has to be put in context. How many people benefit by working for the cable company? How many people would benefit by universal access to fiber/internet? I think we all know the answer there.
vkou 6y ago
Why would I, as a citizen, give two figs about fair competition? All I want is good service, on the cheap. If the government can provide good service, and have zero-profit margin, that's fantastic. That's actually the best possible outcome. If the government service sucks, then their zero-profit margin should not be a significant enough competitive advantage to drive out competitors. In addition to all that, all the criticisms of the zero-profit margin model fall apart in a world where VCs and conglomerates frequently operate local services at a loss, in an effort to capture market share (So that they can later raise prices).
- mperham 6y ago
  Indeed, this is also the argument for universal healthcare.
- michaelt 6y ago
  Depends on the extent to which internet access is a fungible commodity, as opposed to different ISPs having different products. If you had a choice of 10+ ISPs you could choose between a low-low-prices ISP that sells your browsing data to marketers, has a contention ratio of 50:1, and tries to shake down Netflix for peering money; a premium ISP with a great contention ratio and good speeds for netflix and youtube; an uncensored, privacy-loving ISP; a family-friendly ISP with powerful porn-blocking options; and so on.
- icebraining 6y ago
  > If the government service sucks, then their zero-profit margin should not be a significant enough competitive advantage to drive out competitors. Except it's not just a zero-profit margin; it's the money that you pay in taxes for that municipal ISP, which you cannot decide to allocate instead to another ISP. If you want to use an alternative ISP, you have to pay both. If the public ISP doesn't actually receive tax money, then why would the government need to start it? Anyone can start a non-profit ISP. (Note: I'm not saying I'm against the idea, just arguing a specific point)
spinningslate 6y ago
> The biggest argument I see is that the government can compete unfairly against private companies because they don’t have to make a profit. I've seen this too, and my reaction is always to ask why that's unfair. The "free" market is supposed to be open to competition. Why is it "unfair" for public bodies to compete? Public bodies are, after all, funded by tax payers. Who in this case would be the recipients of the service. So we have individuals desiring of a service, funding said service through a public body. Now, the public body is not set up to pay a dividend to shareholders - instead it implicitly returns all profit to its consumers (presumably through reduced costs/better service/whatever). Why is that unfair? It's not preventing commercial entities from competing. If their business model is such that they can't do so - e.g. because of the need to pay away dividends - then that's their problem. Now: I know there's a lot more to it than that, e.g. public bodies accused of being propped up unfairly. And I know Govt in the US is treated very suspiciously by a large cohort of society. But that notwithstanding, why is it "unfair" if a community-oriented entity decides to compete with a commercial organisation?
- admax88q 6y ago
  > But that notwithstanding, why is it "unfair" if a community-oriented entity decides to compete with a commercial organisation? > Public bodies are, after all, funded by tax payers. Who in this case would be the recipients of the service. Not all tax payers are recipients of the service. The government run entity can collect revenue from all taxpayers regardless of which ones are their direct customers. That's what makes it "unfair." The private entity has to turn a profit or break even on their sales alone. The government run entity can subsidize their operation by taking funds from general tax revenue. If one entity is allowed to take always take a loss on their operations how could another entity that needs to pay their employees ever be able to compete?
  - NeutronStar 6y ago
    I'm pretty sure all your complaints about this can be legalized away.
  - vkou 6y ago

stjohnswarts 6y ago

"Unfairness" has to be put in context. How many people benefit by working for the cable company? How many people would benefit by universal access to fiber/internet? I think we all know the answer there.

vkou 6y ago

Why would I, as a citizen, give two figs about fair competition? All I want is good service, on the cheap. If the government can provide good service, and have zero-profit margin, that's fantastic. That's actually the best possible outcome. If the government service sucks, then their zero-profit margin should not be a significant enough competitive advantage to drive out competitors. In addition to all that, all the criticisms of the zero-profit margin model fall apart in a world where VCs and conglomerates frequently operate local services at a loss, in an effort to capture market share (So that they can later raise prices).

mperham 6y ago
Indeed, this is also the argument for universal healthcare.
michaelt 6y ago
Depends on the extent to which internet access is a fungible commodity, as opposed to different ISPs having different products. If you had a choice of 10+ ISPs you could choose between a low-low-prices ISP that sells your browsing data to marketers, has a contention ratio of 50:1, and tries to shake down Netflix for peering money; a premium ISP with a great contention ratio and good speeds for netflix and youtube; an uncensored, privacy-loving ISP; a family-friendly ISP with powerful porn-blocking options; and so on.
icebraining 6y ago
> If the government service sucks, then their zero-profit margin should not be a significant enough competitive advantage to drive out competitors. Except it's not just a zero-profit margin; it's the money that you pay in taxes for that municipal ISP, which you cannot decide to allocate instead to another ISP. If you want to use an alternative ISP, you have to pay both. If the public ISP doesn't actually receive tax money, then why would the government need to start it? Anyone can start a non-profit ISP. (Note: I'm not saying I'm against the idea, just arguing a specific point)

spinningslate 6y ago

> The biggest argument I see is that the government can compete unfairly against private companies because they don’t have to make a profit. I've seen this too, and my reaction is always to ask why that's unfair. The "free" market is supposed to be open to competition. Why is it "unfair" for public bodies to compete? Public bodies are, after all, funded by tax payers. Who in this case would be the recipients of the service. So we have individuals desiring of a service, funding said service through a public body. Now, the public body is not set up to pay a dividend to shareholders - instead it implicitly returns all profit to its consumers (presumably through reduced costs/better service/whatever). Why is that unfair? It's not preventing commercial entities from competing. If their business model is such that they can't do so - e.g. because of the need to pay away dividends - then that's their problem. Now: I know there's a lot more to it than that, e.g. public bodies accused of being propped up unfairly. And I know Govt in the US is treated very suspiciously by a large cohort of society. But that notwithstanding, why is it "unfair" if a community-oriented entity decides to compete with a commercial organisation?

admax88q 6y ago
> But that notwithstanding, why is it "unfair" if a community-oriented entity decides to compete with a commercial organisation? > Public bodies are, after all, funded by tax payers. Who in this case would be the recipients of the service. Not all tax payers are recipients of the service. The government run entity can collect revenue from all taxpayers regardless of which ones are their direct customers. That's what makes it "unfair." The private entity has to turn a profit or break even on their sales alone. The government run entity can subsidize their operation by taking funds from general tax revenue. If one entity is allowed to take always take a loss on their operations how could another entity that needs to pay their employees ever be able to compete?
- NeutronStar 6y ago
  I'm pretty sure all your complaints about this can be legalized away.
- vkou 6y ago