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I think in this case they are related. There are network effects to building the lines, so the difficulty with earning a profit prevents more companies from bui

I think in this case they are related. There are network effects to building the lines, so the difficulty with earning a profit prevents more companies from building out their network. This leads to a lack of competition (I’m sure government intervention has adversely affected this too). But an organization like a co-op or a government would built the lines with no concern for profitability, and find some scheme to lease them to users at cost. Compared to a for-profit which artificially keeps speeds low, the government or co-op would lead to better cheaper service. So broadly the pursuit of profit changes the way the organization works. The profit incentive potentially directly leads to the lack of competition. It also leads these organizations to lobby for government intervention which impedes competition. This last point is also why I would advocate for a co-op over government management, but I’d take either over for-profit networks.

parineum 3y ago
> government would built the lines with no concern for profitability >It also leads these organizations to lobby for government intervention which impedes competition The problem with both of these scenarios is the same, government corruption. Without the corruption, municipal fiber or the free market would work great. The bad guys here are the corrupt regulators, not the evil capitalists.
- SequoiaHope 3y ago
  > The bad guys here are the corrupt regulators, not the evil capitalists. Absolutely no reason to believe it must be one or the other. They are in fact working together. You propose that eliminating the government component would fix the issue, and I contend that eliminating the for-profit component would fix the issue. Both can be true. > Without the corruption, municipal fiber or the free market would work great. Entrenched networks are a well established phenomenon in relatively free markets. The cost to build a replacement for Facebook is relatively low, yet they still have a large moat due to their sizable subscriber base. In a physical system like a digital data network, the start up costs are much higher. It’s not a direct comparison to Facebook because one ISP is generally as good as any other, but generally it is difficult to compete with established companies when gaining a foothold involves a substantial investment from the outset. Finally I did directly address your main point, I’m not quite sure why we’re still at the “either government or private for-profit firms” stage of the discussion when co-ops are a viable third option: >> This last point is also why I would advocate for a co-op over government management, but I’d take either over for-profit networks.
kortilla 3y ago
>But an organization like a co-op or a government would built the lines with no concern for profitability No, they are absolutely concerned about staying in the green. Apart from the federal government, local governments have to make enough money to avoid bankruptcy. Co-ops are even more constrained. This makes them even less likely to invest in risky cutting edge technology or anything approaching R&D. The only place these works are well established technologies. We’ve hit the point in the last decade where fiber is pretty well understood and future proof, so it now is low risk to lay a bunch of it and relatively cheap to upgrade endpoints as needed. Make no mistake though, the only reason fiber has reached the commoditization point is because of a bunch of very profit driven networking gear manufactures dethroning each other over who can pack the most bits over wavelength.

parineum 3y ago

> government would built the lines with no concern for profitability >It also leads these organizations to lobby for government intervention which impedes competition The problem with both of these scenarios is the same, government corruption. Without the corruption, municipal fiber or the free market would work great. The bad guys here are the corrupt regulators, not the evil capitalists.

SequoiaHope 3y ago
> The bad guys here are the corrupt regulators, not the evil capitalists. Absolutely no reason to believe it must be one or the other. They are in fact working together. You propose that eliminating the government component would fix the issue, and I contend that eliminating the for-profit component would fix the issue. Both can be true. > Without the corruption, municipal fiber or the free market would work great. Entrenched networks are a well established phenomenon in relatively free markets. The cost to build a replacement for Facebook is relatively low, yet they still have a large moat due to their sizable subscriber base. In a physical system like a digital data network, the start up costs are much higher. It’s not a direct comparison to Facebook because one ISP is generally as good as any other, but generally it is difficult to compete with established companies when gaining a foothold involves a substantial investment from the outset. Finally I did directly address your main point, I’m not quite sure why we’re still at the “either government or private for-profit firms” stage of the discussion when co-ops are a viable third option: >> This last point is also why I would advocate for a co-op over government management, but I’d take either over for-profit networks.

kortilla 3y ago

>But an organization like a co-op or a government would built the lines with no concern for profitability No, they are absolutely concerned about staying in the green. Apart from the federal government, local governments have to make enough money to avoid bankruptcy. Co-ops are even more constrained. This makes them even less likely to invest in risky cutting edge technology or anything approaching R&D. The only place these works are well established technologies. We’ve hit the point in the last decade where fiber is pretty well understood and future proof, so it now is low risk to lay a bunch of it and relatively cheap to upgrade endpoints as needed. Make no mistake though, the only reason fiber has reached the commoditization point is because of a bunch of very profit driven networking gear manufactures dethroning each other over who can pack the most bits over wavelength.