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The US loves throwing poorly determined amounts of money at projects. For example: PG&E gets to effectively tax Californians an amount of money determined, ro

by amluto 3y ago

The US loves throwing poorly determined amounts of money at projects. For example: PG&E gets to effectively tax Californians an amount of money determined, roughly, as whatever they can spend times 1.1. Guess who massively overpays and who ends up kicking an enormous amount of money toward PG&E for essentially no value. The US allows medical providers to collect money on a basis that has essentially nothing to do with value delivered. Services end up very very expensive. The US kicks approximately fixed amounts of money toward broadband providers. Guess who has no incentive whatsoever to maximize the value delivered for that price? (Comcast recently quoted me approximately $27/foot to extend aerial fiber along an existing Comcast attachment, on a route with no complications whatsoever, so they can provide me (expensive) improved service. If they’re charging rates like this, then it doesn’t matter where the Federal assistance comes from: one way or another, everyone is massively overpaying.) If the FCC wants to improve broadband cost-effectively, they should either attach conditions forcing their money to be well-spent or rework their process to enforce the existence of a genuinely competitive market. Then fiber could be installed at something approximating reasonable prices, and service could be delivered over that fiber at reasonable rates.)

altacc 3y ago
I long ago came to the conclusion that utilities shouldn't be run by for-profit companies. Companies exist to maximize shareholder profit, everything else is consequential. Essential utilities (which arguably includes internet connectivity) run by companies typically lead to worse service and higher prices for customers. Even worse that most utilities are absolute or de facto monopolies, giving consumers no real choice to even pretend there's a market. This is especially bad when countries are pressured by institutions like the IMF to privatize their utilities as conditions for receiving international loans. Our current model of capitalism is failing in so many ways and the answer is not more capitalism and more ownership by companies.
- Aerroon 3y ago
  Utilities are weird anyway. A private company provides the service, but pretty much every aspect of the service is heavily regulated by the government. Isn't that basically a government-controlled company in that case? Why not just have the government handle it?
  - pyk 3y ago
    For telco at least, some countries have exactly that and unfortunately it does not run more efficiently and centralizes potential content control. Innovation comes from competition, and privatization keeps content more freely flowing. If we can solve those two while centralizing that would be amazing but maybe unrealistic with current policy.
- HPsquared 3y ago
  Internet is different to most utilities because there are so many competing delivery methods: Cellular (several networks competing here alone), wired (competition between DSL, FTTP, Cable), and the emerging satellite internet market (currently led by Starlink but plenty of room for competition as it's a global market). This compares to the power grid or water supply in a given city, which are more of a natural monopoly. (Or indeed the railway lines)
  - amluto 3y ago
    And yet the actual best way to deliver data (and TV, etc) services has been unchanged for quite some time: single-mode fiber. PON is a sort-of monopoly-requiring technology, but boring active fiber is not. Someone, e.g. the city or a nonprofit or even the homeowners, could own the fiber, and the other end goes to an exchange point, and service providers can compete to provide service at the other end. If all the ridiculous permitting and attachment rights get sorted out, single-mode fiber is cheap and straightforward to install. Take a look at any of the rural nonprofit fiber services. They’re not particularly expensive to build or operate.
- bityard 3y ago
  You're conflating capitalism with privately-held public utilities, which are very different things. I'm strongly in favor of capitalism, but deeply oppose the concept of privately-held utilities with local monopolies. No company should be able to "own the telephone poles" and have the last word on how they are used and by who. The poles, water pipes, gas pipes, sewer lines, etc, should all be owned by the municipality or county and vendors should have to compete to service and maintain them. There would be a lot of red tape, and plenty of room for corruption, but at least we wouldn't be starting from the position of, "oh, we can't have municipal broadband because that company a few states over owns all of our infrastructure."
- codexb 3y ago
  The thing is, what is a luxury to some is an “essential utility” to others. How many people really need gigabit internet? Is that “essential”? 20 years ago you might have been arguing that cable television was essential.
  - itishappy 3y ago
    I don't think many TV consumers relied on it for their income.
    - codexb 3y ago
      I mean, contractors rely on distributors like Home Depot for their income, that doesn't mean they have a right to Home Depot's in the middle of nowhere just because they want to work there.
  - altacc 3y ago
    Cable TV was never a primary method of accessing government services, banking, interactive education during the pandemic, etc... They don't need gigabit internet but for large numbers rural residents even normal 25Mbps broadband isn't available.
lesuorac 3y ago
> PG&E gets to effectively tax Californians an amount of money determined, roughly, as whatever the can spend times 1.1. Guess who massively overpays and who ends up kicking an enormous amount of money toward PG&E for essentially no value. I mean that's strictly not true. PG&E's spend has to be approved by a regulator who in the past has not approved capital expenses. > When PG&E suggested inspecting 300,000 poles a year to ensure safety in 2012, CPUC cut the total to 235,000.¹¹ In 2011 and 2012, when PG&E spent almost $100 million more on replacing poles than allowed by CPUC, the regulator took that as a reason to deny future claims for pole replacement spending. It said “PG&E demonstrated the capacity and willingness to spend more than previously authorized…to meet service obligations,” thus they would not include extra required pole replacements in the “rate base.” These sorts of decisions created exactly the wrong incentives, penalizing PG&E for doing more than was required.¹² https://ciceroinstitute.org/pge-failing-california/ https://ciceroinstitute.org/pge-failing-california/
- amluto 3y ago
  Sure, the CPUC pushes back a bit. But not nearly enough. PG&E is currently charging 4-7x the national average rate, with CPUC approval. [0] And, even if reimbursement for long-overdue safety improvement is a reasonable idea, the way they’re approaching it is absurd. As an example, there’s a technology called, variously, “rapid earth fault clearance” or a “ground fault neutralizer”. It’s a device at a station that massively reduces the amount of energy delivered into a downstream ground fault (e.g. downed power line hitting dry vegetation). California is uniquely suited to deployment of these devices because CA is the only state that bans the practice of using a neutral conductor that’s grounded along the utility poles (and thus produces a residual current even without a fault if the loads are unbalanced between the phases). The recent PG&E “rate case” in which PG&E got permission to yet again raise rates despite already being hilariously expensive gas PG&E spending ludicrous amounts of money on poles and vegetation management and installing a whopping two REFCL devices per year. For context, a fire-prone region of Australia tested these devices a few years ago by intentionally dropping a protected, energized conductor into a box of dry plants, and they didn’t catch fire. The protection worked. [0] In the state that created Tesla, it’s not actually especially economical to drive one if you live in PG&E territory. This is pathetic.
clutchdude 3y ago
The ACP was considered wildly successful though - do you have any anecdotes on the actual program?
- Althuns 3y ago
  I do. Work in a non-profit ISP in a large US city. We witnessed extreme abuse of the system from the big players. Even chatted with the FCC and whitehouse office about it. We were told to just abuse it ourselves because there was no political capital to actually fix it. My organization is fighting for funding to continue it because despite the abuse, it is very much helping folks. I personally hope it dies though. This is how we get entrenched broken systems. We need to be fighting for a real solution (Municipal ISPs) instead.
  - clutchdude 3y ago
    > , it is very much helping folks. This is the crux of it - there is no reason we can't proposition something to replace it while continuing to move forward. If you want muni ISP, it'll take a few years just to get the ducks in a row. What's your take Google Fiber's foray into ISP territory and it's associated snail pace progress/surrender?
WarOnPrivacy 3y ago
> The US loves throwing poorly determined amounts of money at projects. The use of Throwing here seems to focus ire on the existence of funding. Poorly Determined then amplifies the effect. Together, they would invite a conclusion that funding shouldn't be. The remainder hints that may not have been your intent, tho.
_fat_santa 3y ago
> (Comcast recently quoted me approximately $27/foot to extend aerial fiber along an existing Comcast attachment, on a route with no complications whatsoever, so they can provide me (expensive) improved service. If they’re charging rates like this, then it doesn’t matter where the Federal assistance comes from: one way or another, everyone is massively overpaying.) I rarely pull up my Xfinity account but I did the other day when I moved and was shocked at how bad the experience was. I counted that it took ~3 minutes of loading + redirects to get me from the login screen to my account screen, and that's on a gigabit internet connection from Xfinity! I was pissed but then I relized, they have a virtual monopoly in my region and besides paying for Starlink, there are no other options. These guys have zero incentive to make thier website better, because what are you going to do?
- codexb 3y ago
  Those monopolies are almost always the result of local governments trying to raise money by selling exclusive access to utility easements.
codexb 3y ago
I think people also need to accept that you can’t ignore basic economics. It doesn’t make a lot of sense to run fiber a hundred miles to the middle of nowhere because there’s one small town there. To me, it’s a bit like saying every town needs a Starbucks, and a Home Depot, and a target. And if the town can’t sustain the economics of those businesses, everyone else needs to pay higher prices to subsidize them, because... reasons.
- ryandrake 3y ago
  Those reasons that we sometimes should do things that don't make economic sense are called "the public good". We don't need government and regulations to do things that are aligned with economic incentives--those things do themselves in a reasonably free market. We need government for those things that don't make economic sense, but that we should do anyway because it is better for everyone. Unfortunately, the way the US and state governments tend to do these uneconomical "public good" things is: "Throw money at already-large corporations, who pocket the money and don't do the thing anyway, because there were no strings attached."
  - codexb 3y ago
    I don't think you can really argue that there is "public good" in building essential infrastructure wastefully and inefficiently. Ghosts towns and abandoned towns have always been a thing, since the dawn of civilization. They're abandoned usually precisely because it doesn't make sense to invest in infrastructure there - a railroad, a post office, a port, an electric plant. This isn't new. It's okay if cities die. The people that lived there aren't dying too. They're moving elsewhere, where they have better access to infrastructure and services. There's nothing wrong with that. And we shouldn't be wasting money to prevent it.
    - dcow 3y ago
      We’re not talking about economically inefficient ghost towns. We’re talking about large telco not being interested in building out fiber because the _profit_ wouldn’t make a blip on their spreadsheets and thus wouldn't drive the type of growth their shareholders are looking to see reflected in their company OKRs or whatever. The deal with these protected monopolies, when the public grants them, is that the receiver is required to build out infrastructure to serve all the citizens who granted them the privilege of planting poles or digging trenches all over their public property (for comfy profit) in the first place. However those incentives are at conflict with a for profit charter as you understand. We’ve done a woefully terrible job holding these companies accountable for building and investing in infrastructure even when it wouldn’t be convenient, which has been demonstrated time and again as people are raising in this thread. These telcos literally take billions in gov’t grants and sit on them saying “we tried it was too expensive, moar $$ plz”, which is complete and utter BS. If we didn't have these arrangements then sure, let a for profit company do as it pleases. Let it negotiate the land rights with individual citizens. Let it raise the initial capital privately to fund buildouts. Etc. That’s just not how we handle common good utilities.
Gormo 3y ago
> The US loves throwing poorly determined amounts of money at projects. I'd actually broaden that to say that we love to throw poorly determined sums of money at idealized end-goals. Well-defined projects, with clear strategic approaches and benchmarks of success, are often missing from the equation, and money is regularly spent on activities that are purely performative, or even counter-productive.

by amluto 3y ago

altacc 3y ago

I long ago came to the conclusion that utilities shouldn't be run by for-profit companies. Companies exist to maximize shareholder profit, everything else is consequential. Essential utilities (which arguably includes internet connectivity) run by companies typically lead to worse service and higher prices for customers. Even worse that most utilities are absolute or de facto monopolies, giving consumers no real choice to even pretend there's a market. This is especially bad when countries are pressured by institutions like the IMF to privatize their utilities as conditions for receiving international loans. Our current model of capitalism is failing in so many ways and the answer is not more capitalism and more ownership by companies.

Aerroon 3y ago
Utilities are weird anyway. A private company provides the service, but pretty much every aspect of the service is heavily regulated by the government. Isn't that basically a government-controlled company in that case? Why not just have the government handle it?
- pyk 3y ago
  For telco at least, some countries have exactly that and unfortunately it does not run more efficiently and centralizes potential content control. Innovation comes from competition, and privatization keeps content more freely flowing. If we can solve those two while centralizing that would be amazing but maybe unrealistic with current policy.
HPsquared 3y ago
Internet is different to most utilities because there are so many competing delivery methods: Cellular (several networks competing here alone), wired (competition between DSL, FTTP, Cable), and the emerging satellite internet market (currently led by Starlink but plenty of room for competition as it's a global market). This compares to the power grid or water supply in a given city, which are more of a natural monopoly. (Or indeed the railway lines)
- amluto 3y ago
  And yet the actual best way to deliver data (and TV, etc) services has been unchanged for quite some time: single-mode fiber. PON is a sort-of monopoly-requiring technology, but boring active fiber is not. Someone, e.g. the city or a nonprofit or even the homeowners, could own the fiber, and the other end goes to an exchange point, and service providers can compete to provide service at the other end. If all the ridiculous permitting and attachment rights get sorted out, single-mode fiber is cheap and straightforward to install. Take a look at any of the rural nonprofit fiber services. They’re not particularly expensive to build or operate.
bityard 3y ago
You're conflating capitalism with privately-held public utilities, which are very different things. I'm strongly in favor of capitalism, but deeply oppose the concept of privately-held utilities with local monopolies. No company should be able to "own the telephone poles" and have the last word on how they are used and by who. The poles, water pipes, gas pipes, sewer lines, etc, should all be owned by the municipality or county and vendors should have to compete to service and maintain them. There would be a lot of red tape, and plenty of room for corruption, but at least we wouldn't be starting from the position of, "oh, we can't have municipal broadband because that company a few states over owns all of our infrastructure."
codexb 3y ago
The thing is, what is a luxury to some is an “essential utility” to others. How many people really need gigabit internet? Is that “essential”? 20 years ago you might have been arguing that cable television was essential.
- itishappy 3y ago
  I don't think many TV consumers relied on it for their income.
  - codexb 3y ago
    I mean, contractors rely on distributors like Home Depot for their income, that doesn't mean they have a right to Home Depot's in the middle of nowhere just because they want to work there.
- altacc 3y ago
  Cable TV was never a primary method of accessing government services, banking, interactive education during the pandemic, etc... They don't need gigabit internet but for large numbers rural residents even normal 25Mbps broadband isn't available.

lesuorac 3y ago

> PG&E gets to effectively tax Californians an amount of money determined, roughly, as whatever the can spend times 1.1. Guess who massively overpays and who ends up kicking an enormous amount of money toward PG&E for essentially no value. I mean that's strictly not true. PG&E's spend has to be approved by a regulator who in the past has not approved capital expenses. > When PG&E suggested inspecting 300,000 poles a year to ensure safety in 2012, CPUC cut the total to 235,000.¹¹ In 2011 and 2012, when PG&E spent almost $100 million more on replacing poles than allowed by CPUC, the regulator took that as a reason to deny future claims for pole replacement spending. It said “PG&E demonstrated the capacity and willingness to spend more than previously authorized…to meet service obligations,” thus they would not include extra required pole replacements in the “rate base.” These sorts of decisions created exactly the wrong incentives, penalizing PG&E for doing more than was required.¹² https://ciceroinstitute.org/pge-failing-california/ https://ciceroinstitute.org/pge-failing-california/

amluto 3y ago
Sure, the CPUC pushes back a bit. But not nearly enough. PG&E is currently charging 4-7x the national average rate, with CPUC approval. [0] And, even if reimbursement for long-overdue safety improvement is a reasonable idea, the way they’re approaching it is absurd. As an example, there’s a technology called, variously, “rapid earth fault clearance” or a “ground fault neutralizer”. It’s a device at a station that massively reduces the amount of energy delivered into a downstream ground fault (e.g. downed power line hitting dry vegetation). California is uniquely suited to deployment of these devices because CA is the only state that bans the practice of using a neutral conductor that’s grounded along the utility poles (and thus produces a residual current even without a fault if the loads are unbalanced between the phases). The recent PG&E “rate case” in which PG&E got permission to yet again raise rates despite already being hilariously expensive gas PG&E spending ludicrous amounts of money on poles and vegetation management and installing a whopping two REFCL devices per year. For context, a fire-prone region of Australia tested these devices a few years ago by intentionally dropping a protected, energized conductor into a box of dry plants, and they didn’t catch fire. The protection worked. [0] In the state that created Tesla, it’s not actually especially economical to drive one if you live in PG&E territory. This is pathetic.

clutchdude 3y ago

The ACP was considered wildly successful though - do you have any anecdotes on the actual program?

Althuns 3y ago
I do. Work in a non-profit ISP in a large US city. We witnessed extreme abuse of the system from the big players. Even chatted with the FCC and whitehouse office about it. We were told to just abuse it ourselves because there was no political capital to actually fix it. My organization is fighting for funding to continue it because despite the abuse, it is very much helping folks. I personally hope it dies though. This is how we get entrenched broken systems. We need to be fighting for a real solution (Municipal ISPs) instead.
- clutchdude 3y ago
  > , it is very much helping folks. This is the crux of it - there is no reason we can't proposition something to replace it while continuing to move forward. If you want muni ISP, it'll take a few years just to get the ducks in a row. What's your take Google Fiber's foray into ISP territory and it's associated snail pace progress/surrender?

WarOnPrivacy 3y ago

> The US loves throwing poorly determined amounts of money at projects. The use of Throwing here seems to focus ire on the existence of funding. Poorly Determined then amplifies the effect. Together, they would invite a conclusion that funding shouldn't be. The remainder hints that may not have been your intent, tho.

_fat_santa 3y ago

> (Comcast recently quoted me approximately $27/foot to extend aerial fiber along an existing Comcast attachment, on a route with no complications whatsoever, so they can provide me (expensive) improved service. If they’re charging rates like this, then it doesn’t matter where the Federal assistance comes from: one way or another, everyone is massively overpaying.) I rarely pull up my Xfinity account but I did the other day when I moved and was shocked at how bad the experience was. I counted that it took ~3 minutes of loading + redirects to get me from the login screen to my account screen, and that's on a gigabit internet connection from Xfinity! I was pissed but then I relized, they have a virtual monopoly in my region and besides paying for Starlink, there are no other options. These guys have zero incentive to make thier website better, because what are you going to do?

codexb 3y ago
Those monopolies are almost always the result of local governments trying to raise money by selling exclusive access to utility easements.

codexb 3y ago

I think people also need to accept that you can’t ignore basic economics. It doesn’t make a lot of sense to run fiber a hundred miles to the middle of nowhere because there’s one small town there. To me, it’s a bit like saying every town needs a Starbucks, and a Home Depot, and a target. And if the town can’t sustain the economics of those businesses, everyone else needs to pay higher prices to subsidize them, because... reasons.

ryandrake 3y ago
Those reasons that we sometimes should do things that don't make economic sense are called "the public good". We don't need government and regulations to do things that are aligned with economic incentives--those things do themselves in a reasonably free market. We need government for those things that don't make economic sense, but that we should do anyway because it is better for everyone. Unfortunately, the way the US and state governments tend to do these uneconomical "public good" things is: "Throw money at already-large corporations, who pocket the money and don't do the thing anyway, because there were no strings attached."
- codexb 3y ago
  I don't think you can really argue that there is "public good" in building essential infrastructure wastefully and inefficiently. Ghosts towns and abandoned towns have always been a thing, since the dawn of civilization. They're abandoned usually precisely because it doesn't make sense to invest in infrastructure there - a railroad, a post office, a port, an electric plant. This isn't new. It's okay if cities die. The people that lived there aren't dying too. They're moving elsewhere, where they have better access to infrastructure and services. There's nothing wrong with that. And we shouldn't be wasting money to prevent it.
  - dcow 3y ago
    We’re not talking about economically inefficient ghost towns. We’re talking about large telco not being interested in building out fiber because the _profit_ wouldn’t make a blip on their spreadsheets and thus wouldn't drive the type of growth their shareholders are looking to see reflected in their company OKRs or whatever. The deal with these protected monopolies, when the public grants them, is that the receiver is required to build out infrastructure to serve all the citizens who granted them the privilege of planting poles or digging trenches all over their public property (for comfy profit) in the first place. However those incentives are at conflict with a for profit charter as you understand. We’ve done a woefully terrible job holding these companies accountable for building and investing in infrastructure even when it wouldn’t be convenient, which has been demonstrated time and again as people are raising in this thread. These telcos literally take billions in gov’t grants and sit on them saying “we tried it was too expensive, moar $$ plz”, which is complete and utter BS. If we didn't have these arrangements then sure, let a for profit company do as it pleases. Let it negotiate the land rights with individual citizens. Let it raise the initial capital privately to fund buildouts. Etc. That’s just not how we handle common good utilities.

Gormo 3y ago

> The US loves throwing poorly determined amounts of money at projects. I'd actually broaden that to say that we love to throw poorly determined sums of money at idealized end-goals. Well-defined projects, with clear strategic approaches and benchmarks of success, are often missing from the equation, and money is regularly spent on activities that are purely performative, or even counter-productive.