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The infrastructure in those other countries is considerably less expensive to set up. The US is HUGE. For a company to have nationwide coverage they need to inv

The infrastructure in those other countries is considerably less expensive to set up. The US is HUGE. For a company to have nationwide coverage they need to invest a TON in infrastructure. It's not surprising to me that our services are so much more expensive than the rest of the world. I didn't realize the difference was as big as it was though. It's surprising because even though internet/tv is sort of expensive here, it isn't at all cost prohibitive for the majority of Americans.

autarch 14y ago
That might explain high costs for some users (or subsidies, which I believe we have for rural access). It doesn't explain why these costs would be high in urban areas.
- RandallBrown 14y ago
  My ATT plan doesn't cost any different based on where I live. I guess my comcast plan might, but as far as I can tell, I saw the same deals when I lived in Michigan as I do now in Washington.
talmand 14y ago
I would agree with this except for the fact most people don't even talk about nationwide with this issue. You can look at any major metropolitan area in the US where a great deal of infrastructure is already built and the options vs price is dismal as compared to the rest of the world. Also, as the article points out, the telcos were given subsidies for years to build this infrastructure of which they did little outside of big cities. Building cool stuff in big cities is highly visible and good PR, doing it in small town USA is not quite as PR worthy. Never mind the fact that we have seen several examples of big cable doing everything they can to prevent new infrastructure from being built because they would have to compete with it. Adding insult to injury is that many times this is against small towns that big cable has written off as not worth the investment in the first place. Thankfully I think we're finally seeing a shift against this kind of thing. But even then there are still complaints over the pricing part. If an area doesn't have the infrastructure then that's fine, charge a proper fee for what they do have access to. I'm sure there are plenty of examples of people paying $30 for 10Mb service while an hour down the road people are paying $30 for 2Mb service. This is just internet though, pricing structure over cable TV is seriously screwed up but not just because of cable companies. The companies that create the content have a big hand in that fiasco as well.
jeltz 14y ago
That does not explain why Sweden and Finland have way better coverage while having lower population density. The total area should not matter, only the population density.
- flomo 14y ago
  The US has a lot of suburban sprawl, so population densities are lower in the places where people actually live. (Still I don't believe this is the real reason.) http://www.demographia.com/db-intlua-area2000.htm http://www.demographia.com/db-intlua-area2000.htm
  - jeltz 14y ago
    True, that could explain why Internet over fiber is less common, but does not explain the poor and expensive cell phone coverage. We have good coverage in most of Sweden, even where virtually nobody lives.
    - maxerickson 14y ago
      Skipping having 3-4 incompatible networks probably helped a lot (I'm not familiar with the details, but I think at one point the U.S. had Analog, GSM, CDMA and iDEN networks in widespread use). Greater regulatory uniformity also probably helps a lot. And then there are things like the New York metropolitan area having 3 times the population of Sweden, while many other states are many times the size of Sweden (so a U.S. national carrier needs to specialize in both serving much higher and much lower density than a Swedish national carrier). I'm not insisting that the wildly varying density makes the actual provision of service particularly harder, but combine it with many different regulators and no strong overall regulator and it isn't surprising things are a mess.
      - jeltz 14y ago
        Personally I believe the size has little to do with it. The other factors you mentioned are way more important. The regulation has been handled terribly in the US.
lftl 14y ago
That's a reasonable excuse for nationwide mobile services. I don't think it explains why the infrastructure cost would be very different for cable and internet in major US cities.
klausjensen 14y ago
The US is huge, but there are also a lot of people in the US. Population density (population/km2) <pre> USA 34 Sweden 23 Norway 16 Germany 229 France 114 </pre> Source: http://en.wikipedia.org/wiki/List_of_sovereign_states_and_dependent_territories_by_population_density#cite_ref-1 http://en.wikipedia.org/wiki/List_of_sovereign_states_and_de... So many countries that are far LESS densely populated than the US - and MORE densely populated - have much cheaper Internet. It does not seem to be the deciding factor.
- huxley 14y ago
  That's a problem if you're living in Wyoming but for the majority of the US population, low population density is not a factor. There are vast mostly empty areas in the US, but people congregate in highly dense cities and suburbs. Take California, it's 93.3 /km^2, New York State is 159.2 /km^2, New Jersey is 459 /km^2, and DC is 3,886 /km^2.
digikata 14y ago
The size isn't really the fundamental problem. High density areas in the US are also poorly served. My thought is that the root problem is that free markets for the service in the US aren't efficient because the players are too big and too few. Neither has the FCC regulated the market to a structure that would bring out competitive activity. Europe has more regulation to ensure portability across markets, as well as smaller regions, fundamentally divided by national boundaries. This sizing leads to smaller required capital investments, allowing more competitors and less customer lock in. Collectively this results in a more competitive market. Vs. the US where the cost of spectrum auctions alone lock-out everyone but the largest x companies. With few other competitors, it's logical for the companies to rely on open pricing signals to avoid competition on price.
mitchty 14y ago
But taking out non-cities for example, why are the prices in say New York, which definitely has the population density to support advanced high speed links so high and the connections as abysmal? It comes down to the local bureaucratic hurdles and initiatives. I really support the idea that fibre/internet links should be a utility and not a resource controlled by a single entity. Look at comcast as an example, they are ONLY auto-upgrading plans in FIOS service areas. How this isn't looked at as a severe lack of competition or fundamental problem with our oversight of them I can't entirely fathom.
- krschultz 14y ago
  Actually, I moved to NYC and my internet is significantly faster & cheaper than it was in the 'burbs. I'm on RCN.
  - mitchty 14y ago
    Cool, I've former coworkers that had less than great internet options however. One annoyance I have is with Comcast that they are only upgrading plans "for free" in FIOS areas.
  - dalke 14y ago
    RCN offers 75 Mbps for $90/month. Telia in Sweden offers (in limited markets) 250Mbps fiber for $75/month and 100 Mbps symmetric (more generally) for $60/month. That is, in a city of 50,000 people in Sweden I can get 100/100 Mbps up and down for cheaper than you can in NYC for only 75/10. So while you can get better connectivity in the city than in the suburbs, the question you should ask is why NYC is worse than many Swedish cities or, say, Singapore, where 100 Mbps is about $50/month.
pydave 14y ago
> The US is HUGE. For a company to have nationwide coverage > they need to invest a TON in infrastructure. Canada is bigger and we've had several new entrants to mobile phone business who've set up their own networks to cover the largest cities in Canada. I think the key is that they're not covering everything (they roam on other networks). Wind Mobile (my provider) regularly offers $40/mo for unlimited nationwide talk/text and 5GB/mo (throttled after the cap an no overage charge). Mobilicity has something similar, but with a $22.50 promo price. The catch is that "unlimited" means within the parts of their network: regions around the major cities in Canada. Another company could come along and do a similar scale rollout along the east or west US coasts. I think the difference is that these new operators got to buy up some spectrum back in 2008 because Industry Canada set aside 40 MHz of AWS spectrum for new entrants in an effort to bring more wireless competition to Canada (back then, our three monopoly operators had 94% of the market) [ http://www.dwpv.com/en/Resources/Publications/2009/Flash-Decision-Reached-in-Rare-Public-Hearing-Proceeding-into-the-Ownership-and-Control-of-a-Canadian-Telecommunications-Carrier http://www.dwpv.com/en/Resources/Publications/2009/Flash-Dec... ]. I recall Google bidding on some US spectrum back in 2008. Did anything ever come of that? Did anyone aside from the big networks get any spectrum? Edit: Looks like Google didn't win any spectrum. [ http://en.wikipedia.org/wiki/United_States_2008_wireless_spectrum_auction#Results_of_the_auction http://en.wikipedia.org/wiki/United_States_2008_wireless_spe... ] I'm not familiar enough with the US market to know if any of the winners are upstarts. Edit: You might also be talking about home internet. I have 25 Mbps for $33/mo (it can actually go up to 300 Mbps for $103/mo). Unlike in mobile, my provider Novus is (I believe) reselling service from one of the big networks. (The only other one I know by name is TekSavvy, but I believe there's several of them in different parts of Canada.) I'm not sure if there are similar resellers in the US. Our resellers had some legal battles to allow them to offer this service [ http://en.wikipedia.org/wiki/Usage_Based_Billing_(UBB)#Usage-based_billing_.28UBB.29 http://en.wikipedia.org/wiki/Usage_Based_Billing_(UBB)#Usage... ], so maybe the legal requirements on the network holders is also a contributing factor for increased US prices.
jellicle 14y ago
Were that the case, internet service in Manhattan/Chicago/LA would be cheap. It isn't.
Lost_BiomedE 14y ago
That is why the government gave telcos billions every year to subsidize fiber to the home roll-outs. The telcos laughed out loud while pocketing the money and transferring into overseas assets. For their terrible actions, the gov would give them more money in order to be laughed at again.

autarch 14y ago

That might explain high costs for some users (or subsidies, which I believe we have for rural access). It doesn't explain why these costs would be high in urban areas.

RandallBrown 14y ago
My ATT plan doesn't cost any different based on where I live. I guess my comcast plan might, but as far as I can tell, I saw the same deals when I lived in Michigan as I do now in Washington.

talmand 14y ago

I would agree with this except for the fact most people don't even talk about nationwide with this issue. You can look at any major metropolitan area in the US where a great deal of infrastructure is already built and the options vs price is dismal as compared to the rest of the world. Also, as the article points out, the telcos were given subsidies for years to build this infrastructure of which they did little outside of big cities. Building cool stuff in big cities is highly visible and good PR, doing it in small town USA is not quite as PR worthy. Never mind the fact that we have seen several examples of big cable doing everything they can to prevent new infrastructure from being built because they would have to compete with it. Adding insult to injury is that many times this is against small towns that big cable has written off as not worth the investment in the first place. Thankfully I think we're finally seeing a shift against this kind of thing. But even then there are still complaints over the pricing part. If an area doesn't have the infrastructure then that's fine, charge a proper fee for what they do have access to. I'm sure there are plenty of examples of people paying $30 for 10Mb service while an hour down the road people are paying $30 for 2Mb service. This is just internet though, pricing structure over cable TV is seriously screwed up but not just because of cable companies. The companies that create the content have a big hand in that fiasco as well.

jeltz 14y ago

That does not explain why Sweden and Finland have way better coverage while having lower population density. The total area should not matter, only the population density.

flomo 14y ago
The US has a lot of suburban sprawl, so population densities are lower in the places where people actually live. (Still I don't believe this is the real reason.) http://www.demographia.com/db-intlua-area2000.htm http://www.demographia.com/db-intlua-area2000.htm
- jeltz 14y ago
  True, that could explain why Internet over fiber is less common, but does not explain the poor and expensive cell phone coverage. We have good coverage in most of Sweden, even where virtually nobody lives.
  - maxerickson 14y ago
    Skipping having 3-4 incompatible networks probably helped a lot (I'm not familiar with the details, but I think at one point the U.S. had Analog, GSM, CDMA and iDEN networks in widespread use). Greater regulatory uniformity also probably helps a lot. And then there are things like the New York metropolitan area having 3 times the population of Sweden, while many other states are many times the size of Sweden (so a U.S. national carrier needs to specialize in both serving much higher and much lower density than a Swedish national carrier). I'm not insisting that the wildly varying density makes the actual provision of service particularly harder, but combine it with many different regulators and no strong overall regulator and it isn't surprising things are a mess.
    - jeltz 14y ago
      Personally I believe the size has little to do with it. The other factors you mentioned are way more important. The regulation has been handled terribly in the US.

lftl 14y ago

That's a reasonable excuse for nationwide mobile services. I don't think it explains why the infrastructure cost would be very different for cable and internet in major US cities.

klausjensen 14y ago

The US is huge, but there are also a lot of people in the US. Population density (population/km2) <pre> USA 34 Sweden 23 Norway 16 Germany 229 France 114 </pre> Source: http://en.wikipedia.org/wiki/List_of_sovereign_states_and_dependent_territories_by_population_density#cite_ref-1 http://en.wikipedia.org/wiki/List_of_sovereign_states_and_de... So many countries that are far LESS densely populated than the US - and MORE densely populated - have much cheaper Internet. It does not seem to be the deciding factor.

huxley 14y ago
That's a problem if you're living in Wyoming but for the majority of the US population, low population density is not a factor. There are vast mostly empty areas in the US, but people congregate in highly dense cities and suburbs. Take California, it's 93.3 /km^2, New York State is 159.2 /km^2, New Jersey is 459 /km^2, and DC is 3,886 /km^2.

digikata 14y ago

The size isn't really the fundamental problem. High density areas in the US are also poorly served. My thought is that the root problem is that free markets for the service in the US aren't efficient because the players are too big and too few. Neither has the FCC regulated the market to a structure that would bring out competitive activity. Europe has more regulation to ensure portability across markets, as well as smaller regions, fundamentally divided by national boundaries. This sizing leads to smaller required capital investments, allowing more competitors and less customer lock in. Collectively this results in a more competitive market. Vs. the US where the cost of spectrum auctions alone lock-out everyone but the largest x companies. With few other competitors, it's logical for the companies to rely on open pricing signals to avoid competition on price.

mitchty 14y ago

But taking out non-cities for example, why are the prices in say New York, which definitely has the population density to support advanced high speed links so high and the connections as abysmal? It comes down to the local bureaucratic hurdles and initiatives. I really support the idea that fibre/internet links should be a utility and not a resource controlled by a single entity. Look at comcast as an example, they are ONLY auto-upgrading plans in FIOS service areas. How this isn't looked at as a severe lack of competition or fundamental problem with our oversight of them I can't entirely fathom.

krschultz 14y ago
Actually, I moved to NYC and my internet is significantly faster & cheaper than it was in the 'burbs. I'm on RCN.
- mitchty 14y ago
  Cool, I've former coworkers that had less than great internet options however. One annoyance I have is with Comcast that they are only upgrading plans "for free" in FIOS areas.
- dalke 14y ago
  RCN offers 75 Mbps for $90/month. Telia in Sweden offers (in limited markets) 250Mbps fiber for $75/month and 100 Mbps symmetric (more generally) for $60/month. That is, in a city of 50,000 people in Sweden I can get 100/100 Mbps up and down for cheaper than you can in NYC for only 75/10. So while you can get better connectivity in the city than in the suburbs, the question you should ask is why NYC is worse than many Swedish cities or, say, Singapore, where 100 Mbps is about $50/month.

pydave 14y ago

> The US is HUGE. For a company to have nationwide coverage > they need to invest a TON in infrastructure. Canada is bigger and we've had several new entrants to mobile phone business who've set up their own networks to cover the largest cities in Canada. I think the key is that they're not covering everything (they roam on other networks). Wind Mobile (my provider) regularly offers $40/mo for unlimited nationwide talk/text and 5GB/mo (throttled after the cap an no overage charge). Mobilicity has something similar, but with a $22.50 promo price. The catch is that "unlimited" means within the parts of their network: regions around the major cities in Canada. Another company could come along and do a similar scale rollout along the east or west US coasts. I think the difference is that these new operators got to buy up some spectrum back in 2008 because Industry Canada set aside 40 MHz of AWS spectrum for new entrants in an effort to bring more wireless competition to Canada (back then, our three monopoly operators had 94% of the market) [ http://www.dwpv.com/en/Resources/Publications/2009/Flash-Decision-Reached-in-Rare-Public-Hearing-Proceeding-into-the-Ownership-and-Control-of-a-Canadian-Telecommunications-Carrier http://www.dwpv.com/en/Resources/Publications/2009/Flash-Dec... ]. I recall Google bidding on some US spectrum back in 2008. Did anything ever come of that? Did anyone aside from the big networks get any spectrum? Edit: Looks like Google didn't win any spectrum. [ http://en.wikipedia.org/wiki/United_States_2008_wireless_spectrum_auction#Results_of_the_auction http://en.wikipedia.org/wiki/United_States_2008_wireless_spe... ] I'm not familiar enough with the US market to know if any of the winners are upstarts. Edit: You might also be talking about home internet. I have 25 Mbps for $33/mo (it can actually go up to 300 Mbps for $103/mo). Unlike in mobile, my provider Novus is (I believe) reselling service from one of the big networks. (The only other one I know by name is TekSavvy, but I believe there's several of them in different parts of Canada.) I'm not sure if there are similar resellers in the US. Our resellers had some legal battles to allow them to offer this service [ http://en.wikipedia.org/wiki/Usage_Based_Billing_(UBB)#Usage-based_billing_.28UBB.29 http://en.wikipedia.org/wiki/Usage_Based_Billing_(UBB)#Usage... ], so maybe the legal requirements on the network holders is also a contributing factor for increased US prices.

jellicle 14y ago

Were that the case, internet service in Manhattan/Chicago/LA would be cheap. It isn't.

Lost_BiomedE 14y ago

That is why the government gave telcos billions every year to subsidize fiber to the home roll-outs. The telcos laughed out loud while pocketing the money and transferring into overseas assets. For their terrible actions, the gov would give them more money in order to be laughed at again.