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Yes, but maybe the the internet rate is that low, because it is effectively being subsidized by the telephone revenue (with a hefty profit on the side of course

Yes, but maybe the the internet rate is that low, because it is effectively being subsidized by the telephone revenue (with a hefty profit on the side of course). If telcos all of a sudden started making 10 cents instead of 500 euros then they wouldn't be in business for very long, and then who would manage the network?

crusso 14y ago
You're probably correct about the subsidization, but the solution is to remove the monopolistic protections created by government regulations and infrastructure lock-in then let the telcos compete to see where that real price is.
- eli 14y ago
  Isn't loose regulation of the wireless industry the reason the US has completely incompatible CDMA and GSM networks competing with each other? IMHO the consumer would be much better off today if the government had stepped in and pushed everyone to one or the other.
  - crusso 14y ago
    Nobody really cared about CDMA vs GSM. The market decided that issue with dollars of GSM vs CDMA with a resounding "meh". I mean, look what they did with Healthcare. So many things they could have addressed, but instead foisted a huge behemoth of a law unto consumers and businesses. For all you know, they might have selected TDMA because some congress critter writing the bill had a cousin who had a factory spitting out TDMA chips. Then we all would have been stuck long-term on inferior technology because some congressperson made a political decision. Give consumers choices. Let them decide what's important to them. While it sounds nice to have some benevolent Government helping to organize us and make important decisions, that's just not the way that history has shown it works.
    - eli 14y ago
      That's my point: nobody cared about CDMA vs GSM and now we're all worse off because of it. If we had all agreed on TDMA early on that would have been a bad call, but IMHO it would still be better. All those TDMA towers simply became GSM and UMTS towers. No one makes purchasing decisions based on compatibility, but if compatibility were enforced (just as AT&T is forced to allow you to dial a Verizon number), the market would be more competitive and the service would be better.
jeremiep 14y ago
I don't know for you, but here in Canada companies like Bell, Telus, Cogeco and Videotron have very, very expensive services. Indeed telcos wouldn't be in business with lowered revenues if they keep their current business model. The thing is this model is based on deception and manipulation rather than creating great products that speaks for themselves. As for myself, I would much rather have a Telus booth that doesn't look like it's made of marble but rather sell cheap phones that just works. No salesmen with a sales quota trying to pressure me, no overpriced booth, no bullshit. Telcos only win because most people can't live without their services so they'll buy into them even knowing they get ripped off, keeping the whole thing alive.
- randomdata 14y ago
  I don't know for you, but here in Canada companies like Bell, Telus, Cogeco and Videotron have very, very expensive services. I don't know a whole lot about the big telcos, but I use a small customer-owned telco in Canada and while the prices are basically the same as the big players, the profits aren't extraordinary. In fact, just as the parent suggests, in their case, internet service is operated at a loss and is subsidized by the other services the telco provides. Perhaps the bigger operations can run their networks for less due to their larger scale and only gouge us because they can, or maybe it is just really expensive to operate telecommunication networks in Canada?
  - jeremiep 14y ago
    The thing is, in Canada all small Telcos are using the networks of the big Telcos. In Quebec City for instance, there are only two internet providers: Videotron and Bell for cable and phone line internet respectively, all the small players are just resellers for their network. Of course their profit margins are small: the big Telcos still gets most of it. Their support, however, is often incredibly better than what any big Telco could ever hope to achieve.
    - randomdata 14y ago
      That is certainly true in some places, but the telco I speak of owns the last mile copper and are working on rolling out their own fibre to the customers. There are more telcos in Canada than you might think. Ontario alone has around 20 telephone companies that are not the big players and are not just resellers of the big players infrastructure.
wmf 14y ago
The Internet used to run over telco networks, but now there are non-telco backbones (Cogent comes to mind). It's hard to understand their costs because they keep going bankrupt and then somebody buys the infrastructure for cents on the dollar. Odlyzko has written about this, although I can't find a good reference offhand.

crusso 14y ago

You're probably correct about the subsidization, but the solution is to remove the monopolistic protections created by government regulations and infrastructure lock-in then let the telcos compete to see where that real price is.

eli 14y ago
Isn't loose regulation of the wireless industry the reason the US has completely incompatible CDMA and GSM networks competing with each other? IMHO the consumer would be much better off today if the government had stepped in and pushed everyone to one or the other.
- crusso 14y ago
  Nobody really cared about CDMA vs GSM. The market decided that issue with dollars of GSM vs CDMA with a resounding "meh". I mean, look what they did with Healthcare. So many things they could have addressed, but instead foisted a huge behemoth of a law unto consumers and businesses. For all you know, they might have selected TDMA because some congress critter writing the bill had a cousin who had a factory spitting out TDMA chips. Then we all would have been stuck long-term on inferior technology because some congressperson made a political decision. Give consumers choices. Let them decide what's important to them. While it sounds nice to have some benevolent Government helping to organize us and make important decisions, that's just not the way that history has shown it works.
  - eli 14y ago
    That's my point: nobody cared about CDMA vs GSM and now we're all worse off because of it. If we had all agreed on TDMA early on that would have been a bad call, but IMHO it would still be better. All those TDMA towers simply became GSM and UMTS towers. No one makes purchasing decisions based on compatibility, but if compatibility were enforced (just as AT&T is forced to allow you to dial a Verizon number), the market would be more competitive and the service would be better.

jeremiep 14y ago

I don't know for you, but here in Canada companies like Bell, Telus, Cogeco and Videotron have very, very expensive services. Indeed telcos wouldn't be in business with lowered revenues if they keep their current business model. The thing is this model is based on deception and manipulation rather than creating great products that speaks for themselves. As for myself, I would much rather have a Telus booth that doesn't look like it's made of marble but rather sell cheap phones that just works. No salesmen with a sales quota trying to pressure me, no overpriced booth, no bullshit. Telcos only win because most people can't live without their services so they'll buy into them even knowing they get ripped off, keeping the whole thing alive.

randomdata 14y ago
I don't know for you, but here in Canada companies like Bell, Telus, Cogeco and Videotron have very, very expensive services. I don't know a whole lot about the big telcos, but I use a small customer-owned telco in Canada and while the prices are basically the same as the big players, the profits aren't extraordinary. In fact, just as the parent suggests, in their case, internet service is operated at a loss and is subsidized by the other services the telco provides. Perhaps the bigger operations can run their networks for less due to their larger scale and only gouge us because they can, or maybe it is just really expensive to operate telecommunication networks in Canada?
- jeremiep 14y ago
  The thing is, in Canada all small Telcos are using the networks of the big Telcos. In Quebec City for instance, there are only two internet providers: Videotron and Bell for cable and phone line internet respectively, all the small players are just resellers for their network. Of course their profit margins are small: the big Telcos still gets most of it. Their support, however, is often incredibly better than what any big Telco could ever hope to achieve.
  - randomdata 14y ago
    That is certainly true in some places, but the telco I speak of owns the last mile copper and are working on rolling out their own fibre to the customers. There are more telcos in Canada than you might think. Ontario alone has around 20 telephone companies that are not the big players and are not just resellers of the big players infrastructure.

wmf 14y ago

The Internet used to run over telco networks, but now there are non-telco backbones (Cogent comes to mind). It's hard to understand their costs because they keep going bankrupt and then somebody buys the infrastructure for cents on the dollar. Odlyzko has written about this, although I can't find a good reference offhand.