6 ms·

If there were actual competition in the ISP space anywhere in the US outside of the densest metro areas it wouldn't be possible for incumbents to exert their mo

by olefoo 14y ago

If there were actual competition in the ISP space anywhere in the US outside of the densest metro areas it wouldn't be possible for incumbents to exert their monopoly power like this. It's a drag on US economic activity, and one of the clearest examples of what institutionalized corruption looks like in America today.

beagle3 14y ago
> anywhere in the US outside of the densest metro areas NYC is as dense they come in the US. And there is no actual competition where I live.
- travisp 14y ago
  Really? NYC seems to have some great internet options. I get reliable unlimited 50Mbps down/20Mbps up, and many parts of the city can now get Verizon's 300Mbps down/65Mbps up service, if you're willing to pay extra for it (I wouldn't because it wouldn't speed up most activities and for those it would, my ISP is rarely the bottleneck).
  - beagle3 14y ago
    In my building in Union Square, I can get 30Mbps/5Mbps from TWC for a lot of money, or I can get 1.5Mbps/256Kbps DSL from verizon. I pay $50 for 15/2. I've lived in NYC since 2007, moved several times, and never had FIOS - although the last place I lived in before this one got FIOS a couple of months after I had to move.
res0nat0r 14y ago
Theres a lot of hyperbole there. Is there any evidence that building 100 megabit pipes to non dense metro areas is actually profitable exercise for ISP's right now? There is tons of groaning about slow internet access on HN and especially Reddit, but I'm not sure the majority of Americans would even opt in to this service as they might not have a need for anything more than a basic cable modem connection at $20/month.
- jemka 14y ago
  >Is there any evidence that building 100 megabit pipes to non dense metro areas is actually profitable exercise for ISP's right now? That's not at all what your parent is saying. >I'm not sure the majority of Americans would even opt in to this service as they might not have a need for anything more than a basic cable modem connection at $20/month. Lack of the option (due to few competitors) is the point, not whether or not it would be useful to a majority of Americans. Additionally, "640K is more memory than anyone will ever need" - Bill Gates
- olefoo 14y ago
  Ah yes, that would be why three national telcos sued my local electric utility when they started exploring the idea of doing a city-wide public access fiber network where any number of competing ISPs would provide transit and support but the physical cable plant would be owned by the municipality. So now ten-years later it's the same cable/telco duopoly as it is everywhere else in the US; speeds suck and are asymmetric, and we have these "bandwidth transfer caps", which wouldn't exist if the playing field were level. It's not hyperbole, if anything I'm understating the damage that has been done to the public to feed entrenched private interests.
  - subway 14y ago
    I've seen this a few times -- municipality wants to offer high speed internet, or even just a local fiber network without ip transit, and the telcos start suing. It makes me curious what would happen if a private non-profit were formed to provide the the cable plant instead of the municipality. I know of a number of local DSL providers that provide ip transit over PPPoE and ATM DSL connections, so I can't help but think they would jump at the opportunity to offer services on such a network.
    - wtallis 14y ago
      "It makes me curious what would happen if a private non-profit were formed to provide the the cable plant instead of the municipality." There would still be lawsuits, this time about how a non-profit is anti-competitive because they don't have the expense of trying to make a profit, so they undercut anyone who does try to make a profit.
larrydag 14y ago
I've always wondered how one would disrupt the ISP market. Can you only enter this market with huge capital expenditures to build out a network? Are there ancillary networks/pipelines/bandwidth that could be utilized that are not explored? It seems like Google is going down the road with using huge capital but are there other ways? Republic Wireless is the only other "similar" product to disrupt the telecom market.
- stephengillie 14y ago
  Tacoma's click! network has been giving City of Tacoma residents high speed internet for around 10 years. Seattle's about to join with their own high speed internet offering. I'm starting to think that ISPs should be government-regulated utilities just like electricity, water, sewer, etc. Isn't that how those industries were disrupted -- through regulation?
  - larrydag 14y ago
    I see you're point with govt regulated utilities but some governments have de-regulated such as Texas with electricity. I'm thinking there might be a good hybrid solution.
    - datasage 14y ago
      The biggest barrier to competition is infrastructure. Both the cost of, and getting the permitting necessary to build it. If the infrastructure is managed by a public/private entity, then any number of companies could provide service over it.
      - dsr_ 14y ago
        It's called structural separation, and was the reason why we had so many $20/month ISPs back in the days of 28.8k modems. The infrastructure business -- for electricity, water, information networks, and other similar services -- are high-capital cost very long term investments that typically require some degree of government intervention in terms of rights of use. There's no reasonable way to provide independent supply systems if your goal is 100% coverage, and the government must be allowed to dictate things like "this road can be dug up to install pipes" and "this edge must be allowed to hold wire poles" and so forth. If you want an efficient implementation, you have one big infrastructure system that all the suppliers share. The trouble usually comes when an entity gets to both maintain the infrastructure and supply services on it. That's bad. Now they have an incentive to provide better service for their customers and worse to everyone else's. For example, if you allow an ILEC (telco owning local wire systems) to provide DSL service but require them to rent space in their local wiring centers to their competitors, you will discover that the competitors' service requests are answered more slowly, accidentally ignored more often, and generally deprioritized if not actually sabotaged. The best thing a municipality, county, or state government can do to foster a robust network environment is to establish an infrastructure provider and regulate them as the monopoly that they are, forbidding them to provide the services on top of the infrastructure. Then you can get healthy competition in those services.
Spooky23 14y ago
Ars Technica had a few good articles a couple of years back discussing how the wired telco/cable networks developed. Cable companies all started as co-op type entities that eventually gobbled up the smaller players. IMO, ISPs and Telcos are natural monopolies that need to either be periodically broken up by the government, or be fully regulated like a public utility. The cost of monopoly should be external control of pricing and operating parameters.
- guard-of-terra 14y ago
  I don't see why ISPs are natural monopolies. I live in Russia and ISPs in big cities are highly competitive. When you serve high-rise apartment buildings, ethernet is a viable alternative to DSL. I don't see a technical reason why an independent ISP can't serve a few central districts of a city with fiber and ethernet as the last mile (in this case, the last few meters). I imagine in USA it's ridiculously hard to lay your own cables between apartment blocks and host a few boxes in a common utility cellar; and maybe it's also legally impossible to serve a subset of a city or even a state. But in Russia each apartment block has 2-3 ethernet ISPs offering Internet plus one DSL. These networks grew organically: they were profitable from the day one when they served one large building and they they added a few buildings a month; the industry wasn't regulated so they didn't have fixed regulation costs. Now there are some stupid regulations and the costs of starting that kind of business went up, but there are still a lot of options to choose from. So it seems that by promoting anti-market regulations dedicated to delivering predictable and quality service, you are now stuck with clumsy monopolies. So much for violating principles of capitalism. Additional beauty: Even in smaller towns or remote districts where there is no competition, the de-facto monopolist still has to look up to the "industry best practices". Of course they may still offer comparatively worse service for the money, but on some level the knowledge of "how the things should be" forces them to develop better network than they could get away with.
  - nwh 14y ago
    > When you serve high-rise apartment buildings, ethernet is a viable alternative to DSL. I don't see a technical reason why an independent ISP can't serve a few central districts of a city with fiber and ethernet as the last mile (in this case, the last few meters). That's what's happening in Australia with our national fibre network. Fibre runs to the bottom of apartment blocks, router in the basement and Ethernet to each individual apartment.

by olefoo 14y ago

beagle3 14y ago

> anywhere in the US outside of the densest metro areas NYC is as dense they come in the US. And there is no actual competition where I live.

travisp 14y ago
Really? NYC seems to have some great internet options. I get reliable unlimited 50Mbps down/20Mbps up, and many parts of the city can now get Verizon's 300Mbps down/65Mbps up service, if you're willing to pay extra for it (I wouldn't because it wouldn't speed up most activities and for those it would, my ISP is rarely the bottleneck).
- beagle3 14y ago
  In my building in Union Square, I can get 30Mbps/5Mbps from TWC for a lot of money, or I can get 1.5Mbps/256Kbps DSL from verizon. I pay $50 for 15/2. I've lived in NYC since 2007, moved several times, and never had FIOS - although the last place I lived in before this one got FIOS a couple of months after I had to move.

res0nat0r 14y ago

Theres a lot of hyperbole there. Is there any evidence that building 100 megabit pipes to non dense metro areas is actually profitable exercise for ISP's right now? There is tons of groaning about slow internet access on HN and especially Reddit, but I'm not sure the majority of Americans would even opt in to this service as they might not have a need for anything more than a basic cable modem connection at $20/month.

jemka 14y ago
>Is there any evidence that building 100 megabit pipes to non dense metro areas is actually profitable exercise for ISP's right now? That's not at all what your parent is saying. >I'm not sure the majority of Americans would even opt in to this service as they might not have a need for anything more than a basic cable modem connection at $20/month. Lack of the option (due to few competitors) is the point, not whether or not it would be useful to a majority of Americans. Additionally, "640K is more memory than anyone will ever need" - Bill Gates
olefoo 14y ago
Ah yes, that would be why three national telcos sued my local electric utility when they started exploring the idea of doing a city-wide public access fiber network where any number of competing ISPs would provide transit and support but the physical cable plant would be owned by the municipality. So now ten-years later it's the same cable/telco duopoly as it is everywhere else in the US; speeds suck and are asymmetric, and we have these "bandwidth transfer caps", which wouldn't exist if the playing field were level. It's not hyperbole, if anything I'm understating the damage that has been done to the public to feed entrenched private interests.
- subway 14y ago
  I've seen this a few times -- municipality wants to offer high speed internet, or even just a local fiber network without ip transit, and the telcos start suing. It makes me curious what would happen if a private non-profit were formed to provide the the cable plant instead of the municipality. I know of a number of local DSL providers that provide ip transit over PPPoE and ATM DSL connections, so I can't help but think they would jump at the opportunity to offer services on such a network.
  - wtallis 14y ago
    "It makes me curious what would happen if a private non-profit were formed to provide the the cable plant instead of the municipality." There would still be lawsuits, this time about how a non-profit is anti-competitive because they don't have the expense of trying to make a profit, so they undercut anyone who does try to make a profit.

larrydag 14y ago

I've always wondered how one would disrupt the ISP market. Can you only enter this market with huge capital expenditures to build out a network? Are there ancillary networks/pipelines/bandwidth that could be utilized that are not explored? It seems like Google is going down the road with using huge capital but are there other ways? Republic Wireless is the only other "similar" product to disrupt the telecom market.

stephengillie 14y ago
Tacoma's click! network has been giving City of Tacoma residents high speed internet for around 10 years. Seattle's about to join with their own high speed internet offering. I'm starting to think that ISPs should be government-regulated utilities just like electricity, water, sewer, etc. Isn't that how those industries were disrupted -- through regulation?
- larrydag 14y ago
  I see you're point with govt regulated utilities but some governments have de-regulated such as Texas with electricity. I'm thinking there might be a good hybrid solution.
  - datasage 14y ago
    The biggest barrier to competition is infrastructure. Both the cost of, and getting the permitting necessary to build it. If the infrastructure is managed by a public/private entity, then any number of companies could provide service over it.
    - dsr_ 14y ago
      It's called structural separation, and was the reason why we had so many $20/month ISPs back in the days of 28.8k modems. The infrastructure business -- for electricity, water, information networks, and other similar services -- are high-capital cost very long term investments that typically require some degree of government intervention in terms of rights of use. There's no reasonable way to provide independent supply systems if your goal is 100% coverage, and the government must be allowed to dictate things like "this road can be dug up to install pipes" and "this edge must be allowed to hold wire poles" and so forth. If you want an efficient implementation, you have one big infrastructure system that all the suppliers share. The trouble usually comes when an entity gets to both maintain the infrastructure and supply services on it. That's bad. Now they have an incentive to provide better service for their customers and worse to everyone else's. For example, if you allow an ILEC (telco owning local wire systems) to provide DSL service but require them to rent space in their local wiring centers to their competitors, you will discover that the competitors' service requests are answered more slowly, accidentally ignored more often, and generally deprioritized if not actually sabotaged. The best thing a municipality, county, or state government can do to foster a robust network environment is to establish an infrastructure provider and regulate them as the monopoly that they are, forbidding them to provide the services on top of the infrastructure. Then you can get healthy competition in those services.

Spooky23 14y ago

Ars Technica had a few good articles a couple of years back discussing how the wired telco/cable networks developed. Cable companies all started as co-op type entities that eventually gobbled up the smaller players. IMO, ISPs and Telcos are natural monopolies that need to either be periodically broken up by the government, or be fully regulated like a public utility. The cost of monopoly should be external control of pricing and operating parameters.

guard-of-terra 14y ago
I don't see why ISPs are natural monopolies. I live in Russia and ISPs in big cities are highly competitive. When you serve high-rise apartment buildings, ethernet is a viable alternative to DSL. I don't see a technical reason why an independent ISP can't serve a few central districts of a city with fiber and ethernet as the last mile (in this case, the last few meters). I imagine in USA it's ridiculously hard to lay your own cables between apartment blocks and host a few boxes in a common utility cellar; and maybe it's also legally impossible to serve a subset of a city or even a state. But in Russia each apartment block has 2-3 ethernet ISPs offering Internet plus one DSL. These networks grew organically: they were profitable from the day one when they served one large building and they they added a few buildings a month; the industry wasn't regulated so they didn't have fixed regulation costs. Now there are some stupid regulations and the costs of starting that kind of business went up, but there are still a lot of options to choose from. So it seems that by promoting anti-market regulations dedicated to delivering predictable and quality service, you are now stuck with clumsy monopolies. So much for violating principles of capitalism. Additional beauty: Even in smaller towns or remote districts where there is no competition, the de-facto monopolist still has to look up to the "industry best practices". Of course they may still offer comparatively worse service for the money, but on some level the knowledge of "how the things should be" forces them to develop better network than they could get away with.
- nwh 14y ago
  > When you serve high-rise apartment buildings, ethernet is a viable alternative to DSL. I don't see a technical reason why an independent ISP can't serve a few central districts of a city with fiber and ethernet as the last mile (in this case, the last few meters). That's what's happening in Australia with our national fibre network. Fibre runs to the bottom of apartment blocks, router in the basement and Ethernet to each individual apartment.