11 ms·

Why is broadband more expensive in the US?

57 points by a_w 13y ago

shirro 13y ago
I would rather be in Kansas than Oz. I was only a couple of years from FTTH before the luddites got elected.
- manicdee 13y ago
  Yup. I came here to point and laugh at the Yanks crying about their Internet being expensive. They live in a capitalist country, and complain when they find out that Karl was right.
- quink 13y ago
  But VDSL2 is cheaper AND can be done sooner, is what the review near enough headed by the incumbent telco, Telstra, will say. And that's all that matters. Even if it does cost more simply within ten years because of the difference in maintenance.
nazgulnarsil 13y ago
tl;dr Supply limits due to high barriers to entry due to regulatory capture by ISPs.
- deleted 13y ago
  [deleted]
skittles 13y ago
UK is smaller than Oregon. Oregon has a population of 3.9 million. UK has a population of 63.2 million. It is cheaper to get Internet to concentrations of people (more income per line).
- notauser 13y ago
  Why are people in NYC and San Fransisco subsidising people in Oregon? Shouldn't both of those cities have comparable prices to London, whereas Oregon should be $200+ per line to cover the cost of the long distances between homes?
- hdevalence 13y ago
  Sure, but the density of, say, NYC, Chicago, or SF, is pretty high. If density were the only factor, parts of the US would rank much more highly than they do now, would they not?
  - FireBringer 13y ago
    American Fiber is a corperate venture and doing work in the large cities can be expensive (especially New York) so maybe that has something to do with it.
    - oblio 13y ago
      I'm guessing doing stuff in London is pretty expensive too, so I doubt that reason is valid.
- nubbie 13y ago
  Yeah, Australians have it rough. ADSL2 here costs anywhere between $40-$100, those living a little further from the exchanges get speeds as low as 1.5mbps, and this is in Sydney. I can't imagine what it's like in country Australia. It's a real shame our government decided it's a good idea to CUT investment on broadband.
  - deevus 13y ago
    I was wondering where Australia was in the article graphs. Speed: crap. Price: stupid.
  - velodrome 13y ago
    Don't forget the ridiculously low bandwidth caps.
- itafroma 13y ago
  > UK is smaller than Oregon. Oregon has a population of 3.9 million. UK has a population of 63.2 million. It is cheaper to get Internet to concentrations of people (more income per line). That's a bit misleading: 70% of Oregon's population is concentrated in the Willamette Valley, an area 1/5th the size of England and with a higher population density than Scotland. The US population is not evenly distributed: most of the population concentrates in very dense urban/suburban areas whereas most of the area (particularly in the west) is sparsely populated.[1] [1]: https://en.wikipedia.org/wiki/File:USA-2000-population-density.gif https://en.wikipedia.org/wiki/File:USA-2000-population-densi...
- skrause 13y ago
  Oregon has roughly the same population density as Sweden, which has some of the fastest and cheapest broadband connections available.
- bencoder 13y ago
  The UK isn't the only country with cheap broadband. Most of the US has a population density[0] higher than Finland(16/km^2) or Sweden(20/km^2), yet they also have low cost, high speed broadband(faster than the UK). So I think this argument is misleading [0] http://en.wikipedia.org/wiki/List_of_U.S._states_by_population_density http://en.wikipedia.org/wiki/List_of_U.S._states_by_populati...
p1mrx 13y ago
South Korea may be inexpensive, but they're among the worst in the world when it comes to IPv6 deployment (0.00%, versus 4% in the United States): http://www.google.com/intl/en/ipv6/statistics.html#tab=per-country-ipv6-adoption http://www.google.com/intl/en/ipv6/statistics.html#tab=per-c...
- quink 13y ago
  I cannot possibly think of what actual relevance there is in that. Not least of all because if I don't have IPv6, there's plenty of ways to do that, even from the end-user perspective, with no support from your ISP, no capital expenditure and no great ongoing cost, if any at all. Now let me know how I can get let's say 100 Mbps upload speeds as easily as hooking into IPv6 assuming I have 1 Mbps at the moment.
  - p1mrx 13y ago
    The Internet is an IPv4/IPv6 dual-stack network. When the topic is Internet access, IPv6 is relevant by definition. The fact that Korea has shown no interest in following the IETF standard suggests that they're willing to balkanize the network. High-speed broadband will become meaningless if you have to jump through hoops to reach the Internet.
    - sliverstorm 13y ago
      IPv6 is relevant to technical aspects, but speed & price really doesn't have anything to do with which protocol you use. The pipes are laid, the companies are established. Some network hardware might need replacement, but they are way ahead in terms of fixed costs and organizational structure. Personally, I expect the day IPv6 starts to actually matter, it will be adopted by holdouts like SK. But for now? At least for me, IPv6 is slower!
    - quink 13y ago
      Or maybe South Korea, being a rich country and all, has 2.3 IPv4 addresses per capita available, likely to be enough for a while yet, and there's always the possibility to buy more. http://en.wikipedia.org/wiki/List_of_countries_by_IPv4_address_allocation http://en.wikipedia.org/wiki/List_of_countries_by_IPv4_addre... And it has a very domestically oriented Internet. If IPv6 really matters, and there's hardly going to be much one can access via IPv6 but not IPv4 for a while yet, I can tunnel through and get IPv6 somewhere and vice versa. I can't tunnel myself a 100 Mbps upload speed when I only have 1 Mbps. And all that's assuming that South Korea isn't doing IPv6 at all. Maybe they just haven't got as much of an incentive compared to, let's say, China with 0.25 IPv4 addresses per capita.
ams6110 13y ago
I pay $80/month for internet + basic TV from comcast. It's just BARELY worth it for me; I've been tempted more than once to cancel it but haven't. There's no other choice for me, other than satellite which is far more expensive.
- xur17 13y ago
  Are you in a location where an antenna would work? I have one set up for watching locally aired TV shows and local sports now and then. Most of my viewing has shifted to Netflix / Hulu, so this works great for me. If you aren't a huge sports fan, it's worth a shot, and OTA channels are 720p or 1080i, and uncompressed.
  - newman314 13y ago
    It doesn't change the fact that you pretty much need cable for internet access of any decent speed.
    - mindslight 13y ago
      At least for the first few seconds while you're in "turbo boost" before the throttling starts. And of course if you actually use this bandwidth for any length of time, you'll run over your quota and they'll extort you or cancel your service anyway. More than anything, I blame the poor ISP market in the US on this exact attitude that nothing besides cable is sufficient. Infrastructure is just not at the point where we have the class of connection you're trying to take for granted, and continually choosing only the absolute fastest provider while whining about their policies and prices is being willfully out of touch with the realities of current technology. $55/mo will get you 12M/1M ADSL2+ from an ISP like Sonic.net, which is owned by a real person who even makes crazy statements like "We delete user logs after two weeks. Your Internet provider should, too". You can double that by easily bonding two lines, and/or enable Annex M for increased upload bandwidth. And they aren't particularly concerned with how much traffic you generate, either. While these nameplate speeds are a bit slower than what you're used to seeing in cable companies' large print, keep in mind that 12Mb/sec will let you download 100GB/day, and 5Mb/sec (dual Annex M) will let you upload 42GB/day. When you compare these numbers to the usage caps and expectations of cable companies, you can see they're mostly selling an illusion.
firemanx 13y ago
I live in central WA and pay $80 for 100mb symmetric. We have local public utility districts in the central counties of the state that are all interconnected by local fiber optic networks. It's pushed the price of internet access way, way down.
- spoon16 13y ago
  Can you shoot me an email at eric@spoon16.com. I'd like to learn about the type of work you are doing in Central WA.
loser777 13y ago
As a college student it's hilarious how big the discrepancy is between residential on-campus broadband and off-campus housing "broadband". While in the dorms, I measured around 600mbps down/200mbps up (this service didn't seem to add any considerable amount to housing cost). I now live the same distance from my classes/buildings, but technically off-campus and pay $53 a month for 5mbps down/768k up DSL. Usually I would have the slightly better (but still terrible option) of 20mbps down cable, but another cable provider has a monopoly on my apartment building. I stick to DSL because that's actually the better option, believe it or not. This isn't even in some remote area of the US or something like that. (Westwood, Los Angeles, California.)
- sliverstorm 13y ago
  this service didn't seem to add any considerable amount to housing cost It's rolled into tuition. The dorm access is basically a hangers-on to the typical University model, wherein the school acts as its own ISP with a direct tap into the infrastructure.
  - quink 13y ago
    It's funny because fibre is near enough cheaper to maintain and run than copper is these days. It's just that the copper is already there and the telco that'll say 'go capex blast-off' when you're not going to pay them thousands of dollars in some way or another is a rare telco indeed.
SwellJoe 13y ago
I didn't need to read this article to know why. I watched it happen. My first company sold web caching proxy hardware and software support (all Open Source based on Squid). 95% of my customers for the first several years of operation were independent ISPs. I had maybe 200 of them as customers in the 7 years the company existed, many became friends. When "deregulation" took place in the telephone, cable, and broadband market...at the beginning of the DSL/cable Internet revolution, the last mile became impossible to bridge for ISPs without an agreement with either a telco or cable operator (before that modems could call across the country without any explicit involvement of the telco...though higher speed modems did require data center presence at the telco level). The government required telcos and cable operators to resell the last mile to independent service providers at a fair rate; they were supposed to charge the same thing it cost them to provide the service to their own broadband divisions. So, independent ISPs were offered a DSL link to their customer for, say, $23.50 per month, which is what the telco says it costs them to build/maintain that DSL link and make a modest profit. Great, right? Problem is, whenever ISPs tried to setup a DSL link, the telco would drag their feet. They would take months to deploy service for an independent, or claim they didn't have the hardware in place for that customer, or screw up the installation several times. But, that was just the beginning. The telcos would also send out mailers to those very same customers, offering DSL internet at special introductory prices...$19.95/month, for instance. Yeah, cheaper than the base cost for the line they're charging independents (which doesn't include all the other stuff an ISP has to provide). And, despite having told those customers they couldn't get DSL or having experienced months of delays, the moment the customer called up the telco, DSL would be up and running within a couple of days. I'd been hearing about it from my customers, and then I had it happen to me. I tried two different independents...they worked hard to get me service, and finally gave up, apologizing for the inability to deliver. After 6 months of delays, I received one of those mailers from the telco. I called the telco, and had DSL a few days later. Same circuit they'd refused to install service on as recently as a month before. When I started my first company, there were thousands of independent ISPs. Some of them were really good. Some of them were really successful. Most of them died during the switch to broadband. It wasn't an accident. They were killed off by the old monopolies, and our regulators were complicit in the process. I'm not arguing for more regulation, really, but when the only way to get to your customer is through a state-enforced monopoly, the state better do their damned job. Or, we end up with the mess we have today: Among the worst Internet service at the highest prices in the modern world. How is that allowed to happen in the nation that invented the Internet? All the arguments about distance and density are moot when talking about major cities; San Francisco is very dense. There's not reason for broadband to cost $99 for reasonable speeds, when it costs a third that for more bandwidth in a couple dozen other nations, including places that are less dense. This process didn't kill my company directly (I was able to pivot successfully to serving enterprise, education, and government customers, and I had my best year the last year it was in operation), but it made it so un-fun that I didn't want to do it anymore. The kind of people I wanted to work with were no longer in the business. The smart ones sold out to bigger companies, the stubborn ones clung desperately to their dialup business or spent all their money trying to go to WiMax and bypass the telcos. Almost none of them survived as independent ISPs. Some of the bigger ones brought lawsuits against the telcos. I don't know what became of them, but the companies that did it are mostly gone, so I guess we know how it turned out.
maratd 13y ago
The problem isn't density, as some have mentioned. It's structure. In the US, the pipes are owned by the providers. Those pipes were built out with subsidized funding or exclusive contract guarantees. In other words, it becomes very difficult for a competitor to come in and build pipes, because their competition already got the leg up. A better structure would be where all the pipes are public property and the town hires outside firms to upgrade/maintain them. Much like roads. Providers pay a fee to the town for access to them and for usage. An unlimited number of providers can enter the market. Users pay the providers. Competition between providers reduces prices. P.S. NYC is somewhat moving toward this with their WiFi project.
nostromo 13y ago
A friend and I once decided to look into how much it costs to lease the communications space on public utility poles. This is the space well below the power lines that the cable and telephone companies lease from your local government. Read more here: http://www.annsgarden.com/poles/poles.htm http://www.annsgarden.com/poles/poles.htm Truth is, almost nobody at the local level has any idea how one could go about doing this. Even though they are publicly owned poles and communications companies pay rent to use them, the cities have no mechanism on how to actually rent pole space to any company other than the phone company and the cable company. I think we could see a resurgence of local ISPs and even metropolitan area networks if city governments would take up this one issue -- open up the utility polls to more companies and publish the rental rates for the poles. As a bonus, they could even earn more tax proceeds.
- afuchs 13y ago
  Aren't most utility poles and conduits owned by the utility companies? Look up "poll attachment."
  - nostromo 13y ago
    In my location the city owns the utility. If you have a private utility like PG&E or ConEd, I'm not sure.
BIair 13y ago
Weird, neither the article or the comments seemed to answer the question, "Why is broadband more expensive in the US?"
raverbashing 13y ago
Well, here's the thing The BS with the last mile happens in Germany and France as well. Maybe not as worse, but to get Telekom (the public company of Germany) to set up the last mile for some other company takes around 1 or 2 months. Now let's evaluate what may be the issue with price/speeds: - People outside of US/Canada use less bandwidth heavy services, because of piracy laws - Bigger countries demand more infrastructure (and if you have countryside places with high cost/low speed this skews the average) Now, pay 99 a month for broadband in SF? Ridiculous
- quink 13y ago
  Ah, you think Germany is bad? In Australia we have the choice of Telstra for phone. Well, in Germany Deutsche Telekom used to run HFC as well, until they were forced to sell it off by the EU back when they were privatised. That didn't happen in Australia. And so we have the choice of Telstra for HFC as well. There's another HFC network that was built by Optus, with the anticipation of Telstra overbuilding about 22% of it. Telstra overbuilt to a level of 80% dual coverage. So that's pretty much killed Optus' HFC network, which is about to shut down, NBN or no NBN, quite soon. No wonder then, given all that, that last time we moved it took about 5 weeks just to get the phone line in. In fact, it's a shitfest every single time anyone moves in Australia. And the newly elected Coalition's thing is not likely to be going to fix this, at all.
spikels 13y ago
A: Because our government prevents competition by granting monopolies in exchange for revenue and political support.
joshuaheard 13y ago
I live in Paris and have a basic bundle with Orange, the main telco in France. I pay over 60 euros a month (about $90). This is the same as the American average according to the article. I don't know where you can get a bundle in France for 35 euros (about $25). I think the numbers are skewed by their use of a purchasing power multiplier. Everything costs more in Paris, so the price of broadband is relatively less compared to places with a lower cost of living. However, based on my experience, the broadband prices are the same, which is what you would expect to see.
- rtpg 13y ago
  ...what? a package deal from SFR/Free/whoever is 30 euros a month. Also $35 is 25 euros http://www.free.fr/adsl/freebox-revolution.html http://www.free.fr/adsl/freebox-revolution.html 30 euros a month bundle.
  - Udo 13y ago
    > Also $35 is 25 euros Not really if you consider VAT and generally higher prices. If you compare a random US city with pretty much any place in the northern EU, $ and € are exactly equivalent.
liongeek 13y ago
Why doesn't romania appear in the list? Here we have 50mbps at $9 100mbps at $12 500mbps at $15 1gbps at $18 I think these are the best rates in the world, right?
mathieu45 13y ago
I think the basic problem is the structure of the industry and the kind of people who are in it. In USA, by and large the telco business is a mafia business. That is what is fundamental is control of the territory. This is clear when a state is divided into two parts: one for Verizon and one for ATT. It is clear when one reason given is the costs of "right of way" that needs to be paid to the city: it is a deal between mafia groups. Simply think about it: if you are interested in high tech, where do you go in the USA? Certainly not to the telco. Now ask the same question in France, where do you go? Maybe in telco. The reason is that some countries like France, South Korea, Germany, etc. did not have a big tech sector. Also very little start up culture. But they understood the importance of the tech sector and they did what they could to unblock it by breaking the local mafia. So, the end result is low cost internet. It did only marginally help the creation of a tech sector, but that is what they could do.
a3n 13y ago
Because, in general, this supposed consumer's paradise is actually a corporate paradise. "Consumers" aren't the driver, corporations are, and consumers are only "protected" in the sense that cattle are protected. Why else would drugs be prohibitively expensive in the US, and the exact same drug be an almost insignificant cost to patients right next door in Canada? You might say that pharmaceutical companies need to recoup their development cost. That might even be true. But they're doing it by charging the US consumers more than other countries. Why else would SIM cards and healthy competition not be the norm in the US cell phone market? I'd love to take the phones out of my sock drawer and use them, instead of buying a new phone when I switch carriers. As for broadband, fundamentally they charge so much because they can. Very little competition, usually the only game in town (Comcast has the cable option in my area, with DSL available here and there.) And Congress never met a bribe they didn't like. "US consumers are our most important resource."
- antihero 13y ago
  The "free market" is only as free as the consumer.
rogerthis 13y ago
Have you seen the price of broadband in Brazil?
Philadelphia 13y ago
I'm more curious about the difference in the cost of men's haircuts and loaves of bread that they mention in the opening...

57 points by a_w 13y ago

shirro 13y ago

I would rather be in Kansas than Oz. I was only a couple of years from FTTH before the luddites got elected.

manicdee 13y ago
Yup. I came here to point and laugh at the Yanks crying about their Internet being expensive. They live in a capitalist country, and complain when they find out that Karl was right.
quink 13y ago
But VDSL2 is cheaper AND can be done sooner, is what the review near enough headed by the incumbent telco, Telstra, will say. And that's all that matters. Even if it does cost more simply within ten years because of the difference in maintenance.

nazgulnarsil 13y ago

tl;dr Supply limits due to high barriers to entry due to regulatory capture by ISPs.

deleted 13y ago
[deleted]

skittles 13y ago

UK is smaller than Oregon. Oregon has a population of 3.9 million. UK has a population of 63.2 million. It is cheaper to get Internet to concentrations of people (more income per line).

notauser 13y ago
Why are people in NYC and San Fransisco subsidising people in Oregon? Shouldn't both of those cities have comparable prices to London, whereas Oregon should be $200+ per line to cover the cost of the long distances between homes?
hdevalence 13y ago
Sure, but the density of, say, NYC, Chicago, or SF, is pretty high. If density were the only factor, parts of the US would rank much more highly than they do now, would they not?
- FireBringer 13y ago
  American Fiber is a corperate venture and doing work in the large cities can be expensive (especially New York) so maybe that has something to do with it.
  - oblio 13y ago
    I'm guessing doing stuff in London is pretty expensive too, so I doubt that reason is valid.
nubbie 13y ago
Yeah, Australians have it rough. ADSL2 here costs anywhere between $40-$100, those living a little further from the exchanges get speeds as low as 1.5mbps, and this is in Sydney. I can't imagine what it's like in country Australia. It's a real shame our government decided it's a good idea to CUT investment on broadband.
- deevus 13y ago
  I was wondering where Australia was in the article graphs. Speed: crap. Price: stupid.
- velodrome 13y ago
  Don't forget the ridiculously low bandwidth caps.
itafroma 13y ago
> UK is smaller than Oregon. Oregon has a population of 3.9 million. UK has a population of 63.2 million. It is cheaper to get Internet to concentrations of people (more income per line). That's a bit misleading: 70% of Oregon's population is concentrated in the Willamette Valley, an area 1/5th the size of England and with a higher population density than Scotland. The US population is not evenly distributed: most of the population concentrates in very dense urban/suburban areas whereas most of the area (particularly in the west) is sparsely populated.[1] [1]: https://en.wikipedia.org/wiki/File:USA-2000-population-density.gif https://en.wikipedia.org/wiki/File:USA-2000-population-densi...
skrause 13y ago
Oregon has roughly the same population density as Sweden, which has some of the fastest and cheapest broadband connections available.
bencoder 13y ago
The UK isn't the only country with cheap broadband. Most of the US has a population density[0] higher than Finland(16/km^2) or Sweden(20/km^2), yet they also have low cost, high speed broadband(faster than the UK). So I think this argument is misleading [0] http://en.wikipedia.org/wiki/List_of_U.S._states_by_population_density http://en.wikipedia.org/wiki/List_of_U.S._states_by_populati...

p1mrx 13y ago

South Korea may be inexpensive, but they're among the worst in the world when it comes to IPv6 deployment (0.00%, versus 4% in the United States): http://www.google.com/intl/en/ipv6/statistics.html#tab=per-country-ipv6-adoption http://www.google.com/intl/en/ipv6/statistics.html#tab=per-c...

quink 13y ago
I cannot possibly think of what actual relevance there is in that. Not least of all because if I don't have IPv6, there's plenty of ways to do that, even from the end-user perspective, with no support from your ISP, no capital expenditure and no great ongoing cost, if any at all. Now let me know how I can get let's say 100 Mbps upload speeds as easily as hooking into IPv6 assuming I have 1 Mbps at the moment.
- p1mrx 13y ago
  The Internet is an IPv4/IPv6 dual-stack network. When the topic is Internet access, IPv6 is relevant by definition. The fact that Korea has shown no interest in following the IETF standard suggests that they're willing to balkanize the network. High-speed broadband will become meaningless if you have to jump through hoops to reach the Internet.
  - sliverstorm 13y ago
    IPv6 is relevant to technical aspects, but speed & price really doesn't have anything to do with which protocol you use. The pipes are laid, the companies are established. Some network hardware might need replacement, but they are way ahead in terms of fixed costs and organizational structure. Personally, I expect the day IPv6 starts to actually matter, it will be adopted by holdouts like SK. But for now? At least for me, IPv6 is slower!
  - quink 13y ago
    Or maybe South Korea, being a rich country and all, has 2.3 IPv4 addresses per capita available, likely to be enough for a while yet, and there's always the possibility to buy more. http://en.wikipedia.org/wiki/List_of_countries_by_IPv4_address_allocation http://en.wikipedia.org/wiki/List_of_countries_by_IPv4_addre... And it has a very domestically oriented Internet. If IPv6 really matters, and there's hardly going to be much one can access via IPv6 but not IPv4 for a while yet, I can tunnel through and get IPv6 somewhere and vice versa. I can't tunnel myself a 100 Mbps upload speed when I only have 1 Mbps. And all that's assuming that South Korea isn't doing IPv6 at all. Maybe they just haven't got as much of an incentive compared to, let's say, China with 0.25 IPv4 addresses per capita.

ams6110 13y ago

I pay $80/month for internet + basic TV from comcast. It's just BARELY worth it for me; I've been tempted more than once to cancel it but haven't. There's no other choice for me, other than satellite which is far more expensive.

xur17 13y ago
Are you in a location where an antenna would work? I have one set up for watching locally aired TV shows and local sports now and then. Most of my viewing has shifted to Netflix / Hulu, so this works great for me. If you aren't a huge sports fan, it's worth a shot, and OTA channels are 720p or 1080i, and uncompressed.
- newman314 13y ago
  It doesn't change the fact that you pretty much need cable for internet access of any decent speed.
  - mindslight 13y ago
    At least for the first few seconds while you're in "turbo boost" before the throttling starts. And of course if you actually use this bandwidth for any length of time, you'll run over your quota and they'll extort you or cancel your service anyway. More than anything, I blame the poor ISP market in the US on this exact attitude that nothing besides cable is sufficient. Infrastructure is just not at the point where we have the class of connection you're trying to take for granted, and continually choosing only the absolute fastest provider while whining about their policies and prices is being willfully out of touch with the realities of current technology. $55/mo will get you 12M/1M ADSL2+ from an ISP like Sonic.net, which is owned by a real person who even makes crazy statements like "We delete user logs after two weeks. Your Internet provider should, too". You can double that by easily bonding two lines, and/or enable Annex M for increased upload bandwidth. And they aren't particularly concerned with how much traffic you generate, either. While these nameplate speeds are a bit slower than what you're used to seeing in cable companies' large print, keep in mind that 12Mb/sec will let you download 100GB/day, and 5Mb/sec (dual Annex M) will let you upload 42GB/day. When you compare these numbers to the usage caps and expectations of cable companies, you can see they're mostly selling an illusion.

firemanx 13y ago

I live in central WA and pay $80 for 100mb symmetric. We have local public utility districts in the central counties of the state that are all interconnected by local fiber optic networks. It's pushed the price of internet access way, way down.

spoon16 13y ago
Can you shoot me an email at eric@spoon16.com. I'd like to learn about the type of work you are doing in Central WA.

loser777 13y ago

As a college student it's hilarious how big the discrepancy is between residential on-campus broadband and off-campus housing "broadband". While in the dorms, I measured around 600mbps down/200mbps up (this service didn't seem to add any considerable amount to housing cost). I now live the same distance from my classes/buildings, but technically off-campus and pay $53 a month for 5mbps down/768k up DSL. Usually I would have the slightly better (but still terrible option) of 20mbps down cable, but another cable provider has a monopoly on my apartment building. I stick to DSL because that's actually the better option, believe it or not. This isn't even in some remote area of the US or something like that. (Westwood, Los Angeles, California.)

sliverstorm 13y ago
this service didn't seem to add any considerable amount to housing cost It's rolled into tuition. The dorm access is basically a hangers-on to the typical University model, wherein the school acts as its own ISP with a direct tap into the infrastructure.
- quink 13y ago
  It's funny because fibre is near enough cheaper to maintain and run than copper is these days. It's just that the copper is already there and the telco that'll say 'go capex blast-off' when you're not going to pay them thousands of dollars in some way or another is a rare telco indeed.

SwellJoe 13y ago

I didn't need to read this article to know why. I watched it happen. My first company sold web caching proxy hardware and software support (all Open Source based on Squid). 95% of my customers for the first several years of operation were independent ISPs. I had maybe 200 of them as customers in the 7 years the company existed, many became friends. When "deregulation" took place in the telephone, cable, and broadband market...at the beginning of the DSL/cable Internet revolution, the last mile became impossible to bridge for ISPs without an agreement with either a telco or cable operator (before that modems could call across the country without any explicit involvement of the telco...though higher speed modems did require data center presence at the telco level). The government required telcos and cable operators to resell the last mile to independent service providers at a fair rate; they were supposed to charge the same thing it cost them to provide the service to their own broadband divisions. So, independent ISPs were offered a DSL link to their customer for, say, $23.50 per month, which is what the telco says it costs them to build/maintain that DSL link and make a modest profit. Great, right? Problem is, whenever ISPs tried to setup a DSL link, the telco would drag their feet. They would take months to deploy service for an independent, or claim they didn't have the hardware in place for that customer, or screw up the installation several times. But, that was just the beginning. The telcos would also send out mailers to those very same customers, offering DSL internet at special introductory prices...$19.95/month, for instance. Yeah, cheaper than the base cost for the line they're charging independents (which doesn't include all the other stuff an ISP has to provide). And, despite having told those customers they couldn't get DSL or having experienced months of delays, the moment the customer called up the telco, DSL would be up and running within a couple of days. I'd been hearing about it from my customers, and then I had it happen to me. I tried two different independents...they worked hard to get me service, and finally gave up, apologizing for the inability to deliver. After 6 months of delays, I received one of those mailers from the telco. I called the telco, and had DSL a few days later. Same circuit they'd refused to install service on as recently as a month before. When I started my first company, there were thousands of independent ISPs. Some of them were really good. Some of them were really successful. Most of them died during the switch to broadband. It wasn't an accident. They were killed off by the old monopolies, and our regulators were complicit in the process. I'm not arguing for more regulation, really, but when the only way to get to your customer is through a state-enforced monopoly, the state better do their damned job. Or, we end up with the mess we have today: Among the worst Internet service at the highest prices in the modern world. How is that allowed to happen in the nation that invented the Internet? All the arguments about distance and density are moot when talking about major cities; San Francisco is very dense. There's not reason for broadband to cost $99 for reasonable speeds, when it costs a third that for more bandwidth in a couple dozen other nations, including places that are less dense. This process didn't kill my company directly (I was able to pivot successfully to serving enterprise, education, and government customers, and I had my best year the last year it was in operation), but it made it so un-fun that I didn't want to do it anymore. The kind of people I wanted to work with were no longer in the business. The smart ones sold out to bigger companies, the stubborn ones clung desperately to their dialup business or spent all their money trying to go to WiMax and bypass the telcos. Almost none of them survived as independent ISPs. Some of the bigger ones brought lawsuits against the telcos. I don't know what became of them, but the companies that did it are mostly gone, so I guess we know how it turned out.

maratd 13y ago

The problem isn't density, as some have mentioned. It's structure. In the US, the pipes are owned by the providers. Those pipes were built out with subsidized funding or exclusive contract guarantees. In other words, it becomes very difficult for a competitor to come in and build pipes, because their competition already got the leg up. A better structure would be where all the pipes are public property and the town hires outside firms to upgrade/maintain them. Much like roads. Providers pay a fee to the town for access to them and for usage. An unlimited number of providers can enter the market. Users pay the providers. Competition between providers reduces prices. P.S. NYC is somewhat moving toward this with their WiFi project.

nostromo 13y ago

A friend and I once decided to look into how much it costs to lease the communications space on public utility poles. This is the space well below the power lines that the cable and telephone companies lease from your local government. Read more here: http://www.annsgarden.com/poles/poles.htm http://www.annsgarden.com/poles/poles.htm Truth is, almost nobody at the local level has any idea how one could go about doing this. Even though they are publicly owned poles and communications companies pay rent to use them, the cities have no mechanism on how to actually rent pole space to any company other than the phone company and the cable company. I think we could see a resurgence of local ISPs and even metropolitan area networks if city governments would take up this one issue -- open up the utility polls to more companies and publish the rental rates for the poles. As a bonus, they could even earn more tax proceeds.

afuchs 13y ago
Aren't most utility poles and conduits owned by the utility companies? Look up "poll attachment."
- nostromo 13y ago
  In my location the city owns the utility. If you have a private utility like PG&E or ConEd, I'm not sure.

BIair 13y ago

Weird, neither the article or the comments seemed to answer the question, "Why is broadband more expensive in the US?"

raverbashing 13y ago

Well, here's the thing The BS with the last mile happens in Germany and France as well. Maybe not as worse, but to get Telekom (the public company of Germany) to set up the last mile for some other company takes around 1 or 2 months. Now let's evaluate what may be the issue with price/speeds: - People outside of US/Canada use less bandwidth heavy services, because of piracy laws - Bigger countries demand more infrastructure (and if you have countryside places with high cost/low speed this skews the average) Now, pay 99 a month for broadband in SF? Ridiculous

quink 13y ago
Ah, you think Germany is bad? In Australia we have the choice of Telstra for phone. Well, in Germany Deutsche Telekom used to run HFC as well, until they were forced to sell it off by the EU back when they were privatised. That didn't happen in Australia. And so we have the choice of Telstra for HFC as well. There's another HFC network that was built by Optus, with the anticipation of Telstra overbuilding about 22% of it. Telstra overbuilt to a level of 80% dual coverage. So that's pretty much killed Optus' HFC network, which is about to shut down, NBN or no NBN, quite soon. No wonder then, given all that, that last time we moved it took about 5 weeks just to get the phone line in. In fact, it's a shitfest every single time anyone moves in Australia. And the newly elected Coalition's thing is not likely to be going to fix this, at all.

spikels 13y ago

A: Because our government prevents competition by granting monopolies in exchange for revenue and political support.

joshuaheard 13y ago

I live in Paris and have a basic bundle with Orange, the main telco in France. I pay over 60 euros a month (about $90). This is the same as the American average according to the article. I don't know where you can get a bundle in France for 35 euros (about $25). I think the numbers are skewed by their use of a purchasing power multiplier. Everything costs more in Paris, so the price of broadband is relatively less compared to places with a lower cost of living. However, based on my experience, the broadband prices are the same, which is what you would expect to see.

rtpg 13y ago
...what? a package deal from SFR/Free/whoever is 30 euros a month. Also $35 is 25 euros http://www.free.fr/adsl/freebox-revolution.html http://www.free.fr/adsl/freebox-revolution.html 30 euros a month bundle.
- Udo 13y ago
  > Also $35 is 25 euros Not really if you consider VAT and generally higher prices. If you compare a random US city with pretty much any place in the northern EU, $ and € are exactly equivalent.

liongeek 13y ago

Why doesn't romania appear in the list? Here we have 50mbps at $9 100mbps at $12 500mbps at $15 1gbps at $18 I think these are the best rates in the world, right?

mathieu45 13y ago

I think the basic problem is the structure of the industry and the kind of people who are in it. In USA, by and large the telco business is a mafia business. That is what is fundamental is control of the territory. This is clear when a state is divided into two parts: one for Verizon and one for ATT. It is clear when one reason given is the costs of "right of way" that needs to be paid to the city: it is a deal between mafia groups. Simply think about it: if you are interested in high tech, where do you go in the USA? Certainly not to the telco. Now ask the same question in France, where do you go? Maybe in telco. The reason is that some countries like France, South Korea, Germany, etc. did not have a big tech sector. Also very little start up culture. But they understood the importance of the tech sector and they did what they could to unblock it by breaking the local mafia. So, the end result is low cost internet. It did only marginally help the creation of a tech sector, but that is what they could do.

a3n 13y ago

Because, in general, this supposed consumer's paradise is actually a corporate paradise. "Consumers" aren't the driver, corporations are, and consumers are only "protected" in the sense that cattle are protected. Why else would drugs be prohibitively expensive in the US, and the exact same drug be an almost insignificant cost to patients right next door in Canada? You might say that pharmaceutical companies need to recoup their development cost. That might even be true. But they're doing it by charging the US consumers more than other countries. Why else would SIM cards and healthy competition not be the norm in the US cell phone market? I'd love to take the phones out of my sock drawer and use them, instead of buying a new phone when I switch carriers. As for broadband, fundamentally they charge so much because they can. Very little competition, usually the only game in town (Comcast has the cable option in my area, with DSL available here and there.) And Congress never met a bribe they didn't like. "US consumers are our most important resource."

antihero 13y ago
The "free market" is only as free as the consumer.

rogerthis 13y ago

Have you seen the price of broadband in Brazil?

Philadelphia 13y ago

I'm more curious about the difference in the cost of men's haircuts and loaves of bread that they mention in the opening...