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and the reason you don't have the option to switch to another service provider is your state and local governments granting comcast, et al local monopolies. Pl

and the reason you don't have the option to switch to another service provider is your state and local governments granting comcast, et al local monopolies. Please direct criticism to the proper source: government interference.

exelius 13y ago
No, the reason you don't have an option to switch to another service provider is that running a wireline provider is really expensive. Building one is even more expensive: you literally have to run cables to every household in a city thanks to the FCC's equal access laws (i.e. you can't ignore the poor parts of town when providing service). Each household probably has a fully-loaded cost of around $1000 (this includes switches, routers, a few thousand miles of cable, teams of guys in trucks to run the cable across the poles, etc), so for a small city of 500k households (~1 million people), you're looking at a ballpark of $500 million. Even if the regulation allowed you to start your own cable company, what investor in their right mind would put up the money to do so? Trying to VC pitch a startup ISP would be the worst pitch ever. "Why am I going to give you a billion dollars for a 10% margin business that you're not even guaranteed to be successful in?"
- pdonis 13y ago
  In other words, the reason you don't have options for service providers is that it's expensive to be a provider; and the reason it's expensive to be a provider is...government regulations.
  - exelius 13y ago
    I think even without the government regulations you'd have a similar situation: it's expensive enough to serve even an affluent area that the market can't really support much more than 2 companies (which already exist in the form of Comcast/TimeWarner and FiOS/U-Verse in most wealthy areas). You'd probably also find that some middle-class suburbs would have no providers available at all. Though I do agree that subscriber pricing is much better in areas where you see both a cable company and a telco video provider like FiOS or U-Verse.
    - pdonis 13y ago
      > it's expensive enough to serve even an affluent area that the market can't really support much more than 2 companies I would state this with a key qualifier: it's expensive to serve even an affluent area the way our society currently works. The way our society currently works is that local municipalities are strongly discouraged from doing local development sanely--where "sanely" means that when a new subdivision goes in, say, all the easements for running wired high-speed Internet go in as well. The best way of doing this would be for the local developer to simply run the cables, and have them owned in common by the municipality, homeowner's association, or whatever entity owns the common areas in the development. That entity then leases access to the cables to all Internet providers on an equal basis. The next-best way would be for the local developer to put in all the cable trenches, space for connection hubs, etc. in while the development is being constructed, right along with the water lines, gas lines, storm sewers, and other utilities, and with all the permits, easements, etc. already in place. Then an Internet provider just has to do a cable pull, which is only a small fraction of the cost of installing high-speed Internet in our actual society. When municipalities actually try to do either of the above, however, they find themselves embroiled in lawsuits and negative publicity from the large Internet providers, who can't stand the idea that nobody really wants to buy their overpriced services, and if a way of routing around them became common, their business would be kaput.
  - dragonwriter 13y ago
    > and the reason it's expensive to be a provider is...government regulations. If by government regulations you mean "the fact that running cable means acquiring access rights across large numbers of privately held properties, and government protection of property rights makes you have to negotiate with each of them for the right to access unless you can piggy back on someone else that already has an easement without exceeding the scope of the existing easement", then, sure, its about government regulations. But its the kind of government regulations that even the people who complain about government regulations generally support (often, support most emphatically).
    - rayiner 13y ago
      There needs to be some regulation to make that feasible, no doubt. But why does that function justify forcing cable companies to run cable to areas that aren't economically justifiable? Or to put it a slightly different way: while the public is entitled to make equal access a priority, it can't complain about providers not wanting to enter the market or not wanting to invest more private money in regulated service. You can't have your cake and eat it too.
    - pdonis 13y ago
      You left out a key qualifier: "running cable to every household means acquiring access rights..." The post I responded to specifically mentioned the FCC regulations requiring equal access to all households as the driver of the high cost of being a provider. Without the equal access regulations, it would be a lot easier for smaller providers to compete. (And it would be even easier if state and local governments didn't give sweetheart deals to large providers.)
  - sp332 13y ago
    I'm in favor of the FCC's equal-access laws. Otherwise people in places with poor infrastructure will have to pay even more to get service, which seems counter-productive for society.
    - nardi 13y ago
      Unless that regulation produces unintended consequences that depress internet access for all of society as a whole.
    - smsm42 13y ago
      That's fine, but you can not be in favor of these laws and then condemn their direct consequences with righteous indignation. If you've got the one, you've got the other. If you have onerous regulation in some market, you'll be limited to a few large players that can master that regulation.
deleted 13y ago
[deleted]
mullingitover 13y ago
> and the reason you don't have the option to switch to another service provider is your state and local governments granting comcast, et al local monopolies. The real reason is the FCC doesn't require the infrastructure businesses to sell wholesale access to competitors. Once upon a time, Comcast et al would've leased you the line, but you would've had choice in your ISP service. A stroke of the pen eliminated all serious competition in the ISP game, and made it so Comcast owns the entertainment pipeline all the way from movie studio lot to your internet connection. Odd that the studios aren't allowed to own movie theaters [1], but they're heading straight for the same end result by controlling your internet access. [1] http://en.wikipedia.org/wiki/United_States_v._Paramount_Pictures,_Inc http://en.wikipedia.org/wiki/United_States_v._Paramount_Pict....
- deleted 13y ago
  [deleted]
rayiner 13y ago
Granting exclusive cable franchises has been illegal under federal law since the early 1990's.
wycx 13y ago
Please direct criticism to the proper source: regulatory capture

exelius 13y ago

No, the reason you don't have an option to switch to another service provider is that running a wireline provider is really expensive. Building one is even more expensive: you literally have to run cables to every household in a city thanks to the FCC's equal access laws (i.e. you can't ignore the poor parts of town when providing service). Each household probably has a fully-loaded cost of around $1000 (this includes switches, routers, a few thousand miles of cable, teams of guys in trucks to run the cable across the poles, etc), so for a small city of 500k households (~1 million people), you're looking at a ballpark of $500 million. Even if the regulation allowed you to start your own cable company, what investor in their right mind would put up the money to do so? Trying to VC pitch a startup ISP would be the worst pitch ever. "Why am I going to give you a billion dollars for a 10% margin business that you're not even guaranteed to be successful in?"

pdonis 13y ago
In other words, the reason you don't have options for service providers is that it's expensive to be a provider; and the reason it's expensive to be a provider is...government regulations.
- exelius 13y ago
  I think even without the government regulations you'd have a similar situation: it's expensive enough to serve even an affluent area that the market can't really support much more than 2 companies (which already exist in the form of Comcast/TimeWarner and FiOS/U-Verse in most wealthy areas). You'd probably also find that some middle-class suburbs would have no providers available at all. Though I do agree that subscriber pricing is much better in areas where you see both a cable company and a telco video provider like FiOS or U-Verse.
  - pdonis 13y ago
    > it's expensive enough to serve even an affluent area that the market can't really support much more than 2 companies I would state this with a key qualifier: it's expensive to serve even an affluent area the way our society currently works. The way our society currently works is that local municipalities are strongly discouraged from doing local development sanely--where "sanely" means that when a new subdivision goes in, say, all the easements for running wired high-speed Internet go in as well. The best way of doing this would be for the local developer to simply run the cables, and have them owned in common by the municipality, homeowner's association, or whatever entity owns the common areas in the development. That entity then leases access to the cables to all Internet providers on an equal basis. The next-best way would be for the local developer to put in all the cable trenches, space for connection hubs, etc. in while the development is being constructed, right along with the water lines, gas lines, storm sewers, and other utilities, and with all the permits, easements, etc. already in place. Then an Internet provider just has to do a cable pull, which is only a small fraction of the cost of installing high-speed Internet in our actual society. When municipalities actually try to do either of the above, however, they find themselves embroiled in lawsuits and negative publicity from the large Internet providers, who can't stand the idea that nobody really wants to buy their overpriced services, and if a way of routing around them became common, their business would be kaput.
- dragonwriter 13y ago
  > and the reason it's expensive to be a provider is...government regulations. If by government regulations you mean "the fact that running cable means acquiring access rights across large numbers of privately held properties, and government protection of property rights makes you have to negotiate with each of them for the right to access unless you can piggy back on someone else that already has an easement without exceeding the scope of the existing easement", then, sure, its about government regulations. But its the kind of government regulations that even the people who complain about government regulations generally support (often, support most emphatically).
  - rayiner 13y ago
    There needs to be some regulation to make that feasible, no doubt. But why does that function justify forcing cable companies to run cable to areas that aren't economically justifiable? Or to put it a slightly different way: while the public is entitled to make equal access a priority, it can't complain about providers not wanting to enter the market or not wanting to invest more private money in regulated service. You can't have your cake and eat it too.
  - pdonis 13y ago
    You left out a key qualifier: "running cable to every household means acquiring access rights..." The post I responded to specifically mentioned the FCC regulations requiring equal access to all households as the driver of the high cost of being a provider. Without the equal access regulations, it would be a lot easier for smaller providers to compete. (And it would be even easier if state and local governments didn't give sweetheart deals to large providers.)
- sp332 13y ago
  I'm in favor of the FCC's equal-access laws. Otherwise people in places with poor infrastructure will have to pay even more to get service, which seems counter-productive for society.
  - nardi 13y ago
    Unless that regulation produces unintended consequences that depress internet access for all of society as a whole.
  - smsm42 13y ago
    That's fine, but you can not be in favor of these laws and then condemn their direct consequences with righteous indignation. If you've got the one, you've got the other. If you have onerous regulation in some market, you'll be limited to a few large players that can master that regulation.

deleted 13y ago

[deleted]

mullingitover 13y ago

> and the reason you don't have the option to switch to another service provider is your state and local governments granting comcast, et al local monopolies. The real reason is the FCC doesn't require the infrastructure businesses to sell wholesale access to competitors. Once upon a time, Comcast et al would've leased you the line, but you would've had choice in your ISP service. A stroke of the pen eliminated all serious competition in the ISP game, and made it so Comcast owns the entertainment pipeline all the way from movie studio lot to your internet connection. Odd that the studios aren't allowed to own movie theaters [1], but they're heading straight for the same end result by controlling your internet access. [1] http://en.wikipedia.org/wiki/United_States_v._Paramount_Pictures,_Inc http://en.wikipedia.org/wiki/United_States_v._Paramount_Pict....

deleted 13y ago
[deleted]

rayiner 13y ago

Granting exclusive cable franchises has been illegal under federal law since the early 1990's.

wycx 13y ago

Please direct criticism to the proper source: regulatory capture