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A lot of the difference in economics between Europe and rural Washington state has to do with the extremely high fixed cost of "last mile" internet connection i

by hawkice 12y ago

A lot of the difference in economics between Europe and rural Washington state has to do with the extremely high fixed cost of "last mile" internet connection in rural areas, which are, for a number of reasons, substantially more prohibitive in America. Trying to pay off $9000 in fixed costs with $30/mo internet simply isn't going to happen if a competitor can swoop in and offer the same service for $20/mo with no investment in infrastructure. If the cost is lower, due to having either higher population density or more available infrastructure to scaffold off of, this becomes a less-insane business prospect. But I'm somewhat confused by your initial sentiment. At least four small, local ISPs have investigated installing last mile connectivity to the fiber, and all declined. The status quo (largely a single provider per household) has little to do with this. Are you saying we need unbundling because otherwise we won't have both fiber internet and low prices? Without the rules regarding ISPs being unable to have ownership over infrastructure they pay 100% of the costs for, fiber could be provided profitably for less than $90/mo. to many portions of Kitsap county. Additionally: There are some households in Kitsap that have never had internet access at all -- surely blaming "the monopoly" is nonsense for those customers, and yet they too are hurt by this local policy. EDIT: I anticipate this being non-productive. Suffice it to say, I'm not trying to say "Unbundling is not the best policy." I'm saying, while we consider this policy, let us understand that it is not a pure, unalloyed good in all situations for all people. Policy decisions should not seem one-sided.

shmerl 12y ago
> Are you saying we need unbundling because otherwise we won't have both fiber internet and low prices? I guess it can differ in scenarios when there is no infrastructure in place yet, and when it's already there. For instance when infrastructure is in place and there is one monopolist owning it (it can be already fiber, or coaxial cable for example) charging high prices for mediocre bandwidth while having an ability to provide way more bandwidth for lower price, unbundling can fix it. But if there is nothing there, it's of course different. May be unbundling rules can be applied based on that difference. There sure should be some incentive to build up the network, but it has to be balanced with restricting the natural monopoly which develops when that network is built.
tjl 12y ago
The way it's typically been handled is that the last mile ownership is still with the company that builds it, but they have to lease its use to other companies at a reasonable rate. For places with no last mile infrastructure yet, one way to handle it that's been done is that the public builds it (i.e., it's owned by the municipal government) and leases its use also at a reasonable rate. An example in a different industry is electricity. I'm in Canada and in my province we pay to a local company, but a separate company owns the overall grid. There's a charge for distribution that appears on everyone's bill to pay for the infrastructure.

by hawkice 12y ago

shmerl 12y ago

> Are you saying we need unbundling because otherwise we won't have both fiber internet and low prices? I guess it can differ in scenarios when there is no infrastructure in place yet, and when it's already there. For instance when infrastructure is in place and there is one monopolist owning it (it can be already fiber, or coaxial cable for example) charging high prices for mediocre bandwidth while having an ability to provide way more bandwidth for lower price, unbundling can fix it. But if there is nothing there, it's of course different. May be unbundling rules can be applied based on that difference. There sure should be some incentive to build up the network, but it has to be balanced with restricting the natural monopoly which develops when that network is built.

tjl 12y ago

The way it's typically been handled is that the last mile ownership is still with the company that builds it, but they have to lease its use to other companies at a reasonable rate. For places with no last mile infrastructure yet, one way to handle it that's been done is that the public builds it (i.e., it's owned by the municipal government) and leases its use also at a reasonable rate. An example in a different industry is electricity. I'm in Canada and in my province we pay to a local company, but a separate company owns the overall grid. There's a charge for distribution that appears on everyone's bill to pay for the infrastructure.