Broadband Obstacles

Strange Beer writes: "The Washington Post is running a story discussing many of the roadblocks and speedbumps that Telcoms and ISPs have encountered while trying to rollout broadband. Not surprisingly, most of the obstacles were built by them." The government approach is dysfunctional. Broadband prices are going up - 25% or more in the last six months. Simultaneously rollouts have stopped except in metropolitan areas, and the Bell monopolies are busy finishing off the last independent DSL providers. This is the "free market" in action (government-sponsored monopolies crushing independents), and therefore unquestionable in the US today, and it's also the reason why people aren't getting high-speed access. The only solution suggested in this article is to essentially browbeat citizens into overpaying for high-speed service that they don't want and probably isn't offered in their area, solely so that the MPAA can sell us movies on demand, if they ever decide to do so. What exactly is the thought process here?

Comments

You /. people really like the word "monopoly"

[skrowl]

don't you?

In a free market system, monopolies NATURALLY result from good business practices. Having a monopoly is NOT illegal. What is illegal is using unfair trade practices to keep others out of the market, thereby extending or maintaining a monopoly. The bell DSL providers are doing better because they provide the service at a lower cost to them, with higher quality service.

I'd also like to point out that rr.com is doing pretty well for itself, despite being national. Why was it not mentioned?

Re:You /. people really like the word "monopoly"

[4of12]

Having a monopoly is NOT illegal.

Quite so. And having a totalitarian form of government does not necessarily mean a bad government, either. Benevolent dictators are as possible an outcome as benevolent monopolists. But real world outcomes in either case are mostly different, and to the detriment either of the governed or of the marketplace.

If you believe strongly in the free market system, you will, sooner or later, have to contend with the issue of monopolies. And, I think most students of economics will tell you that markets dominated by a monopoly are imperfect, with all that such imperfection implies.

Re:You /. people really like the word "monopoly"

[bricriu]

If you think Verizon is providing good service, think again. I had to wait a month for them to put in a PHONE LINE. Not a DSL line, not ISDN, a simple phone line to an apartment in a well-populated part of New Jersey's 2nd biggest city.

And if you think it's low cost, sorry. With all options turned off, no long distance, the most basic of basic service, I was still paying $40 a month. Which is nuts.

Verizon sucks. No-one in NY/NJ will contend that. Their basic service makes people want to hit things, and their broadband TOS are unconcionable (as well as their 96 kBps upstream limit). And even if I were to go with Covad, I'd still have to deal with Verizon for the dual pair to my house... and they drag their feet to such an extent that they've been fined for it by the government... all to no effect.

So, to review: 100% monopoly on basic phone services + gov't deregulation in the 90's = high rates, shoddy service, illegal activity, and nowhere else to go.

Re:You /. people really like the word "monopoly"

[stripes]

In a free market system, monopolies NATURALLY result from good business practices.

Sometimes they do, more frequently an oligarchy (small number of dominant players, like the "big 3" car makers in the USA). The phone company did not arise naturally, it was one of many competitors. It convinced the government that the many phone companies would never interconnect and the USA would be stuck with lawyers able to contact lawyers and doctors being able to contact doctors, but the lawyers not being able to call doctors. Oddly enough by the time it finally convinced the government to grant them a monopoly the existing phone companies were already interconnecting (after all lawyers frequently want to talk to doctors and the services that can do that makes more money...)

So in fact we had a government granted (aka unnatural) monopoly for about 100 years. Then AT&T was broken up and long distance was no longer a monopoly, however the RBOCs still were. They had all the hard to reproduce physical assets. There is some modest competition for local business service in very populated areas, but not much else...unless you count the woefully few cablecos who are providing local service.

So you have unnatural access to the wiring from one party...

The bell DSL providers are doing better because they provide the service at a lower cost to them, with higher quality service.

Yeah, but it is widely asserted that the RBOCs provide the service cheaper because they don't charge themselves as much for access to the copper. It is widely asserted that their service is better because they control the line techs that check the problems, and keep their competitors at the end of the line. It is also widely asserted that in the greater DC area they strong arm their competitors into agreeing not to serve anyone more then 18k feet away.

To me that sounds a wee bit like:

unfair trade practices

At least if it is true.

Re:You /. people really like the word "monopoly"

[ZoneGray]

having a totalitarian form of government does not necessarily mean a bad government

It may not lead to bad government, but it does lead to a bad economy. The problem is simply that centralized control is inefficient and subject to corruption.

Not that business is immune from corruption, but no business can survive in a truly free market unless it has customers who buy their products. That's the basic beauty of the system.

Actually, there is another ways to survive, and that is to obtain some government protection... They can be guaranteed customers through regulation (utilities and telecom monopolies are an example), they can obtain relief from competition (such as trade restrictions).

In the telecom sector, they're supposedly deregulating, but the FCC is so involved in making the process work smoothly and trying to direct the outcome that only an fool would call the current situation unregulated... I'm sure they're trying really hard, and their intentions are basically benevolent. But it's not immune to influence, either... since it's staffed largely by veterans from the industry, they inevitably think along the lines of the established companies, and they have friends who are still in the industry. Regulatory agencies always turn out this way... the only way to avoid it is to staff them with people who have no experience, and that wouldn't be much of an improvement, if any.

But the real problem with regulation is that it preserves the status quo. This can be okay in some areas where there's not much change. Electric utilities work fairly well, they've been providing the same product for a hundred years or so, and they do that well. On the flip side, they cost more than they should and they're a haven of hack jobs for the nephews of politicians. But they do provide the service, and the extra costs aren't as high as they might be in other industries.

But in a dynamic market, no government agency can foresee the outcome... indeed, most investors can't. Technological progress is in many ways a process of trial and error. Venture capitalists try a number of different business models, and most fail. Some succeed, and those become the roadmap for the future. A couple of years ago, they tried building a bunch of dot-coms, it seemed like that was going to be the way of the future. It wasn't, but the beauty of the system is that they've all closed down now. If the government had started building dot-coms in 1998, they'd still be running them fifty years later.

The Internet highlights this process more than any phenomenon I've seen in my lifetime... there is so much that is new, so many possibilities. Nobody, no matter how smart, can foresee exactly what the most efficient way to organize it will be.... should we have small ISP's or big ones? Should we have a lot of wireless or a lot of wires? The market sorts these things out... often in a way that pleases no individual person, but in a way that compromises among the various desires of many people.

If you believe strongly in the free market system, you will, sooner or later, have to contend with the issue of monopolies.

Wrong. Monopolies are created by economic friction, by impediments to competition. If the myth were true, then why isn't there a single company that runs all the dry-cleaning shops in the country? Why aren't all the convenience stores run by one huge ConvenienceCo? Why are there 20 brands of VCR's on the shelves instead of one?

The myth that captalism leads to monopoly is utter and complete nonsense, and dangerous indeed. In every case, monopoly power can be traced to some form of govenrment protection. And what makes the "monopoly myth" so dangerous is that it is used to pass more of the same regulations that caused the problem in the first place. The FCC is a shining example of this... they have forbidden competition in some areas because they don't think it will work. They are so involved in regulating the process of deregulation that they've made a mockery of the process, and we see the results... there's some fairly simple and extrememely useful technology that can't get to consumers.

Re:You /. people really like the word "monopoly"

[stripes]

The myth that captalism leads to monopoly is utter and complete nonsense, and dangerous indeed. In every case, monopoly power can be traced to some form of govenrment protection.

Capitalism doesn't lead to monopoly, nor does it prevent it. What government protection led to Microsoft's monopoly of the desktop OS market? Or the office suite?

The only thing I can think of is the normal copyright protections, and also the laws preventing us from storming Redmond and killing them all :-) (I have some friends there I do hope we really wouldn't take out our ire that way)

Re:You /. people really like the word "monopoly"

[ch-chuck]

In a free market system, monopolies NATURALLY result from good business practices.

No they don't - look at any number of industries: gasoline, groceries, pharmaceuticals, etc - in all of these sectors consumers benefit from healthy competition between several major players using good business practices, with room for many minor local businesses. Even in media you have a choice of radio, tv stations, isp's, movie studios. What the big difference is in 'technology' markets that makes them so suceptible to monopolization is the ability to obfuscate your techniques so that people can no longer distinguish "good business practices" from "unfair trade practices". If the Exxon corp. put some special secret ingredient in their gas so that once you used it you could never use a competitors product without major engine damage (or forced you to change to an Exxon gas tank that only works on Exxon pumps) it would clearly be a case of "unfair trade practices", yet the major technology businesses do this all the time, make heaps, and it's suddenly (according to employees, stockholders and their lawyers) "good business practice".

Have you ever delt with a telco? They're full of people who resort to tachnobabble at the drop of a hat to get out of work, knowing full well that they can never lose business to any competitor.

No it's not!

[Perrin-GoldenEyes]

This is the "free market" in action (government-sponsored monopolies crushing independents)

No...it is not. The idea of a "government-sponsored monopoly is anathema to the free market. The whole idea of a free market is that the government keeps its dirty hands OUT of the market. No sponsoring business. No squashing it with excessive tax burden. This doesn't seem to difficult to understand.

Re:No it's not!

[Chris Feddern]

That's why he put the phrase "free market" in quotation marks. Can you say, "sarcasm"?

Once the broadband growth issues are ironed out...

[InterruptDescriptorT]

...watch for the available content to become more and more dictated by the broadband providers. They had to sink a lot of money into building the networks (billions upon billions of dollar), and expect to recoup the cost somehow. One thing they can do is push their content (and thus the advertising space they sell) on you by limiting access to other sites via slowdowns or other disincentives. Imagine not being to access CBSNews.com or drudgereport.com, but having to get all online news from CNN.com if you're an AOL/Time-Warner company, of which CNN is a part.

This is essentially the argument that Lawrence Lessig makes in his latest book, but I suspect that if you see broadband growth progress slowing with falling profit margins and bigger expenditures to (slowly) expand the network, you'll begin to see this technique used a lot in the future.

Competition works in MA

[wayn3]

I live outside Boston, MA where AT&T Cablevision and RCN compete for broadband and cable services. RCN, being #2, has been very competitive and they've provided me with great service.

Your town may not be able to have two cable wire systems running throughout, but there is an alternative: have your town own the wiring, and force your cable company to lease them on a yearly basis. This has worked for some MA communities.

Broadband

[Heem]

We as the 'power user' community, ie, the 3% that the companies talk about that actually USE the product that they sell to us, need to be heard on the issue. If a company could provide us with and IP address, and a relatively high speed pipe, for a fair price, we could keep the cost to them down by not needing any of the BS that they waste so much money on. I don't need someone to sell me 'video email, only with this company' blah blah, i can do video email with any company, AOL if i wanted to. Rediculous. Put a wire in my house with an IP address. I'll pay what it is worth. The only reason I'm upset about paying $50 for the cable service I have now is that they whine and cry about every little thing I do. I'd easily pay $100 for something that was under my control, I could have control over the dns, etc. 4 sets of numbers. That's all I want/need to ever hear from the provider.

What free market?

[stripes]

This is the "free market" in action (government-sponsored monopolies crushing independents)

How can it be a free market operation when it includes government-sponsored monopolies? This is pretty much not a free market, it involves those government-sponsored monopolies controlling most of the resources, and government regulations that in theory force them to share. (And I'll note that is mostly in theory, not practice)

This isn't a failure of the free market any more then Microsoft attempting to port the GIMP to MacOS and failing would be a failure of the open software community.

Waiting Period

[nzhavok]

I think one of the largest problems is the waiting period. Realistically people just don't want to have to wait so long to get up and running with a broadband service.

My personal experience was with satellite broadband, I had to wait 4 weeks before the dish can be installed and then the installer couldn't configure the card properly in my PC.

The second problem I've encountered has been bandwidth caps. I'm back to a 56K now since the satellite company put a download cap of 500MB/month (yes MB). which meant I could blow through the monthly cap in about, oh, 40 minutes!

The end result from this is that people who have had experiences like me will recommend that others don't get broadband because it's not worth the hassle right now.

Free market

[sql*kitten]

This is the "free market" in action (government-sponsored monopolies crushing independents), and therefore unquestionable in the US today

It's not a free market. A free market would mean that government-sponsored monopolies would have been stripped of their protected status, and had to compete on equal terms with wholly-private enterprises. The matter is somewhat complicated by the fact that a lot of the existing infrastructure was created and is controlled by the state monopolies. There's no straightforward way to transfer that to the private sector, and no straightforward way to replace it, because that would mean that every operator would have to lay their own cable infrastructure. That's just not economically viable.

I suspect that the majority of the bad press free market capitalism gets is because people bandy the term about without understanding it. This isn't a problem of the free market, it's a problem of the government. But somehow, the free market gets blamed and the government called to intervene - again. And it's odd that the GPL-loving slashbots would oppose free - not as in speech or as in beer, but freedom to enter into business relationships - just as important.

What good is free speech, Mr Andersen, if you can't act on your words?

And did you really mean "unquestionable"?

Re:Free market

[Boiling_point_]

to transfer that [existing infrastructure] to the private sector...every operator would have to lay their own cable infrastructure.

What do you mean exactly?

Here in Australia, we have a large company named Telstra. The Government spun off Telstra as a private company a few yeara ago and plans to completely sell off its remaining 51% in the near future.

The question is - why didn't the Government swallow the national infrastructure of bandwidth through cables, phone copper lines, exchanges, the whole lot -- and just sell off the operational company? Such an arrangement would mean that the government could restrict the possibility of monopolistic or oligopolistic behaviour should it ever emerge, while leaving the market to decide how it was going to self-assemble when competitors were introduced?

Those companies could then fund the collective growth and maintenance of the underlying infrastructure through public works. Bandwidth supply and demand would truly then be controlled by the market and the general affluence of the population.

Trucking and other transport companies work this way by paying taxes to the Government that maintains roads. Nobody minds that. What's so bad about transport as an industry model, that corporations need to own their own permanent copper cabling?

I am not an economist, I warn you. ;)

It's the Last Mile.

[Masem]

IMO, it's that last mile, from the CO to your home, that's the most critical in the broadband arena. Right now, the problem is that that last mile is owned by the same people that want to sell you services over it, and thus are going to do as much in their power in order to make sure only their service is used over their wire.

What needs to be done is to force these phone companies to divest themselves of the last mile ownership, and instead treat that as a utility, thus which may be handled by a city, or by a small company or the like. Because it's a utility, the only care they have is to hook one end to your house, and provide several outlets at the other end (phone, cable, broadband, etc); you then simply sign up for the services at that other end, paying the phone or cable or broadband company for that service. This way, the last mile utility cannot control what goes in that pipe, only that you pay to maintain it, and that suddenly phone companies will find themselves in competition again with other service providers. That would clear up the pseudo-monopoly that phone co's have right now, *and* may be incentive enough to get fat pipe to every household in American by some means, including urban and rural areas. This could also mean the development of wide-area wireless communication hubs that might serve a small, rural city, since effectively that's much easier to get the last mile than wiring it.

Again, the key here is that the only service that the last mile utility can be concerned with is to make sure that what goes in one side of the last mile wire comes out the other. They cannot provide a service lest they give up their right to control that pipe, otherwise we're right back to square one.

Re:It's the Last Mile.

[scoove]

are going to do as much in their power in order to make sure only their service is used over their wire.

Not only is this very true, but the same people are making sure their wire is the only way to get any service to your home or business.

We've seen numerous legislative efforts pop up to block tower construction projects and were surprised at the apparently sudden interest in "protecting property values," "saving children from evil RF rays" (as claimed by a Missouri congressional fool) and "preserving the environment."
What seemed odd was that while communication towers of any height were targeted, high power transmission lines were not. If RF "evil waves", property values and environmental issues were the focus, you'd expect transmission lines to be at the front of the list.

Then we started to see an interesting parallel: the same congressional sponsors were receiving outstanding support from incumbant local telephone companies. In one case, research briefs used by the congresscritter were prepared by a southwestern bell staffer.

The conclusion? Incumbant telephone companies were attempting to kill cellular and fixed wireless broadband competition, while pushing legislation in various states claiming that there was no way they could upgrade their ancient network without taxpayer money.

Once a monopoly, always a monopoly, apparently. The best we can do is watch these corrupt pols and work to throw them out (or at least expose them) when we discover they're using their position to redirect our tax money for the protection of these incumbants.

*scoove*

Re:It's the Last Mile.

[scoove]

...treat that as a utility, thus which may be handled by a city, or by a small company or the like

I'd be very cautious about the "handled by a city" part - this is often done via a municipal arrangement which sounds well intentioned, but ends up really mucking things up.

In my parts, there are a few municipals that were chartered initially to provide a utility (usually electrical and/or water). Because of the way municipals are managed, the lack of accountability to the city (you typically can't elect/fire them, you can't affect their budget, etc.), they tend to normalize as a mini-monopoly agency with no profit focus and no accountability.

Most in our parts have taken on service after service due to the eagerness for more revenues, power and control. They'll add natural gas service, propane delivery, fuel oil, then migrate into communications: cellular, telephone, cable TV and broadband Internet.

Unfortunately, as they're not market-driven entities, they don't have the natural correcting forces that ensure efficiency. They make up for inefficiency by subsidizing them in their other monopoly areas - e.g. electric rates.

One municipality in the area has hiked their electrical rates to about $0.12/kilowatt hour, whereas the electricity offered just outside town by a coop is $0.06 (with discount programs offering $0.03).

The impact to the town doesn't stop there, either. All of the municipal's services are lousy, but since they have such an established base and the ability to subsidize from their other products, competitors have simply stayed away. The result is quite comperable to the goals of socialism: everyone is equally miserable.

So... get yourself some competitors in your community. Make it easy for them to get in, and don't buy from them if they are lousy. But don't lock yourself into one solution either through the error of municipals or by denying entry via towers and right of ways.

*scoove*

Lack of reliability

[dmuth]

I think that part of the problem with the lack of consumer confidence in high speed Internet Access (especially DSL) is the lack of reliability with these services. DSL outages are something that many folks complain about, and in severe cases, such as when Northpoint went bankrupt, service was cut with little or no warning. Having to put up with things like this make me think twice before getting broadband to my place.

Personally, I think one way to prevent problems like this from happening again would be to have DSL lines regulated by each state's Public Utility Commission, just like POTS and T1s are. With those lines being under their current regulations, getting disconnected suddenly will result in the ILEC landing in very hot water with the PUC. But when Northpoint decides to go belly-up and screw hundreds of thousands of people, they get away scott-free.

That's my $0.02, feel free to mod up or down as appropriate.

Municipal utility?

[truesaer]

After the chaos that Comcast has caused by switching from Mediaone's network (who they bought out, at least in this area) to theirs, my city (Ann Arbor Michigan) has begun to consider regulating them as if they were an essential utility like electric or phone. They seem to understand that this would be something that may never have been attempted before, and could be tough considering the FCC does regulation of them.

But, when the franchise for cable was given to Comcast, they had made all these promises that they would be a lot better than mediaone, provide better customer service, better actual service, etc, etc. Instead, it has been a disaster in terms of service, they've reduced the features you get with your service, and increased the price.

Frankly it would be nice for the city to be able to dictate certain reasonable conditions. And this would be negotiated when their contract expires in about a year. Here is an article.

All I want is the connection

[egburr]

I wish the big bells (and all the other DSL providers and ISPs) could get it through their heads that all I want is the connectivity, not all the extra services. Give me the wire and a static IP address, and no blocking of services. Give me the basics and throw out the fluff. I don't need them to provide DNS, mail, spam, news, a web portal, etc. I can provide or find all of that I want on my own. Offer me just that and for a reasonably low price, and I'll be happy. This would negate much of their costs, including tech support.

Re:All I want is the connection

[verbatim]

That's a very good point and explains the downfall of @home: spending money on useless services that nobody wants/needs/uses.

An ISP should provide:
connectivity, POP/SMTP/NNTP/DNS (things that NORMAL people don't host themselves), and some form of customer support.

An ISP should not provide:
Portal services (there are enough out there as it is), custom browsers (that they either won't support or require FOR support), and anything that is a useless extension that can be found elsewhere. Don't bloat the bill.

But these big companies are used to being a one-stop-wh0ring... umm... shopping place for all your Internet needs. In fact, they'd probably ship the Internet to you on CD or DVD if you asked nicely enough.

Re:All I want is the connection

[Genom]

Speakeasy. Sysadmin package. Around $100 a month for 1.5/384 ADSL, 3 static IPs, no filtering, and unlimited dialup (in case the DSL line goes down). They've done right by me, and until they go out of business, they're the way to go, IMHO. They've only been down for any signifigant period of time once in the 8 months we've had them (they were down for 12 hours due to a cable cut in/near DC) - all other downtime was planned, short, and during off-hours. They never had a problem with servers being run, never gave me a hassle about running an alternative OS, and have always had a response time of a couple hours by email, or a couple minutes(!!) by phone. The install itself took less than 2 weeks from my order to the IPs becoming active.

Contrast this with the shoddy service the local cable monopoly (AT&T) has given us - took them 3 months (!!) to even get a cable line to our apartment building, after which the connection suffered random, intermittant packet loss past the 2nd hop to anywhere. Spent over 2 hours on hold on the phone twice before getting to someone who would acknowledge that there was a problem that didn't lie with my network settings. (Let's not mention the fact that if you so much as breathe the word "Linux" they will hang up on you) They refised to send someone to the apartment to diagnose the problem - always claimed it was "maintenance in your area" (basically a copout to get you off the phone) - claimed that they would call me back, and never did. Gave me fake names and useless "Ticket numbers" that were, of course, never in the system. We cancelled our cable modem service with them once we got DSL, yet every month, they try to bill us for it, and every month I have to spend another hour on the phone arguing with them over whether the service was cancelled or not.

The problem also manifests itself in out digital cable as 1/2-1 second "blackouts", which again, they refuse to acknowledge.

If another cable company offered cable service on our area of MA, we would gladly ditch AT&T altogether. As it stands, in order to have cable, we have to go through them. The city won't even entertain the prospect of allowing another company to sell cable - they're that far in AT&T's pocket.

Telcos don't want to provide good service - they want to take your money, and provide you with as little service as possible.

Re:All I want is the connection

[medcalf]

An ISP should provide:
connectivity, POP/SMTP/NNTP/DNS (things that NORMAL people don't host themselves), and some form of customer support.

No, an ISP should not provide connectivity. That should be handled by any one of several competing entities (the phone company(s), cable company, satellite, wireless - whatever), while the ISP provides services. Then I, as a consumer, can select connectivity from the best provider of connectivity and services (if I need them) from the best provider of services.

Re:All I want is the connection

[Sloppy]

I don't need them to provide DNS, mail, spam, news, a web portal, etc.

I agree with you on mail and web portal, but not on dns and news.

One of the problems facing the 'Net is congestion, and one the easiest solutions to this, is to have as much nearby caching as possible.

When you access the DNS roots yourself (I admit I'm guilty of this as well) instead of using a nearby caching resolver that your neighbors also use (e.g. the ISP's resolver), or when you access a news server 20 hops away, not only do you get degraded performance, but you're also causing a little more performance degradation for everyone else who uses the networks in between. Now, it's not a big deal that you're doing it, but when everybody does it, it all adds up. There was a story on Slashdot a few days ago about what happens at universities when thousands of people run filesharing/piracy apps that all use the outside link instead of having a cache inside the university's network.

I know there are always gotchas (e.g. your ISP's DNS resolver doesn't do the namespaces that you want, their news server doesn't carry the groups that you want), but those gotchas are what need to be addressed or partially worked-around, instead of just giving up. (e.g. run nntpcache and configure it to use your ISP for the groups they carry, and a further away news server for the groups that the ISP doesn't carry.) (And then share your nntpcache with your neighbors, please. :-)

Having certain services within just a couple of hops (BTW, I think caching web proxies should be included in this too) isn't just an ISP control-freak thing. It is also just good sense and the Right Thing to do.

Lawrence Lessig

[wiredog]

Had an op-ed a few days ago in the Post about this.

I don't get it.

[SevenTowers]

I'm in Quebec and my cable provider is Videotron. The price hasn't moved since at least 2 years : $35 canadian (that's about $22 US). The service is great, unlimited download-upload; 16kB/s upload and I often reach 350kB/s sustained downloads.

Recently, the speeds were dropping and the pings going up. We called up videotron (we have 3 cable modems in the house) and they came in and replaced the whole wiring from the street, putting in a new solo cable for each modem and upping the signal, free of charge. The problem is fixed.

In Sweden, large apartment complexes can get 10 or 100Mbit ethernet (if upwards of 80% of the people want it) for $20US per month. Government subventions.

Why is the US in such a weird situation? I mean, lots of people want the product, the law of demand/offer states that the prices should go DOWN not up!

They don't want us

[mbourgon]

To be honest, they don't want us using their service, but we're a necessary evil. We actually USE the product, and that's a problem, since it costs them money to provide it. They'd much rather have Joe Homeowner who pays $50 a month and uses it like a dialup account, going and visiting the provider's sites, etc, etc. (Think @Home's Excite pages). That's basically free money. No slowdowns due to overusage, no pesky NNTP servers needed, just a web site and a modicum of bandwidth. The geek community is a problem: we drive a lot of business their way, but we're also the most vocal about problems.

There's a lot more money to be made from the ignorant than from the informed.

Re:They don't want us

[DrCode]

As a developer, I doubt if my internet use, mostly CVS commits and web-browsing sites that are mainly text, is any more than a fraction of that of the 'average' user, who's likely downloading megabytes of MP3's and porn.

The economics of monopolies

[Mike@AP]

Some of these comments were very interesting, others were hype of the higest order.

Can a fair market include a monopoly? Absolutely. A monopoly simply means that a company has essentially an entire market segment to itself. That doesn't mean, however, that other companies can't try to compete in the same space. It's harder, to be sure, but in the end, consumers will vote with their dollars. If a product is better in the eyes of consumers, then it will eventually win against the established monopoly, as long as the monopoly is acting legally.

Now, has Microsoft, for example, used untoward means to maintain its monopoly? The courts have unequivocally said yes. However, bear in mind that, in general, it achieved it's OS monopoly fair and square. If Apple hadn't stumbled after Jobs left in the 80s, well, we might be bellyaching about the Beast from Cupertino instead of the Beast from Redmond.

My point is, monopolies are not bad, nor do they innately destabilize fair and free markets. It's when the company that has the monopoly takes illegal means to maintain it does the market suffer.

And one thing that, I think, most /. users don't recognize -- the market leader is almost NEVER the best technology available. Market leading products are the best marketed, relatively easy to use, and nearly always appeal to the broadest segment of consumers, also known as the least common denominator.

Of course, that's my opinion. You may now set your flamethrowers to "high burn" and have at me.

Re:The economics of monopolies

[mpe]

Absolutely. A monopoly simply means that a company has essentially an entire market segment to itself. That doesn't mean, however, that other companies can't try to compete in the same space. It's harder, to be sure, but in the end, consumers will vote with their dollars

It may well be impossible for a startup utility to compete against an already existing utility. Not only do they have to make a huge investment before they have anything to sell they also have to convince land owners (and government) to let them install pipes, cables, etc. When they are likely to get the response "there already is electricity, gas, drinking water, telephone,etc there".

Re:The economics of monopolies

[MindStalker]

Not as long as there is sufficent regulation to allow compition, you can currently set up solar panels to generate more electricity than you need, and you will get paid for the extra electricity that gets pumped into the system. Anyone, and I mean Anyone can start their own long distance company, there are even a few competitors in local phone service. There is absolutly no reason there can't be compitition in broadband markets, sharing the same lines. But the regulations to force the big providers to open up their lines don't exist yet.
"there already is electricity (been done), gas (been done), drinking water (could be done, but why?), telephone (been done),etc (working on it) there".

Covad

[peterdaly]

As an interesting sidenote, Covad's stock price is back up to $2.75, from $0.34 earlier this year. They fell off the Nasdaq many months ago, they are on Nasdaq's Bulletin Board exchange. Most nasdaq quote services can still resove them (COVD).

They are not down for the count yet.

-Pete

Bandwidth Costs Are Not Understood

[Bookwyrm]

I suspect a major issue is that bandwidth is not as cheap as people think/desire it to be. Look at all the places that advertised 'unlimited' usage, then went back and added usage caps -- look at the price to actually have 'unlimited' usage.

Up until this point 'unlimited' usage has worked because the statistical multiplexing of the traffic functioned to give the illusion of unlimited usage over the avaiable networks. As usage has increased and the need for consistancy of service, quality of service has increased, the illusion that the statistical multiplexing of the packet traffic in the network is failing.

Fast, good, cheap -- choose two.

If people want fast (broadband) and good (QoS, reliability of service, and not to be run into 50:1 broadband/last mile DSL concentrators feeding out into a single T1), it is not going to be cheap. What people have had so far is fast and cheap -- but no one noticed at first because having it at all was better than nothing.

Glasgow KY

[DontCallMeShirley]

Anyone heard of Glasgow KY? Probably not unless you happened to see a story about them years ago on one of those Dateline - 20/20 type shows. Glasgow is a small farming town, so you wouldn't think they would be on the forefront of technology. But back around 1995 (maybe even earlier) their local Utility company, that had already started up their own cable tv division because of complaints about the local cable company and already had fiber run throughout the town, made broadband internet access available to virtually the entire town. And what's more, they didn't look to profit from it, instead they offered it at "cost" because they saw the benefits to their town by everyone being able to afford access. I believe the rate was $22 a month back then, and is probably still pretty close to that even now. So i guess my point is, there is no excuse for it to not be available to everyone in every town at this point, if a small town like Glasgow has had broadband widely available for 6+ years.

Ireland Offline

[bfree]

Here in Ireland we have no consumer broadband. If I want to connect to the Internet I can:

1. Dialup at up to 56k for $0.6 - $2 per hour + $15 per month line rental
2. ISDN 64k for $0.6 - $2 per hour + $35 per month line rental
3. ISDN 128K for $1.2 - $4 per hour + $35 per month line rental + $25 per month IP connection
4. Leased Line (about $10k per annum for 128k)

It's so bad the incumbent monolpoly telco launched it's Hi-Speed Internet service about 2 years ago ... ISDN (with a reduced installation charge)!! Then they annouced I-Stream (ADSL) with a launch of October 2nd 2001 ... HOWEVER they knew full well they would not actually be allowed to launch at that time, and simply announced the date (and pricing, but NO conditions and STILL no conditions) so as to ensure the service would be stopped and dragged through litigation by it's competitors and the regulators. In the meantime the jokers are raking in the cash while soiling the market for any other potential competitors (the main candidate being ntl who paid (at the time) the highest price per subscriber ever worldwide for the largest Irish cable tv network (which was semi-state at the time and had hyped it's price by talking about cable modem trials which were very small) and who are completly cash strapped having rolled out (allegedly) maybe a POTENTIAL couple of thousand nodes for cable modems (I have yet to find a single person I know who could actually avail of it).

So now we have Ireland Offline trying to act as the voice of reason our politically appointed department of Telecommunications Regulations should be, but neither have any real teeth. Just to top it all off, after NTL bought Cablelink (cableTV) the next government sale came up, Telecom Eireann which was floated to the public with guaranteed share availability to each member of the public, and everyone encouraged (banks throwing money at them) to buy at the government set price. So Eircom was launched (of course they had to rebrand it) and proceeded to lose most of the country some of their hard earned cash (but not the country's "vice prime minister" who was/is on the board who claimed at the first agm/lynching after the floatation that "he had no money to buy with" HAHAHA (insider trading cough cough) HAHA). So after a failed floatition that lost most of their customers potential loyalty (most people even had to deal with a share split as the mobile division was sold off, so they ended up with some vodafone shares) the company went through an incredilby public bidding war resulting in the purchase of the fixed line division by a private group which now has a £2billion+ loan to cover .... so they are going to launch a cheaper service for anything .... I think not ... they will unbundle the local loop now (only 1 year after the EU deadline) and risk losing some analogue call revenue ... NO

To anyone in this thread who has complained in any way about price, quality of service or availability of service I suggest you thank your lucky stars you aren't stuck with 56k (I'm actually extremely lucky that I availed of an offer a few years ago to get unlimited free off-peak net access for $25 per month from one of their competitors who no longer allow people to sign up AND who kicked of many users for over using the unlimited service!) and go search google for errorcom to see just how popular eircom are! I think GPRS will be my first "broadband" connection .... Go 2002!!!

UK has plenty providers

[larien]

Here in the UK we have several providers of ADSL, quite happily competing. In fact, I get my ADSL connection from a comparitively small firm, Nildram. This is despite the incumbent telco monopoly of BT doing its best to screw it up and Oftel largely being a wet fish.

Availability is less than stellar, but it's getting better.

NB: UK users should check ADSLGuide for info on ADSL in the UK.

The thought process? "Make em pay to breathe."

[Moderation abuser]

Basically they want money for nothing. You can see the mentality as companies divest themselves of pretty much everything physical and become "Intellectual property owners" with multiple levels of subcontractors, each taking a cut.

I believe it's to do with the rise of the MBA. People who know nothing but the theory of business but not real business, just, the way they wish it could be.

Anyway, why aren't people buying broadband? Because it's too fucking expensive with the telcos trying to force their blended, homogenised crap "content" which they think is so wonderful down our throats.

I want a fast line to everything. I don't want to be forced to an ISP, I don't want "premium entertainment", video on demand but only from the tel/cable co. I don't give a flying fuck about 500 TV channels. Give me the fucking line and then get out of my way.

Basically, I want infrastructure. All the rest is frothy shit on top. Unfortunately, commercial organisations aren't very good at providing infrastructure. All they can think of is the frothy shit.

Balkanization of the market

[cryptochrome]

The competitive aspects of the market are generally a great way to drive innovation and ensure that individual companies within an industry offer good value for the price. But at the same time, if such companies have any sort of monopoly (and in the telcom business they most certainly do have local ones) they always overcharge, and that same competitiveness can cause balkanization of the market where those monopolies are granted, and thus holding back innovation and usefullness of the industry. Therefore, the government should always consider setting standards where monopolies are granted. And they out to step in now and take action. The US has fallen embarrassingly far behind other countries in the usefullness of high tech.

The broadband market is a good example - companies were allowed to merge with wild abandon, and the quality of service only went down. Users have little or no choice of service, and it's expensive. The other key example is the mobile, wireless, and broadcasting markets - several companies with incompatible systems (so that even SMS won't work together), including legacy systems that are no longer desirable but are kept around for backwards compatibility, using up the fundamentally limited resource of EM bandwidth with gross inefficiency. It would be far more efficient might actually be CHEAPER if the government were to step in, set up a couple of modern standards for local and long-range one-way and two-way communication (perhaps using 802.11 or UWB, and satellites, Metropolitan Area Networks, and ad-hoc adaptive wireless networks using directional antenna), and subsidize the transition for all households. Just think how much bandwidth you could free up for communication if you eliminated the TV and radio bands and delivered those via satellite instead.

Lack of compelling broadband content.

[Restil]

This is probably the biggest issue. People aren't eating up broadband in droves because simply there just aren't that many legitimate needs for it.

Note I point out "legitimate". I know of plenty illegitimate uses for broadband which would be difficult if not impossible without it. Excessive mp3 downloading, movies, tv shows, software. Broadband makes these activities simple.

The problem is, because of the RIAA and MPAA and others' stalling, these services simply aren't offered in a way that makes any sense, and those of us who have the means would rather do it our own way, even if that means that the feetdraggers miss out on the opportunity.

Granted, not everyone who has broadband is using it illegally. A lot of people like the always-on capability. A lot of people like their webpages loading super fast. But fact of the matter is, most of those people don't NEED it. Its merely a convienence, and they wouldn't hesitate to move somewhere that it isn't available, where thats the first question I ask after "how much does it cost?"

-Restil