A DSL Co-op in Your Neighborhood?

Steve Hamlin writes "In reading on Slashdot about the increasing cost of cable broadband (and DSL is no cheaper), I ran across this article about a neighborhood that put together a co-op for DSL broadband. From a DSLAM housed in a barn to microwave relays, a frame relay T-1, and problems with Qwest, the whole deal."

Comments

Broadband is cheap, bandwidth is expensive

[fruey]

You can get a fat pipe to your house for next to nothing.

You can't get data to your house for nothing.

It's already pay for what you use on a larger scale. It's no different for broadband. Bandwidth itself costs money, infrastructures cost money, international sharing agreements cost time and money

Get real people. Having access to 2mbps is not the same as downloading at full speed all the time on it.

Internet always on != downloading all the time.

Here I pay a huge amount for 2mbps. But, I resell parts of it an calculate that I can cut costs because everyone is not using the bandwidth all the time.

Broadband users are generally bandwidth hogs and ISPs just got the pricing wrong. Live with it. The economic reality is that your real cost to your ISP is:

local loop + equipment (probably monthly fee + equipment depreciation) = not a lot
Actual KB transferred = a fixed, calculable cost to them.

So that's all there is to it.

Good argument for government intervention...

[fmaxwell]

The fact that people are forced to do things like this to get broadband access is why we need government intervention.

Because of their monopoly on broadband service in my area, I am a Cox Road Runner subscriber in Fairfax County, VA. The service has been so bad that the County has levied numerous fines against Cox. We have had multi-day outages, packet loss over 50% for days at a time, latency measured at 1/2 second or more, etc. Throughout this, they have said "wait until we get the fiber optic upgrade done." Well, it's just about done and our reward looks like it will be Terms of Service that prohibit VPNs, telecommuting more than one day per week, all servers regardless of the amount of traffic moved (even password-protected ones used only by the subscriber). And we get a $5 to $10 per month increase in service rates.

They don't care because they have a monopoly. DSL coverage is, at best, spotty. The phone company has installed multiplexers everywhere to avoid running more copper, which kills DSL for everyone on the multiplexers.

The Congress needs to issue mandates to the phone companies requiring that they make DSL available to all customers. They need to pass legislation preventing broadband providers from placing limitations on the mechanisms used by the customers to move data (e.g., no limitations on servers, P2P, VPN, etc). If the broadband providers have limits on bandwidth usage, they should be legally required to publish those limits in a clear, easy to read form.

The lack of broadband is beginning to have a real effect on the economy, quality of life, education, and even traffic and pollution (since telecommuting is often impractical with a dial-up line). To all of you anti-government people, I say "get a clue!" The current system is not working and the free market is, by and large, not solving the problem.

Re:Good argument for government intervention...

[King Babar]

To all of you anti-government people, I say "get a clue!" The current system is not working and the free market is, by and large, not solving the problem.

The free market IS solving the problem (see the article that spawned this thread) when it is permited to do so.

The problem here stems from monopolies propped up by the government in the first place, leaving you with no legal alternatives. In fact, about the only thing that justifies government regulation to any extent (and not enough, in my book), is the existance of a government-enforced monopoly.

The most fascinating thing about some radical libertarians is their consistency. The big, gaping piece left out of the above argument about government regulation and monopolies is any comment on how or why we might have some government-sanctioned monopolies in the first place. We have them because there was a time for each monopoly industry when it was believed that the best and cheapest way to provide some capital-intensive service where economies of scale were required was through a private sector company (rather than, say, a municipal utility). In some cases, the decision was probably a good one; in others, possibly less so. In *all* cases, the stage was set for a time when changes in technology would lead to the situation where the status quo (government-regulated monopoly) was awkward. So, I think ATT did about as good and as fast a job of wiring up huge pieces of the US in its day, and provided a level of consistent service that served a genuine public good. But the possibility of commodity long-distance pretty much completely changed that reality, so you had the ATT break-up and now the really awkward situation situation where the Verizons and Qwests of the world have some shadowy status of quasi-monopolies via the effective use of bureaucracy.

Wiring up big metro areas for cable was certainly expensive, costly, and not the kind of thing that any company would jump to do unless they had a guaranteed revenue stream. This was fine when all cable amounted to was higher quality feeds of local channels and a few exotic notions like HBO. Now the capacity and reach of the system has gone waaaay beyond that for which the original monopoly made sense...but getting a system with universal access and anything like free market pricing and any kind of reasonable structure is tough.

I could go on. I think it's pretty clear that in most cases, what has gone wrong is neither some raw "failure of the market" or "failure of governmental regulation" but changes in the whole technology landscape that have had completely unforseen consequences on companies, governments, and citizens. It is going to be a mess. I think a market can set prices when it is competitive, but we don't really have many of those going now (except for long distance telephone, the big success story for de-regulation). I think regulated monopolies can spend the money it takes to get infrastructure built, but they are much less useful when their reach extends to the content that is broadcast or the services that are provided.

For that matter, some of the near-future technologies that can help remove us from this quagmire will also require some amount of regulation to do any good. I think wireless IP will be the best thing since sliced bread within a decade. With the appropriate set-up, you *could* do voice, date, TV...you name it with a much different kind of capital outlay (look ma, no cable being laid in our street!). But we already know that unfettered 802.11b can have some, um, interesting consequences if there is no planning or regulation of the use of the specrum involved.

I have no idea what the best answer is, but I have little faith that either hard-core governmental regulation approaches or cowboy networking provide the best answer to all concerned.

Re:Good argument for government intervention...

[renehollan]

The problem with your analysis is that it empowers the state to overcome "activation energy" at the taxpayer's expense so that a desirable steady-state is achieved sooner, rather than later.

Armed with this power, the state can then extend a monopoly status quo beyond the point where it has short-term bebefits.

Libertarians generally say that this is a poor trade. In those cases where many agree that the short-term expense would be worth the immediate benefit, you wouldn't need government intervention.

There are many industries where economies of scale are enormous. The PC industry is one: it costs an enormous amount of money to make the "first" new-fangled CPU. After that, they're cheap as dirt, almost literally. No government intervention was required for this industry to take off. And, while I would have liked to see cheaper PCs sooner, it would be wrong to tax my fellows to achieve this.

The record on government intervention to "jump-start" infrastructure is generally poor, the odd success notwithstanding extended scrutiny of the track record.

our city apartment shares T1 lines

[call -151]

If you live in a big complex, it may well be cost-effective to do what our complex has done. We have 6 T1 lines coming in and then a wired network so that every unit has good high-speed access. The cost is included in our maintenance, and that brought the cable to just above your front door. (If you want someone else to do the interior wiring in your unit, you have to spring for that.) We've had this for years and everyone is very happy with the arrangement. DSLreports speed test reports 2538kbps down/1368kps up, so we are getting excellent connection speed.

We are in NYC and have co-op apartment in a 5 building complex with 400+ units. The co-op arangement means that the units are owned collectively by people who live here, so the decision was made by people live here and who have very much the interests of those who live here in mind. Our course, many of the people who live here are not taking full advantage of the bandwidth (there are many little old ladies who emigrated from Eastern Europe post WWII here.) In a sense, their maintenance is subsidizing the rest, but even those who do not use it or do not use it much are very pleased with what it has done for the resale value of the apartments. ("Free high-speed internet included with unit.")

Before we did this, we tried to figure out how much it would cost per unit, but that was hard to get a true cost since much of it was one-time costs like wiring and the firewalls and hardware, and since much of the setup and planning was done for free by people who live here. Even the most pessimistic estimates, though, put it at around than $10/mo /unit long-term, way less than the $50/mo cost of cable modem "service", which had been the only previous option. Since around one in five units already were paying for cable modem service, with more people signing up each month (that was two years ago), it was cost-effecive and a significant improvement in many respects.

Re:fallacies and good info

[duffbeer703]

Wrong. Please get a clue about how busineses work.

Have you ever heard of something called "accounting"???

As a business, if you buy $2 million worth of equipment that has a life of 5 years, you charge $400,000 per year against your bottom line as a depreciation expense. Cable companies invested heavily in equipment for broadband service 1-5 years ago, so they are still feeling the pinch of depreciation expenses for capital equipment purchases.

If a line costs $12/month and you charge $40/month, you have a gross margin of 70%. That is incredibly high -- ripoff things like extended warranties and car undercoating usually run in the 50-80% margin range. Supermarkets run 2-5% margins, department stores run 8-15%, manufacturing companies run 5-20%. If you cannot make money with those margins, you are incompetent.

Your call center numbers are crazy too. At my last gig we had a call center with anywhere from 20-120 people working at any one time. These folks handled upwards of 2500 calls per hour peak and 75% of them made $8.50/hour or less.