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Why Is Connectivity So Cheap In Stockholm?
lpress writes "Symmetric, 100 Mbps service in Stockholm, costs $11/month. Conditions in every city are different, but part of the explanation for the low cost is that the city owns a municipal fiber network reaching every block. They lease network access to anyone who would like to offer service. The ISPs, including incumbent telephone and cable companies, compete on an equal footing."
Socialism?
Why Is Connectivity So Cheap In Stockholm?
Because their taxes are so high, it had better be cheap!
When information is power, privacy is freedom.
I'm not a big fan of a huge federal government, but at the local level, cities and towns should have been building out the last mile of service instead of granting local monopolies. If building that infrastructure IS so expensive that no business would do it without the monopoly status, then it probably is something best left to local governments to fund/build and then lease out to whomever wants to offer services to the residents.
My Dad has this problem. He has the choice between the sucky local phone monopoly for DSL or the sucky local cable monopoly for cable.
"The problem with socialism is eventually you run out of other people's money" - Thatcher.
Lafayette, LA, Cox Cable $140 5 50
Capitalism working for the consumer as usual.
My first thought was that because the city owns the entire network, much of the reason for the low cost is self-explanatory. But then I imagined if a similar arrangement were formed in the US, I would be extremely surprised if the same prices were attained. Local governments would likely see this as a source of income and either charge a similar rate to competitors, or possibly undercut their neighbors by a narrow margin in order to appear generous and possibly gain a few extra votes for the incumbents. Does anybody know more particulars of this arrangement and local laws in the area? Is the portion of the Stockholm government that runs this program have any sort of "no-profit" legislation?
Dragging the fiber can't be that expensive. I mean, compared to water or sewer pipes (which they can even be bunded with).
What's wrong here in the US is a strong public distrust of having the government do anything, because the government may screw you over. So instead people prefer to give important tasks to businesses, who will screw you over.
I'm on the Stockholm network mentioned in the summary, and it's more like 80Mbps downlink and 20Mbps uplink in actual usable bandwidth. But I can live with it.
It's the lack of profiteering that keeps the price down.
If you see communications as a service to be provided to your community; rather than something to be exploited for profit then the dynamics change drastically.
The Pirate Bay, of course!
Down With Slashdot BETA!!! I've been around the corner and seen the oliphant; you can only abuse me from your perspecti
... or it could just be that by preventing companies from having monopolies, the players can't just set an arbitrary take-it-or-leave-it price because the consumer can take his money to someone else.
Stokab is a municipal owned company that runs most of the cables in the Stockholm area. Fiber is cheap to own and most of the conducts was already built for other utilities. The bedrock of Stockholm is solid granite and easy to tunnel.
There is no subsidized on the cable costs. The difference is the pay back time on the cable. Stokab probably have calculated a payback time equally the life time of the cable (20 years or more). And because they regularly have to replace there other cable infrastructure adding a few new cables isn't that expensive when the crew is in place.
Another factor that reduce the cost is that most of Stockholm have district heating with concrete ducts that run all over the city. In those conducts there is easy to have an RC robot laying cable besides the existing pipes.
By selling the fiber and black fiber telcos and other are renting fiber from Stokab instead of putting there own in the ground. That is also an factor that reduces the costs for the ISP.
My ISP (Bahnhof.se , of late ./ fame) runs part of there subscriber network in Stokab fibers.
This is a prime example of the mistake people of any nation state thinking that any company, particularly one that's granted a local monopoly will in any way, shape or form act in the consumer's best interest.
I don't think we'll see this in US. I work for a network equipment provider and we do xDSL and FTTH. Even when our customers deploy fiber technology, they still limit the pipe. With video becoming more prominent, they'll have to increase the bandwidth. However, the only advancement we'll see is if there were more players as opposed to only one or two choices.
It really comes down to the fact that last mile connectivity is pretty much a natural monopoly(not quite as severe as roads; but pretty much on par with water and power).
For reasons that, I assume, have to do with a mixture of lobbying by incumbents and a strong distrust of "socialism" we've mostly been denying this fact for years.
It is a simple matter of empirical fact that free markets work pretty well. However, when you are dealing with natural monopolies, free markets aren't really an option, so that is irrelevant. The choice is pretty much between (ill) regulated monopoly and municipal ownership. Frankly, municipal ownership is likely the better choice. I know that I have way, way less trouble with my water service than with my phone service or ISP.
Exactly. By socializing the fiber pull, the gov't was able to give the people a true free-market when it comes to shopping for providers allowing the free market to actually work. This is what gov't is supposed to do when it meddles with business; level the playing field, let competition happen forcing companies to compete (yes, there will be losers), and allow consumers to actually win. It's monopolies that screw up the system, not having some socialist elements. When will people learn that the goal of government should be to improve the lot of the people, not to just to do the cheapest thing.
Internet access is slowly becoming another "must have" commodity. And as with water, electricity, telephones (the landline type), mail, public transport, etc. They are simply best left to the government to finance. Or subside.
If running water, electricity, or mail would be left only for big corporations to run, citizens of smaller (sub 10,000 people) cities would barely have running water.
Consider mail. Do you really think the post office wants to deliver mail to everyone? If the recipient lives in an urban area and the postman gets an average of at least 5 letters per mile, then it isn't bad. But when someone lives in the middle of nowhere and the postman needs to travel five miles per letter, then it simply isn't profitable. Yet people would rebel if suddenly half of the country wouldn't be able to receive mail or have electricity.
The U.S. should use an infrastructure already in place. Pipe fiber through residential gas lines. It's only light traveling across the line so it shouldn't ignite the fuel.
And they got something for it in return, fuck Rand-bots and that bathtub drowning retard (what's his face again?)
Name one price set in the economy, outside the price that government charges for it's "services", that isn't ultimately 'take it or leave it'?
The problem with monopolies isn't whether a price, once set, is "take it or leave it." It's that they have much more power at the point when they're setting the price, which leaves the customers with the choice to "take it" or simply live without it. Customers don't have other options because there isn't meaningful competition.
People wanting to make laws that restrain the power of a monopoly does not constitute "theft".
Yes, the fear of government and of Government regulation can be quite misplaced.
It is well known that in some markets regulation is the only thing that keeps the market even remotely resembling a free market, rather than an oligarchy.
Now regulation can have its issues too. N o doubt that some government regulation is actively harmful. Some of it is well intention regulation that goes sour, which is pretty common considering that macro-scale economics is not a science by any means. Other harmful regulation is that which is supported by the major players in the regulated industry. In general that indicates that the regulation dictates what they would be doing anyway, yet makes it more difficult for competitors to enter the market, or compete with the big players.
In a similar way, having the government perform some function may be very helpful, or may be quite harmful.
Look at the United States Postal Service. People complain about them, but they function pretty well all things considered. The pricing on first class mail is definitely very competitive despite the complete lack of competitors. If the market were opened do you really think UPS, FedEx, or DHL could offer first class mail services at a significantly lower price? Probably not. Perhaps a few cents lower, but not much. The USPS does tend to be slightly more expensive than the alternatives when shipping packages, but that does not really matter, because they have competition there.
Overall the USPS works well. Why does it work well? Perhaps the most important thing to notice is that it is well insulated from the elected politicians. They can't continually mess with it, making changes all the time. It is not profit driven. The apparent goal is to net exactly zero profit, with income covering all the expenses, and employee salaries, upkeep etc, thus requiring no treasury funding. It does reasonably well at that, although they almost never actually reach that goal.
That goes to show that a government institution can work effectively. One that owns last mile infrastructure could also work well, if set up well, such that the politicians have little influence over it, it is set up such that it must price fairly (be this some sort of per endpoint, or bandwidth based pricing scheme, the important thing is that Ma Bell gets no better deal than Joe's DSL Shack), and be set up so that the net profit is zero (the all income covers infrastructure, maintenance, and upgrades).
But alas, the average American is to scared of the government to allow such a thing, and don't see the absurd television, phone, and internet pricing as a real issue.
Stylish sheet to fix many problems in Slashdot's D3: https://gist.github.com/801524
The company is owned by the city of Stockholm and is not a private business. Stokab was founded in 1994 and is owned by the company group Stockholms Stadshus AB, which is in turn owned by the City of Stockholm.
Falcon
Should there be a Law?
like the "idealogical barrier" that prevents the Postal Service from doing an efficient job at anything.
When I was a child, my father often spoke proudly about the U.S. Postal Service, bragging about how a first-class letter could get to just about anywhere in the United States in just 2 days, for the cost of a 7 cent stamp.
Today, it costs 6 times as much, and as often as not takes 6 times as long. What is wrong with this picture?
Name something governments do well, aside perhaps from national defense.
National Defense.
Police.
Fire Supression.
National Resource management. (National Parks).
Airspace management.
Worker/Business relations. (When was the last time you heard of employees rioting and fighting in the streets. Used to be common before the government stepped in.)
Airwaves regulation and leasing.
Autmobile safety regulation. (Airbags, Seat belts, Padded stearing columns etc..)
National Highway system.
Airports.
Bank Deposit Insurance. (FDIC).
Public Libraries.
Driving Regulations. (Standardized safe driving practices and enforcement).
Street Parking Management. (Much cheaper than a parking lot most of the time and super easy).
Science Grant Writing.
Medical Grant Writing.
Drug Testing and Approval.
Food Safety Oversight. (The last few years was a great example of what happens when they lose funding.)
City planning. (Go to Bankok and try getting anywhere. This one is huge.)
Public Transportation.
Baseline Medical Insurance for impoverished children.
A social safety net so that to some degree the poorest in our population can feel free to change jobs and not let the economy completely devolve into a slave/endentured servitude in practice.
Unemployment insurance.
Tobacco taxation. (Reduces smoking use while not banning cigarettes.)
The FBI. If your child is kidnapped or a bank robbed you want these people on your side.
The National Weather Service.
Air Traffic Controllers.
The Public School system. It takes in EVERYBODY unlike a private school. Unlike my school (Private school) they don't expell students who fail a class or get caught with a beer. (shock and amaze, when you expell all the kids who fail classes your overall test scores go up!). They also accept vegetables and make their best effort to get them to an employable state at Burger King or stocking shelves. This saves the government a lot of money from having dependent adults who can't contribute to society.
The US Coast Guard. (If your boat flips you want these people to be well funded.)
I apologize for the other million other government employees who also do a great job every day. I only have so much time to stand up for them.
he said things the government does well!
Out of your list, I would keep maybe Food Safety, Air Traffic Control and the National Weather Service (NOAA).
It might be argued that our government does well at national defense, but if you are talking about a per-dollar value, then most of this list is absolutely pathetic.
It just goes to show the importance of moderation in all things. Moderation in regulation. Moderation in privatization.
How DARE you imply that the Invisible Market Fairy is anything other than the perfect solution?!?!?!
I DEMAND that you retract your statement. This is America, where anything less than 100% unfettered unregulation is pure unadulterated evil!
This is exactly what I've been saying - to anyone that would listen, including the California Public Utilities Commission - should have happened in the United States. What sets the described situation completely apart from anything here is that the "people" collectively own the telecom infrastructure: the companies that built it were paid ad CONTRACTORS and not allowed to retain ownership of that common infrastructure.
The sad thing is that there are other examples of that here in the U.S., like out public highway system; we paid the construction companies (through taxes) to build the roads, but the ownership remains in public hands.
That is what SHOULD have happened with our entire telecom infrastructure, but we screwed up way back in the Eighteen Hundreds; we allowed American Telephone & Telegraph - remember them? - to build telegraph and telephone systems but keep ownership of it. That misperception is perhaps solely responsible for getting us in the mess we're in now here in the U.S. We actually had a chance to rectify this during the anti-trust proceedings against AT&T in the 1970s: we could have reclaimed the wires or forced the monopoly to become "nonprofit" similar to the USPS. What we did instead was to slice and dice the beast but let all the parts keep control of the wires in their new little fiefdoms.
Forget all the breathless FUD about "socialism": common shared infrastructure SHOULD be publicly owned. The fact that Sweden is a nation with a marginally socialist economy is quite possibly irrelevent; what is relevant is that Sweden observed and learned a bit from our mistake.
Ikea, Volvo, Ericcson, H&M,etc,etc
Because they compare themselves to the reactionary superstitions-based society we have here in the US?
Even when excluding the inventions that occurred before the US existed, like the wheel, steel, and printing press, this is still patently (no pun intended) false:
As for people moving to the US, that has nothing to do with this country's greatness, but the amount of money this country is willing to pay smart people precisely because they are such a scarce resource here. While Wehrner Von Braun, Tim Berners-Lee and Linus Torvalds all moved here, that doesn't mean that the US can claim credit for their inventions.
Stockab has fibers connected to municipal housing. That's about 20% of all fiber, and they cost more as both ISP and stockab get paid. The reason why it's so cheap is because of fierce competition between the different broadband providers. There was zero regulation and great tax benefits during the IT-boom era which led to a large number of broadband providers. That made a huge difference.
I pay (in Stockholm) about $7/month for a 100 Mbit connection and that's through privately owned fiber, not the municipal one. It also varies from city to city. In the case of Västerås (another Swedish city) they did actually build a full municipal fiber network and through laws and regulations made it a monopoly (the fibers, not the service). Prices there are about $30-40/month for a 20 Mbit connection.
It is well known that in some markets regulation is the only thing that keeps the market even remotely resembling a free market, rather than an oligarchy.
This is not in some markets. This is absolutely true in every market. A "Free Market" can't possibly ever exist in reality. Approaching that theoretical ideal is the best we will ever be able to do in that arena. A completely unregulated market will always be far away from a free market.
This is easy to prove absolutely.
Want to win in a market without being the best? Murder your competition. What's that, you'll go to prison? Wow, market regulation, It's everywhere and it is an essential requirement of a functioning market.
Over regulation is also bad, but the most commonly deluded types are the ones who not only believe that free markets are real, but they think unregulated markets and free markets are the same thing.
I live in Stockholm, please tell me where I can sign up for a 100Mb/s connection for $11/month. The blog post is pure nonsense. The uplink speed is not really that interesting. Sure you can get a connection with that kind of uplink but how does that differ from a 1Gb/s service? Hell I can sell you a 10Gb/s service for 12$/month. It won't connect anywhere but it will give you a really cool uplink and you will a nice 10Gb/s to all my other customers in your appartment.
http://www.oecdobserver.org/news/fullstory.php/aid/77/The_income_taxes_people_really_pay.html
"The average production worker in Sweden pays no income tax at all to the central government."
The personal exemption is a tenth higher that the average income. So unless you are doing better than most your taxes are in the form of sales tax and other flat taxes or fixed fees.
So tell me this then: What major technological inventions happened in the US during the last 59 years?