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Why American Internet Service Is Slow and Expensive
An anonymous reader writes "Reporter David Cay Johnston was interviewed recently for his new book, which touches on why America's Internet access is slow, expensive, and retarding economic growth. The main reason? Regulatory capture. It seems the telecommunication companies have rewritten the regulatory rules in their favor. In regards to the fees that were meant to build a fast Internet, Johnston speculates those fees went to build out cellular networks. 'The companies essentially have a business model that is antithetical to economic growth,' he says. 'Profits go up if they can provide slow Internet at super high prices.'"
Screwing over people for profit the the American way???
There was an interesting NY Times article on the cost per customer for Verizon to deploy their FiOS product. Essentially it was $4k per subscriber. That's an awfully long payback when you are only getting less than a few hundred bucks a month and you also need to have money to operate the network, provide sales and technical support, etc http://www.nytimes.com/2008/08/19/technology/19fios.html Perhaps continued development in technologies like LTE will provide less expensive methods to get customers in the future
went in to the fat paychecks and bonuses of all the bigshots & executives in the businesses
Politics is Treachery, Religion is Brainwashing
Then what about Japan? Yen is stronger, wages are higher yet fibre optic Internet access at 100 Mbps can be had for less money about anywhere in the country.
There are two rules for success:
1. Never tell everything you know.
What about American exceptionalism?!?! Don't worry the internet is just fine the way it is. Soon gold plated eagles with laser eyes are gonna blast out of the American interwebs and run all the naysayers out of the country!
Did you factor in population density?
Tomorrow is another day...
Communications is a basic service provided by government. It's defined in the US constitution as well, as the Postal service.
There's no reason for private internet providers to exist.
Get rid of them, implement a government-designed system, like the roads. It would be far cheaper than building the highway system.
The best part of government ISP is that it has to follow constitutional freedom-of-speech rights, whereas a private ISP can shut down any message critical of the company, since private organizations don't have to follow the constitution.
The country is big, with lots of low density areas. Thousands of miles of cable don't just pay for and install themselves, and the incentive to cover a lightly inhabited area just isn't there.
Everyone is complaining about so many things. Primarily things that are concerned with Citizen's United, corporate citizenship, overbearing government, corrupt politicians, and institutions we no longer believe in.
So what do We The People do? 40 years ago, we'd organize and take action. Today we whine online, fearful the Man is watching us. So how about it slashdotters -- any ideas?
Only the dead have seen the end of War. - Plato
Did you factor in locations in the US, where the population density is comparable to Japan's?
Your US and local Gubmint wrote, rewrote and and continues to rewrite rules to keep themselves funded and local monopolies de jure.
Pleas stop blaming the (now thousands of) companies because you keep electing leeches.
No brain, no pain.
Don't different countries subsidize the internet in different ways, and to different extents?
If I pay $20 a month to my ISP, then another $20 to my government, to subsidize the ISP, it's the same as paying $40 a month for an unsubsidized ISP. But this calculation may only look at the money paid directly to the ISP.
This breaks down when you *aren't* far away from major, major cities (1 million plus), aren't far away from commuter towns (30k)... and can't get anything but Satellite or line of sight wireless. I am in this situation. It takes me 5 minutes, more or less, to get to town. I am within range of the circuit. The problem? There's a load coil in the line. Good for phones, bad for DSL. That's really the only thing stopping me from having way cheaper roughly 1.5mbps DSL.
This also breaks down when you pay lots of money *in the middle of the city.*
IMO, the basic, fundamental problem is that, because of the nature of the service - like electricity - we have monopolies with basically no competition. You either get DSL or Cable, pretty much... unless you're in one of the few fiber areas. That doesn't exactly generate much competition - one DSL company, one cable company. It's difficult to maintain a market-driven good-for-consumer-pricing environment when there's only one player, maybe two.
And then we get into caps and speed and all that, and it gets worse. ;)
There is no problem that cannot be solved, or created, by adding another layer of regulation.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
The country is big, with lots of low density areas. Thousands of miles of cable don't just pay for and install themselves, and the incentive to cover a lightly inhabited area just isn't there.
There were huge federal subsidies given to the telcos to build out internet infrastructure for exactly that reason. It was stolen and used to line the pockets of the telco investors instead.
"Tell me doctor, with all of your defenses, are there any provisions for an attack by killer bees?"
Yes, this is so blindingly obvious that the only surprise is that people are still asking the question.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Our Cell industry IS largely unregulated - we think of the FCC as performing that function - but compared to most other Western countries, they aren't doing much. Same as ISPs (which, in fact, overlap the Cell industry quite a bit.)
Lobbying (and the results it produces) are a capitalist idea, and they result in bad or no regulation..
Any book that wants to claim to talk about US Internet speeds has to deal with the fact that our average local loops are significantly longer than those of most other countries.
I think there is a great detective story here, because it isn't just a rural or suburban detached house issue, but even in cities the average local loop length is longer, and every meter cuts down on DSL speed.
I suspect that in the 70's and 80's a lot of central offices were consolidated, which made tons of sense for efficient voice delivery, but had the knock -on effect of crushing DSL speeds with long local loops. Today, there is little desire to spend the capital on more distributed central offices.
Now I am sure there also is regulatory capture as well in terms of lowering competition through regulation or local franchising. But you have to address the fact that we are starting with longer loops.
Pretty much what has been happening in Brazil for the last 10 years. Telcos get the rules written to support themselves, get tax cuts from the government, and find ways to work around the law without actually doing anything illegal. I could expand this to pretty much all businesses here: very large profit margins and a government that turns a blind eye to them, since after all, they are paying taxes to keep our bloated government alive.
They're there in their room. You're on your own.
Yet we managed a national phone network with less density and you ignore the fact that actually many states have similar population densities as European countries. Not every state is like the ass end of the mid-west.
You still need to connect those centers together, and every small town and suburbs in between. Fiber is not free. That is still not an excuse for poor service, but it does add to the cost.
Tomorrow is another day...
America's Internet access is slow, expensive
It'll always be of a certain speed and at a certain price. Some people will be happy with that. Some will think it's too slow. Some will think it's too expensive. Some will think both and write books about it.
Profits go up if they can provide Internet at super high prices.
I took out the word "slow" and now it's just supply and demand (with the occasional de facto monopoly, admittedly), same as usual.
systemd is Roko's Basilisk.
I mean, why pay one horrendously high price for a cut-rate service with a cryptic pricing structure when you can pay for two at twice the price?
Mod me down, I shall become more off-topic than you could possibly imagine.
It is so obvious that it makes one wonder why countries who have more low density areas than the US have faster and cheaper access.
Let's see...Japan is almost half the size of Texas so when they lay fiber they lay one big honkin bundle of the stuff. In N. America it has to stretch from sea to shining sea. Granted there's some dead spots in the middle that don't need much in the way of fiber but still. What needs to happen is the pipe be it fiber or coax or POTS or wireless (cellular) needs to be put under the control of a non-profit regulated group and let the service providers compete on...wait for it...service.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
South Korea has a special circumstance: (According to a marketing guy at a router company where I worked) About 95% of their population lives in giant apartment buildings - large enough that they have telephone central offices in their basements.
You don't have to dig up the neighborhood to get the service to them. You can just put an edge router in the basement, run indoor cat5-or-better up the existing communication conduits (if it wasn't there already), and feed them 100M (maybe 1G by now) Ethernet, which gets from building to building and to the backbone via fibers in the bundle that was already there (in old construction) for the telephone service. This makes installation VERY cheap and wiring distances short enough that high speeds are easy.
With that speed available the biggest bandwidth user (according to this guy) was live 1-to-1 naked video "phone calls" between youngsters of opposite sexes still living with their parents. It let them do their courtship form their bedrooms without being in each other's presence unsupervised, or making physical contact (either of which would cause much consternation with their elders in their strongly regimented society). It's much like the way affordable automobiles and drive-in movies changed the courtship habits in the US, especially after WW II.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
The real story behind the Telecom Act of 1996 bamboozle and how we were SUPPOSED to - legally, mind you, mandated by the Act - and also PROMISED by Ma Bell have fiber to our doorsteps long ago.
http://www.teletruth.org/docs/ShortSCANDALSummary.pdf
The entire book is available freely here: http://www.teletruth.org/docs/broadbandscandalfree.pdf
This was telco malfeasance on a massive scale, facilitated by the Federal Government and Congress - perhaps $200B or more misappropriated directly because of the Telecom act. Read on and draw your own conclusions.
Most locations have one or two sources of broadband and cable. A few lucky places may have three or for (two fiber, satellite ...). Price increases should be regulated like a utility then. Our power company has to justify increases due to capital projects and pass-through commodity increases/decreases. So should broadband.
I always though people complaining about lower population density, were complaining about the last mile. Do you mean to say fiber between major interconnects is very very expensive too? Do you have any sources for this claim? And how does Japan avoid these interconnect issues (I assume they interconnect with a lot of countries to help support their last mile)
The main reason American Internet service is slow and expensive is that it's been left in the hands of private corporations instead of treated as a regulated utility.
The secondary reason is that there has been such an enormous consolidation among providers that there are now 3 or 4 companies providing most of the nation's Internet.
End-game laissez-faire looks like this: dog eat dog leaves just a few very big dogs, and they can then pretty much just split up the customers so there is practically no need for competition. It's happened across American corporate culture. Five or fewer corporations where there were once hundreds if not thousands. I was reading the other day that there used to be hundreds of corporations in the packaging business. You know, making boxes and cartons? Now there are basically two and one of them is a multi-national based in New Zealand. The number of banks has been cut in half every couple of years for three decades.
Does anyone believe that AT&T feels it has to be competitive?
You are welcome on my lawn.
If it's so *unregulated,* why does so much money go from telecoms to congress in the form of lobbying?
The word you're looking for is: bribery.
This is a point where ideology really fraks things up: all regulation is not bad. You drink clean water, eat safe food, and breath clean air BECAUSE OF REGULATIONS. Regulations are bad when they favor the few over the many, especially when the few are taking advantage of the many. In this case, the "regulations" in place are largely from the few (wealthy and dishonest) managing to bribe enough people to make laws to give them more power and control, AT THE EXPENSE of everyone else.
Fascism: An authoritarian and nationalistic right-wing system of government and social organization. See also: NAZI's
Both technologies [high-speed Internet and cellular phones] are great examples of the FAILURE OF CAPITALISM in an unregulated and greed driven free market system.
As I understand it this is primarily a failure of the regulators, who mistakenly thought that two competitors are "competition". In fact the equilibrium with two is to split the customer base about equally and keep the price as high as practical. They can do this with price signals and market research rather than explicit collusion (and don't even have to do it deliberately - it's where the profit maximum sits.) Competition driving the price down toward costs doesn't typically happen until there are at least three players and can't be counted on until there are four or more.
In the case of cellphones, in the early rollout the FCC split the available bandwidth into two equal chunks, giving on to the current phone monopoly in an area and the other to one competitor. Eventually more bandwidth became available (at very high prices) to let more than two play. But by then the first two had a strong early-mover advantage compared to upstarts trying to suck in their customers.
In the case of wireline the FCC initially forced the telephone companies to rent the legacy government-subsidized copper wiring to competitors at reasonable rates. But then it deemed that, for "information services", a one-cable-company, one-phone-company "duopoly" was enough competition, and eliminated the requirement for data. Oops! (The wireless alternatives don't have the price/performance to be an effective third competitor.)
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
So what you are saying is fiber laying should be done state by state, and should not be attempted to be done country wide at the same time? Why didnt the ISPs think of this?
This Catbeller has been banging this drum for over eleven years, may I just say?
The "free market" ain't, and never can be, free, when you are dealing with players who understand the markets better than you do, and, furthermore, will cheat like motherfuckers. Conspiracy isn't necessary. The unwritten rules are always clear. Manufacture scarcity.
The new forestry corporations did it in the late 80s, buying up forests and rights, until in 1992 they tripled wood prices overnight, blaming Clinton and his evil environmental regulations, which didn't exist yet, being as he just was elected, for the cause. They cornered the market and fixed prices. The on;y congresscitter to object was fabulously ejected by them funding his shiny new opponent. No one else dared say a word.
Enron INfamously pretended that evil regulations made them incapable of restraining costs as they shut down power plants on mathematicians say-so to jack prices. California's entire budget mess for the last ten years can be traced back to that robbery. Free market is only free for those who control the market.
Enron not-so-famously was hell-bent on cornering the world's water supplies in drought areas - guess why... but don't worry, in their absence other bastards have bought up water rights, and soon "scarcity" will quintuple water prices across the world.
Kucinich in Cleveland was right, when he said the new private power companies would raise rates after they took over power grids. Cleveland to this day still has lower electrical bills than all the surrounding cities with free-market electric companies gouging them for decades.
And internet and radio internet... ah, so damned obviously they have refused to build infrastructure and have been "forced" to raise prices while the rest of the world simply licenses companies to build infrastructure at a decent price. Eleven YEARS ago, here, I posted a quick calculation: how much have people paid, in total, for DSL, cable, and modem charges combined - and how much had the telcos actually spent. It's eleven years later. We've pumped a good chunk of a trillion into their pockets, and they've spent a tiny fraction of that on actual buildout. They are taking us like a lost tourist.
Most of the rest of the world does it correctly. Scale has nothing to do with it. We don't have a limited amount of cash and a limited workforce; our companies can scale up any buildout. THEY DON'T WANT TO.
Copy whatever country did it right. Let local muni governments build out the systems for a fraction of the cost that these lying sacks of excrement quote. Let this end. There Ain't No Such Thing As A Free Market. Not when the "free" market companies can buy each other or merge, thus eliminating the market, or simply cooperate by obeying unwritten rules to jackup prices.
Well, I live in the sticks ( >70 miles outside of a major metro area), and in spite of a county population density of around 22 per sq. mile, I get 30mbps at $30/mo. (more often than not it drifts above 40, especially in winter when the tourists all stay home).
I could probably count on one hand, with all 5 fingers to spare, the number of "one percenters" who live out here.
It isn't fiber-to-the-doorstep, but given the low population and the alternatives in most other rural areas, it ain't half bad. *shrug*
Quo usque tandem abutere, Nimbus, patientia nostra?
Capitalism works better for some things, just not infrastructure. To many systems not enough consistency. Dare I say it, not enough regulation.
well cable can do better but it needs more newer hardware to make room.
Most cable systems are stuck if lot's of old MPEG 2 only boxes and stuff that top's out at 750 MHz - 864 MHz and lot's of sd only boxes as well.
node splits and SDV can help as well.
DSL is running on the old phone wires and it's needs RT near by to be able to offer high speeds.
Fiber is fast but digging up to install it is the hard part and all the other wires and pipes in the way makes it even harder to install.
That's the usual crap excuse by people who don't want to admit that it's just a matter of money, i.e. regulation, incentives, taxation etc.
Europe and Russia have well developed (hence popular) passenger railway systems. Oh and the US used to also. You may want to look up why it was run down.
thegodmovie.com - watch it
We have passed law that allows business to exact full payment for undefined partial service. Clever business use of phrases like " service up to " followed by phrases like " for only $$$.$$/mo* " then " * other charges may apply " and the like have led to a business environment where business can provide whatever they feel like and customers have to take what they are lucky enough to get.
Just one change in the interpretation of the law, where the customer's right to withhold payment for service not received, regardless of what the business printed on their contracts would do the trick.
It would incentivize customer service instead of incentivizing legal trickery as it does now.
Can you imagine the legal representatives of some company defending themselves against a defamation lawsuit where some plaintiff is suing because the company screwed up his credit report ? The plaintiff shows the judge a http://www.speedtest.com/ report showing 23kB/sec when the company claimed a 3MB/sec speed? The corporate lawyer approaches the judge and shows the bill clearly showed $53.93 and the plaintiff only paid fifty cents!
The judge looks at the plaintiff's speedtest report and asks the corporate rep if the IP address on the sheet is theirs.... well follow your imagination of how that meeting should go.
A business license should not be an open pass for theft-by-one-sided contract.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
Must be why Wyoming has no water or electricity. Can't be done.
Speaking as a Finn I find this ridiculous. We have a population density of 16/km2 or 41/sq mi for you who go by the imperial system, that is 201st in the world. The United states has 33.7/km2 or 87.4/sq mi.
In Finland we, in contrary to Sweden, have the industry building out the networks for their own money. Very little is subsidized unlike in Sweden. Still we are able to have really good internet connections. Currently we pay around 30-50euro/month for 24 / 2mbit ADSL (depending on where you live and ISP) in most places where fiber isn't avaliable but fibre is in general being expanded in most population centers and then some local areas such as small municipalities build their own fiber networks.
Where you can get access to fiber you pay the same for a significantly faster connection. I know for example that in my appartment building I would get 250mbit for 50/euro month.
As a matter of fact we are aiming at being able to provide 100mbit to everyone by 2015 source from the finnish broadcasting company
It doesn't matter how you reason, there's absolutely no reason what so ever that the major population centers in the US wouldn't have high speed internet access for affordable prices except the telco cartels.
To take a current example, look at Samsung vs. Apple. No matter who wins, users loose. Where Apple is winning they are trying to eliminate Samsung, and vice versa. Whoever wins, your costs will be artificially high, and your service will suck.
The banking industry is the same way. So is agribusiness. At the consumer level supermarkets have razor thin profit margins, but the big players in food production also form a corrupt insiders club: Monsanto, Cargill, Archer-Daniels-Midland. Individual farmers are not agribusiness insiders, they are another group of victims.
This is capitalism in name only. It does not produce the benefits for society that is the claimed rational for a capitalist economy. As a consumer you have no meaningful choices because all the vendors are corrupt and inefficient. It's organized theft at a global scale.
Why is Snark Required?
I hear this all the time. Sweden is less population dense than the US is! Estonia is less population dense than the US is! Norway is much less population dense than the US is! Why does New York City and San Francisco (the most population dense areas in the United States) get slower and more expensive internet than rural areas in Germany? Hey, Mexico has slower and more expensive internet than the US, and it is more population dense! Maybe it's an inverse relationship after all!
If you plot population density vs internet quality in countries, I don't think you'll come up with any clear trend. And if you only look at urban environments, internet in the USA is still crappy, which is another reason not to bother considering population when wondering why US telcos charge lots of money for low quality service.
The habitable area of Japan is miniscule. It would be more like comparing to Delaware or Massachusets.
A Pirate and a Puritan look the same on a balance sheet.
The CEOs clearly are being overburdened and need a tax break. I am sure if we give them more tax payer money they will help us out from the goodness of their hearts. Trickle down is here to stay
http://saveie6.com/
So Tilamook has great internet and great cheese? Cool! Curious to know how that happened. The internet, not the cheese.
Doesn't really prove anything, since you're clearly not typical. But the "1%" nonsense is getting old. Hey, I'm no TP worshiper of the free market, but blaming everything on the superrich is childish.
The US is falling behind because we've got intermediate options. In many places, it's easier to jump from nothing to broadband, skipping slower options. Here, we've already got the slower options in place, so many people (consumers, not just companies) are perfectly happy to stick with those rather than paying the cost of getting broadband. Eventually, those areas will fall behind enough that that won't be true anymore, and the US will jump out in front again, while others fall behind. Then they'll jump ahead again, etc.
The internet backbone has multiple routes between two points, but it is far from a complete graph. It is probably pretty close to being a planar graph, in which case the number of links grows linearly with the number of nodes. The number of nodes per subscriber is probably higher in rural areas, but that doesn't explain why many urban areas can't get fast and cheap internet either.
Below the backbone level, the vast majority of connections has only one upstream route, so the topology there is a tree. Certainly consumer connections, which is what this article is about. Trees can be seen as a hierarchical version of the hub-and-spoke topology you described, so they are pretty cost effective. Adding a hierarchical level is only necessary if the capacity hub cannot be upgraded anymore and adding one level exponentially increases the number of subscribers that can be served.
So I doubt the extra cost for a larger network is all that much. And I cannot imagine it outweighs the gains from being large, such as being able to do marketing at a larger scale, buying in bulk, spreading research costs over more subscribers etc. Also, if being large isn't an advantage, then why have there been so many mergers in the telecom markets?
It'll always be of a certain speed and at a certain price. Some people will be happy with that. Some will think it's too slow. Some will think it's too expensive.
Is "substantially slower than what is available in other countries at a comparable price" objective enough?
What's wrong with high speed (LTE) wireless?
The fact that it's being rolled out with the same single digit GB/mo cap as 3G and satellite.
"The US has the best government money can buy." This whole regulatory capture issue starts at the top. With de facto bribery being legalized, people who are best at that fundraising game become politicians. They are the ultimate regulators, a frightening thought. They are first legislators. They write the laws and appoint people to see that they are enforced.
"Crony capitalism" is the term we're looking for. When government intervenes in the markets, hold onto your wallets. It's always done under the guise of supporting the public good, but ultimately it winds up extracting more wealth from the population and benefiting favored industries.
"The fish rots from the head." This is why so many industries are able to extract wealth from the society and concentrate it in the hands of the well connected few.
Well said. Also Telcos sue the local governments when they compete. Apparently the state competing with a monopoly is unfair. I'm still waiting for UPS and FedEx to sue away the Post office.
God spoke to me
News at 6, featuring Republican and Libertarian pundits declaring: "it's all because there's too much regulation - deregulate everything and ... umm ... they will magically feel compelled to start a costly (for them) and profit-damaging innovation war". Or setting up a strawman argument: "yeah, but what are you gonna do about it? SOCIALIZE everything? *krak-a-thoom*"
Yeah yeah, I know, the above could also be branded strawman argument. Except that I've heard flesh-and-oil^H^H^Hblood Republican and Libertarian politicians using these flawed arguments countless times.
I think US Internet and wireless service suck: they are slow and overpriced. And Johnson is right: that's due to regulatory capture, insanely consumer-hostile regulations written by Internet and wireless companies. We either need a lot more regulation of these companies or a lot less regulation (and more competition), but right now, regulations make entry into the market hard, yet allow these companies to screw consumers any way they want.
Having said that, however, keep in mind that the French have much less disposable income than Americans: the US median disposable household income is $31000, in France it is $19000. In addition, there are hidden costs, such as special taxes on media and equipment, and the annual television tax (when you buy a TV, your name is passed on to the French tax authorities). Furthermore, the prices cited in the article for the US are a bit exaggerated: that $160 package is an obvious waste of money, and you can get something comparable for half the price. So, in the end, the differences between the US and France are not all that dramatic. But given the size and potential efficiency of the US market, Internet and wireless prices should be much lower here than in Europe, and they fail to be so.
If the number of links grows linearly, then your performance is going to be poor -- though this may be hidden by over-subscription.
Keep in mind that if your network is actually a tree, there is only one route from any point to any other, so you have no redundancy. (It is also possible the redundancy/network complexity is not directly obvious -- when I was dealing with these matters we had a single IP PVC set up over a frame relay network -- even though it looked like a single IP connection, there were failover paths setup within the frame-relay network, so the network topology was actually a bit more complex than it looked from the IP level -- and more expensive than it looked from the IP level, too.) Most of the IP networks I dealt with at the time had no single point of failure between any interior node, so it was a partial graph.
The costs can be tricky. Occasionally you hit the corner case of 'we want to upgrade from a T1 to a T3 in this location, but that requires a larger router, and there is no more space left in that colocation, so we would have to re-home all the customers to a different colocation.' (Also, if the equipment changes, on-site spares have to be factored in, plus tech training.) If you want another non-linear cost, consider customer support -- if you maintain X support staff per N customers, for every so many support staff, you will probably require an additional manager/human resources/etc. person. That requires a certain number more customers to cover the costs of that position, etc.
It is possible to beat this, no question, but there are an awful lot of small ISPs that tried to become big ISPs that failed that suggest that a lot of folks did not figure out the scaling problems ahead of time. The goal of a business is *profit*, not necessarily *size*. If growing 'larger' would not result in more profit, there is no incentive for the company to build out -- that's pretty basic business. It may depend on the right opportunity/technology to make the growth possible.
(You might do a google search on business 'growing too fast'. Growth is not always a good idea, nor always profitable.)
As far as mergers go, you need to factor in whether or not the merging companies have a 'paid for' network infrastructure, etc. If the two networks are already functional as is, then there is no need to do any expansion or new interconnection -- there is no additional capital expenditure involved. The networks could be run as is. (And of course, it's cheaper to buy out someone who has failed, or at least their equipment, cheap, after they've grown too fast and went bust.)
The problem I am referring to is the build-out stage where you have to invest cap-ex to build out capacity and need to be able to recoup that (before the equipment becomes obsolete.) The bigger/more complex the network is, the more it costs to fiddle with it. (Well, if you want to keep it running, that is. If you toss quality out the window, you can do these things really cheap.) The problem can be beat, but it's not necessarily an easy one.
So, given that growth does not always equate to profit (and growing too much or over-extension can lead to an implosion), and that revenue does not scale with costs (network growth is non-linear (even trees), personnel growth is non-linear, etc.) there is a certain pressure not to grow. There has to be a trick that enables the scaling -- better customer support system, new network gear at a cheaper price point, etc. However, if that requires new cap-ex/op-ex to implement, then there has to be a business case to do so.
Also, margins per customer can be really, really important. If you are trying to do a mass market, consumer service with tight margins with the goal of making a profit through volume, you are extremely subject to market prices. (I.e. in an extreme case, if the profit margin per customer is only $1 per customer, with a million customers, then that would be $1 million per month in profit. If anything happens which either raises th
They are also heavily subsidized and protected from competition, and they are still very expensive. In the end, they are not a good deal.
Replace it my hairy ass! They might want to actually attempt to install some of it! The fact that they choose not to and cherry-pick areas where density and demographics provide the highest and fastest payback likely has more to do with their choices of installation areas.
YOU are an apologist for these companies and there is no way around it. I first received DSL in my area in 2001. Optical links, used correctly, should be less, not more, expensive. It's not the hardware, it's the politics. The industry wants us to be THANKFUL of their generosity in providing such wonderfully expensive crappy service.
bob@Osprey:~>
Uh, did you miss the part where I called the 1% thing "nonsense"?
Er, just pointing out, the 1% is not all "super rich". Not all 311,592 of them. Of course, there are super rich people in the 1%, but in order to be considered a 1%-er, statistically speaking, you "only" have to make about 3-400k a year.
Of course, this just serves to underline the income gap in the US when it's not the top 1% that's the ultra-rich, it's the top .01% or .001%.
"People don't want to learn linux" hasn't been a valid excuse since '03.
France is roughly equivalent to the state of California in size and population density. Please explain why California doesn't have passenger rail and internet service equivalent to France (listed in TFA).
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
In the end, they are not a good deal.
Compared to what? Driving or flying over medium distances? I beg to differ.
Oh and the car/interstate and airline/airport systems aren't heavily subsidized and protected?
thegodmovie.com - watch it
Just separate hardware- from service-providers.
Companies - or municipalities, if there isn't a cheap enough offer - can provide hardware. Any ISP can enter the market and pay for their share of hardware use.
The correct answer for any question revolving around "why can't we have _____" is always corporate greed. Why can't we have socialized medicine? Corporate greed. Why can't we have jobs here to the US? Corporate greed. Why can't we have a thriving economy and middle class? Corporate greed. And why can't we have fast, reliable, and cheap broadband, television, and cell phones? Corporate greed.
Starting to see a trend here?
Well, I can still dream, can't I?
Have gnu, will travel.
Gees dude do you know your mathematics at all 1%. Population of the US 311,591,917 - Jul 2011, now that's 311,592 people
Mathematics: 3,115,919 people.
More mathematics: Those people combined make 13.3% of the wealth and pay 22.3% of the federal income taxes (source). This indicates the complete opposite of your use of the term "parasite", regardless of whether you look at the dollar value or the percentage.
All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
Yes, compared to driving, buses, and flying.
It's not a question of opinion. European passenger rail systems are losing money, are unreliable, and have high ticket prices. Driving is overwhelmingly popular in countries like Germany despite the rail system and car ownership is as high as in the US. And the (mis-)use of rail for passengers in Europe means that the rail system is actually inefficiently utilized, while large numbers of trucks are clogging the roads and polluting the environment.
Furthermore, it's not like the US isn't using rail. The US still has a rail system that is twice as large as all of Europe put together and it is nearly 100% utilized. But the US rail system is primarily used for freight, something that rail is excellent for.
I've driven all over Germany and I've taken the ICE.
After driving from Frankfurt to Munich, you're tired, ready for a shower, and have exposed yourself to quite the accident risk (and we don't even need to talk about the amount of energy it took.)
The ICE is faster, you can read or do whatever, and you're fresh when you've arrived.
thegodmovie.com - watch it
um.....120 pounds traveling at 60mph will still kill a person in a collision.
"First they came for the slanderers and i said nothing."
And in some parts of the world, you're damn lucky if you get a couple hours of power a day. Someone always has it worse off than you do.
Taking trains is clearly very pleasant and a wonderful alternative to the car; I take them every time I can when I'm in Europe.
That doesn't make it a good deal: most Europeans pay for these rail lines through taxes, but rarely if ever get to use the infrastructure. Worse, Germany outlawed long distance bus transportation in order to protect the rail system from economically more efficient competition, which means that large parts of Germany have no good or low-cost long distance public transport at all.
But, hey, as long as a few wealthy people and tourists can cruise in style from Munich to Frankfurt (or SF to LA), who cares about the peons who actually have to pay for it, right?
> If it's so profitable to build a telecommunications company then why are more local ones not popping up and serving our desires?
The fact that AT&T and Comcast will have every lobbyist and lawyer on their payroll swarming the city/county commission, state regulators, and anyone else they can think of to get the local government authority prohibit you from doing it? Kind of like they do every time some uppity community gets fed up and decides to lay its own fiber?
Compared to the massive subsidization of American roads and air travel that you just ignored?
Compared to the big money maker that is the Interstate Highway System?
Big corporations are above the law. The only thing that can make them accountable may be a violent revolution.
I've given up my cell phone for a SIP phone (phone over wifi) and it's working out alright for my needs.
"The ability to delude yourself may be an important survival tool" - Jane Wagner -
Subsidies are irrelevant to the question of whether a system is efficient. Assuming no subsidies to any mode of transportation, rail is not competitive with an infrastructure consisting of air and road travel.
And talking of subsidies... The US Interstate highway system cost about $450 billion in modern dollars, for 47000 miles, almost all financed by its users (through various driving-related taxes). California high speed rail costs $55 billion for 430 miles, and it is never going to recoup that cost from users, and people all over the country who are never going to benefit are forced to pay for that.
Oh, I get it, you are the almighty of the internet only your opinion counts, did you miss the part where I refuted your opinion. That's how forums work, different people put up different ideas and opinions and have them challenged, perhaps you are used to a far more right orientated censored forum, where only certain views are allowed.
Chaos - everything, everywhere, everywhen
I was leaping passed the children and retired folk, so as to avoid argument ie 1 in 10, perhaps I should have clarified.
Chaos - everything, everywhere, everywhen
I seriously don't get it this prices.. maybe lack of good competition? I know the country is huge but still... here in Portugal i'm paying 30 euros for 100MB/s download and 20MB/s upload fiber optics with free landline calls 24/7. Even 4G connection with 50/25MB/s is priced as 40 euros per month with unlimited bandwidth.
Fucking a fat girl is like riding a scooter... it's fun 'til someone sees you.
Not if trucks are made of marshmallow. Write your congressman NOW!
I have this exact issue currently. I live the largest city in my state, and I only have internet service available from one(1) ISP. That ISP has chosen to provide only 2 levels of service, I can buy 5Mpbs unlimited for $55/mo or I can buy 50Mbps limited to 50GB of bandwidth, with each GB over costing $0.50. I've checked my bandwidth usage and the limited, albeit higher speed, package would end up costing me well over $100/mo with my current usage. I don't subscribe to cable, because I prefer to stream from Netflix et al. If I were to use cable I would be able to get cable tv plus 50Mbps limited to 100GB of bandwidth per month for $90. As you can see, they're not very interested in providing just internet service to people, and since they currently have the monopoly I have no choice but to pay the exorbitant rates, or purchase service that I won't even use.
This whole things sounds like good reason for everyone to root for the Google Fiber experiment in Kansas City to be a huge success. If they can prove this as remotely profitable, then there's really no reason not to roll it out everywhere.
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
And how much marshmallow do you need to be 120 pounds? Besides, it still doesn't guarantee that the 120-pound marshmallow would not kill a person in collision when it moves at 60mph...
The Deutsche Bahn is a publicly traded corporation. My parents took a bus halfway through Germany just a few years ago. They didn't like it but it was some nearly free deal.
You are full of shit.
thegodmovie.com - watch it
So Tilamook has great internet and great cheese? Cool! Curious to know how that happened. The internet, not the cheese.
May have something to do with this... - the US landing comes out of the ocean a bit north of here, near Cannon Beach.
The Cheese? That just happened by Divine Writ.
But the "1%" nonsense is getting old. Hey, I'm no TP worshiper of the free market, but blaming everything on the superrich is childish.
I agree, hence the quotes around the term. ;)
Quo usque tandem abutere, Nimbus, patientia nostra?
Surprised by regulatory capture? It's one way to reduce competition and has been going on long before the internet; some guy even one an award for describing it. Despite all the complaints companies make about "regulation;" they don't want *their* regulations removed to the extent someone could *gasp* actually offer better service at a lower price. Look how long it took SWA to end the Wright Amendment prohibitions on its operations. Can't have some upstart come in and end our comfortable existence; and no, Romney ain't gonna do jack about either.
I'm a consultant - I convert gibberish into cash-flow.
Why look just at income taxes? The other Federal payroll taxes (Social Security, Medicare, etc.) affect everybody who works for a living, and are the primary Federal tax burden on low-income people. When I was working as a contractor in the mid-2000s, it was 15% of my business income, and I could deduct 7.5% from my taxable income. If you're a regular employee, they disguise that half by calling it the employer portion, but it does come out of your employer's payroll budget. There's a cap, currently somewhere around $100K, so somebody who makes $400K a year pays about a quarter of that percentage. It applies to payroll-type income, so those living on investments (typically not the lower 90%) are exempt.
On the principle that any money tied to my income that goes to the Feds by law is a sort of income tax, what percentage do the 1% pay?
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
You can only refute an opinion that you actually read.
Not a good explanation Good internet access is all about "last mile" infrastructure, not physical proximity to big honking cable. Satisfy my curiousity: who's your ISP?
The fact that cable companies still have customers with MPEG2 boxes just shows they are cheap and soaking every last dollar before they upgrade.
They bitch that bandwidth costs money, then refuse to upgrade to MPEG4 video because they would have to give customers new settop boxes!
SDV is a joke, it’s a bad idea that saved them again from switching to new settops in the house and using IP to the settop to just do multicast joins and unicast VOD, instead SDV with its dynamically assigned QAMs is a mess, and a huge waste of money, when eventually they are going to want to be at IP to the settop anyway. Allot of these cable companies own their own backbones and bandwidth is cheap, but I know many are still talking about billing per used bandwidth! I know TWC in my area will start putting your used bandwidth per month on your bill, but not charging yet for it, they just want to let you know they are watching! I would say this had tons to do with them trying to figure out how to make you not want to use bandwidth watching TV on the internet, instead of them figuring out how to compete and provide better services, its game based on how to hold on to more for longer. And yes you subsidize they guys with your tax dollars!
LOL - It's Charter. They saw what CenturyLink was offering in the area for DSL (hint: it sucked, the customer service was crap, etc), and decided to come in to provide some competition. I think at least half the county swapped over almost immediately.
We see a ton of tourists (being a coastal area), which likely explains the reason we have decent Internet out here. Every {Tom|Dick|Harry} who owned a business wanted to put in wifi, so...
Quo usque tandem abutere, Nimbus, patientia nostra?
...The industry wants us to be THANKFUL of their generosity in providing such wonderfully expensive crappy service because it puts more money in the pockets of those at the top.
I fixed that up a little for ya. Sorry.
:)
So, basically you're paying loss-leader rates. Look for it to go up once they've established market share.
Like you, I'm in an anybody-but-CenturyLink area (Portland). I went with Comcast, which gave me a good rate, though they did try to sneak in bogus charges in the installation. But after a year, they upped my rates drastically. And really, what can I do about it?
in spite of a county population density of around 22 per sq. mile, I get 30mbps at $30/mo.
Could you elaborate on the provider or the business model that got this done?
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Please explain why California doesn't have passenger rail and internet service equivalent to France
Lawsuits Anja Raudabaugh, executive director of the Madera County Farm Bureau, a plaintiff in one of the suits, said an injunction is the only avenue available to "prevent permanent damage and irreparable harm" to agriculture from construction and operation of the train system.
Yup - I fully expect the price to literally double. On the other hand, even if it does, I'm paying the same for 30mbps as I did for 3.5mbps with CenturyLink (they advertise up to 6mbps, but you're lucky to get even half that most times).
I did the Comcast thing before I left PDX. You have my sympathies. :)
Quo usque tandem abutere, Nimbus, patientia nostra?
Yes, and it is 100% owned by the German government, as well as heavily subsidized.
http://en.wikipedia.org/wiki/Deutsche_Bahn
There are some airport transports and some foreign operators, maybe they took those. There is no private long distance bus service in Germany because it was illegal until this year.
http://www.fodors.com/community/europe/germany-lifts-ban-on-long-distance-bus-travel.cfm
You need to do a bit more background research before you start insulting people.
WTH are you talking about? I've been all over Europe in both trains and cars (even drove right in to central Asia from Germany once) and very little of what you're saying is true.
Buses are reasonably common in Germany and regular people use the railways all the time. DB even has special weekend passes where you can pretty much have unlimited travel in Germany for 35 Euros (granted, these are for slow trains and this was ~5 years ago so the price is probably different nowadays)... this alone seems a little contradictory to your "large parts of Germany" statement, but it would seem you can get to most of Germany fairly easily - but if you just want to get from A to B, the high-speed trains are there.
In most countries ticket prices are the same or less than driving - last time I drove from Nice to Barcelona the cost of tolls was similar to the cost of the actual petrol and not so far removed from the price of the train ticket (for comparison, I did the same route a month later by train). Moreover, the trains are highly reliable throughout most of Europe, except when there's a strike on, but those are *relatively* infrequent, even if they are disruptive when they happen. In places like Italy and Spain trains get delayed but, that's not necessarily a railway problem, that's the nature of the country you're in (India, where I live nowadays, is the same or worse).
On the other hand, trains in Scandinavia are top-notch, fairly reasonably priced (arguably cheaper per KM than Germany) and well used. Austrian, Czech and Ukrainian trains are reasonably comfortable, not too expensive and for the most part seemed reasonably well used. ...Anyway, in all countries the railways are built with tax money (not much isn't) but the roads are too - not just with your municipal/federal taxes but at least in Germany the cost of your TUV certificates, insurances and tax from petrol and everything else all contribute to keeping those magical autobahns in service.
Founder & COO, Hayai India (hayai.in) / USA (hayaibroadband.com)
It seems the telecommunication companies have rewritten the regulatory rules in their favor.
The inevitable result of a free and unfettered market is monopolies that pay for laws to be written that regulate all their competitors out of business.
THINK! It's patriotic
German highways are more than covered by the nearly 100% gasoline taxes and user charges on trucks, so they are actually self-financing.
As for rail, if you live in Oberbumfuck (as most people do) and want to travel anywhere, the train is going to be slower than going by car (slow feeders, train changes, frequently delays) and just as expensive. You can't use Greyhound because that's verboten (or used to be). In the end, only 7% of German passenger traffic moves by rail.
Germany is a textbook example for why government-subsidized high speed rail is a bad deal. It's mostly tourists and politicians that like it.
OK I didn't know that the DB IPO had been canceled and I'll have to apologize.
But that buses are somehow illegal doesn't make sense. There are buses all over the place. That's probably one of those laws that nobody takes seriously so everybody ignores it.
thegodmovie.com - watch it
City buses aren't illegal; there are plenty of those. Private long-distance buses were illegal for nearly a century, for the explicit reason that they are cheaper than rail travel and rail can't compete with them.
The monopoly started because the victors of WWI wanted to have a monopoly on transportation in Germany and extract the excessive monopoly profits as war reparations. Later, Hitler used the monopoly to subsidize a railway he used for military purposes and to send Jews to the gas chambers.
Did you factor in population density?
Kansas City has a rather low population density, and Google is deploying 1Gbps (each direction) fiber to the home for a similar price to Time Warner's 15/1Mbps service. Each home will be wired to a "fiber hut," which will be on the Internet backbone. Installation is $300 (waived for a 1 yr Gbit contract or payable over 12 months), then service is $70/month for 1Gbps or free for 5/1Mbps (guaranteed for 7 years), and it comes with a nice router. Their next phase of roll out will include areas with fewer than 350 people per sq mi.
Service cost is a matter of population density and infrastructure. Unless upgrades require different cabling, the level of bandwidth included in the service generally costs per port, not mile.
Except that's not true. The Constitution does give Congress the power "To establish Post Offices and post Roads", but the world exclusive is nowhere to be found. A competing postal service is no more unconstitutional than privately owned highways, of which there are hundreds in the US.
Now, you were going on about being embarrassed?
Capitalist idea? The capitalist idea would be that they should *freely* compete with each other. You don't have to lobby to compete. You have to lobby when you need some sort of permission or you are seeking some sort of protection from the government; i.e., constraining the market in some way. I don't advocate a totally unregulated market. However, to say that lobbying is a capitalist idea is rather odd. Well, maybe not - I guess in the event of total state control, you don't have lobbying because you don't have the company in the first place, just the state.
Regulatory capture... regulatory capture .. OF COURSE!!!!!!!!!!
You think US internet is slow and expensive?
Try Canada, I think we probably have you beat in both traditional service and mobile solutions. By that I mean ours is more expensive and slower. For much the same reasons, but worse. Only a handful of companies, with little or no compatition, most simply mirror each others prices. A reglator agency (CRTC) firmly in bed with industry as well as politicians to keep things favorable for them.
My internet is pretty fast, but I pay 80$ a month for the privliage.
Actually in Japan most of the traffic is to Japanese sites hosted in Japan.
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Sorry sorry sorry, did you say delays? In Germany? Nein nein nein!! Das ist verboten!! The crew would be shot :P
However, at the same time, Germany is a (comparatively) small country compared to, say, the US. Germans, being the stereotypically efficient folks that they are, have worked out that they can probably can get from Frankfurt to Berlin by car faster than they can by train - and it's less hassle than a plane (while I seem to recall Berlins airports being all accessible by train, they're not as well connected as Frankfurt)... but distance is comparable to what... DC to NYC? (I'm guessing wildly here), so it becomes a matter of value/time. No tolls on Autobahns (unlike, say, France and Spain) so driving is perhaps cheaper too, even with the taxes... and so on. But that doesn't mean the German rail network isn't brilliant.
Germany is a great country to go through, so for getting from point A to point B (say, Paris to Vienna - even though I assume this isn't what you mean by tourist**) it's a great option as opposed to flying shitty budget airlines.
And if you don't appreciate it, come to where I currently live (India) - or try my homeland (NZ), where the problem is basically the same: a small island country which you can drive major centre to major centre in ~8 hours even at 100km/h, thus, trains are grossly underused and the roads, similarly free of tolls, are preferred due in part to the pricing but also the scheduling.
**Also, I spent too long in Europe to be a mere tourist.
Founder & COO, Hayai India (hayai.in) / USA (hayaibroadband.com)