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How ISPs Collude To Offer Poor Service

Posted by Soulskill on from the they-do-it-pretty-well-without-collusion-too dept.

alexander_686 writes "Bloomberg is running a series of articles from Susan Crawford about the stagnation of internet access in the U.S., and why consumers in America pay more for slower service. Quoting: 'The two kinds of Internet-access carriers, wired and wireless, have found they can operate without competing with each other. The cable industry and AT&T-Verizon have divided up the world much as Comcast and Time Warner did; only instead of, "You take Philadelphia, I'll take Minneapolis," it's, "You take wired, I'll take wireless." At the end of 2011, the two industries even agreed to market each other’s services.' I am a free market type of guy. I do recognize the abuse that can come from natural monopolies that utilities tend to have, but I have never considered this type of collusion before. To fix the situation, Crawford recommends that the U.S. 'move to a utility model, based on the assumption that all Americans require fiber-optic Internet access at reasonable prices.'"

22 of 207 comments (clear)

  1. Interesting theory by Anonymous Coward · · Score: 5, Insightful

    Crawford recommends that the U.S. 'move to a utility model, based on the assumption that all Americans require fiber-optic Internet access at reasonable prices.

    This all sees well and good. Too bad it's not capable of happening, since the USA is run by corporations, and it'll be a cold day in hell before they shoot themselves in the foot.

    If you want not retarded internet, your single only option is to move out off the continent.

    1. Re:Interesting theory by Anonymous Coward · · Score: 5, Insightful

      If you want fiber-optic Internet access at much lower prices than we have today, you'll have to convince millions of others.

      There are millions of people on 1.5Mbps or less DSL who see no need to pay even $1 more.
      There are millions of people on dialup who don't need to stream anything at all.
      There are millions of people who don't know what all the fuss over this Internet thing is about.

      But you want those millions of people to buy you a pony!

    2. Re:Interesting theory by cdrguru · · Score: 3, Insightful

      Absolutely. Step 1 is figuring out if the statement "all Americans require fiber-optic Internet access" is true. So far, it isn't by a long shot and the assumption that it is true is one of the big problems.

      If Internet access is needed by everyone, then maybe a utility model would work - everyone pays and everyone gets service. However, if it isn't true then moving to that kind of model would impact a huge number of people in very negative ways, especially in the pocketbook.

      Another aspect that should be considered is if the Internet is ready for everyone to need it. What would happen if the entire US had unlimited fiber access? Well, my guess is that spam would increase (ha!) and that scammers would get a lot richer. Most of the people that do not have access today wouldn't know what to do with it if they had it and would certainly believe that a Nigerian prince was holding millions of dollars for them, if they only send $125 to him today.

      Does this sound like a good idea?

    3. Re:Interesting theory by darkfeline · · Score: 5, Insightful

      Depends on what you mean by "require". Not everyone "needs" electricity, gas, telecommunication lines or water either. Hell, why don't we all go back to the days where everyone lives in cottages on a ranch with maybe a well and some farmland?

      The point is, Internet access has an infrastructure dependency and provides a service which fits perfectly with the utility service model, so it makes no sense that we use a better model for gas and electricity and not for Internet. This is Economics 101, here, but the wikipedia page provides a good explanation https://en.wikipedia.org/wiki/Utilities

    4. Re:Interesting theory by Anonymous Coward · · Score: 5, Insightful

      As a dialup user, I still have a smartphone if I want to stream anything video.

      The main problem with dialup these days isn't even the slower connection speed (I have seen as slow as 21600 bps) or the host-based softmodems (HSP or HSF modems). The main problems are: bloated oversized page graphical elements, websites using tons of JQuery and/or Yahoo API and/or Google API and/or Facebook API. Many of those sites use additional scripts just for user tracking and that's even before addressing the ad-serving scripts on the page. Watch that modem process and process sometimes for well over 10 minutes before the site finally loads--IF something doesn't time out and cause a Page Cannot Be Displayed error to be generated by the browser.

      Turn off scripts, and see how fast the actual HTML-only content of the page actually loads over dialup. But, then the page is still mostly broken because buttons and even hyperlinks on some pages are dependent on client-side scripting.

      In summary, it's shitty web design all over "Web 2.0" that designs every page as a dancing and singing application in a web browser instead of a mostly static page with a few optional active elements. I would welcome a throwback to the earliest days of web pages where they would still load over 14400 bps and used mostly HTML-only elements for the page, graphical content was minimal and any graphics used as small of a size as possible balancing quality with loading speed. Either that, or stop using my client-side bandwidth for page control processing, user tracking, and ad serving--do all that shit on the server-side and give me a quick-loading client-side page that will actually respond on click--not a few seconds later.

    5. Re:Interesting theory by Runaway1956 · · Score: 4, Insightful

      The pony was bought and paid for. The telcos have accepted money over the years, from the government, purportedly for the purpose of getting broadband internet out to the "last mile".

      We're not asking for another pony. We just want to ride the frigging pony we've been promised. The pony that we paid for already.

      I would agree with this mockery you make, except, just across the water in Europe, everyone has the pony. Fast ponies. They have pony races, just to see how fast they can go. We can't even climb on a broken down old circus pony to be led around a little rope corral.

      Obviously, we're doing something wrong on this side of the pond.

      --
      "Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
    6. Re:Interesting theory by Runaway1956 · · Score: 3, Interesting

      You're very much right that not everyone actually requires fiberoptic service. First, separating wants from needs is important. I'd like to have super fast fiberoptic, but I don't "need" it. Few of us do, really. We can be patient, and wait for ten minutes to get a file that would have downloaded almost instantly on fiber. So, we're in agreement there.

      But, you're a lot less right when you say that the internet isn't required by everyone. In today's world, if you don't have internet, then you cannot be competitive with the competition just a couple miles away. I live out in the sticks, where internet service was very spotty until five years ago. The access that is available is still pretty crappy today.

      My "auto parts" store of choice lost business to franchised auto parts stores, until they finally got online. People searching for things simply couldn't find them. The franchised stores were either on line, or they were represented by a corporate headquarters site which listed them, along with a map with directions to their stores. My supplier simply didn't exist. Even though I knew where they were, I couldn't go online to find out if they had a particular item in stock, or if they would have to order it.

      Now that Mr. Baker has an online presence, he does get more business. His online presence isn't a very good presence, because he is not tech savvy, and doesn't understand the need to hire someone who is tech savvy. Still - he's there. And he gets business that he never did get before.

      If the old guy would hire someone to market him online, he could gain a lot more business, because he offers things that the franchise stores don't. Farm and tractor supply parts, tractor trailer parts, small engine parts, that O'Reilly's and others don't offer at any price. The bulk of his business comes from word of mouth advertising. A real on line presence, tailored to suit his needs would easily increase his business by 10%, probably 20%. I could potentially increase his business by 100%, but there's no way to prove it until someone actually does it.

      I say that in today's world, internet access is a necessity. You simply can't compete unless people can find you.

      --
      "Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
    7. Re:Interesting theory by hairyfeet · · Score: 5, Interesting

      You simply cannot fix a corrupted system by working within that system, why? Because they will simply change the rules to insure that you can't win silly!

      While I was never a fan of Ron Paul (to me libertarianism is just an excuse for rich to hoard and starve the poor and I think if we ever did have a libertarian government we'd have a full scale uprising from the poor within a decade) but frankly anybody that thought they could change things by working within the system should look up "Jon Stewart Ron Paul" to see how truly badly the thing is rigged and how the MSM is in bed with the megacorps controlling the elections. In the Stewart video he shows clip after clip of stations all over the country, national and local, treating Paul as 'he who shall not be named' and even going so far as to name the first, second and FOURTH place finishers in a race. The last clip even has a reporter saying to the anchor "Here we are talking about Christie and Palin, who aren't even in the race, and not Paul who is doing well here" and the anchor gets a douchebag smirk and looks straight at the camera and says "Well if you get Palin or Christie footage send it up, you can keep the Paul stuff" with another douchebag smirk.

      Add to this the people in charge of counting votes in several places in NH saying "The numbers the RNC reported were NOT what we handed to them, they aren't even close" or the "voice vote" on allowing the Paul delegation to speak where they caught it on film that the vote results were already on the teleprompter before the vote was even cast? You can give it up friend, all you can do is take as much as you possibly can and wait for the entire rotten mess to collapse which it will, probably in the next decade as the bubble they have blown in the financial market will make the crash of 29 look like a bad weekend when it blows.

      Short of violent uprising and revolution there is simply nothing to be done, the same cabal of corps owns the MSM, controls the elections, its all as kayfabe as pro wrestling. Why do you think no matter how you vote nothing changes, and it never gets better? As the lat great George Carlin said "Things will NEVER get better in this country because the owners WANT it this way! They own the country, they own you, and its never gonna get any better!" and he's right, the system is so completely corrupted that it would be impossible to ever fix it, they control what you see and hear, the price of Internet keeps going up to keep more and more peasants away from it, and its never ever gonna get better.

      --
      ACs don't waste your time replying, your posts are never seen by me.
    8. Re:Interesting theory by joocemann · · Score: 4, Insightful

      To clarify.... Not everyone needs internet just like not everyone needs roads... What? Not everyone needs roads? Correct. Some people don't go anywhere, or go places on foot and on bikes, which could be mountain bikes, and using dirt footpaths. They don't need roads...

      But they DO need roads.... they want a pizza delivered. They want the ambulance to show up when their kid biffs hard on his bike. They want their neighbors to be able to get to work 40 miles away and come home in time for the neighborhood bbq.

      Sure.. you don't need internet to have fun, or maybe for your own personal choices. But you need internet for the businesses around you to keep their prices lower with digital age technology. You need your government to have communications tech so they can protect you from the various nutjobs around the world that are angry for debatable reasons. I could go on with a million examples of how you passively take benefit from the internet --- so much so that your current state of life, even without you personally using it, NEEDS the internet.

    9. Re:Interesting theory by hairyfeet · · Score: 3, Insightful

      The problem is more and more of our content is gonna be digital, you have everybody including ALL of the major OSes pushing the appstore model, yet instead of laying lines you have the ISPs putting ever nastier caps. Ever see how much streaming video takes? Or buying a game digitally? I know that I probably went through 50GB on the Steam Summer sale and I wouldn't be surprised if I go through that or more before the Xmas sale is through, how many of those sales do you think they'd get if I was paying $1.50 a GB which is what some of the caps they are proposing run?

      This next gen will probably be the LAST generation where the games come on discs, not only are the games getting bigger but digital distribution allows for cheaper games and can all but kill piracy since most won't have the skills to sideload digital games and hack a Xbox 960 or PS5, so what then? because its obvious the ISPs don't give a shit, not if they have the option to just cap the hell out of everybody and keep the profits. We are finally beginning to reach a point where you can truly have the world on demand, movies games and shows will all be cheap and instant, but if the ISPs just keep adding nastier caps the world will get this great new digital age and we'll be stuck on the equivalent of dialup. Of course the stocks will never be higher, have to think of the stockholders ya know.

      Oh and to the guy talking about "all the millions of slow DSL or dialup" how many of them have any actual choice? I live in a town of over 20,000 and there is plenty of places where your choice is dialup or nothing, hell when I lived in Nashville a while back there was places even in a city that size where it was dialup or nothing, so who says they have any choice? I have several customers on the lowest DSL so you would count them as "not needing faster" but in reality they all tried the highest tier AT&T had and all it did was raise their bills, speedtest.net showed no change for that extra money. Should they simply give AT&T an extra hundred plus as a prezzie so they'll be counted? I tried the highest tier at my cableco, it gained me a whole 3Mbps and cost $120! more a month for 3Mbps more download and 1Mbps instead of 512Kbps upload. Do you think I wouldn't jump at the chance to get anything faster at a fair rate? Hell its costing me $110 a month now for just net and home phone service, but since their phone don't count against the cap and something like Vonage does its not like i have any options, and in my area if you are LUCKY you'll get 2Mbps DSL, most don't even get 756Kbps.

      --
      ACs don't waste your time replying, your posts are never seen by me.
    10. Re:Interesting theory by DragonTHC · · Score: 4, Insightful

      and yet my comcast gives me 25Mbps down and 3Mbps up.

      They just don't want me to use it. They'd rather I downloaded from their networks with services like hulu and any other video services which require a cable subscription to be viewed on the Internet. ISPs should not be in the content business as well.

      --
      They're using their grammar skills there.
    11. Re:Interesting theory by dokebi · · Score: 3, Insightful

      I used to care about users like you--on dial up, or huge latency, etc.

      Use to. Until I realized that my ad revenue from you is basically zero.

      Welcome to the capitalist web.

      --
      In Soviet Russia, articles before post read *you*!
  2. to the surprise of no one. by retchdog · · Score: 5, Informative

    ``I am a free market type of guy... but I have never considered this type of collusion before."

    no shit. try doing some homework. here is a quote from that rampant communist, Adam Smith:

    ``People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary." — book I, ch. 10, An Inquiry into the Nature and Causes of the Wealth of Nations, published 1776.

    --
    "They were pure niggers." – Noam Chomsky
  3. Completely unforeseen! by Qzukk · · Score: 4, Insightful

    but I have never considered this type of collusion before

    What, you never possibly considered that collusion happens because nobody wants to stop the gravy train? AT&T and Verizon and everyone else there have got it good, their train will chug along with minimum investment and massive profits for as long as none of the people aboard says "Stop the train! I want to spend billions of dollars on infrastructure investments and charge less to compete with you head on!"

    --
    If I have been able to see further than others, it is because I bought a pair of binoculars.
    1. Re:Completely unforeseen! by postbigbang · · Score: 4, Interesting

      The history of utilities until they became massive monopolists was that various jurisdictions granted them easements, right-of-way, and lots of other considerations in exchange for getting services built. The telcos were independent, and a long distance network consisted of AT&T, ITT, and others. Then came Judge Greene, a breakup of AT&T, GTE and ITT consolidations of the Baby Bells, and the sense that utilities were unbridled and focused on shareholder return based on serious assets.

      The landlines were different than what is now the Internet. Most were analog copper cables that had muxed data channels. Fiber is only the last 20yrs.

      So there is this mixed bag of monopolist thought as we've boiled down the US landline carriers to six, wireless carriers of significance to four, each with a territory in landlines. Some communities did their own fiber optic services, but they're rare. Communities became forbidden after their state legislators were sufficiently bribed to prevent community utility access. Co-ops went the same way, although there are still some around.

      Collusion? The telcos shifted much away from the State PUCs to the Feds with the TCAct, so they'd only have to fight (I mean bribe) Washington and deal with the FCC.

      And in reality: this is a huge freaking country, and trying to cover it with copper, fiber, or wireless still takes a lot of capital. How do you get capital? A business plan with a guaranteed return on investment. How do you get guarantees for revenue floors? Collusion? What a bright idea.

      Utilities are unique and used to be cooperatives and had a ceiling on revenues, each price increase in front of a state or perhaps federal committee, breathing down their necks to keep prices reasonable. Government doesn't protect people much anymore, it protects the interests of business in the blind faith that says: in doing so, you're disciplining investment. Bullshit.
       

      --
      ---- Teach Peace. It's Cheaper Than War.
  4. Make them operate like utilities. by Roger+Wilcox · · Score: 5, Insightful

    The situation as it stands is unacceptable. The telcos have proved that they cannot operate broadband service fairly without regulation. Therefore: something akin to common carrier laws should be in effect for all broadband service providers.

    1. Re:Make them operate like utilities. by valley · · Score: 4, Interesting

      But as Corporate America now rules Congress, the chance of regulations in favor of the consumer is close to zero.

  5. We'll Get There by nicobigsby · · Score: 5, Insightful

    Competition will solve this problem. It may take a little while but Google's beta test of their ISP service seems to be going well and has the telcos running scared (even reportedly going door to door in KC checking on customer satisfaction). Google is making a move here and I can't believe they intend to come to some sort of gentlemen's agreement with the telcos considering one of the motivations for Google entering the market was to thwart extortion attempts by the major ISPs where they were attempting to force Google to pay them a fee in order for them to deliver Google's content at the higher speeds, when we already pay them for the service of delivering Google's content to us. This move by Google smacks of the style of the old industrialists, like Rockefeller building oil pipelines to circumvent back door deals made by the railroads to charge him more money for shipping oil. This industry is still young, but if Google proves it can be profitable to lay new fiber and thereby dispels the idea that we have to use the existing infrastructure of the telcos, we will see even more new players enter the market. Already many cities are partnering with local companies and universities to offer residents high quality local ISPs for less money. I think it's too early in this industry to jump on the whole "we need the government to fix this for us" train... in the end I can't see that being a great answer anyway... especially when you consider that all conventional utilities have to do is provide consistent power/water supply to their customers, and there is a lower quality of service ceiling than in the ISP game.

  6. Google Fiber by Qwavel · · Score: 5, Insightful

    Isn't this why Google created Google Fiber?

    The primary purpose of Google Fiber is to give the industry a kick in the arse.

    1. Re:Google Fiber by Anonymous Coward · · Score: 5, Insightful

      Yes and no.

      The ability to mine it for information is a plus to them, but their primary motivation was to FORCE the local providers to get off their bum ass and do their jobs.

      I honestly hope google spreads and actually becomes a major player that the local providers have to compete against on a national scale so they have to upgrade and give us decent service instead of this 1 meg up 45kb/s down they want to give us now in some areas.

      Google is offering what the other guys should have ALREADY been offering but refused to do so and for that, I thank them. Do I like the fact they are mining my information online when/if I use them? I am not particularly thrilled about it but it is their entire core industry and they do not hide that fact now what they do with it so I honestly have no issues with it with how they are currently doing it and just follow the rule of "Never put online what you don't want the world to know" and for the other stuff, encryption is your friend.

      My biggest issue with google is not standing up to the US government on requests enough. As far as I am concerned, the government shouldn't be able to ask for information without a warrant period unless in emergency life or death situations and even then, that would be a 90 second phone call to get a warrant.

    2. Re:Google Fiber by Pollardito · · Score: 3, Insightful

      The primary purpose of Google fiber is to threaten anyone in the industry that would charge Google (as a content owner) a fee to move data to their customers (i.e. network neutrality). "You charge us to reach your customers, and we'll make them our customers or less profitable customers with a price war." They probably only need to successfully wire one city to do that, so we'll see what happens after that. They try to avoid entering industries that require a lot of customer service, so it seems unlikely they'd follow up K.C. with a lot more deployments unless they feel they need to do so to prove their point.

  7. Re:Antitrust by U8MyData · · Score: 3, Informative

    On the payroll...