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Why America Won't Match Sweden's Cheap, Fast, Competitive Internet Services
ashshy writes: Swedish Internet services run both cheaper and faster than American ones. For example, many Swedes can pay about $40 a month for 100/100 mbps, choosing between more than a dozen competing providers. It's all powered by a nationwide web of municipal networks in direct competition with ex-government telecom Telia's fiber backbone. The presence of regional government in the Swedish data stream makes many Americans uncomfortable, to say nothing of the very different histories between these backbone buildouts. The Motley Fool explains how the Swedish model developed, and why the U.S. is unlikely ever to follow suit.
TFA asks the following question in the headline...
How Come My ISP Won't Increase Internet Speed and Lower My Bill, Like They Do in Sweden?
then asks later....
So why isn't America following the municipal path to high-speed bliss? ... it's complicated
is it?
is ***profit*** for Verizon & other teleco's really that complicated?
they don't lower our rates or give us better service b/c they have a *monopoly* and no competition or incentive to give us anything other than the bare minimum ammount of service that we will tolerate!
Thank you Dave Raggett
We're 20x the size of them, have a completely different political setup and most people won't think to compare one arbitrary country to another?
Hey, while we're at it, can someone tell me why South Korea has so much better cell phone coverage than the US?
It's time to make peer-to-peer mesh networking a viable technology.
I write sci-fi for metalheads
Profit is king in the US. Providing for your citizens is king in Sweden. Apparently those are unrelated concepts.
Here in SoCal I use Sonic.net as my ISP and get 20/1 mbps + unlimited phone service for $40/month. That's about as good as you can get, if you want a real ISP and not some crap like Comcast, Time-Warner or AT&T.
I'm guessing "anything which would ever smell like socialism and not guarantee the profits of huge corporations simply will not fly".
Sweden made a choice which will benefit all citizens, and uplift them.
There would be political opposition to anything like that, and some will truly believe not having a corporation making obscene profits and being entrenched monopolies would be immoral.
My guess is, the same people who oppose socialized medicine, would disagree on the same premise. Because they somehow feel society is best left to rot as long as they've got their pile of money.
Lost at C:>. Found at C.
It's already been a decade that I've had fiber to my door here in Romania for about $15/month. Recently the ISP started offering gigabit for only two or three dollars more. And it's really reliable high-speed too: no throttling, even when I torrent hundreds of gigabytes a month of films. Show Americans how it works in Northern Europe and they might chalk it all down to the unusual social harmony there. That even villages in a corrupt Eastern Europe country have better and cheaper internet does more to underscore a deep problem with US broadband.
Most Americans would love to see government with municipal broadband. It would save them money despite typical government waste simply because of how much the incumbent ISPs are gouging with their ridiculous pricing structure. We can't have it because politicians are controlled through lobbying to eliminate new forms of competition and it flies in the face of populist "small government" ideology.
I am becoming gerund, destroyer of verbs.
Motley Fool.
I've read their "analyses" on things I actually know about. You might as well get your advice from Yahoo answers.
Please do not read this sig. Thank you.
The population density of Sweden is lower than that of the United States. Of course this is actually a fairly small consideration overall, but I'm only pointing it out due to the inevitable posts saying that the population density of the United States is to blame.
The building I live in in Stockholm has a deal with the ISP Bredbandsbolaget where everyone (ca 200 apartments) pays 15 USD/mo for 100/100. For an additional 10 USD/mo they upgraded my connection to 250/100. My summerhouse in the middle of nowhere has a 100/100 via fiber for about 30 USD/mo.
Sometimes socialist Sweden is nice =)
Everyone talks about download speed but the goal of internet connection shouldn't be how many 4K movies can you stream at a time. For a true Internet, one not dominated by a handful of big name services, we need upload speeds to be close if not symmetric with download. Unfortunately upload speeds are abysmal for even most high-speed lines.
While politics and profit, lack of competition all are major factors in our crappy broadband options, we have to keep in mind that the US is vastly greater, and far more spread out then many countries we are being compared against. The cost to wire up rural areas, hell even some of teh suburbs of major metro areas is significantly more that it is to wire up more densely populated areas. These are businesses after all, they are out to make a profit, and honestly, I do not have an issue with that. What I do have an issue with is companies lobbying for anti competitive laws that prevent local governments from doing what the for profit companies won't do. Trying to wring every last cent out of us. They make billions, yet refuse to upgrade because that will eat into their profits, and the lack of competition between what is essentially a duopoly. And while there is no concrete proof (ie written documentation), it appears that collusion between those duopolies is the name of the game, prices never come down, only go up. Then there are the un fees, below the line fees made to look like regulatory and gov fees, but really are just a way of jacking up the price, without actually having to hike the base price. Almost 30% of my bill is just fees. I could go on, but you can go peruse dslreports/broadbandreports if you really want to know more.
I came, I conquered, I coredumped
Define "it". The Internet service may be better, but that's because it is subsidized by Sweden's considerable taxes.
Which means, the costs are (much?) higher than the bill says — and TFA cites — the difference is paid to the tax-authorities instead of going directly to the service-provider.
In Soviet Washington the swamp drains you.
To start with, I have no idea what the answer to this question is with regards to the Swedish system, but I've found that in many cases of solutions like this the "cost" paid by end users is heavily subsidized in other areas (in the US it's so common it can almost be assumed). So if the $40 / month pays for all of the capital costs, maintenance, depreciation, etc. then wonderful. Otherwise it's just accounting slight-of-hand - put a happy number out for the public, and if somebody digs and puts together real costs then they find that the real number is horrific.
On the other hand, in the US most major metropolitan areas (there are exceptions) have sold monopoly or duopoly franchises on internet service, which also distorts prices horribly and in other directions. I live in one of these areas, as do most of the people I know (I get to chose between mostly tolerable but pricey Cox, and utterly abhorrent AT&T - for practical purposes just one choice). In many cases these "utilities" are limited to certain profit levels, so they just adjust their costs up. Competition isn't magic; it just incentivizes aggressive pursuit of the best cost / quality tradeoffs (which are usually subjective and may vary significantly between individuals, eliminating the possibility of a good "one-size-fits-all" solution).
Help save the critically endangered Blue Iguana
If profit is king, you would see more companies seeking that profit. Where there is an abnormal amount of profit, that is a signal to the market that there is ample reason to enter that market to get a share of that profit. As such, service improves and price decreases... as is noted by Sweden having 10+ service providers.
So ask yourself... why do we NOT have competition? It's not because of greed and profit... it's because of government restrictions.
I have a 10/1 at the cost of 40EUR a month (about $50USD). These wonderfully cheap and fast internet connections are in the big cities and in some medium size cities. I live in a small community 20KM from larger city. I could move there and get 100/10 at 50USD a month but I would have to move to a rental with a rent of $750USD a month for a small one room apartment... but the wait time is right now about 18years so that will probably never happen.
Sweden is a real shit hole on the verge of economical collapse! Socialist governments don't work.. but their propaganda does.
Just because two systems are structured differently doesn't mean they both can't be efficient. The world is full of many different ways of doing things. And many of them are competitive with each other.
The primary problem in the US is regional monopolies. They don't expand because they have no competition. And they don't lower prices because they have no competition.
So in OUR system the solution would be to increase competition by removing artificial barriers to new competitors which should drive down prices and improve services.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
arguing about definitions is a red herring...aka trolling...
TFA talks explicitly about how teleco's compete on the Fiber backbone
it is in no way the same as a "government monopoly" like AT&T had here in the US
Thank you Dave Raggett
The fool says " Flooding or overriding this system with government support would be politically impossible, so we're stuck with this framework. That means focusing on profits over service quality, and there is no incentive at all to lower the cost to consumers."
Municipal broadband is not about the feds pouring money in. It's about the feds fixing the rules so local folks can try to improve their situation. It's an unfortunate situation if a few companies can politically override what seems like the common good.
Sorry being from this frozen land while there is municipal networks it's not the same as the municipal will provide this service to all it's inhabitants for a $40 a month. The municipals are explicitly forbidden in law to provide broadband and other municipal services (water and sewage for example) at subsided prices. This means that unless the network is just outside your door or put in the ground close to you for what ever previous reason you will most of the time need to front the cost of initial connection (i,e the cost of putting the cable in the ground). Sweden being very pricey it can easily mount to $$$ in the case I know of it was an estimate of $15k - $30k plus %25 VAT for broadband, sewage and water. The cost to connect to a nonprofit broadband assosiation was around $6k plus 25% VAT. So if you are outside of the main municipal village your most of the time fed..
There is also a hell of a lot more involved.
yes...for a laymen i understand it would seem that way, but for anyone who has been trained in IT or network engineering or telecommunication engineering would see this as just another day at work
are you saying that teleco's litterally do not know how to make a nation-wide network? b/c that's insane...it's workaday t-com engineering
it's not about lack of knowledge or money...it's about Verizon & Co wanting to keep their gravy train running at our expense
Thank you Dave Raggett
Citation needed.
In Soviet Washington the swamp drains you.
Greed
Apparently Motley Fool is a Stock Pumping organization, and here I though they were just some folks that showed up on NPR once a week
OK, let's watch the video. Turn off the sound; it's a powerpoint anyhow...
Oh my fsm it's still going on will you get to the fscking point! Geez, I give up. Google for it. It's Sierra Wireless (SWIR).
Apparently they make those little yellow balls-on-a-stick that Howard Tayler puts on all the smart devices over at schlockmercenary.com
Oh, and when I try to leave the page, a script asks me "do you really want to...".
Holy crap this reeks of scam. Never again click on motleyfool.com
"Reality is that which, when you stop believing in it, doesn't go away." - Philip K. Dick
How much do Swedes pay for the combination of internet, cable TV, and phone? TFA says $80 for Verizon internet in the US vs. $40 in Sweden, but I paid $80 for all three services the last time that I had a Verizon bill. They essentially gave me basic cable for free and phone for $10. Also, does this include equipment and taxes? The advertised prices for service in the US often differ from the actual bill. Is this unlimited internet (like Verizon) or capped internet (like Comcast)?
While trying to look up phone prices, I found http://www.hotcoursesabroad.co... which suggests that you can't get internet via "fixed line" in many parts of Sweden. This somewhat reduces the impact of having a lower population density.
Sweden is about twice the size of new Jersey. --
1. topology and infrastructure across sweden and 6 million swedes vs 350 million americans and many times the sq mileage.
2. The swedish government subsidizes a lot of it. I prefer to not pay for what I'm not using and keep the state out of my internet (too bad we're far from that goal). If you include the tax money paid into the subsidy it doesn't look so cheap anymore. Fuck high taxes.
The summary almost reads like a "see? your society should be more like swedens" shaming session. The swedes can keep their high income and vat taxes.
To sum up:
Sweden has spent ($UNKNOWN_QUANTITY) to achieve commendable broadband speeds for 57% of its households - probably that's more than 57% of its population since they presumably began in the denser areas, but let's say it's around 7 million of their 9.6 million people.
This is like wiring several major cities in Texas, or, as the article points out, 2/3 of North Carolina. Sweden's population density is less, true, but the sheer amount of labor required to lay fiber for 174,000 square miles (Sweden) versus the 3,794,000 square miles of the United States seems like it might be relevant.
We can all applaud the result, but having no idea what it cost them, I am not sure how we can even begin to make an Apples-to-Apples comparison. What conclusion are we meant to draw? That municipal broadband is a good idea? So many localities and states have tried their hand at it and lost so much money that 22 states now have laws on the books forbidding it. But there are two separate conversations going on here.
Conversation #1 is: 'How do we grow the availability of broadband in the United States in a rapid and efficient manner?'
Conversation #2 is: 'How do we provide the human right of broadband Internet to everybody?'
Here in Austin, we've now got AT&T and Google offering a gigabit for under $100/mo and Time Warner just upped their max speed from 50 to 300 megabits without raising prices. How did this happen? Is Austin special and magical and is it easier to lay fiber here?
Nope: anybody who has ever tried to dig a hole 'round these parts knows the sound of a shovel hitting limestone. Rather, Google got the government to agree to get out of the way. Within a period of a year, AT&T and Time Warner went from a duopoly offering fairly decent service (compared to previous experiences in cities where you had only one choice) to very high levels of service at the same price point.
I don't know anybody who loves AT&T or their cable company and we can decry 'profit motive' all we want, but it seems to me that the trouble with comparisons to places like Sweden is that, in Sweden, they accepted up front that any price is just fine for the infrastructure, so long as the final product has a monthly cost that is palatable -- never mind that the actual cost is surely hidden somewhere inside of Sweden's income tax rates of 31-56% or its VAT of 25%.
All perfectly fine for Swedes if that's what they decided, but it seems that lots of folks are just looking at the final sticker price of $40 and declaring government-run broadband the way to go. It is of course an attractive suggestion that gross executive compensation at AT&T or Comcast is responsible for your $90 or $100 Internet service in the US and that only government intervention will stop these Internet robber-barons from keeping us all down. But it might not kill you to talk to some engineers at these companies to learn about how their company spends money -- and also why Google placed such a premium on finding local governments that were cooperative. There's a reason California and New York won't be seeing Google Fiber anytime soon.
It seems to me that Google has the right idea here: the more people you can induce to pay for your top tier service, the more you can give away your bottom-tier (but still quite useful) service.
Sweden is about the size of Texas. Multiply their rates by 50, nifty, united states, and get a real number. Hey look, a country 1/50th the size of the US can be way more competitive with infrastructure changes, news at 11.
Lower crime rates, mandatory health insurance, larger middle class.
I just want to vomit. Seriously, it's a nation with a tiny population and a gigantic amount of crude petroleum wealth. Stop comparing them to us. That's like saying "Why can't we get the same efficiency that the Prius has in my diesel?"? It is a car analogy.
Government owned utilities using tax dollars to massively build out last-mile solutions do not have a "..Fiduciary responsibility to maximize shareholder value."
The Swedish internet model used taxpayer money to build out a massive national network providing excellent last-mile broadband, which all private competitors are now entitled to ride over.
I remember the first time I visited Gothenburg in 2001, and people had full Video On Demand, digital cable and bundled services. Thirteen years ago.
THIS SPACE INTENTIONALLY LEFT BLANK.
What a CROCK!
/. - please PLEASE get your facts straight.
I moved to Sweden about 4 years ago, and this is the BIGGEST fad I've ever heard. I too heard that Sweden was some kind of broadband heaven BEFORE I moved here, but that's only applicable for the BIG CITIES, not anywhere else.
Here where I live, I pay 60$ for 30/12 mbps (where I only get 13/1 mbps actual speeds), and this is the SOUTH of Sweden, about 1 hour from Swedens 3rd largest city. Heck...even Astoria OREGON in the U.S (where I was visiting at my vacation) had 30/30 Mbps and working...at a simple motel somewhere where there was 10.000 citizens 3 hours away from Portland Oregon US.
In Sweden you also got to pay for the subscriber lines, meaning...even if you don't have a need for a phone line, TELIA makes you (FORCES YOU) to pay for a line service you don't even need. Lets say that you only need internet because you already have a cell phone...doesn't matter...if you want an internet connection in your house...even if your house ALREADY COMES WITH A PHONE LINE...you STILL have to pay for a phone line services in order to get the internet.
PLEASE - before writing these kinds of stories in
What this world is coming to - is for you and me to decide.
that like to scapegoat all of their problems on minorities and foreigners too.
Actually it is an Oligopoly, 4 or 5 providers that collude to not be in the same markets (Comcast and Time Warner are proof of this), or to not provide what they promise.
But the real problem is the corruption of our government that:
1) will not allow municipalities to run utilities
2) will not perform it's job in maintaining "infrastructure" of which many of us would include phone/internet/electricity in addition to roads.
3) will not prevent Monopolies/Oligopolies from forming or prevent municipalities from entering into contracts that prevent anyone else from being in the same market.
4) Listens to corporations who are only in it for their best interests and not that of the people, net neutrality anyone?
5) Gives more weight to the desires of the large donor Corporations than to the citizens that is it's JOB to serve.
MURCA! FREEDOM! To download 6 MB/s if you're lucky and only ever on Steam or torrent, never from anywhere else.
Sweden is a small country with few poor people. If we ever had good service in the US the government would demand even slightly better FREE service for poor people otherwise it's racism.
Another reason is that cable companies pay large kickbacks to cities for exclusive access. They call it an 'access fee' and it can reach 15% of the net profit. In exchange the cities don't allow competition and don't care what kind of shitty service or non serve the cable companies provide.
As much as I dislike the telco's, Sweden is smaller than the US and a late adapter.
"The presence of regional government in the Swedish data stream makes many Americans uncomfortable"
You mean American Companies? Usually the response to municipal broadband is overwhelmingly positive until corporate FUD starts murking up the issue. Cant have competition in a capitalist society after all, a company might go out of business!
Why do you consider it a marking of civil society, that requires people to pay for other people's mistakes? Not encourages, mind you, but requires?
In Soviet Washington the swamp drains you.
I thought they had the best and cheapest Internet services. :/
Ant(Dude) @ Quality Foraged Links (AQFL.net) & The Ant Farm (antfarm.ma.cx / antfarm.home.dhs.org).
Even without the historic spaghetti of regulations and the lobbyists for the big players there is a fundamental difference that makes Sweden much easier to layout: geography. Many of the USA homes are simply further away from nodes and the USA is a far bigger country.
There are many places in the USA, even in backwoods Vermont, where they have 100Mbps. But those places are more localized because there are large areas between them without good connectivity. The result is that because many people live further from those high speed notes we just don't have the more urbanish resources. That's life.
There are also plenty of spots in Sweden that don't have cheap, fast competitive internet service. This doesn't tend to get mentioned. It is not universal.
It is to be noted how comparisons like this are made to selectively targeted countries who have good connections. In other words, this is spin, not science.
I heard this interesting interview over the weekend on NPR (transcript in link). In it, the interviewee has this gem:
I was meeting with the vice president of the Communist Party in Shanghai, and I said, well, you know, what's your plan, sir? And he said, well, our five-year plan is to ensure that every man, woman and child in China has, at the very least, five megs of connectivity. And in all the top 10 cities, everyone's going to have one gig a second of connectivity. So I said, you know, sir have you thought about, you know, the unexpected side effects of giving 1.3 or 1.4 billion people a gig a second? And he says OK, I know what you're saying, I know where you're going, but here's the thing - the future of the human race, at least in this century, is ultra-high-speed Wi-Fi everywhere all the time. And it's going to happen whether you or I don't want it to happen or not. And because it's inevitable, we might as well get there first.
I live in one of the largest metropolitan areas in the US, and my only viable choices for internet connectivity are 3mbps DSL or Cable internet which is supposedly much faster, but capped at 250GB/month. The cheapest option of the two is $50/month. There are no signs of this changing in the next few years. At the current rate we're going, the US is pretty much doomed to be at the back of the line when it comes to internet connectivity. Think of the effects this will have on our economy in the medium to long term and gnash your teeth.
It all comes down to whether your country, its government, and corporations, are retarded or not.
Make plain how much of the cost is paid for by government taxes (spent rather - the taxpayers are 'paying') PER USER
then show how actually cheap it is.
Total costs please including all the layers of bureacrats involved and other indirect costs.
Sweden subsidizes their Internet access with high taxes: it's cheaper in Sweden than the US.
US subsidizes gas prices and/or has unusually low gas taxes: gasoline in US is $3.50/gallon vs $8.00 in Sweden. Not to mention the cars themselves are 25%-100% more depending on tariffs/luxury taxes.
Also, the average 6-pack is $12+ in Sweden! Oh, the humanity...
(1) The open city networks in Sweden are generally expected to pay for themselves through the small fees they charge ISPs when they sell their services on them.
Here is a report (in swedish) from The Swedish Post and Telecom Authority (somewhat equivalent of FCC) on the cost/price calculations commonly done:
If I understand it correctly, they calculate a return on investment of different periods for these categories:
Canalization: 15-50 years (recommended 20-40 years*)
Fiber: 10-30 years (recommended 20-30 years*)
Active equipment: 3-10 years (recommended 3-5 years*)
Equipment at customer: 0-3 years
*recommended by the Swedish City Network Association, a non-profit organization comprising the municipalities and municipality-owned companies who have city networks.
(2) The networks are often built for a much lower cost than you might think. Since it's the municipalities and local utilities building them, they have been taking the opportunity for years whenever there is road/construction work for other purposes to just lay down empty ducts everywhere and later using Cable jetting to build the actual fiberoptic network.
I was told by the CTO of the municipality-owned utility company where I used to live that doing it that way brought down that part of the costs from ~$5M to ~$0.4M versus digging just to lay fiber.
(3) Even if the municipality has a monopoly over the city network infrastructure, there is always competition from xDSL, cable-tv and a handful of different 4G networks, all of which are also available pretty much everywhere.
I happen to live in one of the few municipalities with a privately owned city networks, but i still have a choice from more than a dozen different ISPs, two of which offer gigabit connections at just over $100/month.
(4) The customers are normally never in contact with whatever organisation is running the city network, they deal directly with the ISPs offering their services on them.
Sweden has a lower population density than USA: 22.85 people/km compared to 34.2 people/km (both figures from 2010).
Would you be more satisfied if we compared California with its population density of 95 people/kmÂ?
California has "Silicon Valley" where the world's biggest companies in information technology are located.
From all I have heard, the Internet last mile situation for a home in Silicon Valley is not much better than in any other major US urban area.
"We mustn't be caught by surprise by our own advancing technology" -- Aldous Huxley
Then why does broadband suck in most US cities? If what you say was true, US cities would have some of the best internet in the world, which is patently not true. You making excuses for the sorry state of internet connectivity in the US is only making matters worse.
One could argue that it's probably quite costly to adapt the Swedish model with nationwide and municipal networks. But i'm quite sure that it has payed back well in jobs, education and growing IT sector. My firend pays 9$ a month for a 100/100 Ethernet with static IP. No caps, limits or other stupidness. The biggest problem in Sweden today is the total lack of policies and actions regarding immigration and integration. Im sad to say thats going to be the end for a otherwise successful society.
Actually Carl XVI Gustaf is king in Sweden.
Take that Democracy! jk :)
I believe it because for 2 reasons. comcast/time warner is the telephone company and they don't have to provide stellar service. How would the NSA keep up with monitoring of the increased traffic ?
I pay $40 for 500/500 in Sweden via Bredband2. I feel sorry for Americans...must be very frustrating.
"Everyone knows that vi vi vi is the number of the beast" -- Richard Stallman
Internet in Sweden is 1.5x more expensive than internet in Siberia, where it costs ~25$ for the same 100/100Mbps for any of 5..10 ISPs available, not counting wireless ones. Downsides: >100ms latency to Europe.
Sweden has publicly funded political parties, publicly funded election campaigns, and (to my knowledge) close to the most stringent conflict-of-interest and disclosure rules for politicians in the world. The US has privately funded political parties, privately funded election campaigns, and (to my knowledge) close to the laxest conflict-of-interest and disclosure rules for politicians in the developed world. Regulatory capture is a challenge in Sweden and a dead cinch in the US, and that's why in America, the little people can't have nice things.
Our political situation in the United States of America is totally fucked up. Politicians line their pocketbooks with what the lobbyists pay them, then they pass laws that protect the business . Vote Democrat the Republicans have been on the take way to long.. Get rid of those old white guys. Let's take back control of the United States of America.