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.

Comments

not complicated...monopology

[globaljustin]

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!

Re:not complicated...monopology

[Anonymous Coward]

The government shouldn't be providing services that can be done by the private sector.

Why? If it demonstratively runs better ...

Re:not complicated...monopology

[Anonymous Coward]

The government shouldn't be providing services that can be done by the private sector.

I tend to agree with this point, but there's one big caveat in this case: communications, which are part of infrastructure, should NOT be privatized. We've seen, first hand, what happens when you make infrastructure private. In many places you only have one option for internet access (let alone mobile or POTS access). When that happens, incentive for the provider to compete by offering more competitive pricing, speed, availability, etc. goes down. Since they're a private entity, they have no obligation, beyond whatever the contract says, to deliver service. Infrastructure should never be a "if we feel like it" service.

You are very lucky to have 5, in most small towns I've lived in I've had one, maybe two.

Money money money

[Coditor]

Profit is king in the US. Providing for your citizens is king in Sweden. Apparently those are unrelated concepts.

Re:Money money money

[gstoddart]

And, quite frankly, you're a fool if you believe that capitalism doesn't devolve into oligarchy, collusion, and people generally not playing by the rules which are intrinsic to the assumptions of capitalism. Because, despite these wonderful assumptions, companies will lie, cheat, steal, manipulate the system, hide information, or generally do anything they can do skew the system in their favor.

Politicians can be voted out. The growing oligarchy cannot, and has no interest in doing anything unless it's on terms they dictate, and not on terms the 'free' market is supposed to provide.

The oligarchy is just the next set of feudal lords.

Over the long run, pretty much any system of government devolves into tyranny ... the only issue is who is in charge. A hereditary ruler like Assad or Kim? Self appointed revolutionaries like Mao? Or cartels of corporations like you're seeing now?

Because, right now, corporations have more say in government that citizens do.

And as long as people continue to believe corporations and capitalism is a system which achieves optimal outcomes for any but a few, it will continue.

In Adam Smith's day, those entities had to compete for your business, and provide a quality product at competitive products. These days, it's whatever the hell we put in the EULA, and whatever the hell we feel like.

As currently practiced, capitalism is a complete lie. As described and pitched, it has never existed, and never will.

Re:Cost of government-provided services

[gstoddart]

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.

Which is offset by the fact that it's not contributing to huge corporate profits, and doesn't help pay for ridiculous executive bonuses, or the salaries of lobbyists who get sweetheart deals which only benefit corporations.

Take those two things out of the equation, and it may cost less overall.

And the government run one might actually spend money on maintaining their infrastructure, instead of neglecting it for years and then crying poor and asking for more tax-payer subsidies to deliver on promises they've failed to meet already.

Take the parasites out of the equation, and the economics changes a lot.

Because the for-profit model says "you'll get what we give you, when we feel like giving it to you, and we'll raise your prices any time we wish in order to keep profits up".

Re:Cost of government-provided services

[RingDev]

I pay $45 a month to a company that receives substantial government subsidies (from me, the tax payer) for a 6mb/512kb DSL connection that has never pulled more than 1.2mb down. My only other options are satellite (massive lag), cell (3g), or WiMax (with low uptime performance and significant lag).

There is a tax payer funded fiber line that follows the road right in front of my house, but it was sold/licensed out to a private company who does not service my house nor my neighbors.

At the end of the day, if you look at total communications as a % of GDP and compare the US to Sweden, my guess is that we wouldn't see a significant difference. The total cost balances out between pocket books and tax revenue. But there is clearly a difference in services provided.

And the US tax payers are paying for these networks. Every mile of interstate highway in Wisconsin has a matching mile of 30+ strand dark fiber sitting right next to it, paid for entirely by state and federal taxes. I would expect that every other state has similar programs. Eventually those lines will be lit up and leased/sold to private communications corporations, who will charge us all again for the privilege of using the pipes we paid for.

-Rick

Re:Cost of government-provided services

[gstoddart]

Governments ought to ensure, there is competition in every market

Show me some objective facts to tell me why this is good, desirable, and achieves the outcomes you are ascribing to it.

Not something you believe. Not something you heard. Not something you read in a book. Something which proves the assertion. You can't, because economics isn't a science, it's philosophy with a lot of dodgy math, and inherent assumptions, which may or may not hold true.

Show me some statistics which demonstrates a purely profit driven system provides better outcomes in all cases, or even most cases. And that those outcomes are actually best for consumers overall, instead of just the companies.

I'm not saying government ran is always perfect. I am saying some things are natural monopolies, and the US is so mired in people trying to undermine what governments do that it's pretty much useless to compare the US against anything else.

How does it benefit consumers to have competition if what really happens is infrastructure for each competitor needs to be separately laid, using public rights of way, and public subsidies? You know ... like telecoms, electricity, sewage, water, roads, schools, garbage collection.

Should you have to choose between Bob's sewage system, or Alice's sewage system when you build your house? And if you want to change from Bob to Alice, you have to pay huge sums of money to connect to the different infrastructure, assuming it's anywhere near you. Is this good for consumers? I think not.

That's a series of little disjoint monopolies which instead of having a common infrastructure, becomes a bunch of separate ones.

I reject the entire premise of your questions. Sure, I've read Ayn Rand. I still own her entire collected works.

I've also come to the conclusion she was full of shit.