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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
Profit is king in the US. Providing for your citizens is king in Sweden. Apparently those are unrelated concepts.
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 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 =)
The US also rolled out internet services earlier than many other countries, so it has a older infrastructure to 'rebuild'. It not the central issue, but a factor. If we were to start from scratch today, it would be a lot better.
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
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.
A countries overall population density is largely pointless when talking about internet links. An extreme example would be Australia, which has a low overall population density due to much of the country being uninhabited desert. The parts of Australia that are inhabited have a high population density.
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".
Lost at C:>. Found at C.
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
The European model has long been that because running the cables is a natural monopoly it is best for the government to handle the cable and let private business compete on top of that. The fact that most of Europe has wild ISP competition without impacting provided speeds suggests that their model may in fact be better.
Also attempts at this in the US have had mixed results. Well run municipal broadband has succeeded at providing low cost physical infrastructure and even ISP services without needing any tax money. Badly run ones have been financial disasters wasting both fees and municipal funds. Which honestly is pretty much the same record as most private corporations before the consolidations began leaving us with what is often a dozen monopolies spread across the country who never directly compete.
we are all invisible unless we choose otherwise
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
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
That's not a valid argument/question.
The point is that mentalities in the two countries are very different. One country is focusing on "everyone has a chance to be king of the world." which leads to people trampling one over another to reach that coveted position. At the same time pretty much no one gets there. On the other hand in Sweden community based (or government, if you prefer) approach, with healthy dose of transparency and oversight, offers better infrastructure and overall experience for the people who then use said infrastructure.
It is true that taxes in Sweden are much higher than they are in the US. But people there enjoy greater quality of life, with less stress than they do in the US.
Disclaimer: I'm not from either of the two countries, but I've visited both frequently.
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.
Lost at C:>. Found at C.
As opposed to Verizon/ISPs which passes the FULL costs directly on to you while providing 10% of the service value? Oh and Verizon was granted plenty of subsidies to actually build the network in the first place so your tax dollars are already involved whether you like it or not.
People in cars cause accidents....accidents in cars cause people
If only we could put datagrams on bullets, we might at last get high speed internet!
http://www.economist.com/news/...
The municipalities BUILT the fiber backbone to compete with entrenched monopoly Telia. read that again. They build an entire SECOND network to counter act the monopoly...
Monopolies run by private entities are bad unless heavily regulated. Said regulation divides service into 2 areas. Infrastructure and delivery. The infrastructure is regulated heavily to allow common access. Service can be offered by anybody over the infrastructure. Hence you get the best network with the best competition for the actual service.
The infrastructure contracts are now going to be pushed by the multitude of service providers using that network. This allows everyone to share the costs and reap the benefits of a common standard system.
People in cars cause accidents....accidents in cars cause people
Now, what's left is to determine, that the 7.38 vs. 8.02 difference is thanks to, rather than despite of their taxes being higher — rather than, say, those demography, social and cultural characteristics. They do "celebrate diversity" there too nowadays, but the bulk of the population remains of "original" stock.
In Soviet Washington the swamp drains you.
I'm actually extremely well-informed on this topic. You really should look into it, however, since I think you're not understanding the situation. The regulations that have "prevented" Google from building out are regulations that other providers (i.e. cable and Telco) have long had to abide by. So, Google is saying they'll only build out if they get special treatment that wasn't available to the incumbents.
Google has explicitly said that they will only build out in areas that are willing to work with them, and that means (thus far) offer them concessions (right of way, street cabinet placement, waiver of requirement that they build the entire municipality) which haven't been available to the incumbents. For example, the second article below talks about the deal Google got in Kansas City, which includes the opportunity to place their street cabinets on public land at no cost (something AT&T & TWC can't do), and the ability to put fiber on city-owned poles for about half what TWC is paying, and no requirement for a citywide buildout.
http://online.wsj.com/news/art...
http://www.wired.com/2013/07/w...
Where I live (in Europe), the government has very little to do with providing internet. The infrastructure is all privately owned. The only trick is that owners of the infrastructure are required to lease bandwidth to their competitors, and charge a reasonable fee for it. That means that a new competitor doesn't need a large amount of capital to invest in huge amounts of infrastructure, instead they can lease a bit of capacity at wholesale prices, and set up their own internet business.
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.
Awesome... Well, if that's so — and the better way to run things is not only unknown, but unknowable (like the ways and means of a deity), then there is nothing to talk about either and none of the rest of your rant matter any more than does mine.
But, if we can discuss mere beliefs for a second, I'll propose, that our American system is based on belief in freedom. Unlike, say, China or Russia, who may be using Capitalist methods because (they believe) they are more efficient, the US uses (or used) them, because they aren't infringing individual liberties (as much). For example, in USSR not working was a crime , while in the US you are free to stare at your navel all day. And though most people choose to work in the US too, it is their choice, and we tend to view forced employment as slavery...
That our approach also tends to provide for a wealthier society (or so we believe) is just gravy on top.
Right, whereas with the current scheme of things, I can not switch at all... I don't think, that's better.
Natural monopolies are a myth. Or so someone believes, at least. But it is not merely a belief either — Tokyo has competing subway lines. Why can't New York City have such?
In Soviet Washington the swamp drains you.
You must have forgotten about the billions of tax dollars that were paid to private corporations in the united states to speed up broadband deployment. Which they simply pocketed.
Not to mention the various subsidies they receive including right of way provided through an exercise of eminent domain.
The only difference is that YOUR tax dollars didn't lower the bill they send you.
This is less a theoretical natural monopoly as discussed by that economist, and more a physical and political natural monopoly because we would rather not have cables for 50 companies all running through our property. Also from a financial perspective, few companies want to own those physical connections as they cost a lot to lay in the ground or on a pole. So a very real type of natural monopoly emerges in that the public wants a limit on the hassle and bother caused from tearing up their lawn every year or less depending on demand for services.
Also some areas are not deemed as sufficiently profitable and without government involvement may never have any access if left to the companies to decide. I mean this is the cause of limited availability in many areas. A lot of this is not really 'not profitable' it is instead 'it's mildly profitable in the long run, but has a high initial investment'. We are way to focused on short term returns and not nearly enough on benefiting customers.
we are all invisible unless we choose otherwise
Nevertheless, such "scapegoating" — however unfair it may (or may not) be — is part of the "life satisfaction" and contributes to the index being discussed.
But I only listed it as one of the examples of what might explain the US dragging behind Sweden in "life satisfaction". For another example, the cited Economist article notes, part of the index is trust in public institutions — something, Americans are (and always have been) notoriously "bad" at. Perhaps, for hereditary reasons — it was this distrust that drove many of us and/or our ancestors to move to this continent in the first place.
Either way, the cited index boils down a large variety of factors to a single figure for each country. Like benchmarking computers, operating systems, or web-servers, comparing such single figures to each other is usually meaningless. Using the difference to argue for a single aspect — such as higher taxes — is outright stupid.
In Soviet Washington the swamp drains you.
those demography, social and cultural characteristics
Like a superior educational system (free public universities), a healthcare system where people don't go bankrupt, better transit, and free childcare?
You get what you pay for -- divorcing higher taxes from the services those taxes provide is moronic at best.
-- Political fascism requires a Fuhrer.
Sewer/water lines work the same way in every US city and state. It's a shame that most Americans are so ignorant of the services they use every day that their elected representatives ensure work.
-- Political fascism requires a Fuhrer.
That a person who chose to not buy health insurance goes bankrupt when he gets sick, is hardly grounds for mandating such insurance for everyone.
Since you clearly have no idea how hospitals the rest of the world work, allow me to explain. You get sick. You go to the doctor. You go home. There is no "copay" or "insurance you choose to buy into".
I know it's hard for you to understand that "not dying from preventable illness" is considered a basic human right in most other countries or how you can have a healthcare system that works efficiently without the invisible hand jerking off a group of plutocratic shareholders. The US has the highest healthcare costs as a % of GDP and the a life expectancy between Qatar and Cuba -- and there's the reason for that: it turns out people will pay a lot of money not to die if you force them to.
-- Political fascism requires a Fuhrer.
So basically you're saying that in Sweden people get things they actually want in exchange for taxes.
in the US, we get militarized police, mandatory long sentences for minor crimes, "privatized" infrastructure, healthcare that can bankrupt you, etc.
I submit this is by design. There's a certain political belief that's held by too many which says all taxes are bad for any reason, except for the police and military and putting religion in the law. These people go out of their way to make sure that you don't get value for your taxes because if you did, their argument is lessened. This is why they don't mind so much subsidies for the poor but they won't ever favor something that benefits everyone. This accomplishes the political goal of blaming the poor for taxes and making you angry that you don't get anything for all of these taxes. These same people of course want to be in charge of the government and their stated qualification is that they hate government. (Name me any other job you'd get hired for after stating you can't stand the organization.)
THAT is why we have predatory ISPs with bought and paid for laws against a "public option" for Internet service in many cases.
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.