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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.
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 =)
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
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.
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.
http://www.economist.com/news/...
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
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.