Can the US Actually Cultivate Local Competition in Broadband?

New submitter riskkeyesq writes with a link to a blog post from Dane Jasper, CEO of Sonic.net, about what Jasper sees as the deepest problem in the U.S. broadband market and the Internet in general: "There are a number of threats to the Internet as a system for innovation, commerce and education today. They include net neutrality, the price of Internet access in America, performance, rural availability and privacy. But none of these are the root issue, they're just symptoms. The root cause of all of these symptoms is a disease: a lack of competition for consumer Internet access." Soft landings for former legislators, lobbyists disguised as regulators, hundreds of thousands of miles of fiber sitting unused, the sham that is the internet provider free market is keeping the US in a telecommunications third-world. What, exactly, can American citizens do about it? One upshot, in Jasper's opinion (hardly disinterested, is his role at CEO at an ISP that draws praise from the EFF for its privacy policies) is this: "Today’s FCC should return to the roots of the Telecom Act, and reinforce the unbundling requirements, assuring that they are again technology neutral. This will create an investment ladder to facilities for competitive carriers, opening access to build out and serve areas that are beyond our reach today."

Comments

Split Comcast in two

[jfdavis668]

Give both access to their current cable network. Watch service improve and prices drop.

Re:Split Comcast in two

[Anonymous Coward]

Take yer dirty communism some where else! *cocks shotgun*

-Average Tea Party dipshit

Re: Split Comcast in two

[Anonymous Coward]

This. In all markets, the biggest players almost always win. Not the best. Sooner or later some company starts buying the competitors instead of actually competing. That's when the system fails and the products or services degrade. By then, the company is so big that its focus shifts into changing legislation in its favor becomes more interesting than to innovate. What mechanisms exist to stop this except the extremely weak monopoly laws?

Re:Split Comcast in two

[ColdWetDog]

That may be only a temporary solution. Remember Ma Bell? split up into AT& for long distance and regional 'baby Bells'. The regional companies eventually all morphed back together again, like the liquid-metal terminator. Long-distance rates dropped because companies like Sprint & MCI were allowed to sell services over AT&T's wires (AT&T was forced to allow this). Now we don't quite have a situation of a total monopoly, but it's clear that there's not enough competition, especially at the local level--the service maps are basically gerrymandered districts.

Nothing is permanent. The breakup of Ma Bell did allow for exciting technology such as 2400 baud modems and telephones that had features. It's unclear if the Internet as we know it would exist today if Ma Bell were still alive. Now that the Bell System /SBC has reincarnated itself in AT&T / Verizon it's unclear if the Internet can continue as we know it for much longer.

So I would agree with the the premise of Mr. Jasper - we have to cut the head off the new Zombie before it completely engulfs us. If successful (which I rather doubt), it may set the monster back another decade or two but it will always be there. Under the bed. Hungry. Waiting.

Re:Split Comcast in two

[Z00L00K]

Separate the ownership of the infrastructure (fibers, wires) and the ownership of the service providing regardless of area/company.

Re:Split Comcast in two

[plopez]

Ted Nugent? He was a draft dodger too btw.

Re:Split Comcast in two

[knightghost]

Nothing is permanent? You're right, and it shouldn't be. Time is money - those years after the breakup were worth it. Now do it again.

My local internet options are Terrible vs Atrocious. Competition is a decade late. Time matters. Now or never!

Re: Split Comcast in two

[buchanmilne]

No, require them (and all other fixed broadband access network operators) to wholesale their access network at regulated prices.

Many countries which have access network monopolies (e.g. UK where BT is almost the only provider of access lines) follow this approach.

If you allow competition over the existing infrastructure, you won't have to regulate the service providers, the market will.

I thouhht America was the land of the capitalists (where competition can result in better products and services as long as there is some minimal regulatory oversight).

Re: Split Comcast in two

[kenwd0elq]

This is only practical where there are local or regional monopolies MANDATED by local governments. Cities, towns and counties have allowed, even encouraged, sweetheart deals between the regulators and the regulated. Eliminate cable and telephone monopoly powers, and allow other players into the market, and we might get internet service that's as good as South Korea's.

Re:Split Comcast in two

[Jawnn]

Separate the ownership of the infrastructure (fibers, wires) and the ownership of the service providing regardless of area/company.

Yep. Make the infrastructure a public utility. That is the only solution that makes sense in a market where a natural monopoly exists. With a truly robust infrastructure in place, true competition can exist, on a level playing field. Of course, the so called "conservatives" will resist this at every turn, because they don't really believe in free markets, they just like to give lip service to it because it sells votes in Tea Party land like nobody's business.

Split last-mile from ISP

[corsec67]

The only real solution is to split the last-mile provider from the ISP, and make the last-mile provider a utility.

Competition in the last-mile is infeasable, but connecting customers at a CO to the internet is a much more competition-friendly possibility.

Re:Split last-mile from ISP

[fustakrakich]

The entire pipe should be public works, like the interstate and any other public infrastructure. The service providers can compete for management positions.

3 tier separation

[Anonymous Coward]

You either:
- own the cables.
- provide internet access to consumers.
- sell content.
exclusively. No combinations allowed.

No, but yes

[pmontra]

Due to a well known law of headlines I'd reply No, but if you copy Europe the answer will be Yes. In this case Europe has the advantage of a fragmented market. Different countries, different languages, different operators and different regulations led to competition. No pan-European monopolist.

I don't know if this is widespread (I think it is) but where I live (Italy) unbundling is mandatory and we have new operators using the cables of the former monopolist. In some areas the former monopolist is using the cables of newer companies. There are at least three different fiber networks, unfortunately not particularly fast. 100 Mb/s download and 10 Mb/s upload is the norm for fiber (ADSL goes up to 20 or 30 Mbps with the usual caveats of that technology). I got the feeling that the operators agreed to settle on that and save some money. Fiber was at 10/10 Mb/s 14 years ago. Competiion is never enough.

So, I don't recommend breaking up the US and switching to lots of different languages :-) but maybe you might break down your monopolists, create operators at state level and force unbundling. I read what happened to the Baby Bells and it seems that it worked well for a while. Do it again and by 2020 you'll evaluate what happened and adapt the legislation.

Ideal gas vs Perfect gas vs Real gas

[140Mandak262Jamuna]

We have all gone through our freshman chemistry, where they first talk about ideal gas, and then say nah, it does not that work that way but there is a slightly better approximation called Perfect gas, and then finally let the cat out of the bag with the Real gas. Most people just muddle their way through that and never worry about it. Except for the aerospace majors who end up memorizing one plus gamma minus one by gamma times mach numbered squared whole raised to gamma minus one by gamma, something seared into memory so hard it would not go away even after twenty five years. Damn you Zucrow !

Same way the ideal gas situation of FCC doing its stuff and the invisible hand of the free market doing its stuff and presto you got fantastic internet speed at the low low price of 9.99$ a month. The real gas situation is, all these companies raking money hand over fist lobby the politicians, the FCC, create misinformation campaign and they continue to exploit their customer base. Pressure builds till some disruptive technology comes in, cherry picks the customers and they leave in droves.

One possibility: It could be cell phone companies stringing up fiber up to street corner pillar boxes, and do the last 100 yards over the air with WiFi or a femto-cell network or something. The only true advantage the cable/phone ISPs have is the actual wire to different parts of the home via cat5 cable. But most homes use a router and use WiFi anyway. Someone could run fiber up to street corner pillar boxes, install a WiFi router per customer and cherry pick lots of customers who don't need more than a few WiFi devices. Wireless in the loop is quite well known and is actually deployed in many parts of India and Africa. My old prof Ashok has been talking about it for a long time.

But there could be other such technologies that peel of some serious segments of the captive market of the cable giants. Cable giants too would not sit idle. They would be the first to spot the threat and possibly buy these companies, or adjust their prices in different markets to keep these dogs chomping at their heels just out of reach. Somehow or the other, where such technologies are viable prices would come down. Where it is not viable, the customers would be at the mercy of these corporations

FedEx and UPS are not serving 80% of the country (by area, probably 10% by population). But at least they get US Postal Service. But the current generation of ISPs are suing to make sure government does not provide an alternative even to the market they don't want to serve.

Can government solve government problems?

[bmajik]

Legally, only one ILEC is allowed to run copper pairs to my property. They have no interested in upgrading their plant.

They have a protected monopoly.

In many jurisdictions, only one cable company can put coax in the ground.

They have a protected monopoly.

IP protections, like copyright, are a government protected monopoly.

Frequency allocations, overseen by the FCC, are a government protected monopoly.

Access Easements on private property for incumbent wire owners (e.g. the cable company can put a truck or a box on your property if they like) are a government grant of special privilege.

Given all of the government collusion with the current infrastructure, asking if government can address its own problems seems a bit silly. Of course it could. It could stop enabling all of the stuff it currently enables, for one.

If you try to factor the residential broadband problem into an OSI-type layer model, perhaps what makes sense is to limit vertical integration.

E.g. if there is physical plant, IP transit, content delivery, and content production, it would be problematic to allow, for instance, SONY, to own all 4 of those layers in some specific area.

Ideally there would be robust competition at each layer.

Another action the government could take would be to stop approving merger/consolidation deals that have the net effect of consolidating layers and/or markets in such a way that overall marketplace competition suffers.

In some communities, public utility ownership of layer 1 (physical plant) would make a lot of sense and would be voter supported. In others, it wouldn't, and wouldn't. Both models are worth trying.

As you go up the stack, there are lots of opportunities for different business models. Community owned IP transit? Why not? This is, in some regards, the case at current internet peering points. The members co-own the exchanges. It is in some respects like the agricultural co-ops that are so common in rural America - the land of rugged individualists.

People are, after all, not opposed to working in groups when they like the group and when the cooperation makes sense (as opposed to being coercive in nature)

Re:That worked out well for AT&T

[Rockoon]

sigh...

AT&T did not buy everything back up. In fact, AT&T lost it all. AT&T is gone.

It was the baby bells that merged, most aggressive was Southwestern Bell Corporation (SBC) which picked up the completely failing AT&T in 2005 and took over its name.

AT&T is dead. Long live AT&T.

Easy

[Orgasmatron]

STOP GIVING OUT CABLE MONOPOLIES.

That's really all you have to do. There is no competition in most markets because competition is banned by government decree.

I live in a town with two cable companies. Actually, I live 5 miles out of town. Both cable companies have fiber optic networks here, both have great customer service, high speeds, low prices, etc.

The city I lived in previously had granted a monopoly to Charter. Charter has a coax network, lousy customer service, low speeds, high prices, etc.

Cable + DSL is not a meaningful competition, so having 2 monopolies is not the way to go. Stop granting cable monopolies and you will have competition.

P.S. Both companies have fully developed fiber networks in the ground (and on poles in some places) so don't try claiming that the monopoly is necessary for physical reasons. It isn't.

Uh... no

[rsilvergun]

There's a reason we gave out cable monopolies. It was too expensive to build out the infrastructure w/o a guaranteed profit and we're too frightened of the gov't to just make it a public works project. It's either monopolies or figuring out how to counteract 50+ years of cold war propaganda about the evils of socialism...

Re:Uh... no

[Sabriel]

There's a reason we gave out cable monopolies. It was too expensive to build out the infrastructure w/o a guaranteed profit and we're too frightened of the gov't to just make it a public works project. It's either monopolies or figuring out how to counteract 50+ years of cold war propaganda about the evils of socialism...

Bullshit. "We" gave out cable monopolies because even 50+ years ago "our" politicians were bought and paid for by the cable companies, they just cared more about hiding it back then.

If the government really believed in capitalism, and no corporation was willing to build it without a 'guaranteed' profit (read: not having to worry about competition), it should've said "well too bloody bad then, we're not going to do it for you unless we make a 'guaranteed' profit too!" and held a referendum on whether to create its own for-profit company specifically to build the infrastructure, with itself as the majority investor (anyone else willing to invest being welcome) and lease capacity to anyone willing to pay.

I completely agree

[Dega704]

I honestly think everyone should be putting more time and energy toward this rather than having the FCC enforce net neutrality. It will be much trickier for conservatives to preach their free market line against something that is so obiously designed to open up competition. What gets me every time is when people say "Deregulate broadband and it will increase competition!". I have never once seen someone spout this line and offer a single detail about how this is supposed to work. Do they seriously expect every house and building to have multiple fiber connections built out to them? Google Fiber has also been a double-edged sword in that it has made these same people say "Google did it so that means others will!". I don't even need to point out everything that is wrong with that idea.