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City-Owned Internet Services Offer Cheaper and More Transparent Pricing, Says Harvard Study (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: Municipal broadband networks generally offer cheaper entry-level prices than private Internet providers, and the city-run networks also make it easier for customers to find out the real price of service, a new study from Harvard University researchers found. Researchers collected advertised prices for entry-level broadband plans -- those meeting the federal standard of at least 25Mbps download and 3Mbps upload speeds -- offered by 40 community-owned ISPs and compared them to advertised prices from private competitors. The report by researchers at the Berkman Klein Center for Internet & Society at Harvard doesn't provide a complete picture of municipal vs. private pricing. But that's largely because data about private ISPs' prices is often more difficult to get than information about municipal network pricing, the report says. In cases where the researchers were able to compare municipal prices to private ISP prices, the city-run networks almost always offered lower prices. This may help explain why the broadband industry has repeatedly fought against the expansion of municipal broadband networks.
The American people should just continue to pay for the private infrastructure of the monopoly providers and give up on this pointless dream of cheap, fast internet access.
It sounds positively Socialist shudder.
will be buried in a landslide of counter studies by various pro-industry think tanks. A while back Comcast admitted in their SEC filing what it actually cost to provide internet access. It was about $9 bucks. That includes the tech support. Of course, don't you dare suggest we nationalize it. Here in America we privatize the profits and nationalize the losses, so it all balances out.
Oh, and if you're scared of the gov't censoring you when it's nationalized just cast your eyes to China. They don't _need_ to take control of it to censor. The mega-corps are happy to play ball.
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And business that is permitted to run at a loss indefinitely can undercut a normal business anytime they want by as much as they want.
In the long run though, the deficit will be taken out of your taxes though. We've had that happen here with hydro.
Don't get me wrong - the telcos, in large part are the devil, but comparing them to government fare is silly. At least theoretically, they can go out of business.
When you can spend other people's money it's easy to offer hot deals.
Want to buy my house? It's only 50 dollars (after 1 million in government money wired to my bank account).
25Mbps download? That's far too much for Americans to handle, reckless and excessive, should be 10Mbps as the FCC wants. No point trying to run before you can walk.
Don't get me wrong- I'm all for doing *something* to solve the problem municipalities created in the 1980s when they gave cable companies the monopolies they've mostly retained to this day. However I'm not necessarily a big fan of wealth redistribution schemes nor government interference in the free market. The government(s) should never have granted cable companies monopolies as they were demanding back in the 1980s. However I don't think government should be stealing money from property owners and indirectly tenants to resolve this issue either. The government should tear down the the barriers to entry in the market they themselves have created and thrust the costs of new ISPs entering the market onto the cable (and phone?) providers that benefited from the government granted monopolies of the past. This would probably mean the monopolies would have to fund or otherwise guarantee loans to any new entrants and attach restrictions to prevent incumbents from undercutting newcomers on price by artificially undercutting them for at least as long as said incumbents have been in business (or were otherwise granted a monopoly, or it may be sufficient to the extent the incumbents themselves had to repay any investment costs to their debtors). Otherwise you you will not have a free market as the newcomers weren't allowed (back in the day) to compete in the given market way back when and as a result do not have an equal playing field as would have existed had these monopolies not been granted in the first place. Ohh and there was also that significant amount of money that was given to ISPs that got pocketed in the late 1990s too that needs to be taken into account. Redistribute that wealth and interest and so on from the monopolies.
With a generous contention ratio of just 10:1 (typically reserved for business connections), that's $0.75 for 50Mbps at scale. Bandwidth is dirt cheap.
Funny to see this today, given today's news up here in Canada.
"Private enterprise is more efficient!" go the cries of the free-market absolutists. The question is, more efficient at what, though. Because here it seems telecoms are optimized to extract maximum dollars from the population, which is not something the citizenry wants out of basic infrastructure.
"Live as if you'll die tomorrow." Ridiculous. You could die later today.
They're not perfect, though. The city wifi in Tempe had the crazy failure mode where if your service ever lapsed (say, you forgot to update your credit card), you could never sign up again because the way they implemented the redirect to the portal page would block you from it. There was no way to contact anyone and the URL for the portal was not available on the public internet. So, probably not surprising what happened to it.
That said, I very much welcome the idea of locally owned ISPs that run the wires and allow cities to get competitive service. Even if they hate it, if enough cities do it at once, they won't be able to deal with them all. Even better if we're sneaky and instead of repealing things, just add loopholes to permit city ISPs and such.
"City internet" isn't doing research and development.
If they did 100% "city internet" in the 1990s, we'd all be using dial up modems today because R&D is what makes technology evolve.
That is fine for the water supply because water supply technology doesn't change much, we are still using pipes like the Romans.
City internet has its place, just like public libraries and such. But it is not a widespread answer.
Universal "city internet" has all the weaknesses of 1982 AT&T break up, where phone technology was stifled because monopolies have no reason to evolve.
No taxpayer money, the city just organizes a company, gets money from private investors and everythings works so...nice...
Anyone could do that. You don't need a city to do it. So why don't people do that? There will be some caveat down there...
And as someone said, how is "city internet" customer service?
I won't ever do AT&T because their customer service absolutely is terrible, even though their product is great and similarly priced.
The ISP I use, has great customer service. If I have an outage (pretty rare) it is almost always resolved in a couple of hours.
I don't want to hear about any of this NN or Socialized ISP crap until we grant right of way to cables and conduits for third parties.
Its a giant shit show with monopolists of different types arguing for their monopoly.
Every article is "wahhh, monopolies that no one is allowed to compete with are behaving badly" or "waaah, government built ISPs which are even more monopolistic are even better!"...
How about no monopoly?
To which one of you knuckleheads will say "but then there will be too many cables and that will be ugly!"... This discussion is increasingly an argument against democracy if only because people are allowing themselves to be manipulated into taking positions because they're being told to adopt that position.
Think for yourselves or stop presuming to have an opinion.
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Here is evidence that sometimes government does things better than private industry: Chattanooga Was a Typical Postindustrial City. Then It Began Offering Municipal Broadband.
The Internet, at least here in the U.S., should be treated like any other public utility, this goes some of the distance to proving that, and I think it's the best possible future for it.
Should be obvious because the two entities have two, conflicting goals. The telecom wants people to sign up to one of the fastest connection with no limits. They aren't going to do that by making the slower connections look like good deals in comparison to the package they wish to sell.
The municipal network wants to get as many people connected as possible so it makes sense for them to be charging less for the lower speed connections. All they care about is making enough money back to maintain and make the necessary improvements to the network.
Community-based Internet could have been AWESOME had the WiMax (802.16 series) technology--one that could handle thousands of wireless connections from one transceiving tower--taken off in the USA. WiMax could have made it possible for community Internet, especially in rural areas where the "last mile" connection would have been very expensive to do.
It would be cheaper because taxes would help pay for it and can be run for a loss. Cheaper for the person, but more expensive for the city.
I would not trust a city owned ISP over any private owned ISP. I would pay more for not using a City run ISP. If you want something messed up, you let the government take control of it.
Building a fiber network is expensive - much more expensive than running it for couple years. The first two municipal fiber projects I looked up cost the taxpayers an average of $3,200 per household to build. Whether you want it or not, every resident had to pay to build it and that's the bulk of the cost.
The monthly subscription fees which cover the cost of maintaining it after it's built are a small portion of the cost. Rather than listing a muni such as Lake County as $40/month, if the "study" were intellectually honest they'd list it as "$3,200 up front, plus $40/month". That's the actual cost to residents.
Promoters of these schemes hope that one day subscription revenue might pay back the cost of building the network, but that's never happened yet, to my knowledge.
For *some* projects, bonds are used in such a way that taxpayers will only have to pay the shortfall, the difference between what subscription fees bring in, minus expenses vs the cost to build it and financing costs for that cost. They hope that shortfall might be zero, but often it's thousands of dollars per household.
Most often it's a mixture of bonds, where taxpayers pay the shortfall, and direct tax dollars. For example Lake County was promoted as "financed by bonds, won't cost the taxpayer a dime", but in fact they've spent $15 million in local tax money $1,400 for every man, woman and child in the county, whether they get the service or not, plus state and federal tax dollars.
Chattanooga is probably the biggest "success" hyped by muni fans, and with good reason - it's not losing millions of dollars a year like some are. In fact, it's just started to make payments toward maybe eventually paying back some of the $97 million of taxes used to build the network. That's the big success they point to - so far taxpayers are only out $90 million and it's not getting worse at the moment.
25 down/3 up is considered "entry level" now? Wow, I need an upgrade. I'm at 12/3 and that's not the lowest speed package my ISP (AT&T) offers.
12 seems plenty enough for me, streaming one or two movies at a time, no gaming, no file sharing. no heavy uploads. Video quality is good but not fantastic.
It occurs to me my post was a tad negative, a reaction to yet another misleading propaganda piece on Slashdot. I'm not saying that muni can never work, some might work out okay - just be honest about the numbers. Honest numbers might be something like "on average, muni customers pay $10 less and are responsible for $3,000/household in debt used to build the network". If we'd use honest numbers we could have a rational discussion rather than a propaganda war.
Are you factoring in the increase in house value?
Come on! This is ./
Has nobody heard of dark fibre (https://en.wikipedia.org/wiki/Dark_fibre). This is the way broadband is handled where I live (not the US). The city installed a dark fibre network to ensure that the customers can be reached. The local installations vary, but in my house one operator got the monopoly for a number of years if they A) installed the local network to each apartment and B) had a good monthly price for all subscribers during the period.
Because of this I have 100Mbit full duplex via Ethernet that I CAN max out without trouble (I always get 10.6-10.8 MB/s when downloading/uploading to cloud services) and extremely low latency for less than USD 24 per month. Also I have an empty channel in which the company can install a fibre without any extra installation work (except pushing the fibre through the channel) the day I deem I need faster speeds.
Other houses chose to pay for the local installation themselves and each household can choose a service provider.
The shitty situation which you seem to have in the US is totally unnecessary. If you are so afraid of publicly owned stuff (because that would be socialist... no wait! COMMUNIST!) why don't you go half way? Much of the land is probably owned by the municipality anyway, so it makes sense that you vote for using your tax money to build the infrastructure YOU need. So let them do a dark network and any operator can connect to it. Done right that investment would have paid for itself after a couple of years and you don't have to have every company digging up the streets trying to build their own networks. In my town the infrastructure is maintained, expanded and upgraded by a company fully owned by the city/municipality. They are fast and reliable since they only have one mission, making sure that broadband works for us, private citizens and businesses alike. We all rely on broadband today, just as we want our heating, plumming and electricity to work.
It seems you want to be stuck in "free market hell" where only the easy customers gets service and you either move or pay a lot for crappy service because the "free market" solves everything. (Feel free to feel the sarcasm dripping of that last part)
I am appalled that no one has mentioned this before. This is supposed to be a tech site, sure as hell don't have tech commenters.
Building a fiber network is expensive - much more expensive than running it for couple years. The first two municipal fiber projects I looked up cost the taxpayers an average of $3,200 per household to build. Whether you want it or not, every resident had to pay to build it and that's the bulk of the cost.
How is that different than the billions upon billions of dollars that we already paid in taxes so that private ISPs could build that infrastructure?
What would be your estimate for that number? What do you think is the value difference of a neighborhood has 30 Mbps from Charter for $40 vs one that has 25 Mbps from the city for $35?
Can you perhaps come up with even one example of any city in the US where privately-owned fiber was installed with tax dollars? Anywhere? You can easily look at the annual reports of all the ISPs and telcos and see the billions of dollars they spent, do you see a single dollar of tax money anywhere?
They only projects I know of that involved tax money were failed municipal projects, where after the city got tired of losing money on a project that wasn't working and it went dark they later sold the dark fiber to a company like Greenlight, who brought it back to life, actually serving customers using what had been a multi-million dollar waste by the city.
Are you being intentionally obtuse? Obviously the GP was referring to the $400 billion given to the big ISPs to fund fiber to the home (see http://irregulators.org/bookofbrokenpromises/ or google "cable company subsidies" if you're merely ignorant on the topic).
I skimmed through the 350 pages of that book and didn't find a single mention of any tax money whatsoever spent for any private company to build their fiber in any city in US.
I did find a pissed off author who is very creative in his arithmetic. His basic argument is as follows:
Telcos should spend 25% of their revenue on wireline upgrades. (No real justification for that number, just from his ass.)
If you ignore Uverse, FiOS, and other major upgrades, the remaining minor upgrades are less than 25% of revenue.
Incumbent ISPs got nearly $1 trillion in government handouts primarily in grants and some in loans and tax breaks over the past 2 decades to build out fiber networks. $1 tril is enough to cover ever metro in the USA 12 times over in brand-new fiber. Either 99% of the fiber is installed with tax payer money or there was some massive fraud going on.
You may or may not believe that's true (if so wow you got tricked), but you can't cite a single dollar of tax money ever being spent in such a way.
'Surprise, surprise, surprise!'
'He who has to break a thing to find out what it is, has left the path of wisdom.' -- Gandalf to Saruman
by pointing out that government is far too useful for the ruling class to just pretend it doesn't exist, and so you're going to have government involvement whether you like it or not. So the only question is are you going to take control of the government or are you going to leave a power vacuum in place for the wealthy to exploit to your detriment?
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Assuming it really does cost that - irrespective of who operates it - how do private ISPs even make a profit? Are they getting somebody else to pay for it?
The big ISPs install fiber where there are a lot of customers (lower cost per customer) and try to sell their triple play packages, internet, phone, and TV, with upgrades like HBO.
Comcast's Triple Play of cable, Internet and digital voice has three tiers based on the features that a customer may want priced at $130, $160, and $200.
If we assume most customers come chose a low tier, or don't get all three services, we can conservatively estimate $125 / month average (some customers get the deluxe sports package and HBO and ...). 48 months of service at $125 is $6,000 / household.
So why do munis have so much trouble paying off their capital spend? Munis tend to do put more fiber in less densely populated areas, increasing their capital cost per customer. They may not offer the same service packages, with premium TV channels and such. Instead, they may focus on internet, leaving customers to pay Netflix,is Hulu, Amazon, etc for the content. That reduces their average revenue per customer even if the customer is spending more overall by purchasing content from other companies.
PBS did some investigations on it back in the 90s, then some additional government handouts in the 2000s. Adjust for ~3% yearly inflation and bam, $1tril. I cannot say if any of the fiber was paid for with that money, but they ISP did get that money for the fiber. Either way, we're owed fiber.
Someone gives someone else $1mil to buy a $100k house. Then you go "you can't prove they used the $1mil to buy that house". Does it really matter? They took and spent the $1mil, I want to see $1mil of benefit.