A lot of folks seem to be hung up on the "how do they know that "Half-Life.zip" is actually Half-Life, the game. Fact is, it doesn't matter. Under US law (yes, I know, it's Denmark, so YMMV, but I'm pretty sure the same holds), if you buy a kilo of powdered sugar from an undercover cop, you've just committed a drug crime, so long as there's reasonable evidence to indicate that you _believed_ that you were buying cocaine. By the same token, you'd have a hard time making the argument that you like to download files entitled real_slim_shady.mp3 because you like the name, but had no intention of actually getting an Eminem song.
You'd probably be surprised to know that Steve Ballmer thinks you're right. He commented ~6 months ago that MSFT made a mistake by not including a dial modem in the XBox. When they were designing the XBox, hey made a forecast of broadband penetration, and said a dial modem wasn't necessary. They now readily admit they were wrong, broadband hasn't expanded as fast as they thought.
1. The equipment isn't there to light it - it's not hugely pricey, but it does need to be bought. 2. There's a boatload of dark fiber, but it's nowhere near your house. For a change, the information superhighway analogy really does work: the highway has huge numbers of unused lanes, but there are no local road or on-ramps. That's where the cost is.
You want fiber to your home? No problem. Assuming you live somewhere reasonably dense, all you need to do is get 60% of your neighborhood to sign up, and then pay $1500-3000 each to get it installed. Until you get 60% of a neighborhood to join, and willing to pay that much for install (or enough over and above cable modem/DSL charges to justify a provider fronting those installation charges), don't hold your breath for fiber. It's not the telcos holding you back, it's the fact that digging up streets costs money and pisses off local governments.
The only people who should be very concerned about this merger are people who _sell_ to cable operators (i.e. programmers like HBO or equipment vendors like C-Cor, SA, Motorola, etc.).
For end customers, it won't make a damn bit of difference. AFAIK, not a single market in the US are served by both of these providers, so no consumer will see a reduction in the service offerings provided to them.
For folks who complain about only having one cable operator, it's not a regulatory issue. Every local franchise agreement (contract between the cable company and your city or town that says the cable company gets to string wires and provide service, and in exchange the city government gets a % of the revenue plus free cable service for city offices and schools) signed in the last 15 years is non-exclusive, so another cable operator is welcome to come in and set up shop. Problem is, with a few exceptions (quite dense, wealthy neighborhoods), the economics just don't justify building a second network. It's not some global conspiracy, just the fact that you can pay for building a network to pass 100 houses if you get 65 of them as customers, but not if you only get 37 of them.
This ignores, I think, one of the core values that the record companies bring to the table - screening out the huge amount of unlistenable crap that's out there. They are by no means perfect at this - far from it - but without some sort of screening mechanism, it would become almost impossible to find decent music without sifting through huge reams of people in their garages doing unspeakable things to defenseless Stratocasters.
Here's the employment agreement: our acceptable use policy for our company property notes that we (the company) reserve the right to monitor your conversations at any time. Don't like it? Don't work here. There are a certain array of _explicitly_ defined limitations on employment at will (can't fire for being black, can't fire for not having sex, can't fire for being deaf if the job doesn't require hearing, etc.). Beyond that, it's fair game.
"Your employer does not assume ownership of your rights of person during business hours. You can take a non-business related phone call and use the bathroom during business hours, and it is illegal for them to monitor any of those activities."
As my father likes to say, "Wrong, moosebreath." If you're making a call on a company phone, or sending email from your company account, the company can monitor or record anything it damn well pleases (to make things clean and easy, it should create an official HR-blessed AUP, but it doesn't really HAVE to). Hell, the company can put bugs in the conference rooms, if it wants - the space and communications devices belong to the company.
Of course, remember that violating copyright has also become much easier and more automatic (80s: find someone you know who has the tape, convince him/her to loan it to you, find a dubbing deck, spend 1hr making an imperfect copy, return the original. 00s: fire up Kazaa/Morpheus/etc, click on song hosted by complete stranger, download near-perfect digital copy).
Don't blame the cable companies for this one, blame the TV networks, and more particularly their small market affiliates. If they were allowed to, satellite providers might choose to broadcast only a few stations nationwide (i.e. give everybody their local CBS and NBC affiliates, but broadcast the NYC ABC affiliate nationwide). That would screw the other ABC affiliates, since they make huge coin inserting ads into network programming (ER, CSI, etc.). It would also make the billing awkward for people who wanted to place a locally focused ad on that nationwide-distribution affiliate - how could Bob's Shoestore in Manhattan possibly buy time on ABC NYC when it's competing with Ford, which is trying to reach millions of subs who are watching that affiliate via satellite?
Basically, it's a classic case of what Slashdotters love to complain about when it comes to the music industry - technology has changed the distribution potential of individual affiliates, and they don't want to change their business model to adapt.
If (and it's a big if) SPAM was opt-out, but the opt-out was centralized, and as effective as the DMA's mailing and phone opt-out lists, this wouldn't be that bad. Those "physical world" lists work quite well. Difference is, of course, that, if you hate junk postal mail and telephone solicitations, the DMA _wants_ you to opt-out; why spend postage, phone charges, and staff time soliciting people who aren't going to buy? It's a waste of money. For email SPAM, though, the wasted money is so minimal as to be irrelevant...
1. Time Warner and Disney _do not_ get along. There's been bad blood there for a long time. 2. The FTC would _never_ let them do it - see the recent Echostar/DirecTV merger block. 3. Disney can't afford it anyway.
Dunno about this - most of the apps you mention are pretty low bandwidth. Credit card processing and ATM landline links are usually 9.6kbps or less, GPS-like apps (cargo containers, etc.) work at similar pipe sizes.
One reason, is that the download would be really huge. Typical DVD holds 5-7GBytes of data. Over a cable modem, running flat-out, you _might_ get 1.5Mbps. That means >10 hrs of download time. Much easier just to get a DVD from Blockbuster. As to it being $5 or $10, it wouldn't be. Quite apart from the issue of how much to charge for the intellectual property of the movie, the bandwidth costs would almost certainly exceed the cost of a DVD and packaging.
The revised deal that Dish/Hughes was basically an offer to create/improve other satellite competitors since the FCC's major problem was that this merger essentially created a satellite monopoly. The first part of the plan was to lease space on their spectrum to Comcast, who is starting their own satellite service. Comcast has the spectrum to offer satellite service everywhere in the US except for the West Coast, and Dish/DirecTV would've provided them with the necessary spectrum to offer nationwide service as well as the ability to offer more channels.
Right concept, wrong cable company. It's Cablevision that wants to launch a new satellite TV service. They already own a bunch of programming properties (Bravo, etc.), and are looking for a way to distribute them more widely, without going through the tollgates of the other cable companies. As a Cablevision shareholder, I think this is an incredibly bad idea, given their existing debt load, but that's a rant in and of itself.
They did market to int'l corporations and governments. Problem was, there weren't nearly enough of those customers to pay the interest on a $5BN investment. Really, Iridium was a great idea in 1990 or so when the plans were first laid. Problem was, by 1995 the world had changed: 1. Cellular coverage had gotten a lot more widespread, geographically (i.e. not just the downtowns of major 1st world cities) 2. Cellular roaming, primarily thanks to GSM, was much more widespread than anybody thought
At that point, the right BUSINESS decision would have been to say, "well, we've sunk $2BN into this, but the world has changed, and the business plan no longer works, so let's stop now and cut our losses, rather than sink another $3BN into actually launching the constellation." That's an incredibly hard call to make, though; imagine going in to tell your boss that he should shut down your project after you've sunk $2BN into it? Not an easy conversation to have. Even harder when the boss then has to tell Wall Street why he made that call.
Not quite. Cable is a broadcast medium, you're sharing that pipe with between 350 and 700 other customers (in the US at least, overseas, nodes can be larger or smaller). The total broadcast bandwidth in that node is:
Downstream spectrum: 60-860Mhz = 800Mhz
@ approx. 6Mbps per Mhz (38 Mbps in a 6Mhz channel)
= 4.8Gbps total capacity
Needless to say, in reality there's not that much data coming down. Typically, only the frequencies between about 550-860 are used for digital content. The rest are analog channels, which are _far_ less efficient in terms of spectrum usage (10 digital channels is one 6Mhz spectrum band, but only one analog channel). Thing is, the cable companies can't convert those analog channels to digital without putting digital set-top boxes into the homes of the 2/3 of cable subs who don't have them, at a cost of $150-200 a pop.
Oh, come on. Don't quote the press release like it's gospel truth - the "I was only checking the security" argument simply isn't plausible. It might hold water if he'd accessed it once, noticed what was required, and then stopped. LeMenager and his office accessed 11 students' records 18 times! Why, to see if it would KEEP working?
What LeMenager did is roughly comparable to: 1. Give someone your house keys so they can water your plants while you're gone 2. While in your house, they pick up your office keys 3. They then drive to your office, and search that for anything interesting. 4. They then go back a dozen times to check out your office again.
Was there malice involved? Probably not, I don't know the guy, can't say. Was it unacceptable and monumentally stupid? Damn right.
I hate to respond to clear flamebait, but there's no overpopulation problem. With minor increases in agricultural productivity (much less than we've seen over the last 40 years), there are plenty of resources to feed even the higher-end population growth forecasts. Even today, the world produces more than enough food for everyone. Food shortages that exist today are purely man-made (a la Zimbabwe).
A friend ran the North American production operations of a wireless handset company until quite recently, and he told me that, in multi-million unit volumes, the COST of producing the cheapest available handset circuit boards (not including the casing or assembly) was a bit over $20. Since that was just the RF electronics, these phones have to be costing them $30 or so, at least. Basically, once marketing and airtime is included (airtime wholesale will run them at least $0.03 per minute, or $1.80 for the included 60 minutes), if nobody ever recharges the phones, these folks are hosed.
Re:oh no! multiple A's
on
Social Robot?
·
· Score: 1
"Does this mean in 20 year we will be reading how the AAAI is sueing people for circumnavigating there robots copyprotection scheme?"
Best buy offers no meaningful warranty unless you pay extra for it.
Of course, that's how they make their money. I remember plowing through the finances of Circuit City about three years ago, and it turns out that the appliance/stereo/computer retailing business is basically break-even (CDs are sold as a loss leader to get people into the stores) - the money is actually made on the extended warranties.
I don't remember the exact numbers, but the product margins were something like 5%, but the warranty margins were upwards of 85%. Basically, if it doesn't break in the first 90 days-1 year, it's unlikely to break in the next two or three years, and if it does, a sizable portion of people will either lose the extended warranty info, or forget that they bought one in the first place.
But is there really a difference in the cost of providing bandwidth (other than hardware, which is still a fixed cost) if I want a low end ISDN line or an OC3 pipe? I would liken it to cable TV. Somehow I manage to now get digital cable with a few hundred more channels than its anolog predecessor for the same price. The cable company didn't really have to do all that much other than give me a new cable box (which I rent from them).
Sadly, not true. First, there are big differences in the cost of the customer prem equipment between different networking technologies. You can buy a cable modem for $80 or less in bulk - a SONET box capable of supporting an OC-3 link will cost you ~$15,000. That being said, if you want internet access, your local access provider (be it the phone, cable, or whatever company) is going to have to purchase a connection to the backbone, and that costs money too (figure $40k for a 155Mbps link). Secondly, on the cable front, going from a few analog to a lot of digital channels required billions of dollars in capital expenditures for the cable companies. First of all, they had to upgrade all the amplifiers and passive components in their networks, and introduce a lot of new elements, since the higher frequencies used for digital channels attenuate over shorter distances, and hence need to be re-amplified more often. In many cases, they had to replace the actual physical cable as well.
My phone line has been there for years. Other than a $50 line cleaning kit, what is really the increase in cost for me to get DSL? Other than equiptment that the telco buys to provide DSL. If they buy it to provide access to one user, what is the increase in cost when you add another 300 users? I understand that hubs and routers have physical limitations, but it just seems that we are getting porked.
The equipment on the other end of your DSL connection (called a DSL Access Multiplexer, or DSLAM), doesn't come cheap, and the unit's cost scales pretty close to 1:1 with the number of ports it has - net/net, the cost does rise with the number of customers. Beyond that, the telephone companies had to make some pretty significant adjustments in their network architectures (pushing fiber down the network, for example), to make DSL available on a widespread basis.
I might back up the above by comparing it to wireless (cell) phones vs traditional land lines. Don't the cell division make hand over fist compared to the land line division? I mean, they put up a tower that can service thousands of people. No cables (from telco to your phone) and thus significantly less service persons and cost per customer. It makes me wonder if my inflated cost for use of a cell phone (in my opinion) is there to offset the money-sucking land line division... Shouldn't cell phone service be only a small % of the (my) cost of wire-based telephone service in my house?
Actually, the cellular service providers are LOSING money hand over fist. First off, building those towers isn't cheap, esp. when you consider the legal aspects of getting access to the sites, permitting, etc. Second, they have to buy landline connections from the towers to their networks, and that is usually slow and expensive. Third, there's a limited number of users you can support from a given tower - spectrum isn't endless. This doesn't even begin to consider the costs of obtaining the spectrum itself - look at the billions of $ that the European wireless carriers paid for 3G licenses there. That being said, it's certainly cheaper, if no network exists, to serve an area with cellular than build a physical phone network. A lot of phone companies in the developing world are doing just that (Telmex in rural Mexico, for example). The real costs of cellular, on an operating basis, are operating - marketing, customer service, etc. The industry still has really severe bad debt problems, and customer churn is high, so getting and keeping customers sucks up a huge amount of the revenue pie.
Overall, are we getting hosed? Basically, no, I don't think so.
Slashdot Mirror
A lot of folks seem to be hung up on the "how do they know that "Half-Life.zip" is actually Half-Life, the game. Fact is, it doesn't matter. Under US law (yes, I know, it's Denmark, so YMMV, but I'm pretty sure the same holds), if you buy a kilo of powdered sugar from an undercover cop, you've just committed a drug crime, so long as there's reasonable evidence to indicate that you _believed_ that you were buying cocaine. By the same token, you'd have a hard time making the argument that you like to download files entitled real_slim_shady.mp3 because you like the name, but had no intention of actually getting an Eminem song.
Only if he has an ept boss.
You'd probably be surprised to know that Steve Ballmer thinks you're right. He commented ~6 months ago that MSFT made a mistake by not including a dial modem in the XBox. When they were designing the XBox, hey made a forecast of broadband penetration, and said a dial modem wasn't necessary. They now readily admit they were wrong, broadband hasn't expanded as fast as they thought.
>>
1. The equipment isn't there to light it - it's not hugely pricey, but it does need to be bought.
2. There's a boatload of dark fiber, but it's nowhere near your house. For a change, the information superhighway analogy really does work: the highway has huge numbers of unused lanes, but there are no local road or on-ramps. That's where the cost is.
You want fiber to your home? No problem. Assuming you live somewhere reasonably dense, all you need to do is get 60% of your neighborhood to sign up, and then pay $1500-3000 each to get it installed. Until you get 60% of a neighborhood to join, and willing to pay that much for install (or enough over and above cable modem/DSL charges to justify a provider fronting those installation charges), don't hold your breath for fiber. It's not the telcos holding you back, it's the fact that digging up streets costs money and pisses off local governments.
The only people who should be very concerned about this merger are people who _sell_ to cable operators (i.e. programmers like HBO or equipment vendors like C-Cor, SA, Motorola, etc.).
For end customers, it won't make a damn bit of difference. AFAIK, not a single market in the US are served by both of these providers, so no consumer will see a reduction in the service offerings provided to them.
For folks who complain about only having one cable operator, it's not a regulatory issue. Every local franchise agreement (contract between the cable company and your city or town that says the cable company gets to string wires and provide service, and in exchange the city government gets a % of the revenue plus free cable service for city offices and schools) signed in the last 15 years is non-exclusive, so another cable operator is welcome to come in and set up shop. Problem is, with a few exceptions (quite dense, wealthy neighborhoods), the economics just don't justify building a second network. It's not some global conspiracy, just the fact that you can pay for building a network to pass 100 houses if you get 65 of them as customers, but not if you only get 37 of them.
This ignores, I think, one of the core values that the record companies bring to the table - screening out the huge amount of unlistenable crap that's out there. They are by no means perfect at this - far from it - but without some sort of screening mechanism, it would become almost impossible to find decent music without sifting through huge reams of people in their garages doing unspeakable things to defenseless Stratocasters.
Here's the employment agreement: our acceptable use policy for our company property notes that we (the company) reserve the right to monitor your conversations at any time. Don't like it? Don't work here. There are a certain array of _explicitly_ defined limitations on employment at will (can't fire for being black, can't fire for not having sex, can't fire for being deaf if the job doesn't require hearing, etc.). Beyond that, it's fair game.
"Your employer does not assume ownership of your rights of person during business hours. You can take a non-business related phone call and use the bathroom during business hours, and it is illegal for them to monitor any of those activities."
As my father likes to say, "Wrong, moosebreath." If you're making a call on a company phone, or sending email from your company account, the company can monitor or record anything it damn well pleases (to make things clean and easy, it should create an official HR-blessed AUP, but it doesn't really HAVE to). Hell, the company can put bugs in the conference rooms, if it wants - the space and communications devices belong to the company.
Of course, remember that violating copyright has also become much easier and more automatic (80s: find someone you know who has the tape, convince him/her to loan it to you, find a dubbing deck, spend 1hr making an imperfect copy, return the original. 00s: fire up Kazaa/Morpheus/etc, click on song hosted by complete stranger, download near-perfect digital copy).
>>
Don't blame the cable companies for this one, blame the TV networks, and more particularly their small market affiliates. If they were allowed to, satellite providers might choose to broadcast only a few stations nationwide (i.e. give everybody their local CBS and NBC affiliates, but broadcast the NYC ABC affiliate nationwide). That would screw the other ABC affiliates, since they make huge coin inserting ads into network programming (ER, CSI, etc.). It would also make the billing awkward for people who wanted to place a locally focused ad on that nationwide-distribution affiliate - how could Bob's Shoestore in Manhattan possibly buy time on ABC NYC when it's competing with Ford, which is trying to reach millions of subs who are watching that affiliate via satellite?
Basically, it's a classic case of what Slashdotters love to complain about when it comes to the music industry - technology has changed the distribution potential of individual affiliates, and they don't want to change their business model to adapt.
If (and it's a big if) SPAM was opt-out, but the opt-out was centralized, and as effective as the DMA's mailing and phone opt-out lists, this wouldn't be that bad. Those "physical world" lists work quite well. Difference is, of course, that, if you hate junk postal mail and telephone solicitations, the DMA _wants_ you to opt-out; why spend postage, phone charges, and staff time soliciting people who aren't going to buy? It's a waste of money. For email SPAM, though, the wasted money is so minimal as to be irrelevant...
>>
I severely doubt it.
1. Time Warner and Disney _do not_ get along. There's been bad blood there for a long time.
2. The FTC would _never_ let them do it - see the recent Echostar/DirecTV merger block.
3. Disney can't afford it anyway.
>>
I would say that the victims of the defendant's past crimes would be the unfortunates here, not the perpetrator.
Dunno about this - most of the apps you mention are pretty low bandwidth. Credit card processing and ATM landline links are usually 9.6kbps or less, GPS-like apps (cargo containers, etc.) work at similar pipe sizes.
One reason, is that the download would be really huge. Typical DVD holds 5-7GBytes of data. Over a cable modem, running flat-out, you _might_ get 1.5Mbps. That means >10 hrs of download time. Much easier just to get a DVD from Blockbuster. As to it being $5 or $10, it wouldn't be. Quite apart from the issue of how much to charge for the intellectual property of the movie, the bandwidth costs would almost certainly exceed the cost of a DVD and packaging.
The revised deal that Dish/Hughes was basically an offer to create/improve other satellite competitors since the FCC's major problem was that this merger essentially created a satellite monopoly. The first part of the plan was to lease space on their spectrum to Comcast, who is starting their own satellite service. Comcast has the spectrum to offer satellite service everywhere in the US except for the West Coast, and Dish/DirecTV would've provided them with the necessary spectrum to offer nationwide service as well as the ability to offer more channels.
Right concept, wrong cable company. It's Cablevision that wants to launch a new satellite TV service. They already own a bunch of programming properties (Bravo, etc.), and are looking for a way to distribute them more widely, without going through the tollgates of the other cable companies. As a Cablevision shareholder, I think this is an incredibly bad idea, given their existing debt load, but that's a rant in and of itself.
Wrong. Just flat-out wrong. Denmark and the US have a bilateral extradition treaty dating back to July 31, 1974. Try doing some research occasionally.
http://www.federalcriminallaw.com/bilateral.htm
They did market to int'l corporations and governments. Problem was, there weren't nearly enough of those customers to pay the interest on a $5BN investment. Really, Iridium was a great idea in 1990 or so when the plans were first laid. Problem was, by 1995 the world had changed:
1. Cellular coverage had gotten a lot more widespread, geographically (i.e. not just the downtowns of major 1st world cities)
2. Cellular roaming, primarily thanks to GSM, was much more widespread than anybody thought
At that point, the right BUSINESS decision would have been to say, "well, we've sunk $2BN into this, but the world has changed, and the business plan no longer works, so let's stop now and cut our losses, rather than sink another $3BN into actually launching the constellation." That's an incredibly hard call to make, though; imagine going in to tell your boss that he should shut down your project after you've sunk $2BN into it? Not an easy conversation to have. Even harder when the boss then has to tell Wall Street why he made that call.
Not quite. Cable is a broadcast medium, you're sharing that pipe with between 350 and 700 other customers (in the US at least, overseas, nodes can be larger or smaller). The total broadcast bandwidth in that node is:
Downstream spectrum: 60-860Mhz = 800Mhz
@ approx. 6Mbps per Mhz (38 Mbps in a 6Mhz channel)
= 4.8Gbps total capacity
Needless to say, in reality there's not that much data coming down. Typically, only the frequencies between about 550-860 are used for digital content. The rest are analog channels, which are _far_ less efficient in terms of spectrum usage (10 digital channels is one 6Mhz spectrum band, but only one analog channel). Thing is, the cable companies can't convert those analog channels to digital without putting digital set-top boxes into the homes of the 2/3 of cable subs who don't have them, at a cost of $150-200 a pop.
Oh, come on. Don't quote the press release like it's gospel truth - the "I was only checking the security" argument simply isn't plausible. It might hold water if he'd accessed it once, noticed what was required, and then stopped. LeMenager and his office accessed 11 students' records 18 times! Why, to see if it would KEEP working?
What LeMenager did is roughly comparable to:
1. Give someone your house keys so they can water your plants while you're gone
2. While in your house, they pick up your office keys
3. They then drive to your office, and search that for anything interesting.
4. They then go back a dozen times to check out your office again.
Was there malice involved? Probably not, I don't know the guy, can't say. Was it unacceptable and monumentally stupid? Damn right.
I hate to respond to clear flamebait, but there's no overpopulation problem. With minor increases in agricultural productivity (much less than we've seen over the last 40 years), there are plenty of resources to feed even the higher-end population growth forecasts. Even today, the world produces more than enough food for everyone. Food shortages that exist today are purely man-made (a la Zimbabwe).
A friend ran the North American production operations of a wireless handset company until quite recently, and he told me that, in multi-million unit volumes, the COST of producing the cheapest available handset circuit boards (not including the casing or assembly) was a bit over $20. Since that was just the RF electronics, these phones have to be costing them $30 or so, at least. Basically, once marketing and airtime is included (airtime wholesale will run them at least $0.03 per minute, or $1.80 for the included 60 minutes), if nobody ever recharges the phones, these folks are hosed.
"Does this mean in 20 year we will be reading how the AAAI is sueing people for circumnavigating there robots copyprotection scheme?"
:)
Isn't that what Magellan is for?
Best buy offers no meaningful warranty unless you pay extra for it.
Of course, that's how they make their money. I remember plowing through the finances of Circuit City about three years ago, and it turns out that the appliance/stereo/computer retailing business is basically break-even (CDs are sold as a loss leader to get people into the stores) - the money is actually made on the extended warranties.
I don't remember the exact numbers, but the product margins were something like 5%, but the warranty margins were upwards of 85%. Basically, if it doesn't break in the first 90 days-1 year, it's unlikely to break in the next two or three years, and if it does, a sizable portion of people will either lose the extended warranty info, or forget that they bought one in the first place.
But is there really a difference in the cost of providing bandwidth (other than hardware, which is still a fixed cost) if I want a low end ISDN line or an OC3 pipe? I would liken it to cable TV. Somehow I manage to now get digital cable with a few hundred more channels than its anolog predecessor for the same price. The cable company didn't really have to do all that much other than give me a new cable box (which I rent from them).
Sadly, not true. First, there are big differences in the cost of the customer prem equipment between different networking technologies. You can buy a cable modem for $80 or less in bulk - a SONET box capable of supporting an OC-3 link will cost you ~$15,000. That being said, if you want internet access, your local access provider (be it the phone, cable, or whatever company) is going to have to purchase a connection to the backbone, and that costs money too (figure $40k for a 155Mbps link). Secondly, on the cable front, going from a few analog to a lot of digital channels required billions of dollars in capital expenditures for the cable companies. First of all, they had to upgrade all the amplifiers and passive components in their networks, and introduce a lot of new elements, since the higher frequencies used for digital channels attenuate over shorter distances, and hence need to be re-amplified more often. In many cases, they had to replace the actual physical cable as well.
My phone line has been there for years. Other than a $50 line cleaning kit, what is really the increase in cost for me to get DSL? Other than equiptment that the telco buys to provide DSL. If they buy it to provide access to one user, what is the increase in cost when you add another 300 users? I understand that hubs and routers have physical limitations, but it just seems that we are getting porked.
The equipment on the other end of your DSL connection (called a DSL Access Multiplexer, or DSLAM), doesn't come cheap, and the unit's cost scales pretty close to 1:1 with the number of ports it has - net/net, the cost does rise with the number of customers. Beyond that, the telephone companies had to make some pretty significant adjustments in their network architectures (pushing fiber down the network, for example), to make DSL available on a widespread basis.
I might back up the above by comparing it to wireless (cell) phones vs traditional land lines. Don't the cell division make hand over fist compared to the land line division? I mean, they put up a tower that can service thousands of people. No cables (from telco to your phone) and thus significantly less service persons and cost per customer. It makes me wonder if my inflated cost for use of a cell phone (in my opinion) is there to offset the money-sucking land line division... Shouldn't cell phone service be only a small % of the (my) cost of wire-based telephone service in my house?
Actually, the cellular service providers are LOSING money hand over fist. First off, building those towers isn't cheap, esp. when you consider the legal aspects of getting access to the sites, permitting, etc. Second, they have to buy landline connections from the towers to their networks, and that is usually slow and expensive. Third, there's a limited number of users you can support from a given tower - spectrum isn't endless. This doesn't even begin to consider the costs of obtaining the spectrum itself - look at the billions of $ that the European wireless carriers paid for 3G licenses there. That being said, it's certainly cheaper, if no network exists, to serve an area with cellular than build a physical phone network. A lot of phone companies in the developing world are doing just that (Telmex in rural Mexico, for example). The real costs of cellular, on an operating basis, are operating - marketing, customer service, etc. The industry still has really severe bad debt problems, and customer churn is high, so getting and keeping customers sucks up a huge amount of the revenue pie.
Overall, are we getting hosed? Basically, no, I don't think so.