ISPs Say They Don’t Make Enough Money | Hacker News Reader

ISPs Say They Don’t Make Enough Money

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634 pointsdavegauer236 comments

We have an ISP in San Francisco and it really is a great business. Lots of long lasting recurring revenue and very low recurring costs--bandwidth is actually one of our smallest expenses. The biggest hurdle is really tapping in to the tribal knowledge on how to set up and run an ISP. You've got networking, provisioning, how to buy bandwidth, even what type of power plugs you need to have in your rack (spoiler: there are multiple and they are not all compatible). Besides the cost of initial deployment and setting up new customers, there's not a whole bunch you need to spend money on.

We really like the business, and more people really should start their own. The numbers make sense in a bunch of different markets and scales. If you deploy with fixed wireless, it brings the costs down to the 10's of thousands of dollars range. Laying fiber is obviously a lot more expensive, but not really necessary in most circumstances.

We're working on helping more people start ISPs-launching here on HN next week, but TechCrunch wrote about the project just now: https://techcrunch.com/2018/05/10/necto-looks-to-help-indivi...

Potentially relevant, I remember seeing this a while back: https://startyourownisp.com/

HN Discussion: https://news.ycombinator.com/item?id=16160394

This is a great guide--I highly recommend reading it if you're interested in the space. We met Graham (the author) and he really knows his stuff.

Oh Hi! Author of https://startyourownisp.com/ here. Happy to answer questions.

You mentioned problems scaling in the article. Can you elaborate on that? Will you update that later on?

Yeah, good question. I don't think it's anything more cryptic than what it takes to scale any business, I was just trying to point out that I made a deliberate decision to focus on what's needed to get from 0 customers to 'some' customers instead of what's needed to get from 'some' customers to many customers. I do hope to eventually go in to more depth about what it takes to scale larger.

Briefly, here are some of the challenges WISPs run in to as they scale:

-Getting contracts with relay sites / towers / places to put their wireless infrastructure. This is one of the most time consuming parts of building a WISP, and it's primarily just about waiting and red tape and making lots of phone calls.

-Geographic limitations - IE we have our little valley covered and we've got as many customers here as we're gonna get, now what? It would cost $XXX to go over to the next town/city/county and we don't really have that or don't have the resources to feel like we could handle that logistically, so we're just gonna stay where we are.

-Network upgrades. IE 10 years ago a 5Mbps connection was pretty good! So we built a network that would deliver that. Now customers want 50Mbps, and the technology is there, but we don't have the capital or the know-how to go do a full network and technology upgrade.

For a moment there I almost thought I was reading about a business that was content making some money and employing some people, rather than presuming that mindless, infinite growth is the only possible path.

I was probably imagining it or projecting my perverted ideals but what a beautiful, refreshing moment it was :)

I get what you're doing and at the risk of taking the bait I want to point out that this is actually the way that a lot of WISPs that I know of operate. Build a network up to a certain number of customers that can be supported by 1-5 people and just leave it there and run it as a lifestyle business, or eventually sell it. I personally know maybe 10 or 12 people who are now doing or have done that in the past.

There are of course also businesses in this market that want to continue growing and I don't think there's anything wrong with that.

How do you compete against 4g/5g and the inevitable lowering of the cost of cellular data ?

you're competing against a market that is determined that it's going to keep costs high for the consumer. In some countries people use 4g routers at home instead of wired connections because of how cheap it is, whereas in the UK it's almost $20 for a 4gb plan with most data providers. If the result is that data providers reduce prices, thats a major win for accessibilty.

Good question. Will have to see what happens as 5g becomes a reality.

A few years ago when WiMax was gonna be the 'next big thing' in wireless I remember a lot of people asking what we (WISPs) were gonna do cause it would put us all out of business. Two things happened: 1) We deployed WiMax gear for our customers. If WiMax succeeded we succeeded with it. 2) WiMax was terrible, we could provide much better service without it than with it. Currently many WISPs actually are deploying 4G-LTE equipment for their customers, and that actually works really well - so that's a good situation for WISPs and their customers. Yet to see what 5G will bring.

> Currently many WISPs actually are deploying 4G-LTE equipment for their customerS

What is the use case here ? Is this for business customers ? How do they manage regulations around 4G frequencies ?

Mostly residential customers. WISPs are mostly deploying in CBRS band (3.6Ghz) which is available for this explicitly. Check out Bai Cells for an example of the equipment being deployed: https://baicells.com

Thanks for answering. Do you have any idea of how the economics work out ?

Yeah, pretty good idea. As mentioned up the thread I run a web site dedicated to this kind of thing: https://startyourownisp.com/ we're getting kind of deep in the thread but I'd be happy to chat further via email. I think it's on my profile or my contact info is on that site.

One thing I've never understood is how computers using one ISP connect with computers using another ISP. Is there some sort of law that requires that one ISP's cable must be able to interact with another ISP's cable? What incentive does someone, like say Comcast, have in allowing their users to interact with people using a smaller ISP like yours?

Is this a trolling attempt?

If not, ISPs do not connect to “each other”. They “connect you to the internet.” Which all the ISPs connect to.

Is this the ol' double troll? :)

In fact, ISPs do connect to one another via peering [1].

[1] https://en.wikipedia.org/wiki/Peering

I apologize, this is my ignorance. Thank you for the link, I know more now.

Are you trolling? The internet isn't some kind of giant server in the sky. It's made up entirely of ISPs who connect to each other and route each other's traffic for mutual benefit. ISPs are the internet. One of the hardest things about starting your own ISP is convincing the big guys to connect with you.

Lower tier isp’s usually pay the big guys for peering.

> Lower tier isp’s usually pay the big guys for peering.

In most all cases they don't peer with the "big guys" they simply refuse. What they do is peer up with the local public peering exchange that's non profit/almost free, then the packets find the big guys on their own.

What the small isp's usually have to do is pay the big guys for use of the actual lines/access to the clients, as usually the big guys are the only ones allowed to run physical lines to houses ect, as in if everyone was allowed to run their own lines it would be a huge mess (see Mexico as an example for rats nests of cable lines placed by any company with the will to run them through the gauntlet)

In most cases, lower tier ISPs just buy transit (wholesale internet) to another ISP, like HE, Level3, etc. The nearly mythical non-profit/almost free exchange you describe is going to be congested as hell.

ISPs are not the same as the "Internet Backbone".

https://en.wikipedia.org/wiki/Internet_backbone

Actually, they are. Top level ("Tier 1") ISP's form the "internet backbone."

The topic you are curious about is called peering:

https://en.wikipedia.org/wiki/Peering

While Comcast doesn't have to peer with you directly, there is nothing stopping the ISPs that peer with Comcast to peer with you as well.

For more information on that, look for the term "peering", or potentially "transit". People who want to get bits from one place to another on the Internet need to peer (directly or indirectly) with people who have fiber strung all over the world.

Peering arrangements normally involve some evaluation of whether the arrangement benefits both sides or just one. If you have things that an ISP's customers want, then theoretically that ISP wants to peer with you to improve latency and bandwidth...but in practice, if that ISP's customers will find an indirect peering through some other network provider good enough, and the difference isn't particularly noticeable, then that ISP doesn't necessarily have an incentive to make it better.

That gets into a really interesting aspect of how the internet works. It's not really one entity, the way people sometimes think about it. In reality, it's a bunch of interconnected networks owned by different people like you mentioned. How it works is that you buy something called "transit", which is the right to send traffic to a neighboring network, who is then responsible for trying to pass it along to the destination network or to another intermediary network. Depending on where the traffic is going, this handoff process can happen multiple times before it reaches the destination.

Sometimes, the connections between these networks can get congested...or network owners can allow them to become congested as a way to extract payments from other network owners. This is what happened to Netflix. The different networks are called Autonomous Systems, and each one has a number called an ASN. The path a packet takes between those systems is called an AS Path. When networks interconnect, it's called Peering. Sometimes those peering agreements are settlement-free (no payments), and sometimes one network pays the other (like when you buy transit).

Your ISP will physically link up to peering exchanges in the closest major city. There are public exchanges and private exchanges, for instance my ISP is Electronic Box and they are linked up to "QIX" (the Montreal public exchange) and also linked up to some private ones (which cost money). You can use peeringdb to see which exchanges your ISP is linked upto and see which servers it has direct access to and the bandwidth.

You can see I have direct access to Google, Twitch, OVH (biggest data server in north America) and others.

https://www.peeringdb.com/ix/355

Peering exchanges are great, and a more cost-effective way of reaching other participant networks vs paying for transit. Our local exchange is called SFMIX (https://sfmix.org/). They're a great and under-appreciated group working hard to improve connectivity.

In general, every IP address is reachable from every other IP address on the internet. This is possible because there's many BGP peering agreements between ISPs, and generally traffic is not filtered between them. There's no law saying you can reach everybody else: that's just how the Internet works, because it's in everyone's business interests to make it work. Very few websites are hosted using Comcast's internet service, so if Comcast didn't peer with anyone else, you couldn't get to many websites at all.

Comcast mostly provides service to end-users. Comcast connects with larger backbone providers, like Level 3, NTT, Sprint and Cogent. Those providers sell access to other residential ISPs like Necto, but also to businesses, like website hosting companies, cloud providers, etc. Comcast might directly connect to some bigger businesses like Google, CDNs, etc, for performance and cost-saving reasons.

The large ("Tier 1") providers all peer with each other, and you can pay one of those ISPs to be able to reach the customers of all the others (this is called "Transit"). So Comcast might connect to Level 3, and buy transit from them. My ISP might connect to NTT, and buy transit from them.

When my computer sends a packet, it goes to my ISP. They consult their routing table, and decide it's reachable over NTT. NTT gets the packet, routes it through their network to a peering point with Level 3, who will then route that packet to Comcast, and finally to the end user.

Then some other random home ISP which pays for connectivity with NTT is reachable from my comcast connection. The business relationship is not between Comcast and my ISP, but it's between Comcast and L3, L3 and NTT, and NTT and my ISP.

Thus Comcast would have to go out of their way to block connectivity. Comcast wants to reach everyone on Level 3's network, because that's where the websites users want to connect to are.

This is largely simplified. There's a lot of billing, politics, and technology issues involved here, and I'm not sure I understand them all.

The fact that you can reach almost any IP address is kind of a small miracle when you start digging into it. There are a bunch of interesting examples of addresses becoming unreachable or sent to the wrong destination, both accidentally and intentionally.

The BGP protocol is how each network announces what IP addresses can be reached through them. Those announcements can often be faked, in a process called BGP Hijacking. This happened to EtherWallet: https://www.theverge.com/2018/4/24/17275982/myetherwallet-ha...

Some address ranges are reserved for internal use within each network. If the network is big enough, some network operators "borrow" other less-used public IP addresses and re-purpose them for internal use. This means that traffic inside that network or transiting through it can't reach those IP addresses. Cloudflare's 1.1.1.1 DNS server (and 1.0.0.0/8 more generally) are affected by that a lot: https://blog.cloudflare.com/fixing-reachability-to-1-1-1-1-g...

Also, sometimes single point of failure connections just...break. It's not guaranteed that every connection is redundant, and it's definitely possible for chunks of the internet to just be "disconnected" from the rest.

In researching a report about using ping services to locate VPN servers, I found a few examples where nearby ISPs only peer remotely. Iceland via Germany. Zurich via Italy and Germany. Salt Lake City via Boulder, LA, etc.

"only" as in trying to avoid local peering? Do you have an idea why they might do that?

Yes, no local peering. I have no clue why.

The Iceland example: https://keybase.pub/mirimir/IVPN-is1.gw.ivpn.net-All-Probes-...

From the IVPN article:

> Most notably, the lowest-rtt probe for IVPN server is1.gw.ivpn.net is in Amsterdam, NL. The data is somewhat “V” shaped, with the lowest minimum rtt at ~2,000 km. And indeed, the distance between Reykjavik, IS and Amsterdam, NL is 2013 km. However, given my long-term working relationship with IVPN, one of their network engineers verified that this server is indeed in Reykjavik, IS. It’s also unlikely that the maplatency.com probe “IS midlar ehf” is actually in Amsterdam, because that’s an AS in Iceland. It’s arguably most likely that the probe (in Iceland AS60300) and is1.gw.ivpn.net (in Iceland AS44515) just weren’t peering directly, but instead through an AS near Amsterdam.

My guess is because it does cost some money to do local peering. My understanding is you need to contact each individual company you want to peer with, make sure you both have a Point of Presence in the same datacenter, sign a contract, etc. So you both need to be renting space in that building and both have an open port on your router, and then you need to pay the datacenter to actually physically run the wire between the routers.

Thanks. I hadn't thought it through so clearly.

But wait, how does traffic get to that remote peer?

> how does traffic get to that remote peer?

Not sure what you mean. The two networks (say, a DSL and Cable provider in the same area), need to physically connect at some location in the area (usually at a "Carrier Hotel"). Once they're connected, traffic originating from a DSL customer is routed through the DSL network to the Carrier Hotel, then across the to the Cable provider's network, and then through that Cable network to the Cable customer.

For example, I live in South Bend, IN, where we have Comcast Cable and AT&T DSL. Although we have a few places in town where Comcast and AT&T _could_ each have a point of presence, and then peer with each other, they don't think that's worth it. Instead, traffic is routed to the nearest peering point, which in my case is 350 E Cermak in Chicago, 100 miles away. Peering locally would probably save about 10ms, but that's probably not really worth it.

OK, I get it. In your example, AT&T and Comcast peer in Chicago. In my example, the two Icelandic ASNs peered near Amsterdam. Likely through international intermediaries.

It means that the only people that can cut your connectivity off are in a completely different jurisdiction. Useful if you have a lot of sketchy traffic.

But isn't there always some intermediary with a local presence?

The politics involved can be interesting.

Sometimes, your equipment is fine, but your peer has a 1GB card in their peeing router instead of the 10GB they promised, and they need time to budget the upgrade.

Sometimes, your peer is handing off packets fine, but their peer is dropping some or all of them - and it's difficult to get someone halfway across the world to spend money for you when you're not their direct customer. Influence falls off at an inverse square of the degrees of separation, or so it feels.

Off topic, but I saw you mentioned NTT several times, and wondered if it's the same NTT that I remember from my childhood in Japan. It turns out that yes, the tier-1 provider NTT is headquartered in Japan, and the company name stands for Nippon Telegraph and Telephone. Its history goes back to 1869 when the telegraph was introduced in the country, and is now the 4th largest telecommunications company in the world in terms of revenue.

Thank you. This is very informative.

There have been instances where peering agreements were problematic. I remember Sprint being a part of one. Not sure if they were the problem causer or the victim, but I do remember their network being cut off in a major way for a short period in the 90s while contracts were hammered out.

Comcast is a "last mile" ISP or "eye-ball network." Technically they are tier 3 ISP> They buy transit from Tier 1 ISPs. Tier 1 ISPs "peer" with all the other Tier 1 ISPs.

So you might be a Comcast and they might be transit from Level 3. Your friend might be a customer of some small ISP who buys their transit from AT&T.

Level 3 and AT&T are both Tier 1 ISPs. All tier ISPs have an agreement that they will route their respective customer's traffic to from each other's networks. This called peering. hey have peering agreements with each other. More specifically Tier 1 ISP do what is known as "settlement free" peering with each other because no money changes hands. And these are not legal contracts they are just hand shake deals, its an exclusive club basically. There are only a handful of tier 1's although it is a regional distinction. Tier 1 ISP in the US are not necessarily the same Tier 1 ISPs in Australia for instance.

Comcast only has an incentive int that they would have angry customers if those customer couldn't send emails to their friends or family members who use another ISP. This being said there are occasional peering disputes where the internet becomes partitioned and customers of 1 ISP can not reach customers and site on another ISP. And customers do get upset.

There is few ISPs that are considered Tier 1 which are considered as the core of the Internet. They have peering agreement between each other to not charge for traffic sent between themselves. This also became something equivalent to "cool club" to join it all existing members need to agree, which is unlikely so currently most common way to become tier 1 is to acquire existing member (like what Verizon did).

So then you have Tier 2 which connect to Tier 1 to have internet access and they pay for it. They are paying for the amount of data being sent. To reduce cost they get into agreements between each other to provide direct connections to other Tier 2 ISPs. So if someone from ISP1 needs to talk to ISP2 they can use that peering link and save cost by not having to send traffic over the core.

There's high incentive to be connected to everyone, no one would be happy to only be able to access just part of the Internet. Remember that unlike what we are used to to home ISPs where we have only a single connections. Businesses and especially ISPs have many links. This is both for redundancy (if something happens to one connection there's a backup) but also to decrease cost and increase performance.

I love to learn more about what you guys do! Is there a good way to get in touch with you guys or help out?

Definitely! I'll shoot you an email.

I helped start a few ISPs in the late 90's, early 2000's... Is it really a good business these days? I figured it's low margin and hard to compete with the Comcasts and Verizons of the world. There's one fixed wireless ISP I know of regionally that is a public company, and they're bleeding money.

It's gotta be. My brother and I rent commercial space as a workshop on a main stretch of road in a pretty big midwest city. I asked a few nearby businesses who they use for wifi, they all said AT&T.

So I go onto AT&T's website and the cheapest option they had was 2mb service for 44$ a month AND a year commitment. I checked 4 or 5 more ISPs and they all had the same or worse deals. I ended up buying a hotspot from T-Mobile.

Now that I'm reading about this though.. If I can create a wireless ISP that can do better than 20$ a MB for just a mile or two of the business boulevard I'm on and it costs about ~10k I'm going to do it. Time to research I guess.

We service some "DSL dead zones" like that...it's crazy to see the prices people are forced into paying. We had one customer that was paying over $100/mo for low single digit Mbps before they switched.

Thankfully it's gotten a lot better since then. The RF tech has improved dramatically and bulk bandwidth costs are much more reasonable. Is it Proxim?

I'm right outside of Boston. Towerstream is the ISP I was speaking of... they always seem to be losing money.

I've worked at a few ISPs in Australia. There are still huge efficiency gains to be made, especially on the customer service side of the business which accounts for 70+% of the labour cost.

I wish that the EFF had actually taught people the math of running an ISP, rather than just writing a puff piece.

Here's Comcast's Form 10-K for 2017: https://www.cmcsa.com/static-files/111ba611-eb85-4edc-9000-3...

Yes, the majority of the expense for Internet is definitely the upfront cost of equipment (physically putting in the cables).

Cable companies borrow lots of money in order to do this -- Comcast's Form 10-K shows that they have 64 billion dollars of debt. In order to get bank loans that big, you need to show that you can pay it back. But they only have 3.4 billion in cash; the way they keep their balance sheet from falling apart is knowing you pay your monthly cable bill ("Receivables, net" of 8.4 billion).

Comcast had 41 billion dollars of "Residential" revenue last year, but only 14.7 billion dollars of that was for Internet.

The big expense line item is 13 billion on "Programming" (aka, TV stations from the other conglomerates, for people who haven't cut the cord yet). There's also 6.4 billion on tech support, and 2.5 billion on customer service. If you keep looking further, you see they spent 3.4 billion on "customer premise equipment" (which is probably cable modems and set-top boxes), and another 2.4 billion on "scalable infrastructure", which is the actual "paying money to make your internet better". The balance sheet shows ~38 billion on property and equipment, so maybe Comcast is upgrading, say, 5-10% of their network in a given year?

In my opinion, Comcast's real long-term business risk is the shifting revenue mix from Cable to Home Internet means that Comcast gets smaller cash flows, so there's less money to upgrade the equipment every year. That can't possibly look great for shareholders.

Makes sense. Comcast does everything they can to get you to add legacy cable to your Internet only service.

The 10-K for 2017 is great. You pointed out some great reasons the infrastructure and programming sides could be split.

> Cable companies borrow lots of money in order to do this -- Comcast's Form 10-K shows that they have 64 billion dollars of debt. In order to get bank loans that big, you need to show that you can pay it back. But they only have 3.4 billion in cash; the way they keep their balance sheet from falling apart is knowing you pay your monthly cable bill ("Receivables, net" of 8.4 billion).

I wonder would these look like split out into "internet infrastructure", and "media infrastructure". I bet it would be a stable business with low, but expected, returns, and another with lots of volatility.

As a United States Citizen, I wouldn't mind providing subsidies and incentives for an internet company to expand internet connectivity. I do take offense to a media company taking subsidies to _also_ expand a media empire with those funds.

> Comcast had 41 billion dollars of "Residential" revenue last year, but only 14.7 billion dollars of that was for Internet.

Yes, a split out company would have a smaller market cap. That's actually larger than I expected!

> The big expense line item is 13 billion on "Programming"

Exactly. Get that shit out of my internet provider.

In my opinion, the American Public's real long-term business risk is the over consolidation of businesses. That means that Comcast gets to continue posting record breaking profits while offering shitter services, meanwhile expanding their media empire.

> As a United States Citizen, I wouldn't mind providing subsidies and incentives for an internet company to expand internet connectivity.

We already did, to the tune of somewhere between 100 to 400 billion dollars in tax breaks in the 1990s for fiber that they never delivered.

Search terms: broadband scandal

Not to mention the seemingly endless series of subsidies at the city level, in return for bupkis. Some examples having to do with one connectivity slumlord:

https://www.techdirt.com/articles/20131012/02124724852/decad...

Read the actual source of those claims. It’s not “100 to 400 billion in tax breaks.” See: https://news.ycombinator.com/item?id=7709556.

Comcast doesn’t get any significant subsidies. In fact the opposite is true. Cable service is subject to special municipal taxes (5% of gross revenue is typical) that other businesses don’t pay. We put special taxes on broadband like we do with things we want to discourage: cigarettes and alcohol, soda, etc.

Also, wired broadband is not a “low but expected return” business right now. People are moving to wireless in droves (a growing percentage of households with $100k+ income have no wired service). 5G could make wired broadband obsolete for a big chunk of the population.

> People are moving to wireless in droves

Some source would be nice. Are you saying they are moving to 4g or satellite? Both seem highly unlikely, considering 4g internet is billed on usage. Wireless connectivity has read QOS issues, I don't know how 5g is going to solve that.

https://www.quora.com/What-are-the-problems-in-5G

http://www.washingtonpost.com/news/the-switch/wp/2016/04/18/...

This is why context is important.

The traditional definition of a personal computer has changed from Bulky PC to tablets or phones, which for most is more than good enough for their daily use case. Since tablets and phones have built in 4g connectivity and the device is mobile in nature, it makes sense for those users to user 4g internet for their mobile devices.

So to put things in context. People are not moving to wireless in droves because there is something wrong with wired services. They are moving almost at the same rate as people are ditching traditional PC for Mobile devices.

Gaming, Video Streaming is a huge market. Unless telco is giving out unlimited data at a cheaper rate and not charging per device with low latency + mobile devices having large battery time while playing games and watching Netflix or youtube, I don't see it as a concern for wired internet.

Those droves of people moving to 4g and ditching wired will remain a niche market. Because it doesn't make any practical or economic sense.

Really this. As an ISP owner, I have to say this is the truth. People and organization who like to badmouth big telcos and ISPs that they are ripping them off don't know anything about the business aspect of things. Because they are often thinking about small scale fixed operation cost. While there are small scale wisp success business stories and are probably profitable, they don't scale well when you are big. I wrote about my experience amd actively discourage to go to ISP business if you don't have the money or the technical knowhow and the expense knowhow. Google fibre is a posterboy of why ISP business is hard and expensive to start and scale. Yes Google faced preasure from existing business, but there are many places google did not bother because it would cost them real big investment. They only went to places where they could piggyback on existing infranstructure. Because they know it will take them many decades to see a return in their investment, thats not how google business model works.

https://www.slashgeek.net/2016/05/31/starting-isp-really-har...

TFA isn't about starting an ISP. It's about net neutrality, ISPs, and through United States.

You've stated that returns take time. That can be, and is already, costed into an ISP's stock.

Why do strong net neutrality laws prevent ISPs from making enough returns?

How did ISPs turn record profits when net neutrality laws were in place a short time ago?

I was talking specifically about the person I replied to and many others (actually most comments) in the discussion which had nothing specific about net neutrality about ISPs being profitable.

Great link.

The revelation for me: On-premise gear specific to upstream sources -- Netflix, Google -- turns out to be a business requirement. So NG are more effectively natural monopolies than we might have guessed. Unhappy implications for small WISPs, and for smaller video sites -- Vimeo.

I would Akamai Nodes at the same level. A lot of times large sites leverage on Akamai infrastructure for distribution/CDN. Facebook heavily relied on Akamai (esp outside the USA) for a long time, I don't if they still do it. Youtube's very first live streaming of any type (I think it was a concert) was done on Akamai network.

Akamai was and still is a very big player. Facebook also has their on-promise nodes, but I don't think they are as ubiquitous.

ISPs routinely invest in things that I didn’t ask for: “helpfully” trying to resolve my web typos to their own ad servers, trying to inject pop-ups into HTML streams, wanting to install unnecessary software to “use the Internet”, expecting me to rent equipment that could be bought, etc.

Meanwhile, there is little evidence of investment in things I actually expect an ISP to do. No upgrades to quality of service (except that fateful day when Google Fiber came to town and “miraculously” everything improved practically the next day). Not even an option to have cheap, basic Internet, which you know damned well they CAN do; instead, ridiculous things like “only if bundled with a landline phone” (WHAT?!?). One mystery fee after another. Absolute garbage service, everything from “we will arrive between 1 and 5” meaning “we showed up at 11:30 and you weren’t there, reschedule”, to phone calls about service outages that they seem to be utterly clueless about. A single customer probably gives them at least $1000 a year, what the hell do these people do?

And then on top of those things they have the audacity to refer to things like developing new pricing models as "innovation".

I always read "innovation" as rent seeking opportunities when a company says it.

They aren't only lying about not making enough money. They are "lobbying" to keep up this charade.

Many European nations have much cheaper and faster access to the internet with many more ISPs. I don't see a logical reason why US can't have the same.

It’s the same reason we can’t have cheaper, better healthcare. Our government is controlled/lobbied/influenced by people who stand to profit.

Lobbying is a thing in europe also, but if politicians are too blatant about it they get voted out of office.

All americans seem to agree the problem with their government is crooked politicians. Why do people keep voting those people into office?

The American view on this seems to largely be that the crooked politicians are the ones OTHER people elect. Since our national level laws and policy are set by representatives of much smaller localities, we can love OUR guy, and think everyone else is a no good crook.

I would suggest that it's not because their crooked per se, but because getting into office requires an extraordinary fundraising and PR effort that takes all their time. With the rise of finance and technology, the systems in our modern civilization are incredibly complex and difficult to understand, and the only thing legislators know about issues is what lobbyists tell them. There are no effective lobbyists for anything that is not making someone a lot of money, because it's really hard to compete with well-paid professionals.

So even with the best of intentions, the system conspires against legislators getting an informed yet neutral viewpoint on how policy will affect the myriad systems that make up our society. As if that weren't enough the anti-intellectual streak in America tends punishes anyone who tries to bring in more nuance and public research to difficult questions.

> not because they're crooked per se

If it walks like a duck, and quacks like a duck, is it not a duck?

The end result in terms of narrow corporate interest winning out over overwhelming public sentiment is indistinguishable from bribery.

And yet the solution to each is wildly different.

Because the crooked politicians usually bring something back to their constituents. And people vote on their local politician.

So the US Senate is usually filled with moderate voices (since they have to appeal to millions of voters) while the House of Representatives is filled with crazies who were elected by an order of magnitude less than senators.

Then you have the incumbency effect which makes it pretty hard to lose your next election so long as you have name recognition and a gerrymandered district, unless something really crazy happens with you (sex scandal, fake-news, corruption indictments, going to prison, etc), and even then sometimes the effect is still strong enough to elect you to office before you have to be removed and have the State Governor appoint an UNELECTED replacement who will then have the incumbency effect bestowed upon themselves.

All in all, the US makes it hard to elect people who will "progress" and not just "maintain".

And don't get me started about off-year elections, special elections, primaries, voter ID laws and various other legalized voter suppression (felons, poor people, minorities), and a plethora of other ways that we use to confuse citizens about voting.

Among the other reasons provided, there's a huge challenge the US faces that Europe doesn't seem to: a lack of choice. Our two-party system does not lend itself to voting out crooks.

Everyone who is blaming stupid voters is part of the problem. The news industry colludes with politicians and bureaucrats to ensure that voters never have a real choice. Even fake choices like Trump, Sanders, or Stein are brutalized by the press. (Trump figured out that if he inspired enough ire he could be on TV all the time: expect to see this tactic again.)

Our betters conspire at every turn to give us the choice between Coke and Pepsi. If we thirst for anything else we're welcome to move.

Most European countries have strict campaign finance limits. In the UK, no party can spend more than £19.5m on their national campaign, plus £10,000 to £16,000 for each candidate's local campaign. They're required to provide accounts and receipts for all of their campaign activities and can forfeit the election or face criminal charges if they overspend. That's chump change in American terms - the last presidential election cost about six billion dollars.

With strict campaign finance limits, lobbyists are far less influential. Candidates hardly think about fundraising, because any money raised over their spending limit is useless to them. A lobbyist might be persuasive, they might provide a lot of compelling evidence, they might make the case that a particular policy would be popular, but they can't offer a pseudo-bribe in the form of a massive campaign contribution.

It used to be like that in the US, eg see "Jimmy Carter says when he ran against Gerald Ford, he didn't raise any money" http://www.politifact.com/truth-o-meter/statements/2013/feb/...

It's amazing it's got as messed up as it is. Someone really needs to fix that.

I often get the feeling that our best minds and potential leaders either don't go into politics, or can't survive the brutal realities and shortcomings of the current political system. So basically we are doomed to constantly repeat all of these problems until something significant changes.

Because we all disagree on who the crooked politicians are. Congress as a whole has abysmal approval ratings, but people don't vote on Congress. They vote for their individual Representative and two Senators. When you ask people about their particular representation, those approval ratings are much higher.

Long story short, it's because of abuse of tribalism by the two parties. I'll give you a good example: the 92 presidential debate. Ross Perot, a third party candidate got almost 19 percent of the vote! So what did the two parties do? They worked together to takeover the debates so they could keep third parties from ever getting that close again!

Then couple that with carefully crafted lies, usually based on identity politics, that encourage and foment tribalism and division, add in the corrupt primary system, among other spices like blackmail and three letter surveillance of Congress, and you get what we have.

This is why it angers me so much every time someone says "both parties are just as corrupt" and is met with a thousand "ways $theotherone is actually the bad one but $ourparty is the only one looking out for the people" and derision for even stating it out loud.

After years of pondering this issue I have come to the conclusion we need to, over multiple election cycles, focus on getting third parties and independents who are fully transparent about funding into office, and enough to take away the majority from both parties, hopefully under a coalition of some sort, which would force both parties to come to the table in a more adult like manner.

Make no mistake, all three branches of government have suffered similar corruption, but the legislative is supposed to be the closest to the people, so I think it is the place to start (well really the state congresses are)

So many of the unconstitutional things which our gov does that goes unchecked is due to both sides of Congress violating their oaths. If we had a congress worth a damn we could use them to self correct...

You get two parties naturally out of the winner-take-all system. Some European governments and other governments that got to learn from our mistakes (by forming constitutional republics later in history) have real multi-party systems, which you get much more easily with actual proportional representation.

Even in EU they do things that would be unacceptable for other products:

- Year-long locked in contracts. No trial period.

- Zero guarantees whatsoever on bandwidth and latency.

- No third-party, legally recognized, quality certification/monitoring organizations.

- Little guarantees against traffic inspection, DNS sniffing & so on.

- In some countries it's legal to sell ADSL as "fiber".

- Sharing your uplink with a neighbor can be prohibited by contract.

I know it's nothing new, but that's not an acceptable argument. It's about time we raise our expectations.

>- Year-long locked in contracts. No trial period.

Here we get a 14-day trial period.

>- Zero guarantees whatsoever on bandwidth and latency.

Technically impossible to give such a guarantee.

>- Little guarantees against traffic inspection, DNS sniffing & so on.

How do you guarantee something like this? Let anybody in the datacenters...?

>- Sharing your uplink with a neighbor can be prohibited by contract.

That's normal, otherwise they'd lose tons of money. I mean here you can get 300/300 really cheap, that's more than enough for, let's say, 10 neighbours. But then how do you expect them to cover the investment?

> >- Little guarantees against traffic inspection, DNS sniffing & so on.

> How do you guarantee something like this? Let anybody in the datacenters...?

Spell it in the contract and put people in jail if they break it.

> Technically impossible to give such a guarantee.

Every other service provides five nines or whatever or your money back…

>>- Zero guarantees whatsoever on bandwidth and latency.

> Technically impossible to give such a guarantee.

Not at all. You pick the right oversubscription ratios, monitor the network and give guarantees on the 95%/99% percentiles. It's done in datacenters all the time.

>>- Little guarantees against traffic inspection, DNS sniffing & so on.

> How do you guarantee something like this? Let anybody in the datacenters...?

Just like in many other fields: external verification, rewards for employee and customers reporting malpractices and so on.

Also, encourage your customers to use DNS over HTTPS, VPNs, Tor instead of saying nothing or even discouraging it.

>>- Sharing your uplink with a neighbor can be prohibited by contract.

> That's normal, otherwise they'd lose tons of money.

That's not an argument. The large majority of goods and services in existence can be shared and, very often, even re-sold and there are specific laws against contracts for exclusive use.

It's up to the ISPs to find ways to bill people accordingly (and it's easy to look at what carriers and datacenters ISP do...).

>Technically impossible to give such a guarantee. //

The guarantee is that you won't be charged for service outside of the specifications. That is, an SLA.

In UK airlines and train companies are bound to national SLAs such that if your aeroplane (this might be global?) is delayed by a significant amount [as defined by the SLA] or your train is late you get compensated.

No reason not to have that for ISPs.

The government would need to pair it with a requirement that the ISP can't ordinarily refuse service.

The regions in Europe which have cheaper/faster access have either community managed infra or high population density/cheap power. Does the US have that?

Swedes in say Stockholm have had quick internet access for ages but high population is a relative term. I am sure cities such as New York and Los Angelos are high population compared to Stockholm or cities in The Netherlands. Also, I wouldn't say we got so much choice here in NL. There's basically one cable company: Ziggo (aka Liberty Global, owned by an American) and basically one DSL company: KPN. You can't even always get both (meaning usually Ziggo has a monopoly), and KPN actively hampers fiber because VDSL2 is "viable". Mobile-wise there's traditionally 3 players, rest are MVNO. Now with 4G, the third player (T-Mobile) is actually the best and there's a fourth player as well (Tele2). And 4G has a relatively low latency (especially on T-Mo's network which I personally don't have though). The two big players are once again KPN and Vodafone (joint venture with Ziggo called VodafoneZiggo). Vodafone just bought Unitymedia in Germany and Eastern Europe from Liberty Global, btw.

The problem is that a lot of the cable infrastructure (traditionally owned by the municipalities or small corporations) has been sold very cheap to companies which have all ended up being bought by Liberty Global. The government has done it completely wrong. They should've kept owning the networks, but leasing access to companies. After all, the government owns infrastructure such as roads and rails as well.

Exactly.

But they did the same in France 10 years ago. Then the ISP named "Free" started to sell an offer 3 times cheaper and WOW, suddenly everybody matched the price.

So not only competition on price is possible for ISP, it's actually necessary for the clients. It's wont benefit the existing ISP, obviouly, so it must be done no matter what they say.

Hard to compete when local government is so corrupt they won't let you run physical cables to people's homes.

Not really. If you are in a democratic but corrupt country.

Make local people aware that you want to offer the service and this service can only be offered if the government lets you lay cable.

Start laying cable and offer your people service. Offer them a good deal and ask them to protect your cables in return. You'll be amazed how good communities are at protecting their assets, provided they realize the benefit of keeping it in shape.

Then bring those people in front of government to vouch for you.

Yeah, digging holes in roads without a permit. Not hard at all.

I assume in most places the cables are put on poles. Have you ever seen poles in some cities? It look like a 200 foot tall bird is using them to build a nest.

Genuine question: can you put fiber on poles ? Since it breaks so easily, I would assume it's buried only.

They routinely put fiber cables on high voltage lines, and apparently also on catenary masts along railway lines around here (germany).

Fibers are somewhat fragile, but not the complete cable. But the splicing necessary for local distribution will be hard to do on a mast top.

It hasn't worked out very well for France. They're nearly dead last when it comes to broadband in Europe.

They're 27 out of 31 in Europe as of a year ago, per Akamai's connectivity report. They rank below Russia and Poland, with a 10.8 Mbps average. The US was at 18.7 Mbps, with 48% above 15 Mbps. France only had 18% above that line.

Vietnam came in at 9.5 Mbps by comparison, and Malaysia was at 8.9 Mbps. France has nearly 20 times the GDP per capita of Vietnam.

Surely "average" is a poor statistic for nations with extremely rustic countrysides? It would vastly understate the real conditions in cities in those nations.

So is US.

> It hasn't worked out very well for France.

If you compare it to the situation before and after, it's a huge benefit.

> They're nearly dead last when it comes to broadband in Europe.

First, you assume there is no competition in other europeen countries. There is. Example in Poland: https://rentflatpoland.com/internet-provider-choose/

Then you need to adjust to the cost of life.

Free offers now 1Gb fiber for 30 euros a month. That's 2,5% of the minimum wage (1173 euros)

In Poland, the best I could find is 300Mbps for 60pln, which is 2.9% of the minimum wage (473,27 euros). So more expensive, for something 3 time slower.

And don't get me started on the modem. ISP in France provide crazy setup for you. Like the Free ISP gives you a box with an integrated NAS, a blueray player, a torrent downloader (that you can stream on your TV) and can be configured to use a VPN.

> They rank below Russia and Poland, with a 10.8 Mbps average

Most people in Russia or Vietnam don't have internet. So you are basically comparing a country like France, where even the small countryside towns broadband, with countries where in some remote town you still flaky basic utilities.

Russia seems modern, but it's so huge, covering everything is freaking hard.

Vietnam is very rural.

Poland is getting pretty modern now, but that's nowhere near french level if you get out far from the cities.

Also Vietnam internet is ludicrously good, it far outstrips anything America has to offer.

People bringing up Vietnam in a perjorative sense don’t understand how good Vietnam internet is.

The supposed "deregulation" of the ISP market by the FCC is merely picking the members of the current telecom oligopoly as winners. Killing net neutrality isn't about choice, it's about enriching telecoms because they have bought our government.

Thanks, Citizens United, for making corporate speech so much more powerful than individual speech!

Congress could pass legislation to override the Citizens United decision but, lol, who am I kidding.

I come from one of those nations. There could be many explanations for why things are the way they are in the US and not in some other nations. Maybe federal or state legislation makes it more expensive for competitors to compete. Maybe there are geographical challenges that make it more expensive. Or one of a thousand other explanations.

How do these European nations compare on population density? I live in suburban silicon valley and have been surprised to see how much cheaper internet is for friends of mine who live in cities — even cities like NYC, which are equally expensive otherwise. (i.e., they're not just jacking up the price for folks in Silicon Valley because most people can afford it.) I pay $30 for 12/3 Mbps service; my city friends pay roughly the same for 100/10 Mbps service. This leads me to believe that population density is a big factor here.

Sweden has lower population density than the US, but much better internet.

I think population density is a weak signal for competition in the US market, and that's what you're seeing.

95% of Swedes live in the tip. I doubt upper Sweden has good coverage being that it's a barren tundra.

You'd be wrong. Sweden has a program to essentially guarantee everyone access to broadband coverage, even (and especially) those who live in rural areas.

This map is from Finland in 2016, and shows only a few regions have >90% 100mbps availability.

https://m.imgur.com/wU5WXBV

To be fair, in the US (which is what we're comparing all of this to), broadband is defined as 25Mbps up/3Mbps down.

Ah - by that definition much of central London doesn't have broadband as I get 8 down 0.5 up and can't get much better. Still I find the 8 it basically fine. Maybe the vid is 720p rather than 1080p - whatever.

I'm seeing Sweden as having a significantly higher population density. I have no particular reason to trust this source [1], but it's the only one I found. Why do you say Sweden is less densely populated?

http://www.nationmaster.com/country-info/compare/Sweden/Unit...

> Sweden - 45.43 sq km per 1,000 people

> United States - 30.16 sq km per 1,000 people

Looks like the US is half again more dense than Sweden according to that site.

Ah, my mistake. I think I was looking at the rural pop density stats.

I come from one of those countries. Basically all companies offer the same price regardless of location. Around here, population density may affect coverage -- as in, superfast Internet access may simply not be available in the middle of nowhere -- but not price.

You only pay $30 for 12/3 service??

I pay $75 to AT&T for 12/.75 up in Marin county. Comcast will give me much faster service for just a little more $$, but they haven't connected the building yet, so AT&T is my only choice.

I call in every 12 months to get this deal renewed — the "regular" price is $50. AT&T is not available in my area, except for anemic 3/1 Mbps DSL service.

I live on the border of RWC and Woodside, and have talked to neighbors in central Woodside whom Comcast does not serve and would only do so if they pay $20,000 for the wires to be run to their house. They are stuck with the AT&T DSL service. Lack of choice is undoubtedly part of the reason that Comcast can charge so much here. And it's the reason that I bought Comcast stock a few years ago: https://medium.com/@nicklum/how-my-hatred-of-comcast-drove-m...

The difference to the US is that the companies that owns the cables have been forced (by lawmakers) to share that infrastructure with anyone who wants to start an ISP.

My parents in Sweden recently got fiber to their house in the countryside. There's a company that owns the fiber and you pay them ~10 EUR a month. Then you pick your ISP, whichever you want.

I live in Cupertino (very suburban Silicon Valley) and I was paying $40/mo for 50/15Mbps. About a year ago I upgraded to symmetric gigabit for $80/mo. And this is AT&T (I would get Sonic if AT&T didn't block them!).

Oh, and as it turns out, I could also get 300Mbps from Comcast for $80/mo.

So I don't think density is the real issue here. It's like they said in the article, competition. They only reason AT&T started rolling out fiber was because Comcast has the 300Mbps service and they wanted to come out ahead.

"How do these European nations compare on population density?"

If that point held any water, San Francisco would be a bastion of broadband. It's not.

In my area of France, I have one provider, Orange, and a top speed of .8mbs up and 10mbs down.

“Cheaper and faster” in some places, more expensive and slower in other places. Not everyone lives in Paris.

Aren't most if not all of Large ISPs public companies? They answer to the shareholders... Their business model revolves around making their shareholders the most amount of money possible. The company answers to the shareholders.

A Municipal ISP are mostly non/low profit, they have no share holders to pay out. No one looking for their 'investment' back as capital, just people looking for stable internet. The Muni ISP answers to the customers.

Fun Fact: In many parts of the US it is "illegal" for municipalities to run an ISP.

There's little 'fun' about that 'fact', especially for some of us folks in more rural areas... :/

I appreciate your situation. I verbally chewed on every staffer Bev Purdue could cajole into answering the phones during the run-up to HB 129 passing in North Carolina. Alas, in these parts rednecks vincit omnia.

Slurs are not acceptable on HN.

You claim a slur has been used? Please point it out.

The money has got to come from somewhere. If you want the municipality to run an ISP, then you either have to tax the citizens for the services or take funds from somewhere else. Either way, can we be sure that good intentions from democratically elected local politicians will be enough to somehow make Internet service cheaper than what the private sector is able to provide?

> The money has got to come from somewhere

sure, but the total operating cost can be lower, because they don't have to rake in profit. said another way, the profit-making imperative is operating overhead that a municipal ISP doesn't have.

since their total cost of operation is lower, and since their incentives are more aligned with the desires of their customers, they can provide a better experience for said customers, while using less resources overall. the only people who lose are shareholders of for-profit ISPs. i find that trade-off acceptable.

Shareholders are also people. Some shareholders are large and rich. Some are small. Some are pension funds that want their members to receive dividends and returns.

And maybe I am a pessimist, but I haven't seen that many examples of government run enterprises that can be said to be well-run. And how are we ever able to know whether they are run well when they are tax financed?

> Shareholders are also people.

Shareholders are also miles away from any negative impact that their companies have on the communities in which they operate -- unlike small business owners who interact directly with their customers.

Public corporations are thus more inclined to behave solely according to profit motives, making them less like people and more like undomesticated wildlife, indifferent to humanity.

If a company behaves badly enough towards its customers it will start losing customers and revenue, so the incentives are aligned with providing customers - no matter how far removed shareholders are from the communities you mention - a service they want to pay for. Of course, there are cases where certain legislation makes it difficult for competition to arise, in effect giving an existing company monopoly for delivering Internet in a certain way.

So I don't exactly disagree with what you are saying, although I don't interpret profits negatively.

>If a company behaves badly enough towards its customers it will start losing customers and revenue, so the incentives are aligned with providing customers

That makes sense... if the company is small enough where any dip in customers is significant. When you have something like Comcast, serving tens of millions of people you're losing and gaining thousands of customers a day just from people moving. Additionally your service is so large that people in Cincinnati who are having problems with the service doesn't equate with the whole rest of the nation, as the quality of service isn't uniform. And then in cases where Comcast is a virtual monopoly people might want to ditch them, but what choice do they have? And they'd rather have (crummy) internet than no internet. Comcast's customer base is so large that you're never going to organize a significant percentage of them to meaningful action. It's too many people.

And on top of all that big ISPs/big cable companies are among the most hated companies in the U.S. and have been for 15-20 years... so when are they going to start losing customers and revenue in a meaningful way to be incentivized to clean up their acts?

I mean I understand the formula you're using and the cause an effect you're suggesting. But the reality suggests it's a bit more complicated than that.

I don't see the profit motive as negative, either: it's amoral, not evil. Like fire.

Where I imagine we part ways is on how much power corporations should exercise within society, relative to individual citizens.

I draw straight lines connecting the Citizens United decision giving corporations vastly increased power to buy our politicians, to AT&T actually buying our politicians (consider the headlines today), to the FCC ignoring overwhelming public sentiment and rigging the ISP market in favor of the existing players.

"If a company behaves badly enough towards its customers it will start losing customers and revenue"

Comcast says hi, and thanks for using the same worn-out, disproven trope again.

> Shareholders are also miles away from any negative impact that their companies have on the communities in which they operate -- unlike small business owners who interact directly with their customers.

If you own 1 share of a company you are a share holder. Employees are also given stock as bonuses and have the ability to buy stock at a lower cost. These are shareholders and I am sure these people are in the local economy.

I'd be willing to bet a large portion of the american public is actually invested in these ISPs whether they know it or not (Most people do not know how or what their pension / retirement funds are invested in) and depend on these companies to do well so they can have a nice retirement.

> Shareholders are also people. Some shareholders are large and rich. Some are small. Some are pension funds that want their members to receive dividends and returns.

right. i didn't say i'm happy that shareholders will lose money. just that i found the trade-off acceptable. presumably most of them will get out of for-profit ISP stocks and not totally lose their shirt over it, should things start going downhill. then others will decline to invest in the first place.

if e.g. comcast were to go out of business, then that would suck, because a bunch of people would have to look for other work. i'd hope that competition would just make those sorts of companies into better citizens, and then they could stay in business, and provide a better product at a fairer price.

> And maybe I am a pessimist, but I haven't seen that many examples of government run enterprises that can be said to be well-run.

i've read many articles on arstechnica where people have extolled the quality of their municipal ISP, and bemoaned the ISP-led legislation that banned their municipal ISP.

note that i'm not saying we should outlaw private ISPs. but my strong opinion, based on all the evidence i've read, and my own personal experience, is that national ISPs (comcast, at&t, etc) use their monopoly power to the fullest extent that they can. they have terrible service, they provide a product inferior to what other countries provide municipally for less money, and they do nothing but complain to congress about how they're hurting while bragging to shareholders about how well they're doing. in short, i think they're bad actors, and i'd rather see the thing they provide treated like a public utility, which i firmly believe it is at this point.

> I haven't seen that many examples of government run enterprises that can be said to be well-run

ARPA-E is a fine example of a current government project that is well run and highly lauded. it would also be good to remember that you wouldn't have the internet were it not for "government run enterprise" (it was ARPAnet before it was "the internet").

What about the large percent of the population that is invested in these ISPs without actually knowing they are? There is a large portion of the american public that has zero clue where their pension / retirement fund is being invested. What about all the employees stock that they might have purchased or were awarded as a bonus?

i'd prefer a robust public safety net to corporate welfare.

but again, i find it more likely that comcast and the like would become competitive and less obscenely profitable, as opposed to going out of business entirely.

and if the pension fund knows what they're doing, they'd get out of the ISP stock. municipal ISPs aren't going to ruin anyone's retirement plan. that's absurd.

or as the kids like to say, national ISPs deserve a little disruption. their employees and shareholders will survive, and we'll all be better off.

Those that have ISP stocks as part of their pension/retirement are likely not investing directly in those, but in managed plans. The people who manage those plans would get out of ISP stocks as well.

Note that you're explicitly making an argument that a company being "too big to fail" should require us to continue supporting their monopoly and funneling money to them, all for the sake of "the small guy".

You're right that there is a potential negative impact for direct or indirect shareholders. However, these have to be weighed against a continued cost on society (everyone and their dog overpaying for internet while getting terrible service). I don't see you taking this other side into account. It also doesn't touch on all the money that gets absorbed by various entities somewhere along the way from "customer being charged" to "small guy shareholder getting their pension".

If we've determined that another system can provide a better solution in the long run, the question needs to be "how do we support people in the old system who are going to get hit by its demise", and then go about implementing the better system, instead of advocating for the rent-seeking monopolist's continued existence. Especially if we're talking about infrastructure.

> I haven't seen that many examples of government run enterprises that can be said to be well-run. And how are we ever able to know whether they are run well when they are tax financed?

You also must not have read the article. It clearly discusses EPB, a municipality-owned company that operates profitably and was the first company to offer gigabit speeds in the US. They also have annual financial reports available on their website if you have questions about how well run they are.

But aside from being municipality-owned, it looks like it operates like a private company. I would guess, though, that if they become unprofitable, there will be tax dollars there to save them giving them an unfair advantage to private players.

Maybe, maybe not. The municipal ISP I knew best had lower costs because they didn't upgrade their equipement. When they were competing with dialup their 500k for $20/month was just fine, but eventually the other competition upgraded and were offering 1m for $40/month and the municipal ISP had nothing in the budget to upgrade. Then the competition upgraded speeds again and again while leaving prices the same.

Of course the above can happen to anyone. It is very common for new small business to be so low in price that they can't afford maintenance and they go out of business.

Which just goes to show that it is perfectly feasible for private ISPs to compete against municipal ISPs when they are mis-managed.

The problem with a municipality is the same as the status quo: Too much monopoly. If they're good, then great, if they're bad then too bad -- no other choice. Same as dealing with Comcast.

A better idea is to have the municipality just manage the "last mile" physical cable from the home to the exchange, then have various ISPs operate a backhaul from the exchange outwards, along with customer support, billing, etc.

That way the customer has choice of ISPs (real choice) and you aren't running five cables or more from the exchange to a home.

I don’t think a municipal ISP would necessarily have to be a monopoly.

Well it’s pretty hard for private businesses to compete against a municipal ISP.

A business has to covers its cost with the fees charged to its customers.

A municipal ISP has to cover its cost with the combination fees charged to its customers and subsidies from local government (which are charged to all citizens through taxes, whether or not they use the municipal ISP).

Not exactly an enticing business proposition to compete against a company that gets to charge your customers money whether or not they use the competitors service.

So unless the municipal ISP is so horribly inefficient that a private entity can compete with them on pricing despite the lack of subsidies, presence of a municipal ISP will lead to a municipal monopoly.

I suppose there is also the case of a municipal ISP that receives no government funding, in which case what is the point of the government here? Also, I have never heard of such an arrangement in practice so when people refer municipal ISPs, they are likely referring to government subsidized ISPs.

Rather than a full on ISP, I think I'd prefer to see municipal NSPs. The municipality should be concerned with passing packets within the municipality. When an end user needs packets routed outside the municipality, they engage with an ISP connected to the municipality's network.

This ends up operating very similarly to the way CLECs have allowed 3rd party ISPs to provide DSL service. The end user has a modem that attached to the CLEC's ATM network, then a PPPoE connection transits the ATM network to the user's ISP.

With a municipal NSP, you effectively acknowledge the municipal cable plant and switching fabric as a natural monopoly, while allowing competing ISPs to provide internet transit.

> Also, I have never heard of such an arrangement in practice so when people refer municipal ISPs, they are likely referring to government subsidized ISPs.

Did you not read the article? EPB is a government owned company and operates at a profit. They seem to be doing a much better job providing high speed coverage to their customers than large publicly traded companies like Comcast.

I can read just fine, thanks. I think EBP is great, but it doesn't really contradict anything I said as EBP received more than $100 million in free federal grants to use in building out its initial fiber optic infrastructure.

I'm not against municipal ISPs, but I think government backed businesses are generally going to turn into monopolies, contrary to the parent's comment.

> EBP received more than $100 million in free federal grants to use in building out its initial fiber optic infrastructure.

A grant is not (technically) a subsidy and I would suspect that the majority of ISPs building infrastructure have received federal grants in some form or another. The difference is that EPB actually provided gigabit speeds instead of taking the money and making excuses.

> I think government backed businesses are generally going to turn into monopolies, contrary to the parent's comment.

That may be true, but I think they are less likely to become monopolies when they are government owned than when then are owned by a mega-corp.

Sure, if you already have several small, privately-owned networks in your area offering gigabit speeds then introducing a municipal competitor may increase your odds becoming a monopoly dominated area. Communities like that are the outliers though and not a valid reason for state legislatures to prohibit municipality owned broadband.

Case study in brief: Residents of Wilson, NC were unable to purchase quality high-speed internet access at any price. The incumbent near-monopoly private ISP in the state was disinterested in servicing rural communities to any significant degree, citing "cost of infrastructure" as their primary reason to neglect these markets. Eventually the folks in Wilson got tired of ISDN-equivalent internet access and took matters into their own hands. The municipality floated a bond, contracted to lay fiber, and within a couple years had most of the town wired up with some of the fasted connectivity anywhere on the eastern seaboard. Then (and only then) Time Warner steps in and starts pressuring state legislators to do something because "government shouldn't compete with private industry". HB 129 was drafted, passed the GA, and the governor at the time, while refusing to sign the thing, also refused to veto it. Wilson's ISP was forced to halt expansion despite several other local rural communities interest in getting added to the network. Internet access in eastern NC still sucks, with no remedy in sight.

>Not exactly an enticing business proposition to compete against a company that gets to charge your customers money whether or not they use the competitors service.

The less enticing it is to be comcast the better.

The government can play a valuable role being a "competitor of last resort" in stagnant markets.

I remember when I lived in Singapore (where the government builds a large quantity of social housing at a reasonable quality), the average quality of private housing would be considered stellar elsewhere - simply because the government had set the bar so high.

The much more likely situation is that a municipal ISP can undercut the competitors on price charged to the public and still throw off a healthy profit to the local government (opposite of a subsidy). Which is why Comcast et al. are so vigorously opposed... they like the current low-competition system.

"Well it’s pretty hard for private businesses to compete against a municipal ISP."

No it's not. All they have to do is provide better service for a good price. Same as any other competitor.

"A business has to covers its cost with the fees charged to its customers."

Most municipal ISPs are the same.

Local utilities (water, trash, gas, electric) are often provided by municipalities, funded by users. There's no reason they must rely on subsidies from non-user-fee tax sources.

USPS is a government agency, and even has a legally protected monopoly on first-class mail pricing, and still gets plenty of competition.

What's the point of non-subsidies municipal utilities? Accountability. It uses the structure of government to facilitate cooperative ownership.

One problem with this is that a lot of the problems people experience with their Internet service (slow speeds, latency) are due to problems (overcrowding, poorly maintained infrastructure) in the last mile. Unless the municipality is well incentived to fix problems this can be even worse for the end user - the ISP blames the Muni and vice versa and nothing gets fixed.

Note that I actually agree that this is a good and maybe the best solution and is actually what I have at home (10 GB fiber on a last mile access network with multiple ISP options! In the U.S., even!) Just pointing out a risk.

I disagree. Last mile is just bandwidth and a router, what people complain about is mostly between the last mile and the internet. Netflix slow even though your have X0+Mbit connection on a speed test? That's what people want to fix.

Respectfully, I've been building these networks for about 15 years. I assure you that the last mile is often (but not always!) the problem.

In the last 10 years I have had last mile issues once if you include a firmware update on a router taking a while. That may be an outlier, but last mile networks should be stable consider the phone system used to just work? On average less than 5 miles of wiring should almost never have issues.

Why is the website down when it's up for other people? Why is my BitTorrent being disconnected? Why is the video stuttering? Where is this lagg coming from? Why is Netflix look like crap?

Yea, those are not last mile problems.

> Why is the website down when it's up for other people? Why is my BitTorrent being disconnected? Why is the video stuttering? Where is this lagg coming from? Why is Netflix look like crap?

Literally all of these things are very commonly last mile problems. (but again, not always.) Consider what happens when a connection on the last mile network starts to get congested and/or underperform due to a physical problem (like an old/degraded copper line.) The provider can either upgrade/fix the network (expensive, time consuming, not profitable in the short term) or they can implement traffic control on that segment. The traffic control could be a high burstable rate with a much lower committed rate. In that situation browsing will feel snappy and speed tests will be good, but downloads and video streams will be slow and buffer. Problem solved from the provider's end - they can point to the speed test as evidence that they're providing what you're paying for and blame the streaming provider for the buffering, and they don't need to spend anything to solve the over-congestion problem! And they're not even breaking net neutrality! But experience for the customer is bad.

I think you're confused about what last miles means.

It's the part of the network that's not shared. In cable networks it stops at https://en.m.wikipedia.org/wiki/Service_drop. It may in fact exist entirely inside an large apartment complex.

From a networking standpoint all networks look the same at that point as it's before any form of routing. In no way can you get "Why is the website down when it's up for other people?" from a last mile segment you can see everything or nothing.

PS: HD Streaming video also qualifies as low bandwith now days. Even 4K is not bad, you can run 40+ of them on a 1Gbit connection.

I am not confused, but I do think that we are working from different definitions of last-mile. Your definition of last-mile is a fine and probably more literal one, but I don't think it's very useful when talking about municipal last-mile networks. If the municipal network only extended from the service-drop to the home then each ISP would still need lines run all through the city. In my case for example the 'last-mile' fiber access network has a pedestal in the street every few blocks across several cities - it's a very large network. The ISPs connect at the edges of that network and provide IP to any home connected to it.

Also, fwiw it certainly is possible for a problem at the last mile even in your definition to cause a site to be inaccessible for you and not others. A bad route or a frame size problem for example can cause exactly that. Consider for example the recent problems with AT&T and 1.1.1.1 - AT&T customers couldn't use that site while others could and it was all because of a last-mile problem.

> In my case for example the 'last-mile' fiber access network has a pedestal in the street every few blocks across several cities - it's a very large network. The ISPs connect at the edges of that network and provide IP to any home connected to it.

That network is effectively a full ISP excluding billing as it's connecting to 1000's of homes and then connecting to a few networks from that point.

I understand it seems like a reasonable alternative, but think of something closer to this. Connecting to every single one of those pedestal's would take ~1-3% of the wire as going to every home. If say 10 networks did it then that's not all that much overhead compared to 2 separate last mile networks.

The other approach would be to have say 2-5 networks that went to every box and then each ISP would have a device in those locations which would connect on one or more of those networks.

In either of those 2 cases the ISP's would have full control over how their customers see the internet, without nearly the wiring of having N full networks.

> If they're good, then great, if they're bad then too bad -- no other choice.

If they're bad elect folks to government for whom fixing the ISP is a high priority...

> Same as dealing with Comcast.

Not exactly. If you're not happy with your municipal ISP you have some recourse to get people in there who align with your ideals. Yeah it's not an overnight solution, but it's an option you don't have as a single customer being serviced by a nationwide ISP like Comcast.

> If they're bad elect folks to government for whom fixing the ISP is a high priority...

That hasn't been my experience with American democracy. For one thing, outside of Maine, the US uses first past the poll style elections which invariably lead to elections with only 2 viable candidates. That means the issue of ISP management will be wrapped up with all kinds of other things.

For example, let's say I have an opinion on intervention in Syria and the one of the two available parties supports that view. Well, that's great, unless of course I have an opinion on anything else. Excepting that there just so happens to be a candidate that perfectly represents my views on Syria, free trade, the environment, abortion, education, infrastructure investment, military spending, the debt, and everything else, then I will be making compromises.

Same at the local level. I will have to weigh any candidates ideas on reforming a badly performing municipal ISP against their ideas on recycling, NIMBY/YIMBYism, and so on.

And the above situation is actually the good case. The bad (and much more likely case) case is that both parties, realizing that promising improved performance for a municipal ISP is a difficult endeavor, will not campaign on the issue at all. Instead both parties will focus on easy partisan issues, which are more likely to draw in voters than a nuanced governance issue.

That's essentially the way the UK market operates, albeit with one company (BT OpenReach) owning the last mile.

We have tens of companies that use their network for the last mile and then take over transit at 27 POPs over the country (unless they want to pay BT for transit as well).

And the best bit? We have an equivalent of the FCC (OFCOM) who regulate the price that BT is able to charge for access to this network, and to spur investment into faster solutions (g.fast and FTTP) they have recently reduced the amount BT can charge.

We also have the AltNets snipping at BT's heels, GigaClear, Hyperoptic, B4RN, TrueSpeed, who are rolling out full fibre networks in different parts of the country.

And all of this means prices are generally lower too - Vodafone offer 76 down 20 up using BT's national FTTC infrastructure for $34 a month for totally unlimited use, and that also includes telephone line rental.

Sure we can, if they rely on the internet as well.

I would say that there is a world of difference in wanting some service and then running an enterprise well that provides the service. It seems to me that it is impossible to use voting as a means to guarantee good outcomes.

No, we cannot be certain.

But I think that trying ISPs with motivation beyond "what gets the top executives the biggest bonuses at the end of the year" is worth trying.

"Either way, can we be sure that good intentions from democratically elected local politicians will be enough to somehow make Internet service cheaper than what the private sector is able to provide?"

Aside from your unproven assertion that a private company with a profit motive is able to provide internet cheaply, it does already happen in many places around the country.

In Denmark we have several private companies providing cheap and fast internet, and we usually don't have any cap on data (but often a fair use clause in our contracts). For instance, you can get 80/10 mbit upload/download for around 45 $ a month. What I am getting at is that yes, maybe Comcast sucks, but you cannot guarantee that just because Internet service is provided by the municipality/state and tax funded it will somehow become cheaper or better.

I can all but guarantee that anything else would be better than Comcast.

Elected Local Government Officials answer to their lobbyists.

Muni ISPs answer to the politicians and agencies that run it. The IRS answers to the “customers” as well, but they are far more painful to deal with than any private company.

ISPs answer to the shareholders and shareholder value comes from making a product people want to buy.

The answer is more competition, less regulation, fewer “exclusive” deals negotiated by municipalities.

> but they are far more painful to deal with than any private company.

They are? They've always been super responsive and polite when I've had to deal with them.

My interactions with the IRS have been uniformly good. I’d rate their customer service among the best I’ve ever experienced.

You’ve never lived outside the US then.

I made a mistake and paid them too much. They sent back a letter and a check and fixed the problem for me.

The stable solution is almost always a partnership, with tax dollars being used to built and maintain infrastructure and private dollars being used to maintain service.

The infrastructure is the hard and expensive part.

In my opinion, the simplest (and fairest) solution would be for municipalities to lay down the fiber itself, including last mile connectivity (paid for by whoever develops the land), and the city simply Rents out the fiber to any company interested in servicing the area (all companies would pay the exact same rate). They would simply have to come in with their networking equipment and peering agreements. This would greatly increase competition, in a sense it'd be as free market as possible.

Look at how the internet is done in New Zealand.

We have a handful is big companies that own the fiber, and copper networks and a lot of ISPs that essentially rent the last mile.

Chorus, is one of the biggest infrastructure providers:

https://www.chorus.co.nz/tools-support/broadband-tools/broad...

The headline is, by definition, true for all businesses with shareholders. There is no such thing as enough money. $N+1 in earnings is always better than $N, therefore there does not exist a business in the world that "makes enough money".

I feel that if you put this in front of a CEO of an ISP he will really not understand it. It is so very, very common in business world that you find an argument to ask for more money, which is why you will ask for more money. The question for business people is not the truthfulness of the reason, but how believable it sounds.

And if you try to counter that with truth and succeed you will really irritate these business people. Because now they need to go and find another good-sounding reason to ask for more money.

Truth or not, that is really invisible to them.

ahhh the difference between price and value....

I agree with the EFF on a lot, but there was a dearth of numbers in this article. Does anyone know of any numbers to actually back up, for instance, the 80% claim that the writer makes regarding the cost of initial buildout? Additionally, how would that apply to each individual ISP?

The article also asserts that, "a small handful of massive and extraordinarily profitably Internet service providers (ISPs) are telling state legislatures that network neutrality would hinder their ability to raise revenues to pay for upgrades and thus force them to charge consumers higher bills for Internet access". Does anyone have an actual example where this has happened? I'd expect the author to at least throw in a link to a news article somewhere. Almost every article the author has written for the EFF is related to Net Neutrality, I'd think he'd have plenty of resources to show us.

Also, while I'm not entirely sure how EPB built their network out, Sonic is a terrible example even by the information given in the article. First of all, when almost the entire cost of starting your business is already paid for you, you're doing to have lower costs than someone who actually has to build conduit to lay fiber. On top of that, Sonic's service seems to be entirely concentrated in an extremely small, very high population density area. When you have 2000 customers on a single city block, you're going to have a lot lower costs than a company that has one customer every quarter mile.

If ISPs are so profitable, and the current government is falling for their lies, then ISPs are probably a great investment?

You could buy some Comcast stock (NASDAQ: CMCSA) - it's a bargain right now, down 20% in the past year. Compare vs. the NASDAQ composite index, which is up 20% in a year.

Actually, the more I look at it, they might actually be a good investment after this 2018 correction. I do not have any vested interest in Comcast, but I might make a very small investment after reading this article.

There were some profit margins of big ISPs published - they are insane, and near monopoly situation makes it pretty bad, when ISPs rip off users left and right.

Imagine what it costs to build roads, have drinking water, sewage or electricity. ISP = tiny boxes. The starting cost should be a lot higher.(could be a lone) That way we don't have to rent forever. We don't hook up your house to the sewage system for free either. After you sink many thousands into the sewer it gets rather amazingly cheap.

A lot of ISPs are public companies, so not sure why EFF didn't just dig up their 10-K filings?

Sonic.net is a pure broadband provider with pretty good introductory deals for 1Gbp internet in the Bay Area.[1]

2017 Revenue - $477M

2017 Net income - $64M

2017 Profit margin - 13%

13% isn't bad. It's more than low margin businesses, but doesn't seem egregious to me.

[1]https://www.last10k.com/sec-filings/sonc/0000868611-17-00005...

It looks like that 10-K is for Sonic the fast food chain. I believe Sonic the ISP is still a private company.

Nobody makes enough money... news at 11.

:DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD joke of the month. thank you

Please don't though.

These guys operate as legal monopolies, have received huge tax breaks, and provide bad service.

WISP coverage map for the US:

https://uwn.com

I am no fan of ISPs, but this is a silly argument to make. There is no "enough" when it comes to capitalism. Your problem should be with either the politicians for believing these arguments or with our entire economic system, not with ISPs for lobbying on their own behalf in this manner.

We can still try to hold ISPs accountable for lying (or even misrepresenting) to elected officials, which is what the EFF is attempting to do.

Internet access requires laying cables and huge up front costs and is to a large degree a "natural monopoly". In cases of a natural monopoly, even classic pro capitalist free market economists believe in regulation.

On the other hand, Comcast seems to be deaf to competition. I live in an area where AT&T offers 1 gigabit up and down for $70 all in and Comcast still tries to sell 1Gbps up/35mpbs down for $135 and it's capped. I consistently get 940/940 on AT&T. Comcast couldn't get near the promised speeds during peak time when I had them years ago.

I don't have a problem with ISPs. They are doing what is legal, and it makes logical sense. Spend $xx on lobbying save $xxx.

The problem is much bigger than ISPs in my opinion. There is anti-intellectual movement in the US right now. Uneducated population does not understand the difference between a fact and an opinion.

The government should be hiring educated people, some professors for example that understand subjects related to laws. There should be 0 trust in lobbyist.

> Uneducated population does not understand the difference between a fact and an opinion.

Do not let educated people off so easily. Plenty of them have this same problem.

> Uneducated population does not understand the difference between a fact and an opinion.

Why stop at the "uneducated"? The educated population doesn't know the difference between fact and opinion.

The people who run ISPs are adults who are fully capable of taking responsibility for their actions. I can and will be angry with the ISPs for acting in the way they are.

What's this "enough"? No for-profit entity makes "enough" money. It's a concept that doesn't exist.

Put in real competition and supply-and-demand takes care of "enough".

Yikes, this article is so myopic. They treat large "ISPs" as if they are a single independent entity. The largest ones are owned and operated by gigantic corporate interests, and their sales figures are part of a broader plan, and thus so is pricing. The profits of "EPB Fiber Optics" don't go towards paying for content rights worth billions of dollars a year.

The larger the network, the more expensive it costs to maintain and upgrade. Of course a tiny regional co-op ISP doesn't cost much to run. They don't have 25 million customers in 21 states, or 145,000 miles of fiber in 39 states.

I mean, jesus, this article goes all over the place. It's saying provisioning isn't expensive, and suggests that deployment cost is lowered by changing building codes to require conduit. How does that affect the 91 million homes that already exist?

The article states that net neutrality "prohibits [ISPs] from charging unjustified fees on Internet services". No, it doesn't. They can charge whatever they want for their services. They will increase the price of internet services whether or not net neutrality exists, because it is not getting any cheaper to run a giant ISP that is responsible to the shareholders of a media conglomerate.

If the author really thinks the only reason big ISPs charge high fees is because they're mean and greedy, they really are going to lose this fight, mainly from a lack of critical thinking skills.

Well it's actually quite a bit cheaper to do data in volume, buying dark fiber or laying it your self will give a much better return if you can use it all.

Generally referred to as Economies of Scale. It goes for most businesses.

It's cheaper to do things in volume, but you still have to compare the scale. If the tiny ISP has 100 miles of fiber, they still look really good on a balance sheet because they haven't had to deal with infrastructure 1,450 times larger. Because it's a much smaller set of problems they can be much more efficient.

What are you on about? A single provider would have to pay literally 2x their current budget to increase their 100 mile capacity assuming it was a single link. A larger business can do that in stages by absorbing the risks.

Besides, internet isn't centralized, so you might as well manage each segment of the network as a sub-provider, only managing the financial risks at the higher level.

It makes it only easier.

By that logic, wouldn't a large ISP want to maximize its profit by splitting itself into smaller regional divisions with smaller, less expensive networks?

I think what GP is also saying is the money maker divisions subsidize the 'loser' regional divisions. It would be interesting to see that data...

Absolutely. Modern ISPs are part of corporations which have other business interests that are very, very expensive. All corporations use all of their money-making ventures to help subsidize other parts of the business.

Just look at the old Bell system. They charged exorbitant rates for the long distance service and used this to subsidize local service. When Bell got broken up, local phone service got more expensive, but long distance got cheaper. Later on, a lot of the baby bells got absorbed by others because they were not efficient enough to generate profits as individual units without the "mothership" subsidizing them.

The way a giant corporate monolith works is completely different from a tiny local company.

Then they should kill the business units that are expensive to run, not jack up prices on the profitable services.

No, that would be a logistical nightmare, and the amount of waste and complexity added would just bog down the whole thing and profits would fall.

If you have 100 acres of land to farm, it does not get cheaper or easier to manage by buying 10 sets of tractors, 10 sets of farm hands, 10 grain silos, 10 of everything... you don't need all those things, and they all have implied costs which will all eat away at your profit by the time the grain gets to market.

Right, which is why I'm confused at the parent's claim that "Of course a tiny regional co-op ISP doesn't cost much. It's simpler!" They seem to be confusing absolute costs with the cost per customer, which is the number that's actually relevant for ISPs' users.

Since I wrote my comment, the above comment has been expanded and now seems to be arguing that the reason ISPs are so expensive is because they're paying costs associated with being a media conglomerate (which sounds plausible), and that this is somehow perfectly normal and consumers shouldn't be upset that the cost of their network access is higher (which makes no sense to me at all).

Sorry, I wrote both comments and expanded on them. It's multiple things. It's costs associated with other business interests, it's logistical and operational costs, it's a whole lot of things.

My main point is that it is naive to compare a tiny isp to a gigantic one, because the tiny one doesn't have remotely as many extra considerations or costs.

Of course consumers should be concerned about costs. I personally think they should lobby for municipal ISPs! But I'm also saying you can't say "oh my internet is too expensive compared to the tiny isp". Your internet is probably accurately priced considering who you're getting it from.

In other words: Everything is always accurately priced because there always is a reason for why the price is what it is. Not exactly a helpful way to think about things if you want to understand them, is it?

"The article states that net neutrality "prohibits [ISPs] from charging unjustified fees on Internet services". No, it doesn't. They can charge whatever they want for their services. They will increase the price of internet services whether or not net neutrality exists, because it is not getting any cheaper to run a giant ISP that is responsible to the shareholders of a media conglomerate."

Yes, it does. The 2015 rules prohibit an ISP from charging a site or service such as Airbnb to load for an ISPs' subscribers. This is a subset of the no blocking rule.

The 2015 rules don't regulate prices that ISPs charge their subscribers, though the FCC reserved the right to step in if an ISP's were egregious.

> Yes, it does. The 2015 rules prohibit…

…extortion, basically.

I don't understand what the argument being made here is. They charge high fees because they can. They can because there's no competition to take customers from them. There's no competition because Large ISPs are greedy and lobby local/state/federal governing bodies to protect their interest to ensure they stay on top. They stay on top by not only lobbying but by merging and buying smaller regional companies and aggressively expanding their reach. They are greedy because, well any for-profit company is. That's why we have regulations to keep them in check.

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