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Comment by dsabanin | Hacker News Reader

I just fail to see how Comcast or Verizon are going to be selling you their internet connection if you won't be able to connect to the things you want to connect to (like Netflix, iTunes, YouTube) through them. Especially on higher plans, people buy a lot of bandwidth so that they can stream videos, that's how ISPs up-sell to them. If they start throttling, they'll be selling an empty bucket, and it's not going to be very easy.

To me it seems like this might just revive competition between ISPs, by separating those who do the shady things and those who don't.

I'm curious how this is going to play out, it may not be all bad.

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You must live in one of the few places in the US where high-speed internet is available through multiple providers.

That is definitely not the norm. Most people won't be able to simply switch to the least nasty provider.

But that's my point, it will give a smaller-sized competition more chances to differentiate, since users might start looking for something better.

What smaller competition will be capable of laying copper or fiber to its constituents? Even cities are, in many cases, rendered incapable of providing competition.

And, for the record, wireless is not a viable competition for copper, let alone fiber. The available bandwidth by the most cutting-edge offerings is too low and latency is too high.

the hypothetical here is that Comca$t is going to artificially throttle Netflix and give you mandatory free (paid) access to their own streaming platform.

all a WISP has to do to compete is offer more bandwidth than the throttle allows with no bandwidth shaping at a competitive price.

If all that the internet was was streaming video, sure. It's not, though.

The WISP also has to be resilient against Comcast removing the cap at a lower price (at least until the WISP folds). And against being bought out by Comcast. And against Comcast's lawyers and lobbyists (the wireless spectrum being a government controlled and finite resource).

you make it sound like competing with comcast is impossible. it might be difficult, yes, but if you have less-than-shit policies in your state/muni lots of options tend to pop up.

i live in Utah, and i have several ISP options pretty much anywhere along the Wasatch Front, including fiber and wireless. i can't speak for anywhere else, but its not like its impossible.

On what infrastructure? Pigeon carriers?

They could first start small – municipalities, LANs, HOA-based WANs, consolidating slowly. It's like you're saying that no ISP progress will ever be made if someone is not using existing AT&T networks.

It's infeasible when there's enough political money from the nationwide ISPs to make installing a new network prohibitively expensive.

Comcast, ATT, and Spectrum's ceiling of profit is the difference between the cost of delivering services and the potential cost of installing a competitive network.

And it's far easier to increase the latter than innovate and decrease the former.

If the FCC really wanted to promote competition instead of profits, they could mandate nationwide access to utility poles & shared conduit.

As well as making exclusive franchise agreements illegal.

I still don't really understand how exclusive franchise agreements /aren't/ illegal, given antitrust laws.

Through insane amounts of regulatory capture. You could hardly hope to get government under greater private control with an overwhelming military coup.

We've gone far beyond reducing regulation to ensure that innovation is possible--we've restructured regulation to ensure that doing business is practical only for the major industry players who now write our legislation.

Exclusive franchise agreements are illegal for eg cable. They have been illegal for a quarter of a century.

You'll find that nearly all examples commonly presented of the lack of competition, are not due to market lock-out, it's due to the high cost and time required to gain approval to build in a given town or city. The combined cost, with pre-existing competition entrenched, is a very large disincentive. Google Fiber didn't grind to a halt on their build-out because they couldn't legally access markets, it's because it's painfully expensive and very slow.

There are three solutions to the problem: new technology that bypasses (low earth orbit satellite, wireless); lower the total cost to enter markets and compete; mandate shared access to existing infrastructure (and ideally simultaneously lower the other market entry costs).

Normally when infrastructure is expensive to deploy and wasteful to duplicate like this we turn it into a utility (Water, Electric, Sewer, Roads, Telephone, etc...).

We don't do that for Internet because...

Thanks for the correction! (And as also noted here: https://news.ycombinator.com/item?id=8066340 )

Upton Sinclair's "It is difficult to get a man to understand something, when his salary depends upon his not understanding it" seems relevant here.

It's illegal, but it's also murkey enough that it can be made effectively exclusive through permitting delays, etc.

If the incentives were flipped (say, a federal road fund multiplier that scaled with average speed * number of options), I feel like we'd have a lot more competition.

As is, in the contracts I've read, they're essentially "ISP gets a non-exclusive franchise right in exchange for paying local government x% of their fees from the area, and both parties agree that the portion rebated to the local government may not be separately itemized on the bill."

Which sets up some pretty perverse incentives for most part-time commissioners.

More than half of US households have multiple wired broadband providers: https://arstechnica.com/information-technology/2017/06/50-mi...

This does not include wireless broadband options. Could the competitive situation be better? Absolutely. But it is, in fact, the "norm" to have a choice.

A scant majority is not "the norm" - you're using a term that has no statistical meaning. A duopoly labeled as choice is specious.

The study limited to 100 MBPS. It should have included more tiers like 200, 300, 500, and 1000 to provide a better picture. Once you go past 100 MBPS, there tends to be only one widely available choice per region. This choice is either Comcast or Verizon.

That means nearly half have a single (or no) option. Further, for many who have two choices, the decision is between not-actually-very-Fast DSL or a single cable provider.

In Mountain View I had only shitty DSL or shitty cable. Both sucked and cable was very expensive. (This may be different now. My experience was 8 or so years ago.)

I happen to be lucky to have actual high speed Comcast now, with an option for FTTH from Centurylink, plus DSL. Most people’s options are not so good.

>for many who have two choices, the decision is between not-actually-very-Fast DSL or a single cable provider

Very true. In one city where I have a house, the choice is 4 megabit DSL for $60/month, or 300 megabit cable for $101.

Both are considered "broadband" by the FCC because the DSL is "up to" 8 megabits. But they are not equivalent services.

There's also a wireless ISP, but it's $95/month for 5 megabits.

The FCC definition of broadband is 25mbps, not 8mbps.

There was a proposal to roll that back, however it didn't succeed.

You'll find that companies like Verizon do not call their slow DSL services "broadband." In Verizon's case they say: "High Speed Internet (DSL) service."

https://techcrunch.com/2018/01/18/fcc-report-keeps-faster-de...

If you look at Verizon's DSL page:

https://www.verizon.com/info/dsl-services/

You'll see they can't call their actual service broadband if it's not up at 25mbps. Instead they throw the "broadband" term around on other things on the page, such as "broadband routers" and they call themselves a "broadband provider" (referring to their FiOS offering).

Broadband used to be symmetric (reference to e.g. T1 or E3). Now it is asymmetric. Without mentioning the upload speed, it can be anything.

My two choices are Comcast or shitty DSL. And, the DSL isn't actually "competition" in any conceivable way. It's like saying that the gas station is competition to a super market for food.

My two choices are my rural-telepohone co-op - or satellite. I'm not complaining b/c my ISP seems fine, but there isn't anyone else to run to if I'm unhappy. I don't consider satellite an option.

If we count satellite, doesn't everyone in the US have "access" to broadband?

Depends. Does satellite do a minimum of 25mbps?

Yes. With the usual caveats.

Ie. terrible latency and terrible upload speed.

Is it?

Is a choice between two providers a meaningful enough number for spontaneous commercial differentiation and competition to produce access which provides good value for consumers, and a level playing field for online competition?

That chain of causality is the argument for the benefits of deregulated market-based competition.

I'm not sure the linked report provides much evidence of that. Especially in the context of streaming video, the proportion of households that have 3+ providers for a 25mbps connections appears to be less than 20%. Excluding wireless connections (expensive and unreliable) that number appears to be less than 10%.

We live in a place that supposedly has multiple wired providers. However, if you want more than about a megabyte a second, your "choice" is comcast. DSL exists but is maybe 20x phone line modem speed.

But we have a "choice" of providers, so we're competitive! This is in sfbay peninsula.

I live in a city with multiple providers. Some lucky ones even have choice of FIOS, along with fast cable from two providers and slower DSL.

It doesn't matter for cord-cutters and people like me, who just want to pay for a $30 / month 100 Mbit internet connection without TV, cable, wireless data, HBO, etc. I've lived in several countries outside the US (including 'developing' ones, and this seems possible everywhere but N. America).

None of the providers will sell a $30 / month vanilla internet connection. Either you can get the absurd $20 / month 1Mb down (which they were required to provide for low-income families) or the next higher speed includes Cable, premium channels, rental boxes, etc. You aren't getting out of it without paying $60 / month which ends up being $70 after all the taxes and fees, increasing to $75 next year, etc.

If your list of options can be counted on a persons digits then the market is inefficient.

Yep after moving from MI to NoVA the contrast is night and day my house has both Verizon FIOS and Comcast 2 Gigabit options available and a bunch of smaller providers.

That's the status quo with net neutrality, it's repeal may or may not have an effect on it. It's going to be interesting to watch.

I don't want gigabit access to youtube and netflix. I want gigabit access to the services that don't exist yet because you can't build them until lots of people have gigabit access. If the only ISPs in America are the ones who only offer gigabit access to youtube and netflix, then I better start learning Korean[0], because those hypothetical services will not be built in America.

0: "It is important to note that 100 Mbit/s services are the average standard in urban South Korean homes and the country is rapidly rolling out 1Gbit/s connections or 1,000 Mbit/s, at $20 per month" https://en.wikipedia.org/wiki/Internet_in_South_Korea

Here's some possible scenarios that illustrate what could play out:

- They could zero-rate their own offerings, making them available at a very low price and not counting them against data usage.

- They could offer no-cost access to some of their own offerings with a compatible, captive piece of equipment (e.g. handset, modem, cable box).

- They could charge third-parties more per unit of data for interconnect, creating financial pressure on them that makes third-parties consider no longer interconnecting with that provider. This will make customers choose between having that particular ISP or having access to that particular content provider. Some portion will choose to stay with the ISP, likely cancelling any ongoing subscriptions to the content provider.

They can also make partnerships to zero rate or accelerate partners, netflix pays a little more than hulu and now it costs to watch hulu but not netflix. So now you're picking winners based on who already has money.

>> I just fail to see how Comcast or Verizon are going to be selling you their internet connection if you won't be able to connect to the things you want to connect to (like Netflix, iTunes, YouTube) through them.

It will be more subtle than that. They will have some seemingly high limit with all sorts of exceptions in fine print. It will be like your typical Verizon plan where you sign up for a $50/mo plan and magically get a bill for $112/mo and all sorts of exceptions, nuances, and backstabbing legalese.

> It will be like your typical Verizon plan where you sign up for a $50/mo plan and magically get a bill for $112/mo and all sorts of exceptions, nuances, and backstabbing legalese.

Do you have more than just a flippant accusation about this? I ask because I have a verizon plan that somehow includes no backstabbing or exceptions, and I consisitently pay what I'd expect to.

I can't even buy internet in my city (with 2-3 competing ISPs) without having to bundle cable. It's cheaper to get the internet / cable bundle because they want to up-sell on-demand videos, HD, recorder box rentals, etc. which is only possible with a cable TV bundle.

Comcast and friends are not going to let the cord-cutters get away with $30/month 100Mb down sans media, as is possible in the rest of the world, it seems.

The only way I will believe that we haven't been fleeced by the FCC / end of net neutrality is if there are more choices in the end: If I can get a $30 / month 100Mb standard internet connection without any media content, while those who binge watch Netflix, Prime, Youtube, sports, etc. have to pay more for the massive bandwidth and distribution costs of all that consumable media, I'd be willing to concede that maybe the FCC was right.

But I'm guessing that this won't happen: I'll still be paying high prices even though I don't want all the media content, and those who do will end up paying even more.

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