Hacker News Reader

Comment by alexdumitru | Hacker News Reader

I really don't understand how ISPs became like this in the US. In Romania I pay $9.9 for 1000 Mbps down / 500 Mbps up with no data caps or throttling and it actually works, even though piracy is huge here, so people use a lot of bandwidth.

http://www.speedtest.net/result/7391249917

View on HN

The sibling post's point about differences in prices/costs below is correct. The dominant cost of deploying and maintaining fiber is labor costs, which vary dramatically by country. It's not like consumer electronics that is all made in China and costs the same around the world.

The Romanian model of "micro ISPs," ISPs serving a few blocks here and there, is also illegal in most U.S. cities. The U.S. places a very high value on universal coverage, both of lower-income people and rural people. In nearly any U.S. city, the only way you will get permission to build Internet service to anyone is if you agree to also serve low-income communities or rural parts of town, even if doing so isn't profitable.

The UK achieves universal coverage without the US system, even if in the middle of nowhere it's slow.

Really? Does that apply to Wireless ISPs? (i.e., https://startyourownisp.com/)

It applies to any service that offers cable television, which in the US market is a basic part of the economics of the business. Americans still overwhelmingly expect to get television service bundled with broadband.

I used to live in an apartment building with both cable and fiber. Nobody subscribed to the fiber because the fiber provided didn’t have a franchise to offer television service. It was nuts—I was the first person on a floor of almost a hundred apartments to get the fiber service. I found out because the ONT had been misconfigured when it was first installed years before. People just didn’t care—they wanted their cable package with ESPN. It’s why Google Fiber offers a television package—a broadband only service is not competitive in most US markets.

Micro ISPs have been gone for 10 years I think. They only exist in rural areas and such.

Now we have 3 major ISPs and they all offer similar services.

I'd imagine a good part of the price difference is that good and services are generally cheaper in Romania. Wages in Romania are 20% of those in the USA (not 20% less, 20%).

The fact I pay 75 dollars for the same service doesn't sound so absurd after accounting for that.

And like consumer electronics, which easily flow across borders, which is why an Xbox costs the same in the USA and Romania, ISP is a local service that relies on local labor costs.

Not entirely accurate. It's cheaper to buy some things in the US than it is to buy in Romania, electronics for example. And if cost of employees were the only factor then you wouldn't see such wide differences in prices in the US depending upon whether or not there is competition. Or cities would cost less since there are more people to subsidize the costs, which we typically see the opposite of right up until competition comes in. Plainly, while location and cost of works plays some part in the cost structure, the vast majority of pricing for Comcast and other telcos is what the market will bear in a monopolistic environment. Were it simply the costs of doing business profit margins wouldn't be as drastic as they are.

Despite the source the following breaks down the profit margins based on the telco's own information that they provide.

https://www.huffingtonpost.com/bruce-kushnick/time-warner-ca...

> I really don't understand how ISPs became like this in the US.

Government-sanctioned monopolies, and regulation to prevent competition from having a fighting chance. Basically regulation in the wrong places, while looking the other way in areas that could actually use more regulation.

Reply on news.ycombinator.com