FCC sides with Google Fiber over Comcast with new pro-competition rule
arstechnica.com
arstechnica.com
The administration continues to act in removing Federal jurisdiction and regulations from being used as a tool to prevent startup organizations from entering established markets.
This case is a success in that it removes significant incumbent advantages. Let's hope poor behavior and sloppy work (breaking connections too frequently) doesn't become common. And shame on the incumbents using regulations for financial gain.
As but one example: removing net neutrality only serves established players who can afford to pay for access to each of their customers.
Just try to start a business when it requires separate contracts with (and payments to) each and every ISP in the country.
Most of t admin’s drive against regulations has no impact on startup activity whatsoever: the amount of methane released by oil wells, mileage standards, etc.
The statement by OP furthers the fallacy of proportional trade-offs between economic success vs environmental and other harms.
Regulatory capture (like in this case), subsidies that interfere with markets, bailouts, etc all cripple the economy by propping up businesses/industries that would otherwise die and make way for new competition.
The prime case-in-point is the TimeWarner Cable merger that was scuttled — such a merger would have made Comcast effectively national, and a serious competitor to the old Bells. Meanwhile AT&T purchased DirecTV less than a year later (a deal worth more than the TWC acquisition in both dollars and customers) and the whole thing got rushed through quickly.
Do you think we would still have wired home Internet connections without Comcast? I know they’re a terrible company to be a customer of (what telecom isn’t though?) but when you look at the larger picture, they’re constantly stymied by the FCC from getting “too big” — meanwhile, their two biggest competitors are 2-4x larger on a revenue basis. Verizon and AT&T would drop their residential landline business in a heartbeat if Comcast weren’t around driving demand for it — the way Comcast’s tech architecture works makes it cheaper for them to serve the residential market than AT&T or Verizon will ever be able to do with wired connections.
This is obviously not true since neither Verizon nor AT&T operate hardline access nationwide. Even if you mean copper phone wires specifically, you're leaving out CenturyLink.
Copper phone lines are of course the slowest last mile hardlines. Coax is far superior, and cable ISPs are growing relative to DSL--where the choices are Comcast vs Verizon DSL (for example), Comcast has higher market share.
https://www.tellusventure.com/blog/cable-gains-subs-as-consu...
Verizon FiOS competes directly with Comcast, but is offered in only about 20 metropolitan areas--and even then, incompletely. (FiOS is available in DC but not in Alexandria, which is right across the river.) Verizon stopped growing their FiOS footprint years ago.
> Verizon and AT&T would drop their residential landline business in a heartbeat if Comcast weren’t around driving demand for it
Verizon and AT&T (and CenturyLink) are required by law to provide residential telephone landlines to anyone who asks for it. What does that have to do with last-mile broadband?
This is a little reductive. Although Google Fiber is a sibling company related to Google and probably heavily subsidized by parent Alphabet, it's incorrect to say that Google Fiber is selling billions of ad revenue.
I think this is a good example because it starkly puts in contrast the power dynamics: if an ISP that is strongly subsidized by Alphabet can't even break into the market, we know things are really bad.
This is a great move on the path towards making 15-person startups competitive, and it isn't insignificant. Success and failure are not a binary all-out choice between total ISP monopolistic domination and 100% free market for 1-person startups. It's a sliding scale, and any movement in this direction is a success.
Apparently there was so much heel dragging pole access, they ended up laying their fiber in tiny channels cut into the road.
As an aside, I also heard the channels weren't cut deep enough initially, so they were forced to go back and redo part of the work after much of it was considered complete.
The rule change won't necessarily spur more Google Fiber deployment, since the ISP has other financial problems and has largely stopped expansion of fiber into new cities.
Navigating local laws might be doable with their current expertise, but would definitely be human intensive, absent a real breakthrough in AI.
OTOH, there is that automated portal to fight traffic tickets. I wonder if Google tried to automate and A/B test more complicated court or municipal filings how it would do in the long run.
AT&T seems to be expanding its gigabit footprint rapidly (https://m.att.com/shopmobile/internet/gigapower/coverage-map...) and not just to most affluent sections of the metro area where I live. Comcast is trying but they are still overpriced compared to AT&T and the upload speeds are abysmal- 35Mbps
Thank you Google!
One of those premises has to be wrong.
Because Google wasn't able to get traction on their construction in San Jose, AT&T had time to do street surveys and order custom multistrand fiber with drops for a splitter at every pole, and then get the fiber actually on the pole before Google got much of anything done. Existing carriers can run new cable on poles they already have access without a lot of hassle.
Otoh, Google primarily wanted to show it could be done and spur others to, faster eyeballs without capital costs is a win. If you can't get 10mbps for YouTube on a gigabit connection, something is clearly broken.
Edit: pole instead of poll (thanks unmonk)
But as soon as Google announced the demise of Fiber, they mostly put the brakes on those expansions. They may still expand their own fiber initiatives now, but it's nowhere near as fast, and you won't get as cheap 1Gbps fiber as you would've gotten with Google Fiber around.
The only advantage I see of gigabit Internet is that it’s uncapped and I could easily host some side web projects from home.
Grass-is-greener effect is real. While there may be no competition to spur changes, other things might such as PR and loyalty when facing potential future competition (i.e. in a more competitive future or just by people moving). If the marketing efforts are any measure, customer retention during a move is a big target.
We should realize that they compete for mindshare locally and regionally and there are overlaps, even if they don't affect decisions as significantly as direct competition would.
This on of the reasons Verizon and ATT are moving to improve their services, not Google Fiber
Google Fiber proved there was a demand for faster fiber based wireline services in an era where companies like ATT and Verizon were saying wireline service was dead and the future was 100% wireless...
But like the false narrative of the PC being dead and all computing will be 100% on 5in mobile phone, the idea that wireless will ever replace wired services is pipe dream in the mind of Verizon's CEO
Preemptive retention is much less costly than having to reacquire customers after they've switched to Google Fiber.
It's funny how regional this is, even only looking at major cities. In my part of Los Angeles, you can't get a residential line with more than 20Mbps up for any money.
5G can't come soon enough.
Being an ISP is just too appealing a business model. It's 95% profit once you've paid off the loans for the infrastructure. And when you're Google, you don't need loans.
This is FUD, and it doesn't even pass the smell test.[1] Maintaining broadband infrastructure is incredibly labor intensive (and the required labor is high-skill and often unionized). To use Chattanooga's EBP as an uncontroversial example: https://static.epb.com/annual-reports/2017/media/EPB_2017_Fi.... In FY 2017, it's fiber optic division had revenues of $150 million and expenses of $122 million (not including interest on the underlying fiber optic system, which it looks like is accounted for on the electricity side of the business). That's an operating profit margin of about 20%,[1] which is actually pretty good. Verizon's wireline division in most years has an operating profit margin of under 5%. (EBP, being in a right-to-work southern state, almost certainly has lower labor expenses than Verizon, with its primarily north-east footprint.)
[1] And that's before taxes. A telco can't pull a double Irish with a Dutch sandwich because all its revenues and expenses are domestic. Verizon's effective income tax rate prior to the Trump cuts was 34%: https://247wallst.com/telecom-wireless/2018/01/23/verizon-ea....
Still, good news whatever the reason. Competition is desperately needed here, even if it’s only going to be between three or four major options.
Republicans simply have a different utility function. They consider deregulation, and ease of running a business more important than enforcing fairness via legislation.
They believe the market will do a better job than they can do. Democrats don't trust the market to do that, and feel they can do a better job.
There's a reason control usually flip-flops each election, it's the electorate trying to accomplish this. See here: https://www.politifact.com/truth-o-meter/statements/2010/sep...
> Like have the house and the senate controlled by different parties, or the president and the legislature different parties, etc, etc.
This two party system makes it too easy for one party to control all 3 branches (like now..). Having a true multiparty system (>2, preferably more) forces compromise, because you wouldn't have a government without it.
How do you know which it is?
But it's irrelevant, for the electorate in question, Democrats are most definitely not center.
I was using an absolute scale, and yes, frankly the democrats are a bit right of center.
I mean if you declare the electorate the spectrum, then nothing means anything, because its all a completely meaningless fluid definition which has no basis in actual reality.
What republicans are worried about is attempts to undo the 1996 reforms. There are people who think that rate regulation, municipal utility boards deciding where infrastructure should be built, etc., are actually good ideas. Probably not a majority of people even in the democrat camp, but there are enough people who don't remember why the 1996 act was a good idea that it makes republicans nervous.
But one big problem with "attempts to undo the 1996 reforms" is that Europe kept (and expanded) linesharing and unbundled network element rules; the United States threw out most mandatory UNE rules and never expanded them to include companies operating networks over coax or new-build fiber optic networks.
So now we have this farce where, in some areas, people served by DSL have the choice of several (slow) ISPs because the copper is still technically, kinda unbundled. But if you can't get DSL or can't get a sufficiently fast speed, your sole choice is likely your monopoly cable provider.
U.S. copper unbundling rules are weaker than the U.S., but copper is also largely irrelevant in the U.S., because most broadband is over cable or fiber. Unbundling matters more in Europe, but primarily because DSL is much more common in Europe.
As it so happens, crowded urban centers, where a single cell tower or fiber-optic network can serve thousands of paying customers, benefit a great deal from deregulation. Sparsely populated rural areas, however, where "last mile" really means "last 30 miles", get screwed over by deregulation since companies have minimal incentive to expand if it only means 10 new paying members.
I'm not saying either extreme is perfect -- indeed, deregulation likely helps more than it hurts given increasing population density in U.S. cities -- but it seems to me that there are advantages to both sides of the equation.
Seems Europeans consumers have reaped massive benefits since then:
At least where I live we now have fast Internet access, calls and sms cost nothing (theoretically speaking we get n free minutes and sms, but I never used more in the last few years) and data is cheap.
Not saying this is all because of the deregulation but I think it helped.
In the US we would never tolerate such conditions and it would be legally impossible on a large number of levels, the least of which not also being our minimum wage. While I think this is probably the right way to go, it also means that our taking the higher moral ground there means that we're severely hurting domestic producers by making it literally impossible for them to compete with the prices that they can produce things for. By not relying entirely on market forces we've crippled our ability to compete.
In a world where politics, on both the right and left, was not dictated by business interests there would be bipartisan support to let's say "adjust" our relations with China on this front. It's reminiscent of the times past when countries would speak out against slavery and then buy the dirt cheap American cotton and tobacco by the ton. We believe workers have the right to certain reasonable working conditions and in the process of doing so end up massively cutting employment in our nation and then shipping trillions of dollars to nations with no such concerns. It's hardly logical regardless of your political leaning.
The result is that a sufficiently large social network is, effectively, a natural monopoly. Which is exactly why no-one has managed to dethrone Facebook yet, not even by throwing lots of money at a better alternative (like G+).
In particular, check out Facebook v. Power Ventures, where an entrepreneur was left owing $3M in damages to Facebook for allowing users to extract only their own information.
Underpinning all digital "monopolies" is copyright law, which is eminently changeable. It really pets my peeves when people suggest things like streaming services are natural monopolies as if there is nothing that can be done about it.
Copyright was invented because since the printing press, intellectual goods are so easy to copy that it'd be impossible to sell them at scale without state-enforced supply ceilings (aka copyright).
Doesn't sound like a "natural monopoly" to me. It's wholly artificial and we could change it if we wanted.
The right compromise is forced time horizons which are reasonable, and parallel execution, with significant penalties. Natural monopolies are a huge problem that does need regulation, but this goes to far for me to be comfortable with, and I worked at independent ISPs for like 10 years.
Of course, when that means giving the Comcasts of the world headaches, HW cheers, but when that means good riddance to net neutrality (or rather letting states decide), everyone here screams bloody murder.
If that isn't double standards ...
It's not. The idea of regulations is neither good nor bad - you have to consider them on a case-by-case basis. You especially have to consider the results.
I said "unecessary".
I both cases I quoted, I believe we're dealing with unnecessary regulations.
I thought I was supposed to not like this guy.
I'm curious: donations to whom?
The FCC doesn't have campaigns, so any "donations" aren't campaign contributions.
Well, and the natural monopoly of an upfront capital intensive venture that might not pay for itself if you only get 50% of the market...
I feel like the right order of operations if you did believe in deregulation and encouraging competition would be to ensure there was competition between ISPs and then remove the net neutrality laws though, not the other way around.
I still think internet access should be treated similarly to water/power etc though.
Net neutrality, with respect to content, isn’t really an issue, since 99.9% of content is made overseas.
New Zealand doesn't need net neutrality, because it has something better.
In the US, the ISP is one company that owns the lines and sells its services to customers. They also typically bundle cable tv packages. Many customers are serviced by only one or two ISPs. Setting up a competing ISPs requires laying new cable/fiber.
In New Zealand, the ISPs and the companies which own the lines are different companies (as enforced by regulations). ComCom also regulates the price that the line company can charge the ISP.
This makes setting up a competing ISP easy. Buy some capacity on international fiber links, set up some routing equipment in a peering exchange and contract Chorus/Enable to hook up your customers.
Incidentally, this is how power companies work in NZ too. There have been quite a few new retail power competitors launched over the last 10 years.
Arguing for completing removing regulation is indeed quite silly.
https://arstechnica.com/tech-policy/2017/12/ajit-pai-jokes-a...
Keeping it or removing it won't do anything to spur connection competition.
There are three options.
1. Technology inflection forces greater competition, such as Starlink or 5G. 1a would be that an extremely deep pocket competitor forces some improvement; that works at least temporarily, however I'm skeptical that's sustainable (as witnessed by Google's pull-back).
2. The government makes smart decisions regulation wise, that help to smooth a path for increased competition. That includes things like one touch make ready, dig once fiber rules, and blocking munis from signing cable/etc monopoly agreements.
3. Nationalize the infrastructure and allow anyone to rent it. That's too far fetched (unrealistic) for the US as a mostly market system, to go that direction from a heavily privatized market. 3a would be, pass a law stipulating that muni broadband can't be impeded, if a city or town wants to set up its own network it's legally entitled to attempt it. Every bit of added competition around the country helps.
Any combination of those is a big assist. The US is a top 15 broadband country currently, and most of the nations in front of it are tiny (except Japan and South Korea, both of which have hyper population concentration in just a few cities). We've made tremendous progress from how far we were lagging behind just six or seven years ago. Keep throwing more of the above onto that momentum, and it will keep the US competitive in that top echelon, which is a great outcome. Any time a country the size of the US (not just eg a state like Massachusetts) can keep up with countries like Denmark, Finland, Switzerland and Sweden on broadband, or any infrastructure frankly, it's a big deal.
It would be terribly inconvenient for them to have to go through the same process for their 5G deployment.
That's where I'm placing my bet.
Also, I realize your comment was probably some combination of jest or sarcasm.
hmmm... The "Former" Verizon Lawyer supported Verizon's position.... I am shocked I tell you....
But the regulation to ban or allow should not come at the Federal level. It should be governed by the utility pole owner.
In NYC for example con Ed owns a large number of poles. And then Verizon owns the next number of poles. Verizon and other utility companies pay ConEd based on how high their utility is placed. If it's a Verizon pole, Verizon will put their facility on the very top and spectrum will put their facility on the lower part.
This means that another utility company cannot just come and move someone else's facility around.
I don't disagree though that there should be some form of middle ground (which it seems Pai was trying to find) -- I'm just unsure what it would be.
I will go so far as to say there is not a single citizen who will have a net negative result of this ruling.
Why are poles a "shared limited resource"? They're sticks of wood, companies can either pay to put up their own, or pay to use someone else's.
Seriously, if you don't want your street corners to look like a black deathball or [something straight out of Stranger Things][1], you need to consider those poles as "shared limited resource".
lol... how about no....
That is such a simplistic view of the infrastructure it is bordering on willful ignorance of the topic
Furthermore, the government isn't paying them for these poles in this case, they're forcing a company to allow it's competitors to tamper with and likely disrupt their customer's service. If the government wants to nationalize "the infrastructure", I'm all for it, but then they'd be paying out a lot of money to buy this equipment from the companies that actually own it.
As someone really annoyed when my Internet drops out in the middle of a game, I'm drastically opposed to these sorts of hijinks, I don't need my ISP's competitor taking out my lines at the same time as sending me mailers about how their service is so much more reliable.
ohhh yes they are... They are allowing these companies free use the land those poles are sunk into free of charge from which they force the owners of said properly to allow them to use under the Utility Easement programs.
In most instances the government is also giving them some kind of Monopolistic control over the market segment they service. i.e there is only 1 Telephone Provider, or 1 Electrical Company for that area. In exchange for these FREE things the government requires these companies to SELL attachments to their poles at a reasonable fee. I.e when Comcast wants to connect to a Electrical Pole they pay a monthly FEE to the utility companies
To believe the utility companies some how being harmed just does not match reality
When I lived in Baltimore, it was a well-known problem among all the ISPs I asked for DSL service that, while you needed a Verizon tech to interact with their lines from the pole even if you were using another ISP, the Verizon techs would often outright not show up without notice and leave the ISP's techs sitting there, apologetic and unable to do anything.
After trying this with 3 different DSL ISPs (and multiple attempted appointments per ISP), I concluded that it was unlikely all 3 of them were telling the same lie.
The FCC rules also don't apply in states that have opted out of the federal regime in order to use their own methods of regulating pole attachments. Twenty states and Washington, DC, have previously opted out of the federal pole-attachment rules, while pole attachments in the other 30 states are governed by FCC rules.