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Comment by fyfy18 | Hacker News Reader

> I’ve put my hopes on fiber optical arriving soon, which exposes a much larger market on which multiple providers can compete

I live in Lithuania which has a pretty good fiber rollout, and has fair rules for consumers on common access to physical infrastructure by different providers.

In reality though it means you still only have one choice on who your internet provider is. It's not worth it for multiple providers to wire up an apartment or neighbourhood when there is already an existing provider there.

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I live in Sweden where there is a national plan for rolling out broadband internet throughout the country until 2025 [0].

In Stockholm the physical infrastructure is rolled out by the municipality through Stokab [1] exactly to avoid this issue, the physical infrastructure, which is the most expensive and least competitive part of the deal, is public while leasing it out and providing access to the last mile customers is done through private companies. It seems to work pretty well so far.

[0] https://www.government.se/496173/contentassets/afe9f1cfeaac4...

[1] https://www.stokab.se/Documents/Stockholms%20Stokab%20-%20A%...

Yeah this is pretty much how VDSL works in the UK. The infrastructure is owned by one company, but you can have different any internet provider. I'm not sure I'd say it works well though, as in the UK I'd pay 3x the price for 1/20 the speed :-)

"It's not worth it for multiple providers to wire up an apartment or neighbourhood"

That's not how it is in Russia. In a city not far from Moscow we have 2-4 providers in an apartment building (FTTx). Just checked my bill -- $5 for 60 Mbit/s and $7 for IPTV with ~80 channels included. Hurray to free market :)

"It's not worth it for multiple providers to wire up an apartment or neighbourhood when there is already an existing provider there."

Except that it is kinda worth it if they'd think for a moment just how many folk would instantly switch to any competition that arrived in an area that's been consistently screwed over by the only provider there… All they'd have to do is offer honest services at a fair price and they'd steal a massive chunk of the area's subscriber base.

Imagine the cost of providing fiber is $50/month, and Company A has wired up a town and charges customers $100/month.

You're the CEO of Company B, and you have two choices:

You can wire up the same town, charge $60/month, Company A will drop their prices to match, and you get to make a profit of $10/month from half the town.

Or you can wire up a different town, and charge $100/month - giving you a profit of $50/month from the entire town.

Which one would you do first?

You'll almost nothing a month, as the price races to the bottom - it'll likely be worse than $10 a month

This is why we need municipal competition, we have a last-mile cartel where they have agreed to not compete and just extract rent in the US.

It's actually more like "Company A will drop prices to $40/mo in your coverage area as soon as you start your build-out". Company A has already sunk cost into the infrastructure so they can afford to do this and remain cash-flow positive. As soon as you go out of business they know they can just raise the price again.

For this reason, "overbuilders" tend to target high-income areas where additional bundled services increase the ARPU (annual revenue per user) beyond the base service. There's also usually a higher "take rate" (subscribers per total homes served) in high-income areas. The up-front capital investment required to build out telecom services is absolutely staggering -- we're talking billions for even a small area of a city.

I think the issue here is there isn't much profit to be made though. This isn't the US where you pay $100/mo for slow DSL with a ridiculous datacap.... I pay €19/mo for FTTH at 1gbit up/down and no data limits.

My apartment building has 20 properties, so if a competitor came in offering the same for €15/mo and managed to convert half of the properties that would be... €150/mo revenue. How long would it take to even pay back the GPON hardware they need to install in the building?

My provider hasn't attempted to screw us over at all yet (been with them for 4 years), but I am concerned that they are our only choice, so if they wanted to double prices we'd probably pay.

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