Hacker News Reader

This does not increase the cost to ISPs.

It does marginally decrease their profits.

A profit is not a cost, and despite what finance bros think lower profits are also not a cost.

It is perfectly possible to supply 1000Mbps symmetrical fiber service to end users for $20/mo because numerous self-sufficient non-profit municipal broadband organizations in the United States are doing just that.

This is 2.5% the capacity for 75% the money. If ISPs can't figure out how to do that profitably, they deserve to fail.

After several decades of taking public money to build out their networks, ISPs can give back a little by very slightly lowering their margins when serving low income residents.

What does that have to do with what I wrote? If you want to transfer some ISP profits to low income New Yorkers, do that directly

They just did.

Did you read what you wrote or was it a stream-of-consciousness thing?

Because you wrote:

> This will increase costs for ISPs and likely increase prices for others.

It will not increase costs.

Which is what I wrote.

That wasn't a crucial point of my argument. I disagree but everything I said still applied if you replace increase costs to decrease profits. And there is a response to these things, like increased costs. This is pretty uncontroversial basic economics.

Even that doesnt matter. Just do it directly so you know exactly how much the subsidy is worth. Tax their profits and transfer it to the people. It's simpler, more visible, less unintended consequences

> Just do it directly

It is impossible to do it more directly than at the point of sale.

Literally every other method is less direct.

A tax is ten thousand times less direct.

Forcing someone to provide a service at below market price is not direct.

It would be more direct by taking the market price for these goods and purchasing them directly. Then you have a line item that perfectly encapsulates the subsidy and the transfer and you can reason about it.

That's what I mean by direct

> Tax their profits and transfer it to the people. It's simpler, more visible, less unintended consequences

How is that simpler? I'm assuming by "transfer it to the people" you're talking about a subsidy paid out where the customer pays $15 and the municipality then pays the balance, but why should they? The data networks the ISP is paywalling access to were in large part already funded by the taxpayer. And besides-which, that doesn't put a cap on the price the ISP can charge at all, and in fact gives them a reliable avenue to now help themselves to either the pocket books of the people it's meant to be benefitting, or the state coffers, neither of which is a good solution.

And as to the market effects, I mean genuinely, have you ever purchased internet service? Because I have since I moved out of my parents house in the mid 10's, and I assure you as a sysadmin and pretty techy person, in that time, I needed ONE (1) service call to address an issue in their wiring, and apart from that, to my knowledge, I was basically 100% profit, minus whatever expenses go into maintaining the trunk, and my price went from about $70 per month to within shouting distance of $200 over the course of 3 years, and then stayed there for the subsequent four years, for pretty middle of the road service at half a gig down and about 35 MB up. So I guess by your logic, there must've been a hell of a lot going up further up the trunk to justify me paying ballpark $7,000 over those months.

Or, more likely, the CEO wanted another yacht.

Edit: This stuck in my craw so I googled a bit, and the biggest provider of fiber service in New York is Verizon FIOS, who posted a profit last year of EIGHTY. BILLION. DOLLARS. So you'll forgive me if I have doubts that even if we presume they're losing their shirts on this $15 per month program for qualifying low income folks on a per-address basis, that they're going to go under about it. I think they'll manage just fine.

While sometimes direct monetization of the benefits is a better solution, in this particular case it is not. First of all government in this case doesn't want to give some cash to to the poor, it wants to provide them with access to information. So instead of giving people cash, then verifying if they are spending it on the internet, they are streamlining process for it. And second, direct monetization of benefits won't work in this case. Essentially government is taking some cost out of ISP pocket and redirecting it to the poor ISP customers. But if they monetized same process, the government wouldn't know who to give that money. They would need to additionally track if a poor person is a subscriber or no, and where is he currently located at all times, to know which ISP's money should be redirected to whom. It is way more work for almost no benefit.

> It is perfectly possible to supply 1000Mbps symmetrical fiber service to end users for $20/mo because numerous self-sufficient non-profit municipal broadband organizations in the United States are doing just that.

Probably depends on a lot of things, but my local municipal broadband is an open provider model, my provider charges $95/month and the municipal network takes $59 of that (as of Jan 1 2023). The municipal network doesn't provide IP transit, just gets my bits to my ISP's office. Where in the US is it $20/month?

> This is 2.5% the capacity for 75% the money. If ISPs can't figure out how to do that profitably, they deserve to fail.

Most of the actual cost is maintaining a line to customer premises. My municipality charges ISPs $49/month for 100m and $59/month for 1G, although there's not a real difference in operating costs; either the fiber is up or it's down, and the truck roll to fix an issue is the same. There's maybe an argument that a 100m customer can't/won't cause congestion on the municipal network because (as implemented on my local network), the biggest oversubscription is 48 customers on a 10G uplink. A 25mbps plan would have the same basic costs for my municipality as a 100m plan, although it might actually be trickier because they couldn't just use an ethernet speed setting somewhere in the path to limit speed.

I suspect incumbent broadband providers have some cost advantages over my municipal system, because incumbents have better take ratios, but I honestly doubt they can actually cover costs of just providing a line with service to a home in their territory for $15/month or $20/month.

You are considering only short run marginal cost, not long run; i.e., you're not factoring things like amortizing infra build-out. if repaying that is restricted to a smaller pool of customers, prices for them will go up. worse, this intentionally affects only large, national ISPs, so NY state is effectively leeching off customers in other states to subsidize a NY-only social program. there should be a credible challenge under the commerce clause because of this.

> It is perfectly possible to supply 1000Mbps symmetrical fiber service to end users for $20/mo because numerous self-sufficient non-profit municipal broadband organizations in the United States are doing just that.

This statement is false.

I have almost (800 Mbps) that for 30 euros per month, but I'm not from the US. Pretty sure the first year it was 20€/month too.

> This does not increase the cost to ISPs.

> It does marginally decrease their profits.

Right because they wont claw that back when all ISPs are also suffering the same fate.

Can you tell the ISPs in my neck of the woods (Brussels, supposed capital of Europe) to get off their ass and offer 1G symmetic fiber for any price.

For any price, I'm sure you can arrange for fiber construction, but it's not going to be cheap. From personal experience, not many people are willing to pay tens of thousands of dollars on fiber construction to get 1g symmetric, and then pay a hefty sum monthly.

Maybe from someone like this.

https://www.belcenter.be/en/blog/tout-savoir-sur-la-fibre-de...

I'm sure if you pay for DIA they'll bring it to you.

It's a significant, not marginal reduction in profits.

This money is around 2 customer care calls. Or 0.2 truck rolls.

> I don't like these types of mandates because it distorts the market.

Internet access is more or less a “natural monopoly” because of right of way issues and cost to build just like electricity and gas and water. Those things have always been regulated and had price controls.

> Politicians get to say "we provided X people with internet service and we didn't use a dollar of tax payers' money". Which sounds nice, but you can't really get something for nothing. This will increase costs for ISPs and likely increase prices for others. How much? Who knows!

And what happens when ISPs can charge whatever they want - again a natural monopoly - should the subsidies increase,

> And what happens when ISPs can charge whatever they want - again a natural monopoly - should the subsidies increase,

You're making an assumption here. It worked fine when we did it for healthcare.

/s

> because of right of way issues

Also, before someone says "that's only for cables", I'd point out that useful electromagnetic-spectrum bands and orbital-paths are finite collective resources as well.

> Internet access is more or less a “natural monopoly”

Finally someone with some economic sense. Natural monopolies don't get to dictate prices or conditions of services. That's something that monopolies, have to be content with. If you put yourself in a position where no one can realistically compete with you, you can't complain that the state makes sure that the consumers aren't harmed by the lack of options.

This is a lot of words. Do you think Internet should be a utility, or not? Obviously: yes. You enjoy water, schools, roads and power. Trash removal in NYC is free, and it's better for that community than being private. But also, you work in tech or something. More customers, less money being paid on meaningless rents. And fuck Comcast, right? Think critically. We don't need ISPs, and little about that ecosystem resulted in innovation that mattered historically.

I don't see why it's obviously yes. Broadband providers can compete with each other in a way that the water utility or roads cannot.

How? A broadband provider either has to create infrastructure costing billions hidden like water utilities or use over the air internet which has it own limitations based on spectrum and not all spectrum being usable for data transmission.

Right but that infrastructure is getting created either way, especially when you have power companies starting regional ISPs!

> Broadband providers can compete.

They can, but they don't unless forced to.

For real. In my area, you can choose between xfinity or comcast and if you don't like those hope you enjoy satellite for way too much money and awful latency.

Spoiler for the uninformed: Xfinity and Comcast are the same entity.

Not really, not unless we enforce last mile unbundling. There's not going to be multiple fiber lines run to every house in my neighborhood for the same reasons why there aren't multiple power lines or multiple water lines or multiple sewer lines.

Trash removal is free in NY, sure. The city says people should have trash removal provided and it should be centralized.

The equivalent would be that the city pays ISPs to provide service to certain people.

Instead they say "you have to provide them service even though you'll lose money on these customers".

Do you see why this is different?

> "you have to provide them service even though you'll lose money on these customers".

So if you're not yet convinced, fuck Comcast right? Yes! I want Comcast to lose money! I fucking hate Comcast more than anything, almost everyone who isn't working there does. There are things I can imagine never doing, like working for a tobacco company (fuck them too), and working for Comcast. It's okay to sometimes have limits. You can step on some toes without worrying about the ass they're connected to that you might have to kiss later. I will never kiss Comcast's ass. Laissez-faire absolutists do not arrive at economically or socially optimal outcomes all the time.

> Do you see why this is different?

Not particularly, as long as they have a monopoly/duopoly, because that acts as a giant pile of free money which can pay for these things.

If we had some kind of mechanism in place that resulted in aggressive competition, then maybe "you have to provide service for $15-20" would be a problem.

I think it would be quite a bad idea for the city to pay the asking price to this kind of monopoly/duopoly, because that rent will get jacked up extra high.

> Trash removal in NYC is free

Trash pickup costs the city $109 billion.

https://www.bloomberg.com/news/articles/2024-01-16/nyc-mayor...

... the total NYC budget is $109 billion. They are not spending $13k/resident on trash collection.

Edit: according to https://www.ibo.nyc.ny.us/iboreports/understandingthebudget.... residential garbage collection is $10 million per week.

Assuming this covers all of NYC's population (8.2 million), that's pretty cheap - $1.22/week. I'm paying $160/quarter, so that's $13.33/week or over ten times the cost to a private company. I assume that my prices are regulated locally in some kind of private/public partnership deal.

Compare this to California regulating how much insurance companies can charge. IN that case, its lead to horrendous side effects where insurance companies are leaving the state, dropping customers, etc because they will literally lose money on the policies, which has lead to bad outcomes. Id rather that the state actually pay for the things it wants and not put in a bunch of hidden taxes that have strong distortions on principle.

Call me when you have a free market economy delivering broadband.

You don’t.

The situations are not comparable.

Call me when these type of indirect unfunded mandates ever succeed at squeezing blood out of the corpo stone, or when they don't end up entrenching the existing corpos.

Broadband is indeed a market failure in many places. The answer is to create direct competition in the form of municipal fiber, not to cheer on weasely half-baked approaches that just solidify the positions of the monopolist dinosaurs.

Private companies looking for profit and leaving when they notice that is not profitable is not a undesired thing. If your margins depend on you screwing your customers, your business model shouldn't exist. California will figure something out, maybe making high density residences easier to build, would make a difference. Also, that's not exactly why they are leaving, they are leaving because the state forces them to pay the insurance if an "act of god" (systemic risk, like a wildfire) happens.

The risk of fire has clearly massively increased thanks to climate change. California's rules literally dont allow them to charge prices that account for this. California has an insurance plan of last resort that is now billions underwater, which is a clear sign of the issues at play.

Its not that these insurance companies are screwing their customers; rather at the rates that California requires they charge, these houses should not exist because they are a net negative to society unless their insurance costs more.

I agree on the dense housing. So many of these burns are in areas that we shouldn't have built.

It should be a utility. I'd like the government to eminent domain all internet infrastructure and resell bandwidth to ISPs at fair prices.

I would in fact enjoy a great deal of schadenfreude. The carriers pocketed giant government handouts but did not make the commensurate improvements in infrastructure those were intended to fund.

electricity rates in California are out of control in the summer because there is no competition.

Internet is a utility, like water.

We can't have true competition with utilities, because we'd need six sets of pipes into every apartment just to have six competing providers, so the government needs to step in and regulate utilities, because they are a natural monopoly.

> Which sounds nice, but you can't really get something for nothing.

This is hyperbole. First, nobody's getting something for nothing. Second, the eligibility is limited. Besides, this is hardly the first time a price regulation has been applied to a failing market.

> I really don't want me ISP to track my income.

Then don't apply for the discount.

Right on! You're not even covering the half of it. Incumbent dinosaur ISPs will fight this kicking and screaming, but after they have their tantrums they will embrace it because it keeps new competition out of the market. This general pattern of "unfunded mandates" creates time bombs that become entrenched and impossible to fix (look at the catastrophe of the healthcare industry)

If you want to actually screw big cable (and you should), support the direct action of municipal fiber. The funds for the build out don't even need to come from the general tax fund - with the popularity of such services in 2025, municipal bonds are more than sufficient.

As a beneficiary of sequestered municipal internet. We need this or co-ops. I have the best internet for a LONG way in any direction.

Commercial ISPs are a 1980s idea when few people wanted the service.

Municipal networks, even if last mile only, are the only sensible modern approach where everyone deserves to have access to the service.

Then you can layer different national providers on the framework for individual and commercial contract service and then you can realistically talk about a municipally operated "best effort" /free/ service for everyone else and for those who cannot afford anything.

The market is already distorted by the telephone and cable companies being granted local monopolies.

Vouchers don't work since the ISPs will just raise the price to take into account the increased purchasing power.

Just adding the burden to the ISPs of offering service at a fixed price will let ISPs compete for who can do it the most efficiently and raise the prices for other customers the least.

But in general I agree with the concept of "just give people enough money so they can afford a base standard cost of living", but in the US specifically that seems very anathema to the culture, they're always trying to control how poor people spend their money (see "food stamps" something I've never seen anywhere else) so unless you do the same thing across the board, just giving one single targeted handout will not have the desired effect.

What hidden costs? Taxes? Probably the top 5 thing I'd love my taxes to go to.

I think the downsides will be obvious: their internet is super cheap but not really fast. In other words, not too dissimilar to 3/4/5g plans with phones almost everyone has. No one's gonna be streaming Netflix and any Youtube over 360p on this plan.

If we're arguing that the Internet is a public need, then I don't see the downsides here. use slow internet to get lower income people on their feet. They hopefully rise up and then grab jobs that can allow better internet in the long term.

The hidden costs are the price increases that ISPs add to customer bills to “make up for it.”

Now, I’m not saying that’s right - I actually agree with your premise - nor am I saying that any ISP truly has a marginal cost of each customer (especially given their engrained habit of oversubscribing their infrastructure) that they need to “make up for.” I’m just clarifying the “hidden costs” that GP seems to be mentioning.

IMO, this would be better handled as an explicit tax that’s passed onto customers of the ISP. If every bill came with a line item adding $0.50 charge for “underprivileged broadband access program,” nobody would complain. Phone bills already include these kinds of line items. And at least this way it would be clearly delineated rather than masked in a future price increase.

> If every bill came with a line item adding $0.50 charge for “underprivileged broadband access program,” nobody would complain.

Sure they would.

It’s been happening with both landline and cell phones since the mid 80s on a national level

>price increases that ISPs add to customer bills to “make up for it.”

This implies that ISPs won't do price hikes to begin with. My bill went up $5 over 2024 alone. Not even an announcement or anything. They'll make up whatever excuse they want, similar to CA's increase in wages to fast food workers: "we'll have to fire staff or shut down if we pay workers $4/hr". All the major chains are still around a year later. Some tried the AI drive thru thing, but they all reverted back.

> this would be better handled as an explicit tax that’s passed onto customers of the ISP.

I agree. Itemized lists should definitely be a default, and not something inaccessible at worse, and needing to poke a company for at best.

You seem to assume some connection between costs to ISPs and how much they charge.

But ISP already try to charge as much as the market can bear.

Subsidising doesn't make the market more efficient. As a capitalist American you should have said "we need more competition!"

In France Free dropped the price from something like 45$ to 15$/month, and then they did the same with mobile plans and a 2$/month plan that still exist today.

Recently the senate invited the CEO and asked them why they don't increase their prices. The CEO got mad at them for even asking the question, being proud of proposing low prices while still making a lot of money gave back a lot of consumption power to the people according to them

Right, and mandates like this make the market that much less appealing for anyone considering the massive capital costs needed to compete.

What will actually increase costs for others is the ISPs deciding to raising prices.

Problem solved - AT&T just announced that they're no longer supplying home internet in NY.

Is there a real market? I'm not int the US, but from reading things like these when they come up, people usually complain about the lack of choice. No competition, no market. No market, there is nothing to distort.

but the Internet is free once the infrastructures base costs have been paid.

This is pretty delusional.

Somebody has to run the network. Employees need salaries. Things break and wear out. Customers need service. Billing isn’t free.

have you read about the hunger riots of rome and byzanz? the panopticon has to watch. bread and games are free or else...

if you ventured into farming or gamedev to get rich.. bad decisions all the way .

I fail to see how the above comment is in any way relevant to the discussion of this thread.