Why is broadband more expensive in the US?
bbc.co.uk
bbc.co.uk
Truth is, almost nobody at the local level has any idea how one could go about doing this. Even though they are publicly owned poles and communications companies pay rent to use them, the cities have no mechanism on how to actually rent pole space to any company other than the phone company and the cable company.
I think we could see a resurgence of local ISPs and even metropolitan area networks if city governments would take up this one issue -- open up the utility polls to more companies and publish the rental rates for the poles. As a bonus, they could even earn more tax proceeds.
This isn't even in some remote area of the US or something like that. (Westwood, Los Angeles, California.)
It's rolled into tuition. The dorm access is basically a hangers-on to the typical University model, wherein the school acts as its own ISP with a direct tap into the infrastructure.
It's just that the copper is already there and the telco that'll say 'go capex blast-off' when you're not going to pay them thousands of dollars in some way or another is a rare telco indeed.
Why else would drugs be prohibitively expensive in the US, and the exact same drug be an almost insignificant cost to patients right next door in Canada? You might say that pharmaceutical companies need to recoup their development cost. That might even be true. But they're doing it by charging the US consumers more than other countries.
Why else would SIM cards and healthy competition not be the norm in the US cell phone market? I'd love to take the phones out of my sock drawer and use them, instead of buying a new phone when I switch carriers.
As for broadband, fundamentally they charge so much because they can. Very little competition, usually the only game in town (Comcast has the cable option in my area, with DSL available here and there.) And Congress never met a bribe they didn't like.
"US consumers are our most important resource."
My first company sold web caching proxy hardware and software support (all Open Source based on Squid). 95% of my customers for the first several years of operation were independent ISPs. I had maybe 200 of them as customers in the 7 years the company existed, many became friends. When "deregulation" took place in the telephone, cable, and broadband market...at the beginning of the DSL/cable Internet revolution, the last mile became impossible to bridge for ISPs without an agreement with either a telco or cable operator (before that modems could call across the country without any explicit involvement of the telco...though higher speed modems did require data center presence at the telco level). The government required telcos and cable operators to resell the last mile to independent service providers at a fair rate; they were supposed to charge the same thing it cost them to provide the service to their own broadband divisions.
So, independent ISPs were offered a DSL link to their customer for, say, $23.50 per month, which is what the telco says it costs them to build/maintain that DSL link and make a modest profit. Great, right? Problem is, whenever ISPs tried to setup a DSL link, the telco would drag their feet. They would take months to deploy service for an independent, or claim they didn't have the hardware in place for that customer, or screw up the installation several times. But, that was just the beginning. The telcos would also send out mailers to those very same customers, offering DSL internet at special introductory prices...$19.95/month, for instance. Yeah, cheaper than the base cost for the line they're charging independents (which doesn't include all the other stuff an ISP has to provide). And, despite having told those customers they couldn't get DSL or having experienced months of delays, the moment the customer called up the telco, DSL would be up and running within a couple of days.
I'd been hearing about it from my customers, and then I had it happen to me. I tried two different independents...they worked hard to get me service, and finally gave up, apologizing for the inability to deliver. After 6 months of delays, I received one of those mailers from the telco. I called the telco, and had DSL a few days later. Same circuit they'd refused to install service on as recently as a month before.
When I started my first company, there were thousands of independent ISPs. Some of them were really good. Some of them were really successful. Most of them died during the switch to broadband. It wasn't an accident. They were killed off by the old monopolies, and our regulators were complicit in the process.
I'm not arguing for more regulation, really, but when the only way to get to your customer is through a state-enforced monopoly, the state better do their damned job. Or, we end up with the mess we have today: Among the worst Internet service at the highest prices in the modern world. How is that allowed to happen in the nation that invented the Internet?
All the arguments about distance and density are moot when talking about major cities; San Francisco is very dense. There's not reason for broadband to cost $99 for reasonable speeds, when it costs a third that for more bandwidth in a couple dozen other nations, including places that are less dense.
This process didn't kill my company directly (I was able to pivot successfully to serving enterprise, education, and government customers, and I had my best year the last year it was in operation), but it made it so un-fun that I didn't want to do it anymore. The kind of people I wanted to work with were no longer in the business. The smart ones sold out to bigger companies, the stubborn ones clung desperately to their dialup business or spent all their money trying to go to WiMax and bypass the telcos. Almost none of them survived as independent ISPs.
Some of the bigger ones brought lawsuits against the telcos. I don't know what became of them, but the companies that did it are mostly gone, so I guess we know how it turned out.
Assuming you're not talking about HFC, POTS might be capable of shoving through signals into the dozens of Megahertz, yes. Maybe even into the low hundreds. That would give you a speed near enough 1 Gbps.
But over a distance of, over your typical barely twisted 0.40mm copper wrapped in nothing put some PVC and PE, maybe three or four dozen metres. And that's with G.Fast which is not even seeing any large deployments quite yet.
And if you're talking about HFC, that is a shared medium. So, sure it can do massive speeds. You can shove, over let's say the 800 Mhz you have, about 5 Gbps, sure, if there's no TV on it. But it's going to be contented across all the other users on the same circuit, which might be in the hundreds.
Yes you are. But something in the American psyche makes it very hard to admit this, so you end up with utterly useless regulations and very little desire to enforce the ones you have.
But, yes, more regulation would be one way to solve it. Another way to solve it may have been to not create massive monopolies on that last mile so many years ago, or not allowing those monopolies to simply print money at the expense of consumers and any competitors. I'm not sure about which is the better approach. But, the current approach of government picking one company to destroy all others is a truly awful middle ground.
It's incredibly frustrating but I don't see it changing anytime soon. =(
If there were actual competition in the telco market, we might have a better market without more regulation. But, the telcos were declared a "natural monopoly" and became enforced by law before any of us were born. There have been waves of "deregulation" since, and most stages have led to better treatment of consumers, but still the regulation in place obviously picks winners and makes it impossible to compete with them, thus insuring we remain with effective monopolies on the last mile.
I'm not an ideologue on this, or much of anything else, these days. I tend to like market solutions, if they can be made to work. But, sometimes we end up with the worst of all worlds, and only more regulation can provide some relief. Telcos are one example of this, in the US. Health care is another. Going to more regulated, more subsidized, health care was probably the only sane way forward, given how screwed up our health care and health insurance market is. It's not what I would want, if we were starting from scratch...but, we're pretty far down that rabbit hole. Going back up and starting over with a market solution would probably be even more disastrous than staying put and trying to build some reasonable services down here in the dark (that analogy isn' a very good one, I admit).
A level playing field could be achieved by not having the state elevate some players to an unattainable position above all others. Knocking them down after putting them up there is fine, too, I guess...but they've got a lot of power once they're up there. And, they're willing to lobby and fight tooth and nail to keep those advantages and that license to print money at the expense of everyone else. I'm arguing more for, "Hey, let's never let the state elevate some companies above others in the future." more than "Hey, let's let the most powerful companies set the rules forever, and not regulate their ability to 'compete'."
In the US, the pipes are owned by the providers. Those pipes were built out with subsidized funding or exclusive contract guarantees. In other words, it becomes very difficult for a competitor to come in and build pipes, because their competition already got the leg up.
A better structure would be where all the pipes are public property and the town hires outside firms to upgrade/maintain them. Much like roads. Providers pay a fee to the town for access to them and for usage. An unlimited number of providers can enter the market. Users pay the providers. Competition between providers reduces prices.
P.S. NYC is somewhat moving toward this with their WiFi project.
Shouldn't both of those cities have comparable prices to London, whereas Oregon should be $200+ per line to cover the cost of the long distances between homes?
That's a bit misleading: 70% of Oregon's population is concentrated in the Willamette Valley, an area 1/5th the size of England and with a higher population density than Scotland. The US population is not evenly distributed: most of the population concentrates in very dense urban/suburban areas whereas most of the area (particularly in the west) is sparsely populated.[1]
[1]: https://en.wikipedia.org/wiki/File:USA-2000-population-densi...
[0] http://en.wikipedia.org/wiki/List_of_U.S._states_by_populati...
I think the numbers are skewed by their use of a purchasing power multiplier. Everything costs more in Paris, so the price of broadband is relatively less compared to places with a lower cost of living. However, based on my experience, the broadband prices are the same, which is what you would expect to see.
http://www.free.fr/adsl/freebox-revolution.html 30 euros a month bundle.
Not really if you consider VAT and generally higher prices. If you compare a random US city with pretty much any place in the northern EU, $ and € are exactly equivalent.
The BS with the last mile happens in Germany and France as well. Maybe not as worse, but to get Telekom (the public company of Germany) to set up the last mile for some other company takes around 1 or 2 months.
Now let's evaluate what may be the issue with price/speeds:
- People outside of US/Canada use less bandwidth heavy services, because of piracy laws
- Bigger countries demand more infrastructure (and if you have countryside places with high cost/low speed this skews the average)
Now, pay 99 a month for broadband in SF? Ridiculous
Well, in Germany Deutsche Telekom used to run HFC as well, until they were forced to sell it off by the EU back when they were privatised.
That didn't happen in Australia. And so we have the choice of Telstra for HFC as well.
There's another HFC network that was built by Optus, with the anticipation of Telstra overbuilding about 22% of it. Telstra overbuilt to a level of 80% dual coverage.
So that's pretty much killed Optus' HFC network, which is about to shut down, NBN or no NBN, quite soon.
No wonder then, given all that, that last time we moved it took about 5 weeks just to get the phone line in. In fact, it's a shitfest every single time anyone moves in Australia. And the newly elected Coalition's thing is not likely to be going to fix this, at all.
I think these are the best rates in the world, right?
I came here to point and laugh at the Yanks crying about their Internet being expensive. They live in a capitalist country, and complain when they find out that Karl was right.
Even if it does cost more simply within ten years because of the difference in maintenance.
If you aren't a huge sports fan, it's worth a shot, and OTA channels are 720p or 1080i, and uncompressed.
More than anything, I blame the poor ISP market in the US on this exact attitude that nothing besides cable is sufficient. Infrastructure is just not at the point where we have the class of connection you're trying to take for granted, and continually choosing only the absolute fastest provider while whining about their policies and prices is being willfully out of touch with the realities of current technology.
$55/mo will get you 12M/1M ADSL2+ from an ISP like Sonic.net, which is owned by a real person who even makes crazy statements like "We delete user logs after two weeks. Your Internet provider should, too". You can double that by easily bonding two lines, and/or enable Annex M for increased upload bandwidth. And they aren't particularly concerned with how much traffic you generate, either.
While these nameplate speeds are a bit slower than what you're used to seeing in cable companies' large print, keep in mind that 12Mb/sec will let you download 100GB/day, and 5Mb/sec (dual Annex M) will let you upload 42GB/day. When you compare these numbers to the usage caps and expectations of cable companies, you can see they're mostly selling an illusion.
http://www.google.com/intl/en/ipv6/statistics.html#tab=per-c...
Not least of all because if I don't have IPv6, there's plenty of ways to do that, even from the end-user perspective, with no support from your ISP, no capital expenditure and no great ongoing cost, if any at all.
Now let me know how I can get let's say 100 Mbps upload speeds as easily as hooking into IPv6 assuming I have 1 Mbps at the moment.
The fact that Korea has shown no interest in following the IETF standard suggests that they're willing to balkanize the network. High-speed broadband will become meaningless if you have to jump through hoops to reach the Internet.
Personally, I expect the day IPv6 starts to actually matter, it will be adopted by holdouts like SK. But for now? At least for me, IPv6 is slower!
And it has a very domestically oriented Internet. If IPv6 really matters, and there's hardly going to be much one can access via IPv6 but not IPv4 for a while yet, I can tunnel through and get IPv6 somewhere and vice versa. I can't tunnel myself a 100 Mbps upload speed when I only have 1 Mbps.
And all that's assuming that South Korea isn't doing IPv6 at all. Maybe they just haven't got as much of an incentive compared to, let's say, China with 0.25 IPv4 addresses per capita.