One reason we lack Internet competition: Starting an ISP is hard
arstechnica.com
arstechnica.com
The Australian government had this part right with the National Broadband Network. The fibre and backhaul infrastructure would be owned by the government, while retail companies would be allowed to sell internet connections, telephony and pay TV services over this network . A change of government has slowed things down a bit, but the same model appears to be in tact, where the current proposal is that the government will take ownership and upgrade coax cable (HFC) networks as an intermediate step.
The Australian government has set up a single corporation to roll out a broadband network to every house in Australia. This is something that the government has no special knowledge of, and no demonstrated ability to do. Governments have no business doing this thing. There is a very real risk that ideological differences between the Liberal and Labor parties will see NBN Co. mired in a similar situation to Telstra - a privatised monopoly with massive and unrivaled infrastructure funded by taxpayers with terrible customer service.
What should be done is for the government to maintain an inter-town and inter-city fibre backbone, and cover the cost at taxpayer expense, then let local council and small business wire up individual towns and suburbs. Then let consumers hire an ISP who also handles maintenance of the fibre cables. Maybe give the installer of the cable a 10- or 20-year monopoly on maintaining the cable to allow them to recoup their cost.
Granted, technically the government would want to retain official 'ownership' of the cables, and would still need some sort of administrative group to oversee who was responsible for which cable, but this would be a big improvement over how the rollout actually came together.
Creating new government-backed corporations to own the infrastructure is not a winning formula. The entity building and maintaining the cables needs to be exposed to market forces, and it isn't difficult to see how it could be done.
The government can handle the expensive parts like satellite connections for rural Australia and the inter-town links, if the market isn't likely to provide those things.
I don't see why a government authority can't coordinate an infrastructure rollout like fibre, provided they have the right expertise. They seem to manage the same task fine with roads, etc. That's not to say it's the only model that can work.
The argument of government vs private infrastructure projects is a whole other kettle of fish.
http://media.hotnews.ro/media_server1/image-2012-09-14-13222... http://storage0.dms.mpinteractiv.ro/media/1/1/1686/6527161/1... http://www.b365.ro/media/image/201107/w620/Cabluri-NetCity.j... http://www.b365.ro/media/image/201302/w620/netcity_romania_i... (I was unable to find some of the best pictures.)
Eventually big ISPs started offering higher speed and unlimited traffic plans and the cables are still being buried.
Secondly, population density has a huge impact on the cost of installing fibre. As such, comparing Eastern Europe to Australia is just ridiculous. Even when you're in a city in Australia, the vast majority of the population live in detached houses on what are huge blocks by European standards. Those cable nests in your photos just wouldn't exist in Australia for the simple reason that you can't run a cable more than say 50m (any longer and you start to run into engineering challenges such as dealing with cables stretching in the heat, the weight becoming to much to be easily attachable etc) without putting up another pole, and for most Australians you would be lucky to have more than 4 houses within 50m of any given pole.
This is why cabling is a much more expensive proposition in Australia, standards or not. You would actually have to install enough poles, or bury the cables, neither of which is particularly scalable, and hence not particularly cheap. Much of the US has a similar problem, which is part of the reason that bandwidth costs so much in the US (there are other reasons, but this is certainly a factor).
Not when it's done by eastern europeans paid eastern european salaries in the years before said countries even joined the EU. After enough time, sure it will cost more than a proper solution, but by that time you would have made enough money to move the cables underground.
And yeah population density, that old bogeyman. I can get how it will cost more in a sparsely populated area, but why does it also cost so much in a densely populated one?
Are there any places that have vibrant commercial competition for broadband in the absence of significant government intervention? Are there places where because of government ownership of infrastructure in part of the market (e.g. fiber backhaul) there is increased consumer choice in providers, such that the fully-loaded costs are cheaper that the current US situation? We know from numerous markets that lots of competition drives down prices and drives up quality. The problem with broadband is it feels like a situation where you have a natural monopoly, so what is the right policy mix to enable competition? Or isn't there one?
If you want faster internet in the US, start with your local government.
It also helps that you can just string cables between buildings tying them to lampposts and trees. "Can" meaning that it's against all regulations and kind of unsafe in a thunderstorm (one friend had his NIC fried once, fun times), but people don't complain - you can either have internet that you have to unplug when it rains or no internet at all because running cables and obeying the building code gets too pricey for lean ISP startups.
Today of course most cables are underground and smaller ISPs have merged or were bought by larger telecommunications operators. Also if you want internet access on your mobile phone, be prepared to get robbed in plain sight - GSM operators here operate just like everywhere else.
In the end, the actual pushing of bits around doesn't really cost anything. Just some small amount of electricity. The actual costs to an ISP are all infrastructure and maintenance of the infrastructure. It's not hard to get some money to buy routers and enough bandwidth to service a neighbourhood, then work your ass off as a sysadmin keeping everything running. The hard part is the cables. You have to run your own Ethernet and optics and anything that gets in the way of you running it drives cost up and makes it ever so harder to get into business.
In conclusion, lax building code laws and high consumer demand allowed our ISPs to start out with a minimal investment and upgrade their infrastructure as they went along to make it more and more reliable and safe. Today I'd say the price for access is as low as it can go, the service is pretty solid, with 8-10megabit speeds at the lowest and everybody gets given a static non-NAT IPv4 address for something like 15$/month.
Is it prohibitively difficult for them to find a fast enough pipe to the internet, or is there something else stopping them that I am missing?
If you can get a large enough local membership, you could have a mesh that spans multiple backbones. Your costs are then limited to getting enough people to join the network to actually form a mesh (and getting them all online at the same time), and then paying the backbones directly for the traffic you send them.
Might this be a viable business strategy?
Many different projects have been centered around the idea of a "mesh" network and I don't know of any that have really been successful.
Proper ones aren't really cheap. And to cover a reasonably large area with a big number of users (and I suspect everyone and their dog has some WiFi-capable device nowadays, even in poorer countries) one needs a reasonably large quantities of routers.
Oh, and if that was the idea, I would really warn against trying to provide public connectivity this with commodity out-of-shelf consumer-grade routers. Prototypes work, but it doesn't scale well. My company (a small ISP) had tried and I'd say, in my personal opinion, we mostly failed (i.e., I mean, commodity routers are not fit for such job), even though our setup was much simpler than mesh as we had every router connected to a backbone.
Short summary of issues others should be aware of, when dealing with consumer-grade devices:
- First of all, QoS is a must - and it's a bit tricky to implement. Without QoS just 3-5 torrenting users will completely take the AP down. Getting QoS to work (and perform well) on cheap routers is hard, especially considering it's mostly done in software and their CPUs are slow.
- Another problem is, routers seem practically limited in number of active peers they can handle, and putting too much of them too nearby had its own issues due to signal interference. Not that this is unavoidable, but it may add some headache.
- And another issue is hardware supply. Imagine you polish a firmware so it works acceptably fine and consumers are satisfied. Next year, those routers go out of stock and you can't really get them anymore - only newer revisions or even models are available. A hardware change even between same model revisions could be drastic, so the development struggle never ends.
If so, yes, starting a dialup ISP is not too expensive, and not too difficult. A local ISP I worked for in 1999 ended up using a wholesale provider for dialup, we just ran a radius server for authentication, and mail and web servers.
Unfortunately, the market for dialup ISPs is drying up, many more users want broadband connections, and in the US, it's very hard to get access to the last mile connections for broadband, unlike how easy it was to setup a bank of modems.
Nowadays you have to build out that "phone line" (a.k.a. "the last mile") to the customer which is sorta what this article talks about.
But if you're going to start an ISP, you'd best do it in the next few months. Europe and Asia are already screwed.
I'm with a ~6 month old ISP here in New Zealand, by default everyone is behind CG NAT, but you can request a public IP.
I'm one of those people unfortunately, mostly because my DDoS mitigation and countermeasures are not IPv6 ready- and I can't risk my companies business since it's all public facing ecommerce. :\
although, yeah, you could put everyone behind a NAT for ipv4, but then you have the same problem as with Quatar (or was it Saudi Arabia) where masses of people are blocked because they all exit onto the internet from the same place.
Heh, I've heard my boss (the co-owner of an ISP) say those exact words I don't know how many times.
NB: It's harder than it sounds.
One is in fact in my County near me. STarted as a startup in mid 1990s as a dialup ISP in a garage even.
No, not in the USA. Unique for a western ISP market AFAIK.
The cable companies don't have to share their network, and I don't think their network is structured in a way that would make local loop even possible. I don't believe they have a dedicated local loop per customer.
Fiber installations by the telecoms don't either because they are in a competitive market. Also, only Verizon has laid out FTTH.