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Comment by twoodfin | Hacker News Reader

I hate to give such a short take, but any article about "net neutrality" that doesn't use the words "video" or "streaming" once isn't a serious discussion. "NetFlix" appears one time. The repeated use of "website" seems intended to mislead casual readers about what, exactly, is being debated. Slow banner ads for poor nuns? C'mon.

Any real resolution of this issue has to involve either forcing the cable companies to be dumb pipes and somehow figuring out how that will still incentivize anyone to build out infrastructure, or allowing companies representing 1/3 of primetime traffic to come to negotiated agreements with companies representing 1/3 of primetime viewers.

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> forcing the cable companies to be dumb pipes and somehow figuring out how that will still incentivize anyone to build out infrastructure

That is just a talking point. What do you think happens with the power company in a growing city? If there is going to be twice as much consumption of electricity as there was last year then the power company has to upgrade the distribution infrastructure. They manage to do it without needing the "incentive" of controlling which brands of washer and dryer you can plug into the mains.

If you're going to have a regulated utility then you don't need market incentives (which barely exist in uncompetitive markets like last mile anyway) because you have regulations requiring them to do it. Either they offer speeds which are e.g. 50% faster than the median speed in first world countries or they face penalties worse than the cost of the upgrade.

Power companies are a terrible model, first because most upgrades to power systems happen on a scale of decades, second because power generation has been a disaster in many growing parts of the country like California or Texas, third because the politics and capture surrounding utility regulation are worse than those in telecom, and fourth because the regulated utilities do have incentives to invest in upgrades, like guaranteed rates of return, and such incentives have had decidedly mixed results.

You can't force private companies to build out a network on unattractive terms. They'll just exit the business and take their capital elsewhere. See the difficulty municipalities have had trying to get companies to build out fiber on ridiculous tarms.

The model of regulated utilities has largely been a disaster. If you want public infrastructure, build it with public money, like we do roads. But the problem with that approach is you'll quickly realize ordinary people don't want to spend as much money on all this as the techies do.

> You can't force private companies to build out a network on unattractive terms. They'll just exit the business and take their capital elsewhere. See the difficulty municipalities have had trying to get companies to build out fiber on ridiculous tarms.

Why do the terms have to be ridiculous? What's wrong with offering 10Mbps service for one price and 1000Mbps service for a higher price that reasonably takes into account the capital investment that went into being able to deliver it?

> If you want public infrastructure, build it with public money, like we do roads.

OK sure, all we have to do is make the incumbent ISPs stop damaging any attempt to do such a thing through lobbying and litigation. Easier said than done.

> But the problem with that approach is you'll quickly realize ordinary people don't want to spend as much money on all this as the techies do.

If Comcast can turn a large profit then there is no reason a municipal ISP couldn't break even without consuming any tax dollars. Pay for the initial roll out with a bond issue and then repay the bond over time from subscription fees.

> Why do the terms have to be ridiculous? What's wrong with offering 10Mbps service for one price and 1000Mbps service for a higher price that reasonably takes into account the capital investment that went into being able to deliver it?

Politics forces the terms to be ridiculous. Most U.S. cities are political battlegrounds for socioeconomic and racial conflict. Say you were trying to build fiber in Chicago. What would a private company do? They'd start in the Loop, and build along north Lake Michigan going through the dense upper middle class neighborhoods. In a city bitterly divided by racial and economic conflict, such a project would never fly. So you'd end up building infrastructure through the whole city. These "build out" requirements are a basic part of nearly all the terms municipalities impose on companies. Okay, once you do that, what do you charge? It doesn't cost much less to build slow service than fast service, if you're starting fresh with a fiber network. How much do you charge in all those poor neighborhoods the city forced you to build out to? Can you charge enough to the richer folks to recoup your capital investment in the unprofitable parts of the network, bearing in mind that the more expensive you make it, the more people will just stay with the basic tier? Especially if the basic tier is as fast as 10 Mbps, high enough for 95% of users.

> OK sure, all we have to do is make the incumbent ISPs stop damaging any attempt to do such a thing through lobbying and litigation. Easier said than done.

People lean on this trope too much. It wasn't Comcast that tanked FIOS in Wilmington, it was the city. LA can't get any takers for its municipal fiber project. The ISP's weren't able to stall Google fiber in the cities that were willing to make the requisite regulatory concessions to Google. People have this idea that companies are chomping at the bit to build fiber, and would but for ISP and cable lobbying. This is a fantasy. Companies aren't building fiber because there isn't enough money in it under existing regulatory regimes.

> If Comcast can turn a large profit then there is no reason a municipal ISP couldn't break even without consuming any tax dollars. Pay for the initial roll out with a bond issue and then repay the bond over time from subscription fees.

The states and cities are totally bankrupt. Their credit ratings are in the shitter, and almost all are facing unclosable budget gaps due to pension and healthcare obligations. Limited funds are available just to keel core infrastructure, like bridges, from crumbling. Issuing hundreds of millions in bonds for fiber is utterly untenable.

Not to mention, as shitty as Comcast's service is, do you want your municipality as your ISP? Most can't even get busses to run on time, and only manage to supply power and water because that infrastructure was built before their governments became broken.

> Okay, once you do that, what do you charge?

That seems like a strong candidate for pricing that reflects the realities of the market: Make the monthly fee include a line item for the cost of installing fiber on your street amortized over the first few years and divided by the number of subscribers on your street who have committed to a multi-year contract. A street gets fiber as soon as someone signs up, but they have to commit to a very large bill if they're the only one. Let people sign up contingent on that price falling below some threshold. That way you get universal service availability but no customers are unprofitable. Then if the city wants to help the poor it can subsidize their fee which doubles your bang for the buck because the lower price creates more sign ups which lowers the unit cost.

> Companies aren't building fiber because there isn't enough money in it under existing regulatory regimes.

That's the whole point of municipal fiber -- to have the municipality front the capital so you don't have to cater to private interests.

> The states and cities are totally bankrupt.

Not all cities are as broken as Chicago or Detroit.

> That seems like a strong candidate for pricing that reflects the realities of the market: Make the monthly fee include a line item for the cost of installing fiber on your street amortized over the first few years and divided by the number of subscribers on your street who have committed to a multi-year contract.

We're talking about local politics. You don't get to consider the realities of the market, just the realities of the political situation. In Philadelphia, Comcast offers basic cable for something like $13/month. That almost certainly doesn't reflect the market cost, and they don't do it out of the kindness of their hearts, they do it as a precondition for their license.

> Then if the city wants to help the poor it can subsidize their fee which doubles your bang for the buck because the lower price creates more sign ups which lowers the unit cost.

Cities don't like to spend their own money subsidizing poor and high cost people. They prefer cross-subsidies, so that people don't see the money on their tax bill. That's how we got the cable franchises in the first place--cities offered exclusive monopolies as a carrot for building out networks and offering cheap basic service.

See: http://www.crainsnewyork.com/article/20140219/TECHNOLOGY/140....

In New York, fiber rollout has become an economic justice/civil rights issue, complete with demagoguery ("'If you can't afford to feed your family by the end of the month, you can't afford $75 a month for the broadband service,' she said. 'And that's what we have to fix.'").

> Not all cities are as broken as Chicago or Detroit.

No, but almost all the major ones are effectively bankrupt. See: http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Repor... (page 4). Every city on that list besides Milwaukee and Washington, D.C. has an underfunded pension plan. And those numbers are computed by the cities using optimistic projections about future growth. See: http://www.businessinsider.com/pensions-are-still-making-lud....

> We're talking about local politics. You don't get to consider the realities of the market, just the realities of the political situation.

It seems like your argument is not that good policies don't exist but rather that people are too stubborn, apathetic or corrupt for them to be enacted. But that isn't a policy argument, it's a self-fulfilling prophecy.

> Every city on that list besides Milwaukee and Washington, D.C. has an underfunded pension plan.

That doesn't mean they're bankrupt, it just means they're going to have to reduce spending or raise taxes (or run a deficit). And a municipal fiber project is self-funding through subscription fees. All the city's finances are relevant to is the interest rate paid on the bonds.

Yeah - 'dump pipes' - that was a phrase I was looking for. My water company just pumps water to my house. That's it. It's a commodity service. Major content companies also owning and managing the information pipes seems as bad an idea as having Monsanto or General Mills own and manage my local water infrastructure, no?

But you don't want new pipes that can deliver twice as much water every few years.

No end customer has gotten any new pipes, certainly not at the rate Moore has provided for the ISPs. For them, networking equipment has gotten considerably faster, cheaper and easier to manage.

The technology is certainly not the issue here. The entrenched monopolies have all but guaranteed nothing happened in the last mile for 10+ years while their job got easier.

Just take a look around. There are very very few places in the world where you can get 100 MBit (and use it for more than a minute). This was the height of bandwidth technology in 1995. Today, 10GBit is the jellybean standard in networking gear.

I think there is too much emphasis on the last mile speeds. I see complaints all the time that other countries have 100mbit links to the home whereas the USA is stuck with 5-10mbit. Personally, I have 25mbit down and Fios is always trying to upsell me to 50. However, I never get those speeds to real internet sites. Sure, my speedtest comes in right at 25mbit.

I don't know if it was a typo or if I'm not understanding you correctly, but 100MBit is certainly nothing special in Sweden. Plus, I pay only about $50/month for it. Maybe instead of 'world' you actually meant the U.S?

To be fair, Verizon stopped the fiber game, so I'm not sure we're going to get new pipes from the big providers.

And as I understand it, one reason they did that was the threat of 'neutrality': FiOS only made sense financially if they could slowly turn a (numbers ballparked) $100 cable TV & phone bill into a $200 TV & PPV movies & games & video phone & PPV sports bill via "value-added" services. Neutrality would make that flatly impossible, though I think VZ figured out that even without neutrality, most of what they thought they were going to sell was going to be delivered over the IP connection by third parties anyway.

But they didn't start charging $200 for the service, they just stopped offering it.

That's a lot of money to invest on the hope that the majority of people will more than double their outlay on Internet connectivity.

Verizon stopped FIOS rollout because regulation made it unattractive. We were set to get FIOS in Wilmington. The government demanded Verizon build it throughout the city, which made no sense because most of the city is a ghetto. The government wouldn't budge and we got no FIOS.

As for water pipes: in many places they're a century old and leeching toxins into the drinking water. My wife worked on a project at Northwestern that studied this issue in Midwest cities. Outside a few rich cities, infrastructure like water is in terrible shape. Because there's not much profit motive in building dumb pipes, and the municipalities don't have the money to give much public subsidy.

Great. If they won't provide the service required, take away their license and give it to someone who will.

Yes, because we live in a magical world where companies are chomping at the bit to invest billions of dollars in heavily regulated industries for single digit returns.

Actually, we do. It's not that frequent, but the march of time has seen big changes in water quality, waste water treatment and waste water discharge strategies. Housing densities are increasing fast so bigger pipes are required (more bandwidth?). Dumping waste straight into the sea is no longer acceptable and mixing storm water and waste water is slowly being phased out and separate systems are now utilized. It's not exactly the same, but the dumb pipes that come and go from my suburb are slowly being smartened up. Auckland, New Zealand.

Why bother when they can just put the brakes on? It's not like there's much competition for any given city.

Can't edit now - I meant 'dumb' pipes.

I am secretly hoping this completely backfires on the cable companies and every startup and alternative news outlet that needs to get data to customers bands together to make end-to-end encrypted peer-to-peer infrastructure for delivering video.

i.e. if Comcast or Time Warner won't carry my bits at a reasonable rate, then I join a consortium of companies that band together to make sure their bits are always available quickly through peer-to-peer technology.

If all the small companies and individuals bands together to hide all their bits collectively behind encryption, there will be little that the telco companies will be able to do.

Just like nature finds a way, so does tech. The Bit torrent and p2p sharing community has little by little protected themselves against almost every attack the government and other institutions has thrown at them. The only successful attacks against p2p technologies have come in the form of legal attacks due to the illegal nature of the content. When the content is not illegal, that attack vector becomes unavailable.

If something like this happens, the only attack left is to attack the customer, which would be a total non-starter risking driving customers into the arms of competitors that are more fair.

The whole problem the net neutrality debase is that is phrased as companies on side Telco vs companies on side Tech/startup. The truth is that this should instead be presented as the companies on side A verus their customers.

And then they start throttling anything that isn't to a whitelisted destination.

Which they are now allowed to do.

I know some people who are very wealthy in part as the result of owning a pipeline. Building that pipline was a lot more expensive than laying fiber, and it just does one thing.

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