Yeah, this does seem to be a core issue. How can we make it easier for people to start last-mile ISPs? It seems like a pretty capital intensive business to get involved in :)
Maybe we make Cable companies share their last mile networks like we did with DSL?
Which killed investment in DSL. Who wants to spend billions on infrastructure they are forced to lease out at wholesale rates to competitors?
The American Society of Civil Engineers estimates that we have $3.6 trillion in delayed maintenance and underinvestment of our core infrastructure (water, sewers, bridges, power lines, etc): https://www.wsws.org/en/articles/2013/04/08/infr-a08.html.
I'm not one of those people that believes we shouldn't have public infrastructure, but I do think you have to be cognizant of the trade-offs involved. Take something like Amtrak. Amtrak has an almost $9 billion maintenance backlog on the Northeast Corridor: http://usa.streetsblog.org/2011/06/15/house-plan-to-privatiz.... The NEC is the only part of the whole system that generates an operating profit. A private company would shut down the rest of the network, and try to make the NEC service as attractive as possible for customers. But in a regime where politics decides where the money goes, the operating surplus generated by the NEC instead goes to funding money-losing lines in the rest of the country.
Road building, too, is the result of distorted incentives. As an urbanite who doesn't like to drive, I would spend $0 on highways designed to get suburban commuters into the cities, and spend that money on public transit instead. Surbanites, of course, feel differently. Who decides how that money is allocated? Not the market, but the political system, which at the national level systematically over represents rural and suburban votes.
The situation with telecom companies isn't ideal, but I don't think the dynamics of the telecom market are amenable to the kind of broad political consensus necessary for a successful municipal service. Take water, for example. Everybody needs roughly the same amount of water, and is satisfied with a relatively similar level of water quality. Meanwhile, I'd bet 95% of people would be perfectly happy with 5 mbps service, while a small minority wants gigabit. Do you think the political system is set up to make that small minority happy? If there is anything to learn from how municipalities handle public infrastructure is that when you put it to a vote, the voters will spend as little as possible to get the minimum acceptable level of service. That's exactly what happened to our power and water infrastructure.
Historic and present demand are terrible ways of predicting future demand when it comes to technology. Most people don't know what they want because they're living in yesterday, but wait five years when they see what their early adopter neighbors are doing, then suddenly everybody would be happy with gigabit service, and who needs to upgrade to 10GbE anyway?
You could easily have said that nobody would want more than 128kb/s ISDN, because nobody does anything more intensive than download music, check e-mail, and watch flash animations. Faster speeds made newer services, services that are used by very ordinary people (like Netflix, Hangouts, Skype) possible.
Why? Because utility monopoly. Why? Because lawyers and lobbyists and clueless and corrupt politicians.
Any question?
Companies don't give you what you want because: 1) its expensive; 2) they can make higher returns with that money elsewhere. You can blame lawyers and lobbyists all you want, but the bare fact is that what Facebook paid for WhatsApp would pay for all the lobbying capacity of the top 10 DC lobbying firms for 60 years. That's a really weak argument to lean on when the interested tech players have so much money and lobbying is so cheap.
Just look at what Google is doing with Google Fiber. They're demanding massive regulatory concessions, and still don't seem to be positioning it as a money-making business. If building fiber was a good use of capital, why would internet companies sit on the sidelines and demand someone else do it?
The reason why is because companies have to work with local governments to get construction permits to build out the access network. There are huge barriers here that prevent individuals and small companies from actually getting that work done. One of those barriers is the fact that even local governments have problems with bribery and corruption (you don't say!).
Google Fiber is demanding those massive regulatory concessions because they must! They're asking governments to bend over backwards for them because they recognize how hard it is go get through the bureaucracy. That's why they put on this big campaign to get the people to talk to their local representatives and essentially beg to be saved from the monopolies.
Take for example, Google Fiber versus Sonic.net. Sonic's been trying to build out their fiber network for a long time. However, since they're small it's much more difficult for them to work with the local governments and as a result their fiber rollout has been slower despite consumer demands.
The regulatory hurdles that Google is demanding relief from are (largely) not the result of lobbying. They're the result of the dysfunction of municipal politics. Right now, NYC's mayor is attacking Verizon because poor people can't afford FIOS (at $75/month). He's hired a civil rights lawyer to get into the issue. Is it any wonder companies aren't interested in building fiber? Is this the result of lobbying (or corruption and bribes) or predictable political forces?
At bottom, none of the screeds on this subject address the simple fact: the internet companies aren't rushing to build fiber, or lobbying to get permission to build fiber, or publicly demanding deregulation so they can build fiber. They're trying to get Comcast, Verizon, etc, to build fiber. To this day, Google positions Google Fiber as an effort to shame the ISPs, not a worthwhile business venture standing alone. What does that tell you about the monetary incentives at play?
Reference, please? When I look up the financials, Google's quarterly gross profits are running about $9B, and Comcast's about $11B.
You said it right there. Look further down the financials. Comcast net income is $1.8B, Google is $3.4B. Time Warner Cable (I assume that's what's meant by TMV, although their ticker is TWC) is $0.4B.
Look for net income:
https://www.google.com/finance?fstype=ii&q=NASDAQ:GOOG
Isn't that basically what caust1c said? It looks like the two of you are in violent agreement. :-)
Lobbying is when big companies spend a lot of $ to try to get their way.
The dysfunctional municipal politics rayiner refers to is when politicians pander to various groups of voters to get votes.
The government should, but they wouldn't lease them out to competitors, but providers who happen to be in competition with each other. Make the last mile a utility, like sewers.
Not really. The cost of the interconnect between e.g. Comcast and Level 3 is immaterial in the cost of operating a network. The only reason there is so much contention there is that it's a choke point where Comcast can try to put up a toll booth.