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Comment by brokenparser | Hacker News Reader

This wouldn't happen if those ISPs didn't have local monopolies. Networks should be opened by selling traffic wholesale to other companies so that they can compete for subscribers on those networks. The network owners would have more than enough money for upgrades and if they don't, downlevel ISPs will sue them.

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I'm not making a claim about the veracity of the counter argument to this, but it is easy to state. If network providers had to sell traffic wholesale to other companies, they would have less incentive to upgrade them as those networks then become pure commodities. Right now the local monopolies can use their networks to sell high margin services (cable) bundled with low margin services (internet traffic). If they had to compete with other companies, namely bargain ISP offerings, the cost of ownership of the network would be non-profitable.

I've heard some argue that this is precisely why DSL has lagged so far behind cable in upgrades.

> they would have less incentive to upgrade them as those networks then become pure commodities

Pit DSL against cable, as has happened in the UK. The POTS network is owned by one company (BT) and the cable network by others. Retail customers generally have a choice of connecting to the Internet by either. BT (POTS network owner) are required to sell traffic wholesale to competitor ISPs (who then buy their own transit). This seems to work very well here, and DSL upgrades continue.

British DSL is far worse than cable in my experience. Virgin's cable & fiber offering is massively faster and has a wider footprint than DSL products I've seen.

> British DSL is far worse than cable in my experience.

Define "worse". What ISP were you using?

From a peering point of view as described in the article, there are a large number of ISPs buying transit and then selling Internet connections through BT-provided last mile DSL lines. I never suffer from peering congestion, since my (DSL) ISP pride themselves on not having any.

For the link from my local exchange to my ISP, there are multiple options, too, and my ISP monitors congestion on my line closely. I currently have no congestion there, either, and if I did, there are multiple providers available (thanks to LLU): http://revk.www.me.uk/2014/02/bt-21cn-not-fit-for-purpose.ht...

The only issue with DSL in the UK is the (mostly analogue) quality of the DSL line itself, and the way that BT (the company with the monopoly on POTS lines) manages them. And perhaps the pace of upgrades (eg. to fibre to a street cabinet and copper from there, instead of copper all the way from the exchange), but upgrade rollouts are happening (and fibre to the cabinet is already available to me).

That describes almost precisely how the US system works.

[text removed since it seem to have confused the person who replied]

http://news.cnet.com/FCC-changes-DSL-classification/2100-103... "The ruling puts phone companies on the same regulatory footing as cable companies, which are exempt from having to offer access on their infrastructure to competing Internet service providers."

I'm not an expert, but I'm reasonably certain that Cable providers in the UK are also not required to provide ISP access via their networks.

No, they are not. Otherwise I'd be using one.

Yes but he is claiming the US system works like the British system...when it doesn't.

TV is also a huge factor in the UK. Both BT and Sky need high broadband speeds to be able to offer video on demand that can compete with virgin.

The article said that their cable business is way less profitable than their internet business. I haven't done any research on the topic, but given that they have to pay content providers for cable, and don't for internet, I'm inclined to believe Cringely -- even though in a normal market it should be a low-margin business, selling undifferentiated bits for $.

If it was "selling bits for $" we would already be done.

But today's ISP capacity is unsuitable for tomorrow's ISP demands. One might hand-wave the network as "sunk costs" but the ISP has to keep on sinking those costs.

In fact, that's what Crinkley is complaining about: the ISP isn't sinking costs into its peer with L3.

Sure, so you've got depreciating capital costs on a schedule coupled with ongoing operational costs, that gets you to some amount of $/yr to operate the network, and $/year/bit in terms of network capacity.

What should be happening is competition driving down the price per bit to some amount just marginally above their costs. These costs may be high but the margins should be low. That's Econ 101 and it's what everyone who ever advocated for the free market is making a case for.

What appears to be happening is they're collecting a big fat surplus on top of that figure, and that surplus is in addition to all the wasted money in their corporations that's never had to be cut in a down quarter.

And those people are completely 100% wrong.

DSL got screwed for around 10 years by having more expensive regulatory costs than Cable.

Why yes, if you tax X more than Y, Y is going to have the advantage.

We have essentially such a system in Germany, does not work well. Thing is, that the owner of the network has then to compete with the resellers, but the resellers need to play nice with the owner. The result is a total mess of regulation to force the network owner ( T-Systems) to play nice.

Back in the dial-up days I had my choice of ISPs. Some people chose on price, I chose on quality/service, and mine wasn't that much more than the cheapos.

I can't recall any issues with the underlying phone company operator of the wires, although that may be because the wires were primarily for phone and they have to work by law (I think).

I miss the days of being able to choose my ISP. Now I have Comcast, with CenturyLink DSL an inferior possible second choice.

We have the same system in Canada and the wholesaler ISP (Bell) famously imposed unpopular usage based billing on the re-seller (TekSavvy) to kill the only advantage it had over the ISP.

http://www.cbc.ca/news/technology/crtc-approves-usage-based-...

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