Really, he's calling for the FCC to prevent rent-seeking by local ISP monopolies by allowing the option of municipal networks. It's a really good idea; you can tell because of how stridently Comcast/Verizon/AT&T oppose it.
I far prefer to just obsolete the big providers and to implement internet as a real public utility. Even if private companies end up contracted to provide it in some cases, those would be regulated monopolies, not regulated free market businesses.
I far prefer that we build the case that even a city's own infrastructure would unlikely work without the internet, and that they should have at least some infrastructure that does not rely on commercial providers.
San Francisco's water power plant on the Russian River is a great example of this, it provides power for muni trains and electrified buses, maybe _some_ streetlights and a few other public things. If we have a full PG&E failure, we might still have running trains and lit streets. I'm not sure it doesn't all flow into the same grid, SF being one of the oldest power grids, but if that isn't fully the case now, there is enough power independence to ensure that such a thing would work.
Municipal broadband doesn't mean shutting out ISPs. If done right, it means that the municipalities own the last mile infrastructure and charge a per-customer rate to ISPs that serve residents. But what that does is significantly lower the bar for ISPs to offer service. It can cost millions of dollars to build out that infrastructure in a city/town and that's assuming you have right of way to actually lay the fiber. If the city does that itself, then ISPs only need to connect the city's infrastructure to the larger internet...something that's significantly cheaper.
The Comcasts of the world would still be free to offer service to customers. But they'd have to compete with the smaller ISPs on equal footing and without the giant markups they have today.
This is _precisely_ the discussion I want to have.
Transit is not the same as interconnect, we should have some private competition, but if an entire city is all AT&T and Comcast, I'd rather just have it be municipal fiber.
I have no problem with AT&T, Comcast, Verizon, etc.. running their businesses over a combination of private and municipal networks.
I feel that's ideal.
That's a pretty big if. There's a very real possibility that the same municipal governments that granted the cable monopolies in the first place, will either license the network to an ISP that will either become Comcast-like (monopoly lazyness does that), be bought by Comcast or actually just simply is Comcast (remember, the municipalities have a "good working relationship" with Comcast) or they will setup their own ISP, which might get off to a decent start, but will either make money, and then go on to be milked hard, or it will lose money, and will have to fight with the fire service and the water utility over every last penny for infrastructure upgrades ("What do you mean you need a $5000 router? I have a $30 router at home and it works just fine! In fact, I'll go to Best Buy myself and get you a few of those tomorrow. What the next item on the agenda?").
But IF they do it right, it would be a great solution.
Here's what I foresee actually happening: these networks will work great for 10 years or so. But eventually the maintenance costs will catch up, and you'll have service outages that take days to fix because it's run by lazy government workers with a guaranteed pension. Customers will complain, but nothing will happen until the city goes broke (as happens to nearly every city every decade or so). So the city auctions off the telecom infrastructure to private buyers for pennies on the dollar or spin it off as a new private entity. The net result is the same: the taxpayers will have subsidized the construction of yet another redundant telecommunications network owned by private money.
The reason I'm pretty sure that this is what will happen is because this is exactly what's happened to most of the municipally-owned utilities across the nation. Chances are that your gas company or electric company are privately owned (water/sewage tends to remain municipally owned because it's simply not profitable under any scenario that preserves basic sanitation). The city hits a budget crisis and starts looking for assets to sell, and utilities are huge capital assets that can bring in a lot of cash relatively quickly.
What if the municipality owned, laid, and maintained the physical conduit/poles/enclosures but not the actual network physical plant itself, which is then deliberately designed to be replaceable so commercial providers fish through the cabling they want to municipally-owned physical hubs that are equipped and operated by the providers? The municipalities already have the resources and staff to do so relatively competently from water, wastewater and electrical grid deployment and maintenance. Most of the cost of last-mile deployment is the physical laying, but if that is shifted to a public utility while fishing cables (at most) is left to the providers, then might the providers see dramatic increased incentives to compete on quality of service and price?
[1] http://www.quora.com/What-is-the-lifespan-of-fiber-optic-cab...
Regardless, the architecture you propose would be incredibly expensive for ISPs to implement on any large scale - so much so that it would create significant barriers to entry for any new entrant, and a big incentive for horizontal consolidation. Ideally, the utility ISP would provide route tunneling from a specific port on their demarc switch representing a home to a specific provider at a NOC at the edge of their network. This does create some bottlenecks, but it's better than having 5 ISPs have to put 1,000 switches all over a city just to cover all the homes. Coverage is the entire problem that causes a monopolistic situation - so let the shared service provider worry about coverage.
Even still, I'm not sure of the value that ISPs provide in such a scenario. It seems like a commoditized service with very little in the way of competitive advantage - which means that advertising dollars will be the biggest differentiator (similar to how it is today).
Let me tell you: BT sucks. They are technically a private company, but operating with all the ills that a large governmental monolith has accumulated over decades. With the system you're proposing, you're basically creating a BT. Hopefully it's a small, city-specific BT so at least if one city has a very shitty infrastructure you can move to another city to avoid it... but still. Caveat emptor...
And while I agree with about BT as a whole, OpenReach - the subsidiary of BT that handles the last-mile network - is very different from BT as a whole even though they certainly share a lot of history and baggage. For starters, OpenReach is vastly more tightly regulated (leading to, for example, all prices being publicly available on their website), but OpenReach is also subject to a lot of additional scrutiny and pressure from the 500+ companies that rely on their network to provide services, especially because many of said 500+ companies are directly competing with Virgin for business.
The baggage of BT is also less of an issue simply because while most ISPs uses OpenReach for their backhaul services (relying on OpenReach to provide an IP connection from the subscriber to the ISPs network), OpenReach also provide raw access where the ISP can put equipment in BTs exchanges and get a direct physical connection to the subscribers line, and a number of providers have and do make use of this to provide faster connections than what OpenReach offers for backhaul.
With LLU unbundling the only limitation provided by OpenReach is down to physical constraints of a network they inherited and was not endowed with enough cash to somehow instantly upgrade.
But most ISPs are not willing or able to cover the costs even of taking advantage of the LLU unbundling, which should illustrate that there really isn't a willingness for most to pay for much faster rollouts of higher speeds.
And yes, there are some new developments, there is some hope in the horizon.
Meanwhile, I regularly see tweets from people in, say, Norway, with gigabit internet access.
For example, the broadband service in my town suffers from random slowdowns where everyone's speed drops from 8mb/s down to 0.1mb/s for days at a time. As a town we have been complaining about it for years but nothing ever happens as we have no power over Openreach because they are a private company and are not answerable to us and they also have a de facto monopoly on the infrastructure so we can't take our business elsewhere.
At least if broadband was provided by the local council, we could complain to our local councillor when it's not working. This system works fine for other infrastructure, e.g. if the council haven't gritted the roads we phone our councillor and she gets on to the right department, gives them a row and they sort it out.
As it is, most broadband infrastructure improvement projects in the UK are government driven any way. I don't see the point of Openreach existing as a private company, seems like extra unnecessary bureaucracy which exists purely for the dogmatic reason that private companies are supposedly always more efficient, a claim which I have never seen any serious peer reviewed research to support.
If anyone can explain why this is not a stupid system, then I'm all ears.
I guess you meant those would be regulated monopolies and not unregulated monopolies ;) ISP scene is quite far from free market at the moment.
The other 3 are dedicated business telecom companies and do not offer residential service.
It appears broadbandmap.gov doesn't differentiate between residential and business.
Looking at the wireless I was excited to see Wimax offered in my zip code according to the site. When I go the provider's map of coverage I only see a small section of the metro area covered and it doesn't include my zip code.
It appears broadbandmap.gov doesn't include the actual wireless coverage provided.
There's also a potentially anti-competitive slant to this: There are government subsidies available to provide coverage to unserved areas, which might help a small ISP or competitor move into the area. But if we say we cover it...
I could give you my old Zip code, it would include a small city that had DSL providers and Cable. Where I lived there was one provider, 3mb DSL. That finally showed up about 4 years ago.
I'm looking at the telephone pole near my house and there are only two wires coming off it: one from Comcast and one from the phone company. And the phone lines can't do more than 1mbps.
For my home, 2.5mi from the Capital Building in Washington State, I'm offered four wired broadband providers:
1. Comcast, "advertised 100mbps to 1gbps" (true enough, although you can only get 150mbps, so I'm not sure if that's bracketing)
2. CenturyLink, "25-50mbps" (CenturyLink's own website says "Our systems indicate that our High Speed Internet is not currently available at your service address." I tried several other streets in the area that indicated that none of them had availability either.)
3. Platinum Equity LLC, "10-25mbps" (err, Platinum Equity is an investment firm - oh, one of their portfolio offers "T1 and Bonded T1" lines to businesses)
4. Integra Telecom Holdings, "3-6mbps" (a Vancouver telco that does business fiber).
So there's one - Olympia, WA.
http://www.broadbandmap.gov/internet-service-providers/olymp...
There's Comcast, Verizon, ATT, T-Mobile and a host of others.
EDIT: Facts deserve downvotes?
http://www.broadbandmap.gov/internet-service-providers/olymp...
re: EDIT: I didn't DV you but you shouldn't be surprised. There probably isn't a single HN'er without direct experience shopping for an ISP, and thus few without the knowledge that the many promises of "broadband" service are often mere pie in the sky.
Anyway, one of the wired ones that's listed (CenturyLink) does residential internet from what I can tell[1]. Another wired one that's also listed for residential in Olympia is MegaPath (owned by Platinum Equity, another wired one)[2].
No, to repeat myself, cellular wireless ISP service is neither functionally equivalent to other wired nor even to other wireless ISP service offerings. Cellular offers include low data throughput limits, and are not priced comparably. If there were two DSL offerings and one was priced higher for a lower level of service that would also not be reasonably considered a competitive market situation.
As for CenturyLink in Olympia, Wa. the poster already replied that Century Link do not offer service to his/her residence.
I'm not going to audit the claim about Megapath, but instead just assume that FireBeyond was truthful and correct when they said that Megapath did not offer residential services to their address.
Also - yes, I'm aware CenturyLink does home internet. Not at any of four addresses, including mine and major streets in 98501 where it says they are available according to the original site.
Megapath (the one I found) does residential - in theory. After inputting my service address (and I'm in the heart of the residential area, in a division less than ten years old), here are my options:
1. "Symmetric Ethernet: 6.0M to 45.0M (* Requires Business Account)"
2. "SDSL: 192k" (fairly sure that doesn't meet any current definition of "broadband")
3. "T1: 384k to 3.0M (* Requires Business Account)"
I wouldn't call that a realistic residential broadband offering.
Apropos of anything else, it's as much as you can't just blindly point at broadband.gov and say "look, healthy marketplace!".
Wireless - Poor reception, technicians unable to connect to uplink/head-end equipment
Cellular - Too expensive, data caps, and poor reception (really).
DSL - I used this for four years at my home and was generally satisfied with my private DSL reseller's service. I only left because their service only allowed 1.5Mb, which was no longer satisfactory. Ironically, AT&T now offers 6Mb/s service in my area but DSL resellers apparently aren't permitted to resell "U-verse" even though it is provided via an industry standard protocol, ITU G.992.3
Cable - I have cable now 15Mb, the highest speed they offer. They keep promising to roll out higher speeds, but have yet to do so.
Satellite - Does that count as broadband? Not for me. High latency and low uplink speed rules it out, and expense.
This is an especially crazy situation for me considering that I live near a major internet backbone corridor (0.5mi from my home).
So, strictly speaking there is no monopoly, but the result is hard to distinguish from that of a monopoly/cartel situation.
1 cable provider
2 ADSL providers
It shows FiOS also, but I can almost guarantee that there is no residence within this zip code that can get it. So, the real question is, how much do you consider ADSL "broadband"?
Likewise, why are speeds so low still if there is all that competition? Once the wiring is done, it should be fairly inexpensive to upgrade performance and that should be a pretty clear competitive edge. Are they colluding? Or is it really somehow a noncompetitive market?
I've been in Comcast country a couple times, as soon as there were even whispers of not renewing their franchise, comcast just magically upgraded everyone's performance, I saw that twice. No fee increase.
Real competition is for example Google Fiber or some other small ISP on the scene. That's when you starting getting 1 Gbps for less than $100. But such cases are quite rare still.
Now the "cable monopoly" is a separate issue entirely. Comcast has superior speed in some areas because the municipalities create bottlenecks that keep new wires from being laid (like charging exorbitant fees to do so). See, http://www.wired.com/2013/07/we-need-to-stop-focusing-on-jus...
> Again most Americans don't need 100Mbps+.
That's a pile of trash and song that monopolists like to sing to justify their unwillingness to upgrade their networks (since if there is nowhere else to turn, their inferior networks will be used for crazy prices anyway - users simply will have no choice). They start singing a very different song when they face actual competition. They quickly forget their previous claims that no one needs more bandwidth and start offering it. Which just demonstrates how sick the current ISP market is.
I.e. imagine you are trying to find a transport service, and local transportation company tells you that their horse and buggy service is just fine, because no one needs anything better (didn't everyone use it for hundreds of years already?). And then their competitor actually builds a railroad... You get the idea - that's exactly what's going on with ISPs now.
Obviously there are continued risks with the crypto arms race, but if Google is being beam-split by the NSA, why would we choose a solution that uses more power, provides less overall individual freedom, costs more, and is slower, to guard against a bogeyman that's getting in anyway.
We must always assume we are being wiretapped.
Let's get a discount on being wiretapped, eh? ;)
Now that I've left SF after living there most of a decade, and I live in the east bay, I think it's also a concern that SF gets to own a power source so far away, because of the historical timing of when it was implemented.
The SF Bay Area's intertwining municipalities are a major impedance to certain types of progress, but I also think they are a valuable alternative to a region like NYC where you have a massive city with areas that aren't really like one another.
Anyway, my understanding is that the water power plant supplies muni and other SF public purposes, such as possibly some street lights. I know, though, when I lived in the TL, and we had a power outage, the street lights would go out, so this may all flow together and be metered, rather than be separate, redundant systems.
My point was, we could probably change that. :)
Why is my government providing access to porn? To religious sites? To sites that violate copyright? To sites that contain many sorts of 'unsavory' content? Allowing children uncensored access to many things?
I don't know how those complaints would fare, but I'm absolutely certain they'd be made.
This is a very light touch intervention to increase market-based competition. How much more quickly would there be privately owned fiber networks if consumers had the option of going to City Internet for $150/GB/s?
The UK's (big) ISPs are already required to 'offer' Internet filtering to all customers, collect activity logs, and prevent access to certain torrent sites.
None of them have had a problem implementing this at a national level.
(Setting up a DNS blacklist/redirect isn't hard - you do it in your network/backbone gateways, which aren't anywhere near your subscribers.)
The government being in the delivery business is nothing new. Historically, it has worked out for the better more often than not.
However, we know that government policy is to record all meta-data, forever, without a warrant. HTTP/2 can't come fast enough, but even that doesn't really hide enough meta-data to trust the government with the pipe. E.g. You can tell fairly well what static pages on a domain someone is visiting by simply correlating the size of the response packets.
Of course, they are already doing all of this already, so maybe the ship has sailed... I think the best model is that the government provides the fiber, the L2 and above service is provided by a private entity. It certainly doesn't do much to prevent mass-collection or censorship, but it's marginally better than the Fed actually providing Layer 2.
Why would this be different?
Only two possibilities: ban it -- untenable -- or allow it.
Not sure what you're trying to say here?
2) Click "number of broadband providers" on bottom.
3) Set sliders to color places with 1 provider.
4) The huge areas of green across the US are monopolies.
Then click "unserved" to show those areas...
Interesting stuff...
* Unserved = red * served ~ 2-6 providers = green * white = one provider aka monopoly
Lots of white... I wonder how much is due to lack of interest vs "interference" of any sort.
How so? Whether its good or bad, ISPs would be against it. Most companies do not want competition. (regardless of what they say)
>by allowing the option of municipal networks.
I personally think its rather unfair to ask a for-profit company to compete against a tax funded service.
>Really, he's calling for the FCC to prevent rent-seeking
You can prevent rent-seeking by repealing any "sponsored" laws that protect their monopoly.
Why? If the Free Market Fundamentalists are correct, the for-profit company should have it all over the tax-funded service, because the company would be interested in efficiency and technological advances and so on, as opposed to just being a... welfare... thing... like the US Post Office and everything else which, per dogma, Does Not Work.
> You can prevent rent-seeking by repealing any "sponsored" laws that protect their monopoly.
Like the property laws which prevent others from using the wires they pay to put in, or do you think three cable companies should mean three completely separate sets of coaxial cables running everywhere in town?
¹Modulo obvious caveats.
A private company that thinks it can be profitable can go to a bank. A city will probably have to have a bond on the ballot. And a city can't really get out of things like road repair, law enforcement, etc (they can subcontract, but they still have to provide service) whereas a private company can sell of or shut down any unprofitable aspect of it's business.
So on the surface, comcast or whomever has a lot more leeway then a city.
The issue is, a service like last mile broadband is not incredibly profitable, for a telecom. But if a city can do it, or have a local company do it and it doesn't cost too much (they can waive fees for running cable, or whatever) then it may pay for itself, at least in part, because not only do they benefit from whatever they collect in fees, but broadband can increase local tax revenue (a house with 1000mb/s internet is worth more then a house with 2mb internet).
In domains like Internet infrastructure and health insurance which are empirically pretty terrible when there's no public option, I think there's a lot to be said for that argument.
Is it "fair" for a monopoly to have to compete against an organization that has nearly infinite resources but terribly inefficient operating ability? I don't know. Maybe yes, maybe no. Is it fair to huge ISPs to impose net neutrality on them? Maybe yes, maybe no. But it's no less fair for them than not having net neutrality would be for companies who want to use that infrastructure. It's certainly no less fair than life would be for a child who can't afford access to health care in a black market-like total laissez-faire economic system. I'd prefer to live in an imperfect implementation of capitalism that tries to regulate out negative externalities when possible (despite often failing) and provide as much fairness for as many people as possible, to one that provides so much "fairness" to certain corporations that they can make the game unfair for everyone else, people and companies alike.
Well, actually, I'm claiming that a Free Market alternative should be able to win even if the Free Market includes the government.
Nobody is guaranteed to win, and I don't think a public option would necessarily be odious, but if someone's so gung-ho about competition, they shouldn't be scared of competing with a government.
Edit: OK, yes, I was mocking the Free Market Fundamentalists in my post. Fair's fair, they mock the government and the moderates, often using japes invented by Ronald Reagan (peace be upon him).
Except that shouldn't matter if the private company can compete on technology and service.
If your opponent has unlimited funds but the customer service policies of the DMV and the technological acumen of, uh, some very-non-technical government office of your choice, shouldn't you win?
But if last-mile links are a natural monopoly (or at least demonstrably low competition markets), how do we get better broadband than we have now? We have data points from other nations that seem to indicate that publicly owned or open-access last-mile links create market conditions that deliver broadband more efficiently - both in lower cost and higher bandwidth. There is still competition - it just shifts to different market boundaries.
One other option is to opt for a consumer ownership model where the each home pays for the bit of fiber that connects them to the neighborhood hub or w/e.
The UK did this with British Telecom (BT). In a word, it sucks. It creates confusion for consumers:
* "I get internet from Twinkle but they say they can't repair my line."
* "I signed up for service with Floyd's Internet but a truck showed up at my house that says Ben's Broadband."
* "Decker offered me fast fiber, but when I called to sign up, they said WestLane only has copper to my home and they aren't allowed to run the fiber."
The names have been changed to protect the guilty, but the experiences are real.
OpenReach (the BT subsidiary operating the line network) has a clear (available on their website) policy for how their engineers should interact with people that includes guidelines for informing ISP-customers about who they are and who they represent (OpenReach and the end-user ISP) and how to deal with customers in a way that represents the ISPs well (the customer of OpenReach is the ISP - they're a service delivery company working on behalf of the ISP, not the end-user).
A few years ago some of this may have been confusing, as customers used to have to deal with BT directly, but now "everyone" knows about BT/OpenReach handling the installation on behalf of a lot (not all) ISPs, and every ISP I've had in the last decade has explained this to me when I signed up, and these days customers do not have to deal directly with BT other than OpenReach engineers. And people are used to outsourced service companies dealing with utilities. E.g. I get power from Npower, and over the years a dozen different companies have done meter readings on their behalf where I live.
As for your "Twinkle" and "Decker" examples, blame your ISPs that have decided to use this as an excuse for their own problems. In the Twinkle example, the ISP is a customer of OpenReach, not you, it is their responsibility to deal with OpenReach, not yours. If they're trying to push OpenReach in front of them, that's their bad customer service.
As for your "Decker" example, it's Decker's fault they've not checked coverage prior to making promises they can't keep. And "aren't allowed to run the fiber" == "we've decided (as most, but not all, UK ISPs) that OpenReach provides a good enough network for us, so we won't make any investment in rolling out our own, sorry". Nothing prevents UK ISPs from trying to build competing networks, other than the capital investments needed, and the low projected rate of return for most of them outside of the most densely populated city cores.
The relative lack of competition for OpenReach is a good demonstration that the market doesn't share your assessment of them. Many are unhappy with them, but not unhappy enough to pay for anything better.
I still find it strange that the U.S., which is such a bastion of the free market is so anti-free market In regard to internet ISPs.
In the UK alone, OpenReach, the BT subsidiary that inherited the last mile network, counts more than 500 companies as customers that provide telecoms and ISP services to end-users. Many of them are business focused or offer only specific subsets of services, but there are a huge number of nationwide ISPs using OpenReach's services.
Especially because the starting point is very simple: You can start out using their "backhaul" service which lets you integrate with OpenReach a couple of places and be able to offer broadband nationwide in the UK and have OpenReach provide you with IP connections to each customer for you to do whatever you want with. You can then if you want "graduate" to local loop unbundling where you put equipment in local exchanges as/when demand justifies it, allowing you to connect directly to the local loop (line) of each of your subscribers, which allows you to offer services in excess of what OpenReach does (e.g. some ISPs offer higher speeds).
Once you go the LLU route, you can turn around and offer backhaul services yourself if you wish, in competition with OpenReach.
If even that isn't enough, and you have the capital, you can look at laying your own lines. E.g. in some cities we're starting to see alternative fibre connections to many apartment buildings etc. as providers are capitalising on the density to bypass OpenReach.
So it encourages competition massively by creating a very low barrier to entry, while allowing larger providers to compete with OpenReach itself.
US local governments do not seem to have a good record of maintaining public infrastructure, so why would public internet be any different?
Comcast alone reported a $1,900,000,000 PROFIT in the first 3 months of 2014.
To paraphrase Sam Waterston: "What can you buy for $2 billion that you can't still buy for $1.2 billion?"
Instead, why not change the law (if needed) to prevent monopolies from happening?
With last-mile internet, if you lay in a redundant competitive network in a neighborhood - the capital efficiency of both networks goes down, with no mechanism to make that capital work more. You're limited to the houses in the neighborhood. So in that case you have high cost barriers, and natural monopoly conditions limiting how well that capital can be used to generate return...
Not so much -
http://en.wikipedia.org/wiki/Vertical_integration#Oil_indust...
You can probably observe some region-locking effects short of monopoly by relate the cost of gas in come areas with ability to choose alternatives. e.g. Driving in the middle of nowhere, there are few gas stations and the cost of gas is high. Redundant stations aren't built in competition to one another along those stretches because the volume of traffic isn't high enough along the 'network' of the road, but within the range of the typical car, some will drive on and others will be forced the stop. So even that isn't as airtight a natural monopoly as last-mile internet.
The problem isn't that the government should prop-up start ups in this specific industry to prevent a monopoly, but that the government should embrace communications as a regional monopoly - i.e. own the utility infrastructure and reduce costs for the entire economy.
Obviously they can't nationalize the current companies, but they can start building public infrastructure.
ksk's comments were not out of place.
Those for-profit companies have been granted extremely valuable rights-of-way by the municipal governments without needing to negotiate individually with each and every landowner whose property they cross with their lines. Their networks wouldn't be nearly as valuable if they had to negotiate and potentially (gasp!) share revenue with landowners.
Regardless, this issue is a municipal government's decision-making. If a municipal government doesn't like how their ISPs are acting, they should be able to do something about it. There's no reason for it to be _illegal_, even if it is a bad idea in some places: the local government should be able to do what they think is best for them.
Also, if ISP's have so little trouble making obscene profits, there should be little risk of the government failing to do the same.
But much of the technology and infrastructure the ISPs use today was once built by tax-payer money.