Want 50Mbps Internet in your town? Threaten to roll out your own
arstechnica.com
arstechnica.com
Part one is connecting fiber to every house back to some centralized switching station. This part can, and should, be financed and regulated by government in much the same way power lines are.
Part two is what happens at the switching stations -- who controls the service and bandwidth to the homes. This part should be as free and open as possible, and each home should have at least three available services competing for its business.
We seem to lump all of these problems together when we talk about the problem of internet connectivity. I don't know why. Maybe it's just easier that way. But it obfuscates certain parts of the discussion.
For instance, in this story things got very interesting once two suppliers were competing to connect fiber. Why? Because whoever connected the fiber would run the service, ie, have the business. It shows that as things stand, you physically have to be willing and able to take the fiber right into the house to make the current monopolistic providers increase their service.
So we're stuck, until new technology is rolled out that hasn't been denoted to one company.
The best way to manage this problem would be to say that: 1. The individual owns the line from their house to the street (it is managed by their provider). 2. Any provider can run cables on the street (they must share access to telephone polls etc since they get a right of way from the government they must share.
The key is to always keep things free and competitive and not have bureaucrats making deals that hurt everyone in the long run.
The "bureaucrats making deals that hurt everyone" is a strawman. Why would anyone do something that hurts everyone? Underneith the surface there is a non-obvious reason for a lot of policies but when viewed on a macro scale make a lot of sense. I feel like a lot of anti-government arguements boil down to "I set the limits on the economic value of a government action solely on what it does to my direct taxation and fees", rather than looking at the whole picture. As a programmer is it better to pay a bit more for internet but have a larger market to sell to, or pay slightly less for internet but have significantly fewer customers?
The question becomes - how best can we provide the internet connection people demand in this country for the least amount of money? Somehow running fiber twice in one town and not at all in another doesn't seem like the best position. I think the solution is to make the system completely free market and competitive in a lot of areas where it works, and completely government subsidized areas where the market fails. Half and half in a patchwork fashion across the country is probably the least inefficient method that could possible be derived, yet that is what we have.
Some examples: 1. Burning crops while people starved during the great depression. 2. Printing tons of money, devaluing the currency. 3. Current Cable Monopolies. 4. Software Patents 5. Never ending copyrights 6. The war on drugs 7. Prohibition 8. All sorts of developing countries that take on massive debt. 9. Paying farmers not to produce 10. Minimum wage laws 11. Maximum hour laws (can only work 35 hours a week)
Just to name a few.
I understand the concept of network effects, but you have to remember to look at what else that money could be spent on -- that is what is truly hard. By subsidizing rural/suburban living we encourage it and thus people waste more time commuting, wasting fuel, increasing traffic, requiring more subsidies (larger roads) and so on.
People need to understand that the market is the worlds most powerful information system -- it instantly conveys the wants/desires/needs of every individual in the world.
Interesting that you would pivot from a pro-market position into a social engineering one. Those two usually don't go together.
Look I've paid for the T-1 line to be ran 200 miles so I could have high-speed internet -- and I did this back when you could count the number of T-1s in my area on both hands. So I don't mind only having those who can afford it pay for it.
But I also understand that this country is huge, and spread out. And I don't want to encourage people to live anywhere. If you asked my druthers, I'd want them staying at home in rural America, on fiber, and living more of the agrarian life that the urban one. But that's not the point.
The point is that the community as a whole has a vested interest in infrastructure: roads, power lines, and communication. It's the same argument as national defense: government does really badly at some things, but there are some things that it's the only effective player to pool resources and common interests. That's not a license for socialism, that's just saying that a piece of wire to every home -- phone, power, or internet -- is a political issue much like how many aircraft carriers we need. If we left it up to individuals to decide the response wouldn't be uniform enough, and uniformity is the one requirement that these attributes need to have.
Communication and electric power aren't like pork bellies and automobiles -- they are extensions of our powers as individuals: our power to innovate, collaborate, discover, and create. Hell, it's more like gun ownership than buying pork-chops at the supermarket. They are a hell of a lot more critical than health care or consumer protection.
I'm absolutely for a maximized free market. But the argument here is that limited communication abilities reduces information in the market, stifles innovation, and limits choices. That's why I chose the greater freedom of universal high-speed connectivity -- not as a government bureaucracy, but as government defining the markets so that all the players meet all the needs.
1. All interventions in the market are social engineering, it may not be intentional, but subsidizing/taxing certain behaviors encourages/discourages them.
2. I'm all for getting fiber to every door step. I'm just disagreeing with the approach. There is no reason that individuals couldn't form a co-op, or some other nonprofit, or even for profit company together to provide their internet.
3. I'm going to disagree with the national defense thing on two points. A. The government's sole purpose is defend your rights, national defense is defending your rights from foreign enemies. B. The government has a monopoly on force (except for certain self-defensive purposes).
The community has a vested interest in infrastructure, but if you actually look at what goes on with it is ridiculous. The mass pike was supposed to have tolls removed years ago, but through all sorts tricks they manage to keep the tolls. The big dig, also in boston, cost Billions of dollars for a tiny tunnel.
So my final points: 1. Without competition and voluntary interaction we don't actually know what the value of something is -- high speed is important to some, while for others 56k is enough for them. 2. For almost anything people propose the government should do, a private nonprofit could be created to carry out the same task. 3. Organizations and nonprofits are more driven by results than politicsl they don't want to merely show that they're taking action. 4. Nonprofits/Foundations deal with many critical issues that most people don't realize/know about. For example, the Ford Foundation with regards to Russian studies & American foreign policy/defense. 5. It is very hard to compete against the government since they don't have to make a profit, can alter rules to their advantage, and lastly they don't pay taxes :)
I think I addressed your points above.
As for government protecting rights -- right on. But this gets to whether you view connectivity as an arbitrary service or product or something else. I think the problem we have is that the old metaphors are not descriptive enough. Access to the computer, the internet, and the electric grid are extensions of my person, not external entities. Of course the amount that I have of these things are dependent on my actions, but access to them should not be.
That's not an argument in favor of the government regulating or providing anything, btw. the market can and should provide value based on need -- once I have free and open access.
Computers and connectivity are extensions of our brains, and should not be controlled, even passively, by government. By ensuring connectivity and processing ability, the government is actually getting out of the way of citizens performing their daily lives, not intruding in on them.
We see the same "bad metaphor" problem with Digital Rights Management. If you view the computer as some sort of super record player that folks plays songs on, then perhaps the government has a say in what happens there? (because it is somewhat of a performance) But if you view computers as an extension to people's brains, as they surely are becoming, then controlling what goes on seems silly at best and evil at worst.
This is untrue. I'm not sure which "government" you are referring to.
In most parts of the US, an MSO negotiates with a community government to install and maintain a cable TV service. These contracts are generally NOT exclusive, or are not exclusive for a long period of time.
However, in most areas where the population density is low to moderate, there is not enough market base to support two MSO's in the same area. So while you may think there is an exclusive arrangement, there often is not. In fact, many cities want to lure in more operators to give the citizens better choices and encourage competitive pricing.
I've been personally involved in this sitting on the telecommunications board in previous city ~8 years ago. We had an agreement with Charter, and wanted to get another cable company into the city, but couldn't make it worth their while in any realistic manner.
I paid for the connection to the house from the street (US$2k). The fibre in the street is owned and operated by the municipality/local government. They also own the local multi-gigabit ring and provide redundant connections to the rest of the net.
Then we have four different ISPs offering IP on this fibre at reasonable prices for "home use":
0.5 mbps @ $10/month, 10 mbps @ $23-28/month, 100 mbps @ $33-36/month. Un-metered.
They also offer commercial contracts. I am paying under $100/month for 10 mbps. You can also get VOIP from the same operators and cable TV over the fibre from four different operators.
I currently have 1x 10 mbps for the company, 1x 100 mpbs for everything else + TV and VOIP. A bunch of fixed IP addresses and capacity to add several more connections in the fibre modem.
I know this is not exactly a rural town, but having the local municipality build the IP infrastructure and let companies sell their services on it has been a great success. The local municipality also owns and operates the local roads, water and sewage system, district heating, waste, as well as the local electricity grid. I can choose who to buy IP and electricity from, but water, district heating and sewage has only one supplier.
Works well for us.
Such as for the house I am at right now, a well was dug for water a septic tank was dug for sewage power lines and phone lines were extended (most likely from nearby overhead lines) when the house was built. The problem is that fiber is not extended through overhead lines but dug in, and in a place where satellite is the only option I bet would be extremely expensive depending on how far apart houses are spread apart.
I lucked out that low quality dsl was available I don't think I could handle a sat connection.
Internet really needs to become a public utility operated by the city/state on cost, rather than to line the pockets of greedy corporations...
> Internet really needs to become a public utility
> operated by the city/state on cost, rather than
> to line the pockets of greedy corporations...
Under Capitalism, shouldn't people simply choose another supplier when your ISP does stupid things?
Up here in Burlington VT there is about to be some heads rolling on how the gov handled the gov run phone/internet company.
I can't even imagine what 50MB must be like. The fastest connection I can get here in Georgia is 1.5MB ADSL that costs $35/month (plus phone service, no naked DSL offered) and stops working every time it rains.
If this wasn't the case, you'd have a dozen pairs of copper phone wires and as many cable TV coax lines running into your house, all by different companies -- those industries have existed for far longer than the Internet has, and have traditionally been ridiculously profitable. That you don't have more than one telephone line and one cable line is a strong indication that last-mile infrastructure is a natural monopoly. Whoever gets to your house first basically owns you.
It is. It's an all too common knee-jerk reaction in well-off western societies that when something doesn't go exactly your way, call for politicians to fix it with force. And politicians are all to happy to oblige.
In Britain, back in the early 80s when British Telecom was operated on cost, and not lining the pockets of greedy corporations, it would take weeks or even months to have a single phone line installed.
Arguing that all (or the great majority of) public organizations are wildly inefficient on the basis of i) philosophy, and ii) examples, is like arguing that all (or the vast majority) of governments are dictatorships because back in the 80's, Romania was one.
The argument fails to incorporate some very basic and well understood market mechanism. A company whose products consumers are forced to buy (either because they are subsidised or because they have a government-enforced monopoly) are less inclined to invest and take risks in development. Why take a risk when people are already buying what you have today and can't go anywhere?
Another factor is political interference and the ensuing ICan'tBelieveItsNotCorruption. What happens when the pipes clog up before there's budget for increasing bandwidth because more people than expected are downloading and seeding torrents? Is the memo that says that it's mostly porn and piracy anyway, and we can just block the ports going to be ignored over pumping money in new bandwidth? To help people get porn? Protect the children, save money and get re-elected -- all in one firewall.
Yes, absolutely, a government run business can be more efficiently than a private one, and sometimes if can get some infrastructure in place where it simply isn't practical for for private actors to work. But it's never because they don't have to make money for their owners.
People in big cities usually have a choice of ISPs, but in rural towns, often there is only one "high-speed" ISP. It's kinda a sad state of affairs. I've recently gained a very interesting view, as I'm currently living in Japan. I'm American born though.
And the solution of course is not to have the state run it. It's to introduce competition.
Yes - but nowhere it's stated that the choice must be between immediately comparable services.
The alternative choice they have is to go build their own ISP. But, such a venture is difficult, expensive and risky, and thus wasn't deemed a better option than sticking with the current offering. Until the municipality came around and forced the citizens to undertake the venture.
How does anyone benefit by having two or three equally-slow internet connections into their house (say over copper phone wires, coax, and BPL), rather than having one much faster connection (fiber)? All the money spent duplicating parallel infrastructure could potentially be spent making a single more robust network, one that gets upgraded more frequently.
It doesn't make much sense to force each would-be ISP to drag lines out to their potential customers' houses; once customers have a connection, a second one is just waste (unless there's some way to use both at once, but there generally isn't and most people couldn't afford to anyway due to the way they'd be priced -- each ISP has to recoup the cost of its own infrastructure).
The better way, and the way that actually fosters more competition where it counts, is to have a good, shared, high-speed infrastructure that all providers can operate on and which is made available to all on non-exclusive and non-discriminatory terms.
I think the proper vehicle for these sorts of things are public-private partnerships, similar to the way that transportation projects have been handled for years. (Ex. both the Erie Canal and the NY State Thruway were done by public/private partnerships, called "Authorities" in NY state parlance.) This provides a degree of isolation between the day-to-day management of the infrastructure and the machinations of the political process, and also discourages wasting of taxpayer funds, or raiding of infrastructure funds for other projects. The state might support a project via bond guarantees, but could reasonably expect it to stand on its own (and operate as a non-profit) from then on.
That strikes me as a compromise solution which is likely to produce the most competition where it actually benefits users.
Does that make it bad?
> Isn't the system you currently have simply Capitalism in action?
Does that make it good?
Nowhere else have I come across people who dismiss ideas by saying - Oh, that's Socialism - and seem to think that that's enough.
Game Theory says that mixed strategies are almost always (in the technical sense) the best, so the instant dismissal of ideas simply being they have a flavor of socialism seems stupid, and yet it seems that it's the instant reaction of many, many people in the USA.
I could be wrong, it might not be the case, and it's interesting to see that the perception from outside the USA might be wrong.
You're right about the loudmouths here, but it'd be a mistake to let your sense of public sentiment be overly colored just by volume.
Calling something socialism here is a pretty good debate hack, like calling someone racist or anti-semitic or whatnot; it's enough of a social taboo that the so-accused will usually feel compelled to defend themselves against it, thereby derailing the original course of discussion...this is a good strategy for winning unrefereed debates.
No, it's all paid for by the government. That, my friend, is Socialism. And it's a good thing.
(Actually, it's a bad thing; if people had to pay the full cost of using the road network, it would be a lot easier to get people to take public transportation. But I am just saying it's clear that Americans have nothing against Free Stuff From The Government, even if that Free Stuff is paid for with tax dollars.)
The fact that the roads are owned by state and local governments does not inherently make them socialist.
This is true, but only because most of the people decrying "socialism" don't understand that many of the things they support are also socialist. Both the right and the left are already fairly socialist in the US; Norman Thomas, who ran for US President on the Socialist Party ticket a bunch of times in the early 20th Century, was asked why he wasn't running again at one point and replied that the Republicans had embraced all his major platform points, and the Democrats were already beyond that, so he'd accomplished much of what he'd set out to do. I can't find this in a minute of googling, so maybe it's apocryphal.
In any case, socialists on the right were discredited effectively everywhere by WWII, and in the US, socialists on the left were discredited by the collapse of the Soviet Union around 1990 and/or the (perceived?) near-collapse of Britain in the 1970s.
Also, it is very hard to have a mixed plan because eventually one will exploit the other. Game theory is great and all, but most of the time I don't think it applies to multiple trials -- which is what the real world is.
The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.
This is certainly not Socialism, as the use of government to provide services that individuals and businesses cannot efficiently provide goes back thousands of years, well before Marx started writing.
Due to physical property issues, it needs public rights-of-way for deployment and maintenance. Also, fixed infrastructure costs are very high and only become cost effective with widespread buy-in and positive network externalities.
It makes no economic sense to build two or more parallel networks side-by-side, with each capturing only a fraction of the potential customers.
As a result, an unregulated telco in a natural monopoly has no competition and minimal market incentives to innovate and improve service. Consumers cannot "simply choose another supplier" because other suppliers wouldn't be crazy enough to sink the necessary huge capital investment into a competing service.
In general, the options to deal with this situation are:
* Public ownership and/or administration.
* Regulated monopoly with mandatory service quality benchmarks and profit reinvestment requirements.
* Introduce competition by forcing telcos to offer wholesale service to resellers.
* Introduce competition through public investment in parallel facilities.
* Introduce competition by allowing network service providers to leverage their networks to offer different services (e.g. cablecos offering telephony, telcos offering streaming video).
If companies (private or state owned) are making huge profits at the cost of tax-payers money, then capitalism or socialism doesn't make any differences...
Instead of turning to the government to provide the service (which will result in a sub-par service with no chance of recovery) we should look to innovate and wield new technologies to overcome the barriers and give the greedy corporations a run for their money.
Competition is the answer, not government intervention.
What do you have against lining the pockets of greedy corporations? If there was no profit in it for them they wouldn't be doing it at all and you'd have no internet connection - or almost anything else.
Using 'greedy' as an insult to corporations is like using buoyant as an insult to ships.
I am strongly disagreeing with the grandparent post's sentiment that the ISP should be closed down for being "greedy" and "lining it's pockets".
Being surprised when a company maximizes profits is like being surprised that water runs downhill.
If we want them to invest in infrastructure rather than pay out dividends, we should figure out a way to make the infrastructure investment be the profitable (i.e. greedy) choice. Which is sort of the point of the article; by introducing competition that threatened to take away the incumbent ISP's business, they were forced to invest in infrastructure that they otherwise wouldn't have built.
It's a waste of breath to use loaded, emotional words in reference to big companies; they are the closest thing that exists in the economy to perfectly rational actors. If we, as a society, don't like the outcomes they're producing, the solution is to modify the competitive landscape so that the desirable outcomes are produced, not rail against the companies themselves as if they ought to care about things besides profit.
That's where our collective ire ought to be concentrated. Whenever someone starts railing about the evils of corporations, it's generally a (conscious or unconscious) distraction from the true culprits: regulators or overseers who aren't doing their job.
That's great, until your city decides to start filtering/adding caps/blocking your favorite protocol/etc, and then you don't have any other choices.
I wouldn't mind cities becoming ISPs if people vote for it, but they shouldn't become the only providers.
You clearly don't have much experience with govt.
> The local power station, for instance, can't say that you're only allowed to charge your cellphone during off-peak hours, or that you have to pay extra for every kWh used by your bigscreen TV.
CA does it the other way - they ban devices with certain energy characteristics.
And even if things are good now, do you trust that things will stay that way in the long-run? Better to have more than on choice...
The place it normally gets interesting with this approach is where exactly do you put the demark, especially in the FTTN world. Since you are going to most likely want the public utility to own the DSLAMs in areas with low/medium (eg, suburbs) population density, because the area covered by a cabinet is so small (because technologies like VDSL2+ have such a small optimal zone) and rack space in cabinets is normally at a high premium.
You are also going to most likely want the public utility to own the fibre backhaul from the cabinets to a central exchange. Because of port density constraints and the fact that the DSLAM is probably going to need to be managed by the public utility to stop access seekers doing silly things that affect other access seekers customers.
Now the public utility is also going to need some Ethernet switches to split this out to the various access seekers. Then you have issues of regional backhaul etc...
The issues are different again with the PON (Passive optical networks) family of technologies, but you can pretty much swap DSLAM for POLT, though the customer densities change the economics a bit.
With ISPs handling regional level aggregation and backhaul would probably be the optimal level in my mind at this point in time. But it is becoming interesting what the ISPs role really is anymore, once you take such a large amount of the infrastructure management off their hands. Since it would seem to be in between a traditional consumer ISP and an ISP that purely does transit.
Is it really that expensive to string cable? Fiber was laid like crazy all over the country in the late 90s, just not for the last mile. The "last mile" cost is probably all in dealing with the government to get permits and such. In which case government is the problem. They just need to make it easier to build.
Because of that, the physical connection should be provided and managed by the government, or a designated government run corporation as a non-profit. The service carried on the hardware should be serviced by private companies with equal access to the hardware.
http://www.shrewsbury-ma.gov/egov/docs/1231423976788.htm
That's a perfect example. Town owned and operated and it offers service up to 10Mbps for $50. More expensive and slower than the internet offered in many surrounding places. Oh, and they have a monthly data transfer cap that makes Comcast look good. At $40, you only get 75GB of transfer.
I think it's wonderful if municipalities want to try and roll their own competitors to commercial cable/phone/internet companies. However, it isn't all roses. It's expensive to build and operate and you need to get enough capacity to the internet to serve everyone's speeds.
The threat might have been better than actually building it.
<rant topic="speakeasy">
It turned out to be terrible, but our contract locked us in for a year... and we moved to a new town in 10 months.
Free markets are great, contracts are fine, but in our situation, we simply didn't have any competitive options to choose from. Also, the assumption of "perfect knowledge of the marketplace" was violated because we didn't know how severely non-premium the service would be.
Speakeasy happens to be the worst ISP I have dealt with -- ever. Their support were competent, but customer service was terrible. They had a system-wide outage during the US Inauguration ceremony. Their prices, as I already mentioned, were very high, but we agreed to the contract under the assumption that we were paying for premium service.
In contrast, I can't say enough good about sonic.net, which is a California Bay Area ISP. I'm currently very satisfied with Teksavvy, who are an Ontario ISP.
Speakeasy, though... Avoid them. It's the free market in action. If you're in MA, and specifically in the Boston area, be aware...
</rant>
Somebody in Shrewsbury probably thinks the services and price structure they're offering is reasonable, but that "somebody" probably doesn't have the knowledge of the market or interest in making the ISP a success that an entrepreneur would.
As I said in another comment, there are good arguments in favor of publicly-maintained roads, as an alternative to having multiple parallel toll roads, all poorly maintained; but there are also good arguments why the government doesn't own all the vehicles or operate all the services that run on top of those roads. A government-run trucking company would likely be rather unpleasant to do business with.