Comment by DanielBMarkham | Hacker News Reader

Comment by DanielBMarkham | Hacker News Reader

Speaking as somebody on satellite, and not happy about it, there are two parts to this problem.

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.

Where I live we have it much like you describe it. I live in a suburb of Stockholm, Sweden.

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.

That is very interesting, it probably works well for communities where minimal investment is needed (your 2000 US) but in many more rural towns it just falls under.

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.

It works well until something goes wrong and each claim it is the other's problem.

For the four years I have had this setup I haven't had them blame each other. Not that it has worked flawlessly mind you.

I cannot disagree more with you. Why do most people only have one choice of cable provider? Because the government gave the cable providers local monopolies.

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.

That works in valueable markets that are cheap to build up infrastructure - almost everyone in the suburbs of large cities have a choice of DSL vs Cable at least. But it doesn't work in cities where there simply is not the room to let people run cable at will (in NYC it is BRUTAL to get internet installed even something like commercial ADSL or T1 lines are a bitch because of the massive amount of underground infrastructure already). And it doesn't work in areas where it is less profitable becuase the area is more rural. So the government is basically making it more expensive for people in the suburbs to support those in the rural areas so that the economy as a whole is more efficient since everyone will have better access to the internet.

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.

Often political decisions are driven by short term concerns with no real idea about the long term consequences and there is no way for an individual to opt out. If a company makes a bad deal, they will eventually go out of business or renegotiate the deal (the other party doesn't want them to go out of business). There is no such constraint on the government, you can see this in all sorts of decisions.

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.

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.

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.

I'm enjoying this conversation/debate :) Feel free to email me, if the reply delays get too long.

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.

I think you're making a case against government intervention in the market, and my argument is that government has a role in defining the market. It's a different concept.

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.

You're making a very common mistake here. If the barrier to entry in a new market is prohibitively expensive then there is no free market, just a de facto monopoly. By having the local government own the infrastructure and then lease the lines to ISPs who provide actual service, you get competitive rates in service while anyone and everyone can use the common lines.

I think there might be a slight miscommunication on time scales. I don't believe that any monopoly, except those granted by the government, can maintain its status as a monopoly forever. I believe that in 10 - 15 years the monopoly will lose its grip on the market. It may still be a major player, but it won't be calling the shots. So there is a barrier to entry, eventually someone will enter the market; unless of course the monopoly is losing money or was subsidized by some other entity in which case those using it are getting a good deal -- it cost more than they spent.

* Because the government gave the cable providers local monopolies.*

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.

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