Why American Phone, Cable and Internet Bills are so High

http://finance.yahoo.com/blogs/daily-ticker/why-phone-cable-internet-bills-cost-much-130914030.html

by bretpiatt • 14 years ago

244 254 14 years ago

finance.yahoo.com

mtgx• 14 years ago

I pay $20 for triple pay, with 100 Mbps Internet.

edkennedy• 14 years ago

Your location would be relevant here.

muhfuhkuh• 14 years ago

Not in the US, I'm assuming.

My "triple play" in NC, US was $140, that's with 6Mbps internet (at the time), HD digital cable with no premium channels, and digital phone with unlimited calling in US and Canada.

I "downgraded" to 30Mbit Internet. Added Netflix and Amazon Prime for TV and Vonage for phone, saving $50/mo. in the process. I still feel gypped.

grumps• 14 years ago

Yea, I'd like to know where you live. I'm paying 75 for 50 Mbps and basic cable

drbawb2• 14 years ago

Not 50Mbps/50Mbps I take it. What's you're upload speed and ISP?

I have TWC in the midwestern US; $65 (up from $50 after the introductory offer lapsed) for 35Mbps/5Mbps.

I don't even want faster speeds than that; I just want something resembling symmetrical. I'd be perfectly happy with 15Mbps/15Mbps.

I'm waiting for an ISP to offer "x Mbps" and an unlocked modem that lets you divvy up your bandwidth however you want.

Hell. I'm waiting for an ISP to offer an unlocked modem.

LVB• 14 years ago

I'm assuming you have 6 roommates.

aleyan2• 14 years ago

The article doesn't really answer why the services cost so much. The higher fees aren't going to the margins of the telecoms. Verizon has a revenues of $39.14 per share and earnings of $2.31 per share for the past year.

bretpiatt• 14 years ago

I show $2.89 in earnings for CY2011 and $2.00 in dividends paid for a total of $4.89 on $38.57 in revenue per share, dividends + earnings = 12.6% revenue. That is very high for a mature company in a competitive market. I'll use WalMart as an example -- $132.91 revenue per share, $1.53 in dividends, and $4.74 in EPS for 4.7% of revenue.

lrem• 14 years ago

12% is high but, if I recall correctly, French telcos are way above that. Some news report from a year ago claimed something about 30%, but I don't remember if it was average or one of the trio. This was about the time the trio lost the fight to prevent government from allowing a fourth competitor to enter the market.

wtvanhest2• 14 years ago

Dividends are paid out of earnings so adding dividends to earnings is not an accurate way to understand a company's finances.

Revenues last year were $110,875.

Earnings (profit after expenses including depreciation): $2,404

Profit margin was 2.16% for 2011.

Walmart did about 3.5% for 2011.

Aleyan has a very valid question which is much more interesting than the original story. I would love to hear some people's opinions on why it is so expensive to provide highspeed internet.

nacker• 14 years ago

"The article doesn't really answer why the services cost so much."

The video ends with the author explaining that it is due to a cartel of 5 or 6 companies getting together to fix prices with "non-compete" agreements. Where is the government? In bed with them. There is your answer.

aleyan2• 14 years ago

Doesn't explain then what the telecoms are doing with their alleged ill begotten gains. Burning benjamins in their furnaces? They are certainly not making out-sized returns for the shareholders.

btilly• 14 years ago

Don't autoplay the frigging video! (Maybe some editor can modify the title to warn us?)

I hate sites that start playing video without my asking. Doubly so ones with loud noise. I have sound on my computer for things that really need to get my attention. Not because some site wants to interrupt me and everyone around me.

I wish there was a way to vote this link down so that other people who will be similarly jarred wouldn't have to experience it.

srathi• 14 years ago

A humble suggestion: use Flashblock extension. It is also effective against flash based ads.

shmerl8• 14 years ago

If you use Firefox, you can set plugins.click_to_play to true in about:config. Of course it won't help for HTML5 content which starts playing automatically, but it can improve performance with making Flash playable only on demand.

pdenya• 14 years ago

Chrome has click to play plugins as well, it's hugely improved my browsing even on wifi.

darkstalker• 14 years ago

On firefox you can set click to play (about:config -> plugins.click_to_play)

mauriciob2• 14 years ago

On Chrome, go here: chrome://chrome/settings/content

Then on Plugins, select 'Click to play'.

dfxm12• 14 years ago

I have sound on my computer for things that really need to get my attention. Not because some site wants to interrupt me and everyone around me.

Why do you expect websites to conform to your expectations? There is nothing inherent about the web that suggests it would. You'll save yourself a lot of trouble by being proactive rather than waiting for the world to catch up to your standards.

manys• 14 years ago

The social contract holds that you don't start yelling at people just because they walk up to you. It's user-hostile web design.

laserDinosaur• 14 years ago

"Why do you expect websites to conform to your expectations?"

You mean the user of the website? Well yes I would darn hope they would!

nsns• 14 years ago

There's Flashblock and other addons for that.

ctdonath• 14 years ago

Does nobody notice the irony of a discussion of capped data plans centering on a website which autoplays video?

swang• 14 years ago

I don't think that is irony.

zwieback2• 14 years ago

I've read this same article for the past 10 years now and every time I ask the question: what about fees and taxes Europeans pay apart from their bill? The US system is horrible but I think for a complete picture it would be good to know exactly what taxes and fees pay for the infrastructure in other countries.

As a kid in Germany every household with a radio or TV had to pay a fee to operate those devices and there was a constant barrage of ads reminding new households to register and pay up. I'm assuming there are also other taxes that flow into building communications networks in Europe.

mmanfrin• 14 years ago

A similar thing happens with the discussion about gas prices, except the schema is reversed. In Europe, infrastructure fees are paid at the pump. In the US, a lot of our income taxes go to paying for those road fees and maintenance.

nowarninglabel2• 14 years ago

I was a bit skeptical that road costs took a lot of our income taxes, so I looked it up. It was, at least, more than I thought it'd be. The U.S. will spend $65.3 billion of income tax payments on ground transportation costs in fiscal 2012, at least half of which is on highway costs.

gxs• 14 years ago

Not trolling here, genuinely curious:

I thought that our 19 cents/gallon tax on gasoline is what is used for road repairs etc. Is this not the case?

colomon2• 14 years ago

I think pricing for a lot of things has a large component of historical pricing in it.

My favorite example: the price of books in the US and Canada. Just grabbed a random recent hardcover off my shelves. It's labeled "USA $25.95 Canada $32.50". I believe that price differential got established back when the US dollar was worth $1.25 Canadian -- but it still exists, even though the two currencies are now roughly on par. It's the exact same product with what is effectively a 25% markup for Canadians for no good reason.

haugstrup• 14 years ago

You're comparing apples and oranges. The TV licenses are funding for the public broadcasters to provide programming. They do not go towards laying cables into people's home for cable tv reception and do not fund cell phone towers. It is quite irrelevant to bring into this issue.

In American terms: The TV license pays for PBS programming, it's not a subsidy for Comcast to lay cables.

zwieback2• 14 years ago

Thanks - did not know that.

jcampbell1• 14 years ago

How is that different, from the US system? We pay cable companies $80/month, and they pay $60 to content producers. Does it really matter that Downton Abbey is publicly (ITV) funded, and Breaking Bad is privately (FX) funded? The £145.50/year UK color TV licensing fee must be included when comparing costs.

malsme• 14 years ago

Not quite right. For the UK, £300 million of the licence fee budget (over the next couple of years) will pay for the roll out of high speed internet to rural communities. I doubt the BBC wanted to do it, but it looks like they'll be subsidising ISPs.

http://www.bbc.co.uk/ariel/19181454

X-Istence3• 14 years ago

No such fees and taxes on radio or TV in The Netherlands, income tax was raised a little when it was abolished, but income tax compared to the US is already higher due to the amount of social net that exists for the Dutch populace.

The amount of fees and the costs I pay in America versus what I would pay in The Netherlands is absolutely mind-boggling.

threedaymonk• 14 years ago

> The amount of fees and the costs I pay in America versus what I would pay in The Netherlands is absolutely mind-boggling.

Are you including health insurance? I'm pretty sure that I'm paying significantly less in taxes in the UK than I would be in the US with federal and state taxes plus health insurance.

Your employer might pay for health insurance, of course, but someone is paying.

yaantc• 14 years ago

Fees are already included in the given price. One example is $38 per month for triple play in France. This is actually 30 € all taxes included.

Kell• 14 years ago

Yes, but I think he's speaking about some other taxes, like the infamous (to french people) "redevance audiovisuelle". The ~120€ tax that you pay annually for owning a tv set. But actually, here in France, this tax only subsidize the French Movie Industry and the Public TV Channels (Fr2, Fr3, Fr4, FrO, Tv5, France24 etc.), not the broadband connection.

Still, the broadband connection is subsidized by the gov, so somewhere there are taxes being collected to pay for it. But does it justify the 4 fold price markup in the US ? I don't think so.

sigil• 14 years ago

What about fees and taxes Europeans pay apart from their bill?

I'd also like to see a fairer comparison here. If telecommunications infrastructure in these leading countries was subsidized by tax dollars, as the following article suggests they were, those payments should also be figured into the price of internet. These numbers are harder to get, but you're right that omitting them is disingenuous.

http://bits.blogs.nytimes.com/2009/03/12/the-broadband-gap-w...

hartez• 14 years ago

Can't watch the video right now, but the summary at the bottom mentions France and Bulgaria - does it bother to mention the geographic differences between the US and those countries? I feel like a broken record every time this discussion comes up, but no comparison is complete without addressing the differences in geographic distance and population density that US providers are dealing with.

argv_empty• 14 years ago

That would explain why rural areas are expensive, but that excuse doesn't really carry over to urban areas in the US (where it is also expensive).

dalke5• 14 years ago

Every analysis I've seen does compare geographical differences, and finds that that's not a major factor. If that was a big factor then you would expect that either 1) the US northeast is a hotspot of cheap high-speed internet, or 2) there are no regional providers and the national providers are required to have the same coverage for all their customers. This is not the case.

Why doesn't NYC have 100 MBit to the home, when Singapore (population 5 million) does, and can get it for US$50/month?

Looking now, Cablevision serves the New York tri-state area. Their fastest rate is $45/month for "50 Mbps for downloads and up to 8 Mbps for uploads." Comcast has a much larger range. They offer 50 Mbit for $115/month and 100 MBit for $200/month.

Telia is a Swedish ISP. They offer 100Mbit for $50/month and 100/100 for $60. That's for the cities. So we see that a Swedish ISP can provide higher bandwidth, for cheaper, than two of the ISPs in the biggest metro area in the US.

I then pulled up Telia's numbers for the town of Skurup, population 10,000 in the Swedish countryside. They are limited to 30Mbit, also for about $50/month.

The south of Sweden is densely packed, for Sweden, with 290 people/sq mi in the county. The country is 54/sq. mil. That's about the same density as Pennsylvania. Is it possible to get 100 megabit to your home in Pittsburgh? For under $100/month? Likely not. Why not, when it is possible in mid-sized Swedish cities?

scaphandre• 14 years ago

I pay around $10/month for phone line and around $10/month for unlimited 8mb adsl internet in the UK (annoyingly, I'm just out of fibre region where it would be faster).

I'm not aware of paying anything extra for fees, nor being forced ads.

keithpeter• 14 years ago

UK: The TV licence costs £145.50 per year. The bulk of this goes to the BBC to produce TV and radio programmes and to operate their network of transmitters. None of this money is going for Internet connectivity to homes so far as I am aware.

The 'local loop' to the home is provided by Openreach(BT) who have to make connections available to any company at an appropriate rate. There are also cable TV networks in many towns and cities.

http://www.superfast-openreach.co.uk/where-and-when/

My postcode says 'not currently in plans for rollout' so we are stuck on ADSL over copper for the foreseeable future.

antidoh• 14 years ago

OK, but we generally can't get foreign speeds at any price. It seems that other countries are getting something for what they pay, whether retail or by tax.

Tichy• 14 years ago

That fee in Germany is not a connection fee, though. It is used to finance national television and radio. I still don't like it, and it has some scammy aspects.

CWuestefeld4• 14 years ago

While I don't like paying a lot, and I wish my Internet service were faster, I think the article was sensationalist to the extreme, and remarkably light on facts.

The author hasn't provided any reason for us to believe that prices or services should be comparable between countries. First and foremost, prices are dictated by the value that people attach to a product. If Americans value, say, TV more, than economics would predict that Americans would therefore pay more for it.

And I think that the examples of telephone prices are cherry-picked based on structural differences, or just plain wrong. Communications rates have plummeted since then. I remember back in '84 people would say, "you've got a long-distance call from Xyz". Today, nobody cares if it's long distance.

In the late '80s, when my wife immigrated from China, she could only afford to talk to her parents every month or so, because the international phone rates cost several dollars per minute. Today she talks to her dad -- with video! -- on a whim, because it's free. And the price of telephone-quality audio is negligible (~$0.02/minute).

mikeash3• 14 years ago

Prices are only partially dictated by the value that people attach to a product. In a competitive market, prices are dictated heavily be the inherent underlying cost. When a lot of businesses compete with each other, prices get driven down regardless of how much people valeu the stuff, until they hit a point where they can't go down any further.

The real problem with US telecommunications is that the market is not really competitive. We have four national cell carriers who appear to be pretty big on collusion, and most places only have one or two options for high-speed home internet access.

CWuestefeld4• 14 years ago

In a competitive market, prices are dictated heavily be the inherent underlying cost.

This is false. The relationship between cost and price is weak.

At the expensive end, prestige brands push prices of goods to the stratosphere (think women's handbags).

At the cheap end, it's still quite common for prices to decline below cost. For example, consider cell phones or video game consoles, and of course the old standby example, razors. Each of these products is sold below production costs, but by using lock-in, the vendor can recover the loss through sales of proprietary goods later (monthly fees; licenses in game sales; razor blades, respectively).

hythloday• 14 years ago

If Americans value, say, TV more, than economics would predict that Americans would therefore pay more for it

And in a free market, the price signal that creates would incentivize other suppliers to start offering more, which would push the price down until it was roughly equal to the French rate. Why doesn't that step happen?

CWuestefeld4• 14 years ago

That's sorta true, but it's overly simplified. You're not considering price elasticity.

It would seem that the French are more sensitive to price changes than Americans. That is, as price increases in France, it's hitting a sharper decline in quantity demanded than would be observed in the American market.

I don't know what the actual numbers here are, just that this is micro-economic theory as I understand it.

But in any case, I disbelieve (at least in part) that telephone rates (I don't know about other services) are higher in the USA. I base this on my experience of having just bought two years of domestic service for well under $10/month, and with international calls being cheap to the point of negligible. Moreover, with skype and other services being free, the bottom falls out of any comparison.

Retric2• 14 years ago

Free Markets don't work like that. If you charge 100$ for a bottle of water and most people charge 2$ than you end up selling far fewer bottles of water. Only the fact that we don't have a free market for high speed internet has kept prices so high and service so low.

bencxr2• 14 years ago

I agree. Perhaps the "free market" effect is considerably weaker here perhaps due to the popularity of subsidized phone plans which lock in consumers and hide the real costs. To make matters worse, wireless service cannot be compared with price per mb alone, as there is also a bandwidth quality/coverage factor to look at.

Florin_Andrei• 14 years ago

A "free market" concept in it's pure-bred form does not and cannot exist. You either have some form of government control, or you get a monopoly/duopoly/plutocracy situation that skews things around. This is exactly what's happening now with telcos in the US.

Time to crack the whip and restore sanity in these markets. The telcos have become a law unto themselves.

emehrkay• 14 years ago

> Bandwidth is the new Black Gold

rjsamson2• 14 years ago

What I was hoping to see in this article but didn't (and maybe some HN folks have good ideas on this) is how do we fix it?

bicknergseng• 14 years ago

Sadly, I don't think "how do we fix it?" ever gets the responses it deserves at HN. I imagine it's because anyone with solutions is applying to YC with them. Still, I (and many others who have written blogs along the lines) would love to see HN comments sections filled with more solutions and constructive criticisms and less put downs or complaints for the sake of complaining. Now the question is, how do we fix that?

netfire• 14 years ago

The main problem seems to be the lack of competition due to restricted infrastructure. In a lot of areas in the US, you only have one company that provides service to the area you live in. In a situation like that, the provider has little motivation to improve the service. This needs to be recognized as monopolistic and the infrastructure needs to be opened up so that it can be used by other providers.

Luckily, there is some decent competition in the wireless internet space. As technology continues to improve there, more people will have access to decent internet speeds wirelessly and the wired infrastructure will feel pressure to catch up. Hopefully more options for unlimited data plans will also become available in the near future.

As far as the absurd amount TV providers are charging for HD TV, DVR services and the like. Technologies like Netflix, Hulu, Apple and others are providing more internet-based services that provide this type of On-demand service at a much more reasonable price. I hope more content will become available on these types of services as more people realize how much better of a user experience it is over watching normal network TV (even with DVR).

rjsamson2• 14 years ago

Yeah, I think more and better competition is the answer but I'm not sure what the best way is to get there. More regulation? Less? We do, for the most part, have pretty good baseline infrastructure in the US. The infrastructure part of the problem is the 'last mile' piece, but in my mind this is something that can be easily accomplished by new, locally based entities. I think that municipally owned broadband is a really interesting option - GreenLight in Wilson, NC has had some good success: http://www.wilsonnc.org/living/fiberopticnetwork/greenlighth... - but they have had to fight off lobbying efforts by TimeWarner Cable and others to make such municipally owned efforts illegal, and the legality of such services is still on a State by State basis.

So - I guess another question might be, how do we make Community owned broadband an attractive option across the country?

bduerst2• 14 years ago

Government owned infrastructure.

The most expensive part is the "last mile" or hooking individual buildings up to the grid. What I propose is that the Federal government build fiber to each and every public school and university.

From there, leave it up to the individual state, county, and city governments to see if they want to front the real cost, which is the last mile.

You could even make it like the New Deal and only hire chronic unemployed workers (unemployed >6 months) and train them to lay the fiber. These newly trained workers can then be hired by the local governments who choose to complete the last mile from the national backbone.

It would at least give the unemployed work, the schools access to information, and let the rest of us to decide whether or not to pay the real cost.

HNaTTY• 14 years ago

Anecdotally that is why my small town of <10,000 has two small businesses that offer 100mbps fiber in town and wireless (at ~DSL speeds) out of town.

In the '90s, Iowa put down* fiber that runs right through our town, and these companies were able to tap in and offer it, first to businesses and in a central area, and then later to any homeowner that wants it, thanks to a grant to offset the cost of installation (but only if they offered service to the entire town, probably less than 20 square miles). I pay $70/mo including a local phone number and the money stays local.

* http://en.wikipedia.org/wiki/Iowa_Communications_Network

randomdata2• 14 years ago

Nearly 100 years ago the citizens of my rural locality built a co-operative telephone company. The organization still remains owned by the customers and, as such, have to act to the interests of those customers.

The result is that the entire service area – which consists of mostly farms, and some small town areas – have had DSL connections for more than a decade and they have been working to roll out fibre to those locations for the past few years.

If the citizens are going to pool their money to build infrastructure anyway, what advantage does the government model bring over the co-operative model?

talmand5• 14 years ago

I sadly feel the only way it can be fixed is via government solution. But it has be done on the federal level because a great deal of the issues we have with the current system is due to government on the local level. The system as it is in place right now is highly favorable to the providers which was rubber stamped by local governments in many places.

The US is a big country but it's not the problem of sprawl/distance/density or any of that stuff. The problem is that the US is essentially made up of fifty states that each have their own laws and regulations. Even then these states are broken up into counties (or equivalents) that may also have their own laws and regulations. Now toss in there the different deals and contracts that the different companies have with each of these entities. There's a reason why one neighborhood only has provider A while the next neighborhood down only has provider B.

Granted, there are things like this on the federal level too.

At some point it'll probably take an act of Congress to get the courage to say that the current system is not acceptable and detrimental to the country's future. What will probably have to be done is some kind of mass movement to convert the system to some form of municipal-based service similar to electricity and water in most areas. But even that system doesn't work out well for everybody.

nasmorn2• 14 years ago

I am sorry but the sole problem here is that the US administration has bought the cable and phone companies line that mergers are necessary and that they need to increase the bills to lay more fiber. In the same time in Europe we had massive government mandated unbundling of the last mile so all the companies actually layed fiber because service quality was the main differentiator. I mean who wants to compete on price in a competitive market.

nckbz• 14 years ago

The saddest part about this, for us in Canada, is that when we see any American advertised cell phone or internet deals our natural response is "Damn, those Americans got it good over there." I pay around 90 a month for 200 minutes and 4gb of data with unlimited texting under Rogers. Canadian plans are a joke. Seeing this article with a $38.00 plan for phone, internet, and TV is just completely unfathomable for me. :P

bryanlarsen• 14 years ago

Mobilicity and/or Wind Mobile not available in your city? $45 a month for "unlimited" data, NA voice and global text.

Of course in a few years the big three will purchase them ala Fido and PCS and it will back to the status quo, but in the meantime I am enjoying sane cell phone rates.

dholowiski3• 14 years ago

I haven't checked mobilcity, but Wind Mobile is only available in a few cities (and not very far outside of the cities) over here in western canada.

cdelahousse• 14 years ago

Just remember that Wind and Moblicity are on a different network than Rogers, Telus, Fido and Bell.

My experience with Wind is that the reception is my city (Ottawa) is terrible at best. I'm considering switching to Moblicity.

nasmorn2• 14 years ago

I can get 1000 minutes 1000 texts and 1gb for 7.50€ in Austria with each additional gb costing 5€. This is without a phone of course.

ben1040• 14 years ago

Don't the Canadian carriers also require 3-year contracts on subsidized phones?

run4yourlives• 14 years ago

Most of the time, yes. Unless you want to triple the monthly fee.

krenoten• 14 years ago

I've been horrified by my experience after moving to NYC. I have been unable to find any providers that offer upstream of > 5 Mbps, and my current provider, time warner, supplies a locked down cable modem that doesn't allow me to port forward anything. Apparently I can trick it into giving me access to a control panel by resetting it with the cable unplugged, but I've been unable to access the internet after trying to put the damned thing into bridge mode.

I would pay double or triple what I used to pay verizon for 25/25 symmetrical service before moving to NYC. Does anyone know of a provider that can offer something like this for less than $150/mo in NYC??? I'm considering getting a VPS just to tunnel to so I can access my home services at a steady domain...

drbawb2• 14 years ago

A possibly cheaper option would be to get an unlocked cable modem that is compatible with their service.

In my area anyways, I can go to my TWC "PayXPress" portal (e.g: your online billing control panel) and on their support page they list links for compatible hardware.

Another suggestion: instead of bridge mode, look for an option called "RG Passthrough" or "Gateway Passthrough" or even just "RG enable"... then get your own router and wire the router's WAN port to the 1st ethernet port on your cable modem.

My motorola surfboard SBG-6850 has this option; and it works while bridge mode fails. I only use it because they want $5/mo to enable wireless on my cable modem. That's right, they want $5/mo to enable some hardware I already have.

montecarl• 14 years ago

I remember a time when MODEMs were just that and nothing else. I would be miserable if my ISP forced a router and wireless access point on me. Cheap routers that have to be reset once a week shouldn't be forced on anyone.

My $50 Linksys WRT54GL goes years between resets and then it is only because I am moving.

durkadurkadurka• 14 years ago

im in the same fucked up situation as you in NYC with time warner. there's other isp's on my block and rcn said they would wire the building for free, but clarke mgmt sucks balls and said no. were you able to find a modem that worked on their networks?

seiji3• 14 years ago

Report from the field: On Friday I walked into a cell phone shop and told them I wanted a SIM mainly for data. They suggested a prepaid "all you can eat data" SIM good for one month (realistically it alerts at 15 GB usage). €20 ($26 USD). The €20 goes towards pay-per-minute and pay-per-text usage, but who calls or uses non-iMessage these days?

Back home, my Verizon bill will be $120 every month with one iPhone 5 and one LTE iPad sharing the same data plan (breakdown: $40 for iPhone 5, $10 for iPad, $70 for unlimited talk/text + 4GB shared data (or, replace $70 with $100 for 10 shared GB data for a grand customer abuse total of $150 every month)). You can't seem to even get non-unlimited voice/text anymore. Let's not bring up the $35 fee per device they charge to "activate" it either -- I don't want to headasplode in this room (it has white walls).

Data only, please. For under $3/GB, please. RFN, please, not in another 10 years.

semenko• 14 years ago

To be fair, you can get similar costs in the US, but most people opt for subsidized phones (and the associated contracts).

I have a prepaid mostly-data SIM for $30/month via T-Mobile prepaid (http://prepaid-phones.t-mobile.com/).

Maybe we'll see more consumers move that way around Google's (rumored) November 5th phone launch.

X-Istence3• 14 years ago

If I want to use the iPhone 4S on T-Mobile's network I am stuck using edge only because of incompatibility between the GSM networks (thank you FCC!) and which bands are available to whom.

If I were to want a plan with AT&T that offered me what I have now (450 minutes a month, 2 GB of data and unlimited texting) I'd still be out 90 USD per month whether I purchased my own device or not because AT&T doesn't do discounts for bring your own device customers (T-Mobile contract customers can get a discount for bring your own device, or at least that was the case when I was a customer with them. Knocked $20 off the price off a contract).

I'd be more than happy to purchase a phone outright and pay MUCH less per month.

My sister has an unlimited data plan, 400 minutes a month and unlimited texting for a grand total of 40 EUR in The Netherlands with T-Mobile. She doesn't talk much, but texts and iMessages a crap ton and uses about 6 GB's of data on average listening to streamable music and online radio stations. At the current exchange rate that is 50 USD. Do note that her phone is subsidized as well, also it comes unlocked so she can move carrier when her contract is up without issues.

I pay 90 USD and get only 2 GB of data a month.

How does this even make sense?

ojbyrne• 14 years ago

There's no plan on that page under $50/month. And the $50/month plan (which I currently have) includes first 100 MB (!) at 4G, after which the data is at 2G.

fireflash38• 14 years ago

> who calls or uses non-iMessage these days

Quite a few people actually. The former is rarer, but there is an increasingly large portion of the populace that doesn't use iMessage (considering it's proprietary to Apple). Sure, you can work around using Google Voice to SMS/Call over data, but that isn't for everyone.

w1ntermute4• 14 years ago

Or use Google Talk, for fuck's sake. The protocol is open, and the service is very reliable. I got all my friends running iOS to get Vtok, and now they can chat with me too. And you don't have to be on a Mac to use it from a computer - just log into Gmail or use any Jabber/XMPP client you want. I haven't used any other messaging service in over 5 years.

The only thing I use Google Voice for is the one or two friends still using dumbphones.

notlion• 14 years ago

I had no idea people actually use iMessage o_O

pragmatic• 14 years ago

What is iMessage?

wmat• 14 years ago

I think it's BBM for iPhone users ;)

harpb• 14 years ago

In UK, I was able to get Data plan on 3G for $10/Month on a sim. Doubt that will ever happen here in USA - grrr

jwr• 14 years ago

As a data point, I pay about $15/mo for 8GB of wireless data + 50GB during night hours. HSPA+ speeds, realistically I get 4-6Mbps down and 2Mbps up on average. That's in Poland.

I guess Americans lucked out on amazingly low hardware prices, so that's why you have to get ripped off on data plans :-)

mitjak4• 14 years ago

This doesn't seem to be brought up in the thread, which is surprising:

What about wifi? This month I've cancelled my $70/mo 6GB data/150 min talk service with Fido (Canada) and switched my iPhone to a prepaid SIM. Mostly because I've realized that 99% of the time I need data I am very likely to be reading, coding, or otherwise consuming, in which case I'm probably at home, at a friend's place, at a café, or generally a wifi equipped spot.

It's not a real solution if you do need data everywhere you go, but I recall reading that wifi is much cheaper to build a larger infrastructure from; hence all the city-wide wifi projects I suppose. Can anyone with an insight chime in?

stephengillie• 14 years ago

That's how I am... I'm only missing the internet at the grocery store.

eli_gottlieb5• 14 years ago

I can add another data-point.

Back in the States, I paid $50/month for T-Mobile's unlimited-everything monthly/no-contract plan. There was an additional $10 fee for international calling, if I wanted it. This plan was later grandfathered out, leaving the only similar plan being one where you get on a contract and buy a new, SIM-locked device. Before it was grandfathered out, Consumer Reports ran an article on the under-appreciation of no-contract SIMs in America.

Where I am now (Northern Israel), the government passed a law against lock-in contracts last year. As a result, there has been a "cellular revolution". My new SIM, which might arrive in the mail today, costs 99 shekels per month (roughly $25 USD, but the shekel has been tending to rise against the dollar faster than the Central Bank can buy American bonds to keep it down). It includes unlimited calls, text and data, including international (to my American family) for no additional cost.

The internet service I have here, coupled to minimal public-access television service, is 10 Mb/sec download speed for 65 shekels ($16.25 USD) per month. The providers of physical internet infrastructure (cable and DSL) are also separated here from ISPs. A competitor to my DSL company offers 100 Mb/sec for 20 shekels ($5 USD) per month, but isn't available everywhere. This DSL company will upgrade you to 20 Mb/sec if you catch them offering a sale.

By contrast, a minimal cable package of public-access channels and broadband internet back in the USA cost about $45/month, before you've paid any other bills, and it gave you about 3-5 Mb/sec.

(Admittedly, these prices reflect household incomes being lower here, since the average worker's salary is something like $28k/year and most households have two working parents. But the way America has been going, those kinds of numbers are now typical there too, but without prices having gone down.)

So yeah. America gets gypped because its government consistently refuses to do anything about telecom infrastructure. It's pretty sad, considering how little you actually have to do to get decent results.

ck2• 14 years ago

There is only one cable and one phone company in my city.

Our prices are terrible and guaranteed to go up each year.

But with cellphone companies, there are usually three or four of them and prices are still bad. So I am not sure why the market doesn't "correct itself".

mikeryan• 14 years ago

Most of the "low cost" cell carriers in the US actually lease bandwidth from the larger carriers or are subsidiary of the larger carrier, for example Boost and Virgin Mobile are wholly owned subsidiaries of Sprint.

Point being there's not as many carriers as you think their are.

RandallBrown2• 14 years ago

The infrastructure in those other countries is considerably less expensive to set up. The US is HUGE. For a company to have nationwide coverage they need to invest a TON in infrastructure. It's not surprising to me that our services are so much more expensive than the rest of the world.

I didn't realize the difference was as big as it was though. It's surprising because even though internet/tv is sort of expensive here, it isn't at all cost prohibitive for the majority of Americans.

autarch• 14 years ago

That might explain high costs for some users (or subsidies, which I believe we have for rural access). It doesn't explain why these costs would be high in urban areas.

RandallBrown2• 14 years ago

My ATT plan doesn't cost any different based on where I live. I guess my comcast plan might, but as far as I can tell, I saw the same deals when I lived in Michigan as I do now in Washington.

talmand5• 14 years ago

I would agree with this except for the fact most people don't even talk about nationwide with this issue. You can look at any major metropolitan area in the US where a great deal of infrastructure is already built and the options vs price is dismal as compared to the rest of the world. Also, as the article points out, the telcos were given subsidies for years to build this infrastructure of which they did little outside of big cities. Building cool stuff in big cities is highly visible and good PR, doing it in small town USA is not quite as PR worthy.

Never mind the fact that we have seen several examples of big cable doing everything they can to prevent new infrastructure from being built because they would have to compete with it. Adding insult to injury is that many times this is against small towns that big cable has written off as not worth the investment in the first place. Thankfully I think we're finally seeing a shift against this kind of thing.

But even then there are still complaints over the pricing part. If an area doesn't have the infrastructure then that's fine, charge a proper fee for what they do have access to. I'm sure there are plenty of examples of people paying $30 for 10Mb service while an hour down the road people are paying $30 for 2Mb service.

This is just internet though, pricing structure over cable TV is seriously screwed up but not just because of cable companies. The companies that create the content have a big hand in that fiasco as well.

jeltz5• 14 years ago

That does not explain why Sweden and Finland have way better coverage while having lower population density. The total area should not matter, only the population density.

flomo2• 14 years ago

The US has a lot of suburban sprawl, so population densities are lower in the places where people actually live. (Still I don't believe this is the real reason.)

http://www.demographia.com/db-intlua-area2000.htm

lftl• 14 years ago

That's a reasonable excuse for nationwide mobile services. I don't think it explains why the infrastructure cost would be very different for cable and internet in major US cities.

klausjensen• 14 years ago

The US is huge, but there are also a lot of people in the US.

Population density (population/km2)

<pre> USA 34 Sweden 23 Norway 16 Germany 229 France 114 </pre>

Source: http://en.wikipedia.org/wiki/List_of_sovereign_states_and_de...

So many countries that are far LESS densely populated than the US - and MORE densely populated - have much cheaper Internet. It does not seem to be the deciding factor.

huxley• 14 years ago

That's a problem if you're living in Wyoming but for the majority of the US population, low population density is not a factor. There are vast mostly empty areas in the US, but people congregate in highly dense cities and suburbs.

Take California, it's 93.3 /km^2, New York State is 159.2 /km^2, New Jersey is 459 /km^2, and DC is 3,886 /km^2.

digikata• 14 years ago

The size isn't really the fundamental problem. High density areas in the US are also poorly served. My thought is that the root problem is that free markets for the service in the US aren't efficient because the players are too big and too few. Neither has the FCC regulated the market to a structure that would bring out competitive activity.

Europe has more regulation to ensure portability across markets, as well as smaller regions, fundamentally divided by national boundaries. This sizing leads to smaller required capital investments, allowing more competitors and less customer lock in. Collectively this results in a more competitive market.

Vs. the US where the cost of spectrum auctions alone lock-out everyone but the largest x companies. With few other competitors, it's logical for the companies to rely on open pricing signals to avoid competition on price.

mitchty2• 14 years ago

But taking out non-cities for example, why are the prices in say New York, which definitely has the population density to support advanced high speed links so high and the connections as abysmal?

It comes down to the local bureaucratic hurdles and initiatives. I really support the idea that fibre/internet links should be a utility and not a resource controlled by a single entity. Look at comcast as an example, they are ONLY auto-upgrading plans in FIOS service areas. How this isn't looked at as a severe lack of competition or fundamental problem with our oversight of them I can't entirely fathom.

krschultz• 14 years ago

Actually, I moved to NYC and my internet is significantly faster & cheaper than it was in the 'burbs. I'm on RCN.

pydave• 14 years ago

> The US is HUGE. For a company to have nationwide coverage > they need to invest a TON in infrastructure.

Canada is bigger and we've had several new entrants to mobile phone business who've set up their own networks to cover the largest cities in Canada. I think the key is that they're not covering everything (they roam on other networks). Wind Mobile (my provider) regularly offers $40/mo for unlimited nationwide talk/text and 5GB/mo (throttled after the cap an no overage charge). Mobilicity has something similar, but with a $22.50 promo price.

The catch is that "unlimited" means within the parts of their network: regions around the major cities in Canada.

Another company could come along and do a similar scale rollout along the east or west US coasts. I think the difference is that these new operators got to buy up some spectrum back in 2008 because Industry Canada set aside 40 MHz of AWS spectrum for new entrants in an effort to bring more wireless competition to Canada (back then, our three monopoly operators had 94% of the market) [ http://www.dwpv.com/en/Resources/Publications/2009/Flash-Dec... ]. I recall Google bidding on some US spectrum back in 2008. Did anything ever come of that? Did anyone aside from the big networks get any spectrum?

Edit: Looks like Google didn't win any spectrum. [ http://en.wikipedia.org/wiki/United_States_2008_wireless_spe... ] I'm not familiar enough with the US market to know if any of the winners are upstarts.

Edit: You might also be talking about home internet. I have 25 Mbps for $33/mo (it can actually go up to 300 Mbps for $103/mo). Unlike in mobile, my provider Novus is (I believe) reselling service from one of the big networks. (The only other one I know by name is TekSavvy, but I believe there's several of them in different parts of Canada.) I'm not sure if there are similar resellers in the US. Our resellers had some legal battles to allow them to offer this service [ http://en.wikipedia.org/wiki/Usage_Based_Billing_(UBB)#Usage... ], so maybe the legal requirements on the network holders is also a contributing factor for increased US prices.

jellicle• 14 years ago

Were that the case, internet service in Manhattan/Chicago/LA would be cheap.

It isn't.

Lost_BiomedE• 14 years ago

That is why the government gave telcos billions every year to subsidize fiber to the home roll-outs. The telcos laughed out loud while pocketing the money and transferring into overseas assets. For their terrible actions, the gov would give them more money in order to be laughed at again.

mech4bg• 14 years ago

As others have said, this article was remarkably sensationalist and cherry picked many of their facts.

However there is a grain of truth in here - while Europe had MUCH higher internet / phone / cable costs 10 years ago, from what I've learned from my friends over there the price has dropped dramatically. While 'regular' plans are comparable to US plans, the budget operators are incredibly cheap.

It's been a similar situation in Australia. We had incredibly high costs, and for many years the value of our internet went BACKWARDS - as the price went up, our data was also heavily restricted. However that trend finally reversed and it's much better value now. When I left Australia I had a 200gb 100mbit internet plan with a home line for $78 a month (and that included a cable modem).

I have to say I was pretty shocked at how poor the choice and value is in the US after moving here, particularly in Silicon Valley. Fast internet (> 30mbit) is incredibly unaffordable, and there is huge pressure to have to bundle with cable TV (which I don't want or need).

And what's up with the phone plans here?! The only reason I'm not absolutely screaming about it is I'm on a shared plan with my wife - if I were trying to get a phone just for myself the costs would be insane.

The biggest kicker is trying to find a good prepaid with data SIM - in Australia you can walk into any 7-11 and buy a SIM card for $2 and then get on a $2/day unlimited phone/data prepaid plan (i.e. you just charge up and then every day you use it another $2 is taken off your tab). There is NOTHING like that here.

I'm not sure if it's because of a lack of competition or what - in Australia all networks are now (roughly) compatible with each other, so if you buy a phone on one network it'll work on another. Then you have many many resellers who buy the network access wholesale from the big providers and then resell it. Same for the internet market. That's the only thing I can think of - the US needs to get this happening ASAP.

Jacqued• 14 years ago

One thing that is not mentioned is that in some European countries (like in France where I live), there is no limit to the amount of data transfer you can use in a month -- that is, on the home optic fiber lines, not on the mobile ones.

I have a $30 100Mbps plan, and if I want to download 10 TB in a month, there is no additional charge for that. Mobile plans cost around $20-25 and are tipically capped at 3GB per month.

But don't worry, we're still complaining very much, that the lines are too slow and expensive.

jeltz5• 14 years ago

Unlimited plans for Internet over wire is the norm in most European countries. The only exception I know of is the UK. And at least in Sweden it has been like this since broadband was introduced.

rthomas6• 14 years ago

Actually I'm currently using a $45/mo unlimited phone and data plan in the US. Google Straight Talk. The only catch is apparently they get mad at you if you go over ~2 gb/mo.

chimeracoder• 14 years ago

> The only catch is apparently they get mad at you if you go over ~2 gb/mo.

So, what you're saying is that you have a $45 unlimited phone with 2 GB/month data?

Nearly all phone carriers in the US offer 'unlimited' plans which really boil down to hard- or soft-caps between 3-5 GB/month. It's terrible false advertising.

jarek5• 14 years ago

> The biggest kicker is trying to find a good prepaid with data SIM - in Australia you can walk into any 7-11 and buy a SIM card for $2 and then get on a $2/day unlimited phone/data prepaid plan (i.e. you just charge up and then every day you use it another $2 is taken off your tab). There is NOTHING like that here.

T-Mobile does a plan like this in the U.S., though data is "unlimited" with an asterisk, and you have to order the SIM online. $2 for 2G speeds data, $3 for a limited "4G" allowance. http://prepaid-phones.t-mobile.com/pay-by-the-day-cell-phone...

Timmy_C2• 14 years ago

In Seattle we have a startup called Spectrum Networks which offers 100mbps fiber and microwave internet to a small set of condos and apartments. Last I checked, it was a 9 person operation. I don't see why more startups like this haven't cropped up in other towns.

talmand5• 14 years ago

Off the top of my head, three reasons.

Local government doesn't allow competition against the big company they have some form of agreement with.

Big company buys them out to shut them down so they don't have to compete with it.

Big company crushes them via pricing reduction (until competition is gone so it goes back up), sicks the lawyers on them (doesn't matter if valid or not, defending oneself in court is expensive), or a highly expensive negative PR campaign.

It all depends on the state, county, and/or city. What can work in one area might not be feasible or legal in other areas. It's a huge multi-headed issue in the US.

seiji3• 14 years ago

Disclaimer: I used to work at a wireless ISP and I am going to decorate your comment.

Oddly, local government has no say over it. As long as you can legally place antennas and/or dishes in the right spots, you can do whatever you like. You can run on crappy 2.4GHz or 5GHz radios or use more fancy FCC leased spectrum 30GHz-60GHz radios or even line-of-sight optical lasers. You will typically run a 20Mbps to 1Gbps connection to an apartment/condo complex then feed individual units from there (i.e. each customer isn't getting their own wireless connection unless you are a fancy business paying for that level of service).

Big companies don't care much about tiny ISPs here and there. What's more likely is the biggest of the tiny ISPs will buy you to goose their numbers.

If your tiny ISP is aggressive in servicing buildings, you may see Comcast running counter promotions against your pricing. Welcome to the free market.

andr3w321• 14 years ago

I live here in Seattle and would love an alternative to comcast, however, I don't think this is it. I googled them, looked at their website and see nothing about pricing, how to sign up and their links under "Services" on their homepage don't even work.

seiji3• 14 years ago

Well, they have to light up your entire building first. It's no something you can initiate as a single person. You have to get your apartment/condo/mdu management to send them some flirty emails.

mratzloff3• 14 years ago

CenturyLink recently hooked up my block in West Seattle to fiber.

RyJones2• 14 years ago

There's also CondoInternet. http://www.condointernet.net/

Timmy_C2• 14 years ago

Yes, Spectrum Networks is the other half of Condointernet.net.

aidenn0• 14 years ago

And how much per minute was long-distance in 1984? In the early 80s almost all the profit from telephone service was in the long-distance service. For example, 1980: in today's dollars, it was over $1 PER MINUTE to call New York from Los Angeles.

fennecfoxen• 14 years ago

Fun story. The university I went to used to buy long-distance minutes in bulk at 12 cents, sell them at 25 cents, and made a million bucks a year off of students calling home. Now they buy them at 3, sell them at 5, and everyone uses cell phones so there aren't any landlines in the dorms so emergency and "too much ice, class cancelled" notifications and the campus phone directory are a disaster... also, the IT department is out a million bucks a year.

But they're working on it, they say.

Ntrails2• 14 years ago

"America has gone from #1 in Internet speed (when we invented it) to 29th in the world and falling."

I beg your pardon?

dlan1000• 14 years ago

Which part exactly are you contesting?

Ntrails2• 14 years ago

America inventing the internet?

njharman• 14 years ago

Because we as a nation are willfully delusional as to how corrupt our government and corporations are. How much buying regulation and legislation is standard part of business.

thebigkick• 14 years ago

Did the interviewer say "information super highway"?

d--b• 14 years ago

I am very astonished by the comments I read here. That internet is way cheaper and faster in Europe and Japan than it is in the US is a fact, period. And it is not because the governments pay for it. It is because the market competition works there, not here! America is not always where capitalism is best implemented! Antitrusts law should step in and these companies must compete!

pkandathil• 14 years ago

Couple of reasons why it's more expensive here: 1) Area and population density: Countries like Japan have a small area with a very high population density. This drives, infrastructure costs down and the return on it high because you have a lot of users.

2) Minimum wage in the US: The cost of labor in the US is quite high hence it costs more to build out infrastructure than it does in other countries.

gergles• 14 years ago

People continually try to use density as some sort of an excuse for the ludicrously under-spec broadband deployments in the US.

Why do NYC, SF, Boston, Chicago, and LA all still have the same shitty service as the rest of the country? SF is far more dense than the totality of any European country and only has the same monopolistic, overpriced, underperforming, punitively-capped service as the rest of the US (except for the lucky people who live in the 20 webpass buildings.)

mratzloff3• 14 years ago

Japan, France, Australia, and Britain (a sampling of countries being discussed) all have minimum wages that are comparable to or in excess of the United States.

gregsq• 14 years ago

It is expensive in the US compared to the other two countries I get sims for, the UK and Australia.

In the UK I can get a sim and monthly plan for my iPhone for around £6, which gives me what I need. In Australia it's about $30 for a month. In the US it was either H2O at $50 a month or StraightTalk from Walmart for $45. I recently moved my girlfriends grandfathered AT&T iPhone plan on to StraightTalk for a saving of about $50 pm. A 2 gig limit on data compared to her grandfathered unlimited, but thats OK.

The US is expensive. No doubt about it.

codgercoder• 14 years ago

simplest answer: the 1996 Telecom Deregulation Act. Sold as a way to bring real competition after the breakup of ATT, what it did instead was: 1) coax Baby Boomer money into the stock market, causing the Telecom boom, with all the mis-investing that a boom entails, 2) build a lot of infrastructure with the new money, that the incumbent companies didn't have the stomach for, 3) free up the baby Bells from much regulation, but not enforce the "play fair" rules to allow upstarts to use the extant infrastructure, and 4) crash the boom, allowing the incumbents to pick up intrastructure for cents on the dollar. Instead of a rebirth following the crash, as is usual, in which the newcomers get to pick through the remains of the last boom, the remants mostly got gobbled up by the incumbents (even ATT, absorbed by SBC). So the landscape looks much like it did originally, except now the old incumbents control the Internet, instead of just the phone system. Innovation is largely coming on top of the Internet, instead of in providing it.

codegeek• 14 years ago

I lived in Hong Kong for about 18 months temporarily as an expat from the US. I was astonished that for about 300 HKD (< 40 USD), I could get unlimited data and a new iphone with contract. The only catch: contracts are usually 18 months or longer. But even then, it is dirt cheap compared to US.

Same with cable.

mratzloff3• 14 years ago

In my experience US contracts are often 24 months.

kin• 14 years ago

We're super behind. I can't wait until Google expands their Fiber to more cities so they can get fiber in every household.

tomrod• 14 years ago

When I bought my first landline in the mid-2000s the cost was $40 a month for local service. 75% of that charge was local and state fees.

My first phone call was an automated telemarketer. 98% of my calls after that were also telemarketers of one form or anther. Ads started stressing me out, and I ceased being so nice to cold callers.

The landline lasted maybe two months before I figured a cell would be cheaper and less annoying.

kevinSuttle• 14 years ago

It all comes down to greed and gouging. Period. There's too much money being made to stop it now. I'm all for capitalism and making money by working hard, but this is the opposite of that. Inferior product, astronomical rates. These are industries strangleheld by a few gigantic companies, and that, my friends, is bad for everyone.

dawernik• 14 years ago

The problem with a lot of the comments here is that the participants use logic, while typical Americans do not. The main point is really about lack of transparency by providers and complacency by consumers... Compounded by an industry that has gotten into bed with government.

The market will eventually correct as phone, cable, and internet services continue to be individually picked off by best of breed pure plays that create simple service with transparent business models. May take a while, but it will happen.

devGabriel• 14 years ago

You guys think that is expensive? You don't know Brazil...

DanielBMarkham• 14 years ago

This is one of the things I like ranting about, so I'll try not to do that.

I also live in an area that will never see high-speed internet. We were sold out by both the feds and our state legislators. You can argue that perhaps these government officials were misled or uniformed, but I remain dubious.

We were able to construct an interstate highway system. We were able to wire this country with electricity. We were able to wire it for telephones. The only reason we can't wire it with fiber is because of poor government management of eminent domain. We should kick most of those responsible out of office. To see a bunch of yahoos on TV telling me we need the road paved when most of their constituents don't have enough bandwidth to get high-quality instruction over the web? Or to work over the web? It's the Information Age, bozos. Something is wrong somewhere.

The worst part? I do not expect this to get fixed any time in the next couple of decades. Not only is it broken and hurting, but there's no political incentive to fix it. In fact the incentives run the other way.

MordinSolus4• 14 years ago

So you're saying that the government, either knowingly or unknowingly, made decisions that, in the long run, adversely affected its citizens? No kidding.

nessus426• 14 years ago

'Cuz all those other countries that got it better, did so with a pure, laissez-faire market, free of any government intervention.

batgaijin• 14 years ago

See, I want to agree with you, but I'm not sure.

I think that the future really is in wireles communications. What's the point of laying down fiber if in 10 years we can get wireless at the same speed?

Of course I'm assming that telco will actually compete in tthat domain... but considering how easy it is to switch serfices, I think it can only get more disruptive.

toomuchtodo• 14 years ago

Wireless is a shared medium. There is a limit to how much you can push through the air.

Laying fiber once is long enough to last at least 100 years (based on what we know now). Should we not lay fiber just because wireless may eventually be as fast?

A good decision now is better than the best decision later.

ceph_• 14 years ago

And in those 10 years the amount of data you can mux into fiber pairs will have increased at an even greater pace. What do you think your wireless carriers are using as a backbone? fiber. The fact that speeds of wireless providers have caught up to the average speeds of landline ISPs in most areas is just a sign of the corruption of the cable companies, not that wireless is a superior medium for data transfer.

ktizo4• 14 years ago

What's the point of laying down fiber if in 10 years we can get wireless at the same speed?

Sunspots.

sterna• 14 years ago

Wireless will never be able to match the bandwidth of fiber. Today fiber can transmit close to 10 Tb/s through a single line. This is orders of magnitude more than will ever be possible with wireless.

satori99• 14 years ago

Woz doesnt expect it to change in the US either. He is applying for Australian citizenship to get better broadband.

http://afr.com/p/technology/wozniak_likes_nbn_so_much_he_app...

Natsu• 14 years ago

Have Australia's outbound links improved much? Between Telstra and the latency connecting to the US, I thought that they had sub-par internet.

But I don't live there, so maybe I've been misinformed.

tsotha3• 14 years ago

Why are you expecting the rest of us to subsidize your internet service?

factorizer• 14 years ago

You could say that about every service in rural areas.

If you tried to go all the way with your argument, only a few urban centres would be left with decent infrastructure. And of course infrastructure needed to support those (parasitic) centres (what with food and the like).

A rather gloomy picture of society, if you asked me.

hansy• 14 years ago

OK so assuming Americans do end up paying way more for less in the phone, cable, and internet departments, what's the solution?

I can't recall one month when my parents, both highly educated and cautious, aren't griping about some "strange" or "unknown" charge creeping up into their phone bill. They've even tried different plans on different networks over the years to find the most economical package for the family. When I ask them which network they like the best, they always reply with, "it's not about which network is the best, but about which one sucks the least."

And internet? I'm tired of hearing how overseas ISPs are just better (speed to cost ratio) than the ones here. I guess I'm just crossing my fingers waiting to see what happens with Google Fiber, but I seriously hate putting all my eggs in one basket.

Karunamon• 14 years ago

Hosting on this continent is pretty much a ripoff as well.. one can reasonably assume something is terribly wrong if pricing is broken up to that level.

Anecdote alert: I recently moved from a stateside provider to one in Germany. A dedicated server, quad core, 8 gigs, 1TB transfer out was running me around $120 a month from my usual provider.

The German host has me set up on the same CPU, but with 32 gigs and 10TB transfer out for less than $80.

400% more memory and 1000% more bandwidth for a $40/mo reduction in cost. The pricing on stateside dedicated servers wasn't out of the ordinary either. If anything, I've seen virtual servers be on the same level, with dedicated servers even more absurd.

brg1007• 14 years ago

As Bulgaria came into discussion, let me give you a short glimpse at what the biggest cable company in Romania (4th rank in Akamai average peak connection speed 2012) has to offer. For about 25 USD you will get: - 100Mbps Internet access fiber optic, - +100 TV channels including HBO, HBOGo, - one 3G data SIM with 3GB/month, - access to various WIFI hotspots around the country, - 1 phone landline with various free minutes.

All this infrastructure for this network was build in the past 15 years and it is national. Romania is as big as Oregon State.

In my opinion the prices in US for triple-play are as the article states very very high.

bmunro• 14 years ago

It makes sense to compare US prices with western/northern Europe, as they are similarly rich/developed.

But to compare prices in the USA with those in eastern Europe doesn't seem right. In nominal terms, the GDP per capita of the USA is 6 times that of Romania, and 4 times by purchasing power parity.

hpguy• 14 years ago

I came from a developing country and among the things I miss about it is low cost phone, cable and internet. Basically $25/month vs $150 I'm paying now for pretty similar quality of service. That has puzzled me a great deal, shouldn't tech cost be much higher in a developing country than in the #1 technology country in the world.

blasteye• 14 years ago

Ummm, Google Fiber had to pay over 10k per customer. This article sites around 3k per customer in gross.

So they expect the ISPs to just eat up a 7k difference which will take over 1-2 decades to recoup?

GlennS• 14 years ago

The USA is very sparsely populated compared to South Korea, Japan, or most of Europe. The Ukraine (mentioned in the video), is a really big chunk of land with a smaller population than the UK, but still appears to have more than twice the population density of the USA (eyeballing wikipedia numbers). This is obviously a big deal for any infrastructure project.

I'm not saying this is the whole (or even the main part) of the explanation, but it needs to be taken into account at least. In my opinion it certainly wouldn't excuse poor service in towns with 100k+ people.

When it comes down to it, internet access is crucial now, and it does enable other parts of the economy to flourish. If the government needs to step in to give it a push, it seems worth it in this case? After all, what is a government for if not planning for the long-term when individuals and corporations can't?

bickfordb• 14 years ago

I have considered this a lot and the problem appears to be mostly a policy problem boiling down to the two following issues:

* Right of way laws in localities make it difficult to deploy cabling of any sort. Starting a network operator is incredibly difficult legally even if you have the capital. Also, counties often grant monopolies to particular cable companies and do not allow other operators to enter the market.

* It's a popular economic thought (and apparently one the FCC subscribes to) that CLEC/wholesale style systems do not incentivize network infrastructure maintainers to keep pace with technological advancements. As a result the FCC has granted control to vertically integrated operators like ATT/Verizon/Comcast.

Aloha• 14 years ago

One thing that this article missed out on:

Prior to 1984 Business telephone users cross subsidized Residential users, both thru higher local access rates, and higher LD rates.

tsotha3• 14 years ago

Not a very good article. He's thrown together a bunch of unrelated statistics and left out some pretty important information, like the total cost in the landline example. I remember paying $1/minute to call someone 50 miles away before ATT was broken up.

The question I have is whether or not wireless carriers pay for spectrum in other countries. Verizon paid over $17B for spectrum, and that money is going to have to come from somewhere.

Why American Phone, Cable and Internet Bills are so High

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