Want 50Mbps Internet in your town? Threaten to roll out your own

http://arstechnica.com/tech-policy/news/2009/10/want-50mbps-internet-in-your-town-threaten-to-roll-out-your-own.ars

by theandym • 17 years ago

124 82 17 years ago

And as I found out first hand, if the only internet provider in town starts to roll out bandwidth caps, just raise a ruckus until your senator drops legislation on the table banning caps, and then watch your ISP become a sour grape and refuse to roll out DOCSIS3 in retaliation...

Internet really needs to become a public utility operated by the city/state on cost, rather than to line the pockets of greedy corporations...

RiderOfGiraffes2• 17 years ago

I'm not an American, and I was wondering if you could help me to understand this ...

  > Internet really needs to become a public utility
  > operated by the city/state on cost, rather than
  > to line the pockets of greedy corporations...

How is this not effectively Socialism? Isn't the system you currently have simply Capitalism in action?

Under Capitalism, shouldn't people simply choose another supplier when your ISP does stupid things?

ytNumbers• 17 years ago

In large parts of the USA, there is only one (or fewer) decent Internet providers. It's hard to let the free market decide when there is no real competition.

mseebach3• 17 years ago

> How is this not effectively Socialism?

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.

ramidarigaz• 17 years ago

Ideally, people should be able to choose another provider. Unfortunately, the many of the ISPs in America exhibit monopolistic tendencies. What you call "effective Socialism" is just encouraging competition, like the article says.

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.

alexandros• 17 years ago

In capitalism people are supposed to have choice. I'm not American either, but from reading HN for a while I gather that this does not hold for ISPs in many areas of the US. So basically what they have in those cases is a state-granted fiefdom.

And the solution of course is not to have the state run it. It's to introduce competition.

lucumo• 17 years ago

> How is this not effectively Socialism?

Does that make it bad?

> Isn't the system you currently have simply Capitalism in action?

Does that make it good?

sfnhltb• 17 years ago

Things like this where the costs are dominated by the need to build lots of infrastructure before you can even sell to your first customer are naturally uncompetitive, and even may be natural monopolies. Without significant competition private companies will generally perform worse (as far as the consumer is concerned) than government.

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.

robotron• 17 years ago

It's stunted capitalism. Monopolies are propped up and protected in most areas.

jsz0• 17 years ago

In the US many essential services work this way. Taxes pay for fire, police, roads, water, etc. Electricity & telecom are heavily regulated. Originally this started as a way to get coverage in rural areas. The government setup a non-compete franchise wherein a provider would agree to cover rural areas (even at a loss) but their exclusive rights would allow them to recoup costs. That alone wasn't a bad idea -- the US's adoption of electricity, telephone, and cable TV outpaced the rest of the world. This however is where it should have ended. Instead the exclusive coverage agreements mostly continue to this day. In spots where local government has decided to open competition the incumbent providers have such an overwhelming advantage that most smaller providers fail quickly but usually no one bothers trying. It's too capital intensive.

RyanMcGreal• 17 years ago

I'll assume that your comments about socialism aren't simply trolling and respond that even in a broadly capitalist system, network infrastructure is effectively a natural monopoly.

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).

cmelbye• 17 years ago

As I understand it, some ISPs have a legal monopoly as the only Internet service utility company allowed to operate in an area (similar to how other utilities such as power and water work).

newacc• 17 years ago

Almost every single industry in america is oligopoly and defending oligopolies with the free market capitalism argument is completely illogical and unfair.

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...

sant0sk1• 17 years ago

What we have here is a classic case of barriers to entry.

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.

jodrellblank2• 17 years ago

rather than to line the pockets of greedy corporations

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.

adamhowell• 17 years ago

Yes, and if the Internet wasn't a public works project to begin with the greedy corporations wouldn't have anything to do at all and you'd have no internet connection.

MikeCapone2• 17 years ago

"Internet really needs to become a public utility operated by the city/state on cost, rather than to line the pockets of greedy corporations..."

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.

nuclear_eclipse6• 17 years ago

I would personally assume that any government-managed utility would have well-defined regulations disallowing that sort of practice. 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.

Locke16892• 17 years ago

What? The government would just provide the dark fiber. Service providers would be able to compete over service using the same lines.

jedediah• 17 years ago

No, as the article shows, the internet really needs to become a commodity that's easily delivered by many parties.

yrb2• 17 years ago

Except I am not sure it is destined to become a commodity in the near future because of the sky high capital expenditure required to roll out most forms of infrastructure in most places.

rms• 17 years ago

This argument between left and right often doesn't matter. A true public utility or a true commodity would both be great for the users of broadband. The problem is the corrupt center we have, where an open marketplace was ruined by corporate subsidies.

run4yourlives3• 17 years ago

You don't need six lines connected to your house to deliver various services. It's a natural monopoly the same way having a single water connection is.

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.

rened• 17 years ago

So, before everyone goes off on how it's only big business that's preventing great, high-speed internet, there are municipalities in this country that do run their own cable company.

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.

idm• 17 years ago

The bandwidth cap sucks, but compared to DSL, that's a great deal for 10MBps. In Cambridge, MA we were paying Speakeasy more than that for 1.5MBps.

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>

Kadin6• 17 years ago

I think that's a good argument for why municipalities ought to, at the very most, maintain the bottom-layer infrastructure itself and not try to actually operate services over it.

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.

jimbokun• 17 years ago

Add telecommunications companies to universities, hospitals, mercenaries (Halliburton) and banks as private institutions that receive government money and/or monopoly protection in order to avoid both market competition and public oversight. I continue to think that this is the central problem with the U.S. system at this moment in history.

quellhorst• 17 years ago

I now have 50Mbps, it was easier to move to a town that had it already.

DavidMcLaughlin• 17 years ago

I have to laugh at the idea that 20Mbps is slow. I just got upgraded to 16Mbps (from 2Mbps) and still can't believe I can download a full HD movie in 30 minutes.

nuclear_eclipse6• 17 years ago

Well, that's better than my "10Mbps" connection that only delivers about 2Mbps at any given time...

warfangle• 17 years ago

Heh. I have, at nominal, 16Mbps. During peak times, though, it drops like a rock below that to even being intermittent - Google Talk and AIM will drop every couple of minutes. Our cable node is seriously overloaded, and Cablevision isn't doing a damn thing about it. Over the summer everything was pretty reliable, but then a bunch of new students moved into the 'hook and it plummeted. I can get 16Mbps - if I'm lucky - at 4am, and sometimes 8Mbps throughout the day. But from 7 to midnight or so, it's impossible to even browse the web.

DanielBMarkham3• 17 years ago

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.

dantheman5• 17 years ago

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.

krschultz• 17 years ago

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.

brk• 17 years ago

* 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.

bjelkeman-again2• 17 years ago

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.

buugs• 17 years ago

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.

mukyu• 17 years ago

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

DTrejo• 17 years ago

It would ideal if the government bundled fiber and power lines together and restructured both grids at once. Two birds with one stone. However, this is probably unlikely.

sixbit• 17 years ago

50Mbps is a bit on the slow side these days, we have 120Mbps over coax here...

Want 50Mbps Internet in your town? Threaten to roll out your own

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