8 ms·

Providing last mile service, be it electrical, water, gas, sewage, or TCP/IP is a natural monopoly. No one is going to build more than one sewage pipe to a cust

Providing last mile service, be it electrical, water, gas, sewage, or TCP/IP is a natural monopoly. No one is going to build more than one sewage pipe to a customer. It only makes sense that we don't allow these natural monopolies extract monopoly rents. Right now, we do allow the cable companies to do just that, and worse. If you find that your netflix or youtube is slow, just VPN into a server with a real internet connection and be amazed at how fast the video loads, even with the encryption overhead, all because the VPN bypasses the ISP's domain based throttling. (Unless you're a youtube or netflix employee who can spin up a VM for your own personal VPN or somesuch)

icebraining 12y ago
Lots of us outside the US have multiple ISPs in competition, usually with their own cables. I'd really like to know what's so impossible about this, or what makes monopolization inevitable. Sure running cable is expensive, but it's hardly outside of the range of typical VC investment. It's not like you need to wire a whole country at once, you can start by serving small & cheaper areas.
- ghshephard 12y ago
  The problem is that in many of these areas, the Cable Providers were provided a monopoly in order to get them to build out their services universally. In almost every city, there are tons of profitable opportunities to provide competition, but at the same time, a good portion of the city is not economical to provide services to - and the only reason they get Comcast (or whoever is providing them service) is that they were legally obliged to, in order to get access to the profitable areas. Is it fair to the people who provide universal service that they would have to compete with companies are aren't required to do so?
  - narrowrail 12y ago
    It seems the best option would be for each municipality to buy the coax cable infrastructure and lease it back to the cable company, while allowing for other companies to lease the same infrastructure.
- ghshephard 12y ago
  The problem is that in many of these areas, the Cable Providers were provided a monopoly in order to get them to build out their services universally. In almost every city, there are tons of profitable opportunities to provide competition, but at the same time, a good portion of the city is not economical to provide services to - and the only reason they get Comcast (or whoever is providing them service) is that they were legally obliged to, in order to get access to the profitable areas. Is it fair to the people who provide universal service that they would have to compete with companies are aren't required to do so?
- narrowrail 12y ago
  Just to clarify, something like 80% of the US has both DSL and DOCSIS available. If there is one option available, typically it is only DSL. I have friends that rely on WISPs and/or cellular in more rural areas.
- mschuster91 12y ago
  > Sure running cable is expensive It's not just expensive, it's fucking hard. Speaking as a guy who occasionally does this for a living. The revenue you can make on a single phone wire these days just doesn't pay off in five years. Not in ten. Maybe in twenty years, but this break-even delay is too much for any investor who is not at government level! And this is why speedy stuff like FTTH is deployed in cities and not in rural areas: digging costs approximately the same in rural as in city areas... and if it costs me as provider 50 k€ to wire up 100m of city street with 500 customers, that's paying off in a year. Wiring up a rural area with (if you're lucky, and I'm already leaving out real rural areas!) 50 customers takes 10 years to break even... And this difference is why it is imperative that last-mile infrastructure building is done by a government entity charging the same amount of money for providing a bitstream Internet uplink to the customer - at a price point where the city customers subsidize the rural customers and the utility provider breaks even. The added value by telecom providers renting the wires from utility can be e.g. faster peering to Netflix, Facebook caching servers in the next major city, etc.
  - icebraining 12y ago
    And this difference is why it is imperative that last-mile infrastructure building is done by a government entity Why? I'm really missing that logic step. OK, so rural is too costly to connect. But that doesn't follow that a specific solution is imperative, especially since the vast majority of the population lives in cities. Why can't the government entity only build in rural/unprofitable areas, by imposing a tax on city connections? More: why can't the government entity simply subsidize the bills of rural users, adjusted to the extra cost of wiring their areas? Thinking even wider, must we wire? What's keeping wireless point-to-point connections from working here? Rarely a problem only has one solution, why is this one an exception?
    - mschuster91 12y ago
      > Why can't the government entity only build in rural/unprofitable areas, by imposing a tax on city connections? More: why can't the government entity simply subsidize the bills of rural users, adjusted to the extra cost of wiring their areas? Because charging every customer the same price regardless where he lives is widely accepted - but just imagine you had a "city tax" appear on your telco bill. You'd be outraged by it... > Thinking even wider, must we wire? What's keeping wireless point-to-point connections from working here? That one is easy to answer: people these days are afraid of radiation and high-voltage lines (NIMBY phenomenon). Also, you would not gain much from point-to-point-connecting a rural village as you'd still have to dig fiber into the village center which you then distribute to the individual houses. But as you are already in the village center, you could also just put a FTTC DSLAM box there and be done (this is what Deutsche Telekom is doing right now in a load of rural areas!). edit: (microwave) point-to-point communication also usually requires expensive communication gear as well as individual (!) licenses from regulators. In addition during heavy rain, fog or snowfall communication quality decreases drastically, and heavy wind may displace the dishes.
ghshephard 12y ago
> all because the VPN bypasses the ISP's domain based throttling. Small but important detail - ISPs don't do "domain based throttling" - but it's entirely possible (and was well detailed fact in the case of Netflix/Cogent/Comcast) that your content provider (Netflix) has purchased transit from a provider (Cogent) that is unable to deliver the service they contracted to because they don't have large enough circuits open to the last mile (Comcast) The real question is whether the last-mile providers such as comcast should be obliged to provide settlement free peering at unlimited data rates with all transit providers is the real question. "Strong" network neutrality would say that they do, and, if Strong network neutrality turns out to be the law of the land, the implication will be that all ISP will transition to volume based pricing for their customers in order to make up for the loss in income that they got from selling transit rights. A somewhat weaker version of network neutrality, but still useful, would suggest that comcast can charge for transit peering onto its network, but must do so on a non-discriminatory rate as established by regulators. I.E. Perhaps Comcast can charge 1$ /mbit/second charged @95th percentile, if they are determined to be a common carrier / title II applicable. Then providers like Netflix (or anyone, for that matter) that fulfilled the minimum operational requires (NOC, peering points, etc...) could purchase transit directly from Comcast. Alternatively, if they don't fulfill those technical requirements, or just don't want to bother, they can purchase transit from providers like Cogent/Level 3, who would resell at a bit of a markup. That's the future I envision being the happy medium for consumers, last mile providers, transit providers, and content providers.
- nitrogen 12y ago
  The problem with your proposal is that consumers already pay far more than $1/mbit/s to Comcast unless they are still in the introductory pricing period, or are lucky enough to live where Comcast has competition. What's worse, if the consumer actually uses all of that bandwidth (or even their proportional share of a shared last mile link), they will reach their download cap before the end of the month. The exact thing I pay an ISP to do is to provide unlimited (up to my bandwidth plan) transit to the peering points of the services I want to use. They have no ethical or moral right to turn around and charge Netflix, Google, Crunchyroll, Vimeo, or anybody else for the thing I'm already paying for.

icebraining 12y ago

Lots of us outside the US have multiple ISPs in competition, usually with their own cables. I'd really like to know what's so impossible about this, or what makes monopolization inevitable. Sure running cable is expensive, but it's hardly outside of the range of typical VC investment. It's not like you need to wire a whole country at once, you can start by serving small & cheaper areas.

ghshephard 12y ago
The problem is that in many of these areas, the Cable Providers were provided a monopoly in order to get them to build out their services universally. In almost every city, there are tons of profitable opportunities to provide competition, but at the same time, a good portion of the city is not economical to provide services to - and the only reason they get Comcast (or whoever is providing them service) is that they were legally obliged to, in order to get access to the profitable areas. Is it fair to the people who provide universal service that they would have to compete with companies are aren't required to do so?
- narrowrail 12y ago
  It seems the best option would be for each municipality to buy the coax cable infrastructure and lease it back to the cable company, while allowing for other companies to lease the same infrastructure.
ghshephard 12y ago
The problem is that in many of these areas, the Cable Providers were provided a monopoly in order to get them to build out their services universally. In almost every city, there are tons of profitable opportunities to provide competition, but at the same time, a good portion of the city is not economical to provide services to - and the only reason they get Comcast (or whoever is providing them service) is that they were legally obliged to, in order to get access to the profitable areas. Is it fair to the people who provide universal service that they would have to compete with companies are aren't required to do so?
narrowrail 12y ago
Just to clarify, something like 80% of the US has both DSL and DOCSIS available. If there is one option available, typically it is only DSL. I have friends that rely on WISPs and/or cellular in more rural areas.
mschuster91 12y ago
> Sure running cable is expensive It's not just expensive, it's fucking hard. Speaking as a guy who occasionally does this for a living. The revenue you can make on a single phone wire these days just doesn't pay off in five years. Not in ten. Maybe in twenty years, but this break-even delay is too much for any investor who is not at government level! And this is why speedy stuff like FTTH is deployed in cities and not in rural areas: digging costs approximately the same in rural as in city areas... and if it costs me as provider 50 k€ to wire up 100m of city street with 500 customers, that's paying off in a year. Wiring up a rural area with (if you're lucky, and I'm already leaving out real rural areas!) 50 customers takes 10 years to break even... And this difference is why it is imperative that last-mile infrastructure building is done by a government entity charging the same amount of money for providing a bitstream Internet uplink to the customer - at a price point where the city customers subsidize the rural customers and the utility provider breaks even. The added value by telecom providers renting the wires from utility can be e.g. faster peering to Netflix, Facebook caching servers in the next major city, etc.
- icebraining 12y ago
  And this difference is why it is imperative that last-mile infrastructure building is done by a government entity Why? I'm really missing that logic step. OK, so rural is too costly to connect. But that doesn't follow that a specific solution is imperative, especially since the vast majority of the population lives in cities. Why can't the government entity only build in rural/unprofitable areas, by imposing a tax on city connections? More: why can't the government entity simply subsidize the bills of rural users, adjusted to the extra cost of wiring their areas? Thinking even wider, must we wire? What's keeping wireless point-to-point connections from working here? Rarely a problem only has one solution, why is this one an exception?
  - mschuster91 12y ago
    > Why can't the government entity only build in rural/unprofitable areas, by imposing a tax on city connections? More: why can't the government entity simply subsidize the bills of rural users, adjusted to the extra cost of wiring their areas? Because charging every customer the same price regardless where he lives is widely accepted - but just imagine you had a "city tax" appear on your telco bill. You'd be outraged by it... > Thinking even wider, must we wire? What's keeping wireless point-to-point connections from working here? That one is easy to answer: people these days are afraid of radiation and high-voltage lines (NIMBY phenomenon). Also, you would not gain much from point-to-point-connecting a rural village as you'd still have to dig fiber into the village center which you then distribute to the individual houses. But as you are already in the village center, you could also just put a FTTC DSLAM box there and be done (this is what Deutsche Telekom is doing right now in a load of rural areas!). edit: (microwave) point-to-point communication also usually requires expensive communication gear as well as individual (!) licenses from regulators. In addition during heavy rain, fog or snowfall communication quality decreases drastically, and heavy wind may displace the dishes.

ghshephard 12y ago

> all because the VPN bypasses the ISP's domain based throttling. Small but important detail - ISPs don't do "domain based throttling" - but it's entirely possible (and was well detailed fact in the case of Netflix/Cogent/Comcast) that your content provider (Netflix) has purchased transit from a provider (Cogent) that is unable to deliver the service they contracted to because they don't have large enough circuits open to the last mile (Comcast) The real question is whether the last-mile providers such as comcast should be obliged to provide settlement free peering at unlimited data rates with all transit providers is the real question. "Strong" network neutrality would say that they do, and, if Strong network neutrality turns out to be the law of the land, the implication will be that all ISP will transition to volume based pricing for their customers in order to make up for the loss in income that they got from selling transit rights. A somewhat weaker version of network neutrality, but still useful, would suggest that comcast can charge for transit peering onto its network, but must do so on a non-discriminatory rate as established by regulators. I.E. Perhaps Comcast can charge 1$ /mbit/second charged @95th percentile, if they are determined to be a common carrier / title II applicable. Then providers like Netflix (or anyone, for that matter) that fulfilled the minimum operational requires (NOC, peering points, etc...) could purchase transit directly from Comcast. Alternatively, if they don't fulfill those technical requirements, or just don't want to bother, they can purchase transit from providers like Cogent/Level 3, who would resell at a bit of a markup. That's the future I envision being the happy medium for consumers, last mile providers, transit providers, and content providers.

nitrogen 12y ago
The problem with your proposal is that consumers already pay far more than $1/mbit/s to Comcast unless they are still in the introductory pricing period, or are lucky enough to live where Comcast has competition. What's worse, if the consumer actually uses all of that bandwidth (or even their proportional share of a shared last mile link), they will reach their download cap before the end of the month. The exact thing I pay an ISP to do is to provide unlimited (up to my bandwidth plan) transit to the peering points of the services I want to use. They have no ethical or moral right to turn around and charge Netflix, Google, Crunchyroll, Vimeo, or anybody else for the thing I'm already paying for.