Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors" [1]
Cable companies regularly adjust prices based on the entrance of competitors (Google Fiber), or when a cable company enters a new market, prices are initially low to prevent competition and then slowly raised to a much higher level. The excuses for vast differences in rates in metropolitan cities are usually paper thin, but accepted by the media and government at face value. Cable companies also operate secondary businesses with a conflicting interest to their cable operations (Cable TV packages now directly competes with Broadband Internet, also see: NBC/Comcast), not unlike Standard Oil's purchase of many railways and control of shipping lanes. This arrangement vastly stacks the deck in favor of cable companies, and further cable company "cooperation" with state and national officials have created new restrictions on municipal competition.
Cable companies are our 21st century Standard Oil.
[1] https://en.wikipedia.org/wiki/Standard_Oil#Monopoly_charges_...
Back when oil was getting to be useful, lots of people discovered it. Usually, it was in a remote area. The only way to make money off it was to get it to a refinery and then the market. Standard Oil bullied and bribed the railroads into giving them preferential rates and charging high rates for competitors. It's exactly like what cable companies would like to do by subverting net neutrality, give preferential treatment to the traffic that profits them most. It's just information instead of oil, which is even more insidious since it can control the public discourse.
But nobody is really stepping forward to lay residential fiber. Google is the exception and it's because they're one of the only companies with enough money to survive a war of attrition with the incumbents, and even then it's only in a handful of places.
It's prohibitively expensive to have twelve companies each run a different strand of fiber to every house. And you only need one. The key is to a) get one instead of zero and then b) put competition on the other end of the fiber. Have one company (or municipality) be the regulated monopoly that provides only the physical layer, and then let all willing providers compete to terminate the fiber and provide internet/TV/phone service.
Separating the natural monopoly (the physical layer) from over the top services is the key to preventing monopoly abuse. The entity that does that should do only that.
Hell, 5-6 generations on, Rockeffelers are still filthy rich.
Do you have any evidence that cable companies wanted to charge for preferential treatment for traffic? I've seen that claim repeated a lot but never with evidence.
Cable is a network technology with value defined somewhere between Sarnof's, Metcalfe's, or Tilly-Odlyzko's laws. Scale, and dominating local coverage, matter.
Oil is an extractive mineral resource with very low direct costs vs. use value. Absent some form of central contrl, the price has tended to fall far too low. In the aftermath of the East Texas oilfield discovery of 1930 (the biggest on the mainland lower 48), prices fell fist to $0.13/bbl, then to $0.02/bbl. That's barrels, not gallons.
The governors of Texas and Oklahoma called out their state national guards, and the Rangers in Texas, and seized wellheads at gunpoint to cut supply. The quota system imposed, run by the highly innaccurately named Texas Railraod Commission, lasted until 1972. Daniel Yergin's book The Prize covers this in detail.
A similar control program applied to strategic minerals was created after WWII, originally called the Hobard list, and remains in effect as part of the Defense National Stockpile Center.
Raw material and networking economics differ.
It is entertaining how the stalwart protectors of free markets oppose them when it becomes too inconvenient.
The US acts as if one unregulated carrier is enough in cable.
https://www.opensecrets.org/orgs/recips.php?cycle=2014&id=D0...
Relatedly, it's depressing just how cheaply you can buy the house/senate.
I would never want to live without high-speed mobile Internet (which can provide the equivalent of cell service), but is it really a necessity to live? I was a boy before cell phones even existed, and anyone outside academia and a few tech companies had the Internet, and life was fine.
It's certainly extremely convenient, but I don't think it's a necessity.
> plus some who believe that the poor ought to be excluded from using basic infrastructure anyway
Do you have evidence for that statement?
Setting up infrastructure is extremely expensive especially in cities where allot of the European population lives. The US has a different problem where only 4% of the population lives in a major cities so ISP's have to lay allot of infrastructure and historically the more or less remain around their original starting zones and creep out very slowly.
Fiber/Coax infrastructure in the US should be done on a state and municipal levels and then offered to ISP's at a fixed price to recoup the costs via a tender based on the cost to the end consumer
That requires a rather narrow definition of "major cities".
I'd wager that the short term (~10 years) consequences would be vastly superior service for every day citizens. In the long term, not certain but I suspect it would be much of the same as long as the municipal provider had ever-increasing speeds as one of their primary purposes/guiding principals.
I'm not a communist but I think evidence shows that municipal broadband outperforms both telecom and cable operators in all terms of performance from costs to speeds to reliability.
[0] https://en.wikipedia.org/wiki/National_Broadband_Network
As an off-topic aide: was "I'm not a communist" tongue in cheek? Or would such an infrastructure project be actually seen as "communist" &/or undesirable just for it's oversight?
Edit: terminology, link
In other words, the same number of subscribers now have to pay for 4x the infrastructure costs.
> In other words, the same number of subscribers now have to pay for 4x the infrastructure costs.
In other words, building into each others' territories raises the cost of serving customers while putting downward pressure on pricing. The executives recognize that and try to avoid it.
If the cable companies and telecommunications companies had competing services when they were building their networks in the 20th century, I imagine that they likely would have avoided overlapping service areas too.
Except... that is all they have. All they have ever had. And as the population has risen, they have no budget to deploy more servers to meet demand, so every night the speeds crash and you have intermittent outages. Especially on weekends. They are running 20 year old switches that have to handle Netflix loads on a nightly basis.
So you go to town council meetings to find out whats up and it turns out that over 15 years later they still owe some ~3 million on the original bill of 22 million, and the whole town is 10 million in the red (with a population of 3 thousand) so it cannot spend money on practically anything.
So main street is like driving on a cobble trail with potholes that go unfilled for years, and school taxes are the highest in five surrounding boroughs and its still not enough for them.
Sure, you can be certain they got ripped off with whomever they bought the original deployment from back then, given its just coax and not even fiber, and the municipal ISP is only a small piece of general budget mismanagement, but it is a reflection on how bad in general politicians are at budgeting, and nobody should ever be surprised when someone cannot make a reasonable budget when they are doing it with other peoples money and they have no consequences to themselves besides possible reelection issues.
IMO, it is just a more fundamental reflection that politics and political office as it is arranged in the states is both systemically intentional and attracts people who are not technical, not actuarial, and often lawyers and other "people" persons who can talk big to get elected and then go into an echo-chamber of self-reinforcing superiority with all the other elected officials such that they never attract the kind of critical thinking or knowledge to approach anything close to municipal... anything, really, with any degree of competence. They just defer to their friends friend at a teleco wiring company or a water treatment operator or a civil engineering corps and get turned into a money faucet for terrible results. I'm not saying every government has to behave that way, but at least from my observations all the ones I have been under have, at best, been incompetent, and have often been of malicious intent towards its own citizens at their expense for corporate donors and insiders to their social circle. But it is certainly systemically intentional.
Municipal broadband just replaces one monopoly with another -- one that doesn't even have profit as a requirement, since it is also a taxing authority.
I think that you'd see the same phenomenon as in any country which socialised an industry: at first things are — as you guess — much the same, because the same people keep coming to work in the same buildings, operating the same machines according to the same processes &c. But the rate of innovation lowers, and eventually you get the equivalent of a Soviet grocery store (https://www.youtube.com/watch?v=oOBFMMbUFI8): something much better than what you had before, but nowhere near as good as you could have had.
So after a decade or two of municipal broadband, you can expect that you'll have better broadband than when you started, but far, far, far worse broadband than where there is competition.
Now, if the debate is between a public and a private monopoly, I honestly don't know which is worse. Possibly the public monopoly, because its employees are unfireable, but — I don't know.
Infrastructure has massive capital costs. If roads were owned by car dealerships and only permitted cars of their associated brands to drive on them that would be somewhat analogous to having multiple communication providers lay duplicate fiber (and just as wasteful).
Cable and ILECs are acting perfectly rationally by not competing with each other; there is little to gain when you can just squeeze your captive customer base for more money.
Fiber is fiber. The government could setup a public benefit corporation tasked with delivering fiber broadband last-mile infrastructure and keeping up with the latest innovations. If they fail to follow through, the courts can force them to follow the PBC charter.
If you want to leave maximum room for innovation (with resulting higher costs) the PBC could only be responsible for terminating fiber on both ends and any ISP who wants to compete would have to install an ONT on the customer site and light the fiber at the exchange. Then the ISP can replace equipment to wring faster and faster speeds out of the fiber if they want.
You can go the other way and task the PBC with lighting the fiber and delivering packets. It makes the process of starting an ISP much easier but you're reliant on the PBC to keep up with potential 10GB upgrades in the future. That sure would be a nice problem to have though...
This suggests the interesting possibility, that it may be worthwhile for the neighbors in a street to build their own cable and just give it to a competitor of the cable provider.
Similar things happen with turf wars. If I install services in one community then the incumbent can simply lower prices to match mine very easily. At the end of the day I've spent a bunch of money and may not gain any of my competitors customers. Even if my competitor is still paying off infrastructure in that region and may now be running at a lose the companies are so large one community isn't going to make a difference.
Even if you offer faster services the majority of people don't care, they just want to be able to watch Netflix as cheap as possible.
I don't think cable companies are at a Nash equilibrium, but they may be at other forms of equilibrium that I'm not familiar with. Also this game is iterated so there are other (crucial) dynamics at play that I am not familiar with.
[1] https://en.wikipedia.org/wiki/Subgame_perfect_equilibrium
This assumes that all costs stay proportionately the same, _and_ that there is no other competitive advantage than price.
- bringing back all help desk type jobs that were offshored. All of our call center jobs were in the US until recently and some idiot started outsourcing some of them. We are bringing them back immediately. - EPON fiber build outs everywhere (we realize fiber is better than cable but there is existing cable infrastructure and the protocol can support 1gig/s with the current DOCSIS 3.1 standard so for now we are both upgrading the cable system and building fiber EPON) - no data caps in any form - getting rid of DVRs and having both live video and on demand/saved video stream from servers over IP
I would place us as much more techie friendly than ATT but less so compared to Google. Most of the problems with peoples cable service come from poor install jobs, if you have a problem with lost packets or dropping video please be persistent in getting a tech that is knowledgeable on how to troubleshoot line issues.
p.s. use namebench to find the best DNS servers for your area and use those instead of ours.
So, FCC wants them to enter a territory to increase competition, and Charter says "we want to reduce competition down the road buying the competitor". FCC should simply make it a requirement, that Charter should be forbidden from buying competitors in that market. That's all, problem solved.
And Charter must be really stupid to claim they want to reduce competition when talking about monopoly restricting conditions for the merger.
I'd love to have a third player in the game to add more pressure to keep the prices low.
A coaxial cable is displayed for a photograph in front of a Time Warner Cable helmet in Manhattan Beach, California, U.S., on Monday, August 12, 2013.I'll buy that. For a dollar.