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Why Is Broadband More Expensive In the US Than Elsewhere? 569

Posted by samzenpus
from the pay-up dept.
mrspoonsi writes "The BBC reports "Home broadband in the US costs far more than elsewhere. At high speeds, it costs nearly three times as much as in the UK and France, and more than five times as much as in South Korea. Why?...'Americans pay so much because they don't have a choice,' says Susan Crawford, a former special assistant to President Barack Obama on science, technology and innovation policy. We deregulated high-speed internet access 10 years ago and since then we've seen enormous consolidation and monopolies, so left to their own devices, companies that supply internet access will charge high prices, because they face neither competition nor oversight."
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Why Is Broadband More Expensive In the US Than Elsewhere?

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  • Telco oligopoly (Score:5, Insightful)

    by jhill000 (303048) on Monday October 28, 2013 @05:34PM (#45262953)

    The telco lobby writes the legislation.

    • Re:Telco oligopoly (Score:5, Informative)

      by Creepy (93888) on Monday October 28, 2013 @05:46PM (#45263057) Journal

      Gizmodo article [gizmodo.com] on it from earlier this year.

    • Re:Telco oligopoly (Score:5, Insightful)

      by girlintraining (1395911) on Monday October 28, 2013 @06:24PM (#45263453)

      The telco lobby writes the legislation.

      Nope, but you're half-way there. The problem with the United States is that, well... States. In most other countries, if you want to run cable, utilities, etc., you go to the federal government, get your permit, do whatever environmental impact studies need done, and be on your merry. But here, you have to deal with municipalities. Thousands of them. And that opens the door for exclusive contracts; Which are typically for 10, 20, even 50 years. And it goes to one company. One. For an entire town. For 50 years. They didn't write any legislation, they just took advantage of how our government was organized. It's a glitch courtesy of our Constitution.

      The other half of the equation though, and one most people forget, is that the United States is big. Like, really big. Like, it could fit all those other countries mentioned inside it and still have space left over for dessert. Low population density is what fucks us, even more than the above-mentioned which, while bad, can be fixed by law. You cannot shrink a landmass down to a more maintainable size.

      Roads, water works, electricity, cabling... all of it, we need more. A lot more than say, Japan would. In Japan, people are packed in like sardines. There are parts of this country where you can watch your dog run away for three days it's so flat and barren. But it still needs cabling run across it.

      We are, in a very literal sense, a victim of our own size. No fat american jokes though please.

      • Re:Telco oligopoly (Score:5, Insightful)

        by 0100010001010011 (652467) on Monday October 28, 2013 @06:39PM (#45263631)

        Low population density is what fucks us, even more than the above-mentioned which, while bad, can be fixed by law. You cannot shrink a landmass down to a more maintainable size.

        This is a horse shit excuse and I'm tired of hearing it. Why doesn't the Northeast megalopolis have cheap internet? It has a population density of 360 people/sq km

        How about all of the 'mega regions' of the US? http://en.wikipedia.org/wiki/Megaregions_of_the_United_States [wikipedia.org]

        Why don't the east and west coasts have high speed rail, good cheap internet, etc.

        South Korea is on a peninsula with a country stuck in the 70s to the north. Yet they have great internet. Their population density isn't that much greater than the North East megalopolis and much closer than say Sweden, Norway, Finland. All of which also have great internet. Denmark density is a 1/3 of the north east and I was still getting 1 Gbps in my hotel.

        • Re: (Score:3, Informative)

          by phantomfive (622387)

          Why doesn't the Northeast megalopolis have cheap internet? It has a population density of 360 people/sq km

          Well there's your answer. Seoul has a population density of 17,288 people per sq km.

          • Re:Telco oligopoly (Score:5, Informative)

            by mcrbids (148650) on Monday October 28, 2013 @07:09PM (#45263889) Journal

            Hrm... Seoul is a city, not a region. New York City's population density is about 10,630/km sq and Manhatten is about 25,846/km sq. [wikipedia.org]

            Your argument needs more argument, I think.

          • Re:Telco oligopoly (Score:5, Interesting)

            by Archangel Michael (180766) on Monday October 28, 2013 @07:22PM (#45264009) Journal

            Girlintraining almost has it right. While we are not socialistic and have a government being a good big brother to us, we are pseudo-Capitalistic with the worst part of both Socialism and Capitalism in force. If we had a REALLY free economy, the problem would be solved quite quickly. The problem is, we don't have a friggin clue how to solve the problem infrastructure.

            My solution would be to build out via a BOND measure, Fiber to the house/apt/business. Back haul it to a central facility or neighborhood closet, I don't care. Pay a guy to manage connecting Address A to Service Provider B in the closet, where Service Provider B is the company that Address A contracts service through. Allow for a certain number of Service Providers, via auction, to be able to install their CO-LO equipment in said facility, use that auction pricing to pay for the person in the closet connecting Addresses to Service Providers (or other means).

            The Municipality would build out the FIOS infrastructure plant, not giving "franchise" rights to any single player. This would provide EACH Address the opportunity to buy whatever services they actually need from whomever they actually like. Bad Players would leave the marketplace, new players come in with compelling products that shake up the marketplace.

            The Infrastructure would have to have a service fee for maintenance, based on usage of the FIOS plant. More expensive plans (tax on Service Provider plans) would pay a higher "service fee" and no fee would be charged for people who opt out.

            If this were setup this way, the build out would be contracted, to bring FIOS plant to each Address/dwelling/Apt/Business, a bond measure would be the easiest means to achieving this build out.

            This would give Comcast, Verizon, AT&T, and any other company access to every Address in the municipality via what is essentially "dark fiber". And the is no known downside, except for those companies.

            • Re:Telco oligopoly (Score:5, Insightful)

              by girlintraining (1395911) on Monday October 28, 2013 @08:04PM (#45264333)

              Girlintraining almost has it right. While we are not socialistic and have a government being a good big brother to us, we are pseudo-Capitalistic with the worst part of both Socialism and Capitalism in force. If we had a REALLY free economy, the problem would be solved quite quickly. The problem is, we don't have a friggin clue how to solve the problem infrastructure.

              Infrastructure that depends on right of way to land creates a natural monopoly. I don't feel going laisse faire would accomplish anything. If you remove government control and hand over access to private citizens, you will amplify the problem a thousand-fold; Everyone between point A and point B will want a cut, and not everyone will be willing to offer access at a reasonable rate. This is why you have easements and eminent domain. Our current system places right of way in the hands of municipalities, which often offer exclusive contracts and can also be bullied or bought off in ways that the state or federal authorities cannot.

              You cannot have a 'free' economy when you're dealing with a natural monopoly. Even Adam Smith in Wealth of Nations said as much about land ownership. It must be owned or controlled by the government, or you get situations exactly like this; Profits increase because the fixed costs remain constant but demand is ever-increasing. Telecommunications is the classic case of a natural monopoly. You would be hard pressed to find a better example!

            • Re:Telco oligopoly (Score:5, Interesting)

              by Belial6 (794905) on Monday October 28, 2013 @08:15PM (#45264419)
              I would do similar, but I wouldn't trust the municipality to touch the fiber. Municipalities have little to no experience with Fiber. What they do have huge amounts of experience with is piping. Most municipalities run at least 3 different sets of pipes. 2 to every home, and 1 to most neighborhoods. Water, sewage, and storm drains. If municipalities would run a new set of pipes that were the size of sewer lines, they would have the infrastructure to lease space to dozens of competing businesses. New players could pull whatever cable they see fit at a price that dwarfs what it costs now, and if your cable is having problems, you can push the service provider to replace it, or go to a competitor. It would also allow businesses to run private connections between offices within the same city.
          • Seoul.

            What about Israel, Bulgaria, Switzerland, Belgium, Romania and Latvia. All of which are in the top 10 too.

        • Re: (Score:3, Interesting)

          This is a horse shit excuse and I'm tired of hearing it.

          "A variety of market and technical factors, government efforts, and access to resources at the local level have influenced the deployment of broadband infrastructure. Areas with low population density and rugged terrain, as well as areas removed from cities, are generally more costly to serve than are densely populated areas and areas with flat terrain. As such, deployment tends to be less developed in more rural parts of the country. Technical factors can also affect deployment. GAO also found that a varie

          • Re:Telco oligopoly (Score:5, Insightful)

            by reve_etrange (2377702) on Monday October 28, 2013 @07:32PM (#45264065)

            No one questions that its more costly to supply infrastructure to rural areas. The question is why that excuse is at all relevant to American cities. My connectivity, in an urban area in a technological center of the country, is piss poor and extraordinarily expensive because Comcast has an effective monopoly.

            In addition to their price setting ability, Comcast has no incentive to systematically increase network capacity. Instead, they use incremental upgrades made in the course of necessary maintenance to provide new introductory offers while locking in existing customers at lower and more expensive tiers. I tried to find out recently if I could upgrade to a higher service tier - and the answer was no. Even though I'm on the lowest tier (15 Mbps @ $50/mo) and am an existing customer, they will only "offer" me new subscriber packages for which I am not eligible.

        • Re:Telco oligopoly (Score:4, Informative)

          by couchslug (175151) on Monday October 28, 2013 @07:32PM (#45264069)

          "Why don't the east and west coasts have high speed rail,"

          Old established rail that can't be taken out of service, and NIMBY.
          The Northeast in particular would benefit from HSR, and note that rail made the 'burbs practical LONG before automobiles were available, but there isn't room for a buildout.

      • Re:Telco oligopoly (Score:5, Insightful)

        by akinliat (1771190) on Monday October 28, 2013 @06:55PM (#45263771)

        Except you can't blame municipalities for the cost when they're pretty much the only part of government that's been trying to provide low-cost access. Many municipal governments have tried to set up as ISPs for their citizens, and the costs are typically far lower than what you see from the cable/DSL duopoly. They've been lobbied and sued and otherwise lawyered to death for the effort, but at least they're trying.

        And while you can't fix size, you don't really need to. Most of the long-distance fiber backbones have already been run, and most of the US population lives in urban or suburban areas. The bulk of the land area of the US is rural, and they may not get cheap broadband anytime soon (it literally took an act of Congress to get them electricity and telephone after all), but they're a pretty small minority.

      • by fatphil (181876)
        > Low population density is what fucks us

        Yet the US has a population density higher than that of Sweden and Finland. And yet those two countries have well-connected populations, many effectively having broadband access for free. And not coincidentally, those two are well connected together too, as they are also to their southern neighbours. It's almost as if forward planning and cooperation can achieve objectives benefitting all involved parties. Ouch, it's that nasty European "socialism" rearing its ugl
    • Re:Telco oligopoly (Score:5, Insightful)

      by LurkerXXX (667952) on Monday October 28, 2013 @06:25PM (#45263473)

      We like our internet service like we like our medical service.

      Way overpriced do to large companies owning congress.

    • Why? (Score:5, Insightful)

      by noobermin (1950642) on Monday October 28, 2013 @06:32PM (#45263569) Journal

      Why is Broadband more expensive?
      Why do we pay more for healthcare?
      Why is our productivity so high compared to real wages?
      Why does our government spy on us and disregard our civil liberties?
      Why are we below the average in ability according to OECD?
      Why is the gap between the richest and the poorest on par with that of African countries?

      And finally, why the fuck do people keep telling me this is the greatest country on Earth?

      I want to be proud for my country and what it stood for, but it's hard to see nowadays.

      • Re:Why? (Score:5, Insightful)

        by mythosaz (572040) on Monday October 28, 2013 @06:49PM (#45263725)

        Will McAvoy: [Looks at Jenny] And, yeah, you... sorority girl. Just in case you accidentally wander into a voting booth one day, there are some things you should know. One of them is: There is absolutely no evidence to support the statement that we're the greatest country in the world. We're 7th in literacy, 27th in math, 22nd in science, 49th in life expectancy, 178th in infant mortality, 3rd in median household income, number 4 in labor force and number 4 in exports. We lead the world in only three categories: number of incarcerated citizens per capita, number of adults who believe angels are real and defense spending - where we spend more than the next 26 countries combined, 25 of whom are allies. Now, none of this is the fault of a 20-year-old college student, but you, nonetheless, are without a doubt a member of the worst period generation period ever period, so when you ask what makes us the greatest country in the world, I don't know what the FUCK you're talking about!... Yosemite?
        [Stunned silence]

        • Re:Why? (Score:5, Informative)

          by girlintraining (1395911) on Monday October 28, 2013 @07:49PM (#45264217)

          We're 7th in literacy, 27th in math, 22nd in science, 49th in life expectancy, 178th in infant mortality, 3rd in median household income, number 4 in labor force and number 4 in exports. We lead the world in only three categories: number of incarcerated citizens per capita, number of adults who believe angels are real and defense spending - where we spend more than the next 26 countries combined, 25 of whom are allies.

          Literacy [wikipedia.org]: 48th.
          Math [slj.com]: 32nd.
          Science [nationmaster.com]: 14th
          Life expectancy [wikipedia.org]: 33rd
          Infant mortality ('05-10) [wikipedia.org]: 40th.
          Median household income [wikipedia.org]: 4th.
          Labor force [wikipedia.org]: 3rd
          Exports (per capita) [wikipedia.org]: 43rd
          Exports (gross) [wikipedia.org]: 2nd
          Incarceration (per capita) [wikipedia.org]: 1st
          Adults (belief in angels) [about]: No reliable statistics available. 41-80%
          Defense spending (gross) [wikipedia.org]: 1st
          Defense spending (% GDP) [wikipedia.org]: 2nd (tied with Russia)

          "where we spend more than the next 26 countries combined, 25 of whom are allies."

          False. Only the next 14. Of those, only 9 are allies.

      • Re:Why? (Score:4, Interesting)

        by girlintraining (1395911) on Monday October 28, 2013 @07:27PM (#45264033)

        Why is Broadband more expensive?

        Regulatory hurdles, low population density, and we are one of the largest countries by area on Earth.

        Why do we pay more for healthcare?

        Because America subscribes to a warped version of capitalism that places things in the private domain when most other governments wisely decided to manage these things. This includes, but is not limited to, basic utilities like water, electricity, telecommunications, internet, and even roadways. This policy benefits a tiny fraction of Americans -- perhaps 1 in every 250 Americans, while harming the rest, and it is not changed because our government has essentially been co-opted by wealthy private interests and corporations. As our popular media is controlled by the same, the illusion is presented of choice regarding political affiliation and candidates, when in fact no choice exists.

        Why is our productivity so high compared to real wages?

        Because we don't take vacation, or sick days, and have no labour party present to defend workers' rights, leading to the majority of states passing variations of Right to Work laws which effectively ban unions and allow employers to fire people for any reason, at any time. As a result, the rights of workers suffer, leading to institutionalized abuse and exploitation of workers. Should labor prices rise, it is easy to simply order Congress to flood the affected market with immigrants and crash the labor price.

        Why does our government spy on us and disregard our civil liberties?

        All governments do that. Ours just got caught. As far as why they do it, the reasons are too numerous to list here, but effectively it comes down to national security and preventing any widespread political insurrection amongst a highly exploited worker caste.

        Why are we below the average in ability according to OECD?

        Because we invest very little in public education, and the price of post-secondary education is inflating at double digit percentages every year, effectively eliminating access to higher education for many, if not the majority, of the population.

        Why is the gap between the richest and the poorest on par with that of African countries?

        This isn't entirely accurate. Japan has the lowest wealth inequity of any country on Earth, and the highest is Bolivia. The United States, while scoring nearly the same as Uguanda, also wasn't that far off from the United Kingdom. Source [wikipedia.org] The problem is not a wealth "gap" per-se but rather that when you plot wealth distribution as a curve, the United States has an uncharacteristically high concentration of wealth amongst the top 1% -- far higher than any other country on Earth.

        There are many reasons for this, but essentially it comes down to a lack of inheritance tax and how our economy has been structured; We are much more an investment and service-based economy than most, and both of these, but investment in particular, leads to rapid wealth disparity being created. Deregulation of the stock market, banks, etc., also have contributed significantly to this problem -- we are, as it were, robbing Peter to pay Paul. See also: Too big to fail. While the impact of any one of these legislative initiatives isn't enough to change things, collectively they are excerting a continuous pressure on the economy and over the past thirty years the problem has worsened. However, the retirement of the boomers has acted like a catalyst, rapidly accelerating this trend.

        And finally, why the fuck do people keep telling me this is the greatest country on Earth?

        Because we live here. Duh. Nobody's national anthem starts with "We're Number Two!"

  • by isorox (205688) on Monday October 28, 2013 @05:35PM (#45262967) Homepage Journal

    America is the home of capitalism, which means competition, which drives down prices and raises standards. The rest of the world is a socialist hellhole.

    It's similar to what the North Koreans believe, with a touch of stockholm syndrome.

    • by Moryath (553296) on Monday October 28, 2013 @05:43PM (#45263031)

      Precisely this. The illusion of "choice" and "capitalism" is strong in the USA.

      Then you get down to the nitty gritty.

      In the town I live in, precious few grocery stores aren't the HEB brand. There is no real competition for them and they gouge.
      In the neighborhood I life in, I can't get FiOS and the AT&T DSL options are a joke (they won't bother putting in capacity). So if you want anything but *shudder* dialup, your options are Warner, Warner, or... Warner. Zero competition, price gouging accordingly.

      The communications market is so "deregulated" that monopolism takes over, with deliberate barriers to entry placed by noncompete agreements and dirty tactics. And yet so many people think anarcho-libertarian, "laissez faire" deregulation will somehow make their lives better in every aspect.

      • by Crazy Taco (1083423) on Monday October 28, 2013 @05:51PM (#45263113)

        The communications market is so "deregulated" that monopolism takes over, with deliberate barriers to entry placed by noncompete agreements and dirty tactics. And yet so many people think anarcho-libertarian, "laissez faire" deregulation will somehow make their lives better in every aspect.

        That's not true at all. Try opening up a new cable company in your local town, or opening up a new power plant and running new wires to all the houses. Oh, that's right, you can't, because the government has decided that it would be inefficient to have more than one set of power lines, or water lines, or cable lines, or telephone lines, etc, going into a single home. So they allow one provider to service the whole town and be a government sanctioned monopoly. That's hardly "deregulation"... in fact, it's the epitome of the government regulating and controlling everything.

        • by icebike (68054) on Monday October 28, 2013 @06:07PM (#45263281)

          Its more a matter of practicality than regulation.

          Nobody would stand for yet another cable company trenching through every neighborhood laying new wire or fiber. Even if they wanted to, they couldn't afford it. The only way this gets done is when the neighborhood is built, and there is nothing to disrupt, and not sidewalks or driveways are laid yet. You can trench, pipe, and pedestal a hundred home subdivision in an afternoon and leave it to the home builder to cable each house to the pedestal. Comcast or Verizon will jump at the chance to do that because it means a lot of customers are locked in.

          When you build a subdivision, you typically deed the streets, waterlines, sewers, to the city/county at the end of construction.
          Its long past time to stop subcontracting the bandwidth job to the Telco/Cable companies and make the subdivision contractor put that in
          and deed that to the city as well. Yes it raises home prices.

          • That's ridiculous. I used to install pipelines and wells beneath roads in southern California. That's a much slower and messier process than laying underground cables (I know because we did that too). Believe me, the residents did stand for it. To them it's just more road work. It would be easy for a company to lay new subterranean cable, and it would be even easier to place it above ground.

        • by Ichijo (607641)
          Telephone is a many-to-many service, using circuit switching to dramatically reduce the number of necessary wires. Why couldn't power lines, water lines, cable lines, and so on do the same using valves, relays, etc.?
          • by icebike (68054)

            Telephone is a many-to-many service, using circuit switching to dramatically reduce the number of necessary wires. Why couldn't power lines, water lines, cable lines, and so on do the same using valves, relays, etc.?

            What ?

            Are you daft? You're streaming music from the web and suddenly it goes silent because your neighbor checked his mail?
            How to you propose to have water at every tap without a pipe running to the faucet? Bang on the pipe till some
            operator dressed like Lilly Tomlin working in your basement pulls a hose out of one pipe and plugs it into another?

        • by Mitchell314 (1576581) on Monday October 28, 2013 @06:11PM (#45263317)
          'Inefficiency' has little to do with why governments regulate and limit utilities. The biggest is safety; there used to be a time when there were many competitors for power supply and the combined distributions systems were incredibly dangerous. Not to mention a horrible pain to track and maintain for the companies and the technicians. There are also big issues with the legalities of easements, as well practical and technical problems. The market is very unlike common commodity markets.
        • by Zenin (266666)

          Alternatives?

          The reality is it's simply not practical to allow any random person to dig up the streets or put up new telephone poles willy-nilly to run new lines, especially considering the extreme risk both to existing lines (corporate property) and personal residences.

          If my neighbor signs up with a shotty power, water, gas, or even Internet company...my home is at higher risk of fire or flooding.

          It's not (simply) about inefficiencies. It's about safety, reliability, and accountability.

          The fact is there a

          • by jonbryce (703250) on Monday October 28, 2013 @06:20PM (#45263407) Homepage

            In the UK, there is one set of electricity wires in the street, one set of gas pipes, and one set (or sometimes two sets) of telephone cables.

            The owner of the electricity wires, the gas pipes, and except in Hull, one of the sets of telephone cables, is required to make them available to other suppliers at a regulated price. That means I can choose from many different people to supply my gas, electricity and telephone.

            • In the US telco companies are required to lease their plant at wholesale rates to competitive exchange carriers. This deregulation is what gave us unlimited long distance and voip. In most areas of the country DSL that can be leased on a wholesale basis is quite slow based in technology issues. CLEC's are mostly stuck buying bare wires from the customer premise to the local telco exchange, putting the loop distance in the ADSL range. They have kept CLEC's out of their VDSL and fiber products due to how the

        • by polar red (215081)

          . in fact, it's the epitome of the government regulating and controlling everything.

          That's not what I call regulation. regulation serves to increase competition and protect the weakest actor on the market (in this case: the consumer, by far). The thing you think that is regulation, is in fact a tool of plutocracy.

        • by Jane Q. Public (1010737) on Monday October 28, 2013 @06:16PM (#45263367)

          "you can't, because the government has decided that it would be inefficient to have more than one set of power lines, or water lines, or cable lines, or telephone lines, etc, going into a single home."

          This all actually fits together. The glue that makes it all stick (or rather, fall apart) is regulation under FCC Title II. At the risk of oversimplifying, it went something like this:

          In the early telephone days, the U.S. saw that multiple competing, and usually incompatible, telephone systems wasn't working well. It decided to allow one highly regulated monopoly to build our countrywide telephone infrastucture. In exchange for allowing it to operate unchallenged, it had to live with certain regulations, as a common carrier under FCC Title II.

          There are certain strict regulations that apply to Title II common carriers. Among the rules are, in no particular order: (1) the carriers cannot supply content, they can only carry content (telephone conversations, internet packets) created by others. (2) A common carrier cannot intercept communications, or allow communications to be intentionally intercepted, without a warrant. There are other rules, too, but those are the two important ones for the moment.

          As a result of having a single, unified infrastructure, at the time the U.S. phone system was the envy of the world. This telephone monopoly was eventually broken up (the reasons are beyond the scope of this summary), but telcos still have to live by common carrier rules.

          Then along came cable TV. Back when it started to become apparent that cable could also be a good medium for internet communication, the cable companies (which were already fat from cable TV profits) lobbied Congress to specifically pass a law saying Title II (common carrier) regulation would not apply to ISPs.

          The result is what we see today: ISPs can legally intercept your communications in various ways, cable companies can supply content AS WELL AS carry communications (the possible negative consequences of this should be obvious), and they have had huge mergers and developed monopolies because they are not subject to the same sane regulation as the telcos were (are).

          The point being this: in countries where the common communications backbones are required to allow sharing by competitors, internet service is faster and cheaper. That is true competition. What the cable companies in the U.S. are calling "competition" really isn't.

          Free-market capitalism is not always the best answer, when it comes to common public services, utilities, etc. And it is becoming increasingly obvious that it hasn't worked for cable in the U.S. [But note: lobbying Congress is not "free market capitalism", either... so it's kind of a moot point in this particular instance.]

          • I should add that they did not get the Title II exemption just for the purposes of carrying internet. They also wanted to be able to provide content as well as deliver it.
        • by Luckyo (1726890) on Monday October 28, 2013 @06:24PM (#45263443)

          And as of typing this, three ignorant fools modded you insightful.

          Do you know what happens in reality, behind those pretty words and talking points that are carefully fed to you via mass media? When your megatelco sees competition it:

          1. Blocks peering at local exchanges which it mostly controls, or puts in prices so high that fledgling business goes under.
          2. Lowers its user prices for a short period, dumping the price and bankrupting the competitor. Then pushing prices to even higher level to gain the money lost back.
          3. Buys new competitor out outright.
          4. Uses local bought and paid for legislature to block the competitor.
          5. Reminds its contacts in the local media to talk about 4. as if it's the fault of the government, and that more deregulation is needed to control 1-4. And so useful idiot like yourself types up that wonderful ideological drivel that is being carefully fed to him and he gets to parrot, and three other ignorant fools mod him insightful.

        • by geekoid (135745)

          "inefficient"
          actual, its because it isn't practical and it create a heavy burden on the citizen.
          So it's a good way to gt infrastructure they requires long distances built, but doesn't many everyone gets the street torn apart of each competitor.

          You should study the initial roll outs and expansion of electricity where a lot of people where running lines. It's pretty horrible.
          The regulation exists becasue of a reason. You should look at why any regulation exists.

        • by mishehu (712452)
          You're simply contributing scenarios as to to why last-mile needs to belong to the municipality / county / state gov't and the users select their service provider on top of this. The telcos and cable cos need to NOT own the last mile.
      • Re: (Score:2, Informative)

        by clarkkent09 (1104833)

        Except that monopolies are almost always created by regulation.

        In the town I live in, precious few grocery stores aren't the HEB brand. There is no real competition for them and they gouge.

        Why is there no competition for them? Is there something stopping another chain from opening a store and charging slightly less and taking all their customer?

        In the neighborhood I life in, I can't get FiOS and the AT&T DSL options are a joke (they won't bother putting in capacity). So if you w

        • by dpidcoe (2606549)

          3) If the current provider is really "gouging" the customers, it should be no problem for the newcomer to offer a better deal and still be profitable

          Maybe more of a problem than you think. If they've been gouging, that means they're rolling in money compared to you. When you show up with a new low price, they can easily undercut you (even to the point of taking losses for a few years) and your selling point dries up overnight.

        • by AK Marc (707885) on Monday October 28, 2013 @06:18PM (#45263379)

          Why is there no competition for them? Is there something stopping another chain from opening a store and charging slightly less and taking all their customer?

          Yes, the cost of setting up a new store. That's a significant cost, and if you did do that, they'd drop their prices. I've seen where stores have waited until a competitor bought land near them, then they dropped their prices significantly. The land was sold by the competitor because it was no longer profitable. Then the prices went back up. The monopoly bought the land, making money from their competitor, then developed into something that could never compete with them (offices, rather than retail), then sold it to a property management company, ensuring nobody could get an equivelent piece of land at a reasonable price for miles around them

          There are many ways for monopolies to abuse the marketplace without directly manipulating it.

        • by Luckyo (1726890)

          Monopoly is natural outcome of unregulated capitalism. Take a look at what was happening in US in early 20th century.

      • Re: (Score:3, Insightful)

        by James Sarvey (3348883)
        I'm mostly in favor of laissez faire policies, but there are some industries where it just doesn't make sense. Communications is one of those. There's only so much EM spectrum to sell, and only so much space for copper wire, fiber, etc. There's an argument to be made that it's a natural monopoly, and in some ways we treat it that way; whichever company buys a bit of spectrum from the FCC has a monopoly on it, and in many places cable companies have contracts with local governments that grant them a monopoly
    • by Thomas Miconi (85282) on Monday October 28, 2013 @06:00PM (#45263199)

      Well, it's complicated.

      Take the example of France. Broadband internet and digital TV go largely through DSL. And yes, it's pretty damn cheap. When I was there, three years ago, I was paying 30 Euros / month for broadband internet + unlimited phone calls + television with a bazillion channels (did you know that there are two channels broadcasting in frigging Aramaic?)

      Now one reason why France has cheap, abundant DSL is because of massive infrastructure built by former government monopolies. But at the beginning, even though they had this infrastructure, internet was still pretty damn expensive. The few telcos that were operating the networks obviously had a very gentle concept of competition.

      Then this guy [wikipedia.org] came along, leased an existing network and offered much better service at much lower cost. Everybody had to align.

      So it's not just about competition or government - it's both together. Also, there's competition and "competition". Competition only works if you have some outsider willing to move in and break the "gentlemen's agreements". Apparently T-mobile is kind of doing this in America with mobile phone contracts, but broadband internet is still firmly within the grip of the cable oligopoly.

    • by Zenin (266666) on Monday October 28, 2013 @06:02PM (#45263237) Homepage

      America is the home of capitalism, which means competition,

      Horrendously wrong.

      Capitalism is a game in which the goal is simply to make the most money (with the least effort). The "free market" (aka competition) is just one of many possible strategies to make the most money. Competing in the free market however, is without question the most expensive, the riskiest, and the least rewarding possible strategy available to most business...which is precisely why practically every business on earth bends over backwards to avoid the free market at all costs.

      Going into "new markets", forming monopolies, getting regulations passed to raise the barriers to entry, avoiding "mature markets", etc are all entirely about avoiding the free market and thus avoiding competition.

      This is the biggest mental issue free market advocates face: The ironic reality that if you want an actual free market...you must drag people into it kicking and screaming (most effectively through tight regulation...).

    • by Sperbels (1008585) on Monday October 28, 2013 @06:28PM (#45263509)

      America is the home of capitalism, which means competition, which drives down prices and raises standards.

      Competition. Right. My choices for internet are 50 mbps Comcast (which has to be bundled with cable service I don't use) or 1.5 mbps DSL. Seems there's lots of competition here.

  • âoeIf he needs a million acres to make him feel rich, seems to me he needs it 'cause he feels awful poor inside hisself, and if he's poor in hisself, there ain't no million acres gonna make him feel rich, an' maybe he's disappointed that nothin' he can do 'll make him feel rich.â
    â John Steinbeck, The Grapes of Wrath
  • People will pay whatever is charged up to the point that the market will bear. It's not that far off from an unregulated utility at this point. Television content delivery has similarly pulled their prices up through the roof, because people will pay it.

    I haven't paid for either service (at least intentionally) since 2009. Under the right circumstances I might be persuaded to get the broadband again, but not cable or satellite television.

    • by mythosaz (572040)

      People will pay whatever is charged up to the point that the market will bear.

      +Everything, informative.

    • People will pay whatever is charged up to the point that the market will bear.

      ... at which point purchase will become compulsory via government mandate.

    • by jamstar7 (694492)

      People will pay whatever is charged up to the point that the market will bear. It's not that far off from an unregulated utility at this point. Television content delivery has similarly pulled their prices up through the roof, because people will pay it.

      I haven't paid for either service (at least intentionally) since 2009. Under the right circumstances I might be persuaded to get the broadband again, but not cable or satellite television.

      I pay for satellite service here for TV because there is no cable company locally. I live in a town of about 3000, 40 miles from anywhere. Likewise, only ONE internet provider here, and the lines are slow as hell and expensive. Why? Because there is no competition.

    • by ewibble (1655195)

      Suppliers will lower their prices until the can no longer to afford to be in business, they will innovate to reduce costs. That of course relies on competition. That is why you need competition. Otherwise yes they will charge as much as they can. They will produce it inefficiently as well because there is no driver to reduce costs, in fact high costs can be used to justify a high price.

      That is why when you hear a pricing scheme that goes along the lines well product A replaces B so lets about the same price

  • by Austrian Anarchy (3010653) on Monday October 28, 2013 @05:41PM (#45263009) Homepage Journal
    1. Where I live we do have choice between carriers, and it is not even a big city. 2. When I was in a densely populated area, Northern VA, we had choice too. Deregulation to allow competition causes monopolies? No, does not compute. Regulation creates barriers to entry that leans to monopolies or few providers, those who can get the government to protect their territory with police power. ATT was a national monopoly only until the feds allowed competition. Your local utility is only a monopoly as long as your local government makes them one, same with your cable provider, etc.
    • Where I live, we have precisely 2 choices: AT&T, or Mediacon.

      Every once in a while, I see ads for some local startup offering decent speeds at fair prices, but it doesn't seem like they last more than 2-3 months before getting swallowed up by one of the aforementioned Big Fish.

    • by petes_PoV (912422) on Monday October 28, 2013 @05:49PM (#45263085)

      Your local utility is only a monopoly as long as your local government makes them one

      The problem in the USA is that pressure groups, whether industrial or commercial have no counterbalance. The wrong sort of regulation stunts growth and competition. However zero regulation turns a free market into survival of the fittest with that survivor killing off the rest. Neither situation is good and a regulator who is able to stop consolidation and monopolies would act in the interests of the consumers.

      That's what happens in most countries and it's what keeps a competitive market operating. The USA has allowed its corporations to become too influential and too powerful.

  • by F34nor (321515)

    to buy a congressman than to build a better business. To all those you think America is a free market, go fuck you ignorant self then read up on Mussolini's definition of fascism.

  • No real choice (Score:4, Insightful)

    by stewsters (1406737) on Monday October 28, 2013 @05:42PM (#45263027)
    Much like healthcare, most Americans don't have a real choice. I would pay less and get better healthcare and faster internet service if I could.

    Why is this? I would guess that it's probably due to monopolies taking advantage of regulations to make competition stay away. Also probably in part to people wanting to watch specific sports and shows, and only being able to get them though one of the major cable/satellite networks. Shows like that are going to be hard for a startup internet company to replicate. Things like piracy, netflix, and itunes alleviates some of these problems, but a lot of people still prefer to get their games live.
  • Hmmm .... (Score:5, Insightful)

    by gstoddart (321705) on Monday October 28, 2013 @05:48PM (#45263075) Homepage

    We deregulated high-speed internet access 10 years ago and since then we've seen enormous consolidation and monopolies, so left to their own devices, companies that supply internet access will charge high prices, because they face neither competition nor oversight.

    So, the conclusion is de-regulation is bad for consumers, but good for businesses.

    Gee, I'm shocked. De-regulation basically is carte blanche to screw over your customers and not be accountable to anybody.

    The whole mentality of "it's good as long someone is making profit" will be the death of us.

    The 'free market' is a lie, and it always has been. Consumers don't have perfect information, and corporations will lie cheat and steal to improve their bottom line.

    That de-regulation would ever improve anything for consumers has always been a big lie.

    • Re:Hmmm .... (Score:4, Interesting)

      by MobyDisk (75490) on Monday October 28, 2013 @06:11PM (#45263315) Homepage

      Day 1: Deregulation is evil!!!
      Day 2: Deregulation is wonderful!!

      In this story, all deregulation is evil and capitalism is an illusion. In the Tesla story, deregulating car dealerships [slashdot.org] is great and everyone loves it. In states where people can choose their own power provider, deregulation is great. When we deregulated phone sales, everyone was happy. (For those who don't know: In the 1970s you had to buy phones from the phone company. they were all big, ugly, and expensive. No answering machines were allowed, etc.)

      Can we just stop the blanket "all deregulation sucks" posts? Removing bad regulations is good. Updating old regulations to reflect modern technology is good. But not all regulations are bad. It just isn't black and white.

      P.S. What deregulation of high-speed internet access were you even talking about? How can you say it was good or bad without even knowing what is being discussed?

    • by bobbied (2522392)

      De-regulation basically is carte blanche to screw over your customers and not be accountable to anybody.

      Not exactly true. If you deregulate an industry, you also make it easier for new businesses to popup and thrive which where not possible before. Assuming your regulations didn't create a single monolithic company that provides an essential service, when you remove regulations the capitalist forces will drive efficiency and competition will drive prices down.

      So... What REALLY is the effect of deregulation? Better, more efficient delivery at reduced prices with more companies competing for your business.

      T

  • by pieterh (196118) on Monday October 28, 2013 @05:48PM (#45263083) Homepage

    Once Upon a Time in America

    Cheap communications has changed our society more than any other of our inventions and it has removed more tyrants from power than any weapon. Let’s take another step into the history books, back to May 1st, in 1844. Alfred Vail, working with Samuel Morse, was setting up the first telegraph line, and on that day sent the world’s first ever electronic message down the 24 miles of cable that were working, from Annapolis Junction to Washington D.C., to report the results of the Whig Party presidential nominations (Henry Clay won that nomination, and lost the subsequent election).

    Just a decade later in 1855, the New York and Mississippi Valley Printing Telegraph Company and the New York & Western Union Telegraph Company merged to create Western Union. One assumes new-york-and-mississippi-valley-and-western-union-printing-telegraph-company.com was already taken by domain name squatters.

    By 1900, Western Union operated a million miles of telegraph lines, and by 1945 it had an effective monopoly over the US market. As the New Yorker wrote [newyorker.com], monopolies make spying easier. It is an easy and obvious trade: the government allows, by inaction or by intervention, a powerful telecommunications company to become dominant in a market through mergers and acquisitions. In return that company provides the government with surveillance.

    The New Yorker explains how Western Union used its monopoly to serve those in power:

    What we now call electronic privacy first became an issue in the eighteen-seventies, after Western Union, the earliest and, in some ways, the most terrifying of the communications monopolies, achieved dominion over the telegraph system. Western Union was accused of intercepting and reading its customers’ telegraphs for both political and financial purposes (what’s now considered insider trading).

    Western Union was a known ally of the Republican Party, but the Democrats of the day had no choice but to use its wires, which put them at a disadvantage; for example, Republicans won the contested election of 1876 thanks in part to an intercepted telegraph. The extent of Western Union’s actions might never be entirely known, since in response to a congressional inquiry the company destroyed most of its relevant records.

    It is quite visible how cost gravity drove communications down from an experiment for the wealthy to a mass market product so cheap even Western Union couldn’t make profits from it. By 1980 its telegraph business was dying, and the old Western Union business was finally closed in 2006 [wikipedia.org], after 151 years of operation. The name was, as we know, reused for a financial services company which today enjoys a government-sanctioned monopoly.

    Curiously, Western Union’s long telegraph monopoly seems to have had only a small impact on the size of communications networks. If cost gravity was operating fully, at 29% a year, and telegraph costs were in free-fall, there would have been 37M miles of telegraph by 1900. Instead, assuming Western Union had half the market, there were 2M miles. That is a factor of 16 over 55 years, which is not much, and a part of that can be accounted for by quality improvements.

    I’m also not sure what to do with the random figure of 113 million kilometers [integer-research.com] of fiber optic cable produced in 2010. A cable is a bundle of fibers, and the traffic rates are rather higher than Western Union’s old stock. Has cost gravity been working?

    One smoking gun pointing to a century and half of cost gravity being hijacked by telecoms monopolies back through AT&T and Western Union is the cost of the modern equivalent of a telegraph, the text message.

  • by Okian Warrior (537106) on Monday October 28, 2013 @05:55PM (#45263133) Homepage Journal

    Yes, yes - it's a "natural monopoly", we get it, you studied economics in college.

    This whole thing could be fixed by changing the model from "pay to access" to "pay to use".

    The US considers the infrastructure a fixed resource - fixed radio bandwidth allocated to certain players, fixed easements given to certain players, and so on. When you have a fixed resource, you have high access fees and discouraged use: multi-year contracts, high monthly bills, data caps, throttled access, poor/no connectivity with no guarantee, and so on.

    In a "pay to use" model, the government would mandate a fixed maximum charge per gigabyte of usage. Companies with a fixed resource could increase profits only by encouraging more usage: deploy newer and faster technology, connecting more people, encouraging high data-transfer activities (netflix, et al.), and so on.

    Such a change wouldn't even affect the existing players: take the total cost of internet access and divide by total internet usage to come up with a fee per-gigabyte that would give the same income next year as they get with the current system.

    The difference being, now they have an incentive for service, instead of an incentive for rent-seeking.

  • by MrDoh! (71235) on Monday October 28, 2013 @05:56PM (#45263147) Homepage Journal
    All that extra hardware to spy on US citizens, that cost has to be passed on to consumers. Probably why it's hard to get fast speeds too, you have to wait till the gov upgrades their backend to handle the extra workload of everyone on faster links; when they get their new spy gear in, you get another 5mb.
  • Deregulated monopoly (Score:5, Interesting)

    by Todd Knarr (15451) on Monday October 28, 2013 @05:58PM (#45263167) Homepage

    The big problem is that we deregulated the cable and phone companies, but we didn't remove their monopoly agreements and we didn't enforce any regulations barring them from entering into non-compete agreements. So you end up with a situation like where I live, where Cox Cable isn't subject to regulation regarding rates, services and quality, etc. but at the same time no competing cable company's allowed in (because Cox still has an agreement with the city making them the only cable company allowed to run cable on the public right-of-way), the city attorney routinely enforces that agreement (taking legal action when one of the two cable companies in the area tries to provide service in an area assigned to the other, even when that other company isn't actually providing service in the affected area), and there's an agreement between Cox and Time-Warner (the other company in the area) not to offer service where the other's already providing it. End result: all the downsides of a monopoly combined with all the downsides of completely-unregulated services. They can do whatever they want with rates, there's no legal basis for challenging them, and there's no competitor you can switch to. To fix the problem we have to remove this pseudo-deregulation: either they're fully deregulated and not allowed to bar competition from entering the area, or they've got a monopoly on service and are subject to regulation as a public utility.

  • There's your tax-subsidized patent-owned-by-public answer.

    Capitalism drives down costs.

    Mercantalism, which Adam Smith, the father of Capitalism railed against, provides large players with greater rewards for inefficiencies propped up by people who claim to be Capitalists, but depend on the lack of competition to win them billions.

  • by Kohath (38547) on Monday October 28, 2013 @06:01PM (#45263229)

    It is worse in the US than in Korea. But Canada also has bad Internet [nationalpost.com]. South Africa has some slow speeds and usage caps [wikipedia.org]. Also Australia and other countries [arstechnica.com].

    We're neither the slowest nor the most expensive.

  • by upuv (1201447) on Monday October 28, 2013 @06:06PM (#45263259) Journal

    US broadband is more expensive than a few countries.

    Also the available speeds vary widely as well. The US has a decent speed overall. Given that a significant amount of content is available in the US. The real world speed in the US is significantly better than other locations around the world. See: http://www.netindex.com/ [netindex.com]

    Lets also factor in region locking of content. The US generally does not suffer from the issue. Other regions around the world are simple blocked from content due to the region they are in. Again the US is at a significant advantage here.

    There are a lot of other countries that are a hell of a lot more expensive than the US. Case in point a first world country Australia.

    Overall the Internet experience in my humble opinion in the US is vastly superior to most other locations around the planet.

    Now lets also factor in penetration of broadband and average household income. The US fairs very well indeed when you start to think about these factors. However the US is still behind some notables. Korea for some time still be the bench mark that other countries try to achieve on all fronts. Other countries are embarking on plans to significantly improve speed, bandwidth, and costs.

    This article should have been about. If the US doesn't do anything to upgrade it's aging internet infrastructure it will soon be one the the most expensive and poorest performing broadband countries in the world.

  • Another transatlantic pissing contest yay!

  • Since the 90s most of the deregulation that has occurred has not benefited the public interest or the consumer, but instead benefited the shareholder by decreasing competition through mergers and acquisitions. Even in the recent financial collapse, we found out that there were certain businesses that were too big to fail and had to be bailed out by the government. By definition, any business that is so big that it's failure would be catastrophic to the economy and needs bailed out by the government means t

  • I will remind folks that the US has much longer telephone local loop length than other countries.

    Part of this is due to more rural and spread out suburbs, earlier deployment of telephone than other countries, but part of that may be also be due to CO consolidation during the firming up of ESS.

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