Why There Are So Few ISP Start-Ups In the U.S. 223
An anonymous reader writes "Despite whispers of growing dissatisfaction among consumers, there are still very few ISP start-ups popping up in communities all over the U.S. There are two main reasons for this: up-front costs and legal obstacles. The first reason discourages anyone who doesn't have Google's investors or the local government financially supporting them from even getting a toe in the business. 'Financial analysts last year estimated that Google had to spend $84 million to build a fiber network that passed 149,000 homes in Kansas City, with the cost per home at $500 to $674.' The second reason will keep any new start-up defending itself in court against frivolous lawsuits incumbent ISP providers have been known to file to bleed the newcomers dry in legal fees. There are also ISP lobbyists working to pass laws that prevent local governments from either entering the ISP market themselves or partnering with private companies to provide ISP alternatives. Given these set-backs and growing dissatisfaction with the status quo, one has to wonder how long before the U.S. recognizes the internet as a utility and passes laws and regulations accordingly."
Re:falling behind (Score:1, Informative)
Loser Pay Legislation (Score:3, Informative)
Loser-Pay Legislation would take care of the second one. Been saying it for years.
Eventually, those folks who oppose it simply because it seems too "conservative" for their politics are going to get their minds right.
The United States is the only major Western Democracy that doesn't follow the "british rule," where the winning party in a lawsuit is generally allowed to recover the costs of bringing or defending a suit.
Re:yea no (Score:5, Informative)
Oh stuff a sock in it.
The cost for the infrastructural build out of basic telephone service, which is what the incumbent telcos are required to provide, was paid for decades ago and with significant taxpayer subsidies. None of the incumbents are required to provide universal internet service at all, let alone reasonably useful universal internet service, so your complaint is bull crap. Also, Comcast/Time Warner/Charter etc are not required to provide any level of universal service.
Re:Ah, Crony-Capitalism! (Score:2, Informative)
I live in the EU (UK) and I don't see things working any better here.
The UK energy market is dominated by a small number of highly vertically-integrated suppliers (the same company generates, wholesales, distributes, and retails), who pretty much have a license to print money - they don't really compete with each other, one of them raises prices, and a few months later the rest al follow suit. Apart from some vigorous hand-waving, the regulator can't do jack about it. Sure, governments keep threatening to do something about it, but the energy companies just play the investment card, they say if the government interferes with them, they won't invest in the energy infrastructure, and a few years down the line we'll be having blackouts. The government ends up doing nothing.
As far as ISPs are concerned, the three largest are BT (former national monopoly telco), Virgin (the only cable provider in the UK) and PlusNet (owned by BT). BT and Virgin are vertically integrated (they own everything from the backbone to the cables under the streets to the end-user equipment). Most other ISPs are customers of BT's wholesale arm. So between them, two companies basically have the ISP market sown up. Far from getting fined by the government, BT is the only company getting government funds to roll out rural broadband services - as usual with such schemes, the big incumbents are the only companies big enough to take on the grand government schemes, and so their position is reinforced by a fat helping of taxpayers money.
Re:For God's Sake, Internet is a LUXURY not a UTIL (Score:5, Informative)
Except for banking. And filing some legal papers. Education. Weather reporting. Checking commodity reports, which is very important to farmers. Rapid shipping of design documents to job sites. Those are just a few I can think of.
Re:Ah, Crony-Capitalism! (Score:4, Informative)
" Virgin (the only cable provider in the UK)"
Because they acquired all their competitors. There used to be more, Virgin bought them all up.
Re:For God's Sake, Internet is a LUXURY not a UTIL (Score:4, Informative)
And compared to using the internet, every one of those alternatives is either more expensive, more time consuming, or both. As time goes on, the brick and mortar method will become 'depricated' as anyone still catering to that group will be less cost effective than their online-only counterparts. Obligatory car analogy: Once upon a time, people could get anywhere they needed to go via public transportation or by simply walking. Automobile travel enabled the 'big box retailers' model, and local businesses in small towns evaporated.
Same thing with cell phones: People once used a combination of pagers and pay phones. Now there's very few pay phones, so that model is no longer viable.
Re:Meanwhile in other countries (Score:5, Informative)
Being regulated doesn't mean being efficient or not being corrupt.
Look at the mexican telephone company.
Its a state monopoly... ever seen a mexican telephone bill?
Sorry, sport... its a zero cost operation. Its a tax/revenue scheme for local governments to get a little extra tax money through a service fee.
You see it in phone bills as well.
Ever tried to take your phone bill as low as you could go? Ever seen what portion of the bill that is left is taxes?
I set up a phone not long ago that was I shit you not 80 percent taxes. The phone company operated on 20 percent of what I was paying. 80 percent went to the government.
The government just needs to be taken out of these things. They want money? Remove the crap service taxes and have the stones to raise the actual taxes.
The point of all these little nickle and dime taxes is to hide the real tax rate. You have one big tax that is about as big as you can get away with... and then you have a thousand little taxes that eat away at the edges. And then you have taxes at different levels of the supply chain so that by the time someone goes to buy something they don't realize that half the price of whatever they're buying is just people up the supply chain passing the taxes down.
That's the game.
Its all predicated on the assumption that the people are stupid, unaware, incurious, gullible, and moronically trusting. Is that redundant? Only in the way that three exclamation marks are redundant and yet emphasize the point just that much more.