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Communications Network The Internet

The Startup That Wants To Disrupt Big Internet Providers (axios.com) 55

Posted by msmash from the closer-look dept.
A new startup backed by funding from AOL founder Steve Case and Laurene Powell Jobs wants to break up broadband monopolies across the country. From a report: Internet access has been crucial during the pandemic, but it's not ubiquitous, and it can be both slow and unaffordable in swaths of the country. Underline, a community infrastructure company, began building its first open access fiber network in Colorado Springs, Colorado, last week. Under the open access model, Underline builds and operates the fiber network while multiple service providers can use it and offer service to customers. Residential service will start at $49 per month for a 500 megabits per second connection, with a gigabit connection available for $65 per month. That's much faster than the 25-Mbps benchmark the Federal Communications Commission uses to define high-speed internet service. Underline chose Colorado Springs for its first project by evaluating several factors, including households that lack internet access, the number of existing providers and how angry customers were with their current internet options, CEO Bob Thompson told Axios.
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The Startup That Wants To Disrupt Big Internet Providers

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  • Google (Score:5, Interesting)

    by Zak3056 ( 69287 ) on Wednesday October 27, 2021 @10:34AM (#61932065) Journal

    Much like Google, I think they're going to find out that this is harder than they think it will be. Google had cities auditioning for the role of candidate and begging them to come in and still had huge problems.

    I don't think this is a problem that gets solved nationally. I think this problem gets solved locally. In East TN we have power co-ops building fiber networks and offering service with rates comparable to those in the summary. It neatly solves a lot of problems, because these are organizations familiar with operating a large cable plant in a rural environment and the rate payers own the utility. Hopefully, more locations follow the example.

    • Re: (Score:3, Informative)

      by nicolaiplum ( 169077 )

      The problem Google had was the local and regional telecoms regulators being entirely under the control of the incumbent telcos, who used the regulators and local governments to pass laws preventing Google (or anyone other than the incumbent telcos) from operating.

      Case & Jobs will have the same problem.

    • Re:Google (Score:5, Informative)

      by Anubis IV ( 1279820 ) on Wednesday October 27, 2021 @11:17AM (#61932207)

      You've hit the nail on the head all around. Google ran into so many issues with this:
      1) This is an inherently location-by-location-based issue because the federal government can't establish its own authority to act in this area. Their authority to intervene in these matters has been repeatedly challenged by the states and is even now being challenged by California in court, if memory serves (following the Trump-era FCC rule that restricted the rights of states to enforce their own net neutrality rules).

      2) Decades-long exclusivity agreements were in many cases signed between local jurisdictions and local or regional ISPs. Those ISPs then got bought out by the big ISPs, who now own those exclusivity agreements across broad swaths of the US, preventing any newcomers from being able to lay their own lines or deploy their own services in those regions.

      3) Those big ISPs either own, lease, or have exclusive right to use the poles and conduits in many of the locations in which they operate. Even in situations where newcomers have the right to put line on those poles, the incumbent ISPs have in many cases gotten laws passed that require that the newcomer schedule a time for a representative of the incumbent to be present at the installation. The ostensible purpose of those laws is to ensure that the newcomer doesn't "accidentally" damage the incumbent's line while adding their own to the pole, but what Google found was that the incumbent's representative simply wouldn't show up at the scheduled time, or else would show up 1 minute before fines kicked in for failing to arrive, ensuring that Google had as little time as possible, or no time at all, to do any work. And that's assuming there were fines at all. In places where there were no fines, the representatives simply wouldn't appear and Google was forced to abandon their plans.

      4) The places that actually have sane laws are in many cases already being served by their local utility companies or a thriving market, negating the need to roll out a service like this.

      5) For everyone else who's stuck with a bad ISP (*raises hand*), the point will hopefully be moot soon, what with Starlink, Amazon Kuiper, and other LEO ISPs starting to get off the ground (pun intended). Even if those services aren't particularly great at launch (pun intended, once again), they'll quickly establish a nationwide ceiling on what can be charged for various tiers of service. As they continue to get better, the problem of specific locations being locked into bad ISPs will eventually sort itself out.

      • 5) For everyone else who's stuck with a bad ISP (*raises hand*), the point will hopefully be moot soon, what with Starlink, Amazon Kuiper, and other LEO ISPs starting to get off the ground (pun intended). Even if those services aren't particularly great at launch (pun intended, once again), they'll quickly establish a nationwide ceiling on what can be charged for various tiers of service. As they continue to get better, the problem of specific locations being locked into bad ISPs will eventually sort itself out.

        While that would be nice, and it will be a lifeline for some people, it's by no means assured, and in the end, it won't make a dent.

        As with all radio communications, a single "base station" can only serve so many clients while maintaining reasonable bandwidth. As Starlink continues to build out the number of available base stations will go up and up, but in the end, American suburbs are too dense for a mass migration to Starlink to escape a horrible incumbent wireline provider to be possible. Even the wre

      • The statement in your post is clear to me. But it is actually a seriously messed up situation. That you actually have to have a satellite system like StarLink in place for decent (enough) internet connections. Even though there is already a network readily available.

        Would it not be cheaper and easier to simply make it a law that terminates all existing exclusivity arrangements and only allow new ones that may last only 3 to 5 years before any ISP can bid on providing infrastructure for regions they wish to

    • Yep. I get so many ads for Google Fiber. It is available in my city but not in my neighborhood. I think the closest area is 1 mile away and has been for 1 mile away for 6 years. It seems that new neighborhoods can get it easily. Existing ones may never get it.

      • Installing fiber in utility trenches that haven't been buried yet is probably very much preferred to having to bring in a boring / trenching tool and screwing up streets and lawns, to say nothing about dealing with the legal hassles around utility easements, etc.

        I don't blame them for working with contractors that are building a subdivision, and putting it in before the sidewalks are poured. That's an easy win. Unfortunate for people in established neighborhoods though.

        • FYI, google fiber prefers nano trenching (putting into the space between the curb and the pavement) nowadays. Saves somewhere around 30-40% on cost.

    • Google also doesn't have the willpower to follow through on anything once it gets difficult. They find a new shiny bauble to play with and move on. They're really a bad measuring stick. Regardless, fiber is expensive to run and fraught with incumbent challenges, so I'm curious to see how this company does and I hope they succeed. Colorado Springs has a "fuck you" approach to government and regulation, so maybe they chose it because it will be easier for them to get through red tape.

  • Lawsuits protecting entrenched interests incoming (Score:5, Insightful)

    by spun ( 1352 ) <loverevolutionary&yahoo,com> on Wednesday October 27, 2021 @10:35AM (#61932069) Journal

    How DARE they steal the customers that big ISPs have rightfully paid local, state, and federal officials large bribes for? The ISPs bought those monopoly markets fair and square!

    • Ugh, my mother got snookered by AT&T. She doesn't need that much internet, she just browses and reads email, no streaming, no youtube, etc. But found out she's got the top tier class now, I was measuring 200Mbps upload speeds and that was over my old ipad. She's got a modem the size of a toaster But she thinks it is cheaper than the old plan, because that's what the sales people said. She doesn't understand the "first year is cheap, then you pay painfully through the nose later!" concept. Her bill w

    • It's a natural monopoly. Without laws, the outcome would be 1 provider that can lower prices selectively to outlast any upstarts that may come along.

      I think the best outcome for fiber is a regulated monopoly physical infrastructure, with a market for service providers on top. Although ISDN was regulated this way and it wasn't a smashing success either.

      • Re: (Score:2)

        by spun ( 1352 )

        While you are absolutely correct, I'm talking about the states that enacted laws making publicly funded Internet illegal. It's only a natural monopoly after you run the wires. Laws keeping competition from running wires in the first place are definitely of the "unnatural monopoly" variety, lol.

        • Comment removed based on user account deletion

          • Re: (Score:2)

            by spun ( 1352 )

            Ah, do you not understand the definition of a natural monopoly? Here: https://en.wikipedia.org/wiki/... [wikipedia.org] It's an important concept in economics, one of the three primary ways a free market can fail to allocate goods efficiently. The other two are imbalance of information, and externalities, both positive and negative.

            Of course, you may just be a fanatical libertarian who swallowed the whole "the free market can never fail!" Kool-Aid. If so, it's on you to prove mainstream economics wrong. When startup costs

            • Comment removed based on user account deletion

              • Re: (Score:2)

                by spun ( 1352 )

                You fail to address the actual contents of the explanation I linked. You are not talking about natural monopolies at all. And TBH, I can't parse a lot of what you wrote. Like the first sentence:

                "What have you bye passed the market, Our chance of rules through applications of physics." What does this even mean?

                Are you not a native English speaker? This sounds like Mandarin run through a translator. Or maybe you were drunk when you wrote this?

    • The ISPs are actually an oligopoly: https://www.youtube.com/watch?... [youtube.com]

      Also interesting is the $200 billion USD scandal from the late 1990's (tax fraud plus a coverup) that also resulted in deregulation so the telecoms/ISPs could build fiber networks to each home (of which they, of course, built none). That deregulation effort lead directly to today's oligopolies: https://newnetworks.com/ShortS... [newnetworks.com]

  • Just because you only have 1 local choice for Internet services. /s

  • and is an GPON spilt at 16:1, 32:1, 64:1 or direct fiber line back to the co?

  • Aren't other companies building fiber networks? They can just turn on the speeds. What are you disrupting when you're literally doing what everyone else is doing?

    Oh silly me; I forgot the silicon valley narrative. We're always disrupting. I'll have to get tell my local deli he's selling his ham sandwich wrong, he's in fact "disrupting big sandwich by offering an attractive meat-and-cheese-in-bread solution".

    • Oh silly me; I forgot the silicon valley narrative. We're always disrupting. I'll have to get tell my local deli he's selling his ham sandwich wrong, he's in fact "disrupting big sandwich by offering an attractive meat-and-cheese-in-bread solution".

      I mean...he might be doing it wrong if the sign on the door says he's a Kosher deli.

    • Nope, they aren't allowed to in many places and republicans want to disallow it nationwide. https://arstechnica.com/tech-p... [arstechnica.com]

      • To be fair, it's been muddy across parties in the US for a long time. California finally let a law expire that essentially prohibited competition in broadband(intention was to democratize, but all it did is let the people with the most money control it) and as of this year finally passed a bill that will build middle mile open access fiber networks across the state(starting with underserved/unincorporated areas) and provide pathways for local communities and governments to fund last mile based on local dis

      • Fortunately, that wording allows the very type of competitive broadband I'm now enjoying (symmetrical gigabit, no caps, no restrictions [including commercial use, which is explicitly encouraged]). The city utility company installs and owns the fiber network, but does not provide the actual service. All they do is ensure that the bits can travel through the fiber.

        The actual service is provided by Quantum Fiber. I've had it for several months now, and it's the best Internet I've ever had. All for significantl

    • I believe the "disruption" is that they are just being a dumb pipe provider, and any higher layer services (email, web hosting, etc.) would come from an "ISP" that signs on to receive the traffic.

      You know, like we wish every ISP actually did.

  • Companies like Comcast and AT&T won't take this lying down. Like all good criminal organizations they'll send Guido and the boys to break their kneecaps.

  • Regulation... (Score:5, Insightful)

    by nicolaiplum ( 169077 ) on Wednesday October 27, 2021 @11:07AM (#61932177)

    They seem to think that telco provisioning is a free market in the USA and they can start a competitive company.

    It is nothing of the sort. It is an oligopoly of large telcos, who have entirely captured city and state regulators (and got the FCC to mostly ignore them), portioned out the customer markets between them, and who use this power to crush any competition. Telecoms in the USA is highly regulated - highly regulated in favour of the incumbent telcos.

    *Google* gave up on laying fibre because of the obstruction of incumbent regional telcos. Unless Jobs has inherited her husband's reality distortion field and is willing to spend truly Jobsian levels of wealth on beating the incumbent telcos, this startup will not succeed without changes in regulation.

    Good luck removing the endemic problems in US local and regional regulators, of any sort.

    • What would be stupendously hilarious is if there was a general call of "Hey, we have this legislation we wrote that would shitcan the avenues of obstruction that incumbent ISPs usually use for derailing progress, and anyone that co-sponsors the legislation in their state legislature and votes for the bill without amendment will receive a $20,000 donation to their re-election committee. Members of Congress get $35,000. United States Senators get $50,000. There are limits to how many donations we give; the

  • “In today's competitive marketplace, it also is critical that all providers are treated fairly and operate under the same set of rules and regulations.”

    Translation: We're going to sue and lobby these upstarts into oblivion.

  • LOL (Score:1)

    by zaax ( 637433 )
    The telcos have this all tied up tighter than a . The only way to do this is to build a completely new network, like Starlink

  • One of the major issues, and one that's already impacting me locally, is state bans on municipal or utility internet service.

    My local power company is banned from providing retail level service, they're only allowed to whore out their lines to private companies on a wholesale basis.

  • Seporate the Infrastructure from the ISP (Score:3)

    by jellomizer ( 103300 ) on Wednesday October 27, 2021 @12:24PM (#61932445)

    Back in the old days of dialup. People chose their ISP independent of their telephone company (or at lest mostly, as the ISP number is preferred not to be a long distance number) My first ISP was a local BBS They had a T1 line hooked onto their BBS, and allowed SLIP connections. I paid by the hour, so I would buy 250 hours for $25 and my Internet usage had me good for 4 - 6 months.
    Then the BBS went down (as it was ran by a teenager who just got tired of it), so I switched to a different ISP which ran more like an ISP with a PPP connection.

    These ISP's were local small businesses, I can talk to the owner and they were responsive for my needs, for example when I was off to college, I was able to suspend my account, and start it up when I was on winter and summer break, keeping my account info, and email.

    However After college, everyone started to move toward broadband. So I had to go with my Cable TV Company for a cable modem. Where they were also the ISP. So gone was the day of easy support, because I needed to go to corporate for all my issues. While for the most part I really don't have much to complain about my Cable ISP as over 20 years later I am still using the same company (mostly as they had merged and change name). However, I don't have too much competition to compare. I don't have fiber in my area, DSL, and Satellite is either still too slow and/or too expensive.

    But I would love to say pay the Cable Company $40 a month for the Cable Infrastructure, and pay an other bill say $20 a month for access to the ISP. Or perhaps cheaper if I just want access to the Gateway vs email and all the other crap ISP offer that we don't use.

  • I see that people have mentioned that Google was unable to do this. Google suffers from having too much money and too much technical talent and not enough appetite to get things done. As a startup, this company will probably bring common sense and a sense of urgency to the project. According to the numbers in the article, it may cost them less than $2k per customer to build the fiber, which will probably have a present gross value of $10k per customer. That's a good start. It's also an attractive inves

    • Re: (Score:2)

      by MobyDisk ( 75490 )

      The bottom line is: you can't compete with a monopoly. There doesn't seem to be anything different about this company from the hundreds that came before it. every open access internet company in my state either died or was bought-out by the local telecom monopoly. I don't buy your argument that Google failed because they had too much money and talent. The only group lacking the "appetite to get things done" is the monopolies that profit by dragging their feet, delaying things, and using the courts to ma

  • I am a huge proponent of what they want to accomplish and it's the actual answer to the problems people face with residential Internet access. However as others have pointed out, Google Fiber has demonstrated how difficult this is in practice given the fragmentation in the marketplace since localities have a lot of control over access to poles and right of way. But what is most concerning is the perceived lack of talent in the team they have assembled to date. Their network engineering team has some indu

  • In "Third Wave", Steve Case puts himself and AOL as the creator of the internet.

    But it was not the case. AOL wanted to be the "online" monopoly, as did Compuserv. They were the centralized and pretty walled garden BBS's.

    When the internet came, both kept services that they provided before the internet, and internet access was an add-on.

    Luckily, ISP's came along to provide "Just the internet". It was a big threat to the business model of AOL and Compuserv.

    AOL pivoted to the email/internet for idiots approac

  • Under the open access model, Underline builds and operates the fiber network while multiple service providers can use it and offer service to customers.

    Okay, here's where I get confused. Once packets are routed to and from my computer, what services do I need from the service providers? We're way beyond the days of everyone getting their email from their ISP. What does your ISP give you beyond connectivity and an IP address? Once I have that I can self-host or pay someone else to host any service I need f

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