Ramblings of an old Doc

 

Not discussing the content.

I’m discussing how the basic principal of Capitalism has failed us: Competition in a free market.

We all agree that when power is concentrated in the hands of a few, our freedoms are inevitably curtailed.

This is true, as it turns out, regarding the internet as well.

“At the heart of the problem lie a few powerful companies with enormous influence over policy making. Both the wireless and wired markets for high-speed Internet access have become heavily concentrated, and neither is subject to substantial competition nor oversight. … As a result, prices are too high and speeds too slow.” – Susan Crawford

Susan Crawford is the Benjamin N. Cardozo Law School Professor, and a former special assistant to President Obama for science, technology and innovation. Her central thesis is that if you live in the U.S.A., you’re probably paying a lot more to your ISP for inferior service when compared to other countries.

At the heart of the problem, she maintains, is the above quote. Huge cable companies like Time Warner and Comcast have no reason to to expand the infrastructure to lay down fiber. Also, Verizon and AT&T have abandoned fiber in favor of LTE. This will limit us to average speeds.

Further: The government has policies to protect and give them resources to propagate their grip on the internet service market. I wonder how those laws got written, and by whom.

“The resounding success of Google Fiber in Kansas City has already started to help this shift in expectations. People around the country are already jealous that some people have access to 1 Gbps Internet for just $70 a month, but most of us don’t.” – Andrew Couts

We need more companies and people pressuring local government to lay down fiber optic cable to provide better and faster service. The key to this is providing low interest, long term loans to allow small companies to germinate and do the things the big boys won’t.

The Connect America Fund is the way to do it. The bottle neck is the FCC and it’s allocating monies to the big internet providers which aren’t doing what’s needed. The problem is the laws which constrain the type of company eligible for the funds. They need change. If that happens, the CAF money can get many more players into the action. Competition. It works.

There are many (Like Steve Largent CEO of CTIA, the Wireless Association) who say, “The service you’re getting by existing cable and LTE are just fine. There is no problem.”

Reminds me of truly self serving statements. If you were the fox, would you tell the farmer about the hole in the wire fence?

How can anyone argue against improving our infrastructure? Like this:

Their argument is basically, the status quo is just fine, you’re getting what you paid for. No reason to expect more or better and no reason for us to improve.

Really? If that weren’t absurd enough, then how about this:

“Take a look at your most recent Internet service bill, and think about the fact that people in Hong Kong can get a 500Mbps symmetric fiber connection for just $25 per month, and tell me you’re happy with the way things are.” – ibid

Why am I reminded of what happened with Ma Bell?

Just as “too big to fail” needs to be fixed, so does this.

Source:

http://www.digitaltrends.com/opinion/its-time-to-get-angry-about-your-crappy-internet-service/

http://www.nytimes.com/2013/01/24/opinion/how-to-get-high-speed-internet-to-all-americans.html?_r=0


Comments (Page 2)
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on Feb 22, 2013

Seleuceia



You can blame cable companies and the government for inflated prices, but blaming them for bad infrastructure is a much greater stretch...I'm not saying it isn't their fault, but without a free market to prove otherwise there's no guarantee the infrastructure would drastically improve in the near future just because the industry became more competitive...using a previous example, years of competition between many car companies has yielded only small improvements in fuel efficiency over the years....things like hybrid cars, electric cars, and ethanol using vehicles have not taken off despite being out there for years....


Quoting Alstein,
reply 14
Broadband needs to be regulated like the utility it is.

You can't argue free market forces are going to reduce rates, then turn around and say they should be regulated like utility companies...

 

Well, I want one or the other, not the current model, which regulates higher profits for cable companies for reduced service.

Lets put it this way: there's a reason Europe has much better internet than the US- it's not population density or wealth, but government investments and regulations designed to prevent monopolies.   That's the real problem- we have broadband monopoly, and trustbusting is dead in the US.

 

 

on Feb 22, 2013

Hybrid cars are more expensive than gasoline cars, and there isn't a good secondary market yet.  Also, repairs are more expensive.  Etc.

on Feb 22, 2013

athelasloraiel
We have flat raet all over Croatia (Southeastern Europe) both mobile and ADSL.

To what degree is it subsidzed by your government?

Seleuceia
Case in point, car companies

Really? Cars are the second largest investments people make, therefore apples and oranges. How about a more suitable comparison... like another utility.

You write about a free market and letting it determine the course. The whole point is that currently it isn't a free market. The point is how to get it to become one.

 

on Feb 22, 2013

Regulating ISP's got us into the mess we're in, returning to our regulated environment would be stupid.  They talk about how we used to have great internet a decade back, but they ignore that the only decent internet we had was piggybacked on existing cable networks.  They also ignore that our internet essentially stayed in a static condition for several years while the rest of the world left us behind.

 

We used to regulate competition in, and it killed the drive to advance.  Now we're regulating competition out, and it's accomplished the same thing.  The big companies get free money courtesy of your taxes, and they use it to keep the politicians on their side.  Unless we kill off all the politicians, any regulation will likely advance the problem, not a solution.

on Feb 22, 2013

“Take a look at your most recent Internet service bill, and think about the fact that people in Hong Kong can get a 500Mbps symmetric fiber connection for just $25 per month, and tell me you’re happy with the way things are.” – ibid

Not sure you can compare Hong Kong's Internet service to ours.

While they may have faster service for less expense, they also have censorship that limits content.

The major problem with all of this was the Telecommunications Act of 1996 that was signed into law by Clinton. While it looked good on paper, the opposite of the intent happened and the major companies bought up the smaller ones.  

on Feb 22, 2013

CarGuy1
While they may have faster service for less expense, they also have censorship that limits content.

Looking this up, I found this:  http://news.cnet.com/8301-30684_3-20000905-265.html?_escaped_fragment_=

I remember Google pulling out of the PRC and setting up its search engine in Hong Kong (or routing it through Hong Kong).

The point of the OP isn't to idealize Hong Kong, rather to point to speed and cost. Kansas City and Google's experiment there is just as good.

As for the Telecommunications Act of 1996 - cashing out and leveraged buyouts were the big thing then. I still believe that making money available through low interest, long term loans through the CFA is the way to go.

We need the infrastructure expansion. The jobs created won't be bad either.

on Feb 22, 2013

athelasloraiel

Houses usualy pay 24$ for flat, 4Mb/s DL, and 512Kb/s upload.

 
 

I live in small town in central Europe and I have 40/20 down/up optic fiber for 12 EUROs per month. No FUP. Fucking yes. 

BTW i dont think there are any subventions by government over here, not regarding internet at least. It actually seems to be a competition, just a year ago, i was still on 2Mbit DSL for 18 EUROs per month, provided by local Telecom company (which is partially owned by Deutsche Telekom)...and there wasnt really any better alternative. Until these guys, called Digi, showed up with the aforementioned deal, which was really difficult to turn down. They are i believe a Romanian company by origin and they are quite new over here, so i suppose they try hard to take over customers from existing companies...and they do it well i have to say. So they can have my money and Telecom can fuck off. 

on Feb 22, 2013

The OZ experience ...

We had a company, Telstra, in charge of telecommunications in Australia which was run by the government, a huge company which basically had all of the copper and phone networks. Around twenty+ years ago a conservative government decided to privatize it, so there will be 'greater competition' in the market, prices will go down and there will be a greater choice in the market. The people of Australia didn't want it to happen, it was our company, our infrastructure and we were happy about the status quo ... and we knew it was a cash grab by the government.

Anyway it was floated and privatized. The company, like all companies, didn't want any competition and because it had the copper wires made it hard for other companies to compete.

Further down the track ... after price increases, poor maintenance to the infrastructure and terrible customer services ... the new government wasn't happy how we were left behind and wanted to upgrade our network to the digital age with optical cabling. Telstra was making a fortune out of the old copper network and didn't want to invest into new infrastructure, why should they, profits were good, no real competition (only in the mobile market, just). They told the government to go and jump.

After many years of fist shaking ... the government made a new company to lay down the new optical network, Telstra came on board when they thought about all of the money they will loose and is now helping the government. The cost will be huge to the tax payer in the short term, the network will pay for itself in the future and we will get the infrastructure Australia deserves. Although the conservative opposition wants to scrap it and put in a 'faster' (??) network based on mobile technology...

We never wanted Telstra to be sold off in the first place, we want a optical network and yet powerful people, with a strong ideology, keep telling us how private companies do to right thing for our country ... no they don't, they look after themselves.

on Feb 22, 2013

Just to talk about North Carolina again, a list needs to be made on who is in the pockets of Time Warner and ATT. And vote them out of office, what they did is about the same time Chattanooga, TN brought in Giga speeds and were the fastest in the country till Google came in to Kansas City KS/MO. Yea Google, yeah the snoop you emails so they can sell you stuff, but who doesn't these days...

Where I live in the North East, everyone overlaps, Verizon, Time Warner, Cablevision. Google is forcing competition which is good for all of us in the long run, better service speeds at lower cost to the consumer. But the downside is it is going to be a while before Google wires up the US....

on Feb 22, 2013

tazgecko
We never wanted Telstra to be sold off in the first place, we want a optical network and yet powerful people, with a strong ideology, keep telling us how private companies do to right thing for our country ... no they don't, they look after themselves.

Because of the laws... and the financing. Optic cable isn't cheap. The only way to finance it is via the government or a consortium. Did anyone ever try to put one together?

Did anyone bother to bring suit on the grounds that the company has to buy out what it owes to the people of Oz for the equipment and lines?

on Feb 22, 2013

You don't have to have big entities for the network.  It will just be a bunch of little companies servicing smaller areas.

on Feb 22, 2013

tazgecko
We never wanted Telstra to be sold off in the first place, we want a optical network and yet powerful people, with a strong ideology, keep telling us how private companies do to right thing for our country ... no they don't, they look after themselves.

Right on!  The sale of Telstra [formerly Telecom] was the single worst thing to happen to telecommunications in Australia:

* One; it failed to properly maintain the copper network... thus it is forever breaking down, getting congested and overloaded.

* Two; it's monopoly status ensured it could charge whatever it wanted and people would have no choice but to pay.

* Three, Telstra's ownership of the copper network means that competitors must pay it in order to operate, thus competitors are forced to charge higher prices than necessary to cover high wholesale prices to Telstra.

* Four, Testra's ownership of the terminals that service households and businesses means that is has the NBN [National Broadband Network] by the short and curlies.  The NBN, although it will own its own firbre optic network, still has to cow tow to Telstra in order to deliver its services.

* Five, we already owned the copper network and terminals, it belonged to the taxpayer, and now were being forced to pay again for this poorly maintained, rundown equipment as it charges the NBN rental fees on the terminals.

Sadly, the orchestrators of the NBN did not forsee this situation to create its own terminals... as self-sufficiency would have provided consumers with better than Telstra prices.  As it is, those who have been connected are paying premuim prices for high speed broadband because Telstra controls the terminals

on Feb 23, 2013

DrJBHL
The only way to finance it is via the government or a consortium. Did anyone ever try to put one together?
Did anyone bother to bring suit on the grounds that the company has to buy out what it owes to the people of Oz for the equipment and lines?

Telstra is too big. It was a giant profitable company before the government sold it, all they did was make a monopoly. The government first went to Telstra to build a fiber network, Telstra didn't like having to let other Telcos use the network at cost price, that and they had control of the copper network and was able to keep wholesale prices high.

When the government put forward the NBN, all the other Telcos were on board and wanted it to happen. So Telstra threaten to build a fiber network as well, basically to make the NBN unprofitable and to keep their monopoly. If the government didn't have the guts to take them on and forced their hand by calling them a monopoly, and a threat to split the company up, we will still be on a copper line for the next fifty years .... or more.

Markets work when there's competition. Once a few companies controls an infrastructure, prices go up and maintenance goes down.

starkers
Telstra controls the terminals

Ah, I thought the NBN would take control of the terminals ... so much for keeping prices down.

 

on Feb 23, 2013

G_Bison
Just to talk about North Carolina again, a list needs to be made on who is in the pockets of Time Warner and ATT. And vote them out of office, what they did is about the same time Chattanooga, TN brought in Giga speeds and were the fastest in the country till Google came in to Kansas City KS/MO. Yea Google, yeah the snoop you emails so they can sell you stuff, but who doesn't these days...

Where I live in the North East, everyone overlaps, Verizon, Time Warner, Cablevision. Google is forcing competition which is good for all of us in the long run, better service speeds at lower cost to the consumer. But the downside is it is going to be a while before Google wires up the US....

 

Sen.Tillman from Randolph County is one of the big ones- but good luck kicking out folks in gerrymandered districts.   Sad thing is that at a personal level, his family is pretty nice, but he's a horrible politician.

 

 

on Feb 23, 2013

tazgecko
Telstra is too big.

Just what I said as well. Someone should bring suit. Really.

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