At this point, Cable companies are all members of a single large shadow monopoly not unlike Standard Oil was in the early 20th century. The rational the justice system used to break up Standard Oil is shockingly similar to the situation we now face with cable:
Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors" [1]
Cable companies regularly adjust prices based on the entrance of competitors (Google Fiber), or when a cable company enters a new market, prices are initially low to prevent competition and then slowly raised to a much higher level. The excuses for vast differences in rates in metropolitan cities are usually paper thin, but accepted by the media and government at face value. Cable companies also operate secondary businesses with a conflicting interest to their cable operations (Cable TV packages now directly competes with Broadband Internet, also see: NBC/Comcast), not unlike Standard Oil's purchase of many railways and control of shipping lanes. This arrangement vastly stacks the deck in favor of cable companies, and further cable company "cooperation" with state and national officials have created new restrictions on municipal competition.
Cable companies are our 21st century Standard Oil.
It really is shockingly similar and a lot of the arguments against net neutrality try to dismiss it as applying "laws made for railroads" to the Internet.
Back when oil was getting to be useful, lots of people discovered it. Usually, it was in a remote area. The only way to make money off it was to get it to a refinery and then the market. Standard Oil bullied and bribed the railroads into giving them preferential rates and charging high rates for competitors. It's exactly like what cable companies would like to do by subverting net neutrality, give preferential treatment to the traffic that profits them most. It's just information instead of oil, which is even more insidious since it can control the public discourse.
The thing is, cable is more like the railroad than it is like Standard Oil. Petroleum isn't at all like a natural monopoly. It took a lot of corruption and bribery for Standard Oil to keep competition at bay.
But nobody is really stepping forward to lay residential fiber. Google is the exception and it's because they're one of the only companies with enough money to survive a war of attrition with the incumbents, and even then it's only in a handful of places.
It's prohibitively expensive to have twelve companies each run a different strand of fiber to every house. And you only need one. The key is to a) get one instead of zero and then b) put competition on the other end of the fiber. Have one company (or municipality) be the regulated monopoly that provides only the physical layer, and then let all willing providers compete to terminate the fiber and provide internet/TV/phone service.
Separating the natural monopoly (the physical layer) from over the top services is the key to preventing monopoly abuse. The entity that does that should do only that.
True. I recall reading somewhere that Japan has a law requiring the owner of the physical wires to lease them to anyone as long as they pay some set fee - sort of like mechanical royalties that we have for music. This is part of the reason why Japan has some of the fastest and cheapest Internet in the world.
Yep, local loop unbundling was a thing in the US, it was basically a provision in the 1996 Telecommunications Act to promote competition. It largely worked too, you used to have your choice of 10 or 12 DSL providers in the US. You could do that with things like copper local loops, I would love to see it with Cable but I suppose theres not a good way to share the local loops in cable plant as they are mostly fiber now. It too bad EEOC(ethernet over copper) never took off.
In looking them up, I stumbled on mailing lists for TPIAs hosted by Torix. Realised at that point that TPIAs have a lot in common with Canadian IXPs -- both put pressure on prices from Canadian ISPs, TIPAs by consumers and IXPs from businesses/services aghast at how much certain folks charge. See https://cira.ca/sites/default/files/cira-ixp-overview-web.pd... for more on IXPs. I wonder if there's a book on this somewhere, or what ISPs think. Rogers Cable peers with Torix, so it's not exclusively smaller players, in fact I'd say it's the everybody-but-telcos club but I'm sure telcos and US players are welcome if they cared to... (let's pretend they simply are unaware of the ahem, savings...)
Huh? Here in EU the DSL speeds have been steadily growing up to 50Mbit without users doing much (ISPs deploy either modern ADSL2+ or versions of VDSL). A copper wire that could only carry 8Mbit before now carries full triple-play at 30+Mbits.
Most of that has come from legislation that forced the monopolistic owner of copper wires to let competition use them.
Parent was referring to the fact that VDSL/VDSL2 is more sensitive to loop attenuation that ADSLx. Yes, you can get 100MB symmetric over a copper pair, but only for 300M or so.
Hence VDSLx is usually rolled out only as part of an FTTC deployment, where the ISP needs to roll out new fibre (rather than copper) to the caninet/junction box, and in most cases install DSLAM units in those cabinets also.
well when the state of Georgia deregulated natural gas sales that is effectively what happened. A management company became the owners of the gas lines, responsible for maintenance and expansion. That fee appears on every gas bill
In Rochester, NY we are fortunate to have a local company competing with Time Warner by offering gigabit fiber to the home[1]. The local company is hugely popular, and based on their rate of expansion, very successful.
When my house was built in 1890 it did not have electricity, and all rooms were illuminated by gas lights. As of last year, it has gigabit fiber. Infrastructure can change. It helps to have locals take action, and citizens have to be vocal.
Do you have any evidence that cable companies wanted to charge for preferential treatment for traffic? I've seen that claim repeated a lot but never with evidence.
A few years ago YouTube got similar treatment on Time Warner -- they funneled everything to a YouTube point of presence on the TWC network that was over saturated. You could modify DNS and use and alternate URL and watch 1080p video with no lag.
Verizon also started limiting aggregate Netflix traffic. Through conincidence, it happened to start happening when they launched a video service.
What happened with netflix wasn't covered under net neutrality anyway (as the links above point out), and they weren't being charged for prioritization, nor were they discriminated against.
I responded to a comment saying "It's exactly like what cable companies would like to do by subverting net neutrality, give preferential treatment to the traffic that profits them most."
Cable is a network technology with value defined somewhere between Sarnof's, Metcalfe's, or Tilly-Odlyzko's laws. Scale, and dominating local coverage, matter.
Oil is an extractive mineral resource with very low direct costs vs. use value. Absent some form of central contrl, the price has tended to fall far too low. In the aftermath of the East Texas oilfield discovery of 1930 (the biggest on the mainland lower 48), prices fell fist to $0.13/bbl, then to $0.02/bbl. That's barrels, not gallons.
The governors of Texas and Oklahoma called out their state national guards, and the Rangers in Texas, and seized wellheads at gunpoint to cut supply. The quota system imposed, run by the highly innaccurately named Texas Railraod Commission, lasted until 1972. Daniel Yergin's book The Prize covers this in detail.
A similar control program applied to strategic minerals was created after WWII, originally called the Hobard list, and remains in effect as part of the Defense National Stockpile Center.
Great analysis. Cartel behavior as I call it should never be ignored in discussions on these subjects as it's been discovered so many times. Even more so when organizations are both non-competitive and taking taxpayer subsidies.
Yes! If there was ever a case for trust-busting. Just noticed last night that Comcast is blocking some streaming apps that I use on my home PC. Certainly not the worst thing they do, but does remind me of how Standard Oil used to tie up rail capacity to keep it out of the hands of competitors.
There's a nice analysis in this week's Economist on cellular competition in Europe. There's been a conclusion by some European antitrust regulators that it takes at least four competing cellular carriers before prices come down. Three isn't enough.
The US acts as if one unregulated carrier is enough in cable.
I think we still have some cultural inertia such that things like high-speed internet and cell service are seen as luxuries and not basic infrastructure (plus some who believe that the poor ought to be excluded from using basic infrastructure anyway). I'm also not convinced that Capitol Hill has fully realized that Comcast isn't competing with rabbit ears anymore.
Since we invitably have legislatures heavily influence (and sometimes fully captured) by moneyed interests, often the best we can hope for is competition between the different factions of moneyed interests to shape policy such that the outcome is triangulated to be somewhat more beneficial to the public than if one faction had unchecked influence. Until the last 20 years or so, the media and telecoms industry were separate factions that had some competing interests and sometimes served as a checked on one another. Now they're merged/merging into media telecoms conglomerates, but the tech industry has recently risen as a competitor with even more directly competing interests.
It'll be interesting to see how the lobbyist wrangling behind the scenes works out. The tech industry is the new kid on the block, especially in terms of their presence in Washington DC, and it takes time to build up relationships and influence in politics. It's not quite as quickly scalable as the tech industry is used to, but they also have vastly more resources.
> high-speed internet and cell service are seen as luxuries and not basic infrastructure
I would never want to live without high-speed mobile Internet (which can provide the equivalent of cell service), but is it really a necessity to live? I was a boy before cell phones even existed, and anyone outside academia and a few tech companies had the Internet, and life was fine.
It's certainly extremely convenient, but I don't think it's a necessity.
> plus some who believe that the poor ought to be excluded from using basic infrastructure anyway
Even more previous generations' people would make the same argument: "Is telephone really a necessity? We lived without telephones and we were fine, our life was fine" and so on. Replace telephone with telegram or a car for even earlier generations.
Now the problem with this argument is that we're not living in that generation. We're living in the present generation, where a decent, if not high speed internet is absolutely essential in order to progress. Can you still live without internet in the present generation? Sure. But is there a remote chance that such life would be comfortable and painless? Absolutely not. Not even a chance.
I hear you but you can counter-claim it easily for high-speed Internet for business. Just look at how critical the Internet is to all kinds of firms these days. Even those that mostly don't need the Internet often have an expensive, leased line for main HQ. There's also the meme of traveling salespeople and such who benefit from higher speeds.
So, with so much dependence, it stands to reason a country's businesses can be a bit more competitive and efficient if they have high-speed, low-cost Internet. The Internet part is necessary for most even if other attributes aren't. They're certainly useful, though, as they increase capabilities and profit simultaneously.
The EU telecom market is just as horrible, most countries have only 1-2 "true" ISP's with actual infrastructure to their subscribers and 2-3 cell providers the rest are ISP's that rent fibers/coax access and MVNOs.
Setting up infrastructure is extremely expensive especially in cities where allot of the European population lives.
The US has a different problem where only 4% of the population lives in a major cities so ISP's have to lay allot of infrastructure and historically the more or less remain around their original starting zones and creep out very slowly.
Fiber/Coax infrastructure in the US should be done on a state and municipal levels and then offered to ISP's at a fixed price to recoup the costs via a tender based on the cost to the end consumer
The largest 10 cities are home to 16M Americans, the 10 largest cities in the UK are host to 12M Brits.
The 100 largest cities in the US are home to 59M Americans, the 100 largest cities in the UK are home to 34M Brits.
The US is 5 times as populous but there is only 30% difference between the top 10 cities in the US vs UK and 50% in top 100.
Most people in the US live in cities under <100K residents, most people in the UK live in cities with over 250K residents.
The rest of Europe isn't that much different.
WW2 caused a major shift of population to major cities while in the US it didn't while the US population is still very urban they size of cities/towns is smaller in general.
Also i really hate when people compare the US to a specific EU country the US is bigger than Europe go out of major cities in Europe and you'll have shitty internet, there are towns and cities in Germany where the best you can get is a 10mbit DSL and it's not a unique case in Europe.
Your numbers are way wrong, even if we discredit another commenter's point about city vs metropolitan areas. The top FIVE cities in the US total over 19 million people. If you instead use the top FIVE metropolitan areas you get just shy of 70 million. That's 20% of the US population living in or directly around the top five cities. Furthermore, there are over 300 cities in the US with populations over 100k. I'm too lazy to do the math to add it up, but I'd venture a guess than 50% of the US population lives in a metropolitan area of over 100k people.
(Edit: fixed 25 for 19, accidentally added a city twice)
One last post to further emphasize my point, in the UK there are zero areas with a population of over 10k per square mile (highest[0] is ~15k per km², which is very roughly ~6k in miles²). In the US, there's >100 cities, per Wikipedia [1].
I think last link is the wrong data to use. Despite the title of the article, it is using the largest possible "Combined statistical area" that contains the city, rather than anything commonly known as the metro area.
> A combined statistical area (CSA) is composed of adjacent metropolitan (MSA) and micropolitan statistical areas (µSA) in the United States and Puerto Rico that can demonstrate economic or social linkage. The OMB defines a CSA as consisting of various combinations of adjacent metropolitan and micropolitan areas with economic ties measured by commuting patterns.
For instance, the "Washington-Baltimore-Arlington, DC-MD-VA-WV-PA Combined Statistical Area" (which is not part of the top 5 cities) includes all of Hampshire County, West Virginia
If you use metropolitan areas then you're just proving the original point. Metro areas in the US are HUGE! For example, the Greater Las Angeles area is ~34k square miles. The entire country of England is only ~50k square miles! Understanding this is key to understanding why the cable and telecom businesses in the US are so difficult to enter.
Per this link [0], there's 10 million homes (out of 90 million with broadband) in the US with fiber to the premise, versus 250k in the UK. The number seems a bit suspect, but I generally trust Ars.
Also, the point I was refuting from the parent post is the claim that Europe is urban where as the US is not. That's simply not factual, as others have also pointed out.
Many small/medium American "cities" are municipalities that are directly attached to (or even surrounded by) a larger urban area. It's basically a quirk of how local government is structured rather than anything that has to do with population or infrastructure density. For example, it's unlikely that many residents of Beverly Hills (<50K residents) think of themselves as living in a small town outside of Los Angeles.
Similarly, the municipalities of Boston and Cambridge remain separated by the natural border of the Charles River, even if by nothing else at all. Cambridge and Somerville don't even have that much justification for existing as separate municipalities: you can accidentally walk across the municipal border and back again without noticing it in some places.
I'm not sure where you got your numbers. The 10 largest cities in the US have a population of 26M (2015 estimates, Wikipedia). Generally population estimates are given for the metropolitan area. The 10 largest have a population of 73 million. There are 53 MSAs with a population over 1M with perhaps a total population of 150M. (I was too lazy to do all the addition.) The US has a large area, but it is primarily urban.
> The largest 10 cities are home to 16M Americans, the 10 largest cities in the UK are host to 12M Brits. The 100 largest cities in the US are home to 59M Americans, the 100 largest cities in the UK are home to 34M Brits. The US is 5 times as populous but there is only 30% difference between the top 10 cities in the US vs UK and 50% in top 100.
This is a nonsensical statistic to use, irrespective of whether the numbers of right or wrong. Imagine taking the UK and copy-pasting it 10 times. Make the new deca-UK a single country, let's call it 10UK.
Obviously, 10UK has exactly the same proportion of people living in "major cities" as the original UK. Obviously, the infrastructure serving the 10 copies of each major city is equally affordable for a country with 10x of everything (or even more affordable, due to more economies of scale).
But the 10 largest cities of 10UK are the 10 copies of London, and thus the proportion of people living in the 10 largest cities of 10UK is equal to the proportion of people living in the single largest city in the UK. Clearly, this is the wrong number to use to estimate anything related to the problem at hand.
This is one of those rare situations where avoiding the wrong conclusion requires zero knowledge of the world; cognitive ability on its own is sufficient. In other words, you are demonstrably stupid.
Can someone explain to me what innovation cable companies provide that they deserve their anti-competitive monopolies? If we were to replace them all with municipal broadband what would the short and long term consequences be?
I'd wager that the short term (~10 years) consequences would be vastly superior service for every day citizens. In the long term, not certain but I suspect it would be much of the same as long as the municipal provider had ever-increasing speeds as one of their primary purposes/guiding principals.
I'm not a communist but I think evidence shows that municipal broadband outperforms both telecom and cable operators in all terms of performance from costs to speeds to reliability.
Obviously the situation has it's differences, but the original form of the National Broadband Network[0] here in Australia was, in part, to help nip these kinds of problems in the bud. It was close to a nationwide glass utility, but still allowed for a competitive commercial market. There was a lot of excitement for both short-term technological gains & long-term economics. I'm still dirty it got so mangled.
As an off-topic aide: was "I'm not a communist" tongue in cheek? Or would such an infrastructure project be actually seen as "communist" &/or undesirable just for it's oversight?
My understanding was it's seen as an incentive for the massive upfront infrastructure costs needed to run cable to every house. Much like power or other utilities. But of course cable companies don't want to accept the regulation that is the flip side of being treated like a utility (e.g. net neutrality).
I think it is mostly because having multiple companies laying physical wires is problematic. It is very capital intensive, and disruptive to infrastructure (digging up lots of ground). In the end, it might not be better for customers; for example, imagine 4 different cable companies spend all the capital to lay 4 sets of cables to every house in a town of 100,000. Since there are 4 choices of cable company to choose from, then you can imagine each company will only get around 25% of the subscribers. The infrastructure costs to cover running cable to 100% of the houses now has to be supported by only 25% of the subscriber base.
In other words, the same number of subscribers now have to pay for 4x the infrastructure costs.
This is why I think the makes the most sense for cities to own their own broadband infrastructure (just like they often own their road & water/sewer infrastructure). Maybe let out a contract for management of it comercially that gets periodically reviewed - maybe even split the basic infrastructure maintenance with companies competing to deliver data from common data centers across the last mile wiring/fiber so multiple have a market to compete within.
This is, in general, close to what the Australian NBN model was aiming for; the fibre capacity was to be "leased" wholesale to the commercial entities, with the leases used for maintenance & upgrades. In theory it avoids special interests & provides a baseline platform.
> I think it is mostly because having multiple companies laying physical wires is problematic. It is very capital intensive, and disruptive to infrastructure (digging up lots of ground). In the end, it might not be better for customers; for example, imagine 4 different cable companies spend all the capital to lay 4 sets of cables to every house in a town of 100,000. Since there are 4 choices of cable company to choose from, then you can imagine each company will only get around 25% of the subscribers. The infrastructure costs to cover running cable to 100% of the houses now has to be supported by only 25% of the subscriber base.
> In other words, the same number of subscribers now have to pay for 4x the infrastructure costs.
In other words, building into each others' territories raises the cost of serving customers while putting downward pressure on pricing. The executives recognize that and try to avoid it.
If the cable companies and telecommunications companies had competing services when they were building their networks in the 20th century, I imagine that they likely would have avoided overlapping service areas too.
The downward pressure of pricing can't press prices below the cost of the infrastructure and maintenance cost (otherwise, the company will either go out of business or stop offering the service)
I live in a town that got municipal broadband at the turn of the millennia. Since about 1999 they have offered 10/2 up to 10/10 speeds for $25-$50 a month over coax.
Except... that is all they have. All they have ever had. And as the population has risen, they have no budget to deploy more servers to meet demand, so every night the speeds crash and you have intermittent outages. Especially on weekends. They are running 20 year old switches that have to handle Netflix loads on a nightly basis.
So you go to town council meetings to find out whats up and it turns out that over 15 years later they still owe some ~3 million on the original bill of 22 million, and the whole town is 10 million in the red (with a population of 3 thousand) so it cannot spend money on practically anything.
So main street is like driving on a cobble trail with potholes that go unfilled for years, and school taxes are the highest in five surrounding boroughs and its still not enough for them.
Sure, you can be certain they got ripped off with whomever they bought the original deployment from back then, given its just coax and not even fiber, and the municipal ISP is only a small piece of general budget mismanagement, but it is a reflection on how bad in general politicians are at budgeting, and nobody should ever be surprised when someone cannot make a reasonable budget when they are doing it with other peoples money and they have no consequences to themselves besides possible reelection issues.
IMO, it is just a more fundamental reflection that politics and political office as it is arranged in the states is both systemically intentional and attracts people who are not technical, not actuarial, and often lawyers and other "people" persons who can talk big to get elected and then go into an echo-chamber of self-reinforcing superiority with all the other elected officials such that they never attract the kind of critical thinking or knowledge to approach anything close to municipal... anything, really, with any degree of competence. They just defer to their friends friend at a teleco wiring company or a water treatment operator or a civil engineering corps and get turned into a money faucet for terrible results. I'm not saying every government has to behave that way, but at least from my observations all the ones I have been under have, at best, been incompetent, and have often been of malicious intent towards its own citizens at their expense for corporate donors and insiders to their social circle. But it is certainly systemically intentional.
The water actually has a lead warning in east PA, and we do have near weekly evening power outages. But the septic is county based and the electric is at the state level, and in PA you can buy from any electric provider in the state and the lines are maintained near us by Harrisburg.
So it sounds like your area fails in the infrastructure department pretty fundamentally. There are many other cities where it never blacks out, the water and sanitation has been great for decades and the roads are maintained. Those places would do municipal internet better too.
My internet speeds today are an order of magnitude faster than they were even a few years ago. Does that not count as innovation? It certainly required a fairly massive capital investment.
Actually, my speeds are about the same as those in Korea as I live in NYC. Which makes sense because South Korea is almost entirely urban much like NYC. It's not really fair to make cross country comparisons between countries with vastly different geographies.
> It's not really fair to make cross country comparisons between countries with vastly different geographies.
It's fairer than you'd think. There were some articles in the last few years (summarized at Ars Technica, I think) about how the US is really, really average at delivering residential network bandwidth at a decent cost, compared against a wide variety of countries.
The thing that struck me about it was that the countries in the comparisons varied a lot politically (highly regulated vs. largely free market, etc.) and in terms of varying population density. I think the main conclusion I drew was that there isn't really one simple explanation for why we're pretty mediocre at this. We just have a crappy system.
Out of curiosity, what provider and what advertised speeds and what speeds during actual use?
I'm not doubting your statement so much as just honestly curious, since getting access to the Internet in the US, from my experience, has been significantly worse than other places in the world where I've lived. In most of the EU, Asia, and in Russia, getting Internet was a breeze for my partner and I whenever we moved, and the speeds were usually, if not always, exactly as advertised.
For example, my partner and I live in Russia, and for some time, she did contract work as a chemist in Pereslavl, around 100 km north of Moscow. It was a remote and small town by any definition, but it had I believe 4 different internet providers and the options were all clearly laid out with simple pricing, and the pricing on the sites was the same as the pricing on our monthly bills.
Comparing this to when I've attempted to help friends prepare to move within the US and looking at ISPs, getting Internet in the US is a complete nightmare. The major ISPs often aren't able to give you an accurate pricing offer without first inputting an actual address onto their website, and very often the tool is broken or for whatever reason returns that the property is in the service area, even if the property already has a current connection from said ISP. (checking to ensure my parent's were getting a fair price from their ISP, for example, had both Charter's website and their sales representative inform me that Charter was not available in their neighborhood and address, despite them having used Charter's service for ~7 years.)
After that, it's introductory deals with the actual pricing buried in fine print on another page. Constant push to try to bundle land-line and media services, representatives insisting you need to rent a modem/router combo from the company when their own website has information on providing your own modem/router. While I do realize not all modems are created equal, that was not the pitch given to people I know or to family while I was present and helping them set up Internet.
I don't know, it just seems like virtually everywhere else, even if the speeds in major US cities are comparable, the entire "experience" of shopping around and getting Internet access is just better. The only place in the US where I've lived and it wasn't a pain to get service was when I lived in Tacoma, WA and used one of their municipal services. Aside from some occasionally goofy DNS issues, the service was lovely, competitively priced with Comcast, and their reps were also really fantastic. They also were very good at quickly getting information customers on known outages; their automated support line would switch to a special greeting informing the caller of a known outage, which saved a heck of a lot of time when storm damage or another random event disrupted service.
Averages are meaningless except when measuring trends. What you said has no bearing on whether you or they are getting a better deal. You'd instead have to look at what work went into proding what speeds at what rates in whatever geography. That would be more fair comparison.
Note: I can't get unrestricted Gigabit for around $30 almost anywhere in States because companies don't want it to exist.
What evidence is that. The evidence in my town is that the city can't walk and chew gum at the same time. I have zero confidence they could operate a broadband utility with anything approaching competence.
Municipal broadband just replaces one monopoly with another -- one that doesn't even have profit as a requirement, since it is also a taxing authority.
> I'd wager that the short term (~10 years) consequences would be vastly superior service for every day citizens. In the long term, not certain
I think that you'd see the same phenomenon as in any country which socialised an industry: at first things are — as you guess — much the same, because the same people keep coming to work in the same buildings, operating the same machines according to the same processes &c. But the rate of innovation lowers, and eventually you get the equivalent of a Soviet grocery store (https://www.youtube.com/watch?v=oOBFMMbUFI8): something much better than what you had before, but nowhere near as good as you could have had.
So after a decade or two of municipal broadband, you can expect that you'll have better broadband than when you started, but far, far, far worse broadband than where there is competition.
Now, if the debate is between a public and a private monopoly, I honestly don't know which is worse. Possibly the public monopoly, because its employees are unfireable, but — I don't know.
Nonsense; we're talking about natural monopolies here. Of course the government can't make a better grocery store. There is relatively little barrier to entry for that market.
Infrastructure has massive capital costs. If roads were owned by car dealerships and only permitted cars of their associated brands to drive on them that would be somewhat analogous to having multiple communication providers lay duplicate fiber (and just as wasteful).
Cable and ILECs are acting perfectly rationally by not competing with each other; there is little to gain when you can just squeeze your captive customer base for more money.
Fiber is fiber. The government could setup a public benefit corporation tasked with delivering fiber broadband last-mile infrastructure and keeping up with the latest innovations. If they fail to follow through, the courts can force them to follow the PBC charter.
If you want to leave maximum room for innovation (with resulting higher costs) the PBC could only be responsible for terminating fiber on both ends and any ISP who wants to compete would have to install an ONT on the customer site and light the fiber at the exchange. Then the ISP can replace equipment to wring faster and faster speeds out of the fiber if they want.
You can go the other way and task the PBC with lighting the fiber and delivering packets. It makes the process of starting an ISP much easier but you're reliant on the PBC to keep up with potential 10GB upgrades in the future. That sure would be a nice problem to have though...
The problem with burying cables is, that the first mover advantage can not be overcome. The calculation of the first guy is, that he has some cost X for N subscribers who will have to pay a monopoly rate M. The calculation of the second guy is, he has to pay X to bury a cable to capture some fraction of the subscribers fN who each pay a competitive subscription rate C much smaller than M. (In fact close to the marginal cost of an additional subscriber, that is basically 0). So the first guy expects to break even after X/(MN) and the second guy at X/(CfN).
This suggests the interesting possibility, that it may be worthwhile for the neighbors in a street to build their own cable and just give it to a competitor of the cable provider.
Cable companies don't compete because the market has reached a Nash equilibrium. This is Game Theory 101. If one company lowers their prices or increase their services then as soon as others start seeing attrition they simply lower their prices in response until attrition stops. At the end of the day no one gains any customers and they've all lowered their prices. No one wins.
Similar things happen with turf wars. If I install services in one community then the incumbent can simply lower prices to match mine very easily. At the end of the day I've spent a bunch of money and may not gain any of my competitors customers. Even if my competitor is still paying off infrastructure in that region and may now be running at a lose the companies are so large one community isn't going to make a difference.
Even if you offer faster services the majority of people don't care, they just want to be able to watch Netflix as cheap as possible.
Your first description isn't a Nash equilibrium because you're considering second-order effects (you're considering the reaction of other players to your changes), when Nash equilibrium only concerns itself with first-order effects - you assume other players do not change and if under that assumption every player is at the best action already, then you're in a Nash equilibrium.
I don't think cable companies are at a Nash equilibrium, but they may be at other forms of equilibrium that I'm not familiar with. Also this game is iterated so there are other (crucial) dynamics at play that I am not familiar with.
It's not Nash equilibrium, but this is a standard result in industrial organization. Companies "collude" by threatening to start price wars. The threat of a price war is enough deterrent to prevent anyone from undercutting anyone else.
Not entirely accurate though. "In closed-door meetings where we've secretly agreed to not have differing prices" is called price-fixing, which is 100% illegal.
It may be to little too late, but I am an engineer for Charter and we are doing a few things that I think are worth noting. This is my own opinion and not an official statement from the company.
- bringing back all help desk type jobs that were offshored. All of our call center jobs were in the US until recently and some idiot started outsourcing some of them. We are bringing them back immediately.
- EPON fiber build outs everywhere (we realize fiber is better than cable but there is existing cable infrastructure and the protocol can support 1gig/s with the current DOCSIS 3.1 standard so for now we are both upgrading the cable system and building fiber EPON)
- no data caps in any form
- getting rid of DVRs and having both live video and on demand/saved video stream from servers over IP
I would place us as much more techie friendly than ATT but less so compared to Google. Most of the problems with peoples cable service come from poor install jobs, if you have a problem with lost packets or dropping video please be persistent in getting a tech that is knowledgeable on how to troubleshoot line issues.
p.s. use namebench to find the best DNS servers for your area and use those instead of ours.
> What Charter really wants is the flexibility to buy up other cable companies in the future, and it'll have a harder time selling those deals to government regulators if Charter has been competing with the target firms the whole time.
So, FCC wants them to enter a territory to increase competition, and Charter says "we want to reduce competition down the road buying the competitor". FCC should simply make it a requirement, that Charter should be forbidden from buying competitors in that market. That's all, problem solved.
And Charter must be really stupid to claim they want to reduce competition when talking about monopoly restricting conditions for the merger.
Headline is clickbait; could the HN title be changed to something like "cable companies won't compete because they want to leave acquisition options open?" About as long, and far more informative.
That's the real lesson here: if there were less regulation then companies would compete with one another — which would cost them profits, which is why they lobby for more regulations.
Where I live, it's a legally mandated monopoly. Before Verizon FIOS came on the scene, there was one cable provider here. Way back when, it was CableVision, then Adelphia, then Comcast. We now have the choice of Comcast or Verizon. I've been switching back and forth between them for years. As soon as my promotional price ends and they start inching up my rate, I jump ship, rinse and repeat.
I'd love to have a third player in the game to add more pressure to keep the prices low.
I think this article is the best proof we need to show that basic connectivity infrastructure should be paid with tax dollars and licensed to operators by the federal government since there's no incentive whatsoever to create a real market around it.
Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors" [1]
Cable companies regularly adjust prices based on the entrance of competitors (Google Fiber), or when a cable company enters a new market, prices are initially low to prevent competition and then slowly raised to a much higher level. The excuses for vast differences in rates in metropolitan cities are usually paper thin, but accepted by the media and government at face value. Cable companies also operate secondary businesses with a conflicting interest to their cable operations (Cable TV packages now directly competes with Broadband Internet, also see: NBC/Comcast), not unlike Standard Oil's purchase of many railways and control of shipping lanes. This arrangement vastly stacks the deck in favor of cable companies, and further cable company "cooperation" with state and national officials have created new restrictions on municipal competition.
Cable companies are our 21st century Standard Oil.
[1] https://en.wikipedia.org/wiki/Standard_Oil#Monopoly_charges_...