Repeal of "Net neutrality"?

Demistate said:
... These companies know that everybody will need to pay for more bandwidth as time goes forward and telecom companies will be there to sell you higher tiers of service. ...
Click to expand...

Quite the opposite has happened. As technology has become available, prices have not grown proportional to the bandwidth. The price per bit has shrunk dramatically and continues to do so. Starting out with 9600kbps modems through 56kbps modems, there was a flat rate for dial-up of about $10/month. When ADSL came along, telcos provided as much bandwith as was technically feasible; about 8mbs downstream. Then VDSL and FTTH came along and they offered even more bandwidth. Verizon now offers 50mb up/down for a remarkable $55/month. That is $.000,001/bit vs the $.000,2/bit cost of the modem.

The next offering will be the ability to replace the single fiber per home (FiOS) with a single fiber/neighbor hood and then provide up to 1G/user via wireless. That will drop the carriers operating costs and that savings will be passed on in the form of more bandwidth for little more money.


Demistate said:
...There is a reason why telecom stocks have been rushed to with the new administration. They knew that they were going to have a field day being able to charge whatever they want.
Click to expand...

They have a field day now. There are no regulations regarding prices for internet access. Price offerings are based upon competition. One of the great bits of competition in the wireless phone business is T-Mobile. They have single-handedly forced AT&T and Verizon to cut prices and improve bandwidth offerings. They are the ones that forced Verizon to give up on the 2 year contract. They are also the ones that forced Verizon to offer their new unlimited bandwidth package.

The competition is fierce between the telcos and the cable companies and we are enjoying the benefits of that.
 
Disagree in many markets in the US where wired service is the only viable service for running your business and only one offers more than 5mbps.

All have data caps now. Those use to not exist just a few years ago.
 
Yes indeed, there are large areas of the States left by the wayside. My characterizations were focused on the major metro areas that enjoy the benefits of the latest technologies. Wireless internet is not here today for anyone; at least not in the kinds of speeds that we are talking about. But it will come with 5G. In the meantime, if you are not on cable or if you are with AT&T or Verizon outside of their U-Verse or FiOS service, you are stuck with ADSL, which as you say, is only a few mbs. Even if you have U-verse, but are more than 5000' from AT&T's box, you only get a few mbs.

One of the downsides of the wireless telephone service's big success is that it has inspired AT&T and Verizon to be largely un-interested in wired service in all but the most densely populated areas. They have sold off their less compelling regions. This leaves a very big portion of the U.S. territory to be served by secondary providers such as Frontier, Fairpoint, Windstream, and Century Link. These companies are not nearly as well capitalized as the big two. When you have to cover endless miles of farmland or desert and have low density populations, there just isn't enough income to be able to spend billions on new equipment. That leaves a great deal of the country with less compelling service. 5G may help that situation in the coming years.

Regarding data caps, that is simply a matter of them trying to find a way to provide a fair level of service for all of their customers. The equipment that was installed a few years ago simply can't keep up with the demand for bandwidth. When ADSL was invented, there was no youtube or netflix. It was thought that 5mbs would serve even the most advanced customer. With the new unforseen bandwidth demands, customers are choking the equipment with bandwidth demands that simply can't be dealt with. In order to deal with this in a fair way, data caps or upcharges were put in place to try to curb usage. Of course, this is a bandaid and there is a rush to put in better equipment to deal with the problem.

Again, metro areas will be served first and best. Other areas will have to suffer longer and not see the advancements needed to keep up with demand.
 
Last edited:
In order to deal with this in a fair way, data caps or upcharges were put in place to try to curb usage.

lol, how come in places like South Korea, where the data usage is proportionally much greater (what with the massive games market), they're managing just fine without caps and overcharges - in fact the opposite: both far cheaper than the U.S. charges, and much faster internet overall. It's just complete nonsense. They put in caps and overcharges because they can, and because it benefits their profit margins, period. Classic rent-seeking behavior. The fact remains that it's not just about technology but about the whole social/economic context (I won't say more, as that might involve politics).

One of the great bits of competition in the wireless phone business is T-Mobile.

lol, competition - just a little while ago, T-Mobile almost got bought out, and was stopped only because of the regulatory regimen - a regimen that changes with the times and which is likely to go toward a freeforall of no regulation (I'm not going to elaborate, as I don't want to get anywhere near politics). Anyone counting on competion without reference to the realities on the ground, is in for a bit of a wakeup call.
 
Most high bandwidth services, like YouTube, Netflix, Amazon etc, have servers inside large ISP's networks, called a CDN (Content Delivery Network). The bandwidth internally is more than enough to serve massive amounts of data, and the ISPs only pay for the initial transfer from a peering agreement between one network and another. The cost is paid once in most instances.

If they were really being fair, they would just meter your data when you crossed a network that really did incur a cost at a different rate than pushing bits around on their internal network.

How much profit do large telecoms in the US need to make if they are unwilling to build the expensive backend you're telling me they wont build due to wireless services being more profitable?
 
South Korea is much smaller geographically the US (duh, you say!), so it costs a lot less to run cables.

And one has to consider other factors - such as funds redirected from other governmental funds and/or collected from other sources - to see the actual cost of all services, including the internet. In other words, the Korean government could give its large chaebol huge tax breaks on the back end, as an example. That would offset the revenues that the state collects from taxation. The US has similar - though probably not identical - tax laws that allow accelerated write-offs on investments.

PS. In the 90's, I recall paying $21.95 for AOL with my 28.8K modem and, frequently, speeds often slowed down to a complete crawl, where it took minutes to load a graphics intensive page. These days, the building has an official 75 Mbps (I tested it at 80) speed for roughly double the price. And AOL comes free.
 
Caps are in place for wired internet because of the bandwidth congestion. The top selling first-generation ADSL equipment sold to the telcos
has a capacity of 45mbs in its mostly-deployed configuration. That 45mbs is shared by up to 768 customers. 45mbs/768 customers is 58kbps per customer. Of course, traffic is bursty and not everyone is on at the same time, but even if a few customers are streaming at the same time, you see there is a major problem. They have been dealing with this issue for years. Demand has outpaced their ability to fix the problem.

The second-generation equipment has much greater capability, but is limited by the fact that the technology is only high-speed VDSL out to about 5000'. Not all customers are that close to the equipment.

The third-generation equipment (fiber to the home) does not have these issues. But its deployment is only cost effective in certain areas where customers still have telephone poles which make it practical to deploy fiber. So it was only deployed en-masse by Verizon as FiOS. Google tried to deploy fiber to homes and found out how expensive it is and has stopped that project.

Last-mile access has always been the problem. They can get unlimited bandwidth to the neighborhood with bundles of fiber, but getting that bandwidth to the house has been an issue they have struggled with. 5G is expected to eliminate these issues. They will be able to run fiber to a neighborhood and then put up towers (if municipalities will allow them to) that will provide coverage to every house with as much bandwidth as you can consume.

Meanwhile, cable companies have not had these issues. They had the good fortune to be using coax cable, which unlike twisted pair wires, has a tremendous bandwidth capacity. They also have had the good fortune to figure out how to use it. I just ran a speed test and I am getting 116mbs downstream and 6mbs upstream. Now if they were the evil empire, trying to get maximum profits (which they are, just like most everyone is), there would be a cap on that speed. But there is not. That is the standard offering for internet at this location. I am located in a town of 60,000 that is 40 miles away from a major metropolitan city. But AT&T also offers service to my house. It is offered through their best technology (U-Verse). It offers a meager 10mbs or so and it cannot offer me television because I am farther than 5000' from the box.

Back to Comcast cable - There is no speed cap because there is no need for a cap. At least not for speed. But there is a data usage cap at 300GB per month. That is there to prevent gross users from abusing the system just as the telcos have to do.

Indeed, other countries have better and worse offerings. You picked South Korea, which has the best internet participation on the earth. They are ranked as number one in participation for a few reasons, but mostly it has to do with their size. South Korea is a mere 38,000 square miles. That is equivalent in size to the U.S. counties of San Diego, Phoenix, Los Angeles, Las Vegas, Reno, Seattle, and Chicago. The United States is 3,000,000 square miles. If Verizon and AT&T only had to wire up seven high-density counties, and ignore the rest of the states, you could expect the same here. Would it be as cheap? Maybe not. South Korea is talking about 1Gbs for $20. You won't see that here for a while.

The issue for us in the US is that there really isn't enough competition in the ISP market. In the metro areas, cable is king. They have the bandwidth and most telcos can't compete. So the cable companies can charge premium prices. That may improve when 5G LTE.

As to the evil empire maximizing profits, the telcos are dividend stocks that provide their investors with a remarkably steady dividend income. This is used by pension funds and retirees to secure themselves a retirement.

https://www.att.com/gen/investor-relations?pid=5675
 
Last edited:
I don't call any company "an evil empire" - they exist to make a profit, and that's their mission, perfectly legitimate. Nor do I care about what they do with their profits - if you get ripped off by a company, you're not going to be consoled by the fact that they distribute their dividends to orphans and widows. Irrelevant. But they are profiteering in a specific regulatory environment. I don't object to any company making a profit, but when they also define the marketplace, the consumer loses - it's called regulatory capture (and I say no more, as it might veer off into politics). That's the problem here.

And as to all the excuses about density or whatnot driving the cost of service - more nonsense. First, ISPs have not been shy in the U.S. in simply not providing services to unprofitable rural areas or cherrypicking areas of service while prevailing on politicians to forbid metro, state or city provided public alternatives. So that's a bunch of bunk straight from provider propaganda sheets - and if you don't like the South Korean example, I'm ready with another example... a country with the second fastest internet in the world, Sweden - and nobody can argue that Sweden is densly populated, quite the opposite, and then of course there is Norway with 100% internet penetration and even more sparsely populated - somehow all those distant and scattered little villages and towns manage what great big providers in the U.S. are all sad trombones about "density". In other words bunk.

Again, the barriers are not technological or even economical - they're about policy priorities and infrastructure philosophies. Then again, back in the day the Egyptians had a tax on air, so if you were breathing you needed to be taxed on that - I'm sure enterprising companies are thinking hard about how to lay claim to such a resource and a good profit center, it's already happening with water after all. In the end, it's all about policy. The internet in the U.S. is expensive and slow for very specific reasons, and technology is the least of those (btw: it's good to remember that the foundational technology behind the internet was originally developed on the taxpayer dime, yet here we are) - in other words, follow the money.
 
Last edited:
DLD said:
A long article with a lot of links on Google Fiber 2.0 (using the final mile wireless) and its battles with AT&T and others.

http://www.zdnet.com/article/google...ge-its-comeback-as-at-t-fiber-prepares-to-go/
Click to expand...

From the article:

. . . to make use of public utility poles owned by providers such as AT&T.
Click to expand...

If they are "public," then how can they be owned by a private company?

like many other US cities with a tangled web of ownership, laws, and ordinances around utilities.
Click to expand...

When Google first added the Kentucky city to its list of potential Fiber deployments in September 2015, AT&T responded three months later, claiming that it would soon be connecting the city to its fiber network
Click to expand...

Then a lot of quote-worthy paragraphs, about AT&T shadowing Google Fiber's every move. When Google announced, AT&T announced. AT&T hired contractors like crazy, digging trenches and laying cable. Then when Google hit a snag, AT&T's workers stopped midway through.

Capitalism only works if there's competition, folks.

I finally took the time to learn about Webpass, a company bought by Google. If you look up which cities have Google Fiber, certain big cities like San Francisco, Boston, and Chicago are Webpass cities. So what is Webpass. I googled around and found out that they deploy 60 Mbps internet access (both upload and download is 60 Mbps!), and they can install in new buildings in 30 days. Wow, how do they deploy so fast. Point-to-point wireless. They put a wireless receiver on the top of the building, and then wire to each unit. They don't do houses, just apartments and such.

 
Paul F said:
Yes indeed, there are large areas of the States left by the wayside. My characterizations were focused on the major metro areas that enjoy the benefits of the latest technologies. Wireless internet is not here today for anyone; at least not in the kinds of speeds that we are talking about. But it will come with 5G. In the meantime, if you are not on cable or if you are with AT&T or Verizon outside of their U-Verse or FiOS service, you are stuck with ADSL, which as you say, is only a few mbs. Even if you have U-verse, but are more than 5000' from AT&T's box, you only get a few mbs.

One of the downsides of the wireless telephone service's big success is that it has inspired AT&T and Verizon to be largely un-interested in wired service in all but the most densely populated areas. They have sold off their less compelling regions. This leaves a very big portion of the U.S. territory to be served by secondary providers such as Frontier, Fairpoint, Windstream, and Century Link. These companies are not nearly as well capitalized as the big two. When you have to cover endless miles of farmland or desert and have low density populations, there just isn't enough income to be able to spend billions on new equipment. That leaves a great deal of the country with less compelling service. 5G may help that situation in the coming years.

Regarding data caps, that is simply a matter of them trying to find a way to provide a fair level of service for all of their customers. The equipment that was installed a few years ago simply can't keep up with the demand for bandwidth. When ADSL was invented, there was no youtube or netflix. It was thought that 5mbs would serve even the most advanced customer. With the new unforseen bandwidth demands, customers are choking the equipment with bandwidth demands that simply can't be dealt with. In order to deal with this in a fair way, data caps or upcharges were put in place to try to curb usage. Of course, this is a bandaid and there is a rush to put in better equipment to deal with the problem.

Again, metro areas will be served first and best. Other areas will have to suffer longer and not see the advancements needed to keep up with demand.
Click to expand...

It doesn't even have to apply to large open areas like deserts. My dad lives 5 miles outside of the Green Bay, WI area and to this day cannot get any internet service besides dial up or a satellite based service with insane data caps. I don't see any options in the foreseeable future for him either. I have called cable and phone companies begging for service and so have his neighbors but no company wants to bother setting up service in the rural areas to service a handful of customers. The cost to lay the infrastructure is astronomical compared to the amount of customers that will actually pay for the service.

Really the only realistic option for all sides is to see an increase in 4g and 5g coverage areas to blanket the entire country. And to eliminate caps or at least make them realistic for streaming video. At least Verizon is starting to bring back unlimited data although they limit speeds after a certain amount. Still if the coverage can get better at my Dads house I will likely set him up with a 4g/5g hot spot device and forget about any land based service ever again.
 
Don't rely on wireless spectrum somehow solving US's bandwidth problems

1) The same companies that provide wireline service provide wireless service, and profit motives will still favor more densly populated areas over rual areas.
2) Limited amount of spectrum available today
3) 3x competing telecoms divide up that spectrum to be less efficient.

How far down the best internet connected countries do you have to go before they have a private system like ours where there are several companies overlapping coverage instead of nationalized lines? That should tell you about the efficency of Private/public owned infrastructure.
 
Just as another cautionary tale, Remember how bad AT&T's service got in the US when the iPhone was only available on their network? It's not that the US couldn't support the amount of iPhone users , it's just that they overcrowded 1/3 of the available US spectrum.
 
Demistate said:
... How far down the best internet connected countries do you have to go before they have a private system like ours where there are several companies overlapping coverage instead of nationalized lines? That should tell you about the efficency of Private/public owned infrastructure.
Click to expand...

OK, let's ponder these scenarios.

Country A - A has no state sponsored internet. The cities are wired up, the rural areas are not. Each company can compete for any client, enter and exit a market, throttle or eliminate any given stream.

Country B - B has a mix of public and private and a mix of the city and rural net. The rurals often have to buy satellite dishes and have to settle for a lower quality streaming. There are local jurisdictions that could favor a certain provider over the other.

Country C - C has a fully government created, supported and controlled internet. The government then decides who gets what speeds. The government can - though the extent of this control varies - also decide what gets through these pipes and who pays what fees for whatever service someone is getting because there is no competition in the market place.

These are the basic choices.
 
DLD said:
OK, let's ponder these scenarios.

Country A - A has no state sponsored internet. The cities are wired up, the rural areas are not. Each company can compete for any client, enter and exit a market, throttle or eliminate any given stream.

Country B - B has a mix of public and private and a mix of the city and rural net. The rurals often have to buy satellite dishes and have to settle for a lower quality streaming. There are local jurisdictions that could favor a certain provider over the other.

Country C - C has a fully government created, supported and controlled internet. The government then decides who gets what speeds. The government can - though the extent of this control varies - also decide what gets through these pipes and who pays what fees for whatever service someone is getting because there is no competition in the market place.

These are the basic choices.
Click to expand...

That's really simplistic. There are many, many - MANY - more choices and it all comes down to policy. Remember, we saw this movie before. With telephone services. (I'll try to discuss this without getting into politics). You can have the private market provide most if not all of the service, as long as the appropriate regulatory environment and policy priorities are in place - you simply compel the providers "if you want to be in this market, you must also provide services in rural areas" - this resulted in an additional payment from all consumers, but the rural areas would be covered... of course, it also depends on how universal you make it - and that often was questionable as providers bought off politicians. Of course, it looks like going forward they are getting rid of some of the "you must provide service" obligation, so we'll soon be in the Country A scenario. And Country B is not sustainable if there is no policy support - we've seen it around here with the Postal Service - USPS is obligated by law to provide services everywhere including rural areas that are less economical, but that worked, because those areas were subsidized by the USPS premium services, such as packages. Then private companies got into the market - and of course, they are not compelled by law to deliver to rural and unprofitable areas, they get to cherry pick. So they only provide services to profitable areas and can undercut the USPS, because they don't need to subsidize rural areas. So as a result, the USPS loses their premium market to the private companies and are left with only delivering unprofitable areas and services, at which point politicians who are in the pocket of the private companies say "look how unprofitable the USPS is, shut it down" - and that way you are left with no competition and now the private companies have a chokehold on the market and prices go up and rural areas are still not serviced... in other words, how the internet looks economically, with too little competition. The solution of course is not to forbid private companies from providing services, but to compel them, legally through the regulatory regimen to also service rural areas. In other words, provide an even playing field for competition - then we can see better service all around. But that of course cannot happen due to - and now I stop that line of thought as it would veer too close to politics.

But competition is of course key - and that's what went wrong with Ma Bell. When AT&T was broken up you saw an explosion of services and innovation. Thank you, anti-monopoly laws, and a good regulatory environmnet. But then we dropped the ball again, and we see more and more mergers, less competition and worse service and the consumer loses. That is also true of capital investment into building out - in order to get clearance to merge companies would promise that they'll invest massive capital in building out infrastructure so everyone benefits - then they merge and never deliver on the promises, and there is no punishment, or just a slap on the wrist, which just becomes the cost of doing business and the consumer is screwed.

Bottom line: yes, there are many, many, many ways of getting your infrastucture. If you believe that a certain infrastructure is a fundamental precondition for a functioning economy, that will be reflected in your policy. Take roads - you can have the government build out roads based on the idea that everyone benefits from this, or you can turn over the whole thing to private businesses that can charge for toll-roads. Take a look at history and see which system worked better. Now, do you believe that services such as roads, and telephony and the internet fall into the area of chokehold rent seeking opportunities for companies relying on regulatory capture, or do you believe in competition and sane regulation? The answer to this question is reflected in the price and quality of internet services the world over... and don't believe in the propaganda from any source - instead, look at the results.
 
DLD said:
OK, let's ponder these scenarios.

Country A - A has no state sponsored internet. The cities are wired up, the rural areas are not. Each company can compete for any client, enter and exit a market, throttle or eliminate any given stream.

Country B - B has a mix of public and private and a mix of the city and rural net. The rurals often have to buy satellite dishes and have to settle for a lower quality streaming. There are local jurisdictions that could favor a certain provider over the other.

Country C - C has a fully government created, supported and controlled internet. The government then decides who gets what speeds. The government can - though the extent of this control varies - also decide what gets through these pipes and who pays what fees for whatever service someone is getting because there is no competition in the market place.

These are the basic choices.
Click to expand...

Very simplistic.

The UK HAD a state owned monopoly. This became a private monopoly with government oversight and now there is a lot more government lead openness. This means that the UK, a geographically relatively small country, has a fully wired phone system to virtually every building in the UK. (for the same reason we have something line 95% mobile phone coverage) Now the private ISP's can put equipment into the telephone exchanges to use the local Telecoms lines to the buildings. i.e. houses and companies. This is at government controlled costs. Therefor any ISP can supply any customer without having to rewire the local lines to buildings.

Due to the former state owned telco also selling and renting out bandwidth to other ISP's it is in their interests to speed up the lines from the exchanges to the buildings. Therefore we now have "fibre to the cabinet" This is fibre optic not just to the exchanges but from the exchanges to the distribution cabinets that are within a few 100 yards of the buildings. This means that over the 500 or so metres of POTs (Plain Old Telephone, i.e. copper) wires to my house I get VDSL 40mb in and 10 mb out. (it's capped to that). From the telephone exchanges (all of which are run by BT the former state owned company) the ISP's can run their own trunk lines and networks and some do.

Interestingly due to geography, as noted the UK is not that big, due to the network of trunk lines by BT and other ISP's some villages have very high speed internet access off trunk lines that pass close to the village. Severl friends of min in a small village "in the middle of nowhere" have 80mb in and 40mb out!!! Then again some houses just out side some towns and cities have low speeds due to distance from the exchange on pure copper wires and no fibre in their direction. Though these are the exception now as BT is pushing more fibre optics from the exchanges to the cabinets. Whilst not a trivial taste they are able to use all the underground ducting as originally laid for the telephones 50+ years ago.

In the UK as the gas, electric and telephone were all state owned in the 20th Century they were all put undergoing across the whole of the UK. (To be fair in the late 1940's and early 50's we had some redecorating to do anyway,. As idid most of Europe)
This has the advantage that there are very few telephone or power lines on poles to get damaged by storms etc. We get very few interruptions of electricity, phones or internet.


There is one ISP, Virgin, who do a cable service, mainly in urban areas, but not all of them which is entirely separate to the BT system. I am not sure if there are any others. I have not seen any in my area. They have to dig up the roads to lay cables. Therefor they don't cover rural areas much and not all the urban areas either.
 
Yes, I was very simplistic. By design. Because I restrained from entering the domain of political economy. Which falls outside of the preferences as set forth by the owners/operators of this site.

PS. It doesn't mean I can't enter into the discussion on political economy, at least, as it pertains to several nations across the globe. But, once again, I refrain from the taboo topics.
 
Field trials of 5G are underway. These trials can take months, up to a year.

"(Reuters) - Verizon Communications Inc said on Wednesday it would offer its high-speed wireless 5G network to certain customers in 11 U.S. cities in the first half of 2017. Verizon will begin pilot testing 5G "pre-commercial services" in cities, including Atlanta, Dallas, Denver, Houston, Miami, Seattle and Washington, D.C....

New 5G networks are expected to provide speeds at least 10 times and up to maybe 100 times faster than today's 4G networks, with the potential to connect at least 100 billion devices with download speeds that can reach 10 gigabits per second.

AT&T Inc said in January that it planned to test its high-speed wireless 5G network for customers of its online streaming television service, DirecTv Now, in Austin, Texas."

The interesting thing to note about this is that AT&T is running a field trial of 5G not for wireless phone service. but for television service. That indicates that 5G has bandwidth to burn if it is being used to provide television service, which is part of AT&T's least profitable segment, the Entertainment Group (2015 annual report).
 
Last edited:
You must log in or register to reply here.
Back
Top