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Why American Internet Service Is Slow and Expensive

Unknown Lamer posted about 2 years ago | from the collusion-laws-prove-useless dept.

The Internet 351

An anonymous reader writes "Reporter David Cay Johnston was interviewed recently for his new book, which touches on why America's Internet access is slow, expensive, and retarding economic growth. The main reason? Regulatory capture. It seems the telecommunication companies have rewritten the regulatory rules in their favor. In regards to the fees that were meant to build a fast Internet, Johnston speculates those fees went to build out cellular networks. 'The companies essentially have a business model that is antithetical to economic growth,' he says. 'Profits go up if they can provide slow Internet at super high prices.'"

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351 comments

Because... (5, Insightful)

Fuzzy_Pumper (673365) | about 2 years ago | (#41456519)

Screwing over people for profit the the American way???

SOCIALIZE! (5, Interesting)

mozumder (178398) | about 2 years ago | (#41456631)

Communications is a basic service provided by government. It's defined in the US constitution as well, as the Postal service.

There's no reason for private internet providers to exist.

Get rid of them, implement a government-designed system, like the roads. It would be far cheaper than building the highway system.

The best part of government ISP is that it has to follow constitutional freedom-of-speech rights, whereas a private ISP can shut down any message critical of the company, since private organizations don't have to follow the constitution.

Re: SOCIALIZE! (5, Insightful)

Anonymous Coward | about 2 years ago | (#41456785)

Given that the government tramples on constitutional rights all the time (i.e. 2nd Amendment), the FCC would find a way to restrict your "freedom-of-speech rights". Using your highway system example, driving is a privilege granted by the government to use their roads, not a right. Just as they have implemented laws and rules and restrictions on driving, they could easily do so on the internet. Fines could be implemented for cussing, anit-political rantings, etc. and it would just become another government cash cow. We would end up paying as much or more as we do now in registration fees and licensing, and likely have less freedoms on the internet.

Re: SOCIALIZE! (5, Insightful)

Anonymous Coward | about 2 years ago | (#41457311)

That's another form of "capture", in this case by control freaks. We don't have a government that represents the people, at least not all of them. All too often government represents the interests of the rich and powerful, the loud and obnoxious, or those who want others to conform to their way of thinking--when what government should be doing is guaranteeing and preserving freedom (and yes, that includes freedom FROM monied interests in some cases, sorry libertarians).

Government should not be in the business of controlling individual liberties without a damned good reason. The "driving is a privilege" BS is a prime example. That should never have been allowed to take root, has no basis in any kind of constitutional republic, and that it has taken root we're going to be forever eradicating it, just as we're going to be forever eradicating the "because it's on a computer/on the Internet then law enforcement should have it without a warrant" crap too. Both things, BTW, have been allowed to exist because some people are fearful of cars and some people are fearful of computers and control freaks use those to gain support for their positions.

However, consider this: corporations are not exactly huge defenders of freedom and individual liberty. They are in fact quite the opposite and they prove it constantly. It is at least possible for people to take their government back and make it work for them. I would aruge it is their duty, as would some rather wise folks from a couple hundred years ago. It is not possible to make a corporation behave correctly in a civilized society absent a monetary interest or force of law. We need the force of law on OUR side, not theirs. In this case, it need not be government provided broadband. I don't want the government making my computers, shoes, jeans, etc. and broadband isn't something they should do either for just those reasons you specified. However, government can and should require certain behaviors out of the private entities that do so, in no small part because of their use of right of way, the limited useful spectrum, and the fact that they seem to have taken our money and stolen it. Governments should not be prohibited from stepping in and providing services in those areas where private companies don't want to, which of course is what private companies have been buying into law for some time now.

It's not black and white, this or that, etc. There are ways to make things better without giving all the power to one side or the other. The point is right now the power is too far on the private side when it comes to money, the "force" is all directed against the citizens, and it's not helping anybody.

Re: SOCIALIZE! (0)

drooling-dog (189103) | about 2 years ago | (#41457481)

Whereas we would have nothing to fear from a private Internet monopoly, unrestrained by any regulation enforcing net neutrality or the constitutional limits that apply to government. The executives and shareholders of such a monopoly would realize their civic responsibility to uphold the free expression and exchange of ideas among the citizenry, and would readily uphold that responsibility even if it meant taking a hit on the bottom line.

That's the way it is in the Bizarro World, anyway. In this real world, an unregulated entrenched monopoly/oligopoly has all the power of government with none of the accountability.

Re: SOCIALIZE! (4, Insightful)

Rolgar (556636) | about 2 years ago | (#41457541)

You don't have to have it done by the government. In rural areas in the central U.S., power lines are often provided by co-op because of the lack of profitablit. Essentially the same owners although directly (as customer-owners) instead of indirectly (through the government). I never had any complaints with my power lines through the coop. I imagine I wouldn't have any problems with coop internet service either. And the great thing for rural folks, who already have a co-op organization, the right of way and necessary machinery are already under control. They'd just have to lay down the wiring.

Folks in town need to convince their rural neighbors to get their coop to do this, then extend their reach into town. And the coops could even connect to each other and provide a competitor to the companies that connect the various ISP networks together. Then you don't need network neutrality, because the coop will belong to and therefore serve the customers.

Re:SOCIALIZE! (0)

ra1n85 (2708917) | about 2 years ago | (#41456793)

I disagree. Although your monthly bill will disappear, the massive agency that will run the federal ISP will need funding. Where does that money come from in your equation? Add the gross inefficiencies, waste, and abuse that are rife in government agencies and contracting, and you'll be paying more in the end.

Re:SOCIALIZE! (5, Insightful)

Anonymous Coward | about 2 years ago | (#41456881)

gross inefficiencies, waste, and abuse

This is a oft mentioned fallacy by the anti-government crowd. The cheapest way to get a letter (an actual paper one, not e-mail) from NYC to LA is via the US Postal Service. The reason that the conservatives in Congress were so against making Medicare available to be purchased by anyone is because they knew that private insurance companies wouldn't be able to compete. There are some things government does well, others it doesn't. It's not a universal truism that they fuck up everything they touch.

Re:SOCIALIZE! (0)

RenderSeven (938535) | about 2 years ago | (#41457243)

I agree its not a given, but personally I believe the government would fuck up a national ISP. It's too tantalizing a target for politicization for either party, too rife with income opportunities to be left untaxed, too big to avoid corruption by big business. Perhaps that's largely what we have now, but if it was handed over to the government it would likely become worse. IMHO anyway.

Re:SOCIALIZE! (-1)

postbigbang (761081) | about 2 years ago | (#41457397)

I'd like them to start first with the oil monopoly. If they recovered just half the profits, the price of a gallon of gas would drop significantly.

They're never going to nationalize ISPs, just as there's no utility regulatory reform on a national basis. Constitutionally, there's only so much the FCC can do. Then the states can twist it however they want, within their boundaries. Easement/right-of-way law, tariffs, it's all rife for abuse.

Re:SOCIALIZE! (0)

Anonymous Coward | about 2 years ago | (#41457257)

Look into the usps monopoly on first class mail.

Re:SOCIALIZE! (4, Insightful)

Penguinisto (415985) | about 2 years ago | (#41457337)

Yes and no (on the USPS). The reason I say that is due to one question: how much of a break in taxation, fuel, and other costs does the USPS get? I'm willing to wager that they don't have to pay any FAA-associated fees for aircraft certification, and are usually exempt from state vehicle taxation, fuel taxes, property taxes on post offices, vehicle insurance premiums (the gov't handles that), etc. There's also the fact that the USPS doesn't have to pay taxes on income, and has no shareholders to please. FedEx, UPS, DHL... they all have to pay all of that and more.

I bet it's enough to have an artificially-reduced bottom-line - far, far smaller than the likes of FedEx or UPS. This in turn artificially lowers the entire overhead costs per entity once you count in HR/salary costs.

I don't hate the post office or anything, but before pointing to them as a shining example? At least remember that unlike their competition, the USPS gets to start the race quite a few strides ahead of the competition.

Re:SOCIALIZE! (0)

mozumder (178398) | about 2 years ago | (#41457421)

I don't hate the post office or anything, but before pointing to them as a shining example? At least remember that unlike their competition, the USPS gets to start the race quite a few strides ahead of the competition.

Great. Now apply this logic to other services, such as internet, and you'll see why government-run services are a lot better than private services.

Re:SOCIALIZE! (0)

mozumder (178398) | about 2 years ago | (#41457341)

I agree.

Government is best at essential services. Private industry is largely useless at that.

I think we can all agree that private industry is too inefficient. They are not as efficient as government.

The more government control we implement, the better society will be.

Re:SOCIALIZE! (0)

mozumder (178398) | about 2 years ago | (#41457303)

I disagree. Although your monthly bill will disappear, the massive agency that will run the federal ISP will need funding. Where does that money come from in your equation?

Like with everything else in government: through taxes, with rich people paying more.

Add the gross inefficiencies, waste, and abuse that are rife in government agencies and contracting, and you'll be paying more in the end.

That's ok. I prefer government inefficiencies, waste, and abuse over private inefficiencies, waste, and abuse.

Or do you think private inefficiencies, waste, and abuse is better?

There is no room for libertarianism in America. America need more government, not less. A strong, authoritative central government is best.

The best part? You get to pay for it through your tax dollars.

You'll thank us pro-government types later.

Re:SOCIALIZE! (1)

Anonymous Coward | about 2 years ago | (#41456847)

Communications is a basic service provided by government. It's defined in the US constitution as well, as the Postal service.

No it isn't. The existence of a Constitutional authorization to establish a postal service does not extend to...well, to anything other than a postal service. I'm not against public Internet service, but I AM against letting Congress do things without the proper authority. We have too much of that as it is.

There's no reason for private internet providers to exist.

There most certainly is, just as there are reasons for FedEx and UPS to exist alongside the Post Office, and for private schools to exist alongside public schools.

Get rid of them, implement a government-designed system, like the roads. It would be far cheaper than building the highway system.

You do realize there are still lots of privately-owned roads in the US, right?

Re:SOCIALIZE! (0)

Anonymous Coward | about 2 years ago | (#41456923)

"Communications is a basic service provided by government. It's defined in the US constitution as well, as the Postal service."

Ignoring of course the fact that the USPS is broke. Kind of important but that's just me.

What makes you think that state run internet would be any different?

The Article I, Section 8, Clause 7 of the United States Constitution "To establish Post Offices and post Roads" was put there because at the time there was no other way.

The internet is the 'other way'. And it is neither a road nor an office.

Nice try statist.

Re:SOCIALIZE! (5, Informative)

Kiraxa (1840002) | about 2 years ago | (#41457225)

Ignoring the fact that the USPS is only broke because Congress is trying to kill it by forcing them to pre-pay 75 years worth of pensions. Without the pre-paid 75 years worth of pensions, USPS is running at better margins than the publicly owned couriers.

Re:SOCIALIZE! (0)

Anonymous Coward | about 2 years ago | (#41457331)

Is not congress an arm of the state?

Do these pensions not need to be paid?

Then they are broke, because they are run by the state. Like everything else the state touches; SSI, Medicare, the federal government, you name it.

And you didn't answer my question; What makes you think that state run internet would be any different?

Re:SOCIALIZE! (0)

Catbeller (118204) | about 2 years ago | (#41457463)

They are "broke" because the laws are being run by the Republicans. If the dems win the next election, then suddenly they won't be "broke" anymore. 'nuff said.

Re:SOCIALIZE! (0)

Anonymous Coward | about 2 years ago | (#41457233)

The postal service is broke because congress doesn't let them run their own business, keeps their rates artificially low, and keeps 6 day delivery. It's not like UPS and Fedex are billions in debt, its that the USPS cant raise postage costs or cut down deliveries.

But yeah, socialization is not the answer either because you are still handing everything over to big money interests that write the laws for their paid elected officials... Unless its fairly small and local like the municipal fiber that was on here last week that maybe combined with at cost line leasing for cable/internet service. That'd maybe up competition quite a bit, but then you come to bundling, and large monopoly providers will have much more leverage on the cable side of things for negotiating rates. Everything was "bundled" phone/cable/internet, to kill off the local telcos, and they'd just do the same for anyone providing 1 or 2 of those services.

These are the companies that control the media channels now as well so good luck getting much widespread outrage from their outrage machines the people happy to pay 1500+ dollars a year to view their 1000 channels and surf youtube for cat videos, oblivious to what a mbps is or what the rates in other places are, so they have no idea how much they've had the screws taken to them over the last 20 years.

Re:SOCIALIZE! (0)

Anonymous Coward | about 2 years ago | (#41457375)

Well I agree with you. But you do not take this to the next step. What then is the solution?

And I mean that in the larger sense, I am not asking for a detailed business plan and step by step recipe for success... But in the broader sense (no pun intended), what should be done when the state fails us?

Re:SOCIALIZE! (0)

Anonymous Coward | about 2 years ago | (#41457209)

Communications is a basic service provided by government. It's defined in the US constitution as well, as the Postal service.

There's no reason for private internet providers to exist.

Get rid of them, implement a government-designed system, like the roads. It would be far cheaper than building the highway system.

The best part of government ISP is that it has to follow constitutional freedom-of-speech rights, whereas a private ISP can shut down any message critical of the company, since private organizations don't have to follow the constitution.

So, the government fucks something up by following the Golden Rule (them's that got the gold makes the rules), and you believe the solution is even MORE government intervention?

And that will break the cycle of corruption?

Take a look at Obamacare. Remember those EVIL those health insurance companies? Guess what? Obamacare FORCES more people to buy health insurance. The ones who didn't buy health insurance because for the most part it didn't make financial sense - the health insurance companies would make too much money off them in general.

So the big evil health insurance companies are now going to have even more money to buy the rules they want from the government.

Hip-hip-horay for more government. :-P

It's an Internet (0)

Jeremiah Cornelius (137) | about 2 years ago | (#41456647)

Built for the 1%.

Re:It's an Internet (5, Interesting)

Penguinisto (415985) | about 2 years ago | (#41457411)

Well, I live in the sticks ( >70 miles outside of a major metro area), and in spite of a county population density of around 22 per sq. mile [wikipedia.org] , I get 30mbps at $30/mo. (more often than not it drifts above 40, especially in winter when the tourists all stay home).

I could probably count on one hand, with all 5 fingers to spare, the number of "one percenters" who live out here.

It isn't fiber-to-the-doorstep, but given the low population and the alternatives in most other rural areas, it ain't half bad. *shrug*

Re:Because... (0)

Anonymous Coward | about 2 years ago | (#41456971)

Of course you meant to say "The state screwing over people for profit the the American way." right?

What do you think "have rewritten the regulatory rules in their favor" means? The telecommunication companies write no regulatory rules. You understand this right?

Re:Because... (0)

Anonymous Coward | about 2 years ago | (#41457139)

"The telecommunication companies write no regulatory rules. "

Absolutely true - it's the senators and congresscritters in their pocket that write those rules in their favor.

But calculate the same as the beer calculation (0)

Anonymous Coward | about 2 years ago | (#41456535)

You have to consider the cost relative to our income. Sure south Korea has cheaper internet, but what is their per capita?

And also figure in how much we use.

Americans have to work 5 minutes for 20 megabits of internet - or whatever.

Re:But calculate the same as the beer calculation (5, Informative)

bursch-X (458146) | about 2 years ago | (#41456603)

Then what about Japan? Yen is stronger, wages are higher yet fibre optic Internet access at 100 Mbps can be had for less money about anywhere in the country.

Re:But calculate the same as the beer calculation (1)

gagol (583737) | about 2 years ago | (#41456619)

Did you factor in population density?

Re:But calculate the same as the beer calculation (3, Insightful)

ThatsMyNick (2004126) | about 2 years ago | (#41456697)

Did you factor in locations in the US, where the population density is comparable to Japan's?

Re:But calculate the same as the beer calculation (1)

gagol (583737) | about 2 years ago | (#41456955)

You still need to connect those centers together, and every small town and suburbs in between. Fiber is not free. That is still not an excuse for poor service, but it does add to the cost.

Re:But calculate the same as the beer calculation (2)

ThatsMyNick (2004126) | about 2 years ago | (#41457253)

I always though people complaining about lower population density, were complaining about the last mile. Do you mean to say fiber between major interconnects is very very expensive too? Do you have any sources for this claim? And how does Japan avoid these interconnect issues (I assume they interconnect with a lot of countries to help support their last mile)

Re:But calculate the same as the beer calculation (1)

ArhcAngel (247594) | about 2 years ago | (#41457085)

Let's see...Japan is almost half the size of Texas so when they lay fiber they lay one big honkin bundle of the stuff. In N. America it has to stretch from sea to shining sea. Granted there's some dead spots in the middle that don't need much in the way of fiber but still. What needs to happen is the pipe be it fiber or coax or POTS or wireless (cellular) needs to be put under the control of a non-profit regulated group and let the service providers compete on...wait for it...service.

Re:But calculate the same as the beer calculation (1)

ThatsMyNick (2004126) | about 2 years ago | (#41457371)

So what you are saying is fiber laying should be done state by state, and should not be attempted to be done country wide at the same time? Why didnt the ISPs think of this?

South Korea is a special case. (5, Interesting)

Ungrounded Lightning (62228) | about 2 years ago | (#41457107)

South Korea has a special circumstance: (According to a marketing guy at a router company where I worked) About 95% of their population lives in giant apartment buildings - large enough that they have telephone central offices in their basements.

You don't have to dig up the neighborhood to get the service to them. You can just put an edge router in the basement, run indoor cat5-or-better up the existing communication conduits (if it wasn't there already), and feed them 100M (maybe 1G by now) Ethernet, which gets from building to building and to the backbone via fibers in the bundle that was already there (in old construction) for the telephone service. This makes installation VERY cheap and wiring distances short enough that high speeds are easy.

With that speed available the biggest bandwidth user (according to this guy) was live 1-to-1 naked video "phone calls" between youngsters of opposite sexes still living with their parents. It let them do their courtship form their bedrooms without being in each other's presence unsupervised, or making physical contact (either of which would cause much consternation with their elders in their strongly regimented society). It's much like the way affordable automobiles and drive-in movies changed the courtship habits in the US, especially after WW II.

Yep.... (-1)

Anonymous Coward | about 2 years ago | (#41456539)

Sounds like American capitalism!

It's not cheap to build (5, Interesting)

bbeesley (2709435) | about 2 years ago | (#41456579)

There was an interesting NY Times article on the cost per customer for Verizon to deploy their FiOS product. Essentially it was $4k per subscriber. That's an awfully long payback when you are only getting less than a few hundred bucks a month and you also need to have money to operate the network, provide sales and technical support, etc http://www.nytimes.com/2008/08/19/technology/19fios.html [nytimes.com] Perhaps continued development in technologies like LTE will provide less expensive methods to get customers in the future

Re:It's not cheap to build (2, Insightful)

Anonymous Coward | about 2 years ago | (#41456719)

Essentially it was $4k per subscriber. That's an awfully long payback when you are only getting less than a few hundred bucks a month

*facepalm*

$100/mo is 30% ROR - I don't know, but that is quite good. Even for 10% ROR, you know, $33/mo, it is not that expensive as infrastructure goes. And you can upsell your customers with lots of stuff over these connections, be it TV, or phone service, or security systems, etc.

Re:It's not cheap to build (4, Insightful)

Comrade Ogilvy (1719488) | about 2 years ago | (#41456979)

Agreed. Somehow lots and lots of suburban households are able to be serviced with telephone, electricity, water, natural gas, and even cable television for ballpark $50-$100 per month each. It is just a basic consumer infrastructure problem, one that has been solved before literally billions of times already. Why are broadband companies so especially less competent than others at providing this kind of service?

I am paying $45 per month for a decent DSL service. There is plenty of money up for grabs to pay for these things, if the malignant monopolies can be pushed aside.

Re:It's not cheap to build (2)

rrohbeck (944847) | about 2 years ago | (#41457299)

That happens only if those utilities are socialized or at least heavily regulated.
The issue here is that networking and wireless are in the transition phase from newfangled with high investments to utilities which have to be regulated because otherwise the providers can squeeze the customers because there's no market, hence no competition.

Re:It's not cheap to build (1)

rrohbeck (944847) | about 2 years ago | (#41457255)

Not if you're used to making money with hardly any investment at all (because you're the incumbent) and have to pay off many people (execs, politicians ...)

Re:It's not cheap to build (5, Insightful)

Vancorps (746090) | about 2 years ago | (#41456757)

That's cool, what about the billions in tax payer subsidies to pay for it as well?

Re:It's not cheap to build (2, Interesting)

Anonymous Coward | about 2 years ago | (#41456961)

Then explain why Verizon is on the forbes 50 and has one of THE highest margins in the fortune 500...

I bet most of the profits (2, Insightful)

FudRucker (866063) | about 2 years ago | (#41456585)

went in to the fat paychecks and bonuses of all the bigshots & executives in the businesses

Re:I bet most of the profits (0)

Anonymous Coward | about 2 years ago | (#41456673)

If you think America is slow, try living in Germany or Austria (I have been in Germany for a year and in Austria for the last 6 years). Internet here SUCKS!! UPC SUCKS. Always down a couple times a month. I am in a major city also. In Germany I had an employee at the telcom Deutsch Telcom which is basically T-com Tmobile. try to tell me that copper was much better than cable or fiber.

Re:I bet most of the profits (0)

Anonymous Coward | about 2 years ago | (#41457453)

In America, they tell U-Verse subscribers that copper *IS* fiber. Check forums and yahoo answers for confused victims. Hilarious if it wasn't so sad.
Note, there is a 1% of U-Verse that is fiber, the rest is just short shot DSL.

Re:I bet most of the profits (0)

Anonymous Coward | about 2 years ago | (#41457513)

tell me that copper was much better than cable or fiber.

You do realize that cable and copper are the same thing.

Re:I bet most of the profits (0)

Carewolf (581105) | about 2 years ago | (#41456735)

went in to the fat paychecks and bonuses of all the bigshots & executives in the businesses

Well, they WERE the ones to come up with the innovative business plan of screwing over the customers, and they WERE the ones playing golf with politicians, and sending money in their general directions. For once it sounds like they gave the bonuses to the people that actually had something to do with bringing the money in... Now, that doesn't happen very often, does it?

This is a failure of LAW, not failure of ISP (4, Insightful)

anubi (640541) | about 2 years ago | (#41457447)

We have passed law that allows business to exact full payment for undefined partial service. Clever business use of phrases like " service up to " followed by phrases like " for only $$$.$$/mo* " then " * other charges may apply " and the like have led to a business environment where business can provide whatever they feel like and customers have to take what they are lucky enough to get.

Just one change in the interpretation of the law, where the customer's right to withhold payment for service not received, regardless of what the business printed on their contracts would do the trick.

It would incentivize customer service instead of incentivizing legal trickery as it does now.

Can you imagine the legal representatives of some company defending themselves against a defamation lawsuit where some plaintiff is suing because the company screwed up his credit report ? The plaintiff shows the judge a http://www.speedtest.com/ [speedtest.com] report showing 23kB/sec when the company claimed a 3MB/sec speed? The corporate lawyer approaches the judge and shows the bill clearly showed $53.93 and the plaintiff only paid fifty cents!

The judge looks at the plaintiff's speedtest report and asks the corporate rep if the IP address on the sheet is theirs.... well follow your imagination of how that meeting should go.

A business license should not be an open pass for theft-by-one-sided contract.

but! (1, Funny)

osmosys (2730525) | about 2 years ago | (#41456609)

What about American exceptionalism?!?! Don't worry the internet is just fine the way it is. Soon gold plated eagles with laser eyes are gonna blast out of the American interwebs and run all the naysayers out of the country!

Re: but! (3, Funny)

ColdWetDog (752185) | about 2 years ago | (#41456783)

What about American exceptionalism?!?

Beer is cheap [slashdot.org] . What could be better than that!

USA! USA! USA!

Re: but! (0)

meglon (1001833) | about 2 years ago | (#41457189)

Real beer being cheap, instead of the American horse-piss that the inbred mouth breathers call beer.

What? No! (0)

Anonymous Coward | about 2 years ago | (#41456625)

According to the usual industry apologists (who will be posting shortly), it's actually because the US is so BIG, gosh-darnit!

Never-you-mind the fact that we're one of the strongest economies in the world; never-you-mind the fact that countries with less population density than the ass end of North Dakota completely kick our ass in broadband speed and availability. Ignore the idiocy of local governments handing out monopoly contracts, the FCC allowing Bell-like establishments, or price gouging by these useless carriers.

Nope, our Internet sucks simply because the US is BIG!

one word (-1)

Anonymous Coward | about 2 years ago | (#41456663)

capitalism

The same reason our passenger rail system stinks. (3, Insightful)

djh101010 (656795) | about 2 years ago | (#41456683)

The country is big, with lots of low density areas. Thousands of miles of cable don't just pay for and install themselves, and the incentive to cover a lightly inhabited area just isn't there.

Re:The same reason our passenger rail system stink (4, Insightful)

CannonballHead (842625) | about 2 years ago | (#41456767)

This breaks down when you *aren't* far away from major, major cities (1 million plus), aren't far away from commuter towns (30k)... and can't get anything but Satellite or line of sight wireless. I am in this situation. It takes me 5 minutes, more or less, to get to town. I am within range of the circuit. The problem? There's a load coil in the line. Good for phones, bad for DSL. That's really the only thing stopping me from having way cheaper roughly 1.5mbps DSL.

This also breaks down when you pay lots of money *in the middle of the city.*

IMO, the basic, fundamental problem is that, because of the nature of the service - like electricity - we have monopolies with basically no competition. You either get DSL or Cable, pretty much... unless you're in one of the few fiber areas. That doesn't exactly generate much competition - one DSL company, one cable company. It's difficult to maintain a market-driven good-for-consumer-pricing environment when there's only one player, maybe two.

And then we get into caps and speed and all that, and it gets worse. ;)

Re:The same reason our passenger rail system stink (4, Informative)

Scutter (18425) | about 2 years ago | (#41456805)

The country is big, with lots of low density areas. Thousands of miles of cable don't just pay for and install themselves, and the incentive to cover a lightly inhabited area just isn't there.

There were huge federal subsidies given to the telcos to build out internet infrastructure for exactly that reason. It was stolen and used to line the pockets of the telco investors instead.

Re:The same reason our passenger rail system stink (3, Insightful)

Catbeller (118204) | about 2 years ago | (#41457475)

Must be why Wyoming has no water or electricity. Can't be done.

Re:The same reason our passenger rail system stink (1)

petes_PoV (912422) | about 2 years ago | (#41456817)

Yes, this is so blindingly obvious that the only surprise is that people are still asking the question.

Re:The same reason our passenger rail system stink (1)

Anonymous Coward | about 2 years ago | (#41457049)

It is so obvious that it makes one wonder why countries who have more low density areas than the US have faster and cheaper access.

Re:The same reason our passenger rail system stink (1)

thetoadwarrior (1268702) | about 2 years ago | (#41456935)

Yet we managed a national phone network with less density and you ignore the fact that actually many states have similar population densities as European countries. Not every state is like the ass end of the mid-west.

Re:The same reason our passenger rail system stink (3, Insightful)

rrohbeck (944847) | about 2 years ago | (#41457437)

That's the usual crap excuse by people who don't want to admit that it's just a matter of money, i.e. regulation, incentives, taxation etc.
Europe and Russia have well developed (hence popular) passenger railway systems. Oh and the US used to also. You may want to look up why it was run down.

Sometimes it really just is slow and expensive. (0)

Anonymous Coward | about 2 years ago | (#41456685)

I worked for a regional telco/ISP that provided service to even the most remote customers in a mountainous region. You could probably count on your hands the number of people in their service area that didn't have broadband available, and if you visited them you'd immediately know why. Their broadband penetration was nothing short of astounding.

But it was slow and (by these metrics) expensive, and it was slow and expensive for legitimate reasons. The equipment is expensive. Running lines is expensive. Maintaining the lines is expensive. And if your data center isn't in the city, upstream bandwidth is expensive.

Serving tightly packed populations lets you consolidate your expenses and profit from the customer volume. Out in the boonies? Forget it. My old company spent more money providing service than they took in from customers. They ability to stay in the black and make their profit came from subsidies like the Universal Service Fund.

The US needs better broadband and it can have better broadband. But when you're serving spread-out populations, sometimes it really just is slow and expensive.

So what do we do? (1)

ALeader71 (687693) | about 2 years ago | (#41456691)

Everyone is complaining about so many things. Primarily things that are concerned with Citizen's United, corporate citizenship, overbearing government, corrupt politicians, and institutions we no longer believe in.

So what do We The People do? 40 years ago, we'd organize and take action. Today we whine online, fearful the Man is watching us. So how about it slashdotters -- any ideas?

Re:So what do we do? (4, Insightful)

Paradise Pete (33184) | about 2 years ago | (#41456789)

So what do We The People do? 40 years ago, we'd organize and take action.

Those people from 40 years ago? They're the ones in charge now.

Re:So what do we do? (2)

CanHasDIY (1672858) | about 2 years ago | (#41456837)

So how about it slashdotters -- any ideas?

What if we all went and got bridging routers, and just made one big fuckin' mesh network?

Re:So what do we do? (2)

Hatta (162192) | about 2 years ago | (#41457191)

Start lynching CEOs.

Re:So what do we do? (1)

johnlcallaway (165670) | about 2 years ago | (#41457317)

Forty years ago most would just get on with their life when they didn't have enough money to pay for something, or save for it, or do without if they couldn't get it. People got along just fine 40 years ago without it. But really ... how 'useful' is the Internet?? Sure, I can get email and facebook and twitter and all kinds of almost instantaneous communication. I can look up things and get answers really fast. But how has that changed my life from what it was even 10 years ago?? Very little. It's great to be able to access IMDB and look up the actors in a movie I'm watching, but who really needs it?

So that leaves schools, libraries, and research facilities, who can probably afford to have high speed internet brought in. I don't mind the government helping libraries get high speed Internet access to help people learn new things, not just browse facebook.

The sad fact is that hardly anyone really needs high speed Internet at home. Many just want it.

Don't get me wrong, I love the Internet. I went on a 2,500 mile motorcycle ride a couple of weeks ago, and it was great to have use a GPS and have access to online maps and be able to change motel rooms online. But 30 years ago I would have had an atlas with me, and if I needed to change my reservations I would just have called the hotel from a payphone. Did just that when I drove to Winnipeg in 1979 to view the solar eclipse. Got there just fine, even though there was a blizzard out. Didn't even make hotel reservations for the trip back, just took an exit and walked into a lobby. My ex-wife and I went on a vacation to Florida in 1984 and only made one reservation for the first night and a rental car. Every other night was stopping and looking for a hotel. No Hotels.com or Travelocity needed, a phone and billboard was all that was required.

It's great to download movies and books. Love Kindle and NetFlix. Used to just go to the library or video store to get books or movies. Before that, I just didn't watch that much TV.

The Internet is a nice convenience, it is far from a necessity.Except to people who have never learned how to live without it. Maybe someday they will discover there is an entire world out there and the Internet is not required to access any of it. As long as they don't expect me to pay because they haven't learned that happiness is learning to enjoy life for what you have and working for what you want to have instead of someone just giving it to you.

One could ask the same question about Cell service (-1, Troll)

yossie (93792) | about 2 years ago | (#41456701)

And get the same answer. Both technologies are great examples of the FAILURE OF CAPITALISM in an unregulated and greed driven free market system.
I don't expect this will change till after the singularity..

Re:One could ask the same question about Cell serv (0)

CannonballHead (842625) | about 2 years ago | (#41456795)

Both technologies are great examples of the FAILURE OF CAPITALISM in an unregulated and greed driven free market system.

Unregulated? You mean aside from the FCC?

If it's so *unregulated,* why does so much money go from telecoms to congress in the form of lobbying?

Re:One could ask the same question about Cell serv (1)

yossie (93792) | about 2 years ago | (#41456859)

Our Cell industry IS largely unregulated - we think of the FCC as performing that function - but compared to most other Western countries, they aren't doing much. Same as ISPs (which, in fact, overlap the Cell industry quite a bit.)
Lobbying (and the results it produces) are a capitalist idea, and they result in bad or no regulation..

Re:One could ask the same question about Cell serv (4, Insightful)

meglon (1001833) | about 2 years ago | (#41457283)

If it's so *unregulated,* why does so much money go from telecoms to congress in the form of lobbying?

The word you're looking for is: bribery.

This is a point where ideology really fraks things up: all regulation is not bad. You drink clean water, eat safe food, and breath clean air BECAUSE OF REGULATIONS. Regulations are bad when they favor the few over the many, especially when the few are taking advantage of the many. In this case, the "regulations" in place are largely from the few (wealthy and dishonest) managing to bribe enough people to make laws to give them more power and control, AT THE EXPENSE of everyone else.

Re:One could ask the same question about Cell serv (2)

Ungrounded Lightning (62228) | about 2 years ago | (#41457351)

Both technologies [high-speed Internet and cellular phones] are great examples of the FAILURE OF CAPITALISM in an unregulated and greed driven free market system.

As I understand it this is primarily a failure of the regulators, who mistakenly thought that two competitors are "competition". In fact the equilibrium with two is to split the customer base about equally and keep the price as high as practical. They can do this with price signals and market research rather than explicit collusion (and don't even have to do it deliberately - it's where the profit maximum sits.) Competition driving the price down toward costs doesn't typically happen until there are at least three players and can't be counted on until there are four or more.

In the case of cellphones, in the early rollout the FCC split the available bandwidth into two equal chunks, giving on to the current phone monopoly in an area and the other to one competitor. Eventually more bandwidth became available (at very high prices) to let more than two play. But by then the first two had a strong early-mover advantage compared to upstarts trying to suck in their customers.

In the case of wireline the FCC initially forced the telephone companies to rent the legacy government-subsidized copper wiring to competitors at reasonable rates. But then it deemed that, for "information services", a one-cable-company, one-phone-company "duopoly" was enough competition, and eliminated the requirement for data. Oops! (The wireless alternatives don't have the price/performance to be an effective third competitor.)

'They' did not rewrite the rules (1)

drainbramage (588291) | about 2 years ago | (#41456707)

Your US and local Gubmint wrote, rewrote and and continues to rewrite rules to keep themselves funded and local monopolies de jure.
Pleas stop blaming the (now thousands of) companies because you keep electing leeches.

Re:'They' did not rewrite the rules (1)

firewrought (36952) | about 2 years ago | (#41457133)

Your US and local Gubmint wrote, rewrote and and continues to rewrite rules to keep themselves funded and local monopolies de jure. Pleas stop blaming the (now thousands of) companies because you keep electing leeches.

One second, I'm checking.... checking... checking.... DING! Okay, yeah, I did some quick checking and according to my moral reasoning, it's still wrong for companies to corrupt (or attempt to corrupt) government officials. And since those bribes... er... "contributions" help incumbents get disproportionate air time, it's sort of hard for an electorate (that has soooooo many other issues of political salience) to self-correct these things. If you've got an idea, I'm all for trying it, but don't go around excusing the originators of the problem.

(On a positive note, I understand that foreign anti-corruption laws in the US and Europe have helped curtail third-world corruption that was happening in conjunction with first-world countries.)

Re:'They' did not rewrite the rules (0)

Anonymous Coward | about 2 years ago | (#41457153)

Ain't that the truth. The companies in question can't buy what isn't being sold.
 
I love how the people who understand that profits allow the laws to be bent are the same people are asking for the same people who already shown that they can be bought to run the show without recourse. How logical is that?

Letting the foxes run the hen house. (0)

Anonymous Coward | about 2 years ago | (#41456721)

Wow, it turns out that letting business write the laws that govern them is a terrible idea! Who would have thought? Shit, I wish we had thought of that in the 90s when it was all the rage!

Shitty service and high prices are just the start for the cynical euphemism that is "deregulation". In reality deregulation is just more regulation designed to put public money in to the pockets of private business owners. - The real endgame is that companies don't actually know how to write good legislation, and end up shooting themselves in the foot anyway. - Ex. PG&E in California. They literally wrote the new dereg laws, and in a fit of greed left in loopholes that screwed them later. California residents - Do you remember the rolling blackouts. Did you know there was plenty of power to go around, but bad actors were able to distort prices so badly that nobody could afford it?

Does this figure in government subsidies? (1)

walterbyrd (182728) | about 2 years ago | (#41456727)

Don't different countries subsidize the internet in different ways, and to different extents?

If I pay $20 a month to my ISP, then another $20 to my government, to subsidize the ISP, it's the same as paying $40 a month for an unsubsidized ISP. But this calculation may only look at the money paid directly to the ISP.

American corporate socialism... (0)

harvey the nerd (582806) | about 2 years ago | (#41456731)

American corporations are now largely ripoffs, overpriced with low quality goods and services, protected by their legislative "friends". Brands are advertising phenomona that often bear little correlation to product quality. Prices are built on padded costs, regulatory manipulation, and marketing bs. Overseas service is much, much better, even in some lower rated 3rd world countries. It was once a great, competitive country.

This ain't the Wild West no more (0)

Anonymous Coward | about 2 years ago | (#41456745)

As much fun as it would be to bang up a bunch of lines and start serving people no one wants a jungle of cable hanging between buildings or on their own property or city property or it must be built to city/state/national codes using certain kinds of labour...

Why if it wasn't for Everything Else it would be cheap and easy!

Ah, regulations... (1)

swillden (191260) | about 2 years ago | (#41456791)

There is no problem that cannot be solved, or created, by adding another layer of regulation.

Misses infrastructure reality (1)

TheSync (5291) | about 2 years ago | (#41456877)

Any book that wants to claim to talk about US Internet speeds has to deal with the fact that our average local loops are significantly longer than those of most other countries.

I think there is a great detective story here, because it isn't just a rural or suburban detached house issue, but even in cities the average local loop length is longer, and every meter cuts down on DSL speed.

I suspect that in the 70's and 80's a lot of central offices were consolidated, which made tons of sense for efficient voice delivery, but had the knock -on effect of crushing DSL speeds with long local loops. Today, there is little desire to spend the capital on more distributed central offices.

Now I am sure there also is regulatory capture as well in terms of lowering competition through regulation or local franchising. But you have to address the fact that we are starting with longer loops.

Re:Misses infrastructure reality (1)

roc97007 (608802) | about 2 years ago | (#41456953)

People still use DSL?

You have it easy. (1)

rbprbp (2731083) | about 2 years ago | (#41456915)

Pretty much what has been happening in Brazil for the last 10 years. Telcos get the rules written to support themselves, get tax cuts from the government, and find ways to work around the law without actually doing anything illegal. I could expand this to pretty much all businesses here: very large profit margins and a government that turns a blind eye to them, since after all, they are paying taxes to keep our bloated government alive.

It's all relative (1)

wonkey_monkey (2592601) | about 2 years ago | (#41457001)

It could half the price or twice as fast and someone would still write this article. Just like computers, which are thousands of times faster than they were a few decades ago, our use of the internet and the services made available by the providers expand with it. We haven't had streaming HD video all that long, but lots of people want it and will complain if they get it on their connection (I can't). In a few years' time it'll be streaming 3D video. Then it'll be streaming immersive virtual reality, and not everyone's connection will be able to handle that, and so on.

America's Internet access is slow, expensive

It'll always be of a certain speed and at a certain price. Some people will be happy with that. Some will think it's too slow. Some will think it's too expensive. Some will think both and write books about it.

Profits go up if they can provide Internet at super high prices.

I took out the word "slow" and now it's just supply and demand (with the occasional de facto monopoly, admittedly), same as usual.

Artificial supply (1)

anavictoriasaavedra (1968822) | about 2 years ago | (#41457017)

It's called "choke the market once you got it by the balls". Happens all the time in the 3rd world, believe me. Artificially restrict supply once your market is hooked on your product and they'll pay exorbitant sums for whatever you sell them.

Free Market at Work in a World Economy (0)

Anonymous Coward | about 2 years ago | (#41457029)

The problem is not really regulation. The problem is that we have a huge amount of legacy investment in telecommunication infrastructure.

A local telephone cooperative in northern Minnesota has rolled out fiber optic cable to compete with Qwest and Mediacom for new customers. The result is that I have a fiber optic connection to my home in a small rural community of 10,000 people and there is even a fiber optic connection to a family cabin 15 miles outside of town that 40 years ago lacked electricity.

But the coops' existing customers continue to be served by copper wire. The cost of putting in fiber doesn't make financial sense where they already have an investment in dated technology. This is capitalism at work.

If we expect to stay competitive with the rest of the world, we can't rely on the free market. For private businesses it makes a lot more sense to invest elsewhere rather than replacing valuable existing infrastructure. And that is not a problem limited to internet connections. Most of our capital is controlled by money managers with access to investments all over the world. The best return on the dollar is overseas. That's where the investments are being made.

Sounds like a good deal to me... (1)

otaku244 (1804244) | about 2 years ago | (#41457041)

I mean, why pay one horrendously high price for a cut-rate service with a cryptic pricing structure when you can pay for two at twice the price?

Then start a fiber company and make everyone happy (0)

Anonymous Coward | about 2 years ago | (#41457057)

If it's so profitable to build a telecommunications company then why are more local ones not popping up and serving our desires?
Oh yeah, that's right... Everyone forgets that the main reason that everything is so expensive in this country is because of the population density. Face it friends, we live in a rural country (I live is a small town in Vermont). We have great transit systems in many of our cities, and we also have better internet connections there too. It's not economical for companies to string us all together with fiber, if it were, there would be way more of them participating. Plus... we are the outliers, we WANT high speed internet, most Americans don't give a F. If it's not economical and many people don't care about it, then why should companies provide it? What's wrong with high speed (LTE) wireless? Hell, I get faster speeds in NYC on LTE than I do at home on my WIFI network... It's the same for high speed rail. It works in high density areas.... No so much in South Dakota...
This isn't an issue with the government or companies. The real problem is that the majority of our country doesn't care. Imagine if Fiber to the home was on everyones mind and we turned it into an election issue.

Network cost is not proportional to user base size (0)

Bookwyrm (3535) | about 2 years ago | (#41457071)

There is one annoying gotcha to network capacity planning -- network costs tend to increase in a non-linear fashion though the subscriber base (and hence revenue) does.

If you can maintain a pure hub-and-spoke network topology where all user connections connect to the same central point, then the network cost grows in direct proportion to the user count -- each time you add a new user, you add a new spoke. So the total number of network links is the same as the total number of users. As long as the hub is adequate, this works.

The opposite topology (which you almost never see) is that for each point added to the network, you add a link to all existing points, so that each network node has a direct link to every other node. This means the total number of links is, for *n* number of users, is (n*(n-1))/2 -- or, if you prefer, O(N^2) growth. The more users that are added, the more expensive it becomes to add more users. (A crude visualization would be that the user base represents the circumference of a circle, and the network represents (a fraction) of the area of the circle that connects each point on the circumference. The growth of the length of the circumference is linear, but the network growth is squared.)

Realistic networks fall somewhere in between, but that still means that each new user/network node added to the network is slightly more expensive than the previous one in terms of cost. This plays merry hell with trying to juggle network capacity planning verses performance verses revenues verses growth. Even assuming the most altruistic company that is making only a minimal profit, network growth increases costs more than it increases profits, barring the introduction of more efficient technologies. (And the introduction of new technologies (i.e. new vendors) in a large network can be a huge, profit-eating cost in terms of the capital expenditure, and can be a surprising drain on operational expenditures to maintain multiple vendor platforms at once.)

So there is a certain pressure, capitalism-wise, to be only as large and fast as one has to be, and not one penny more.

Covered quite well before... go to teletruth.org (1)

Anonymous Coward | about 2 years ago | (#41457159)

The real story behind the Telecom Act of 1996 bamboozle and how we were SUPPOSED to - legally, mind you, mandated by the Act - and also PROMISED by Ma Bell have fiber to our doorsteps long ago.

http://www.teletruth.org/docs/ShortSCANDALSummary.pdf

The entire book is available freely here: http://www.teletruth.org/docs/broadbandscandalfree.pdf

This was telco malfeasance on a massive scale, facilitated by the Federal Government and Congress - perhaps $200B or more misappropriated directly because of the Telecom act. Read on and draw your own conclusions.

almost a monopoly (1)

peter303 (12292) | about 2 years ago | (#41457215)

Most locations have one or two sources of broadband and cable. A few lucky places may have three or for (two fiber, satellite ...). Price increases should be regulated like a utility then. Our power company has to justify increases due to capital projects and pass-through commodity increases/decreases. So should broadband.

sure (3, Interesting)

PopeRatzo (965947) | about 2 years ago | (#41457281)

The main reason American Internet service is slow and expensive is that it's been left in the hands of private corporations instead of treated as a regulated utility.

The secondary reason is that there has been such an enormous consolidation among providers that there are now 3 or 4 companies providing most of the nation's Internet.

End-game laissez-faire looks like this: dog eat dog leaves just a few very big dogs, and they can then pretty much just split up the customers so there is practically no need for competition. It's happened across American corporate culture. Five or fewer corporations where there were once hundreds if not thousands. I was reading the other day that there used to be hundreds of corporations in the packaging business. You know, making boxes and cartons? Now there are basically two and one of them is a multi-national based in New Zealand. The number of banks has been cut in half every couple of years for three decades.

Does anyone believe that AT&T feels it has to be competitive?

Manufacturing scarcity - TANSTAAFM (5, Interesting)

Catbeller (118204) | about 2 years ago | (#41457385)

This Catbeller has been banging this drum for over eleven years, may I just say?

The "free market" ain't, and never can be, free, when you are dealing with players who understand the markets better than you do, and, furthermore, will cheat like motherfuckers. Conspiracy isn't necessary. The unwritten rules are always clear. Manufacture scarcity.

The new forestry corporations did it in the late 80s, buying up forests and rights, until in 1992 they tripled wood prices overnight, blaming Clinton and his evil environmental regulations, which didn't exist yet, being as he just was elected, for the cause. They cornered the market and fixed prices. The on;y congresscitter to object was fabulously ejected by them funding his shiny new opponent. No one else dared say a word.

Enron INfamously pretended that evil regulations made them incapable of restraining costs as they shut down power plants on mathematicians say-so to jack prices. California's entire budget mess for the last ten years can be traced back to that robbery. Free market is only free for those who control the market.

Enron not-so-famously was hell-bent on cornering the world's water supplies in drought areas - guess why... but don't worry, in their absence other bastards have bought up water rights, and soon "scarcity" will quintuple water prices across the world.

Kucinich in Cleveland was right, when he said the new private power companies would raise rates after they took over power grids. Cleveland to this day still has lower electrical bills than all the surrounding cities with free-market electric companies gouging them for decades.

And internet and radio internet... ah, so damned obviously they have refused to build infrastructure and have been "forced" to raise prices while the rest of the world simply licenses companies to build infrastructure at a decent price. Eleven YEARS ago, here, I posted a quick calculation: how much have people paid, in total, for DSL, cable, and modem charges combined - and how much had the telcos actually spent. It's eleven years later. We've pumped a good chunk of a trillion into their pockets, and they've spent a tiny fraction of that on actual buildout. They are taking us like a lost tourist.

Most of the rest of the world does it correctly. Scale has nothing to do with it. We don't have a limited amount of cash and a limited workforce; our companies can scale up any buildout. THEY DON'T WANT TO.

Copy whatever country did it right. Let local muni governments build out the systems for a fraction of the cost that these lying sacks of excrement quote. Let this end. There Ain't No Such Thing As A Free Market. Not when the "free" market companies can buy each other or merge, thus eliminating the market, or simply cooperate by obeying unwritten rules to jackup prices.

Capitallism (1)

Revek (133289) | about 2 years ago | (#41457413)

Capitalism works better for some things, just not infrastructure. To many systems not enough consistency. Dare I say it, not enough regulation.

well cable can do better but it needs more hardwar (1)

Joe_Dragon (2206452) | about 2 years ago | (#41457425)

well cable can do better but it needs more newer hardware to make room.

Most cable systems are stuck if lot's of old MPEG 2 only boxes and stuff that top's out at 750 MHz - 864 MHz and lot's of sd only boxes as well.

node splits and SDV can help as well.

DSL is running on the old phone wires and it's needs RT near by to be able to offer high speeds.

Fiber is fast but digging up to install it is the hard part and all the other wires and pipes in the way makes it even harder to install.

People are talking about population density (5, Informative)

Picardo85 (1408929) | about 2 years ago | (#41457485)

Speaking as a Finn I find this ridiculous. We have a population density of 16/km2 or 41/sq mi for you who go by the imperial system, that is 201st in the world. The United states has 33.7/km2 or 87.4/sq mi.

In Finland we, in contrary to Sweden, have the industry building out the networks for their own money. Very little is subsidized unlike in Sweden. Still we are able to have really good internet connections. Currently we pay around 30-50euro/month for 24 / 2mbit ADSL (depending on where you live and ISP) in most places where fiber isn't avaliable but fibre is in general being expanded in most population centers and then some local areas such as small municipalities build their own fiber networks.

Where you can get access to fiber you pay the same for a significantly faster connection. I know for example that in my appartment building I would get 250mbit for 50/euro month.

As a matter of fact we are aiming at being able to provide 100mbit to everyone by 2015 source from the finnish broadcasting company [yle.fi]

It doesn't matter how you reason, there's absolutely no reason what so ever that the major population centers in the US wouldn't have high speed internet access for affordable prices except the telco cartels.

(;plu5 one Informative) (-1)

Anonymous Coward | about 2 years ago | (#41457491)

are a 4athetic
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